Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers Holdings Inc.'s fourth quarter and full year 2025 earnings conference call and webcast. At this time, all participants are in listen-only mode. If you need assistance, please alert a conference specialist by pressing star followed by zero. Following the presentation, instructions will be given for the question and answer session. Please note that this event is being recorded. I will now turn the call over to Quynh McGuire. Please go ahead.

Thanks. Good morning. I am Quynh McGuire, Vice President of Investor Relations. Welcome to our fourth quarter and full year 2025 earnings conference call. We issued our press release earlier today. You can access it via our website at www.koppers.com. As indicated in our announcement, we have 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. A recording of this call will be available on our website for replay through May 26, 2026. 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 Holdings Inc., and Brad Pearce, Interim Chief Financial Officer and Chief Accounting Officer. At this time, I will turn the discussion over to Leroy.

Thank you, Quynh. Good morning, everyone. I am pleased to join you this morning to provide more insight on Koppers Holdings Inc.'s performance in 2025 and how we see 2026 developing based upon current information. Let me start on page 4, which lists highlights for last year overall, which include adjusted EBITDA of $256.7 million and a 13.7% adjusted EBITDA margin, the second highest year on record for both when you exclude KJCC, and on an as-reported basis, 13.7% adjusted EBITDA margin actually represents a new high watermark for Koppers Holdings Inc. We reached operating profit of $167.8 million, also the second highest year on record, $4.07 in adjusted earnings per share, marking the sixth consecutive year above $4 after never reaching that mark previously, and operating cash flow of $122.5 million for the seventh straight year of more than $100 million in that category. In addition, we have tapered back our capital expenditures to a normalized $55 million, enabling a heavier capital deployment allocation to shareholders, as demonstrated by $38.2 million in share repurchases and $6.4 million in dividends. $21 million went towards inorganic growth, with a small acquisition of a utility pole procurement business in one of our targeted growth areas, UIP, and we still had $12 million remaining to pay down debt. In early 2025, we launched our transformation process named Catalyst, which delivered $46 million in benefits during the year. Catalyst helped to deliver EBITDA within 2% of prior year, while our sales declined by 10%. The conscious decisions to exit our phthalic anhydride business and sell our railroad structures business accounted for 4% of the overall sales decline, with the other 6% resulting from softer market conditions and some net loss of market share. Other benefits derived from Catalyst in 2025 include reducing our adjusted…

Thanks, Leroy. Earlier today, we issued a press release detailing our fourth quarter and full year 2025 results. My remarks today are based on that information. As seen on slide 8, we reported consolidated fourth quarter sales of $433 million, down $44 million or 9% from the prior year. Relative to the prior year quarter, RUPS sales decreased by $7 million or 3%. PC sales were down $20 million or 14%, and CMMC sales decreased by $17 million or 15%. As shown on slide 9, full year sales totaled $1.9 billion, a 10% drop from prior year sales of $2.1 billion. RUPS continued to be our largest segment, with sales of $927 million, followed by PC with sales of $544 million, and CMMC with sales of $409 million. Each segment was lower as compared to the prior year, with a 2% decrease at RUPS, followed by 17% and 18% decreases for PC and CM&C, respectively. On slide 10, adjusted EBITDA for the fourth quarter was $53 million, which represents a 12.3% EBITDA margin on sales. By segment, PC delivered adjusted EBITDA of $28 million, followed by RUPS of $22 million and CM&C of $4 million. PC led with adjusted EBITDA margin of 22%. RUPS maintained adjusted EBITDA margin above 10%, while CM&C reported a 4% margin. Full year adjusted EBITDA results, as seen on slide 11, were $257 million, reflecting a 13.7% margin. RUPS adjusted EBITDA was $108 million, returning a 12% margin, while PC delivered adjusted EBITDA of $103 million, a 19% margin. CMMC adjusted EBITDA totaled $46 million, resulting in an 11% margin. Focusing on the RUPS business, slide 12 shows fourth quarter sales of $209 million, compared with $216 million in the prior year quarter. Approximately $5 million of the decrease in sales was due to lower…

