Thanks, Steph. Good morning, everyone. I'm Quinn Magcguire. I'm the vice president of investor relations for Koppers and welcome to today's 2026 Koppers Investor Day. We appreciate that you're joining us and we look forward to sharing our story today. We've posted materials to the investor relations page of our website at www.koppers.com that will be referenced in today's discussion.
This event is being broadcast live on our website and a recording will be available for replay for one year. Before we begin, I'd like to note that today's discussion will include forward-looking statements. Certain comments made today 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 presentation 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 our 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 today's discussion.
References may also be made to certain non-GAAP financial measures. The company's presentation, which is available on our website, contains reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. And I'll now turn the discussion over to Leroy, our CEO of Koppers.
Okay, fantastic. Thank you, Quinn. Appreciate that. I want to start off by welcoming everybody that's in the room here today, as well as those who have decided to join us virtually to Koppers' 2026 Investor Day. Now, for those I haven't met, I'm Leroy Ball, CEO and board chair of Koppers. And I recently enjoyed my 16-year anniversary with Koppers, having joined the company in September of 2010 as first the chief financial officer before stepping into the role of CEO in January of 2015. As we gather here today in mid-September at the start of a new college and professional football season, I'm reminded that a few things capture the power of hope quite like the beginning of a new season.
Every team starts with a clean slate and a renewed belief in what might be possible. Yes, dare I say to even Cleveland Browns. And hope we don't have any Browns fans in the audience here today, but there's hope that the lessons learned from past setbacks have made us wiser and stronger. And hope that the countless hours of preparation, sacrifice, and hard work will pay dividends when the moment of truth arrives. And hope that this could be the season when all that effort, discipline, and perseverance finally come together to achieve something extraordinary. And that's what makes the start of a new season so exciting.
Right now, as I step back and I think about how the hope and excitement of a new season correlates to Koppers, I can't help but think that the same sense of possibility applies to us. We've learned from our challenges. We've strengthened our capabilities. And we've continued to invest in the future. And like every team taking the field this fall, we have every reason to believe that the work that we put in can translate into something special in the season ahead. And today you'll hear from several members of our leadership team who will share important updates on our company, the progress we've made during what I would characterize as our preseason here in 2026, and our plans to achieve higher levels of performance in 2027 and 28.
We've laid the foundation, we put in the preparation, and now we're focused on converting that preparation into sustained execution that translates into superior results as we enter this next phase of our strategy. Before we look ahead, however, I'd like to begin with a brief overview of Koppers for those who may be newer to our story. You know, Koppers has evolved significantly over time. In 2014, we began transforming from a legacy carbon materials company and railroad company into a wood preservation technology leader through a series of strategic acquisitions. And these include what are now the cornerstone of our growth strategy, performance chemicals or what we refer to in shorthand as our PC business and utility and industrial products or UIP.
Meanwhile, our two legacy businesses, railroad products and services, also known as RPS and carbon materials and chemicals or CMC, have been asked to step back in prominence to play a different role in our go-forward strategy. But they still remain an important part of our value creation story. You'll be hearing multiple references to these names and acronyms throughout this morning.
Today, our 1,800 team members around the world provide wood preservation technologies, carbon compounds, and services that support critical infrastructure. And guided by safety and sustainability, we help enable the movement of goods, the delivery of power and connectivity, and the creation of outdoor living spaces. Our products often operate behind the scenes, but their impact is everywhere. They help produce the aluminum that goes into the cars we drive and the airplanes that we fly on. They protect the cross ties that keep rail networks moving the goods that power our economy. They preserve the utility poles that deliver electricity and support the communications infrastructure connecting us to the digital world. And they protect the wood used in the decks, fences, docks, and outdoor spaces that enhance everyday life. Simply put, Koppers helps build and preserve the infrastructure that keeps the world moving, connected, and growing.
And with that perspective in mind, let's get things underway with a look at today's agenda on slide two. I'm going to kick things off today with an overview of the company, which will include a summary of the portfolio transformation that has occurred during my time at the company, as well as an update on Catalyst, the enterprise-wide transformation of our operating model that we launched in 2025. And of course, I will get into the rationale behind our 2028 strategic plan. Next, Stephanie Apostolou, our chief legal and strategy officer, will discuss in greater depth how we are executing our strategy, which is designed to enhance value creation for our shareholders. She'll then follow that up by moderating a discussion with our business leaders on the various initiatives that they're overseeing and their impact.
Eric Brener, our chief financial officer and treasurer, will then outline the financial framework supporting our strategy, including our path to 15% or higher adjusted EBITDA margins and $300 million of cumulative free cash flow through 2028. Then I'll return to wrap up and open the floor up for Q&A.
All right, Quinn has already gone over the safe harbor statement, but I do want to say that everything here today leads back to a single unifying theme. We believe that Koppers is well positioned to accelerate performance, expand profitability, increase cash flow, and deliver meaningful value for shareholders for years to come. And here's how.
Slide four captures the investment thesis for Koppers in a single page. We've reshaped the portfolio. We've completed much of the heavy investment. And we've installed a more disciplined operating model. We're now positioned to convert that work into stronger margins, greater cash generation, and higher shareholder returns.
Now, most recently, we launched Catalyst, our enterprise-wide operating model transformation. Catalyst is fundamentally changing how that we drive performance improvement across the organization by bringing greater structure, discipline, accountability, and transparency to how we identify, prioritize, resource, execute, and measure improvement initiatives. And as a result, we've already seen a meaningful step change in cash flow generation, reaching levels well beyond anything previously achieved in our history.
At the same time, we've sharpened our capital allocation approach, directing discretionary investments toward the most attractive areas of our portfolio, particularly PC and UIP while returning substantial capital to shareholders through dividends, share repurchases, and debt reduction.
Now, taken together, these actions are creating a stronger, more resilient, and more focused Koppers. And they're also establishing the foundation for what we believe will be the next phase of value creation. One that's characterized by stronger profitability, higher cash generation, disciplined capital deployment, and increased returns to our shareholder base.
If we move to slide five, I'm going to show you what I mean. To start, Koppers begins from a position of strength as a market leader in critical end markets. The diversity in our end markets is a strength that's often undervalued as our business risk is spread across several distinct end markets. It's this diversification that helps moderate the effects of downturns or disruptions in any one particular end market. The vertical integration of our chemical and wood treatment business is another aspect of our model that is often misunderstood.
