KOP - NYSE

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koppers’ Third Quarter 2024 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. [Operator Instructions]. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Quynh McGuire, Investor Relations. Please go ahead.

Thanks, and good morning. I'm Quynh McGuire, Vice President of Investor Relations. Welcome to our third quarter 2024 earnings conference call. We issued our press release earlier today. You may access it via our website 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 8, 2025. 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 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 of Koppers; and Jimmi Sue Smith, Chief Financial Officer. I'll now turn this discussion over to Leroy.

Thank you, Quynh. Good morning everyone. I'm pleased to share the details of another strong performance delivered by our global Koppers team in the third quarter, which includes record third quarter sales and record third quarter profitability and better safety performance. We generated improved sequential profitability in our railroad and carbon materials businesses, helped by cost reduction initiatives undertaken earlier this year. On the other hand, we continue to experience reduced year-over-year volumes in our legacy utility pole business and lower sequential profitability in our Performance Chemicals business due to higher raw material costs. Now, as always, we believe that our balanced and diversified business portfolio, as well as our team's ongoing commitment to solving everyday challenges will keep us on track to meet our 2024 goals. So let's begin on Slide 4 by looking at some of our key metrics from the quarter. Consolidated sales of $554.3 million represented a record third quarter compared with sales of $550.4 million in the prior year quarter. Our Railroad and Utility Products and Services segment reported record third quarter sales while Performance Chemicals sales slightly declined due to Brown Wood sales now being reported as intercompany and Carbon Materials and Chemicals still seeing some demand weakness. We generated adjusted EBITDA of $77.4 million, a new third quarter record compared with $70.70 million in the prior year. Adjusted EBITDA margin was 14% versus 12.8% in the prior year. Third quarter diluted earnings per share was $1.09 compared with $1.22 in the prior year quarter while adjusted earnings per share for the quarter were $1.37 compared with $1.32 in the prior year quarter. Operating cash flow was $29.8 million for the third quarter and $44.7 million for the year-to-date period through September of 2024. That's versus $81.6 million and $79.5 million in 2023 respectively. Let's now review our continuing

Thanks, Leroy. We issued a press release this morning detailing our third quarter 2024 results. My comments today are based on that information. Starting on Slide 9, third quarter sales rose by $4 million or 0.7% from the prior year, a record for third quarter sales. By segment RUPS sales increased $14 million or 6%, also a third quarter record. PC sales decreased $3 million or 1.5% and CMC sales decreased $7 million or 5.5% from the prior year quarter. On Slide 10, adjusted EBITDA was $77 million, which was a third quarter record resulting in a 14% margin. By segment, RUPS generated adjusted EBITDA of $25 million with a 10% margin. PC delivered adjusted EBITDA of $40 million with a 22.6% margin and CMC reported adjusted EBITDA of 13 million with a 9.8% margin. On Slide 11, our RUPS business achieved record third quarter sales of $248 million compared to $234 million in the prior year quarter. As we realized $10 million of price increases mainly for domestic crossties and utility poles in Australia. Volumes in our domestic utility pole business were up 11%, primarily attributable to Brown Wood volumes and our railroad bridge services business saw increased activity. These increases were partly offset by lower activity in our crosstie recovery business. From a market trend perspective, prices for untreated crossties remain relatively stable compared to the prior year quarter crosstie procurement declined by 11% and crosstie treatment was lower by 8%. Adjusted EBITDA for RUPS remained consistent with the prior year quarter at $25 million. Profitability was flat year-over-year even with a net sales increase and $3.4 million from improved plant utilization as these gains were offset by $14.1 million of higher raw materials operating and SG&A costs. On Slide 12, our Performance Chemicals business generated third quarter sales of $177 million compared to $179 million in the prior year quarter. The sales decline can be attributed to preservative sales to Brown Wood now being treated as intercompany sales. Excluding Brown Wood volumes were slightly higher, but offset by lower sales prices. Adjusted EBITDA for PC was $40 million compared with $35 million in the prior year quarter. Profitability was higher despite the net decrease in sales driven by lower raw material and logistics costs, which were favorably impacted by timing. On Slide 13, our Carbon Materials and Chemicals business reported third quarter sales of $130 million compared to $137 million in the prior year quarter. We had $16.6 million of lower sales prices across most products, particularly for carbon pitch where prices decreased 20% globally driven by market dynamics, especially in Europe, as well as lower volumes of carbon black feedstock. These factors were partly offset by volume increases for carbon pitch and phthalic anhydride. Adjusted EBITDA for CMC in the third quarter was $13 million compared with $10 million in the prior year quarter. Profitability was higher due to $9.2 million of lower raw material costs, mainly in Europe, as well as lower SG&A costs and a higher volume of carbon pitch and phthalic anhydride, partly offset by price decreases and higher operating expenses. Compared with the second quarter of this year, the average pricing of major products was 1% lower and the average cost of coal tar decreased by 4%. Compared to the prior year quarter, the average pricing of major products and the average coal tar cost both decreased by 8%. Slide 15 outlines our capital allocation approach. Net capital expenditures were $55 million through September 30th. Total CapEx is forecast to be $80 million for 2024 compared with $116 million in the prior year. We spent $42 million on share repurchases year-to-date, including $10.4 million in the third quarter. Further buybacks for the remainder of this year, if any, will depend on cash flow and stock performance during our open window period. We have approximately $12 million remaining on our existing authorization. We also returned capital to shareholders through a quarterly dividend of $0.07 per share this quarter and we continue to focus on reducing our net leverage. We ended the quarter with $936.4 million in net debt and $332 million of liquidity, reflecting the $100 million we borrowed to purchase Brown Wood. Our net leverage ratio was 3.6x. We continue to be confident in our ability to grow earnings and generate cash and remain committed to our long-term target of 2x to 3x net debt to EBITDA with the expectation that it will be in the low 3s at year end. Slide 16 shows the details of our capital expenditures through the third quarter. We spent $55 million net or $59 million gross. By category, $38 million was for maintenance, $4 million for

