Koppers Holdings Inc.
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
KOP$29.97-24.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0000950170-25-028542
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001315257-26-000012
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 84 current paragraphs.
36 unchanged; 29 reworded; 19 added; 20 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Significant areas of focus include:
Current report
•Market demand for utility poles is expected to grow over the next few years. The main driver for growth is the construction of datacenters that support artificial intelligence development. The datacenters that are being constructed nationwide consume large amounts of electricity. Other drivers of pole demand include aging pole infrastructure, the expansion of renewable energy, vehicle electrification, grid-hardening measures, and extreme weather protection. Our Utility Products business continues to focus on expanding its presence in the midwestern and western United States.
Current report
Recent Developments
Current report
In February 2026, we made the decision to idle production activities at our Utility and Industrial Products facility in Vance, Alabama, effective immediately. Substantially all production handled at this location was transitioned to our Kennedy, Alabama plant. These facilities were located within 60 miles of each other and served the same market which resulted in plant underutilization, redundancy and higher operating costs.
Current report
In February 2026, we also announced our plan to idle production activities at our Railroad Products and Services facility in Florence, South Carolina due to lower overall future forecasted demand from the facility's largest customer. We expect to ramp down production at Florence over the next several months with plant idling activities to be completed by November 2026. During this time period, we will transition incremental production to our facility in Guthrie, Kentucky.
Current report
Consolidating production of these facilities will help us optimize our network, better align capacity with demand, reduce operating costs and strengthen the long-term competitiveness of our operations.
Current report
Trade Tariff Uncertainties
Current report
Our outlook reflects plans to substantially offset costs related to import and export tariffs, where possible, but there is continued uncertainty regarding the implementation dates and scope of potential additional tariffs, as well as potential retaliatory trade policy. As a result of these items, our outlook may vary. See also Item 1A. Risk Factors in this Form 10-K.
Current report
RUPS net sales decreased due to $21.8 million of lower volumes in our Class I crosstie business and lower activity in our maintenance-of-way businesses, including approximately $11.1 million related to the sale of our railroad bridge services business during the third quarter of 2025. These decreases were partly offset by increased volumes in our domestic utility pole business and $11.0 million of price increases across multiple markets, particularly for crossties. Foreign currency changes compared to the prior year period had an unfavorable impact on sales in the current year period of $1.9 million, mainly from our Australian utility pole business.
Current report
PC net sales decreased due primarily to a 17 percent volume decrease driven by a shift in United States market share and a slight decrease in remaining customer volumes as well as sales to Brown Wood (as described in Note 3 of the Notes to Consolidated Financial Statements) which were included in external sales during the first quarter of 2024. Foreign currency changes compared to the prior year period from our international markets had an unfavorable impact on sales in the current year period of $1.6 million.
Current report
CMC net sales decreased mainly due to lower phthalic anhydride volumes of $67.5 million as we ceased production of the product in the second quarter of 2025, lower volumes and prices for carbon black feedstock and lower sales prices for multiple products, particularly for carbon pitch which decreased six percent globally. The decreases in carbon pitch prices were driven by market dynamics in the current year period, particularly in Australasia. These decreases were partly offset by volume increases for carbon pitch, naphthalene, creosote and refined tar. Foreign currency changes compared to the prior year period from our international markets had a favorable impact on sales in the current year period of $3.3 million.
Current report
Depreciation and amortization expenses were $6.1 million higher when compared to the prior year period primarily as a result of increased asset retirement obligations in our North American CMC operations and our acquisition of Brown Wood.
Current report
Selling, general and administrative expenses were $24.4 million lower when compared to the prior year period due mainly to a decrease in compensation-related costs and other administrative expenses, in particular lower stock-based long term incentive plan expenses of $8.2 million. See Note 8 - Stock-based Compensation for changes related to our long-term incentive plan.
Current report
Other income, net increased in the current year period primarily as a result of increased royalty income in our PC business and lower pension costs.
Current report
Loss on pension settlement for both years relates to the settlement loss recorded as a result of the termination of our United States qualified pension plan as discussed in Note 14 – Pensions and Post-Retirement Benefit Plans.
Current report
RUPS adjusted EBITDA increased due to $11.6 million of lower operating and raw material expenses and $10.2 million of lower selling, general and administrative expense, in addition to net sales price increases and increased utilization, partly offset by net sales volume decreases.
