Good morning, ladies and gentlemen. Thank you for standing by. Welcome to COPR's first quarter 2026 earnings conference call and webcast. At this time, all participants are in a 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 Quinn McGuire. Please go ahead.

Thanks, and good morning. I'm Quinn McGuire, Vice President of Investor Relations. Welcome to our first quarter 2026 earnings conference call. We issued our press release earlier today. You can access it via our website at www.coppers.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 and 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 June 8, 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. five. 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 objective 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 and Chair of COPPERS, and Brad Pierce, Interim Chief Financial Officer and Chief Accounting Officer. At this time, I'll turn the discussion over to Leroy.

Thank you, Quinn. Good morning, everyone. I'm pleased to join you today to provide more insight on COPPERS' performance in the first quarter of 2026, as well as provide an update on how we're progressing towards our 2028 transformation targets. So, let me start with our major news from this morning. At the present moment, I'm in Chicago, where just a few hours ago, I delivered the unfortunate news to our workforce here of our conditional decision to begin immediately winding down production at our Stickney, Illinois facility with a target to cease distillation by the end of this year. And note that I'm using the word conditional because the decision is subject to the satisfaction of any bargaining obligations that might exist with the union representing certain employees at the facility. Now, as outlined on page four, this conditional decision impacting approximately 85 employees was driven by the continued challenging market conditions that have persisted for well over a decade when we made the decisions to close our other two u.s facilities for cmc in 2016 approximately 565 000 metric tons of coal tar were being produced and readily available in north america after the most recent coke plant closure we announced earlier this year of algalma steel that number has now dropped to 350 000 metric tons simultaneously putting pressure on raw material pricing and reducing our throughput this has resulted in higher unit costs which have not been able to be fully recovered in the form of higher pricing and adding to the mix is that despite having spent over 100 billion in capital at stickney over the past five years which is a multiple of the spending at any other copper site we still find ourselves dealing with reliability issues which means we would still have significant future capital requirements to address aging equipment this is not a people issue as the team at stickney has done heroic work over the past 10 years to try and get us to a better place and i sincerely thank them for their efforts but the bottom line remains that we feel we've done everything we can to make this operation viable and we just don't see a credible path to get there at this time we're tentatively targeting fourth quarter of 2026 for shifting production to our coal tar distillation facility in newborg Denmark. In the meantime, we've further strengthened the supply chain from New Borg to the U.S. through expanded shipping and terminal capabilities in order to ensure an effective transition for existing pitch and creosote customers. We anticipate investing between 10 to 15 million dollars to further strengthen that supply chain over the next few years, which can be done while staying within our annual 55 million maintenance capex as capital is freed up from Stickney. Now, the discontinuation of production activities at Stickney is anticipated to result in pre-tax charges to earnings of $227 to $262 million through the end of 2029, which includes $170 to $195 million of non-cash charges projected to be recorded in the second and third quarters of this year. Cash closure charges of $57 to $67 million will be spent over a three-year period beginning in the second quarter of 2026. These charges will be funded by the operating and capital cash benefits generated by this action, which are expected to total $15 to $25 million on an annualized basis, and therefore will have little impact on our near-term free cash flow projections, except