Thank you Jimmi Sue. Now let’s take a look at the notable happenings from the third quarter. Our Utility and Industrial Products team members stepped up to help communities devastated by Hurricane Helene and Hurricane Milton which impacted 48 of our utility customers across eight states. As pictured on Slide 20, our people responded in a huge way to meet the demand for new poles as utilities rebuild their networks and restore power to affected residents. Despite dealing with their own personal losses from the storms, UIP employees shipped nearly 40,000 utility poles to affected areas across the Southeastern U.S. with more to come. Storm response is where our team shines, showing up for our customers and their communities to help them through the toughest of times. It’s been a truly heroic effort by many individuals and Koppers is proud to play a key role in the recovery efforts. Now on to a review of each of the businesses. I’ll start with Performance Chemicals on Page 23. The third quarter continued to be solid from a volume standpoint as our legacy MicroPro ground contact volumes were slightly ahead of Q3 2023, which is similar to the sales volume comparison of this product category for the year-to-date September period. Our above ground residential volumes were weaker in Q3 and through three quarters were down about 4% compared to prior year due primarily to geographic and customer mix. The trends are expected to persist through the fourth quarter with slightly more softness in our ground contact product line as some recent market share losses will begin to take effect during Q4. The data on existing home sales continues to be disappointing. While new home construction has picked up some of the slack in available housing stock. Remodeling spending should begin to come out of the trough that hit in Q3 and move back to positive comps beginning in Q2 of 2025, according to the Joint Center for Housing Studies of Harvard’s Leading Indicator of Remodeling Activity. It is difficult to pinpoint exactly why treated wood has continued to fare okay through what has been a generally tougher building products market. However, two logical factors behind this trend are the normalization of lumber prices to pre pandemic levels and people being priced out of moving up in home value and instead investing in their current home figuring that they’re going to be there longer. Industrial volumes were down in Q3 compared to prior year, but normalized for the acquisition of Brown Wood in April of this year, volumes remained flat. Year-to-date, Industrial volumes were up a couple of percent, but adjusting for Brown the increase is more like 5% to 10%. Now this will likely expand further in the fourth quarter due to the heavier demand we saw coming from storm response after Hurricanes Helene and Milton. The storm response has also had a positive impact on residential product demand in early Q4 as lumber yards and home improvement stores needed to stock up for the repair and rebuild process. Pricing for non-contracted business has been under some pressure throughout the year as costs other than copper have begun to moderate. We’ve also continued to pull back on discretionary spending, which has helped push profitability to new heights. As a result of all that, we are upping our estimate of full year EBITDA for our PC segment to $140 million at the midpoint of our range increase. Moving on to our Utility & Industrial Products business shown on Page 24. Demand in Q3 continued to be softer than prior year when we exclude sales from the Brown Wood acquisition. A combination of needing to work down higher inventories, a higher interest rate environment causing utilities to reassess project scope and timing while they seek rate increases, and a shifting of constrained budgets to more critical power generation projects have all contributed to what we view as a short-term constraint on pole demand. Now that included the Brown business and our entry into the Texas market, which are both running behind early expectations but remain poised to make significant contributions when normal demand picks back up. As mentioned earlier when I highlighted the work by our UIP team in late September and early October, Hurricanes Helene and Milton devastated various parts of the Southeast U.S. causing death and destruction not seen in many years. To serve affected customers and communities, our team came together to ship approximately 40,000 poles which is 3x to 4x our typical storm response. Now the vast majority of that volume was shipped in October, which was a record sales month for UIP. We were thankful to have the Brown Wood plant as a part of Koppers as it enabled us to do more than we could have otherwise. Responding to those storms has enabled Koppers and certain of our customers to work down inventories, improving the chances that 2025 sales will get off to a positive start. On a final note, our Australian pole business had another strong quarter and with one quarter left this year finds itself in position to have its best financial performance since 2014. Our Railroad Products and Services business is summarized on Page 25. Through nine months, we’ve recognized $20 million in higher price, which has helped us chip away at covering the increased costs we’ve experienced over the past couple of years. Also