Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers' Third Quarter 2025 Earnings Conference Call and Webcast. Please note that this event is being recorded. I will now turn the call over to Quynh McGuire. Please go ahead.

Thanks, and good morning. I'm Quynh McGuire, Vice President of Investor Relations. Welcome to our third quarter 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, and a recording of this call will be available on our website for replay through February 7, 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 those 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 will turn the discussion over to Leroy.

Thank you, Quynh. Good morning, everyone. I'm pleased to join you this morning to provide more insight on Koppers' third quarter operating performance. Our results largely fell within our expectations despite market forces continuing to exert headwinds on top line performance. Sales for the quarter were down by 12% compared to Q3 2024, continuing the trend we've seen throughout 2025. Our team's diligent control of spending once again offset much of the impact of lower sales volumes, and we were able to deliver adjusted EBITDA for the quarter of $70.9 million compared to last year's Q3 adjusted EBITDA of $77.4 million. Adjusted EPS for Q3 2025 was $1.21 per share compared to $1.37 last year as the impact of our lower top line more than offset our cost containment for the quarter. At the same time, benefits from reducing our interest costs through lower average borrowings and lower average interest rates were essentially offset by a higher effective tax rate in Q3, driven by a geographic earnings mix more heavily tilted to outside the United States. Moving to Page 4. I'd like to provide a little more high-level color by summarizing just a few key takeaways from our third quarter. As mentioned, we focused intently on controlling costs to weather the cyclical softness we're experiencing currently. Through 3 quarters, our SG&A was down 14% on an adjusted basis compared to the prior year, which equates to over $19 million in savings on top of the millions of dollars in operating savings that we are also generating. Through Catalyst, we're developing a blueprint to make those savings permanent by further simplifying our business, upgrading our technology and advancing the skill sets of our team members. Because of what we've been able to accomplish on the cost side of the equation for the second straight quarter, we were able to post adjusted EBITDA margins not seen in a number of years. As we capture more profit from every dollar of sales, we're also improving our rate of converting those profits to free cash flow and deploying that cash to reduce debt and return capital to shareholders through our dividend and a steady stream of share repurchases. During Q3, we continued to simplify our portfolio by completing the sale of our Railroad Structures business, which came as part of the Performance Chemicals transaction in 2014. The Structures business had been a steady contributor for a number of years but struggled leading up to and through the pandemic. It had begun to regain its footing recently and through the day of the sale was having one of its better years in a long time, but still was margin dilutive for the past 9 years. Other than selling to the same customers as our crosstie business, it did not have any strong synergistic aspects. Once again, we wish that team well and thank them for their contributions over the past 11 years. Further simplification of our business occurred in April 2025 through the closure of our phthalic anhydride plant in our CM&C segment. Next up, we're also finalizing our assessment of shifting our North American CM&C business to a single column operation. In doing so, we will further lessen our exposure to the volatility of the CM&C business, while also reducing the future capital requirements from running a 2-column operation. Later in the presentation, I'll speak further to Catalyst and what is going on in our various end markets. For now, I'd like to provide a quick snapshot of how we're progressing on the Zero Harm front. On Page 5, you can see that we've made significant progress on safety thus far this year with leading activities up by 29%. This serves as a strong contributor to our lagging metrics of recordable injury rate and serious safety incidents showing declines of 23% and 72%, respectively. During the quarter, we had 23 of our 41 sites work accident-free with our European businesses and our Australasian Performance Chemicals standing out with 0 recordables thus far in 2025. We can never let up on safety because exposure is all around us and one mental lapse or shortcut could lead to catastrophic consequences. I continue to be heartened by our global team being on pace for another record-setting safety year. A great big thanks to all of our team members for your efforts thus far. Keep up the great work. Finally, turning to Page 6. I'd like to welcome our newest Board member, Laura Posadas, who was elected to our Board 2 days ago. Laura is the current CEO of Canlak Coatings, Inc., a leading formulator and manufacturer of high-quality wood coating systems. Laura's experience in innovation and strategy, in addition to our track record of leading high-performance teams, is a welcome addition to our Board's broad range of experience and skill sets. Laura represents the third Board member added over the past 3 years as we continue an orderly succession process for directors reaching the Board's mandatory retirement age. We look forward to tapping into Laura's experience on a number of matters relevant to our business, and I'm enthusiastic to have her as a member of our Board. I'll now turn things over to Jimmi Sue to speak in more detail to our quarterly financial performance.

