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Koppers Releases Second
Quarter Earnings; Reports Record Revenues
July 29, 1998, Pittsburgh, Pennsylvania — Net
income of Koppers("Koppers") for the quarter ending June
30, 1998 was $7.5 million, or $1.84 per share on a diluted basis,
compared to $6.3 million, or $0.69 per share in the second quarter
of 1997. Sales in the quarter just completed increased to a record
$174.2 million from $157.5 million in the comparable 1997 period,
reflecting higher revenues from railroad-related products and the
1997 consolidation of Koppers Australia Pty. Limited ("Koppers
Australia"). Continued high levels of maintenance spending
by Class 1 railroads have resultedin strong demand for Koppers
crosstie products and enhanced services.
Second quarter 1998 results
include $3.4 million of additional year-over-year interest expense
as the result of Koppers December
1997 recapitalization and subsequent acquisition of Koppers Australia.
Earnings for the second quarter were impacted by lower pricing
for phthalic anhydride, a chemical produced by Koppers, which is
used in the production of plastics and related products. Phthalic
prices were down approximately 25% from the comparable period in
1997. Second quarter 1997 results were also negatively impacted
by one-time charges totaling $2.2 million for the write-off of
IPO costs and severance charges.
According to Walter Turner, CEO, "We
continue to see strong demand for Koppers railroad products and
services and we are very
focused on exceeding our customers' expectations by expanding our
service offerings to this market. In Australia, our business remains
stable in carbon materials and timber products and results are
in line with estimates. Finally, our domestic carbon material and
chemicals business is reporting lower profitability due primarily
to phthalic anhydride pricing, which is at its lowest levels in
at least a decade. Our focus in all segments remains on customer
satisfaction, improved productivity and profitable growth."
For
the first six months of 1998, Koppers net income was $8.1 million
or $1.91 per share compared to $9.7 million and $1.05 per share
in the first half of 1997, on the larger number of shares then
outstanding. Interest expense for the first six months of 1998
was $6.4 million higher than in the same period in 1997. Sales
for the first six months of 1998 were $330.7 million compared
to $291.5 million in the same period in 1997.
In the fourth quarter
of 1997, the Company completed a financial recapitalization and
the acquisition of Koppers Australia, bringing
ownership of the $120 million revenue Australian organization
to 100%. To facilitate this acquisition, as well as the redemption
of approximately 60% of the Company's outstanding common stock,
Koppers completed a refinancing as of December 1, 1997 which
resulted
in total corporate debt of $345.1 million as of June 30, 1998
versus $204.1 million at the same date in 1997.
Koppers is a leading integrated
producer of carbon compounds, chemicals, and treated wood products
for use in a variety of markets including
the chemical, railroad, utility, aluminum and steel industries.
Headquartered in Pittsburgh, Pennsylvania, Koppers employs approximately
2,000 people worldwide at 35 manufacturing facilities throughout
the United States, Australia and the Pacific Rim, and participates
in joint ventures in the United States and Europe.
View the "Koppers
Results for the First Six Months and Second Quarter 1998" |