for timing. At the same time, the longer-term result of this move will be significantly accretive to free cash flow. We're estimating that the adjusted EBITDA savings related to this action will reach annual run rate of $15 to $20 million in 2027 and beyond, which would result in a 75 to 100 basis point bump in adjusted EBITDA margin. And translating the adjusted EBITDA benefit to adjusted EPS would result in an increase of $1 to $1.20 per share. We also anticipate $8 to $15 million in reduced future annual capital expenditures. I again want to thank our STICME employees for their continued hard work and determination while operating under persistently tough circumstances i understand that this situation is incredibly difficult and will have a real impact on our employees and their families which we will make every effort to minimize our priority is to provide the support and assistance needed to help the employees navigate any transition as we map out the future of our cmc business so now let's move on to page five which outlines our results for the first quarter including adjusted EBITDA of 49.3 million which is a 10.8% adjusted EBITDA margin. We had operating profit of $22 million and 57 cents in adjusted earnings per share. We generated operating cash flow of 46.3 million and free cash flow of 34.9 million, both cash flow metrics representing a first quarter record. On a trailing 12-month basis, operating cash flow of 192 million and free cash flow of 139 million also represent new highs. Capital expenditures, net of insurance proceeds, and sales assets for the quarter were $11.4 million. And we also deployed $29 million in share repurchases and $1.9 million in dividends, while keeping total debt consistent with December 2025. So now let's move on to our zero harm accomplishments as seen on page six. Thanks to the commitment of our worldwide team, 30 of our 40 sites were accident-free in the first quarter. Our European CMC and PC businesses, as well as our Australasian PC and CMC businesses, had zero recordables in the first quarter. Leading activities, a key contributor to our serious safety incidents, took a step back compared with prior year recorder. However, our recordable injury rate improved from prior year. The objective of zero harm is to constantly focus on what is most important, the health and safety of our team members. and we will never lose sight of our goal of zero by reinforcing the foundational elements of the safety culture deploying additional tools and training and driving environmental improvements in 2026 and beyond so turning to page eight we issued our 2025 annual report in 2026 proxy statement which are available excuse me on the coppers website now for more information please use the qr codes to access these materials as shown on page nine coppers gained additional recognition by being named a Newsweek Magazine's 300-member listing of America's most charitable companies for 2026. This honor reflects our employees' ongoing commitment to volunteerism and our corporate support of community initiatives and causes. It joins previous recognition of Coppers as one of Newsweek America's most responsible companies, USA Today's America's Climate Leaders list, and Times, America's best midsize companies. Now, on March 30th, our leadership team joined me to ring the closing bell on the New York Stock Exchange, celebrating 20 years of Coppers as a publicly traded company, as seen on page 10. In addition, I participated in an interview on the financial news program, Taking Stock, to share the story of our continuing path to sustainable profitability for our customers. Now, moving on to page 11, Coppers will be hosting an investor day on Thursday, September 17th, in Atlanta. On September 16th, the prior day, we will be conducting a tour of our research and development lab, our performance chemicals business. On Wednesday evening, the Copper's executive team will also host a meet-and-greet reception, so look for more details in the months to come. In the meantime, please mark your calendars planned to join us for our Investor Day and related activities. Now, I'll return in a bit to provide my view on how we're seeing the current year within each business while also reviewing our outlook for the remainder of 2026. But for now, I'm going to turn it over to Brad to speak in more detail on our first quarter financial performance.

Thanks, Leroy. Earlier today, we issued a press release detailing our first quarter 2026 results. My remarks today are based on that information. As seen on slide 13, we reported consolidated first quarter sales of $455 million, essentially flat compared with prior year sales. Relative to the prior year quarter, RUP sales decreased by 15 million, or 6%. PC sales were up $21 million, or 18%, and CM&C sales decreased by $7 million, or 7%. On slide 14, adjusted EBITDA for the first quarter was $49 million, representing a 10.8% EBITDA margin on sales, compared with $56 million and 12.2% in the prior year quarter. By segment, RUPS generated adjusted EBITDA of $23 million, or 10.3% EBITDA margin. PC generated adjusted EBITDA of $26 million, or 18% EBITDA margin. And CM&C reported adjusted EBITDA of $1 million, or 1% EBITDA margin. Turning to the RUPS business, slide 15 shows first quarter sales of $220 million compared with $235 million in the prior year quarter. Of the $15 million change in sales, approximately $10 million of the decrease came from the railroad structures business that we sold in 2025. The remaining decrease in sales can be attributed to customer mix and price decreases in our Class I cross-tie business and lower activity in the maintenance of whey businesses. These factors were partly offset by volume increases in our domestic utility pool business, higher commercial cross-tie volumes, and a $1.4 million in favorable foreign currency changes compared with the prior year period. mostly attributed to our Australian utility pole business. We adjusted EBITDA of $23 million compared with $26 million in the prior year due to lower sales and lower sales volume. Turning to slide 16, our performance chemicals business reported first quarter sales of $142 million, up from $121 million in the prior year quarter. This increase was primarily due to a 15% volume increase, higher sales activity primarily in the Americas, and $2.7 million in favorable foreign currency changes from international companies. The adjusted EBITDA for PC increased to $26 million versus $20 million in the prior year quarter. Profitability benefited from higher sales volumes and higher prices, partly offset by $2.4 million. Slide 17 shows that sales in the first quarter for our CM&C business were $93 million compared to $101 million in the prior year quarter. This decrease was primarily driven by $14 million of lower volumes related to our phthalic and hydride business, which was discontinued in the second quarter of 2025 and lower sales prices across most products, especially carbon pitch, which was down 9%. These are partly offset by volume increases in carbon pitch, naphthalene, and carbon black feedstock, as well as $7.6 million in favorable foreign currency changes from international companies. The EBITDA for CM&C in the first quarter was $1 million compared with $10 million in the prior year quarter due to lower sales prices and higher operating and raw material costs, partly offset by operating cost savings associated with discontinuing the phallic and high-drive business. With the first quarter of 2025, the average pricing of major products was lower by 11%, while average coal tar costs were slightly higher. On slide 19, we continue to pursue a balanced approach to capital allocation. In terms of investments to position the company for the future, $11.4 million was spent in the first quarter for capital expenditures. We are anticipating a total of $55 million in gross capital spending for the full year of 2026. Their buyback activity in the first quarter totaled approximately $29 million, including those associated with tax withholding, we have approximately $45 million remaining on our $100 million repurchase authorization. We also continue to return capital to shareholders through our quarterly dividend of $0.09 per share. At March 31st, we had $386 million in available liquidity and $877 million of net debt, representing a net leverage ratio of 3.5 times. We remain focused on our long-term goal of reducing the net leverage ratio to 2 to 520 provides additional detail on our total capital expenditures for the first quarter of just over $11 million. We deployed approximately $7 million to maintenance capital spending, with the remaining balance allocated to zero-harm initiatives and growth and productivity projects. Capital expenditures were approximately $5 million for RUPS and $3 million for both PC and CM&C. As highlighted on slide 21, our Board of Directors declared a quarterly cash dividend on May 7th of $0.09, reflecting a 12.5% increase from the prior year. This dividend will be paid on June 15th to shareholders of record as of the close of trading on May 29th. While future dividends are subject to ongoing board approval, maintaining a quarterly dividend at this rate will result in an annual dividend of $0.36 per share for 2026. I will turn it back.

Thank you, Brad. So I'll now review the market outlook for each of our businesses, starting with performance chemicals on page 23. Now, despite a number of different headwinds on demand, such as the Middle East conflict, higher mortgage rates, lower housing turnover, and general inflationary pressures, our pc business still posted a healthy 15 top line gain from volume in q1 as we expected the gains came from market share growth of about nine percent and customer inventory build added about six percent while organic volumes were mostly flat through q1 that puts us reasonably on track to likely exceed our expected top line increase of 11 as the inventory build will continue through q2 and then taper off however we will only begin hitting our run rate for market share growth in q2 as we finish the remaining plant conversions as i mentioned most external markers that drive the health of this business such as mortgage rates housing turnover and repair and remodeling spending are still lagging but the recent move from our customers is more hopeful than it has been in some time that a recovery may be around the corner now we're discounting that optimism for now until we begin seeing it in the numbers so as a result we're still forecasting flat demand on the base in residential business with a mid-single-digit volume increase expected for our industrial product segment as driven by growth and utility pole demand. Now, on the cost side of the equation, to say there's a lot of noise in the system would be a vast understatement. Between potential IEPA tariff recoveries, net exposure to the across-the-board 10% tariffs that were put in place in response to the IEPA rolling, higher fuel costs from the spike in In oil and copper volatility, I'd say we have more working against us than for us right now. And with what amounts to a 5 to 10 million current net exposure, our procurement team has been working hard to offset it by negotiating better pricing in certain materials, while our commercial team has been preparing to implement fuel surcharges. Copper has continued to hold its lofty pricing with modest periodic corrections, but it looks like mid to high $5 per pound copper is likely the new low-water mark, and we're now above the six dollar threshold so that's going to require at least 50 million dollars in price adjustments in 2027 to just recover that increase in summary pc has gotten off to a strong start giving us confidence to move our sales projection up slightly from our initial view of the year while holding our ebitda projection where it was as those additional sales get offset by a net cost increase and that's obviously contingent on base residential volumes holding steady and our ability to mitigate some of our cost exposure via pricing pass-throughs and other cost reductions now moving on to our utility and industrial products business shown on page 24 market sentiment remains bullish for all the reasons we've continued to talk about which include increasing electrical demand related to build out of ai infrastructure crypto mining ev development new manufacturing now our first quarter sales increased by 12 percent due to volume and that reflects the bullish that bullishness with three percent of that 12 resulting from the december 2025 acquisition of our dug first supply chain now in our targeted underserved regions we grew volumes by nine percent coming off of growth in 2025 of 17 market demand remains concentrated on a limited range of pole sizes and this has put pressure on fiber sourcing and driven up raw material costs which we're working to recoup to return margins to our long-term target we expect some cost relief on the whitewood side when our peeler in leesville louisiana which was damaged by fire last september comes back online which will enable us to bring more peeling capacity back in house and lower our third-party costs as mentioned earlier our doug fir acquisition is showing early dividends by increasing our access to this important fiber enabling us to better compete for previously unavailable business and on the flip side the southern yellow pine market is under pressure due to closures of pulp and paper mills and lumber mills as well as fires that destroy tracts of timber in the southeast now if sales volume is strong and pricing relatively flat we have more work to do to bring costs into check getting the leesville pillar back online will help along with the consolidation advance production into kennedy which began in q1 and should contribute two million dollars in savings by year end we're experiencing higher costs for fuel and freight that we're working to pass on an additional catalyst initiatives are Our transformation program launched in 2025 are expected to generate further cost savings, which will help to overcome the additional corporate cost allocations that have been shifted to UIP this year and enable our full business to contribute to the year-over-year EBITDA improvement projected for the rough segment. The market outlook for our railroad products and services business is summarized on page 25, and our Q1 top line was down compared to prior year, despite cross-tie sold being consistent with prior year. After adjusting for the sale of our KRS business last August, the main driver of our revenue decline was an unfavorable mix, with lower pricing having a smaller impact. We had a greater proportion of treatment service-only sales in Q1 compared to prior year, combined with lower green-tie purchases and black-tie shipments. The severe winter storms that hit much of the country in Q1 knocked our plants offline for a number of days. This impacted production and shipping, which we began making up in March. But uneven customer car flow in and out of our plants also had an impact. And our customers have pledged to work on improving that situation, which should enable us to catch up as the year goes on. And while we've had a few customers pull back on their demand for the year, most of it was known as we entered 2026. And a few others are increasing demand, which is expected to more than offset the other railroads' reductions. Commercial backlog remains as strong as ever, delivering 3% higher sales in Q1. And the price reductions we exchanged for growing our piece of a smaller market this year will be made up through the year as we work to idle the Florence, South Carolina facility by October. We also continue to relentlessly go after costs with Q1 representing the eighth consecutive quarter of reduced operating expense and direct SG&A compared to the prior year quarter. While we expect to be in good shape from a demand standpoint this year, the overall lower industry demand is wreaking havoc on saltmills, resulting in reduced production and widespread mill closures. I mentioned our strong cash border during my earlier comments. Well, our RPS business led the way in that area with stellar working capital management, holding inventory in check during a period where we usually see a build. And while we still expect strong sales in both RPS and