As others in the treating industry have dealt with quality issues, we've been able to bring our direct chemical expertise to the table to assure customers that we have experts in-house to address their concerns. And I believe it has directly led to Koppers being the preferred supplier at several major customers. And with most major investments behind us, we're primed for a breakout with a little market tailwind. But even if markets remain subdued, we have a model that can still generate cash at a rate that is top tier with our cash flow yield comfortably in double digits at our current share price.
Moving forward, each business uniquely contributes to Koppers' value creation strategy. With RPS growth being limited as a pure repair and replacement business, it's all about optimizing our cost to serve by maximizing the utilization of our asset base in order to maintain our leading market share and generate cash to deploy to PC, UIP, and to shareholders.
For CMC, the end goal of driving maximum cash flow is the same as RPS, but we'll get there by better managing the inherent risk and volatility in the business that has experienced large swings in raw material costs over time and higher operating and capital costs for safety, environmental, and plant reliability.
PC and UIP are positioned as our higher growth, higher margin, less capital intensive businesses where we look to continue investing to earn greater market share that results in higher sales and increased profitability and cash. As PC and UIP grow to make up a greater proportion of our top line, our consolidated margins and free cash flow will expand in turn.
Now if we drill down another layer on slide six, you can see more details on the four businesses across three segments. All of which will serve critical end markets or support essential infrastructure. And together they provide a balanced platform for managing risk, strengthening our market position in our treating business and supporting a more diversified earnings base that smooths out the peaks and valleys of the economic cycle.
As an example, our performance chemicals business is the recognized market leader in developing treatment solutions for the wood preservation industry, holding 139 patents, including the patent for MicroPro, the current industry standard for residential lumber treatment. And clearly the cornerstone of our portfolio, PC is a global business that generates attractive high-teens margins and it's a business that we intend to build around.
Our utility and industrial products business does the bulk of its business in the US, but also is the leading utility pole supplier in Australia. With attractive margin profile, our smallest geographic presence and macro demand drivers that make this the largest growth opportunity in our portfolio, UIP is being targeted as a prime option for growth.
Our railroad products and services business is a major supplier of cross ties to all six Class I railroads as well as commercial rail customers. And while this will never be our highest margin business, I believe we can continue to optimize it by applying our Catalyst principles, generate adequate returns, and use the cash to fuel growth in PC and UIP.
And finally, our carbon materials and chemicals business serves most major aluminum producers in North America, Europe, and Australia, while also operating as a key supplier of creosote to the North American rail cross tie industry. With a structurally declining coke industry in developed countries, we've reached a point where our industry needs to think hard about how we work together to remain valuable for our customer base that relies so dearly upon the key products that we supply such as creosote and carbon pitch. We are the number one or number two player in most of our markets which are heavily concentrated and we maintain that position by delivering superior quality, service and safe operations. And the journey to our current portfolio can be explained in three phases as the next slide will show.
Slide seven highlights more than a decade of deliberate actions that have transformed Koppers into the wood preservation technology leader of today. 2014 to 2020 served as the portfolio transformation phase. We began the shift away from carbon products to focus on wood preservation. First by acquiring Osmose which is now our performance chemicals business and also Cox Industries which is our utility and industrial products business. And during this period we closed or sold eight of 11 CMC facilities. We exited production in China and continued to prune the other parts of our underperforming portfolio by selling or shutting down five additional operating sites.
Now the year before this transformation began CMC made up over 60% of our top line and over 50% of our adjusted EBITDA and by the end of 2020 that has been flipped with PC and UIP making up over 50% of adjusted EBITDA and CMC just over 20%. But this happened by adding leverage which had been as high as 5.1 times on a pro forma basis but by the end of 2020 had been reduced to three and a half times.
2021 to 2025 was our expand and optimize phase and it was during this phase that we made heavy capital investments across all four businesses that have brought us to where we are today. We expanded service to higher value carbon product markets by investing in enhanced carbon products line in CMC Denmark while exiting the lower value phthalic anhydride business at our Stickney, Illinois plant. We bought a cross tie procurement business enabling us to increase profitability at our Canadian plant and built a new cross tie treating facility at North Little Rock allowing us to close our Denver treating plant and consolidate production.
We invested in our Leeville, Louisiana utility pole filling and drying facility to better serve the Southwest market. Then we acquired the Brownwood Preserving utility pole business which gave us greater access to the larger Midwest market and most recently acquired the Greenhill Reload, a Douglas fir procurement business which expanded UIP's product portfolio.
Now key investments in our micronized copper production and the addition of DCOI to our industrial preservative portfolio helped PC reach new heights in profitability before taking a step back in 2025 with the loss of some market share. Now, we were on a path to reach our 2025 target of $300 million in adjusted EBITDA, but a combination of that PC market loss, the Russia and Ukraine conflict, tariffs, and a generally softer demand environment in PC and UIP prevented us ultimately from reaching that goal. It did not however stop us from doing what we do best, which is finding other ways to attack the challenges. And thus, Catalyst was born.
So as we move to the next phase of our strategy from 2026 forward, we plan to accelerate cash generation through Catalyst by capturing the full benefits of significant investments made during our expand and optimize phase. And that's what makes our investment story attractive.
Since the major capital projects are complete, we can focus on further optimizing the portfolio and harvesting cash to reduce leverage and share count as we look patiently for opportunities to grow in PC and UIP.
We exceeded our initial 2025 Catalyst target of $40 million in benefits by generating $46 million in total in that year. And in 2026, we're already delivering meaningful benefits and working capital improvements. And through two quarters, PC and UIP make up now two-thirds of our year-to-date adjusted EBITDA and just under half of our sales. And we expect those numbers to climb in the coming years. With a track record of actively managing our portfolio, Catalyst now provides the foundation for our next phase of profit optimization and cash generation. It's a really good story.
If we turn to slide eight, we'll get deeper into that story. We can see how Catalyst is reshaping how we operate, make decisions, and deliver results. By identifying, evaluating, and implementing ideas from across the organization, we are strengthening our competitive position and increasing scalability.
The early successes give us more confidence in this framework. And as I stand in front of you today, we're reaffirming our commitment to generate $90 million of benefits to annual adjusted EBITDA by the end of 2028 through a combination of commercial growth and cost savings, which when added to the $46 million of benefits captured in 2025 would bring total Catalyst benefits from 2025 through 2028 to $136 million. Now, beyond 2028, we'll continue incorporating Catalyst into our annual planning process to drive execution and improve performance.
Now, Catalyst is not a one-and-done cost reduction exercise, as can be seen on slide nine. It's how we do business across our operations and it's delivering meaningful returns. We've identified initiatives expected to generate $90 million in recurring annual adjusted EBITDA by the end of 2028 across several key areas. In the category of commercial excellence, we are targeting to generate $40 to $53 million of benefits by improving our right to win through a combination of rededicating ourselves to key customers, pricing actions, building out our network to open up new regional markets, and adding technology to improve our sales team's effectiveness.
The category of network rationalization, which is set to generate $15 to $22 million of benefits, always seems to get the most attention because it's the easiest to understand and monitor. We can see when production has stopped at one location and we can just as easily tell when it's ramping up at another. We have been operating the plant consolidation playbook for a long time with our announcements this year that we'll be ceasing operations at Stickney, Florence, and Vance just the latest in a long line of adjusting to changes in market conditions.
Now the remaining categories of manufacturing, procurement, and other cost savings are estimated to generate another $20 to $30 million of annualized benefits. And the important point is that these again are recurring benefits measured against the consistent 2025 baseline and they're helping to offset today's headwinds which have been massive to date. They've enabled us to combat the challenges of a stalled housing market, a pullback in cross tie replacements, an unpredictable tariff environment, inflationary costs, and a carbon products market upended by two wars while also still generating historic cash flow.
The value of these initiatives should become visible as markets improve and the benefits flow through on top of a healthier earnings base.
So now I want to take the opportunity on slide 10 and to dig a little deeper into an important Catalyst case study that epitomizes our mindset as we approached Catalyst and that's that everything was fair game for evaluation. And with that in mind, we conducted a thorough review of our organization design, which was an exercise that had never been conducted before at Koppers to my knowledge. And while the hard dollar benefit opportunity is important, I'm actually most excited by the doors that our redesigned organization opens for us to capture even greater value in the years to come.
We designed the organization around five guiding principles. One, centralize where scale matters. Two, streamline and simplify before adding resources. Three, push down, out, or automate transactional work. Four, strengthen where risk, judgment, or value matter. Five, invest where capabilities create value and align for execution.
Let me provide a couple of examples here. So a shining example of where we look to centralize where scale and standardization matter is in the financial planning and analysis or FP&A function. Our former structure had FP&A roles in some businesses but not all. And where we had them, they reported into our business unit heads. Now this made FP&A reporting extremely difficult to standardize. So we were getting varying quality of information from each area and we had no consistent view of performance below the headline metrics that we could point to across the enterprise.
We've now addressed this with FP&A resources in each business that roll up to a corporate FP&A leader who can ensure that our one Koppers model is applied consistently across the enterprise and vastly improving the value of our reporting and analysis. Before the change, we had a handful of analysts that operated mostly independently, providing analysis that they thought important in a format of their choice. We now have a team of professionals that provide critical strategic decision support, acting as a true partner to our business leaders while adding the value of efficiency, quality, governance, and scalability that comes with a centralized function.
Another example is where we are strengthening our capability where risk, judgment, or value matter. As we benchmarked our spend across functions, we confirmed what we had long suspected, which is we've continually underinvested in our IT resources over time. And as a result, we're leaving value on the table. In addition to investing in a new ERP platform that we're in the process of implementing, we've added roles to bridge the divide between the businesses and IT. Now, this will enable us to derive the most out of our enhanced systems while also adding AI and data enablement capabilities to help us harness the vast possibilities that exist to work smarter, faster, safer, while also spending less to do it as we increase our levels of productivity.
And the last example I will leave you with is related to designing the organization for execution, not theoretical performance. And it's reflected in the change in responsibilities of the members of my team. Effective September 1st, Stephanie Apostolou assumed the role of chief legal and strategy officer, adding oversight of Catalyst and our transformation office to her responsibilities with the rationale of creating a stronger link between strategy and the execution elements connected to Catalyst.
At the same time, Jim Sullivan, who was overseeing Catalyst as our chief transformation officer, has now shifted his focus to the restructuring and transformation of CMC. Christian Nielsson continues to lead CMC globally and manage day-to-day operations. But Jim is overseeing the Stickney closure, the disposition of the remaining assets at Stickney, and the evaluation of options to further reduce our risk and exposure in CMC markets. There's no one else in our organization who has that depth of experience. And the fact that I specifically asked Jim to take on these responsibilities demonstrates our commitment to designing the organization for execution.
Now, finishing this off, our CFO, Eric Brener, has now added oversight of procurement logistics to his responsibilities, which will bring a greater focus to process standardization and analytics. This will help to ensure that we're capturing the full value available across our supply chain and working capital while continuing to deliver value to our customers.
Going through the org design was an intense six-month process that's put us in a much better position to succeed. Responsibilities have been clarified. Key capabilities have been added where lacking. Roles have been better aligned to create value. And an expectation of accountability for performance is now clearly understood throughout the company.
So now I want to shift gears and begin to give you a closer look at how each of our main businesses plan to maximize their operations to serve customers, generate results, and contribute to a higher level of performance.
So on slide 11, I'm going to start with a video that features Doug Fenwick, our president of Performance Chemicals, who will discuss the customer relationships, technical expertise, and market leadership that drive growth in his business.
Performance Chemicals is a world-leading formulator of wood preservation chemicals for the infrastructure, commercial, and residential businesses. Hi, I'm Doug Fenwick. I am president of Koppers Performance Chemicals. If you took a piece of lumber from a local lumber yard or from a piece that you found in your garage and you stuck it in the ground, it would fail within 3 to 5 years depending on where you were in the country. By pressure treating in our different preservatives for the different uses, that prevents fungal decay, termite attack, even fire attack. And it starts right from the beginning with our Hubbell, Michigan facility up in the UP or Upper Peninsula. The Upper Peninsula facility produces PCC, basic copper carbonate. We're taking millions of pounds of scrap copper from all over North America, bringing it into that facility, processing it, and then circulating that material into our two manufacturing plants in Buckhannon, South Carolina and Millington, Tennessee.
