Koppers Holdings Inc. (NYSE:KOP) Q1 2025 Earnings Call Transcript

Koppers Holdings Inc. (NYSE:KOP) Q1 2025 Earnings Call Transcript May 9, 2025

Koppers Holdings Inc. beats earnings expectations. Reported EPS is $0.71, expectations were $0.56.

Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers First Quarter 2025 Earnings Conference Call and webcast. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Quynh McGuire. Please go ahead.

Quynh McGuire: Thanks, and good morning. I’m Quynh McGuire, Vice President of Investor Relations. Welcome to our first quarter 2025 earnings conference call. We issued our press release earlier today. You may access it via our website at www.koppers.com. As indicated in our announcement, we’ve also posted materials to the Investor Relations page of our website that will be referenced in today’s call. Consistent with our practice in prior quarterly conference calls, this is being broadcast live on our website, and a recording of this call will be available on our website for replay through August 9, 2025. At this time, I would like to direct your attention to our forward-looking disclosure statement seen on Slide 2. Certain comments made on this conference call may be characterized as forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.

These forward-looking statements involve a number of assumptions, risks and uncertainties, including risks described in the cautionary statement included in our press release and in the Company’s filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included in the Company’s comments, you should not regard the inclusion of such information as a representation that its objectives, plans and projected results will be achieved. The Company’s actual results, performance or achievements may differ materially from those expressed in or implied by such forward-looking statements. The Company assumes no obligation to update any forward-looking statements made during this call.

Also, references may be made today to certain non-GAAP financial measures. The press release, which is available on our website, also contains reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. Joining me for our call today are Leroy Ball, Chief Executive Officer of Koppers; and Jimmi Sue Smith, Chief Financial Officer. At this time, I’ll turn the discussion over to Leroy.

Leroy Ball: Thank you, Quynh. Good morning, everyone. I’m pleased to report that despite a decrease in sales in the first quarter, we delivered solid profitability on an adjusted basis. Now as previously announced, we began taking steps in late 2024 to combat some market share loss and lingering softness in some of our end markets by resizing our employee base and improving our cost structure in anticipation of the challenges we knew were coming in 2025. Unsurprisingly, our first quarter results benefited from these actions and enabled us to offset the transitory headwinds. Through Q1, our global employee base has been reduced by 5% and our SG&A finished the quarter $4.1 million lower than Q1 2024. We’re also realizing cost benefits at the plant level that also helped Q1.

And we’ll continue to focus on improving our business performance and margins through actions we’re developing from the initial performance assessment we’ve recently completed and we’ll share more with you as plans get finalized and implemented. Slide 4 highlights key metrics for the first quarter. We achieved consolidated sales of $456.5 million compared with $497.6 million in the prior year. First quarter adjusted EBITDA was $55.5 million compared to $51.5 million in the prior year quarter. Our overall adjusted EBITDA margin was 12.2%, which compared favorably with 10.3% in the prior year quarter and represented our strongest Q1 margin since 2021. First quarter diluted loss per share was $0.68 compared with diluted earnings per share of $0.59 in the prior year quarter, driven by restructuring charges and a loss recorded from terminating the bulk of our U.S. defined benefit pension plan.

Adjusted earnings per share for the quarter were $0.71 compared with $0.62 in the prior year quarter primarily due to benefits realized from cost actions. Cash flow used in operations in the first quarter was $22.7 million, which included a $14 million payment associated with the termination of our U.S. pension plan. By comparison, we used $12.3 million of cash from operations in the prior year quarter. Capital expenditures net of insurance proceeds and sales of assets were $10 million for the first quarter compared with $25.8 million in the prior year quarter. Gross CapEx is now down to a normalized level and will provide a significant positive benefit to future free cash flow. On Slide 6, we had 31 out of 41 facilities worldwide operating accident free for the quarter.

Our European CM&C, European PC and Australasian PC businesses completed the quarter with zero recordable incidents. Leading activities designed to identify and eliminate hazards increased this quarter compared with last year, which is a good thing and that led to reductions in recordable injuries and serious safety incidents. At Koppers, we continue to take our responsibility to operate sustainably seriously and as shown on Slide 7, our 2025 Zero Harm Plan includes improving our environmental performance across our operating footprint and reinforcing the foundational elements of Zero Harm to bring us closer to our goal of zero injuries. Zero Harm continues to be a core element of the Koppers’s culture and will remain so as we continue to look for ways to push our performance to new heights.