Current report
PC adjusted EBITDA decreased due primarily to lower sales volumes and higher raw material costs of $19.0 million, partly offset by lower selling, general and administrative expenses of $5.0 million, lower logistics expenses of $4.5 million, particularly in North America, and higher royalty income of $3.1 million. Higher raw material costs were unfavorably impacted by scrap copper costs, net of the benefit realized from our copper-hedging program.
Current report
CMC adjusted EBITDA increased due to lower raw material and operating expenses of $19.9 million, particularly in North America, including the operating cost savings from discontinuing phthalic anhydride production, lower selling, general and administrative expense of $9.2 million and improved plant performance as a result of an outage in North America in the prior year period, partly offset by lower sales prices.
Current report
(2)See Note 3 - Acquisitions and Restructuring.
Removed paragraphs (20)
Previous report
Our keys to success in 2025 include:
Previous report
Market demand for utilities poles is expected to grow in 2025 with most of the growth concentrated in the second half of the year, while demand in the first half is expected to remain relatively flat. Key drivers include aging pole infrastructure, the expansion of renewable energy, vehicle electrification, grid-hardening measures and extreme weather protection. Recently, the realization of potential productivity gains from artificial intelligence (AI) has significantly increased the demand for electricity. Technology companies are now securing power supplies for data centers to fuel AI, resulting in higher volume demand for both distribution and transmission wood poles. We will continue to focus on expanding our presence in the western and midwestern United States and Canada along with improving our efficiency and capturing new customers to increase our market share.
Previous report
Results of Operations – Comparison of Years Ended December 31, 2024 and December 31, 2023
Previous report
Net sales for the years ended December 31, 2024 and 2023 are summarized by segment in the following table:
Previous report
RUPS net sales increased largely due to $29.5 million of pricing increases for crossties and utility poles, along with higher volumes for these products and an increase in activity in our railroad bridge services business, partly offset by lower activity in our crosstie recovery business. Volumes in our domestic utility pole business increased 6.9 percent primarily as a result of our acquisition of Brown Wood and was partly offset by a decrease in our legacy utility pole business due to temporary customer overstock and budget realignment.
Previous report
PC net sales decreased due primarily to sales to the recently acquired Brown Wood of approximately $9 million no longer being included in our reported sales beginning April 1, 2024, lower volumes of our industrial non-copper based preservatives and lower pricing of $3.1 million in the Americas.
Previous report
CMC net sales decreased largely due to $81.4 million of lower sales prices across most products, especially carbon pitch where prices were down approximately 20 percent globally, along with $25.0 million of lower volumes of carbon pitch. The decreases in carbon pitch prices and volumes were driven by reduced market demand in the current year period. These decreases were partly offset by volume increases for phthalic anhydride and other products.
Previous report
Depreciation and amortization expenses were $10.5 million higher when compared to the prior year period as a result of recent capital expenditures including growth projects such as the expansion of our RUPS facility in North Little Rock, Arkansas and the yield enhancement project at our CMC facility in Nyborg, Denmark, as well as the acquisition of Brown Wood. Additionally, asset retirement obligations in our European CMC operations and its related depreciation expense increased during 2024 when compared to the prior year period.
Previous report
Selling, general and administrative expenses were $5.2 million higher when compared to the prior year period due mainly to an increase in compensation-related costs along with an increase in professional service and insurance expenses.
Previous report
Loss on pension settlementwas $4.0 million in 2024. See Note 14 – Pensions and Post-Retirement Benefit Plans.
Previous report
Segment adjusted EBITDA and adjusted EBITDA margin is summarized in the following table:
Previous report
RUPS adjusted EBITDA decreased due primarily to $50.3 million of higher raw material, operating and allocated selling, general and administrative expenses, which combined to more than offset net sales increases and $11.8 million from improved plant utilization.
Previous report
PC adjusted EBITDA increased despite lower sales, as a result of lower raw material and logistics costs offsetting lower sales prices. Lower raw material costs were favorably impacted by timing, including an increase in gains realized from our copper-hedging program, net of an increase in the cost of scrap copper recognized to date.