So, our MCA residential flagship product for residential. We've been in commercialization of that for over two decades now, and its patent is coming to an end in 2029. We don't anticipate patent ending causing any massive issues, but we do have new technology coming in right behind it and that's micronized copper pentachlorophenol. There's potential for us to launch that on a small scale next year and in a bigger scale the year after that. We have a lot of interest in it from our customers mainly because the pentachlorophenol is a very robust biocide and because it is so robust it allows us to use less copper and in a very volatile copper market that's of great interest to our customers and their retail partners.
So from the time that we have an idea in R&D either from Dr. June or one of his research scientists or one of our field people come up with an idea and they bring it to R&D and from the time that they talk about that to the time it actually gets to market is 10 years. Performance Chemicals recently had a C-suite executive say to us which was very thoughtful that he no longer views us as a supplier. He views us as a true partner. We continue to look for growth opportunities. We continue to develop very good relationships with our customers and continue to provide extraordinary engineering services that help our customers continue to run their facilities at top efficiencies. The new technology coming forward, the opportunity of fire retardants and the continued growth on the commercial side are all real opportunities for us going forward.
Slide 12 shows that Performance Chemicals reported $544 million of revenue in 2025 and an 18.9% adjusted EBITDA margin. And as Doug stated, Performance Chemicals provides copper-based wood preservatives and fire retardant technologies including MicroPro, MicroShades, DCOI, CCA, and FlamePro for residential, industrial, and infrastructure markets.
Residential demand is driven primarily by repair and remodeling spending which is driven by existing home sales and to a lesser extent new home construction. Obviously the interest rate environment and consumer confidence have a lot to do with what is going on in this business and those markers haven't been in a great spot in quite some time. But the industrial drivers are healthier as evidenced by what we're seeing in our utility business and they're expected to remain that way over the next several years.
Bottom line is if you've ever enjoyed a summer afternoon on a backyard deck, chances are you are walking across wood that's protected by PC treatment solutions. Our technical expertise, engineering support, and regulatory knowledge differentiate Koppers and help drive growth, customer satisfaction, and profitability.
Now, continuing to slide 13. Next up is a video featuring Jason Bach, our vice president of utility and industrial products, who will discuss the growth opportunities and competitive advantages driving this business.
We sell poles to help our customers supply power to the communities and ensure that the power continues to stay on, lights stay on. My name is Jason Bach. I'm the vice president of the utility and industrial products group at Koppers. Well, it all starts in the woods. We have foresters that go into the woods, mark the trees that would be suitable for a utility pole. We peel them, dry them, they go through the framing process, and then we take the poles, load them into a pressure treating cylinder and treat it in our cylinders and then sell to the customers.
We're vertically integrated with them, and it's a great relationship that we have with them. It makes it better. We have a steady supply of chemicals. We're able to get what we need when we want it. We have security of supply and it works out well for both of us.
We made a strategic decision to get into the Douglas fir business and there's a number of reasons for that. Douglas fir itself is a huge market in the United States. It's a good portion of the wood utility pole business. So the transmission projects that do use wood poles are going to mostly be Douglas fir. So some contracts specify both Douglas fir and southern yellow pine. And historically we've only been able to bid on the southern yellow pine portion. And now we're able to bid on both the Douglas fir and the southern yellow pine portion which a lot of utilities want.
Utility poles in the United States are very old. Utility companies are investing in grid hardening. They're using bigger poles. They're trying to replace the older poles that are coming of age. You have a great hardening aspect too to the demand story over the next four to five years. And we expect the market to grow. So big numbers pushing the industry, lots of tailwinds supporting the business and helping us grow the business. So we feel very confident going into the years ahead that our business will continue to grow.
Now, as outlined on slide 14, our UIP business generated $335 million of revenue in 2025, which was an increase of 5.2% year-over-year.
Now, UIP supplies pressure-treated transmission and distribution poles to electric and telecommunications utilities. And our integrated supply chain with preservatives produced internally by PC and CMC gives UIP customers the added benefit of security of supply and it also provides us a friendly conduit to others in the industry which in many cases provides an inside edge when it comes to considering consolidation opportunities.
As a leading utility pole supplier in the US and the largest utility pole supplier in Australia, UIP is the one business where we hold less than 30% market share in our largest market. So we have an opportunity to grow through targeted expansion in geographies that we know well through our other businesses. In terms of pure market demand, grid modernization and AI-related power needs have created a multi-year growth opportunity which we believe we can participate in while also growing our footprint and capabilities to serve other parts of the US. And while the pace of data center development may vary, the underlying demand for grid expansion remains a compelling growth opportunity that isn't going away anytime soon.
So, next up on slide 15 is Travis Gross, our vice president of railroad products and services. And he's going to talk about the customer relationships, competitive strengths, and strategic actions that drive this business forward.
We have to be agile. We've got to be ready to shift with the market, with our customers' needs. Whatever they may be, we need to be able to react. And I take pride in our team and our ability to do that. My name is Travis Gross. I'm the vice president of railroad products and services. We primarily manufacture treated railroad ties. The railroad ties come in either by truck or by rail. We run it through our tie sorder. That's where we inspect the ties. We grade them. They're then sorted. We end plate those ties, which prevents them from splitting. We take them from there. We stack them and we call it German stacking and we put them up for air dry. They'll dry from 6 to 12 months depending on the climate and the humidity.
From there, we take them down from the stacks. We put them into our cylinders where we pressure treat them with creosote petroleum solution. We then take it from there and we bring it out and we package it for shipment either by rail car or by truck. We can control from the chemical all the way through the treating process. We've got complete control over that.
We're looking at the available market that's out there and we're saying how can we get the biggest piece of that but we need to be strategic in the share that we're going after because we have to protect our margins. For this point we've right-sized for the Class I demand but we still have excess capacity so now we're looking at the commercial markets and we're saying how can we be more aggressive in the commercial market, what business do we want to target because again it's all about that volume and throughput through our facilities and that keeps our unit cost down and allows us to be more competitive. We're focused on attacking our costs so we can be price competitive in the market and I think we've done a really great job of that.
So, we're reaching customers that we've not reached before. We're having greater success than we've ever had before and as a result, you know, we're not only maintaining our market share, but we're growing. We're here for the long haul. We've right-sized our network to the point now where we'll continue to show improvement and profitability. I think we'll be on the forefront of advancements in technology as we move into the future. We're working with our customers and our suppliers on a daily basis trying to figure out what's next and we are the leader today, but we want to continue to be the leader into the future. And I think we've got a very, very bright future.