As seen on Slide 9, it’s my pleasure to visit with two of our most recent additions to the Koppers network in Mathison, Mississippi and Kennedy, Alabama. These two facilities joined Koppers last year with the acquisition of Brown Wood Preserving Company, expanding our capabilities in the manufacture and sale of pressure treated wood utility poles, while growing our geographic reach in the Midwest and Central Regions of the U.S. And this expansion of our operating footprint greatly improves our ability to expand our product offerings and penetrate underserved geographic markets in a more cost-effective way than we were able to before the acquisition. Moving on to Slide 10. We issued our 2024 annual report and 2025 proxy statement, which are available on the Koppers website.

You can also access these materials using QR codes as shown. Our commitment to sustainability continues to garner positive attention as shown on Slide 11. For the third consecutive year, Koppers was named to USA Today’s list of America’s Climate Leaders, which recognizes companies that set a meaningful standard for emissions reduction in the U.S. In addition, Koppers has gained further recognition by our customer CSX as they honored us with a Chemical Safety Excellence Award for safely transporting hazardous materials with zero non accidental releases in 2024. In summary, there continues to be a lot of positive developments on multiple fronts at Koppers. I’ll now turn the discussion over to our Chief Financial Officer, Jimmi Sue Smith.

Jimmi Sue Smith: Thanks, Leroy. Earlier today, we issued a press release detailing our first quarter 2025 results. My comments, this morning, are based on that information. As seen on Slide 13, we had consolidated first quarter sales of $457 million, a decrease of $41 million or 8% from the prior year quarter. By segment, RUPS sales increased by $10 million or 4% compared with the prior year, while PC sales were lower by $29 million or 19.5% and CM&C sales decreased by $22 million or 18%. On Slide 14, adjusted EBITDA for the first quarter was $56 million with a 12.2% margin. By segment, RUPS generated adjusted EBITDA of $26 million with an 11% margin. PC delivered adjusted EBITDA of $20 million and a 17% margin, while CM&C reported adjusted EBITDA of $10 million with a 10% margin.

On Slide 15, our RUPS business generated first quarter sales of $235 million compared with $225 million in the prior year. The sales increase was primarily due to higher volumes of Class I crossties, $4.6 million of price increases and a 9% increase in domestic pole volume, driven by the Brown Wood acquisition and higher activity in the railroad bridge services business, partly offset by lower volumes of commercial crossties. Market prices for untreated crossties remained stable. Year-over-year, first quarter crosstie procurement was down 19% with crosstie treatment lower by 3%. RUPS also delivered adjusted EBITDA of $26 million compared with $18 million in the prior year. Profitability improved primarily due to increases in net sales volume and prices along with a $2.2 million lower operating expenses primarily in our cross-sell business, partly offset by $2.5 million of higher raw material and allocated SG&A expenses.

On Slide 16, our Performance Chemicals business reported first quarter sales of $121 million compared to $150 million in the prior year. We saw a 21.5% volume decrease of residential and industrial wood treatment preservatives in the Americas resulting from a market share shift in the U.S. associated with the residential preservative market, lower activity due to winter weather, and an unfavorable impact of $2.4 million from foreign currency. Adjusted EBITDA for PC came in at $20 million compared to $30 million in the prior year. Profitability was impacted by the decrease in sales as well as higher raw material costs, partly offset by $3.7 million of lower logistics and SG&A expenses, primarily in North America. Slide 17 shows first quarter CM&C sales of $101 million compared to $122 million in the prior year.

This decrease was driven by about $11 million of lower volumes for phthalic anhydride as we exit that business, as well as approximately 8% lower sales prices for carbon pitch as a result of market dynamics, primarily in Australasia and $2.3 million of unfavorable foreign currency impact. Adjusted EBITDA for CM&C in the first quarter was $10 million compared with $4 million in the prior year. This improvement in profitability was due to $7 million of lower raw material and allocated selling, general and administrative expenses, particularly in North America, a favorable sales mix and improved plant performance as a result of a plant outage in North America in the prior year period, which combined to more than offset the price decreases. Compared to the prior quarter, the average pricing in major products increased by 5% and average coal tar costs were higher by 6%.

