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Koppers Inc. Reports 2003 Year End Results
PITTSBURGH, March 17 -- Sales for the year ended
December 31, 2003 were $842.9 million as compared to $776.5 million
for the prior year. The increase in sales is a result of increased
activity in the US railroad market as well as higher sales in Australia
and Europe, which foreign sales also benefited from favorable exchange
conversion rates. Earnings before interest and taxes (EBIT)
for the year were $19.1 million as compared to $54.1 million in 2002. The
2003 EBIT results were affected by special charges totaling $17.6
million, including $12.1 million of fourth quarter charges for restructuring
costs associated with the US Carbon Materials & Chemicals business
that resulted in the curtailment of production of the Woodward, Alabama
tar distillation plant, asset impairments most significantly at the
Portland, Oregon Terminal, restructuring of a logistics contract
and severance. Also in 2003, the Company recorded $2.9 million
of charges related to the closure of the Company’s Logansport,
Louisiana pole treating facility and $2.6 million of other charges
primarily associated with the write off of receivables from a bankruptcy,
and severance. The 2003 EBIT was also negatively impacted by
$9.8 million due to the loss of certain tax credits realized in 2002
that did not recur in 2003 and additional accretion expense of $2.4
million associated with the adoption of FAS 143 in 2003.
Net losses, before cumulative effect of accounting change, for the
year ended December 31, 2003 were $19.0 million as compared to
net income of $16.5 million in 2002. Net income in 2003 was adversely
affected by special charges of $17.6 million, expiration of tax credits
that generated $9.8 million of income in 2002, write off of deferred
financing costs of $6.4 million and an early call premium of $5.8
million associated with the retirement of existing bonds in October
2003. Net losses for the year were $37.1 million as compared
to net income of $16.5 million in 2002.
Effective in the first quarter 2003, the Company adopted the provisions
of FAS 143 related to asset retirement obligations. This
adoption resulted in the recognition of a cumulative effect charge,
after tax, of $18.1 million.
Commenting on the year, President and
CEO Walter W. Turner said, “The
operating results for 2003 have obviously been significantly impacted
by the fourth quarter restructuring of the U. S. Carbon Materials & Chemicals
business that included the curtailment of production at the Woodward
tar distillation plant. I am confident that the restructuring
and the closure of the Logansport pole treating facility earlier in
the year have allowed us to better position the U.S. businesses for
greater profitability through increased productivity and the elimination
of recurring costs of between $5 and $6 million from domestic operations. We
continue to see strong results from our US Railroad business as well
as our Australian operations and believe that the steps we have taken
to restructure our U.S. Carbon Materials & Chemicals business combined
with a new contract for supply of coke will lead to improved results
in 2004. In keeping with our international growth strategy, I
am also pleased to announce our re-entry into our Joint Venture in
China effective January 1, 2004 and I am optimistic that the results
will positively impact 2004 and beyond. Our focus remains on
cash management and I am pleased to have achieved our year end target
for borrowings, net of cash, of $331 million. We continue to
be driven by our strategy of providing our customers with the highest
quality products and services while continuing to focus on safety,
health and environmental issues.”
About Koppers
Koppers, with corporate headquarters and a research center in
Pittsburgh, Pennsylvania, is a global integrated producer of
carbon compounds and treated wood products. Including its joint
ventures, Koppers operates 39 facilities in the United States,
United Kingdom, Denmark, Australia, the Pacific Rim and South
Africa.
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