So going to slide 16, we see that RPS represents our largest top-line business at $622 million of revenue in 2025. And our product portfolio includes treated and untreated railroad cross ties, rail joint bars, and cross tie recovery services which serves several aspects of our customers' needs. Demand is driven by railroad maintenance of way spending which is recurring and replacement-based rather than tied to new construction plus ongoing transit investment. Our customers include Class I, short line, and commercial railroads as well as transit systems.
Class I railroads purchase approximately 70% of all cross ties produced in the US and Canada and Koppers remains the largest supplier of cross ties to the Class I railroads in North America supplying all six. Key strengths include a strong quality system backstopped by captive wood preservative expertise, security of supply through internally sourced creosote, and logistics advantages created by plants located on the rail lines of our customers. May not be the most glamorous business, but it certainly remains one of the most essential for the transportation of goods and people.
So, let's move to slide 17 for a video from Christian Nielsson, our senior vice president of global carbon materials and chemicals, who will speak to our plans for repositioning CMC to streamline the footprint, derisk the business, and reduce volatility.
We are much more efficient than we have been in the past for sure. There's a lot of focus on energy usage. There's a lot of focus on like the emissions from the plants.
I'm President Nelson and I'm senior vice president in carbon material and chemicals. So we get a lot of different quality of coal tar. Then we put it to our distillation plant where we separate it by boiling point. So we have some light products which are around 20% of our production which are naphthalene solvent. Then we have a middle section which are the carbon black and the creosote oil. And at the end, we have the heaviest fraction which are distilled on the vacuum which are the pitches. And the pitch is going into aluminum production as anodes or into steel production for cathodes.
ECP pitch in the future will be hopefully used as a coating material for graphite or for the base material for carbon fibers.
We do not have the necessary feedstock in North America to keep Sydnor running efficiently. The new plant is also located directly at the sea which means that we can produce the product in Europe and we can ship it all over to the North American market. We will be able to supply 100% of the pressure that RPS needs out of Newport. I have no doubt about that. Carbon material and chemicals is set in a really good spot because we have the right location. We have the logistic setup to supply to our customer and we have a very efficient workforce and we have a very efficient plant. We have a really good position in the future.
Now on slide 18, CMNC reported 409 million of revenue in 2025 and an 11.2% adjusted EBITDA margin. CMNC distills coal tar and creosote, carbon pitch and specialty chemicals and demand is driven by a diverse set of end markets including railroad infrastructure, aluminum production, steel manufacturing and construction activity. We serve customers across North America, Europe, and Australia through a flexible supply network. And now, earlier this year, we announced the pending closure of our Stickney facility, and we're shifting production to our Nyrstar Denmark facility, which will continue to supply products to our North American customers. And key strengths include our position as a leading supplier of creosote, multiple sourcing options, and vertically integrated operations. And through the actions that we're taking to streamline the business, we expect to significantly reduce production costs and improve cash generation. Even a legacy business like CMNC is finding new ways to operate more effectively, providing part of the foundational cash to spur growth across the wider company.
Now, our business connects to and operates from our sustainability strategy as seen on slide 19. And this strategy is built upon three foundational pillars, people, planet, and performance. And zero harm remains the cornerstone of our culture, placing the welfare of our people, the environment, and the communities where we operate as our top priority. This continued focus on the health and safety of our people led to an all-time best safety rate in 2025. And we may be a little behind so far in 2026 in terms of leading activities and serious incidents, but even with fewer hours worked year-over-year, we're holding steady on our total recordable injury rate, which is a major achievement. Now, this is a never-ending push for us as we constantly strive to get to our goal of zero. Additional training and renewed effort to drive environmental improvements are central to zero harm in 2026.
Our proprietary environmental metric called TEIR, which stands for total environmental incident rate, measures a combination of airborne and surface exceedances. And as Koppers developed tool was fully implemented in 2026 to better understand our environmental performance, and assess where we can improve. And while we're relatively mature on using data to drive safety decisions and improvements, TEIR is our first step to reaching a similar level of maturity and performance on the environmental side. Our 2025 sustainability report issued in June details our 2030 sustainability strategy and we are proud of the progress and recognition that Koppers has achieved to date. We intentionally focused on areas that could support sustainability imperatives while providing real business value. We believe we successfully threaded that needle to focus our strategy on the highest impact goals for 2030.
Now, everything I've discussed so far leads to a fundamental question. How do these actions translate into higher earnings and stronger cash flow? As shown on slide 20, this bridge illustrates the path from our 2025 adjusted EBITDA to our directional earnings potential in 2028. And most importantly, we are not waiting for markets to recover. While market conditions will eventually improve, our plan does not depend on that outcome. Through commercial execution, cost actions, portfolio optimization, and catalyst-driven initiatives, we are taking action today that strengthen Koppers and support our 2028 objectives.
Now, the earnings gap created by the contraction of the PC business is precisely what our 2028 strategic plan is designed to address. Through a combination of commercial execution, market share recovery, product line rationalization, and catalyst-driven self-help initiatives, we believe we can restore that earnings power and create meaningful value for shareholders. And a key message I want you to take away is this. The majority of the earnings improvement reflected in our 2028 outlook is expected to come from actions within our control. Market recovery and pricing represent additional upside, but not the foundation of the plan.
And we spent a lot of time today discussing how we're improving the quality of our business, expanding margins, strengthening operating performance, but ultimately value is created when those improvements translate into cash generation. After all, EBITDA is important, but cash is what provides flexibility. Cash is what allows us to reduce debt, return capital to shareholders, and invest in the highest return opportunities. And as shown on slide 21, our plan to generate stronger cash flow begins with streamlining our operations, and enhancing our business mix. We're containing SG&A expenses, optimizing capital expenditures, reducing working capital requirements, and maximizing cash generation from our CMNC and RPS businesses to be redeployed with a clearer path to stronger cash generation. Our focus shifts from creating cash to deploying it in a disciplined manner. And specifically, we intend to accelerate deleveraging through excess free cash flow. Return capital to shareholders through dividends and opportunistic share repurchases, particularly while we believe our shares remain undervalued as they are today, and pursue adjacent growth opportunities by expanding TC and UIP into new markets and geographies where we see attractive risk-adjusted returns. And what I particularly like about this framework is that it's self-reinforcing.
By improving our structure and business mix, we generate more cash. That cash then strengthens the balance sheet, supports shareholder returns, and funds attractive growth opportunities. Those investments in turn further improve the quality and earnings power of the portfolio.
Now, the initiatives I reviewed are designed to produce measurable results. And here's what success looks like in 2028, as outlined on slide 22: adjusted EBITDA margins of 15% or higher which reflects the benefits of our self-help initiatives and a stronger business mix; three-year EPS CAGR of 10% or higher which delivers sustained earnings growth for shareholders; net leverage at or below two and a half times which demonstrates continued balance sheet improvement; free cash flow averaging 100 million annually or approximately 300 million over the 26 through 28 time period providing the flexibility to invest in growth, reduce debt and return capital to shareholders; and PC and our RPS business is targeted to represent 85% or more of the sales reflecting our intentional shift towards higher margin, more durable businesses. And taken together, these outcomes would represent a fundamentally stronger Koppers, a company with higher margins, stronger cash generation, greater financial flexibility, and a portfolio positioned to create sustainable long-term value. So how do we get there? And the path forward is clear. As we can see on slide 23,
we are advancing a disciplined set of priorities designed to strengthen the business, improve performance, increase that financial flexibility, and drive long-term value creation. And we're confident in our ability to deliver. The strategy is clear, the priorities are defined, and our team is aligned. And that brings me back to where I started today. Every new season begins with optimism, but championships aren't won on optimism alone. They're won through preparation, discipline, execution, and a relentless focus on the fundamentals. And over the past several years, we've strengthened our team. We've improved our capabilities, and we've built a playbook designed to create long-term value. The preseason work is almost behind us, and now it's time to take the field. The opportunity in front of us is significant. The strategy is clear. The groundwork has been laid. The Koppers team is ready. And as we enter the next phase of our journey, we believe our best season is still ahead of us. With that, I'm going to turn it over to Stephanie Apostolou, our chief legal and strategy officer. Stephanie,
thank you, Leroy. Good morning everyone. I'm Stephanie Apostolou, Koppers' Chief Legal and Strategy Officer. I've been with the company now for 15 plus years. And my key responsibilities include legal, strategic planning, the catalyst transformation office, risk management, engineering, sustainability, and the zero harm functions. Today, as seen on slide 24, I'll be taking you through Koppers' strategy for focused value creation. It's a cohesive story explaining how we plan to create durable value across the portfolio with a targeted strategy for each of our segments. After that, I'm going to moderate a panel discussion where you can hear directly from our business leaders about the macro factors impacting each of their businesses, the opportunities we see ahead, and how we're using Catalyst to drive execution towards our 2028 goals.
Now, the strategies summarized here on slide 25 are well underway and have begun to propel us towards those 2028 goals that Leroy just outlined. Our catalyst transformation program is the engine driving consistent execution across each segment and function in our business and each segment has a targeted strategy. In performance chemicals, we're focusing on growth via new products and geographies. In UIP, we're looking for share gains and geographic expansion. RPS is maximizing cash flow through operational excellence and CMNC is taking major actions to reduce risk, volatility, and cash requirements. These are four distinct plays under a single unified operating discipline all driven by catalyst and aimed squarely at value creation.
Now before we go into our panel I want to take a high-level look at each business unit starting here with PC where we see several exciting opportunities. First, PC is actively working on go-to-market plans for a number of new products. They have a next generation residential wood preservative in the final stage of development and it offers improved performance and reduced copper dependency. PC is also developing fire-resistant infrastructure and building materials to meet rising demand driven by the increased prevalence of wildfires and new building code requirements out west. We're also looking to expand PC into new growth markets. And the first example of this is our brand new Brazil CCA manufacturing facility which is targeted to be complete in Q1 2027. We're also exploring adjacent chemistries and end markets that leverage PC's technical expertise in areas such as copper biocides and other wood products. Another differentiator for PC is its history of commercial excellence that provides for close customer relationships, which I'll explain more here as we get to slide 27.
So, how does Koppers and PC win? This shows how we turn these opportunities into a competitive advantage at PC. Our dedicated technical support and enhanced R&D capabilities deepen our partnerships by helping our customers solve product challenges and develop more cost-effective solutions. PC is not simply providing a preservative to their customers. They work with their customers on formulations, performance, and process efficiency. And that deepens those core relationships and opens new opportunities. So, as we're heading into these 2027 contract renewals at PC, we believe this track record of innovation and partnership also provides an opening to retain share with existing customers and then selectively pursue further share gains. These are just a few examples of growth built on innovation, geographic expansion, and commercial excellence at PC. And you're going to hear more details about this shortly in our panel discussion.
Now I want to move on to UIP here on slide 28. You see here that the US wood pole market is projected to grow from about 2.2 billion in 22 and 23 to roughly 2.9 billion by 2028 which is a 4.3% annual growth rate. We believe that Koppers stands in the number two position in the US pole market with room to grow. Our primary opportunities for gaining share are concentrated mainly in the Midwest and Southwest markets in the US. And as you're going to hear in our discussion, we have deliberately built and bought new assets over the past several years that have established a network that allows UIP to effectively serve these markets. A growing market plus a fragmented customer base gives us a broad runway for share gain in UIP. We have the infrastructure in place to expand UIP's reach and we're working hard to generate the sales needed to make our path into these new regions.
Now, RPS and CMNC are going to play a key role in generating cash flow over the next several years. As we see here on slide 29, RPS now features an improved streamlined portfolio after the sale of our KRS railroad services group and the shift in our KR business to a recovery-only model both in 2025. In our core crosstie business, we're pursuing a strategy of reset and optimize as contracts with certain class one customers come up for renewal or are open for renegotiation. And in addition, network optimizations are underway to increase utilization at our existing facilities as evidenced by the idling of our Florence plant which we announced earlier this year.
In CMNC, we're moving to reduce risk through footprint consolidation with phthalic and hydride production being discontinued in 2025 and now all North American supply shifting to our Nyrstar Denmark facility as we proceed with the closure of our Stickney, Illinois plant which we announced earlier this year. We continue to expect the Stickney shutdown to generate the following benefits: 15 to 20 million in annual adjusted EBITDA, $1 to $1.20 of annual adjusted EPS, 8 to 15 million in lower capex, roughly 50% lower CMNC production costs versus 2024, and we've already seen record first half 2025 cash flow. Essentially, we're maximizing efficiency and reducing risk in RPS and CMNC to provide the foundational cash to allow us to invest in more aggressive growth opportunities in PC and UIP.
So, with that strategic framework established, I want to turn to our panel discussion featuring our four business leaders. I'm going to ask you all to please bear with us briefly as we bring them up and get this place set for our discussion. Thanks.
All right. So, please let me introduce you to today's panelists. I'm going to start on my far left. We have Jason Bach, our vice president of utility and industrial products. Here immediately to my left we have Doug Fenwick, president of PC. Over here on my right is Travis Gross, vice president of RPS. And on my far right is Jim Sullivan, president of Koppers Inc. Thank you all for joining this morning. I want to start with the same question for each of you and that is if an investor looked at your business three years ago when we had our last investor day and compared it to today, what would be the biggest change they would see? Jason, let's start with you.
Sure. Three years ago, investors would have seen UIP as a solid operating business with a focus on the northeast and southeast markets in the US, which by the way are two of the most competitive regions in North America. Today, you would see a very different UIP than you would have three years ago. Koppers has invested heavily in UIP, in its assets, and its people in preparation for the demand growth we're expecting in the years to come.
Thanks, Jason. Doug, let's turn to you for that question.
Three years ago, I think PC would have been viewed as a very high performing division of Koppers, very strong market positions. The shifts we experienced in 2025 were both challenging and quite frankly humbling for us. We ultimately made us a better, stronger, and more customer focused company. Going forward, we're approaching the 27 contract negotiations with some real discipline and a commitment to deepening our partnerships. I believe we're positioned to be a long-term contributor to Koppers overall.
Great. Thanks, Doug. Travis, let's go to you next for that one.
Yeah, I'd say three years ago, honestly, I think the investment community probably looked at RPS as an underperformer. I'm excited to say we've made a lot of meaningful changes in our operations. We're way more focused on customer economics, better project execution, improved network optimization. I think that discipline along with the investments that we've made put us in a much stronger position moving forward.
Thanks, Travis. Okay. Now, Jim for CMNC.
Yeah, sure. Three years ago, an investor would have seen CMNC coming off one of its best years ever. Actually, was it best year since 2018. But what was happening is we were facing some rapidly changing market dynamics and those dynamics came in the form of reduced availability of our critical raw material under constant demand which meant that costs went up. So you've already heard of some of the actions that we've taken. We've already shut down the phthalic and hydride plant and our Stickney, Illinois facility and we've announced a closure of the entire plant effective at the end of this month and that will help offset some of these headwinds.
Thanks Jim. I want to pivot now to get each of your takes on some of the larger macro economic impacts hitting your business. So Doug, let's start with you. Tell us a bit about the markets where you play, how you see those evolving, and how PC is positioned.
Thanks. As Leroy mentioned in his presentation, we're a global player. We perform in almost every market around the globe. The current largest market for us is North America and it's been relatively flat. We've been able to offset that by some share recapture in 26 and some new customer wins. We've been very proud of that. 27 is going to be challenging. We've got some sustained copper inflation, raw material volatility, diesel pricing, etc. We've been talking to our customers since the spring. We historically started talking to them in September, October, and we've already managed to put together a few contracts, so we're satisfied with that, but still have some work ahead of us going forward. We're very well positioned though as far as our competition goes with our vertical copper integration, pricing discipline, and our technical capabilities. That all supports our profitability and cash flow initiatives. Industrial growth also, as Leroy mentioned, has helped offset the flat residential market. Pole demand's been strong. Outside of our main competitor, we've been able to wrap up almost every pole manufacturer across the country as well as our introduction of DCI. Our new industrial preservative's been very profitable for the division.
Okay, great. Thank you, Doug. I want to turn now to Jason. Jason, we've been clear that UIP is a business we want to grow moving forward. So, why are you confident that the utility pole market can support attractive growth for an extended period of time?
Yeah, great question, Stephanie. First I'd like to say like the demand drivers are durable. And I'll start with aging infrastructure. The average useful life of a wood utility pole is approximately 50 years, you know, plus or minus. And there's a large group of poles right now in the US that are either at the 50-year mark or have passed that need to be replaced simply because of their age. So, you know, that's a good tailwind for our business. And then you have grid hardening, which is essentially the replacement of small poles with larger stronger poles. And this is being done in response to the increased storm activity that we've all experienced across the country, you know. So, another good tailwind to our business. And then finally is load growth. And this is I think the most important contributor to what we expect to see as a growing business in the years ahead. Over the last 20 years, load growth in the US has been essentially flat. And now we're starting to see it increase and it's expected to increase 2 to 3% per year up to 2030 and probably beyond. The main driver for this is what we're all reading in the news with AI and the buildout of data centers. But you also have other contributors to power consumption like increased manufacturing, crypto, electrification of vehicles. Again, all tailwinds for the business that we're excited about.
Thanks, Jason. I want to dig in a little deeper on that point. You mentioned data center demand and how is that phenomenon impacting UIP specifically? Do you think it's real or is it overstated and hype?
No, AI demand is real. It's not hype and it's changing the infrastructure needs across the economy. Over the last 14 years, utilities have increased their spend on capex every year. Last year in 2025, that investment was somewhere north of $200 billion. So again, lots of investment. It's increasing and we expect that trend to continue. Some prognosticators project $1.3 to $1.5 trillion of capex investment from utilities through 2030. It's a big number and that's not a one for one translation into pole demand but it signals the major scale and duration of the investment cycle that our customers are entering.
So is UIP seeing growth from that increased utility investment yet?
Yeah, I mean we're experiencing growth. We see strong demand right now. We have a very healthy backlog of orders and you know, like I said, utilities are preparing for the AI-driven load growth that again we're all expecting in the years to come. There's also another important factor that helps drive capex investment with utilities and that's the rate increase approval by public utility commissions. So a utility cannot increase rates to its customers, you know, many of us, without getting approval from these commissions. And so the trend we're seeing is that these public utility commissions are starting to approve rate increases. And that ultimately leads to more capex investment from the utility because they're able to generate more revenue. So again, another positive tailwind that we're seeing in our business. We have one Southeast customer who recently announced a hundred billion dollar investment plan to build out infrastructure out to 2032. And that happened following an approval of a rate increase from a public utility commission. So again, the industry pattern is rate approvals from these commissions lead to higher capex plans for the public utilities.
