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Koppers pays $31.6 million debt to garner net leverage ratio of 3.5x
By Devika Patel
Knoxville, Tenn., Aug. 3 – Koppers Inc. has brought its net leverage metrics down to 3.5x from 3.7x during the second quarter and hopes to be at 3x or below in the long-term.
The company reached this lower ratio in the quarter by paying down $31.6 million of debt.
“I’m pleased that our strong seasonal cash generation allowed us to reduce net debt by $31.6 million during the quarter,” president and chief executive officer Leroy M. Ball, Jr. said on the company’s second quarter earnings conference call on Thursday.
“Consequently, we were able to lower our net leverage ratio to 3.5x compared to a ratio of 3.7x at March 31 and Dec. 31.
“As we continue to ratchet our leverage down, we open up so many opportunities to deploy capital in ways that will create exponentially more shareholder value than the one-to-one relationship of transferring value from debt to equity holders that paying down debt offers,” Ball stated.
The company’s top financial executive expounded on Ball’s remarks.
“At the end of last year, we began using a net leverage ratio to monitor our debt status,” chief financial officer Michael J. Zugay said on the call.
“During the current quarter, we reduced our net debt by $31.6 million and in doing so we lowered our net leverage ratio to 3.5x and this compares very favorably with 3.7x at March 31.
“In spite of our higher capex spending, we expect to be at a net leverage ratio lower than 3.5x by the end of the year and our long-range goal continues to be 3x or lower,” Zugay said.
Net debt was $652.9 million at June 30, $684.6 million at March 31 and $641.6 million at Dec. 31, 2016.
Adjusted EBITDA was $55.7 million compared with $52.6 million in the second quarter of 2016.
Koppers is a Pittsburgh-based integrated producer of carbon compounds, chemicals and treated wood products and services.
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