Thanks, Leroy. Earlier today, we issued a press release detailing our third quarter 2025 results. My remarks today are based on that information. As seen on Slide 8, we reported consolidated third quarter sales of $485 million, down $69 million or 12% from the prior year. By segment, RUPS sales decreased by $15 million or 6%. PC sales were down $32 million or 18%, and CM&C sales decreased by $21 million or 16% compared with the prior year quarter. On Slide 9, adjusted EBITDA for the third quarter was $71 million with a 14.6% margin. By segment, RUPS generated adjusted EBITDA of $29 million with a 12.5% margin. PC delivered adjusted EBITDA of $26 million with an 18.1% margin, while CM&C reported adjusted EBITDA of $16 million with a 14.4% margin. On Slide 10, our RUPS business generated third quarter sales of $233 million compared with $248 million in the prior year. The decrease in sales was driven primarily by $15.8 million of lower volumes of Class I crossties and lower activity in the maintenance-of-way business, including the sale of our railroad bridge services business. These were partly offset by higher commercial crosstie volumes, a 6.5% volume increase in domestic utility poles and $1.9 million of price increases related primarily to crossties. The untreated crosstie market remained stable. Year-to-year, crosstie procurement was down 18%, while crosstie treatment was down 5%. RUPS delivered adjusted EBITDA of $29 million compared with $25 million in the prior year. Profitability improved despite lower sales due primarily to $7.7 million in lower SG&A and operating expenses, along with net sales price increases, partly offset by the lower sales volumes. On Slide 11, our Performance Chemicals business reported third quarter sales of $144 million compared to $177 million in the prior year. The decline in sales was primarily the result of volumes decreasing by 19%, mostly as a result of market share shifts in the United States, but also combined with a slight net decrease in sales volume for other customers. Adjusted EBITDA for PC came in at $26 million compared to $40 million in the prior year. Profitability was impacted by the lower sales volumes as well as $7.3 million in higher raw material and operating costs, partly offset by $1.6 million of lower logistics costs and SG&A expenses, as well as higher royalty income. Slide 12 shows third quarter CM&C sales of $108 million compared to $130 million in the prior year. This decrease was primarily driven by $19.6 million of lower volumes for phthalic anhydride as we discontinued that product in April 2025. Adjusted EBITDA for CM&C in the third quarter was $16 million compared with $13 million in the prior year. This increase in profitability was due to lower operating costs, increasing production of phthalic anhydride and $2.9 million of lower raw material costs, partly offset by lower sales prices. Sequentially, the average pricing of major products decreased by 2%, and average coal tar costs were higher by 3% compared to the second quarter. Compared to the prior year quarter, the average pricing of major products was lower by 8%, while average coal tar costs increased by 7%. Now moving to capital allocation. As shown on Slide 14, we continue to pursue a balanced approach to capital allocation. Net of cash received from insurance proceeds and asset sales, we invested $33.7 million into our business through September 30th. We are now expecting 2025 CapEx to be approximately $52 million to $55 million, a significant reduction from $74 million last year, reflecting our focus on increasing free cash flow. Year-to-date, we've repurchased $33.3 million of stock through share buybacks, including tax withholdings. We have approximately $71.5 million remaining on our $100 million repurchase authorization. We also returned capital to shareholders through our quarterly dividend of $0.08 per share. At September 30th, we had $885 million of net debt comparable to where we ended 2024 and approximately $45 million lower than June 30th, reflecting our commitment to putting a significant portion of our free cash flow toward debt reduction this year, as well as progress toward our continued long-term target of 2 to 3x net leverage ratio. We ended the quarter with a net leverage ratio of 3.4x and $379 million in available liquidity. On Slide 15, total capital expenditures for the third quarter were $38.4 million gross or $33.7 million net. We spent $31 million on maintenance, $3.2 million on Zero Harm and $4.2 million on growth and productivity projects. By business segment, we spent $13.6 million in RUP, $9.6 million in PC, $13.8 million in CM&C and $1.4 million in corporate projects. And finally, on Slide 17, our Board of Directors declared a quarterly cash dividend of $0.08 per share of Koppers common stock on November 6th. This dividend will be paid on December 16th to shareholders of record as of the close of trading on November 28th. At this quarterly dividend rate, the annual dividend is $0.32 per share for 2025, a 14% increase over the 2024 dividend. And with that, I'll turn it back over to Leroy.