And one last question for Jason on this point. So how much of the opportunity do you think is underlying market growth versus Koppers taking share and why should our investors believe that UIP can successfully take share from established competitors?
Great. Another good question. Well, first of all, the utility pole market is expected to grow 3% annually through 2030, which will result in UIP growing its revenue in the mid single digits. As far as taking market share, UIP has operated in and continues to operate in the southeast region of the United States, which is by far the most competitive region in the country. And we've done it successfully. So, we can take our assets and our knowledge and our experience that we've had in the Southeast and use that to grow our business into the Midwest, into the Southwest and the Western States, which we've been doing and will continue to do now, especially with the growing demand. On top of that, we have multiple treating, peeling, and drying facilities located in the heart of the southern yellow pine wood basket. You know, and we have a strong logistics and procurement system as well. So, we've invested in all parts of the business in preparation for the expected demand. And you know, we expect to continue to see growth from both the increase in volume and taking market share as we move into these new regions.
Thanks, Jason. That was a lot of great information. Thanks. So Travis, I want to turn to RPS now. So how should investors distinguish between the current environment you're seeing in the crosstie market and the long-term health of that market?
Yeah. We're currently seeing softer crosstie demand, but you know, in my 19 years, I've seen plenty of those purchasing cycles. So I would separate the timing of purchases from the underlying replacement need. You know, our customers may slow down those tie purchases temporarily, but at the end of the day, they have to replace that tie. You know, the tie's going to age, the track's going to wear. So, ultimately, that maintenance has to happen for them to keep the network safe. So, lowered purchasing today may represent deferred maintenance. And typically, what we see with deferred maintenance is higher demand in the future. So, you know, we're not attempting to predict the future. We're focused on what we can control. What we can control is our costs, our inventory management, and cash generation.
So, what are you and your team doing operationally, Travis, to prepare for that potential uptick in demand in the future?
Yes, operationally, we're focused on staying flexible and disciplined, and we're aligning our production and inventory with our current demand. We're reducing our working capital. We're managing our costs through actions like idling Florence. But we're keeping the network ready. You know, our investments like North Little Rock, that provides flexibility and capacity for our network. Catalyst provides structure for that continuous improvement and so when we see that deferred maintenance create higher demand for our products in the future we want to be ready to respond and convert that volume into cash.
Thanks Travis. So Jim let's talk about CMNC. You've got a number of external factors that continue to impact CMNC performance. How's Koppers dealing with these variables?
Yeah. So let's talk about the external factors first. None of which we can control. So there's three big ones, right? So the first one is the war in Europe. So the Ukraine-Russia war. What that did was took out a significant amount of raw material from that market and the demand for that raw material never changed. So the costs have gone up. So that's been difficult. And then the other issue that we have on the external factors is a continual shift in steel making production and technology from basic oxygen furnace technology to produce steel which produces coal tar to electric arc furnace technology which just melts scrap steel and there is no coal tar produced. So the availability of raw material in Europe and North America have gone down as a result of that and once again the demand has stayed the same. So the cost has gone up and the final external factor is the conflict in the Middle East. So as everybody knows the conflict in the Middle East has rapidly escalated fuel costs, oil costs. And why that's an issue for Koppers is that some of our raw material in certain regions is indexed directly to oil costs. So as oil costs goes up, our raw material goes up. And normally that will self sort. But it has happened so fast that we have not been able to pass on those costs in the way of pricing to our customers as of yet. Now to answer your question about what we're doing about it. So we've approached our customers and said look, you know, the past practice of having long-term pricing contracts is just got to end. The world's changing way too fast. We have to compress the timeline from when we can reset pricing. Now, we are making some ground on that, but we will have a chance to reset those contracts when it's time for them to renew. And the final thing that we're doing is we've accelerated or expedited the closure of our Stickney, Illinois facility. So, we moved that up a number of months and we're set to cease distillation operations at the end of this month.
Thanks, Jim. Doug, I want to go back to you. I want to hear a little bit more from you about how innovation deepens customer relationships and creates additional avenues for growth at PC.
Sure, Stephanie. Any of you that toured our facility yesterday can see our commitment to innovation. The investment that Koppers made in that R&D center over the last couple years is significant and it's gone over very well with our customer base. Our customers really see us, as Leroy and Stephanie both said, they see us as a partner and not really as a supplier, and that goes a long way in collaboration, working with them on formulation, performance, processing, efficiencies, etc. And that opens up adjacent markets, new projects that we talked about yesterday, that was in particular one customer that brought us a project that Dr. Jun's group's been working on for about a year now. That provides not only an adjacent marketplace for us but additional market share growth with that particular customer. We've got a very strong runway right now in additives, fire retardants, formulations, and industrial applications.
You also mentioned in your video, Doug, the forthcoming patent expiration for MicroPro, which is PC's flagship residential product. How is PC preparing for that?
We're prepared and again talked about this in our lab tour yesterday. That was one of the questions that came up. MicroPro has been around for around 20 years now. We've enjoyed some tremendous market growth with that. It is the known standard in North America and while the patent expiration may create some new entrants, I believe capital, engineering, expertise as well as regulatory barriers are going to create some real issues for anybody wanting to get into what's already an oversupplied market. In addition to that, as we talked about yesterday, we have our next patented product MicroPro XP coming in right behind it. We did introduce it to customers this year. There's tremendous interest in the product mainly because of the reduced copper retentions in it. But our customers, as I explained yesterday, are battling with price increases this year. And they just thought it was going to be too much in order to do both a price increase and a new product introduction, but we're excited about that product line for down the road, and it's going to give us a stronghold in the market to continue.
Thank you, Doug. Travis, let's go back to you and RPS. So I know your team continues to find ways to improve performance and drive operational excellence. Can you tell us a little bit about how Catalyst has changed the way you operate?
Yeah, I mean Catalyst has really changed the way that we look at our business every single day. And we approach the Catalyst process with a simple mindset. Find small, fix small, keep building on it. So you know, we know those big improvements don't just come from one big move. We see practical improvements show up in our business every day, really across the business. So, we know that one improvement may not move the needle, but those repeated small improvements across the network really tend to add up and that Catalyst process allows us to share those good ideas across the company. So, it's kind of become more of a common operating language for us and a way for us to continue to improve.