through September, we’ve realized $4 million of cost savings that we targeted for the year, which is at the low end of our previously stated range. Now that gives me confidence that we’ll finish the year closer to the high end of our target and also providing help on the cost front is reducing our need for boultonizing and having the healthiest air stacked inventory levels we’ve seen in years. Switching issues and inconsistent car flow in and out of our plants, something that we don’t control continues to be an issue at several of our facilities. Now we're addressing those issues as best we can as they arise, but they've contributed to inefficiencies that we have had a limited ability to recoup. We still expect to finish the year flat from an overall crosstie demand standpoint, while our commercial business remains a bright spot as backlog and profitability remains strong. With volumes in both utility and rail customers muted and less price recovery than what was expected coming into the year, we're expecting an increase in EBITDA from our RUPS business of $9 million to $10 million, which is at the lower end of the range of our expectations that we communicated last quarter. Finally, onto the CM&C business which is summarized on Page 26. As expected, we saw both sequential and year-over-year improvement in profitability for our global CM&C business, pitch markets appear to be at or close to bottom as pricing continues to be weak comparatively speaking, but we did experience a small boost in volumes during the quarter. While pricing was down, we didn't lose any ground as coal tar reductions kept pace with finished goods price declines. We continue to work on raw material contract extensions, the result of which will be key to our success beyond this year. We have agreed on the important terms for our coal tar supply in Australia, while discussions in Europe and the U.S. continue. Like RPS, cost is a big issue in CM&C, particularly in North America where we have been focused on finding cost savings capturing $7 million through September. Somewhat specific to CM&C, we have also cut back planned capital expenditures for this year and are tracking to a capital number for CM&C this year that is $24 million less than last year. Moving forward, this represents an annual run rate that we plan to stick to and potentially reduce even further. For CM&C, we now expect a decline in EBITDA for this year between $9 million and $11 million, which is in the middle of our previously communicated range. On Slide 28, we continue to expect consolidated sales to be flat year-over-year. RUPS sales are projected to see $50 million in top line increase, including contributions from Brown Wood. PC sales are forecasted to decrease slightly by $15 million from the prior year and CM&C sales are estimated to decrease by $75 million due primarily to price and volume declines in carbon pitch, much of which we've already experienced, partially offset by volume increases in phthalic anhydride. As a result, our consolidated sales forecast for 2024 is approximately $2.1 billion, which would be similar to 2023. On Slide 29, we're tightening our forecast for adjusted EBITDA to be in the range of $270 million to $275 million due to the various reasons already explained. On Slide 30 we provide our adjusted earnings per share bridge where we continue to expect a strong contribution from operations offset somewhat by depreciation and amortization and interest expenses. For 2024, we're tightening our EPS range to be $4.25 to $4.45, with the upper end representing a new high for Koppers. On Slide 31, we are projecting capital spending to be $80 million in 2024, $73 million net of cash proceeds. This is $5 million better than the low-end of our previous range and $43 million better than the net $116 million that was spent in 2023. That has enabled us to devote $42 million this year to repurchasing shares at levels well below our stock price highs experienced early this year. Moving to Slide 32, I'd like to spend a few minutes providing a high level rundown of our early expectations for 2025. In performance chemicals we've already seen a more competitive environment in the residential preservative market and thus will be experiencing some market share loss and margin erosion as we compete to minimize our net share loss for next year. However, lower mortgage rates are expected to support an improved housing market and that in combination with improved repair and remodeling expenditures should support healthier market conditions. For our industrial products, we're projecting demand growth due to net market share gains and an improved industry backdrop. In terms of raw materials, copper prices will rise, but they are hedged and most other product costs should not experience any measurable change. It is fair to say that our PC business probably outperformed in 2024 and is due for a step back. Now while that will happen in 2025, it will be somewhat mitigated by stronger industrial demand and aggressive cost reduction measures. All told, we can still see a path for Performance Chemicals to have its second or third best year ever, which would make me happy. In our utility and industrial products business, a healthier utility market is expected to support modestly higher volumes and we will have a full year of benefits from the