Previous report
CMC adjusted EBITDA decreased as a result of lower sales prices, lower plant utilization and higher operating expenses, partly offset by a $56.5 million reduction in raw material costs, particularly in Europe, as well as lower allocated selling, general and administrative costs and higher volumes of phthalic anhydride.
Previous report
On February 27, 2025, we announced that the board of directors approved a $100 million share repurchase program. The repurchase program has no expiration date and replaces our previous share repurchase program of $100 million, which was approved in August 2021 and had approximately $11 million remaining.
Previous report
Pension and Post-retirement Benefits. Accounting for pension and other post-retirement benefit obligations involves numerous assumptions, the most significant of which relate to the discount rate for measuring the present value of future plan obligations and the expected long-term return on plan assets.
Previous report
We develop our demographics and utilize the work of third-party actuaries to assist in the measurement of these obligations. We have selected different discount rates for our pension plans and our other post-retirement benefit plans due to the different projected benefit payment patterns. In determining the assumed discount rates at December 31, 2024, we used our third-party actuary’s discount rate model. This model calculates an equivalent single discount rate for the projected benefit plan cash flows using a hypothetical bond portfolio to match expected cash flows under our benefit plans. The bonds used are rated AA or higher by a recognized rating agency, and only non-callable bonds are included with the exception of those with a make-whole call feature. The actuary limited the selection to those bonds with a minimum of 100,000 outstanding issues. Outlier bonds whose yields exceeded two standard deviations from the yield curve derived from similar quality bonds were excluded.
Previous report
Of the assumptions used to measure the year-end obligations and estimated annual net periodic benefit cost, the discount rate has the most significant effect on the periodic benefit cost reported for the plans. Decreasing the discount rates by 0.25 percent for our pension plans and 0.25 percent for our other post-retirement benefit plans would increase pension obligations and other post-retirement benefit plan obligations by $3.1 million. Increasing the discount rates by the same amount would not have a material effect on defined benefit pension expense and other post-retirement benefit plan expense.
Previous report
The asset rate of return assumption considers the asset mix of the plans (currently targeted at 100 percent fixed income securities and cash equivalents for the funded U.S. pension plan), past performance and other factors, including expected re-allocations of asset mix occurring within a reasonable period of time. Our asset rate of return assumption is 4.92 percent for 2024 defined benefit pension expense. Decreasing the asset rate of return assumption by 0.25 percent would increase our defined benefit pension expense by $0.3 million.
Previous report
See Note 14 – Pensions and Post-Retirement Benefit Plans for detailed information about the assumptions used to calculate the components of our annual defined benefit pension and other post-retirement plan expense, as well as the obligations and accumulated other comprehensive loss reported on the year-end balance sheets.
Reworded paragraphs (29)
Previous wording
Adjusted EBITDA is a non-GAAP financial measure defined as income from continuing operations before interest, income taxes, depreciation, amortization and other adjustments. These other adjustments are items that we believe are not representative of underlying business performance. Adjusted items typically include certain expenses associated with impairment, restructuring and plant closure costs, significant gains and losses on asset disposals or business combinations, LIFO, mark-to-market commodity hedging, cloud-computing amortization expenses and other unusual items. The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis. An Adjusted EBITDA Reconciliation is presented in the Segment Results section and reconciles net income to adjusted EBITDA on a consolidated basis.
Current wording
Adjusted EBITDA is a non-GAAP financial measure defined as income before interest expense, income taxes, depreciation, amortization and other adjustments. These other adjustments are items that we believe are not representative of underlying business performance. Adjusted items typically include LIFO inventory effects, impairment, restructuring and plant closure costs, significant gains and losses on asset disposals or business combinations, mark-to- market commodity hedging, acquisition-related charges, cloud-computing amortization expenses and other unusual items. The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis. An adjusted EBITDA reconciliation is presented in the Segment Results section and reconciles net income to adjusted EBITDA on a consolidated basis.
Previous wording
Although we believe that these non-GAAP financial measures enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP financial measures and should be read in conjunction with the relevant GAAP financial measures. Other companies in a similar industry may define or calculate these measures differently than we do, limiting their usefulness as comparative measures. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP.
