Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers’ First Quarter 2023 Earnings Conference Call and Webcast. [Operator Instructions] I will now turn the call over to Quynh McGuire. Please go ahead.

Thanks. And good morning. I am Quynh McGuire, Vice President of Investor Relations. Welcome to our first quarter 2023 earnings conference call. We issued our press release earlier today. You may access it via our website at www.koppers.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 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 August 5, 2023. 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. References may also be made today to certain non-GAAP financial measures. The company has provided with its press release, which is available on our website, reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. Joining me for our call today are Leroy Ball, President and CEO of Koppers; and Jimmi Sue Smith, Chief Financial Officer. I will now turn this discussion over to Leroy.

Thank you, Quynh. Good morning, everyone. And thanks for taking time to join us today. As you may have seen in our announcement earlier and as shown on Slide 3, Koppers will be hosting an Investor Day scheduled for Thursday, September 14, 2023, which will take place at the InterContinental Chicago. On the prior day Wednesday, September 13, we'll be hosting a tour of our Stickney facility, which is in the Chicago area. And I sincerely hope that you'll be able to join me and our senior management team for one or hopefully both of these events. We will, of course, closely monitor health and safety guidelines as appropriate. The management presentation portion of our Investor Day will also be available virtually with a live webcast. For those who will be attending the management presentation virtually, you will have the opportunity to participate in real-time in the question-and-answer session following the presentation. And if you're not able to attend either in person or virtually, we will provide a replay of the webcast on our website following the conclusion of the event. Now let's review some of the headlines from our first quarter. We have a lot of exciting activities to report today that reinforce our work to strengthen our unique vertically integrated business models serving key infrastructure markets. We continue to make great progress in expanding our business by enhancing our comprehensive product portfolio, further penetrating certain geographic markets, entering new markets, and gaining market share. In addition, our work in optimizing our operating and logistics network not only reduces cost by making us more efficient, but opens up new business opportunities. We attribute this to the quality of products and services we provide, while adhering to the strictest standards of safety and sustainability expected from our customer base. Now…

Thanks, Leroy. This morning's press release provided our first quarter 2023 results. And my comments today are based on that information. On Slide 9, our consolidated sales were a first quarter record of $513 million, up $54 million or 12% over the first quarter of 2022. By segment, RUPS sales increase $30 million or 16% from the prior year quarter. PC sales increased $11 million or 8%. And CMC sales increased $14 million or 10%. On Slide 10, adjusted EBITDA was a first quarter record at $62 million, a 12% margin. By segment RUPS generated EBITDA of $16 million, a 7% margin. PC had EBITDA of $26 million, an 18% margin. And CMC had EBITDA of $19 million, at 13% margin. Moving on to our RUPS business, on Slide 11, RUPS had record quarter sales of $213 million compared with $183 million in the prior year. The improvement was primarily the result of increased pricing for crossties and utility poles in the United States and higher volumes of untreated crossties enhanced by our acquisition of Gross & Janes last year. In general, market prices for untreated crossties remain relatively high, but they are stabilizing. As a result crosstie procurement was hired by 64% compared to the first quarter of last year. Crosstie treatment decreased by 11% versus the prior year. Adjusted EBITDA for RUPS was $16 million up from $12 million in the prior year on net sales price increases of more than $21 million partly offset by higher raw material and operating costs. It's worth noting that the Utility and Industrial Products portion of this business achieved record first quarter sales, adjusted EBITDA and adjusted EBITDA margin, contributing significantly to the overall performance for RUPS. On Slide 12, our Performance Chemicals business delivered record first quarter sales of $147…

Thanks Jimmi Sue. And moving on to notable happenings around Koppers, Slide 21 offers highlights from our global leadership conference. This event, the first in-person event like this that we've had since 2018 brought approximately 150 leaders from around the world to Pittsburgh in March to reconnect around our values of people, planet, and performance. On the people front, we spent time building leadership capabilities and gaining a greater understanding of the importance of creating and maintaining an inclusive culture. On the planet front, it was about delving deeper into the various environmental sustainability initiatives that will serve to validate our social license to operate for generations to come. And finally, on the performance front, we spent time creating alignment and building commitment to our 2025 goal of $300 million in profitability, while ensuring that our short-term quest for financial performance doesn't come in conflict with our values for people and the planet. We're most successful when all three values are pursued in balance, which we will continue to strive to do. Also, we welcome the new member of our Board of Directors during the first quarter. As seen on Slide 22, Andrew Sandifer joined the board, bringing extensive experience and an international perspective from the manufacturing and service sectors. Andrew currently serves as a CFO of FMC Corporation, a global agricultural sciences company, and previously spent time at ARAMARK, a global food service organization. With Andrew's appointment, the Koppers’ Board of Directors expands from eight to nine members and we look forward to benefiting from Andrew's valuable insights. And during the past quarter, I visited three of our manufacturing facilities and met with our employees at those locations as seen on Slide 23. In North Little Rock, I got to see firsthand the progress made by Plant Manager, Chris…

[Operator Instructions] Our first question is from Liam Burke with B. Riley. Please go ahead.