Brown Wood acquisition. We're also expecting to further expand our presence in Texas and Midwest regions to realize additional market share growth. Market drivers continue to remain positive, supporting long-term growth driven by continued infrastructure build out, grid hardening and broadband expansion. In addition, we will continue to evaluate opportunities to further grow our business, whether it be through further consolidation or entering new fiber markets. The recent storm activity that led to much needed destocking already sets up the 2025 demand backdrop to skew more positive in just a quarter ago. There is little question in my mind that 2025 will represent a new high in profitability for our UIP business. The only question is where does it end up and we'll have a much better idea of that when we talk in more detail about how we see 2025 on our call in February of next year. In Railroad, Products and Services we're expecting slightly higher sales volumes in 2025 which will come from market share gains. Although overall demand from the Class 1 market is projected to be flat to slightly down. We anticipate higher contract pricing with operating costs staying in check or going lower due to cost reduction activities. For the commercial crosstie market demand should remain in line with 2024 levels and I don't expect our maintenance of weigh business to have an appreciable impact on our year-over-year results. Slightly higher volumes combined with higher pricing and lower cost is a favorable equation. In combination with our expectations for UIP, this should push our RUPS segment to a new all time high in profitability and finally bring our segment EBITDA margins back above the 10% mark for the first time since 2016. In carbon, materials and chemicals improved volumes in our RPS business will help drive higher creosote sales. We expect Europe and Australia to maintain similar levels of profitability as in 2024, some of which is expected to come from enhanced carbon product sales. In North America if we're unable to reach sustainable cost improvement we'll seriously consider rationalizing capacity. For capital expenditures we plan to reduce spending across CMC for the second straight year as we work to improve the free cash flow yield in this segment. I expect that 2025 will see improvement from our global CMC business if for no other reason than cost reductions. Any benefit from improvement in market conditions will only be additive to our expectations. And like UIP we will have a better view of that come February. Further to what we see on the horizon in our business segments, if you turn to Slide 33 you can see the other actions we're taking to ensure that we reach an 11th straight year of improved performance. The termination of our U.S. pension plan will result in an estimated $4 million of annual cost savings, with $3 million being realized in 2025, excluding an estimated $40 million in special charges to GAAP earnings that will be incurred over the next two quarters, with most of it in early next year. Also, we will be resizing our workforce over the next two quarters through a combination of voluntary and involuntary actions. These actions will enable us to align our spending levels more closely to commodity chemical cost metrics and allow us to compete more effectively. Also, we expect to realize interest expense and cash savings from a combination of lower average borrowings and lower rates. Regarding capital deployment we anticipate there will be a final contribution of $25 million as part of terminating our U.S. pension plan, and we're forecasting a normal capital investment year of $65 million to $75 million as we take a breather to allow the significant internal investments made over the past four years to begin generating greater returns. We're planning to consider our normal annual dividend increase in February of 2025 as well as to allocate capital to share repurchases to offset dilution and to support our stock price during periods of market overreaction as we have experienced this year. Our remaining free cash flow will be allocated to reduce debt. In summary, our top line in 2025 is not expected to differ markedly from 2024 as market share erosion in PC is expected to be offset by top line growth in our other two business segments. In terms of profitability, we believe that 2025 will result in new highs in adjusted EBITDA, adjusted EBITDA margin and adjusted earnings per share. Now, while we're still working through the details and there is much yet to be determined, including the ultimate amount of cost savings, we are confident we will exceed the current consensus estimates of $285 million for adjusted EBITDA for 2025. And we are still targeting to achieve $300 million or better next year. At the same time, we anticipate that our net leverage will drop to below 3 times adjusted EBITDA from a combination of higher adjusted EBITDA and lower net debt. The final details supporting our 2025 targets will be shared during our fourth quarter earnings call in February of 2025. Also, we're in the process of finalizing our 2030 strategy and look forward to unveiling the details of our next five year plan to the financial community during our next Investor Day, which will take place in September of 2025. At this time, I would like to open it up to questions.

