Koppers Announces Conditional Plan to Discontinue Production Activities at Facility in Stickney, Illinois
Rhea-AI Summary
Koppers (NYSE: KOP) announced a conditional decision to discontinue distillation and chemical production at its Stickney, Illinois facility, subject to union bargaining, affecting about 85 employees. Koppers expects wind-down by Dec 31, 2026, shift production to Nyborg, Denmark, and is evaluating future use of Stickney.
The company expects pre-tax charges of $227M–$262M through 2029 (including $170M–$195M non-cash recorded in Q2–Q3 2026), cash closure charges $57M–$67M over three years, and annual free cash flow improvement of $15M–$25M.
Positive
- Annual free cash flow improvement of $15M–$25M
- Adjusted EBITDA run-rate savings of $15M–$20M from 2027
- Incremental adjusted EPS benefit of $1.00–$1.20 per share
Negative
- Pre-tax charges of $227M–$262M through 2029
- Non-cash charges of $170M–$195M expected in Q2–Q3 2026
- Approximately 85 employees impacted by discontinuation
Key Figures
Market Reality Check
Peers on Argus
KOP down 1.08% while several chemical peers show larger single-day declines, but no scanner-flagged sector momentum.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| May 07 | Dividend declaration | Positive | -1.1% | Announced quarterly cash dividend of $0.09 per share for shareholders. |
| Apr 24 | Earnings call schedule | Neutral | +4.2% | Set date and time for release and call on Q1 2026 results. |
| Mar 31 | Annual report filing | Neutral | +1.1% | Published 2025 Annual Report and audited financial statements with SEC filing. |
| Mar 30 | NYSE content feature | Neutral | +0.8% | NYSE update noting Koppers ringing Closing Bell and media appearance. |
| Mar 30 | Listing anniversary event | Positive | +0.8% | Celebration of 20th NYSE listing anniversary and investor meetings in New York. |
Recent company communications (dividend, investor events, filings) have generally seen modest positive or mixed price reactions, with the dividend declaration followed by a small decline.
Over the past months, Koppers highlighted shareholder returns and investor engagement, declaring a $0.09 quarterly dividend payable on June 15, 2026 and scheduling its Q1 2026 earnings call for May 8, 2026. It also published the 2025 Annual Report and celebrated its 20th NYSE listing anniversary with a Closing Bell event and investor meetings. Against this backdrop of steady corporate communication, today’s news centers on restructuring its Stickney facility to address long-running margin and cash flow pressures.
Market Pulse Summary
This announcement outlines a conditional plan to end production at the Stickney facility and consolidate operations in Nyborg, targeting structural margin and cash flow improvement. Management expects total pre-tax charges of $227M–$262M and annual adjusted EBITDA savings of $15M–$20M, supporting an estimated $1.00–$1.20 adjusted EPS benefit. Investors may track progress on union negotiations, the 2026 wind-down timeline, and whether projected free cash flow gains of $15M–$25M materialize after the transition.
Key Terms
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AI-generated analysis. Not financial advice.
Continues Enterprise-wide Strategy to Focus on Improving Margins and Cash Flow
The conditional decision, which is pending negotiations and consultation with the union and would impact approximately 85 employees, was driven by challenging market conditions over the past decade, including unit operating costs outpacing our ability to capture higher pricing, reduced raw material supply from North American steel manufacturers, and increased capital requirements.
Koppers anticipates winding down the remaining distillation and chemical production activities by December 31, 2026, pending discussions with the union. The company is tentatively targeting fourth quarter 2026 for shifting production to its coal tar distillation facility located in Nyborg,
This action is anticipated to result in pre-tax charges to earnings of
Commenting on the intended action, Koppers Chief Executive Officer and Chair Leroy Ball said, "Our Carbon Materials and Chemicals business has faced structural market challenges for more than a decade and despite significant restructuring efforts, our
Mr. Ball continued, "I want to thank our employees for their continued hard work and determination while operating under persistently tough circumstances. We understand that this situation is incredibly difficult and will have a real impact on our employees and their families. Our priority is to provide the support and assistance needed to help them navigate any transition."
Koppers does not provide reconciliations of guidance for adjusted EBITDA, free cash flow and adjusted earnings per share to comparable GAAP measures, in reliance on the unreasonable efforts exception. Koppers is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures. These items include, but are not limited to, restructuring and impairment charges, acquisition-related costs, mark-to-market commodity hedging, and LIFO adjustments that are difficult to forecast for a GAAP estimate and may be significant. Forward-looking statements, including the guidance above, are based upon current expectations and are subject to factors that could cause actual results to differ materially from those set forth above. Please see the "Safe Harbor Statement" below for more information.
About Koppers
Koppers (NYSE: KOP) is an integrated global provider of essential treated wood products, wood preservation technologies and carbon compounds. Our team of approximately 1,850 employees create, protect and preserve key elements of our global infrastructure – including railroad crossties, utility poles, outdoor wooden structures, and production feedstocks for steel, aluminum and construction materials, among others – applying decades of industry-leading expertise while constantly innovating to anticipate the needs of tomorrow. Together we are providing safe and sustainable solutions to enable rail transportation, keep power flowing, and create spaces of enjoyment for people everywhere. Protecting What Matters, Preserving The Future. Learn more at Koppers.com.
Inquiries from the media should be directed to Ms. Jessica Franklin Black at BlackJF@koppers.com or 412-227-2025. Inquiries from the investment community should be directed to Ms. Quynh McGuire at McGuireQT@koppers.com or 412-227-2049.
Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and may include, but are not limited to, statements about sales levels, acquisitions, restructuring, declines in the value of Koppers assets and the effect of any related impairment charges, profitability and anticipated expenses and cash outflows. All forward-looking statements involve risks and uncertainties.
All statements contained herein that are not clearly historical in nature are forward-looking, and words such as "outlook," "guidance," "forecast," "believe," "anticipate," "expect," "estimate," "may," "will," "should," "continue," "plan," "potential," "intend," "likely," or other similar words or phrases are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in other press releases, written statements or other documents filed with the Securities and Exchange Commission, regarding future dividends, expectations with respect to sales, earnings, cash flows, operating efficiencies, restructurings, cost reduction efforts, transformation initiatives, product introductions or expansions, the benefits of acquisitions, divestitures, joint ventures or other matters as well as financings and debt reduction, are subject to known and unknown risks, uncertainties and contingencies.
Many of these risks, uncertainties and contingencies are beyond our control, and may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Factors that might affect such forward-looking statements include, among other things, availability of and fluctuations in the prices of key raw materials, including coal tar, lumber and scrap copper; the impact of changes in commodity prices, such as oil, copper and chemicals, on product margins; the successful implementation of multi-year cost mitigation programs; the extent of the dependence of certain of our businesses on certain market sectors and customers; economic, political and environmental conditions in international markets, including governmental changes, tariffs, restrictions on trade and restrictions on the ability to transfer capital across countries; current and potential future tariffs or duties; general economic and business conditions; potential difficulties in protecting our intellectual property; the ratings on our debt and our ability to repay or refinance our outstanding indebtedness as it matures; our ability to operate within the limitations of our debt covenants; unexpected business disruptions; potential delays in timing or changes to expected benefits from cost reduction efforts; timing and results of any transformation initiatives, including estimates and assumptions related to the cost and the anticipated benefits of the transformation initiatives; potential impairment of our goodwill and/or long-lived assets; demand for Koppers goods and services; competitive conditions; capital market conditions, including interest rates, borrowing costs and foreign currency rate fluctuations; disruptions and inefficiencies in the supply chain; changes in laws; the impact of environmental laws and regulations and compliance therewith; unfavorable resolution of claims against us, as well as those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Koppers, particularly our latest annual report on Form 10-K and any subsequent filings by Koppers with the Securities and Exchange Commission. We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this release may not in fact occur. Any forward-looking statements in this release speak only as of the date of this release, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after that date or to reflect the occurrence of unanticipated events.
For | Quynh McGuire, Vice President, Investor Relations | |
412 227 2049 | ||
Jessica Black, Senior Manager, Corporate Communications 412 227 2025 |
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SOURCE KOPPERS HOLDINGS INC.