Current wording
Although we believe adjusted EBITDA enhances investors’ understanding of our business and performance, this non-GAAP financial measure should not be considered an alternative to GAAP financial measures and should be read in conjunction with the relevant GAAP financial measures. Other companies in a similar industry may define or calculate this measure differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, this non-GAAP financial measure should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Previous wording
We do not provide reconciliations of guidance for adjusted EBITDA and adjusted EPS to comparable GAAP measures, in reliance on the unreasonable efforts exception. We are 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 below, are based upon current expectations and are subject to factors that could cause actual results to differ materially from those set forth below. Please see “Forward-Looking Statements” for more information.
Current wording
Forward-looking statements, including the guidance below, are based upon current expectations and are subject to factors that could cause actual results to differ materially from those set forth below. Please see “Forward-Looking Statements” and "Risk Factors" for more information.
Previous wording
After considering the current intensely competitive environment, global economic conditions, as well as ongoing uncertainty associated with geopolitical and supply chain challenges, we anticipate taking measures to streamline our organization to support an increasingly cost-conscious customer base. These actions, some of which are one-time savings and some of which are expected to be permanent savings, are intended to ensure that we extend our decade-long growth in profitability and support a higher margin profile by leveraging a smaller global team highly focused on serving customer preferences.
Current wording
After considering the current intensely competitive environment, global economic conditions, as well as ongoing uncertainty associated with geopolitical and supply chain challenges, we commenced taking measures to streamline our organization to support an increasingly cost-conscious customer base. These actions, some of which are one-time savings and some of which are expected to be permanent savings, are intended to ensure that we grow our profitability and support a higher margin profile by leveraging a smaller global team highly focused on serving customer preferences. Through the planning phase that occurred throughout 2025, we believe we have identified actionable transformation initiatives to position Koppers for future success, creating a roadmap to reshape our company into a higher earning, higher margin, higher free cash flow and higher return on capital business over the next three years. These initiatives impact all facets of the organization and are focused on growing the more profitable businesses while continuing to selectively scale back our lower margin, capital intensive business. We believe this will grow earnings per share, lower our maintenance and capital requirements and consistently generate higher margins.
Previous wording
For our RUPS segment, our focus is to (i) recoup cost increases, including the value of our creosote preservative in the market, (ii) maximize opportunities for increased volumes, including expanding our customer base into the Texas, western and midwestern utility pole markets and (iii) lower operating and selling, general and administrative expenses.
Current wording
•For our RUPS segment, our focus is to continue to (i) recoup cost increases, including the value of our creosote preservative in the market, (ii) maximize opportunities for increased volumes, including expanding our customer base in the midwestern and western utility pole markets and (iii) lower operating and selling, general and administrative expenses.
Previous wording
For our PC segment, our focus is to (i) acquire new customers in our residential preservatives markets to offset certain customer market share losses, (ii) expand market share in our industrial preservatives markets and (iii) align and improve our cost structure.
Current wording
•For our PC segment, our focus is to continue to (i) acquire new customers and grow organic market share in our residential preservatives markets (ii) expand market share in our industrial preservatives markets and (iii) align and improve our cost structure.
Previous wording
For our CMC segment, our focus is to (i) execute on domestic plant restructuring projects, (ii) optimize and develop markets for enhanced carbon products and (iii) implement global tar and pitch strategies.
Current wording
•For our CMC segment, our focus is to continue to (i) execute on domestic plant restructuring projects, (ii) optimize and develop markets for enhanced carbon products and (iii) develop and implement global tar and pitch strategies to mitigate expected raw material cost increases.
Previous wording
The Railway Tie Association’s estimate of total crosstie purchases in 2025 is approximately 19.5 million ties, with approximately 13.3 million for Class I railroads. This is slightly lower than the estimated 2024 crosstie purchases of approximately 19.6 million crossties with the small decrease expected to be from Class I railroads. We expect the crosstie market to remain stable.
Current wording
•The Railway Tie Association’s estimate of total crosstie purchases in 2026 is approximately 19.9 million ties, with approximately 13.3 million for Class I railroads. This is comparable to the 2025 estimate of crosstie purchases of approximately 19.9 million crossties. Over the past few years, North American demand for crossties has been in the range of 18 million to 22 million crossties annually. We expect the crosstie market to remain stable and within this range. However, volumes for our business in any year can be affected by individual customer demands, logistics and business conditions.