[Operator Instructions] Our first question today comes from Gary Prestopino from Barrington Research. Please go ahead with your question.

Sure. Hi, good morning everyone.

Good morning.

Hey Leroy, you mentioned some competitive issues and share losses in PC. Could you go into that a little bit more please? What's going on there?

Sure, so. Yes, Gary. So we've traditionally, I think since we've owned the business, have had anywhere from two to three-year agreements with our major customers in performance chemicals. And you might remember going back, I think to the end of 2022 when we were experiencing a lot of inflationary pressures on the cost side and some erosion margin. We were actually going through a renewal of agreements with our customer base that went out two years and we were able to get significant price increases pushed through to, enable us to recapture a lot of the cost increases that we were eating at that point in time. And we're in that phase right now where renewals are happening for the next two to three years. And as we're going through that process with the significant price increases that we had to push through the last time, it's just created an opportunity, I think, for others, if you will, to make a case is to why some of these customers should shift some volume over. So we've seen some erosion from that standpoint and we will see some erosion from that standpoint in terms of our customer base. But I'd say from an overall standpoint, some of that was probably due to happen at some point in time given the amount of significant share gains that we have picked up over the last five, six years. And so I look at this as sort of normal competitive actions and reactions. We've been on quite a run where it's been us who then, taking a lot of share over the last few years. And there's, this particular case, I think on a net overall basis there'll be a little bit shifting back the other way. We are picking up some share and from some other customers and things like that. So it's not – it's not all going one way. But from an overall net standpoint, this will be 2025 will be a year where we lose a little share, which is the first time that's probably happened in a long time for us.

Okay, thank you for that. And then just on your overall summary, you said contemplating sale or shutdown of various operations. Can we assume that, that would just be some manufacturing capacity or could that even be assumed a significant restructuring within your business segments?

I wouldn't go that far. I mean we still have some smaller businesses that again, some align maybe a little better with the overall core of the business, others maybe not as much. And so, if there's an opportunity to again, you move any of those smaller businesses, we might look to do that if the price was right. As it relates to capacity, we've shuttered a lot of capacity over time, went through a major restructuring when we went from 11 facilities in Carbon Materials and Chemicals down to three. There's not a whole lot much more week, week can do there. But there are some things that certainly we believe we can do that might be short-term in nature, some could be long-term in nature depending upon our view of where the markets are at and where they're going. So we're evaluating to make the right decision for Koppers and our shareholders and that market has seen a little bit of tough times over the past 18 months and in particular in North America. So there's things that I think we have to look at and, again, the shareholders would expect us to look at. And so we will look at that. And our communication in terms of putting that out there is really more or less just to let everyone know that, we everything is on the table for us and continues to be.

Yes. And then just lastly, how does the acquisition pipeline look? And after Brown Wood, would you have an appetite for doing something in 2025?

I think, yes, so we continue to try and keep up relationships and ensure that folks know that, we have an interest in continuing to grow in that business. And it's really about when the time is right. On the other side of things, which you can never quite tell. So we're certainly open to opportunities that might arise and we'll continue to keep that pipeline going. How that goes? Again, you can't always choose when the other party is ready to make a move. So it's hard to say about whether anything would materialize in 2025 or not. But we certainly that, that is an interest of ours and we believe it creates a good opportunity for us. So we do remain open to that.

Okay, thank you.

Yes, thank you.

And our next question comes from David Marsh from Singular Research. Please go ahead with your question.

Hi guys. Congrats on the quarter, and thanks very much for taking the question. Appreciate it.

Yes, thank you.

Just wanted to start notice that your SG&A sequentially was down a couple million dollars in the current quarter, which was actually a very positive surprise. Can you talk about the sustainability of that in light of your comments around the potential reduction?

Yes, I mean I think as always, we're looking at ways that we can improve the business, improve our profitability, react and respond to things that are happening around us. We've had for us, I think, a fairly aggressive growth plan over the last four years leading through this 2025 strategy that had some significant, again for us that are in low growth markets, growth associated with it. Right. So a lot of capital that we've invested and we had sized up for that as well. And so those investments have been made. We've seen a couple of the markets that we're in end up kind of coming down into what we would consider trough periods. We have some net market share losses heading into 2025 in our Performance Chemicals business. So we're looking at what we can do to, resize, streamline the organization to sort of fit, a year where again, we flat overall sales in 2025. And so we think there are some opportunities to do that within our SG&A category and as well as on the operating side. So it's not just exclusive to that, but what you saw there in terms of the quarter, there's an expectation that, that will continue for us moving forward. And again, we're not prepared at this point in time to talk about by how much the savings could be. We'll do that in February, but we're working through that right now and. But I would say certainly that the expectation is that, that is a focus of ours and you'll see that sort of performance, I think, continue moving forward.

That's great. And then just looking at your interest expense was up obviously due to the debt related to the acquisition. But since the quarter we've had a couple of interest rate cuts. Could you kind of help quantify the impact on interest expense of the 75 basis points in rate cuts that we've seen so far by the Fed?

Yes, I think Jimmi Sue would be perfect to respond to that.

Yes, thanks, Leroy. I would say that you would want to apply that to about $500 million of our debt, because we are hedged for a big portion of what's out there. So you can kind of think about it that way.

Yep, perfect. Got it. Thank you. And then just kind of following on the first question with regard to acquisitions, in terms of, you guys have different business lines and obviously there's a lot of different factors in each one of them. But could you kind of help prioritize like in your mind right now, like the order of priority where you would look to acquire something in terms of the different business lines?

I think, yes, that's actually pretty easy. I mean, for us, we see most of the opportunity on the utility side of the business. It's the area that we are smallest in. It's the areas where we cover less geography. That's the area where quite frankly [ph] show the most opportunity. So that would be high on our list. Secondary to that would be anything that might make sense around our Performance Chemicals business that would help us, if you will, add around the preservative business that we have in place there today. Outside of that, there is we already hold a significant share in the rail side of the business. So there's really nothing much to do there. We're not looking to really grow outside of that in maintenance way, in any way. And then CMC, again, that is a business that has been in some tough straits for a number of years. And so we think being one of the last few remaining distillation companies provides some level of advantage moving forward, but we're not looking to build around that other than, again, if things happen to take off in some of our new products that we're trying to get into starting out in our European location.

Great. Thank you guys. Appreciate it.

Yep. Thank you.

Ladies and gentlemen, with that, we'll be concluding today's question-and-answer session. At this time, I'd like to turn the floor back over to CEO, Leroy Ball for closing remarks.

Thank you. Yes no, look, we appreciate the interest in Koppers. We still think that we have a lot of runway to continue to show improvement. We're expecting again a continued improvement in 2025 and strong performance and beyond that as well. We look forward to sharing again the details of how we see 2025 shaping up in early next year when we do our fourth quarter earnings call and currently look forward to unveiling more details around our 2030 strategy in September of next year. So thank you again for all your support.