Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers' Third Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions] 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 Kopper's 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 spending once again continued to 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 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…

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 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. 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…

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 positive -- 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% demonstrate 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…

[Operator Instructions] Our first question today is from Gary Prestopino with Barrington Research.

Question here, Leroy, is -- I'm looking at Slide 23, okay? You've taken some good expenses out of CMC, some out of RUPS, yet PC is the lowest expense capture there. But I mean, that's the only business that showed a down quarter really in adjusted EBITDA and down EBITDA margins. I mean, is there something inherent there that you can't take costs out or you just feel you shouldn't be taking costs out because the markets are going to eventually rebound?

Yes. Gary, it's a good question. I mean, there are costs being taken out of there. And when we look across the board, you can't view all those numbers as necessarily being only cost takeout, right? Because there's actually things that we've been able to do to improve within our operations, particularly in CM&C, which is why that's a larger overall number. But for PC, we have taken out costs, and we've certainly taken out corporate allocations, corporate overhead costs as well, which is helping them. But look, that is the business that we are continuing to see as our future here, and we want to make sure that we're not cutting too far back in that area when we're trying to go out and win back some business, expand into some different product categories and look at continuing to build around that business. So we don't -- that's one we want to be a little more careful about in terms of how hard we cut back. It's not in the same, if you will, commodity category as some of our other businesses where I think inherently, we just have to be really, really tight on our cost, both operating as well as overhead. So that's why you don't see it quite as much there. The opportunities that are going to come on PC as it relates to Catalyst, they're really going to be on the commercial and less so probably on the cost end.

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 into CM&C. And I think it's on a -- 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, could you give us some color on -- or if there is any, on your strategy of growing the utility pole business either organically or through acquisition?

Yes. So look, we've talked about the fact that we have a pretty strong business in the traditional markets that, that business served when we acquired the Cox utility business back in 2018. So very strong in the Southwest, pretty strong in the Northeast. Not a lot of coverage in the Midwest, basically nothing done in the Southwest and nothing out West. And so, there's a lot of market opportunity for us to go after, again, in markets that we certainly serve in different geographies and know well. So, we obviously bring to bear the wood preservative technology, the treating technology, we've been treating in industrial products for most of the company's history. And so, all of that, we think, translates pretty well to being able to expand that business model. Part of it is you need to be in species beyond just Southern Yellow Pine, which is why we're -- we've been building out a supply chain there. The Brown acquisition and the facility that was added there with its capabilities, really also opens up the door for us in a way that we couldn't do with our existing asset base. And so, yes, we're -- we think we have great opportunity to go after share in underserved markets that, quite frankly, only one or maybe even 2 major suppliers have been able to serve. And now we can provide another option. As I've mentioned time and time again, it is not our intent to go out and try and start a race to the bottom. We think that there's enough share to be won by just being able to provide a second source of stable supply. And so, in conversations we've had, we certainly have been encouraged to go down that route. So we'll continue to build out our sales capabilities. We'll continue to add to our technology and supply chain. And we view UIP as an important part of our growth story.

Great. Thank you. The next question is, if I'm looking at existing homes as a rough benchmark for demand -- for derived demand for PC. They've obviously come off from a very high level, but are starting to stabilize at a certain unit volume, we'll call it, $4 million. If I think about anniversarying your market share loss, do you have a sort of a baseline revenue for PC now where you could see growing off that reset base?

Yes. I mean I think that, the way we think about the business overall is this setback that we're experiencing this year, and to your point, it's beyond losing a little bit of business. It includes an overall market that has dropped by, again, 3% or so year-over-year, which is something we've not seen actually, I think, since -- well, I don't know -- actually we've seen it since we've owned the business. So we don't think it's anything that is systemic or indicative of the start of any longer term trend. So we think it provides a base moving forward that we can expect to see more regular growth coming from, most of -- the growth that's more in line with kind of what we have seen over time, which is, again, more in that 3% to 4% year-over-year range. All that being said, again, whether our customer base is scarred by what they're going through right now or whether they truly have visibility longer term, they're basically giving signals that they don't expect to -- they're not building in growth for next year, organic growth. I think they're setting expectations of kind of holding flat. And maybe, again, part of that is to prepare for another year of tepid demand. And if it gets better than that, then great, but not setting expectations too high and then being disappointed as the year goes on. So I think they're expecting a better year because, again, this year is right now down about 3% overall, but they're not right now factoring in or at least telling us that they're factoring in any real growth in the market.

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.