Previous wording
Product demand for our PC business has historically been associated with consumer spending on home repair and remodeling projects in North America. The Leading Indicator of Remodeling Activity (LIRA) reported by the Joint Center for Housing Studies of Harvard University projects that year-over-year spending for annual homeowner renovation and maintenance expenditures is expected to grow by 1.2 percent in 2025. While the LIRA projects a mild increase in 2025, our PC business expects flat or lower volumes as a result of customer market share shifts.
Current wording
•Product demand for our PC business has historically been associated with consumer spending on home repair and remodeling projects in North America. The Leading Indicator of Remodeling Activity (LIRA) reported by the Joint Center for Housing Studies of Harvard University projects that year-over-year spending for annual homeowner renovation and maintenance expenditures is expected to grow by 2.9 percent in early 2026 before easing to 1.6 percent by the end of 2026. Our PC business expects higher volumes through market share growth and acquiring new customers supported by the LIRA projections.
Previous wording
For the external markets served by our CMC business, we have experienced a slowdown in the near-term in manufacturing overall, including the steel, aluminum and carbon black industries. The availability of coal tar, the primary raw material for our CMC business, is linked to levels of metallurgical coke production. As the global steel industry, excluding Asia, has reduced the production of steel using metallurgical coke, the volumes of coal tar have been reduced. We are actively working to mitigate the impacts of the long-term decline of coal tar supply by gaining market acceptance for petroleum-blended products, investing in projects to increase distillation yields and balancing raw material supply and cost with customer demand and pricing.
Current wording
•For the external markets served by our CMC business, we have experienced a slowdown in manufacturing overall as well as in the steel, aluminum and carbon black industries. The availability of coal tar, the primary raw material for our CMC business, is linked to levels of metallurgical coke production. As the global steel industry, excluding Asia, has reduced the production of steel using metallurgical coke, the volumes of coal tar have been reduced. We are actively working to mitigate the impacts of the long-term decline of coal tar supply by gaining market acceptance for petroleum-blended products. We are also investing in projects to increase distillation yields and balance raw material supply and cost with customer demand and pricing.
Previous wording
Our businesses and results of operations are affected by various competitive and other factors including (i) the impact of global economic conditions on demand for our products, including the impact of imported products from competitors in certain regions where we operate; (ii) raw material pricing and availability, in particular the cost and availability of hardwood lumber for railroad crossties, softwood lumber for utility poles, scrap copper prices, and the cost and amount of coal tar available in global markets, which is negatively affected by reductions in blast furnace steel production; (iii) volatility in oil prices, which impacts the cost of coal tar and certain other raw materials, as well as selling prices and margins for certain of our products including carbon black feedstock, phthalic anhydride, and naphthalene; (iv) competitive conditions in our performance chemicals business and global carbon pitch markets; (v) changes in foreign exchange rates; and (vi) the other factors set forth in the section titled "Forward-Looking Statements." Any or all of these or other factors could impact our actual results for 2025.
Current wording
Our businesses and results of operations are affected by various competitive and other factors including (i) the impact of global economic conditions on demand for our products, including the impact of imported products from competitors in certain regions where we operate as well as tariffs and international trade policy; (ii) raw material pricing and availability, in particular the cost and availability of hardwood lumber for railroad crossties, softwood lumber for utility poles, scrap copper prices, and the cost and amount of coal tar available in global markets, which is negatively affected by reductions in blast furnace steel production; (iii) volatility in oil prices, which impacts the cost of coal tar and certain other raw materials, as well as selling prices and margins for certain of our products including carbon black feedstock and naphthalene; (iv) competitive conditions in our performance chemicals business and global carbon pitch markets; (v) the effectiveness of our commodity hedging programs; (vi) changes in foreign exchange rates; and (vii) the other factors set forth in the "Forward-Looking Statements" disclaimer. Any or all of these or other factors could impact our actual results.
Previous wording
Cost of sales as a percentage of net sales was 80 percent for both periods as lower raw material costs were offset by the market driven reduction in sales. Significant items impacting cost of sales in individual operating segments are discussed as part of "Segment adjusted EBITDA and adjusted EBITDA margin" herein.
Current wording
Cost of sales as a percentage of net sales was 76 percent, compared to 80 percent in the prior year period as lower operating expenses and freight costs were partly offset by lower sales volumes. Significant items impacting cost of sales in individual operating segments are discussed as part of "Segment adjusted EBITDA and adjusted EBITDA margin" herein.