Compared to the prior year quarter, the average pricing in major products was lower by 8%, while average coal tar costs decreased by 5%. As shown on Slide 19, we continue to pursue a balanced approach to capital allocation. Net of cash received from insurance proceeds and asset sales, we invested $10 million into our business in the first quarter. For 2025, we’re targeting $65 million in net CapEx. We repurchased $19 million through stock buybacks, including tax withholdings in the first quarter. We have approximately $85 million remaining in our $100 million share repurchase program. We also returned capital to shareholders through our quarterly dividend of $0.08 per share this quarter. In terms of leverage, we finished the quarter with $948 million of net debt, $320 million in available liquidity, and net leverage of 3.6x at March 31, reflecting our typical seasonal cash flow pattern.

We remain committed to our long-term target of 2x to 3x our net leverage ratio. On Slide 20, total capital expenditures for the first quarter were $14 million gross or $10 million net. We spent $12 million on maintenance, $1 million on Zero Harm and $1 million on growth and productivity projects. By business segment, we spent $5 million in RUPS, $3.5 million in PC, $5 million in CM&C and under $1 million in corporate projects. And finally, on Slide 22, our Board of Directors declared a quarterly cash dividend of $0.08 per share on Koppers’s common stock on May 8. This dividend will be paid on June 17 to shareholders of record as of the close of trading on May 30. At this planned quarterly dividend rate, which is subject to review by the Board of Directors, the annual dividend is expected to be $0.32 per share for 2025, a 14% increase over the 2024 dividend.

And with that, I’ll turn it back over to Leroy.

Leroy Ball: Thank you, Sue. Now on to a quick review of each of the businesses. As seen on Page 24, our Performance Chemicals business finds itself in a challenging spot that it hasn’t experienced in a few years, as we’ve seen some residential preservative volume move away from Koppers after many consecutive years of market share gains. To compound matters, after a solid start to the year, demand seemed to lose steam as the quarter progressed, partly due to a colder winter throughout the country and partly we believe the broader economic uncertainty stifling individuals’ decisions to spend discretionary dollars on outdoor projects. Now nothing in the external data gets us really excited that spending on home projects will turn around soon.

The continued backdrop of economic uncertainty driven by tariff activity and the direct and unintended consequences remain a concern that could continue to weigh on near-term demand, and we’re hearing mixed messages from our customer base in regards to their optimism for volume improvement this year. And we’ve enacted several tariff mitigation actions that have reduced the overall exposure from our cross border transactions across all our business segments. As a result, at this point, we feel the situation is manageable, but as we know, it remains fluid. On the cost front, we’ve paired back spending quite a bit and realigned cost to better fit a smaller top-line in the near future and will continue to be aggressive in order to combat any potential market slowdown.

Moving on to our Utility and Industrial Products business shown on Page 25. Demand in the early part of this year has been similar to 2024 levels, which was a softer year compared to ’23. While the second quarter isn’t expected to look a whole lot than the first, we continue to hear that, volume is expected to pick up in the back half of the year. Like our PC business, I do have some worries that persistently high interest rates and fiscal policy uncertainties could dampen enthusiasm in the industry to move forward with projects. That however does not change my long-term view on this business, as various demand drivers remain in place to support a bullish outlook. We’re starting to see greater interest from the customer base in our new geographic markets and we continue to invest resources to build out our sales team and distribution network to support our expected growth in those underrepresented areas.

As I mentioned earlier, the sites acquired from Brown Wood a little over a year ago play a key role in accessing some of these markets and they’re performing solidly. On a final note, our Australian coal business had its best Q1 since 2021 and we’re anticipating another year of steady profitability. Our railroad products and services, business is summarized on Page 26. While volumes in Q1 weren’t quite where we expected them to be, the combination of small contractual price increases and lower operating costs led to our best profit metrics in the crosstie part of our business since 2016. Now if our sales reach the 8% improvement we plan for coming into this year, then 2025 should represent one of our strongest years ever for the rail business.

Presently, we have no major capital need for this business and our inventory is at a good level, which means, it should be back to generating significant free cash flow. We’ve been able to avoid tariff impact for this business thus far, but we do worry about the tariff effect on some of our sawmill suppliers who rely heavily on hardwood exports to China, which have dried up. Our shift away from the disposal part of our crosstie recovery model was already generating positive benefits and we expect greater consistency in our financial performance from that piece of RPS as a result. Overall, our maintenance — weight business was a solid contributor to the RPS results in Q1 and as of now are on pace for their best year since 2016. Next on to the CMC business which is summarized on Page 27.

Like last year’s fourth quarter, the first quarter for CMC represented significant improvement over the prior year performance. That improvement came despite a lower sales figure with some due to the ramp down of our phthalic anhydride production and the other half due to lower product pricing. As in all our businesses, we remain focused on driving down costs to support better operating performance. Our exit of the phthalic anhydride business in the U.S. supports that concept through reducing the complexity of our operations, which will improve our cost structure as well as the safety and environmental footprint of our Stickney plant. We recently ceased production of phthalic slightly ahead of our May target date and are working through the next steps of our closure.

We’ve recently extended our raw material supply in Australia and are looking to do the same in North America and Europe. While there is much [Technical Difficulty] overall health. And it’s times like these that we’ve experienced in the past couple of years, which many times lead to that happening. So, it’s something we will definitely be keeping our eyes on. Moving on to our outlook for 2025. As shown on Slide 29, we expect consolidated sales to reach $2 billion to $2.2 billion in 2025 compared with $2.1 billion in 2024. With lower volumes in PC and lower volumes in pricing in CMC partially offset by higher volumes and some pricing improvement in RPS and RUPS, I’m sorry, being the most likely outcome. On Slide 30, we’re maintaining our adjusted EBITDA forecast of $280 million compared with $262 million in 2024.

In line with the sales changes reflected on the previous page, we expect to see significant year-over-year improvement in RUPS, which we’ve already begun to realize in Q1, while PC will take a hit in profitability in line with its reduced sales volumes. Despite the lower top-line from CMC, we expect to see its profitability improve due to lower raw material costs and lower operating costs, and the Q1 results from this year are already reflective of that. As mentioned on our previous call, our entire organization underwent a comprehensive performance assessment to determine how high our potential performance could be, and the initial output of that assessment uncovered quite a bit of opportunity. We’re now in the process of prioritizing and developing the detailed plans for how we turn these opportunities into results.

And I expect that we’ll have more shares as the year progresses and the impact that could have on the remainder of this year and future years. Slide 31 shows our 2025 adjusted earnings per share bridge and the improvement we expect in 2025, driven by higher operating earnings and lower interest expense. Accordingly, we’re continuing to expect $4.75 per share in 2025 compared with $4.11 in 2024. On Slide 32, we’re projecting net capital spending of $65 million in 2025 compared with $74 million in 2024. And based upon the run rate we saw in Q1, we’re moving comfortably towards meeting that target or even coming in a little less. Now, the final point I will make before moving to Q&A is that, despite the extreme uncertainty that exists in the markets right now, we are fighting our way through it, and we’ll come out the other side in an even stronger position due to the measures we’ve already taken as well as others that are near-term actionable.

With no major capital expenditures looming and a portfolio of opportunities to act upon at our disposal, we find ourselves in a position to generate significant free cash flow over the next few years, which will be put to good use delevering the balance sheet and returning capital to shareholders. Now, I would like to open it up to any questions.

Q&A Session

Operator: [Operator Instructions] Our first question today is from Liam Burke with B. Riley Securities. Please go ahead.

Liam Burke: Leroy, on the RUPS business, you saw double-digits EBITDA margins. You highlighted some of the reasons why you’re driving good year-over-year profitability results. Expectations for the rest of the year are better. I was just curious how much does the utility pulp product mix help your margins going forward?

Leroy Ball: It’s a good question, Liam. I mean, the utility piece of the business, utility pulp piece of the business is one that structurally — has historically generated better margin performance. So, as we continue to grow that business, we would expect that to have a positive impact on our margins for that segment. At the same time, in the rail piece of that business, again, we are active — we have been actively working on a number of things both commercially as well as on the cost side that are already starting to bear fruit and had a pretty good impact here in the first quarter and we expect that to continue as well. So, we’re seeing improving margins in the rail piece. And certainly, as we continue to grow utility, as that proportion becomes a bigger piece of that segment, we would expect to see margin improvement as well.

Liam Burke: Okay. And just staying on RUPS, your contracts with the Class Is, are you satisfied with all of them or do you still have work to do there?

Leroy Ball: Look, I think there is certainly still work to do there and things that we would like to see improved. So, it remains a work in progress. But we’re in a better spot than we were, Liam, but I’d say, there’s still some more work to do.

Operator: The next question is from Gary Prestopino with Barrington Research. Please go ahead.

Gary Prestopino: Couple of questions here, Leroy, and I’m going to refer to the state of the business and looking at the RUPS utility and Industrial Products. I mean, you’re saying a pickup in the second half of the year, which you’re also saying for the RUPS business. Is that based on business quotes that you have in hand from your end customers? Or is there something going on there that is going to drive that growth that you’re expecting, I guess, is what I want to get at?

Leroy Ball: Yes. I understand. I think, look, a lot of it is related to feedback from the market. And so, like, any of our businesses, we are somewhat subject to what we’re hearing from our customer base. But there has continued to be a common refrain of the back half of this year, seeing an expected volume pickup and moving forward of projects. As I mentioned, I do have some worries about that just in terms of the overall economic uncertainty that’s out there, but that’s one of the bigger drivers. We are seeing some improvement in increased activity in some of the newer markets that we’ve been going after. So, I’d say, a combination of those two things is really what we’re relying upon.

Gary Prestopino: Okay. A lot of the companies that we’re speaking to and on the conference calls, they basically had said that starting in March things just fell off a cliff, once Liberation Day came and became clear what the tariff impacts could be. And then after that there was a lessening and they’re starting to see a reinvigoration on their pipelines. Were your customers really impacted by this as well?

Leroy Ball: I think that’s really consistent I’d say with more or less what we’ve seen, and I kind of refer to that particularly in the PC business, where we seem to begin the year on a stronger note, and then sort of saw that wane as the quarter went on. I would say in the other two segments, it’s been a little more consistent throughout the quarter. I think I don’t know of industry that’s not experiencing some impact from the tariffs and the constant-changing and moving of the ball there. So, some of it comes directly, some of it comes in the form of some unintended consequences that you end up having to deal with. And again, I sort of mentioned the one on the RUPS side, where our sawmill suppliers are having to deal with export volume that’s drying up, which will ultimately end up having an impact on hardwood prices for crossties, that they more or less produce as a byproduct of their regular production.

So, those are the things that we are still going to have to see how they fare it out, as time moves on. But overall, as we’ve assessed the current situation, there are several mitigation plans that we’ve already put in place for the things that are actually happening. And obviously, we’re planning and doing some actions to try and get in front of other potential changes that could occur. But, it’s very tough, right, because again things seem to change. Lately, it seems to be a little bit more settled down, but certainly for a period, things were changing day-by-day. So, the unintended consequences that tend to jump up and get you. And, right now, like I said, the one that is near-term on the radar is what’s going on in the hardwood market.

Gary Prestopino: Yes. I don’t envy you having to try to run a business in this environment.

Leroy Ball: Yes. It’s not easy.

Gary Prestopino: Yes. And then I just wanted to drill back down to your forecast here, $2 billion to $2.2 billion of sales, which is I think you were at $2.17 billion on your prior forecast.

Leroy Ball: Yes.

Gary Prestopino: But you really didn’t give us — you really didn’t change your adjusted EBITDA guidance. You’re still at $280 million. So, I guess what I want to ask you is, if you’re trending more towards the low end of that guidance range on sales, do you have additional flex down on costs that would help you get to that two eighty EBITDA?

Leroy Ball: We do. We’re actively going after a number of different cost measures there. Yes, obviously the closer it gets down to the two, the tougher that will be and the tougher it will make it. But we do have a number of items that again are already in process and some of that you saw reflected in the first quarter. And we expect that to continue moving forward. So, yes, like you would expect, the closer it gets to the lower end of that range, the more challenging it will be to reach the number. And the closer it ends to the higher end of that range, I’d say, we have pretty good room. But that’s not going to stop us from continuing to try and drive the performance improvement through the various businesses.

Operator: The next question is from David Marsh with Singular Research. Please go ahead.

David Marsh: I have to say that, the EBITDA result in the CMC business in light of the revenue is really pretty impressive, and it really speaks to the efforts you guys undertook to cut costs. Could you talk about to the extent that you see recovery there, what the kind of incremental revenue dollar looks like on the EBITDA line?

Leroy Ball: Yes. That’s been a challenge to business certainly in the past couple of years, as we’ve talked about. And I even referenced in my prepared comments how the industry really is at a point, and it’s been at a point for a while, where it does need some further rationalization. We feel like, we did our part back in the 2015 to 2020 timeframe, where we took a bunch of capacity out of the industry. We feel that, it’s past time for some others probably to consider doing the same. But as end markets get stronger and pricing improves, obviously that will work its way down to the bottom-line. In terms of volumes, certainly throughput is an issue as well. And while overall we did pretty well in Q1 from a volume standpoint, we’ve taken a hit on volumes in the past year to 18 months as again things have gotten more challenging.