Thanks, Brad. Before I dive into each of the businesses, I would like to provide our perspective on the recent Supreme Court ruling, which vacated tariffs under IEEPA. Prior to the ruling, we were estimating a tariff impact on our business of around $5 million-$6 million in 2026. Removing the IEEPA tariff and replacing it with a worldwide tariff of 10% essentially reshuffles the deck and leaves us in a slightly better position. Of course, these are only in place for 150 days, the administration has promised to use this time to put more permanent tariffs in place, it remains to be seen how it will impact our business. Perhaps a greater concern are potential tariffs under Section 232, which has an ongoing investigation into refined copper imports. We do not import copper for our products, as we use domestically sourced scrap copper, for unhedged copper requirements, any tariff on refined copper will increase the market price of this key raw material for our PC business. The uncertainty of tariffs continues. The numbers seem to change from day to day. While I am providing our most current view, that can obviously change quickly. For now, I am going to review the market outlook for each of our businesses, starting with Performance Chemicals on page 20. Let me lead with the good news. We are projecting a top-line increase of approximately 11% in 2026, driven entirely by market share expansion in both our residential and industrial product lines. A large component of our Catalyst initiatives for PC centered around converting commercial opportunities that we knew were in play coming into 2026 as new business. We realized success on a number of accounts, refocusing our attention on serving the customer, while also demonstrating the value of our R&D and tech service capabilities…

We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Gary Prestopino with Barrington Research. Please go ahead.

Good morning, everyone.

Hi, Gary.

Hey, Leroy. I want to refer to slide 20 here with the PC business. Last year, you said there was a competitor that came in and took share, lowered prices, now what you are saying is that for 2026, you are looking at market share capture in both residential and industrial markets. You have raised prices. Could you maybe square what is actually going on and take a deeper dive into that market, how you are able to get share? Prior share was lost because of, you know, price competition.

Yes, so Gary, we did take a market share hit in 2025. It was the, you know, the most significant portion of our PC sales decline.

Mm-hmm.

You know, there was some business that was available to potentially recapture in heading into 2026, and we were able to, you know, convert on a portion of that. There is, I would say the bulk of the business that we are adding in 2026 is unrelated to that market share loss. It is current customers where we, you know, had already had a pretty good footprint with them, but through some consolidation that they had done, that had business with, again, one of our major competitors, they had elected to move some of that business over to our new technology in those areas. That is a good piece of it. You know, the industrial business we have made inroads in over the past number of years, so there is kind of nothing new from that standpoint. I will say, and I do want to make sure I clarify, like, we are not growing market share and improving price in 2026. That is not happening. You know, it is a competitive market out there. It continues to be. You know, I expect that we will see some price compression in 2026, but we will see market expansion in 2026 on the PC side.

Okay. You may have done this. There is a lot of information here we have got to go over, obviously. Did you kind of segment what you anticipate the Catalyst benefit to be in 2026?

Yes, I mentioned in my prepared remarks, I think, We are targeting somewhere between $20 million and $40 million of Catalyst benefits in 2026.

Okay, thank you.

Yes.

I am sorry, I missed that.

No, no worries.

I am trying to keep up with everything.

Yep.

Lastly, and it just a kind of a philosophical question here. You, in the slide 24, where you are talking about your objectives of getting PC and RUPS up to 85% of sales.

Yep.

I would assume that you would expect at least the percentage of EBITDA contributed to be at that 85% or better from both of these divisions?

That would be correct.

Okay. Can I just... The rationale for even keeping the CMMC business, now I understand that you have got, you know, some intercompany sales there with the creosote and all that, but is that really the rationale for keeping that as it becomes so small? Could you possibly sell it and get, you know, contracts locked in, that would be advantageous to you for your supplier creosote?

Yes. Good question, right? Complicated answer. Long complicated answer.

Oh, no.

No, no. I mean, you know, because it is a, you know, it is a significant, it is a significant component of our supply chain. There is no question there is that.

Yeah

that component of it, right?

Mm-hmm.

Which, you know, can, I think, you know, you can probably work through that potential complication. You will end up having to deal with it whenever, you know, whatever contract you put in place ultimately ends up coming to an end, which it will at some point in time.

Right.

In terms of in initially, yes, that can probably be overcome. You know, I would say, you know, you have got issues around a descaling of the entire organization as a result of that, and stranded costs that would come. You know, the environmental footprint around that would probably be somewhat restrictive in terms of what you might be able to get in terms of an attraction for an individual wanting to come into the market.

Mm-hmm.

You know, consolidation opportunities are really limited, because there is only a few folks that are really doing it, in our geographies that we serve. You know, there is just a whole host of constraints around that.

Right.

Look, I mean, I have continued to say, and, you know, it is not just, you know, it is not just bluster. I mean, we continue to look at our business portfolio actively. If you have looked over, you know, the 11 years that I have been doing this job, our portfolio has shifted dramatically in terms of businesses that we have gotten into, businesses we have gotten out of, operations that have been rationalized, those sorts of things. We are constantly looking at that. Where we see opportunities to improve by, you know, by peeling back in some of our lower value areas, we will look to do that. You know, nothing is off the table, and that is something that we will continue to look at as we do regularly.

Okay. Thank you so much.

No, you are welcome.

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

Hey, thank you guys for taking the questions. Appreciate it.

Yep.

Just wanted to start, if I could, with a couple of kind of housekeeping type items. First, noticed that the DNA went up about $2 million sequentially versus Q3. Was hoping maybe you guys could give a little bit of clarification around that and kind of what the execution would be going forward. I did not know if maybe that was because of the sale of the business.

I, you know, I, I do not have, you know, those details handy. I will say that, you know, you know, we are, again, as part of what we are doing relative to, you know, keeping costs in check, there is a lot of work and initiatives that continue to be in process around, SG&A and operating costs in general. Any particular.

I am sorry, Leroy. I am sorry, Leroy. If I said SG&A, I meant DNA.

DNA. Okay, thank you.

DNA bumped up a couple million dollars sequentially. I was getting a little confused there.

Oh, okay. Okay, no problem. I will, you know, I will turn that over to Brad, maybe, and ask him to comment on the DNA.

Yeah, you know, I think the DNA obviously is going to change as we close, you know, projects and begin to depreciate them. I think it is really just probably a combination of some timing, right? We came off a couple of years of some higher capital spending, and that is now, you know, moved into depreciation phase. What can also be coming through depreciation might be some impacts for, you know, asset retirement obligations. As you know, we closed our phthalic operation in 2025, and some of those charges might be coming through for that.

One thing I will say, David, is, you know, I referenced, we are expecting DNA to drop by a couple million, I think, in 2026, and would expect some further moderation as we, you know, basically have a certainly the next several-year run rate at a more normalized CapEx number that is below, you know, that current DNA run rate. Would expect that to improve as the years, at least over the next several years.

Got it. You talked about Catalyst perhaps driving as much as $20 million-$40 million in savings in 2026. I mean, how would that break out in terms of a split between, like, COGS and SG&A? Would it have a, you know, kind of a little, maybe a little heavier impact on the COGS side, or is it kind of equally split, or how does that play out? Because I noticed the gross margin in the quarter was really nice. It was up really nicely.

Yeah. It will be heavier on the COGS side. I mean, we got a lot of the low-hanging fruit on SG&A. There is still more we think we can do there. But it will be heavier on the COGS side. COGS and commercial benefits as well. You know, there is pieces to it, so we tend to default and sort of think of Catalyst as it relates to the cost side, but there is a, you know, a heavy component about this that is about putting ourselves in a position to, you know, win more profitable business. When I mentioned PC as an example, 2026, most of our Catalyst initiatives were centered around commercial, it was about being able to win additional business, take some additional market share, and we have achieved that, right. That is going to come through in the form of some of the market share penetration and increased revenues, as well as the profits that will come from that.

Got it. Got it. Very helpful. Your interest expense in the fourth quarter was down a good bit sequentially on a percentage basis. You know, the overall debt was not really down a lot. Like, is there what, can you talk about what is at play there? I noticed, you know, it did look like you guys put some swaps back on in terms of the derivatives contracts coming back on the balance sheet. Maybe just give us a little bit of color around that.

Just, sorry, interest expense? Yeah. Yeah.

Yeah, it was down sequentially.

Yeah, well, yeah, I mean, we are obviously getting some benefit on lower rates coming through, you know, as well as, you know, again, just lower overall borrowing. You know, that did have an impact. You know, our swap profile, where we have converted, you know, some of our variable into fixed, that has not changed, you know, over the past year.

Okay. All right. Well, hey, thanks very much for taking the questions, guys.

Yep, thank you.

The last question comes from Michael Mathison with Sidoti & Company. Please go ahead.

Good morning, you guys, and congratulations on all the margin improvement.

Thank you, Michael.

In particular, the adjusted EBITDA margin in PC was up 370 basis points sequentially, so quite an achievement. Can you comment on what drove the upswing, and is that the new normal? Is that margin level sustainable?

You know, there is things that move around, if you will, right? It is not always, you know, clean quarters, I would say. We did have a benefit of an asset sale that I think helped their results for the quarter and probably added a little bit of that. That is, you know, something that is not repeatable. Overall, I would say the margin profile, I was really pleased with what they were able to do through a challenging, you know, sales year. I think with what we are doing moving forward, we certainly expect that we are going to be able to generate margins that are in that range on a go-forward basis. I will not necessarily commit to, again, getting back up above the 20% profile at this point. There is just still too many moving parts. You know, as Brad talked about, you know, relative to, you know, copper and things like that, you know, those sorts of things, you know, we try to insulate ourselves from, but there is always some level of exposure. We have, sometimes we are more successful at getting greater discounts than others, there is a whole bunch of factors that come into play there. I guess the main point I would say is, we were pleased with the overall margin performance, not just in Q4, but for the full year for PC, and expect that we will be able to continue to generate in that range, and obviously targeting to do a little bit better than that. You know, we think we have done a pretty good job of putting that business in a position to still consistently generate on the high end of the margin profile spectrum.

Thanks. Turning to the CMMC business, you have spoken previously about potentially reducing the footprint at Stickney to a single column. Are you still planning to go ahead with that? What would that mean for CMMC margins? Is there any revenue impact from lost business?

Yes, it is a good question. There is a high likelihood that we will be heading in that direction because we think that there is a whole host of benefits that come about as a result of that. In terms of what impact that would have on the revenues and profitability, nothing, as it relates to 2026, because of raw material that we already have in inventory that we need to run through and things of that nature. That would not be something that would be realized until, you know, we kind of really move out into 2027, the 2027 timeframe. The fact that we have less raw material to work with obviously means that, you know, we will be generating less sales as a result of that. If we move down to a single column, we think we can certainly cut costs as part of that, and, as long as pricing remains stable, improve our overall margin profile for that business. That is, it is part of the Catalyst initiatives that, you know, we are continuing to do some work around. You know, as I have more information on that, we will talk about that and potentially up in upcoming quarters.

Great, thanks. Looking at your utility pole business, I did not see a press release about the Douglas fir acquisition. Could you just give us a little.

Yeah.

more color about

Yeah.

where they are located?

Yeah.

Will that help with your effort to, for geographic expansion?

Yeah. Yeah. Yeah, small business. It is, it is out in Oregon, and it just, it really secures up a, you know, Douglas fir supply chain for us that we were, you know, beginning to access out over the last, 12 to 18 months. You know, there was a level of risk that, you know, that could potentially put us in a spot where, you know, we, you know, we would be, you know, dependent upon a source that, could move away from us at any point in time. We saw it as an opportunity to lock that in, secure that source of supply and assets, and capabilities, and bring that into our portfolio, which actually, you know, we think helps improve our opportunities in some of our traditional markets, where we might have been shut out of bids that would require some Doug Fir component that we, you know, could not offer, or we would need to try and, you know, work with others to be able to provide that. Right now, it is more geared towards helping us in markets that we are already in and trying to grow. You know, it could be a, you know, a, an initial jumping off point, at some point in the future if we want to think more aggressively about expanding out further west.

Well, great. Thank you for taking my questions. Congratulations again.

Thank you, Michael. Yep.

We have an additional question from Liam Burke with B. Riley Securities. Please go ahead.

Thank you. Good morning, Leroy. Good morning, Brad.

Good morning.

Leroy, on PC, we talked about the puts and takes on residential, but are you making significant enough headway on the commercial side of the business, where it is actually moving the needle and contributing to this anticipated revenue growth?

I mean, we believe so. I mean, I think, if you again go back to our 2026 projections, I think that, you know, we are happy with the commercial wins that the team generated in the back half of 2025, that will carry into this year. You know, it is all good business, and it certainly helps us on the throughput side as well in our plants. You know, we are a manufacturer, right? I mean, the more we can put through our plants, the better we are going to do. You know, you are always balancing those things out against any potential price trade-off that you have. Throughput is king in our world, and so, it is important to be able to have that volume. The team again, our team came back strong in 2025 with a sort of a really a refocused effort on ensuring that we were making sure that our customer base understood that we value what they do for us, and we want to do everything we can to not just meet their needs, but exceed their needs and expectations. I think we were able to regain some confidence in some areas, and we already had confidence in others that I think, ultimately resulted in additional business coming our way, again, as certain customers consolidated their own production activities. Real happy and pleased with the efforts our PC team did in 2025, coming back from a tough year.

Great. In the past, you have talked about adding to the utility pole business by tucking in a pretty fragmented area.

Yep.

Do you see opportunities there, or has pricing got out of hand with the bigger demand or increasing demand for infrastructure build?

I, you know, I think that, you know, we are always open to those opportunities and always looking and, but wanting to make sure that again, we are disciplined in that process and how we go about it. You know, there are opportunities there, Liam. You know, it is tough to say if and when any of them could shake loose, but in the meantime, we think we, you know, we still have capacity to fill, and that opens up enough opportunities for us to continue to grow our business with the existing capacity that we have on hand. That is, you know, 2025, there was a tremendous amount of effort in terms of sort of upping our, you know, sales skills, if you will, and technology, right? We have added technology, we have added new sales leadership, we have added more boots on the ground. You know, we have gone hard in areas that we feel were underrepresented and provided opportunities for us. Again, also pleased with the efforts of our leadership and team on the UIP side, and I think we will continue to see, you know, those benefits come through in, you know, 2026 as well.

Great. Thank you, Leroy.

Yeah. Thank you, Liam. Yep.

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

Thank you. I just want to thank everybody for participating on today's call and for your continued interest in Koppers Holdings Inc. Look forward to connecting with you again next quarter. Take care.

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