Previous wording
Impairment and restructuring charges were $16.9 million in 2024 due primarily to the decision to discontinue phthalic anhydride production at our facility in Stickney, Illinois and our workforce reduction program across selected U.S. locations to streamline operations and reduce costs. See Note 3 – Acquisitions, Divestitures and Discontinued Operations.
Current wording
Impairment and restructuring charges for both years were due primarily to costs associated with discontinuing phthalic anhydride production at our facility in Stickney, Illinois, consulting services related to our comprehensive assessment of our businesses and our workforce reduction program across selected U.S. locations to streamline operations and reduce costs. See Note 3 – Acquisitions and Restructuring.
Previous wording
Loss (gain) on sale of assets was primarily related to the liquidation of our former coal tar distillation facility located in China while the gain on sale of assets for 2023 was related to a sale of assets at that same facility. See Note 3 – Acquisitions, Divestitures and Discontinued Operations.
Current wording
(Gain) loss on sale of assets in the prior year period was primarily related to the liquidation of our former coal tar distillation facility located in China. See Note 3 – Acquisitions and Restructuring.
Previous wording
Interest expense was $5.2 million higher when compared to the prior year period due to higher borrowings and interest rates, partly offset by the write-off of debt issuance costs in 2023.
Current wording
Interest expense was $10.1 million lower when compared to the prior year period due to lower interest rates.
Previous wording
Income tax expense decreased by $14.1 million when compared to the prior year period due primarily to lower income before income taxes. See Note 10 – Income Taxes.
Current wording
Income tax expense increased by $4.5 million when compared to the prior year period due primarily to higher income before income taxes. See Note 10 – Income Taxes.
Previous wording
(1) The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis.
Current wording
(1)The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis.
Previous wording
Net cash provided by operating activitiesfor the year ended December 31, 2024 was $119.4 million compared to $146.1 million in the prior year. For both periods, the primary source of cash was net income, excluding non-cash items, less working capital usage which was higher in the current year primarily as a result of the timing of purchases and payments.
Current wording
Net cash provided by operating activities for the year ended December 31, 2025 was $122.5 million compared to $119.4 million in the prior year. For both periods, the primary source of cash was net income, excluding non-cash items, principally depreciation and in 2025, the pension settlement loss. Working capital usage was slightly lower in the current year primarily as a result of the timing of receipts and payments, partly offset by net pension funding of approximately $12 million in connection with the settlement.
Previous wording
Net cash used in investing activitiesfor the year ended December 31, 2024 was $173.3 million compared to $116.0 million in the prior year. The increase was due to cash paid for the Brown Wood acquisition, partly offset by lower capital expenditures. Capital expenditures were higher in the prior year period due to investment in growth projects, such as the expansion of our RUPS facility in North Little Rock, Arkansas which was completed in the fourth quarter of 2023 and a yield enhancement project at our CMC facility in Nyborg, Denmark which was completed in the first quarter of 2024.
Current wording
Net cash used in investing activities for the year ended December 31, 2025 was $72.7 million compared to $173.3 million in the prior year. The decrease was due to cash paid for the Brown Wood acquisition in the prior year as well as lower capital expenditures in the current year due to the completion of certain growth projects, such as the yield enhancement project at our CMC facility in Nyborg, Denmark which was completed in the first quarter of 2024. These decreases were partly offset by cash paid for the Greenhill acquisition (as described in Note 3 of the Notes to Consolidated Financial Statements) in the current year.
Previous wording
Net cash provided by financing activities for the year ended December 31, 2024 was $35.7 million compared to $2.6 million in the prior year. The primary source of financing cash flows for the year ended December 31, 2024 was net borrowings of $88.7 million and the primary uses of financing cash flows were repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans, and dividends paid. In the prior year, the sources of financing cash flows were net borrowings of $23.1 million and issuances of common stock due to the exercise of stock options and the primary uses of financing cash flows were repurchases of common stock, payments of debt issuance costs and dividends paid.