Thanks, Jimmi Sue. Now I'll do a quick review of each of the businesses, starting with our Performance Chemicals or PC business on Page 19. The third quarter saw a continuation of softer demand in North America, our largest market, as residential units pulled back even further, while industrial demand turned positive. And while both categories are down by about 3% year-to-date through September, excluding our known market share loss, residential was down by about 5% for the quarter compared to last year, while industrial was 2.5 points higher, consistent with the stronger demand we experienced in our own industrial business. External markers such as the leading indicator of remodeling activity, existing home sales and mortgage rates are all starting to move in a more positive direction. However, customer sentiment remains muted, with most looking forward to putting 2025 behind them and starting fresh in 2026. Outside of tariff impacts, we managed to keep costs in check for the most part, which enabled us to deliver a solid 18% adjusted EBITDA margin on a sales line that was 18% lower than 2024's third quarter. On the tariff front, we did absorb a couple of million dollars of direct impact, as well as a few million dollars of impact from hedged copper rates disconnecting from the U.S. futures market. With flat pricing for the quarter and absorbing the direct and indirect impacts of tariffs, our ability to still generate margins of 18% demonstrates the success we've had in reducing our other controllable costs and the overall resiliency of the business. Moving on to our Utility and Industrial Products business shown on Page 20. We're seeing volumes continue to move in the right direction, as each successive quarter this year has seen a greater year-over-year improvement. Q3 saw volumes up over prior year by 6% as the optimism we were hearing earlier in the year is beginning to manifest itself into sales. Unfortunately, the impact of those higher volumes was offset by the damage from a fire at one of our facilities that impacted results by over $1 million. Now that we're more than 1 year out from the Brown acquisition, we're getting an even greater feel for the critical role played in our network by the Kennedy, Alabama facility that came with that acquisition. We've allocated volume to Kennedy where it logistically makes sense and are using it as a primary site for treating the Douglas fir species that we began adding to our product portfolio at the beginning of this year. Getting into that market is opening doors for us that were previously closed in certain accounts where customers didn't want to split their Southern Yellow Pine and Douglas fir business. Now we're early in the game, but adding that species, as well as sales talent and upgrading our CRM technology is positioning Koppers to be a stronger competitive force in our existing markets, and I believe we are starting to benefit from those investments. We continue to feel good about the longer-term demand outlook for the utility pole market and believe that we can participate meaningfully in meeting its pole infrastructure needs. Our Railroad Products and Services business is summarized on Page 21. The third quarter saw another solid quarter of performance from our RPS business despite treated tie sales units being down by 7% compared to the prior year. Class I units were down almost across the board, while commercial units saw a 9% increase. Aggressive cost actions and a slight improvement from pricing helped to offset the volume decline and drove a year-over-year 18% improvement in profitability for the RUPS segment. If we adjust for the sale of the KRS business, profitability was actually up over 20% compared to Q3 prior year, with an even higher increase when looking at just RPS. Again, excluding the sale of KRS, RPS has reduced its employee base by 147 people or 19%. Within the crossties business, that number is 14%, and that's on a volume base only 2% lower than last year through September. While we expect some comparative volume improvement in Q4, our updated projection of flat year-over-year sales volumes is another drop from previously communicated customer expectations. I spoke a few times over the past 2 years of customers providing forecasts that have subsequently been pulled back, and that trend has not abated. The railroad companies are feeling more pressure than ever to reduce costs everywhere they can, including tie installations. It's difficult to forecast how long the current trend can sustainably continue, but we expect to adjust our forecast down from whatever we are told as we head into 2026, now that we've dealt with 2 straight years of actual purchases coming in lower than customer forecasts. The bigger message I hope everyone takes away is that we have adjusted our cost structure to fit a pullback in the market to the extent it turns out to not be temporary. That also puts plant consolidation back on the table, if necessary. But as always, we would view that as a last resort depending upon our long-term outlook with each customer. Next on to the CMC business summarized on Page 22. Despite minimal positive movement on carbon product end markets, we still delivered a solid quarter of performance, finishing $2.9 million better than Q3 2024. Excluding the exit of our phthalic anhydride business, volumes were slightly positive compared to prior year, while average pricing was down by about 4%, consistent with what it is down year-to-date. There continues to be a lot influx in our CMC markets. On the plus side, in early August, Century Aluminum announced that the company will be restarting idle capacity, which should result in a positive impact on our pitch sales in North America beginning in 2026. On the downside, more coal tar will be coming out of the market, as one