Thank you. Good morning, Leroy. Good morning, Jimmi Sue.

Hi, Liam.

Leroy, you talked about the pricing in terms of crosstie. Do you have any potential lifecycle management contracts in the works that could help offset some of that pricing pressure?

Well, I mean, we continue to have discussions in that regard. I'd say we're working with almost all of the Class I's at this point in time on – on their lifecycle management of crossties. So we continue the discussions. I'd say there's – there's nothing that that I'm aware of that, that is imminent. And I'd say from our perspective, Liam, it's again we think it's an important part of the overall value proposition. But the bigger driver for us in terms of trying to push to get results in this business is really being able to recoup the cost, the significant cost increases that we've incurred over the past several years. And so getting the industry to understand that a creosote treated wood crosstie is the best overall lifecycle solution for them. And then the willingness to pay for the product has – is what we continue to work on. And we've made some progress I'd say across the board, but there's still more progress to be made. We think that the demand environment for this market is promising over the next few years. And so if we can get the pricing aligned with what we've seen from a cost standpoint, I think – I think we have a pretty good runway out over the next couple of years in the RPS business.

Great. And on PC, the existing home sales used to be a pretty good benchmark to the demand for domestic wood protection. Now that's, you seem to be seeing some disconnect between the bouncing around of existing home sales and the demand for that product being pretty steady. Am I reading that right?

Yes. It's one of those ones where – since we've owned that business that was a leading indicator that our PC management group always looked at. But it's unique times, so I'd just say that, right, coming through the pandemic and all of the money that's been spent on repair remodeling now with higher interest rates, having people make different decisions in terms of whether to enter into a new mortgage for a new home or in many cases unfortunately getting priced out of that and making a decision to instead spend on their current home. You have those sorts of decisions that we think are impacting this somewhat. You have – we were just talking actually the other day about the fact that with a lot of the new home construction that happened again through the pandemic and that boom, that not now these – these homes are at the point in time where they're doing the, if you will cosmetic landscaping and outdoor structural features that that tend to get added after a new home is built and that having some impact on things. And we can't discount the fact that everybody's had, I think inflation fatigue. And when you go into, again a big box retailer and everything that you see is some significant percentage higher from a cost standpoint than it was just a few years ago, but you can go to either treated wood aisle and know that the project that you wanted to get done that would've been significantly higher a year or so ago is one of the few areas where you feel like you're getting some value for your money. I think that that we can't discount the fact of what impact that might be having on the market as well.

Correct. Thank you, Leroy.

Yes. You're welcome Liam.

The next question is from Gary Prestopino with Barrington Research. Please go ahead.

Hey good morning everyone.

Hi Gary.

Hey, Leroy. You put in all these price increases at the beginning of the year, right, across your segments?

Yes, yes.

Okay. In terms of the highest peak of where your input – input costs were, where did they really peak last year and then start to come down or?

Well, I don't think we've actually seen them really come down at this point. I mean, when you are looking PC, which is where we were – where we were significantly underwater. The biggest cost component that we have in there is copper, and so copper continues to bounce around that – that $4 a pound level. And so that's at least $1.50 to $1.25 over sort of where we were at for a couple years there sort of pre-pandemic. So you have that with the expiring of the agreements that have enabled us to reset pricing and do some catch up there. But a lot of the other components that go into our micronized copper product as well as some of our industrial products they've all gone up considerably as well. And most of them have remained elevated. Some bounce around a little bit but most have still remained elevated. So this – this, it was important for us to be able to – be able to get that price, hold onto it, and we'll see where the costs go as we look further beyond this year. But right now we're in a pretty decent position from a performance chemical standpoint. The big change in carbon materials and chemicals, which has a downstream effect on the RPS businesses, is in the coal tar raw material. And so with the elevated price of oil that was impacted that we saw basically coming out of the early parts of the pandemic and with the war in Ukraine, again earthquakes in Turkey de-carbonization still there's just a whole host of factors that have contributed to a tightening of raw material, which has increased the costs, which have increased. Obviously our cost of material on the CM&C and so when we make creosote,…

Okay. Thank you very much.

No, you're welcome.

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

I'd just like to thank again everybody for your continued confidence in coppers, and we will continue to work on executing on our strategy for 2025 and get to that $300 million of EBITDA, while focusing on people, planet and performance, and our Zero Harm culture. So thanks everybody for tuning in today.

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