UIP for the year, we're incorporating more of an unfavorable mix into our forecast for the year, also baking in some of the impact from higher oil. This is bringing our revenue projections down by $10 million on both the top and bottom end of our range, as well as bringing our EBITDA projections down proportionally. Now, the outlook for our CMC business is summarized on page 26. Overall, the market continues to be in turmoil, with Q1 results reaching their lowest point since the beginning of our major restructuring efforts in 2016. The war in the Middle East, which began two days after our last earnings call, has only made the situation in this business more challenging as oil price shocks have resulted in rapidly escalating raw material costs. If higher oil prices hold, we'll be playing catch-up over the next couple of quarters regarding passing on higher pricing. This is estimated to have a $5 million impact on CM&C over the remainder of the year, in addition to the $1 million impact it had on Q1 for this segment. On the plus side, this could potentially create some market opportunity for Australian, European, and North American aluminum producers to fill the void of Middle East aluminum producers and will likely create an opportunity of more sales for coppers. The continued uncertainty in the carbon products markets only highlight the necessity to take a major action, which we're doing by ceasing production at our Stickney site. There's no need to repeat all the financial details I previously mentioned, but they are once again outlined on page 26 and speak for themselves. Once we felt comfortable that we had the capacity to reliably absorb the U.S. volume in Denmark and could beef up our logistics assets to further improve reliability, it became a very unfortunate but obvious no-brainer to move forward with shifting production to Europe. While there are no celebrations at coppers to commemorate this action, it's an unquestionable win for our shareholders. This action is expected to pay for itself over the next few years while improving earnings and long-term cash flow significantly. In addition, by significantly strengthening our European operation, we increase the likelihood that weaker European competitors will eventually succumb to the challenging market conditions. For this year, though, we're going to have to reduce both our revenue and EBITDA estimates for CM&C due to impacts from higher oil and generally worse market conditions. As shown on slide 27, we're a little over a year into our Catalyst transformation and executing successfully on many initiatives. In Q1, we realized $14 million of benefits spread across our business segments and corporate functions. In PC, the driver was market share growth and new products. In RUPS, it was the plant consolidation advance and market share growth. For CM&C Incorporated, it was procurement savings. In addition, we're using Catalyst to improve our working capital discipline, delivering $16 million in benefits in Q1. driven primarily by inventory control and rps adding the benefits from our sticky announcement we've now identified a minimum of 90 million of benefits to be realized from 2026 through 2028 and of that we expect 30 to 40 million of benefits in 26 which is up by 10 million on the low end this puts us squarely on track to deliver on our 2028 goals of adjusted ebitda greater than 15 percent, a three-year EPS CAGR of more than 10 percent, net leverage of lower than two and a half times, a three-year free cash flow average of 100 million minimum, and our combined PC and RUP segments making up 80 percent, 85 percent or more of our sales. The result of reaching those metrics should result in significant shareholder value creation. Now, as we move on to slide 29, our consolidated sales guidance remains at $1.9 to $2.0 billion in 2026, compared with $1.88 billion in 2025, with higher sales in PC and RUPS more than offsetting lower CM&C sales. The foundation of customer demand is proving to be solid four months into the year, especially for our PC and RUPS segments, as we have now turned the corner on our PC market share loss from last year and are starting to see the needle move in the other direction. On slide 30, we're lowering our adjusted EBITDA forecast to 240 to 260 million in 2026, compared with 257 million in 2025. The major reason for shifting our previous range of guidance down by 10 million is the impact of higher oil across our entire enterprise. The war in the Middle East was not a variable we had contemplated when we communicated our 2026 guidance in February. And while we believe it is contained to a less than 5% impact on our consolidated EBITDA, we believe it's prudent to incorporate it into current guidance at this point, while the various other puts and takes are projected to offset each other. Slide 31 shows our adjusted earnings per share bridge, which reflects a range of $3.80 to $4.60 per share in 2026, compared with $4.07 in 2025. Year-over-year, that represents a 3% increase at the midpoint and a 13% increase at the high end. Most of our projected improvement is expected to come from lower interest expense and benefits from a lower share count. On slide 32, we now expect an even higher jump in both operating cash flow and free cash flow this year. As a result, this will provide the most cash we've had for debt paydown since 2020 when we received the cash proceeds from selling our KJCC business. not only would operating cash flow and free cash flow represent new highs at these projected levels but more importantly 2026 will represent an inflection point for our step change in cash generation as we expect these new higher levels to become the norm at our current market cap this equates to a 10 to 15 percent free cash flow yield and places coffers at the top end of whatever industry you want to compare us to and provide several attractive options for how we deploy our excess cash. On slide 33, in terms of capital spending, we continue to forecast $55 million for the year, consistent with $55 million spent in 2025. Currently, we're spending at a run rate lower than $55 million, but we'll still likely spend at that rate for the year as we take dollars that we would have spent at Stickney this year and put it towards bulking up our logistics assets. The foundation we have built over the past decade has set us up to create significant shareholder value over the next several years, and I'm confident we will deliver. We still maintain leading shares in niche markets that utilize our essential products with low capital requirements going forward. And couple that with the unlocking of significant cash flow, we find ourselves in a strong position to deliver shareholder value in multiple ways. While today represents a difficult next step, I believe it's the right one for our customers, our team members at Coppers, and our shareholders who have patiently hung in while we have methodically built a model that is built to last. So now I would like to open it up to any questions. Thank you. We will now begin

the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and then two. At this time, we'll pause momentarily to assemble the roster. The first question will come from Gary Prestopino with Barrington Research. Please go ahead.

Hi. Good morning, all. Hey, Neroi, throughout your narrative on what you're looking for, go forward in a couple of your segments. You mentioned you've got to get some price increases to offset some of these input increases. I mean, in the past, how successful have you been at driving those kind of price increases? And what's generally the lag? How long does it usually take relative to, you know, where we are right now in the cycle?

um yeah that's a good question so i think it it varies and it varies depending upon business unit as well but um i'd say for the most part we we have been successful um but but yeah there's a timing aspect to it um there's been some changes that we've made in some of our agreements uh you know over the past you know coming through covet in that big inflationary uh environment that we were in that we got kind of caught in for a period where we were hamstrung in terms of being able to pass on some of these increases. We were able to make some changes in certain contracts that give us more flexibility to pass stuff on a little more currently. I would say generally the way that we feel about it, you know, as it relates to passing on fuel surcharges, those sorts of things, I think we have an ability to do that more or less currently, right? So there's little to no lag that needs to happen there. We've tried to, in regards to, again, some of the larger relationships we have, understand exactly whether this stuff was going to be sustainable or short term. But we've obviously gotten to the point now where we're moving forward on trying to work with passing that on. As it relates to some of the bigger issues in terms of impacts on raw materials that we know are going to linger for a bit. You know, most of our contracts on the Siemen C side, you know, we're at least a quarter to six months from being able to pass that on, which is why we talk about the impact we see more or less in the back half of the year that we won't, you know, get to catch up on until we probably turn the page into either the fourth quarter or into 2027. And then, you know, on the PC side of things, you know, we tend to go through a couple year agreements in this, you know, the latest cycle wraps up this year. So, discussions will be happening in the back part of this year. Actually, discussions are, you know, currently happening about trying to give them some insight in terms of where the overall cost structure looks like at this point and what to expect. So, you know, we'll have more news on that as we get to the back half of the year. As we talk about often, And we're mostly hedged for the biggest piece of that as it relates to copper. But there will need to be a reset on that as we head into next year. But, you know, we also are continuing to work on new products that can help maybe minimize the amount of copper that needs to go in and or retention rates. And so there's all kinds of things that we're working on to try and mitigate and minimize the impact on our customer. hopefully put a few more dollars in their pockets as well as ours

and just create more success for the industry.

So it's a mixed bag, Gary. But we, you know, bringing the guidance down by 10 million, both top and bottom end of the range, was our best attempt at, from an unmitigated standpoint, that's what we would expect for the year related to the oil impact, which is the biggest, well, other than copper, is the biggest impact that, well, the biggest impact we're currently facing on an ongoing basis. it'll be copper in oil, but we feel pretty good that we have that captured there with a little opportunity for upside on pass-throughs. Okay, that's a good explanation. And then

as it relates to what you're doing with in the CMC business, I realize it's a difficult decision. It's always hard to tell people of that decision. Is it mostly just that you're looking at it as cutting excess capacity there just isn't the end demand there and by folding everything in a Niborg you would expect that you'd get more utilization of that facility and you can get your margins up

that way is that kind of how we should think about it it it is a it is a consolidation play yes it is uh we have excess capacity at Niborg um you know that's that's uh freed itself up over the last couple of years, at the same time, raw material availability in North America has come down. So, with what we have remaining here in North America, we found that we could comfortably fit that into our Niborg operations and have, you know, very little incremental cost to do so. And so we could essentially, again, source raw material from North America, process it there, and actually still serve the vast majority of our customer base here in North America and cut out a significant level of fixed costs in the process. So, yes, it's a consolidation play.

Okay. Thank you very much.

You're very welcome.

The next question will come from Liam Burke with D. Reilly Securities. Please go ahead.

Thank you. Good morning, Leroy.

Hi, Liam.

Leroy, with the shifting of production from Stickme to Nyborg, do you anticipate any competitive disadvantage? Having your in-house creosote for the coatings has been a competitive advantage. Would the greater distance affect that competitive advantage?

No, we don't believe so. I mean, you know, that's really happening today. We already bring a significant amount of creosote into North America. Like I said, with where the cost structure was at, in fact, what we believe is we'll be able to actually improve the reliability of the supply chain. Because while certainly distilling in, you know, Chicago, you can look at and say, well, again, you're closer to your customers. There's no question. But, again, the aging equipment that we have there, you know, has created a host of different reliability issues over the years. And so, we would find ourselves scrambling at times despite the fact that, again, we had operations right here. Niborg is, you know, it's a beautiful facility. It's been incredibly well-maintained, and we do not deal at all with those sorts of issues as it relates to that. So, you know, yes, you're extending the time to get product back and forth, but, again, we're adding tank capacity here. We already have, you know, terminals set up and actually a fairly mature logistics operation that's been doing this for a while. And, you know, our competitor does, you know, makes, you know, similar sorts of shipments back and forth across the pond as well. So, this is not unique. It's not new. And we believe it actually improves the reliability and competitiveness for us, which is, again, a driver for us making the decision.

Great. That is good news. On copper pricing, you've been able to increase prices to your customer with margin, or is that going to create a competitive pricing problem?

Well, you know, I think, you know, we'll be pricing to market because we're not the only one in this situation. You know, our margins fluctuate, they range, you know, anywhere in that 17% to 22% range over time. We've had one year, I think, where, you know, it fell down below that. That was actually, I think, in 22 or 23 when we ate a lot of costs, and it was not necessarily on the copper side. It was on all the other raw material pieces that we weren't able to pass through at that point in time. That was an anomaly. And we've had an occasion here or there where we bumped up above that 22% range. I see no reason why going through this round, we'll end up somewhere in that range coming out of it. But we'll have to be competitive. I mean, we'll definitely be doing that while also, again, hoping to demonstrate to our customers our commitment to them, our commitment to the industry in terms of looking to develop new products for them to take to market and, again, help them from a profitability standpoint. So I think we're in a good position to sort of maintain that 17% to 22% margin range overall.

Great. Thank you, Leroy.

Yeah, you're welcome, Liam. Thank you.

The next question will come from Michael Matheson with Sidoti & Company.

Please go ahead. Congratulations. on the quarter, you guys. Very impressive. Thank you, Michael. Appreciate that. Just turning to my questions, you mentioned a $10 million impact this year from the increase in oil prices, which, of course, fluctuate. They were down a lot the past few days. Is there a rule of thumb that we can use that if oil prices move by X, the impact to coppers is Y percent? Yeah, I

wish it was that simple. I wish it was that simple. because there's so many tentacles to it that it's tough to put your finger on it with that level of precision. But, you know, you can look at, you know, sort of the current situation that we're going through as a little bit of a guide. I mean, you know, with oil prices rising suddenly at the end of February up into, you know, anywhere that $100 to, you know, over $100 a barrel range, right, we're sitting here telling you and talking about the fact that that's going to have what we believe up to a $10 million unmitigated impact over the year. So, you know, that gives you some indication in terms of that level of sensitivity, but, you know, we do have abilities to pass some of that stuff on to negotiate higher pricing because, again, these sorts of things don't just impact us. They impact our competition as well. And so it's not a situation where any of this sort of stuff is copper specific. I believe we will get it back over a reasonable timeframe, and that's what we'll work to do. But when you think about it overall, I mentioned this, you know, this number here is going to be less than a 5% impact. It's, you know, again, it's meaningful to the numbers that we gave out. But, you know, in the grand scheme of things, not necessarily so. And it's something that we'll be able to pull back in over the next, you know, 3 to 12 months, I would say.

Okay. Fair enough. Turning to the future of the CMC business, if we look forward to 2027 after the plan shut down at Stickney, is there an EBITDA margin target for CMC that you can share with us?

I would say that, you know, we certainly have run those numbers internally. And I would say that it would be in line with our overall consolidated margin target. So, we have talked about, you know, one of our transformation target goals is to be at a 15% or greater EBITDA margin from an overall company standpoint. And I think our expectation is that this particular business will be right around that number.

Okay, perfect. Very helpful. Just turning to PC, the sales growth there was especially striking. Flat overall market, residential sales. What drove the market share increase, if you can share that with us?

Well, you know, it was a situation where, you know, it was a stark change last year, as you know, as we took a market share hit. We had talked about in the back part of last year that we thought we had opportunities to, you know, win back a little bit of that market share. And we were able to do that to some extent while also picking up some additional market share from some of, again, our larger customers who, you know, still has a little bit of business out there in the other camp, you know, the other two camps. And, again, through some different product development we had done, we were able to get them comfortable to make some conversions on some straggling plants that were not in our network at this point in time and get them moved over. And on the industrial side, I think we've done a really good job. You know, Tommy Kaiser and his team in PC have done a really good job of continuing to develop that business. And that is, you know, a business that's in a nice, healthy spot right now, too. So, you know, it's just our sales team has, I think, consistently done a really good job of building that customer network, relationship network. And sometimes, you know, we've been successful more often in winning that business than losing it. You're going to go through some phases. And, again, we went through a good eight years of nothing but wins, wins, wins, and, you know, all that just made us more vulnerable at some point that some business was going to get moved away, and that's what happened last year. And we kind of did a reset, and I think we've proven to our customer base that we understand they're incredibly important to us, And it's our it's our job to help them be be more profitable and open up doors for them to to be successful because their success is ultimately ours. And and but but we had signaled that near the end of last year. And, you know, now it's it's, you know, it's just being put into action.

OK, excellent. Thanks for the information and good luck in the coming quarter.

You're welcome. Thank you.

The final question will come from Jim Marone with Singular Research. Please go ahead.

Yeah, great. Good afternoon, gentlemen. My question is just with regards to all this volatility with regards to commodity markets, inflationary pressure. What are you getting the sense of with regards to your competitors? Is there a lot of tailwinds with regards to them or headwinds? In other words, are you funding any M&A activity opportunities as a result of all this volatility in the markets?

Yeah, that's a good question. That's a good question. You know, look, three of our four businesses, we hold such significant share that, you know, any sort of M&A consolidation activities for us in those businesses are really unlikely, you know, from an anti-trust standpoint. So, it doesn't really matter at the end of the day as it relates to RPS and, for the most part, PC, certainly in North America, as well as CM&C. UIP is a different animal, and certainly we would have much more flexibility in terms of M&A in that space. um uh we continue to you know to keep up our relationships and have our conversations and see where they go um you know i i know there's a lot of companies and you know certainly on the smaller end that are feeling the pinch um and uh but uh but you know there's there's there's nothing to that we have to report at this moment as it relates to that we continue to keep monitor and keep our eyes on it. And, you know, if something pops up, obviously we'll be looking to evaluate it. And if it makes sense, we'll do it. And if it doesn't, we'll pass and go on from there. But it's really only one business where we have that sort of opportunity as it relates to the core business. And that's in the UIP side.

Thank you very much for that insight.

You know, you're very welcome. Thank you.

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

Yeah, so thank you. I really appreciate, again, everybody's patience and hanging in. It's been a tough, hard-fought last year, but the company, again, and our team continues to do an amazing job keeping their fellow teammates safe, keeping everybody focused on the bigger goals at hand. And, well, again, today's an unfortunate and painful chapter in our history from a people standpoint. For shareholders, it's clearly a win, and we're seeing that reflected in the market today. We look forward to continuing to execute on our plans and updating you on them in the future. But thank you, everybody, for tuning in today.

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