of our North American suppliers notified us that they've successfully converted to electric arc production sooner than anticipated and that we would be receiving our last shipments of raw material from this supplier by the end of the year. Now that action further justifies our intent to simplify our U.S. distillation capacity to a single column from the 2-column operation that we run today. Doing so, we will further shrink our CMC footprint, reducing our cost structure and our required future capital outlay. Unfortunately, it is yet another step back that will put the only major U.S. producer of critical products for the U.S. aluminum and railroad markets in further jeopardy. We're exploring various scenarios as to how to improve the supply situation, which could be simply resolved by more domestic coal tar production staying in the U.S. to support the long-term health of the industry. As shown on Slide 23, I'd like to move on to something more positive, which is the work we're doing in Catalyst and its expected impact. Now let's start with the why. Is it why we feel we need to transform? The short answer is that in spite of our many accomplishments and the progress we've made, we still have solid potential to perform at an even higher level. As an organization, we have no shortage of good ideas. Capturing, quantifying, prioritizing, planning, resourcing, implementing and then tracking these ideas through to completion is a different story. Frankly, it's where all but the very best organizations fall down. You need a well-developed process, the right technology and a workforce that's more financially astute to improve your chances of reaching success in a reasonable time frame. And that's what we're building with Catalyst. So when I look at our full potential, I see an organization that should be able to deliver 15-plus percent margins on a consistent basis, an organization that should be able to drive earnings improvement of greater than 10% on average over the next 3 years, an organization that should be able to reduce leverage to the low end of our stated range below 2.5x, driven by significantly greater free cash flow generation, what we believe to be over $300 million over the next 3 years. Part of the path to get there is a continued evolution of our portfolio that would make PC and RUPS a larger share of our top and bottom line as we focus on our more structurally sound businesses that have opportunity for growth and have proven to consistently generate higher margins with lower capital requirements. What does that mean in tangible terms in terms of expected benefits from Catalyst? It means that we expect that Catalyst will deliver approximately $80 million of ongoing benefits by the time we exit 2028. In 2025, we're estimating our capture rate at over $40 million based on our expectation to finish this year at a similar EBITDA level as prior year, in spite of a 10% lower sales line. That means we believe we can deliver another $40 million of benefits in the next 3 years coming from all areas of the organization. Less certain are the headwinds we may experience or any potential bolstering tailwinds, which we certainly haven't had for the past 18 months. There are still a lot of parts moving around as we try to nail down our expectations for next year. And as such, I'm going to hold off on speaking to how much of that additional $40 million benefit we expect to see in 2026 and how much of that could be potentially delivered to the bottom line until we have a more complete picture regarding all other aspects of our business. I'll speak to more detail about all this in February 2026 when we announce our year-end earnings. Moving on to our outlook for 2025. As shown on Slide 25, we're now revising our consolidated sales guidance to $1.9 billion in 2025 compared with $2.1 billion in 2024. This reflects our sales expectation at the low end of our previously communicated range due to the soft demand environment across all markets, other than utility. On Slide 26, we're revising our adjusted EBITDA forecast to $255 million to $260 million compared with $262 million in 2024. Both CM&C and PC are expected to be solidly within our previous range, while RUPS is being adjusted to slightly below the low point of its previous range. This is to account for lower than previously forecast crosstie demand and higher operating costs in our UIP business. Slide 27 shows our 2025 adjusted earnings per share bridge, reflecting a range of $4 to $4.15 per share, with interest savings and benefits from a lower share count being offset by higher depreciation and amortization, a higher tax rate and lower operating contribution. That said, our range still puts us on par with 2024 EPS, even with a 10% lower top line, which is not a bad outcome, all things considered. On Slide 28, we're now projecting capital spending for the year to fall between $52 million and $55 million compared with $74 million in 2024. While 2025 has been more challenging than we first thought, I'm encouraged by our team's resilience to step up to the challenge and fight their way through it. I find it quite remarkable that we could be looking at profitability in line with the prior year in spite of the softer economic backdrop and tariff disruption we've endured throughout this year. We set the organization up for significant improvement once economic conditions improve. We don't consider our work done, however, as we're ingraining the Catalyst mindset into the way we work every day and continuing to mine for opportunities beyond what is already in the current implementation phase. Similar to what we're hearing from many of our customers, I'm also looking forward to putting 2025 behind us and focusing on what we expect to be a brighter 2026 and beyond. Now I'd like to open it up to questions.

Our first question today is from Gary Prestopino with Barrington Research.

Question here, Leroy, is I'm looking at Slide 23. You've made some good reductions in expenses for CMC and some for RUPS, but PC remains the lowest in terms of expense capture. However, that is the only division that reported a decline in adjusted EBITDA and EBITDA margins. Is there a reason why you can't reduce costs there, or do you believe it’s better not to reduce costs because the markets will eventually recover?

Yes, Gary, that’s an insightful question. There are indeed costs being reduced. However, it's important to note that not all the figures reflect just cost reductions. We have made improvements in our operations, especially in CM&C, which is why that number is larger overall. For PC, we have eliminated costs and have also reduced corporate allocations and overhead expenses, which helps. Nevertheless, we consider this business to be part of our future and want to be cautious about cutting back too much while we aim to regain some business and explore new product categories. Therefore, we want to be careful about how aggressively we reduce spending in this area. It does not fall into the same commodity category as some of our other businesses, where we have to be very strict with our operating and overhead costs, which is why you don’t see the same level of reductions. The opportunities for PC, particularly related to Catalyst, will primarily focus on commercial aspects rather than on cost reductions.

Okay. And then just looking at your objectives with PC and RUPS being greater than 85% of sales, and I realize you're going to be focusing on that for growth. But does that entail further shrinking of CMC?

Yes, I think it's a combination of things. I think certainly, we're focused on growing UIP. We're focused on growing PC and growing around PC. And I've been pretty open about the fact that we're not going to be investing in CM&C. And I think it has been for a number of years on a secular downturn, right? So I think it's certainly to be expected that, that business will continue to shrink and be a smaller part of the overall organization. So we're evaluating all kinds of different scenarios around CM&C and how it fits into the future of the company. But I would expect it will be a smaller part going forward that could play into both sides of it with maybe changes being made there as well as certainly additions being made in some of our other businesses.

The final question today is from Liam Burke with B. Riley.

Leroy, can you share your thoughts on the strategy for growing the utility pole business, whether through organic growth or acquisitions?

Yes, we've discussed our strong presence in traditional markets since acquiring the Cox utility business in 2018. We have a solid position in the Southwest and a good presence in the Northeast, but there's limited coverage in the Midwest and essentially none in the West. This presents significant market opportunities for us to explore in regions where we have existing experience. Our wood preservative and treating technologies have been utilized in industrial products for most of our history, which we believe will support the expansion of our business model. To diversify beyond just Southern Yellow Pine, we are building out a supply chain. The acquisition of Brown and the capabilities added through that facility also provide us with opportunities we couldn't leverage with our previous assets. We believe there is a substantial opportunity to capture market share in underserved areas currently served by only one or two major suppliers. Our goal is not to engage in a price war, as we see ample market share to be gained by simply offering a reliable second source of supply. Encouraging discussions have led us down this path, and we will continue to enhance our sales capabilities along with our technology and supply chain. We consider UIP a key component of our growth strategy.

Thank you. The next question is about using existing homes as a benchmark for demand for PCs. While they have come down from a very high level, it seems they are stabilizing at around $4 million in unit volume. Considering your market share loss, do you have a baseline revenue for PCs now that could allow for growth from that reset point?

Yes. We believe that the current challenges we are facing this year go beyond just losing some business; they reflect an overall market decline of about 3% year-over-year. This trend is something we haven’t encountered since taking ownership of the business. We don’t see it as a systemic issue or a sign of a longer-term trend. Instead, we see it as a foundation for future regular growth, which we expect to return to the historical range of 3% to 4% year-over-year. That said, our customers seem to be cautious. They are signaling that they are not anticipating organic growth for next year and are likely preparing for another year of modest demand. They appear to prefer setting conservative expectations to avoid disappointment if the year doesn’t improve significantly. While they are anticipating a better year in light of this year’s overall decline of about 3%, they currently aren't factoring in any substantial market growth.

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 taking the time to listen in today. Again, I think we have a great story to tell. And despite the challenges that we faced so far in 2025, I really do think we've set ourselves up for greater success going forward. The Catalyst is actually bearing fruit. We see it in the numbers, and we expect to see more benefits coming from that, that will basically move us in the direction of being a higher margin, higher cash flow yielding, higher earnings business out over the next number of years. So, appreciate your support and patience, and thank you for joining today.

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