Current wording
Net cash used in financing activities for the year ended December 31, 2025 was $58.5 million compared to net cash provided by financing activities of $35.7 million in the prior year. The primary uses of financing cash flows for the year ended December 31, 2025 were net debt repayments of $12.7 million, repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans, dividends and debt issuance costs. In the prior year, the primary source of financing cash flows was net borrowings of $88.7 million and the primary uses of financing cash flows were repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans, and dividends.
Previous wording
As of December 31, 2024, liquidity from our Credit Facility and cash on hand was approximately $381 million. Our Credit Facility is described in Note 15 – Debt.
Current wording
As of December 31, 2025, liquidity from our Credit Facility and cash on hand was approximately $383 million. Our Credit Facility is described in Note 15 – Debt.
Previous wording
Our need for cash in the next twelve months relates primarily to contractual obligations which includes debt service, pension plan funding, purchase commitments and operating leases, as well as working capital, capital spending, dividends and share repurchases. We may also use cash to pursue other potential strategic acquisitions or voluntary pension plan contributions, including pension plan settlements. Capital expenditures in 2025, excluding acquisitions, if any, are expected to total approximately $65 million and are expected to be funded by cash from operations. We anticipate that our liquidity will continue to be adequate to fund our cash requirements for at least the next twelve months.
Current wording
Our need for cash in the next twelve months relates primarily to contractual obligations which includes debt service, purchase commitments and operating leases, as well as working capital, capital spending, dividends and share repurchases. We may also use cash to pursue other potential strategic acquisitions. Capital expenditures in 2026, excluding acquisitions, if any, are expected to total approximately $55 million and are expected to be funded by cash from operations. We anticipate that our liquidity will continue to be adequate to fund our cash requirements for at least the next twelve months.
Previous wording
We manage our working capital to increase our flexibility to pay down debt. The amount of our outstanding debt and our overall cash flows will fluctuate throughout any operating period based upon, among other things, the timing of receipts from customers and payments to vendors. As of December 31, 2024 and 2023, approximately 85 percent of accounts payable was current and 15 percent was 1-30 days past due.
Current wording
We manage our working capital to increase our flexibility to pay down debt. The amount of our outstanding debt and our overall cash flows will fluctuate throughout any operating period based upon, among other things, the timing of receipts from customers and payments to vendors. As of December 31, 2025, approximately 95 percent of accounts payable was current and 5 percent was 1-30 days past due. As of December 31, 2024, approximately 85 percent of accounts payable was current and 15 percent was 1-30 days past due.
Previous wording
The total net leverage ratio is calculated as of the last day of each fiscal quarter in accordance with the Credit Facility definitions of consolidated total net debt divided by consolidated EBITDA and is not permitted to exceed 5.0. The total net leverage ratio as of December 31, 2024 was 3.20. Effective during the second quarter of 2025, the total net leverage ratio will not be permitted to exceed 4.75.
Current wording
▪The total net leverage ratio is calculated as of the last day of each fiscal quarter in accordance with the Credit Facility definitions of consolidated total net debt divided by consolidated EBITDA and is not permitted to exceed 4.75. The total net leverage ratio as of December 31, 2025 was 3.3.
Previous wording
The cash interest coverage ratio, calculated as of the last day of each fiscal quarter, is not permitted to be less than 2.0. The cash interest coverage ratio as of December 31, 2024 was 3.95.
Current wording
▪The cash interest coverage ratio, calculated as of the last day of each fiscal quarter, is not permitted to be less than 2.0. The cash interest coverage ratio as of December 31, 2025 was 4.4.
Previous wording
Pension and other employee benefit plan funding contributions (for defined benefit plans) are expected to total approximately $4.0 million in 2025, for normal plan operations. Estimated funding obligations are determined by asset performance, workforce and retiree demographics, tax and employment laws and other actuarial assumptions, which may change the annual funding obligations in addition to decisions to fund in excess of statutorily required amounts. In addition, we terminated our largest United States qualified defined benefit plan through a funding payment of $14 million in February 2025. The funded status of our defined benefit plans is disclosed in Note 14 – Pensions and Post-Retirement Benefit Plans.
Current wording
Pension and other employee benefit plan funding contributions (for defined benefit plans) are expected to total approximately $1.5 million in 2026, for normal plan operations. Estimated funding obligations are determined by asset performance, workforce and retiree demographics, tax and employment laws and other actuarial assumptions, which may change the annual funding obligations in addition to decisions to fund in excess of statutorily required amounts. The funded status of our defined benefit plans is disclosed in Note 14 – Pensions and Post-Retirement Benefit Plans.