But there’s no question if we can see the health of our end markets improve, which will enable us to get more throughput through the plant. We are going to be able to improve efficiency, drive down our unit costs and improve profitability. So, all that is absolutely connected. At the same time, simplifying our operations, as we’re in the process of doing at Stickney and trying to make that operation very similar to our other two, the one in Australia and the one in Denmark. I think the more that we can drive improved margins through that business. So, we’ve seen that business before at its peak being in the high teens in terms of margins. There’s no reason we can’t get back to that point in a healthy environment, especially with some of the actions we’re taking out to simplify our operating footprint.

David Marsh: I appreciate that. It’s helpful. Your debt did tick up a little bit year-over-year. Would you talk about priority uses of cash flow and how managing your leverage factors into that please?

Leroy Ball: Yes. So actually, I think the first quarter, I was pleased with where we ended up in the first quarter, considering we had the pension termination and put $14 million in to do that. Taking that out, we actually had better cash flow, operating cash flow — lower and negative operating cash flow with that out of the picture. We have that behind us. So even though our contributions have been lower in the past few years, we now have that and any potential volatility from that behind us. First quarter is always a working capital draw. So absolutely that had an impact as well. We are still expecting a pretty strong cash flow year and the near-term focus is in two areas. As we continue to remain undervalued, certainly, we will allocate cash to repurchase shares.

So, the reason why we enacted the $100 million share repurchase program last quarter. And of course, we will put the remainder towards delevering the balance sheet. So, those are the two primary focuses in the near-term as it relates to cash.

David Marsh: Yes, that’s fair. And then just, as we have this little bit of economic uncertainty here, are you seeing any disruption that might lead to some attractive M&A opportunities for you?

Leroy Ball: I mean, potentially, because as you point out, yes, but it’s times in this sort of disruption where those sorts of opportunities do tend to surface. We always remain active in our conversations and looking at opportunities. And it takes two parties obviously and a meeting of the minds in terms of what fair value is. So that always tends to be the toughest point. But we continue to remain active in our discussions and maybe this current environment will shake some things out, but we’ll just have to wait and see.

David Marsh: Okay. Is there — I mean, would you be most interested in looking at potential targets in the RUPS business or all businesses really?

Leroy Ball: Yes. Definitely not. I’d say, certainly our focus is we have been talking about now for several quarters is on growing our utility and industrial products business. So, if there is ways to do that faster with acquisitions that make sense, we’ll look to do that. The acquisition of Brown Wood Preserving was an important acquisition for us here a year ago and it’s opened up opportunities for us to expand our product portfolio, expand our geographic reach and we’re going to see significant returns from that, as the overall market improves. If we have other sorts of opportunities that will help us to get into markets faster and those sorts of things, we would absolutely entertain that. I don’t think we — I wouldn’t say we have a broad M&A strategy as it relates to across the business segments. But again, we will always remain open to opportunities. And so, there is no absolute no’s in any particular area. It will come down to what makes sense at what price.

Operator: And the last question today comes from Jamie Wilen with Wilen Management. Please go ahead.

Jamie Wilen: Yes, I think it’s truly amazing that you’re able to take $4 million year-over-year out of SG&A. I think it’s fantastic to have that reduction. Given the new cost structure and a strong outlook looking forward and the stock trading at 5x to 6x, would you expect an EBITDA this year? I know that stock repurchase is part of the program, but why would you not at this point in time accelerate what you’re doing and buy back stock in greater quantities today, while you do have an unusually depressed share price?

Leroy Ball: We don’t speak specifically about any intentions that we have in any particular quarter. We did repurchase 15 million shares in our open window period in the first quarter from the new plan. We do have limitations within our credit agreements in terms of what we’re able to do on an annual basis. So, we try to manage that. But I share your interest in taking advantage of the opportunity, when we’re in the position that we’re in. And I think we stated that, actually when we announced the share repurchase plan that, as long as we view our future or certainly at least our near-term operating performance is being improved over prior periods and we remain at historic low trading multiples that we are going to use that lever. And so, we didn’t enact — we didn’t approve the share repurchase program to have it sit on the shelf. And so, we will continue to monitor the situation and I think be consistent in our approach to repurchasing shares as the year goes on.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to CEO, Leroy Ball, for any closing remarks.

Leroy Ball: Yes. I would just like to thank everybody for your continued interest in Koppers, and we will continue working on improving the results of the overall business. We really do believe we have a bright future ahead of us, not just this year, but beyond that in terms of free cash flow performance, operating performance, and we’re looking forward to executing. So, look forward to talking to everybody again in August. Thank you.

Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.