Previous wording
We are subject to foreign currency translation fluctuations due to our foreign operations. See the Consolidated Statement of Comprehensive Income for the impact that exchange rate fluctuations had on comprehensive income. Foreign currency transaction gains and losses result from transactions denominated in a currency that is different from the currency used by the entity to prepare its financial statements. Foreign currency transaction gains (losses) were $(0.9) million, $1.0 million, and $(0.8) million for the years ended December 31, 2024, 2023 and 2022, respectively.
Current wording
We are subject to foreign currency translation fluctuations due to our foreign operations. See the Consolidated Statement of Comprehensive Income for the impact that exchange rate fluctuations had on comprehensive income. Foreign currency transaction gains and losses result from transactions denominated in a currency that is different from the currency used by the entity to prepare its financial statements. Foreign currency transaction gains were $0.7 million, $0.9 million, and $1.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Previous wording
We utilize the work of third-party specialists to assist in the fair value estimates. The key assumptions for the market and income approaches we use to determine fair value of our reporting units are updated at least annually. Those key assumptions include discount rates (12.0 percent – 18.0 percent), market multiples (5.1 – 7.0 times adjusted EBITDA) and terminal growth rates (5.0 – 6.5 times adjusted EBITDA) as well as future forecasts of revenue growth and adjusted EBITDA, which are based on our strategic plan. The strategic plan is updated as part of the annual planning process and is reviewed and approved by management and the Board of Directors. The strategic plan may be revised as necessary during the fiscal year based on changes in operating or economic conditions. The actual fair value may vary from our estimate under the market approach for many reasons, including because the peer group valuation differs from how investors value our business, valuation multiples change as a result of market conditions, changes in our business assumptions and other factors. Discount rates may be impacted by adverse changes in macroeconomic environment, volatility in the equity and debt markets or other factors. Our key assumptions are materially consistent with prior year.
Current wording
We utilize the work of third-party specialists to assist in the fair value estimates. The key assumptions for the market and income approaches we use to determine fair value of our reporting units are updated at least annually. Those key assumptions include discount rates (12.5 percent – 20.0 percent), market multiples (4.4 – 7.5 times adjusted EBITDA) and terminal growth rates (4.0 – 6.5 times adjusted EBITDA) as well as future forecasts of revenue growth and adjusted EBITDA, which are based on our strategic plan. The strategic plan is updated as part of the annual planning process and is reviewed and approved by management and the Board of Directors. The strategic plan may be revised as necessary during the fiscal year based on changes in operating or economic conditions. The actual fair value may vary from our estimate under the market approach for many reasons, including because the peer group valuation differs from how investors value our business, valuation multiples change as a result of market conditions, changes in our business assumptions and other factors. Discount rates may be impacted by adverse changes in macroeconomic environment, volatility in the equity and debt markets or other factors. Our key assumptions are materially consistent with prior year.
Previous wording
During the fourth quarter of 2024, we performed an impairment test for goodwill for each of our reporting units using the quantitative approach. We determined the fair value of each of the reporting units exceeded its respective carrying amount; therefore, we determined that goodwill was not impaired at any of our reporting units as of December 31, 2024. The estimated fair value, as calculated at October 31, 2024, for the three reporting units ranged from approximately 22 percent to 103 percent greater than their carrying value (eight percent to 110 percent at the previous impairment assessment date). Our reporting units could experience impairment in the future if we do not achieve our profitability projections, there is a change in key assumptions underlying the valuation or if we experience a substantial decrease in our stock price.
Current wording
During the fourth quarter of 2025, we performed an impairment test for goodwill for each of our reporting units using the quantitative approach. We determined the fair value of each of the reporting units exceeded its respective carrying amount; therefore, we determined that goodwill was not impaired at any of our reporting units as of December 31, 2025. The estimated fair value, as calculated at October 31, 2025, for the three reporting units ranged from approximately 24 percent to 58 percent greater than their carrying value (22 percent to 103 percent at the previous impairment assessment date). Our reporting units could experience impairment in the future if we do not achieve our profitability projections, there is a change in key assumptions underlying the valuation or if we experience a substantial decrease in our stock price.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS