Sep 18, 2025 4:30 PM Eastern Daylight Time Kaiser Aluminum Corporation, headquartered in Franklin, Tenn., is a leading producer of semi-fabricated specialty aluminum products, serving customers worldwide with highly-engineered solutions for aerospace and high-strength, packaging, general engineering, automotive extrusions, and other industrial applications. The Company's North American facilities produce value-added plate, sheet, coil, extrusions, rod, bar, tube, and wire products, adhering to traditions of ...

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum if future growth does not justify high valuations [1] - Identifying the right entry point for fast-moving stocks is challenging, and traditional momentum parameters may not always be reliable [1] Group 2: Bargain Stocks and Screening - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score is useful for identifying strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen helps find attractively priced fast-moving stocks [2] Group 3: Kaiser Aluminum (KALU) Analysis - Kaiser Aluminum (KALU) has shown a price increase of 3.1% over the past four weeks, indicating growing investor interest [3] - KALU has gained 0.3% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.54, suggesting it moves 54% higher than the market in either direction, indicating fast-paced momentum [4] Group 4: Valuation and Earnings Estimates - KALU has a Momentum Score of B, suggesting it is a favorable time to invest in the stock [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investor interest [6] - KALU is trading at a Price-to-Sales ratio of 0.40, indicating it is relatively cheap, as investors pay only 40 cents for each dollar of sales [6] Group 5: Additional Investment Opportunities - KALU is not the only stock that meets the 'Fast-Paced Momentum at a Bargain' criteria; there are several other candidates worth considering [7] - Investors can choose from over 45 Zacks Premium Screens tailored to different investing styles to find potential winning stocks [8]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying the right ones involves significant risk and volatility [1] Group 1: Company Overview - Kaiser Aluminum (KALU) is identified as a promising growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 5.5%, but projected EPS growth for this year is expected to be 84.9%, significantly higher than the industry average of 3.4% [5] Group 2: Key Growth Metrics - The asset utilization ratio for Kaiser is 1.3, indicating that the company generates $1.3 in sales for every dollar in assets, outperforming the industry average of 0.85 [6] - Kaiser’s sales are projected to grow by 14.8% this year, compared to an industry average of 0% [7] Group 3: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Kaiser, with the Zacks Consensus Estimate for the current year increasing by 11.3% over the past month [8] Group 4: Investment Positioning - Kaiser holds a Growth Score of B and a Zacks Rank of 2, positioning it well for potential outperformance in the growth stock category [10]

Group 1 - The Zacks Rank system focuses on earnings estimates and revisions to identify winning stocks, while also considering trends in value, growth, and momentum [1][2] - Value investing is a popular strategy that utilizes fundamental analysis and traditional valuation metrics to find undervalued stocks [2] - The Style Scores system helps investors find stocks with specific traits, particularly in the "Value" category, where high Zacks Ranks and "A" grades indicate high-quality value stocks [3] Group 2 - Kaiser Aluminum (KALU) is highlighted as a potential value investment, currently holding a Zacks Rank 2 (Buy) and an A for Value [4] - KALU has a P/E ratio of 13.59, significantly lower than the industry average P/E of 26.99, indicating potential undervaluation [4] - The Forward P/E for KALU has fluctuated between 11.50 and 26.64 over the past 12 months, with a median of 14.12 [4] - The P/S ratio for KALU is 0.39, compared to the industry's average P/S of 0.92, further suggesting that KALU is undervalued [5] - Overall, KALU's metrics indicate it is likely undervalued, and its strong earnings outlook positions it as one of the market's strongest value stocks [6]

Core Insights - Ahold and Kaiser Aluminum are identified as high-growth stocks with strong value, trading under 16X forward earnings and 0.3X forward sales [1][2] Ahold's Growth Strategy - Ahold is expanding rapidly under its "Growing Together" strategy, aiming to deliver affordable food and non-food products across the U.S. and Europe by 2028 [4] - The company operates supermarkets, convenience stores, and gas stations, focusing on own-brand development and healthy food options [5] - Ahold's financial targets include achieving 80% omnichannel loyalty sales penetration, 30 million monthly active users, a 4% net sales CAGR, and high-single-digit EPS growth [6] Ahold's Financial Projections - Ahold's total sales are expected to increase by 13% in fiscal 2025 and by another 2% in FY26, reaching $111.54 billion [9] - Annual earnings are projected to grow by 11% in FY25 and by 9% in FY26, reaching $3.33 per share [10] Kaiser Aluminum's Market Focus - Kaiser Aluminum is focusing on high-growth markets such as aerospace, automotive, general engineering, and packaging [7] - The company has made significant upgrades to facilities to enhance capacity for aerospace and general engineering products [7] Kaiser Aluminum's Business Model - Kaiser’s business model emphasizes converting aluminum rather than speculating on raw material prices, focusing on value-added services [8] Kaiser Aluminum's Financial Projections - Kaiser's top line is expected to grow by 15% this year and by 19% in FY26, reaching $4.12 billion [12] - EPS is projected to increase by 85% in FY25 to $4.64 and by another 35% in FY26 to $6.28 [12] Dividends - Both Ahold and Kaiser offer generous annual dividend yields of 3.01% and 4.21%, respectively [14] Investment Outlook - Ahold and Kaiser are currently benefiting from positive earnings estimate revisions for fiscal 2025 and FY26, with Ahold holding a Zacks Rank 1 (Strong Buy) and Kaiser a Zacks Rank 2 (Buy) [17]

Industry Overview - The Zacks Metal Products - Procurement and Fabrication industry is experiencing strong demand across various end markets, with improvements in order levels and strategic pricing expected to help maintain margins despite tariff impacts [1][4] - The industry primarily includes metal processing and fabrication service providers that transform metal into parts and components for sectors such as construction, aerospace, automotive, and more [3] Market Trends - Recent data shows signs of recovery in the manufacturing sector, with the Institute for Supply Management's manufacturing index slightly increasing to 49% in June from 48.5% in May, and the Production Index rising to 50.3% [4] - Industrial production increased by 0.3% in June, with an annual growth rate of 1.1% for the second quarter [4] Strategic Initiatives - Companies are implementing strategic pricing adjustments and cost-reduction initiatives to tackle rising labor, freight, and fuel costs, while also diversifying supplier bases to mitigate tariff impacts [5] - A strong focus on automation and innovation is expected to drive future growth, particularly in manufacturing, aerospace, and automotive sectors [6] Performance Metrics - The Zacks Metal Products - Procurement and Fabrication industry has outperformed both its sector and the Zacks S&P 500 composite over the past year, growing by 27.2% compared to the sector's 13.5% and the S&P 500's 16.8% [10] - The industry is currently trading at a trailing 12-month EV/EBITDA ratio of 17.38X, which is lower than the S&P 500's 17.93X and the Industrial Products sector's 19.57X [13] Company Highlights - Kaiser Aluminum reported better-than-expected second-quarter results, with expectations for a 10-15% year-over-year increase in adjusted EBITDA and a 5-10% rise in conversion revenues for 2025 [19][20] - ESAB Corporation is making growth investments and pursuing acquisitions to enhance its market presence, with a recent 25% increase in its quarterly dividend [24] - TriMas Corporation's packaging segment is benefiting from solid demand, with an anticipated consolidated sales growth of 8-10% for full-year 2025 [26]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying those that can fulfill their potential is challenging [1] Group 1: Company Overview - Kaiser Aluminum (KALU) is identified as a promising growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 5.5%, but projected EPS growth for this year is expected to be 84.9%, significantly outperforming the industry average of 2.8% [5] Group 2: Financial Metrics - Kaiser Aluminum has an asset utilization ratio (sales-to-total-assets ratio) of 1.3, indicating that the company generates $1.3 in sales for every dollar in assets, compared to the industry average of 0.85 [6] - The company's sales are projected to grow by 14.8% this year, while the industry average is 0% [7] Group 3: Earnings Estimates - The current-year earnings estimates for Kaiser have been revised upward, with the Zacks Consensus Estimate increasing by 11.3% over the past month [9] - Kaiser has achieved a Growth Score of B and holds a Zacks Rank 1 due to positive earnings estimate revisions, suggesting it is a strong choice for growth investors [11]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited consolidated financial statements and notes, reflecting a retrospective change in inventory valuation from LIFO to WAC [Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS%20(UNAUDITED)) The balance sheets show an increase in total assets and liabilities from year-end 2024 to June 30, 2025 Consolidated Balance Sheet Summary | Metric | As of June 30, 2025 (Millions $) | As of December 31, 2024 (As Adjusted, Millions $) | | :--------------------------------- | :------------------------------- | :------------------------------------------------ | | **Assets** | | | | Total current assets | 1,150.6 | 1,074.6 | | Total assets | 2,512.8 | 2,409.9 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | 426.2 | 400.5 | | Total liabilities | 1,736.8 | 1,666.8 | | Total stockholders' equity | 776.0 | 743.1 | - Total assets **increased by $102.9 million** from December 31, 2024, to June 30, 2025, primarily driven by increases in trade receivables and property, plant, and equipment, net[11](index=11&type=chunk) - Total liabilities **increased by $70.0 million**, mainly due to higher accounts payable and long-term debt, net[11](index=11&type=chunk) [Statements of Consolidated Income (Unaudited)](index=6&type=section&id=STATEMENTS%20OF%20CONSOLIDATED%20INCOME%20(UNAUDITED)) The income statements reflect year-over-year growth in net sales and net income for both the quarter and six-month periods Consolidated Income Summary | Metric | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (As Adjusted, Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (As Adjusted, Millions $) | | :--------------------------------------- | :------------------------------------- | :---------------------------------------------------- | :------------------------------------------ | :---------------------------------------------------- | | Net sales | 823.1 | 773.4 | 1,600.5 | 1,510.9 | | Operating income | 38.0 | 36.2 | 79.4 | 60.5 | | Net income | 23.2 | 18.9 | 44.8 | 37.1 | | Basic net income per common share | 1.44 | 1.18 | 2.77 | 2.31 | | Diluted net income per common share | 1.41 | 1.15 | 2.72 | 2.27 | - Net sales **increased by $49.7 million (6%)** for the quarter and **$89.6 million (6%)** for the six months ended June 30, 2025, compared to the prior year periods[14](index=14&type=chunk) - Net income **increased by $4.3 million (22.8%)** for the quarter and **$7.7 million (20.8%)** for the six months ended June 30, 2025, compared to the prior year periods[14](index=14&type=chunk) [Statements of Consolidated Comprehensive Income (Unaudited)](index=7&type=section&id=STATEMENTS%20OF%20CONSOLIDATED%20COMPREHENSIVE%20INCOME%20(UNAUDITED)) Comprehensive income grew year-over-year, driven by higher net income and other comprehensive income from cash flow hedges Consolidated Comprehensive Income Summary | Metric | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (As Adjusted, Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (As Adjusted, Millions $) | | :----------------------------------- | :------------------------------------- | :---------------------------------------------------- | :------------------------------------------ | :---------------------------------------------------- | | Net income | 23.2 | 18.9 | 44.8 | 37.1 | | Other comprehensive income, net of tax | 4.1 | 3.2 | 6.7 | 1.1 | | Comprehensive income | 27.3 | 22.1 | 51.5 | 38.2 | - Comprehensive income **increased by $5.2 million (23.5%)** for the quarter and **$13.3 million (34.8%)** for the six months ended June 30, 2025, driven by higher net income and other comprehensive income[16](index=16&type=chunk) - Other comprehensive income, net of tax, for the six months ended June 30, 2025, was significantly higher at **$6.7 million** compared to $1.1 million in the prior year, primarily due to cash flow hedges[16](index=16&type=chunk) [Statements of Consolidated Stockholders' Equity (Unaudited)](index=8&type=section&id=STATEMENTS%20OF%20CONSOLIDATED%20STOCKHOLDERS'%20EQUITY%20(UNAUDITED)) Stockholders' equity increased during the first half of 2025, primarily due to net income offsetting cash dividend payments Consolidated Stockholders' Equity Summary | Metric | As of Dec 31, 2024 (As Adjusted, Millions $) | As of June 30, 2025 (Millions $) | | :--------------------------------- | :------------------------------------------- | :------------------------------- | | Total Stockholders' Equity | 743.1 | 776.0 | | Net income (6 months) | - | 44.8 | | Other comprehensive income (6 months) | - | 6.7 | | Cash dividends declared (6 months) | - | (25.7) | | Amortization of unearned equity compensation (6 months) | - | 8.5 | - Total stockholders' equity **increased from $743.1 million** at December 31, 2024, to **$776.0 million** at June 30, 2025, primarily due to net income and other comprehensive income, partially offset by cash dividends[20](index=20&type=chunk) - Cash dividends declared were **$0.77 per common share** for both the March 31, 2025, and June 30, 2025 quarters, totaling **$25.7 million** for the six months ended June 30, 2025[21](index=21&type=chunk)[30](index=30&type=chunk) [Statements of Consolidated Cash Flows (Unaudited)](index=10&type=section&id=STATEMENTS%20OF%20CONSOLIDATED%20CASH%20FLOWS%20(UNAUDITED)) Cash from operations decreased year-over-year due to working capital changes, while financing activities improved from net borrowings Consolidated Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (As Adjusted, Millions $) | | :------------------------- | :------------------------------------------ | :---------------------------------------------------- | | Operating activities | 72.9 | 89.6 | | Investing activities | (81.9) | (73.6) | | Financing activities | 4.0 | (28.0) | | Net decrease in cash | (5.0) | (12.0) | | Cash at end of period | 32.9 | 88.7 | - Net cash provided by operating activities **decreased to $72.9 million** for the six months ended June 30, 2025, from $89.6 million in the prior year, mainly due to changes in working capital[30](index=30&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Net cash used in investing activities **increased to $81.9 million**, primarily due to higher capital expenditures[30](index=30&type=chunk) - Net cash provided by financing activities was **$4.0 million**, a significant improvement from $28.0 million used in the prior year, driven by net borrowings under the Revolving Credit Facility[30](index=30&type=chunk) [Notes to Interim Consolidated Financial Statements – Unaudited](index=11&type=section&id=NOTES%20TO%20INTERIM%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20-%20UNAUDITED) These notes provide detailed explanations of accounting policies, financial statement line items, and other required disclosures [Note 1. Basis of Presentation and Recent Accounting Pronouncements](index=12&type=section&id=Note%201%20Basis%20of%20Presentation%20and%20Recent%20Accounting%20Pronouncements) This note details the basis of financial statement presentation, including a significant retrospective change in inventory valuation from LIFO to WAC - Effective January 1, 2025, the Company **changed its inventory valuation methodology from LIFO to WAC**, retrospectively applying this change to all prior periods presented to improve comparability and better reflect the physical flow of goods[38](index=38&type=chunk) - New accounting pronouncements (ASU 2023-06, ASU 2023-09, ASU 2024-03) are **not expected to have a material impact** on the Company's consolidated financial statements, primarily affecting disclosure and presentation requirements[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Note 2. Supplemental Balance Sheet Information](index=15&type=section&id=Note%202%20Supplemental%20Balance%20Sheet%20Information) This note provides detailed breakdowns of selected balance sheet accounts, showing changes in key assets and liabilities Selected Balance Sheet Accounts | Account | As of June 30, 2025 (Millions $) | As of December 31, 2024 (As Adjusted, Millions $) | | :-------------------------------- | :------------------------------- | :------------------------------------------------ | | Trade receivables, net | 378.7 | 319.7 | | Inventories | 595.6 | 601.9 | | Property, plant and equipment, net | 1,204.9 | 1,161.2 | | Other assets | 67.9 | 78.6 | | Other accrued liabilities | 55.1 | 79.3 | | Long-term liabilities | 84.8 | 84.0 | - Trade receivables, net, **increased by $59.0 million**, while inventories slightly decreased by $6.3 million, reflecting ongoing inventory management efforts[44](index=44&type=chunk) - Machinery and equipment increased significantly, with **$18.3 million of assets** associated with the Warrick acquisition conveyed and placed in service during the quarter ended March 31, 2025[44](index=44&type=chunk)[48](index=48&type=chunk) [Note 3. Employee Benefits](index=16&type=section&id=Note%203%20Employee%20Benefits) This note details the company's various employee benefit plans and associated expenses, which increased year-over-year Employee Benefit Plan Expenses | Benefit Plan Expense | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Defined contribution plans | 4.6 | 4.2 | 10.6 | 10.0 | | Deferred compensation plan | 0.4 | — | 0.6 | 0.7 | | Multiemployer pension plans | 1.6 | 1.5 | 3.1 | 3.0 | | Net periodic defined benefit plans | 2.5 | 2.8 | 4.8 | 4.3 | | **Total** | **9.1** | **8.5** | **19.1** | **18.0** | - Total employee benefit plan expenses **increased to $9.1 million** for the quarter and **$19.1 million** for the six months ended June 30, 2025, compared to the prior year periods[47](index=47&type=chunk) - The Company contributed **$3.1 million** to its pension plans during the first six months of 2025 and expects to contribute an additional $3.1 million by year-end[51](index=51&type=chunk) [Note 4. Restructuring](index=17&type=section&id=Note%204%20Restructuring) This note details costs associated with the 2025 and 2024 restructuring plans aimed at cost reduction and facility consolidation - The 2025 Restructuring Plan, initiated in Q1 2025, incurred **$1.9 million in charges** for severance and related benefits through June 30, 2025, with total estimated costs ranging from $2.0 million to $3.0 million[52](index=52&type=chunk) - The 2024 Restructuring Plan, initiated in Q2 2024 to exit the Sherman, Texas facility, incurred **$7.5 million in charges** through June 30, 2025, including a $4.6 million multiemployer pension obligation[54](index=54&type=chunk) Restructuring Liability Summary | Restructuring Plan | Balance, Dec 31, 2024 (Millions $) | Restructuring Costs (6 months ended June 30, 2025, Millions $) | Costs Paid (6 months ended June 30, 2025, Millions $) | Balance, June 30, 2025 (Millions $) | | :----------------- | :--------------------------------- | :----------------------------------------------------------- | :---------------------------------------------------- | :---------------------------------- | | 2025 Plan | — | 1.9 | (1.7) | 0.2 | | 2024 Plan | 4.7 | — | (0.1) | 4.6 | [Note 5. Derivatives, Hedging Programs and Other Financial Instruments](index=18&type=section&id=Note%205%20Derivatives,%20Hedging%20Programs%20and%20Other%20Financial%20Instruments) This note details the company's use of derivative instruments to manage commodity price and foreign currency risks - The Company uses derivatives to limit exposure to metal price, energy price, and foreign currency risks, primarily through cash flow hedges, and **does not use them for speculative purposes**[57](index=57&type=chunk)[61](index=61&type=chunk) Notional Amounts of Derivative Contracts | Derivative Type | Notional Amount (June 30, 2025) | | :---------------- | :------------------------------ | | Aluminum | 139.0 mmlbs | | Alloying Metals | 5.8 mmlbs | | Natural Gas | 3,360,000 mmbtu | | Euro | €3.2 million | Gains and Losses on Cash Flow Hedges | (Gain) Loss on Cash Flow Hedges | Quarter Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2025 (Millions $) | | :-------------------------------- | :------------------------------------- | :------------------------------------------ | | Aluminum | (2.2) | (7.4) | | Alloying Metals | (0.5) | (0.9) | | Natural gas | 0.3 | 0.3 | | Electricity | — | — | | Foreign exchange contracts | (0.1) | — | | **Total** | **(2.5)** | **(8.0)** | [Note 6. Debt and Credit Facility](index=23&type=section&id=Note%206%20Debt%20and%20Credit%20Facility) This note provides details on the company's outstanding Senior Notes and its Revolving Credit Facility, including terms and availability Outstanding Debt Summary | Debt Instrument | Principal Amount (June 30, 2025, Millions $) | Effective Interest Rate | Maturity | | :---------------- | :------------------------------------------- | :---------------------- | :------- | | 4.625% Senior Notes | 500.0 | 4.8% | March 2028 | | 4.50% Senior Notes | 550.0 | 4.7% | June 2031 | | **Total Debt** | **1,050.0** | | | - The Revolving Credit Facility has a maximum commitment of $575.0 million, with **$524.6 million remaining borrowing availability** as of June 30, 2025[76](index=76&type=chunk)[77](index=77&type=chunk) - Outstanding borrowings under the Revolving Credit Facility were **$32.8 million** as of June 30, 2025, with $217.6 million borrowed and $184.8 million repaid during the six months ended June 30, 2025[76](index=76&type=chunk) Interest Expense Components | Interest Expense Component | Quarter Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2025 (Millions $) | | :------------------------- | :------------------------------------- | :------------------------------------------ | | Senior Notes | 12.4 | 24.8 | | Revolving Credit Facility | 0.7 | 1.3 | | Finance lease liabilities | 0.2 | 0.4 | | Capitalized interest | (0.8) | (2.8) | | **Total Interest Expense** | **12.5** | **23.7** | [Note 7. Commitments and Contingencies](index=25&type=section&id=Note%207%20Commitments%20and%20Contingencies) This note details the company's environmental remediation liabilities and other legal contingencies - The Company is actively engaged in remediation activities for historical **PCB contamination** at its Trentwood facility, including the implementation of a full-scale UV/AOP treatment system[82](index=82&type=chunk) - For the Newark facility, the Company **increased its environmental accrual by $2.9 million** in Q3 2024 based on proposed remediation options and expects to submit a revised Alternate Arrays Document (AAD) by September 30, 2025[83](index=83&type=chunk) - As of June 30, 2025, the environmental accrual was **$18.2 million**, with a reasonably possible additional undiscounted cost of up to **$13.4 million** over the remediation period[84](index=84&type=chunk)[85](index=85&type=chunk) [Note 8. Accumulated Other Comprehensive Income](index=27&type=section&id=Note%208%20Accumulated%20Other%20Comprehensive%20Income) This note presents the changes in Accumulated Other Comprehensive Income (AOCI), driven primarily by cash flow hedges Changes in AOCI Components | AOCI Component | Beginning Balance (June 30, 2025, Millions $) | Other Comprehensive Income (Loss), Net of Tax (Q2 2025, Millions $) | Ending Balance (June 30, 2025, Millions $) | | :--------------- | :-------------------------------------------- | :---------------------------------------------------------------- | :----------------------------------------- | | Defined Benefit Plans | 19.2 | 0.4 | 19.6 | | Cash Flow Hedges | 3.9 | 3.7 | 7.6 | | **Total AOCI** | **23.1** | **4.1** | **27.2** | - AOCI **increased from $20.5 million** at December 31, 2024, to **$27.2 million** at June 30, 2025, primarily driven by a net unrealized gain on cash flow hedges[11](index=11&type=chunk)[88](index=88&type=chunk) - The Company estimates a net mark-to-market gain of **$9.1 million before tax** in AOCI will be reclassified into Net income upon settlement within the next 12 months[89](index=89&type=chunk) [Note 9. Other Income (Expense), Net](index=28&type=section&id=Note%209%20Other%20Income%20(Expense),%20Net) This note details the components of other income and expense, highlighting a significant gain from business interruption insurance Components of Other Income (Expense), Net | Component | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | | :--------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Interest income | 0.2 | 1.2 | 0.4 | 2.1 | | Net periodic postretirement benefit cost | (1.4) | (1.5) | (2.6) | (1.8) | | Gain on business interruption insurance | 5.0 | — | 5.0 | 10.5 | | **Other income (expense), net** | **4.4** | **(0.5)** | **3.0** | **10.4** | - Other income (expense), net, significantly improved to **$4.4 million** for the quarter ended June 30, 2025, from an expense of $0.5 million in the prior year, primarily due to **$5.0 million in business interruption insurance recoveries**[90](index=90&type=chunk) - The Company sold **$484.2 million in trade accounts receivable** through supply chain financing arrangements during the six months ended June 30, 2025, with associated discount fees of $11.0 million, substantially reimbursed by customers[91](index=91&type=chunk) [Note 10. Income Tax Matters](index=28&type=section&id=Note%2010%20Income%20Tax%20Matters) This note provides a breakdown of the income tax provision and discusses the potential impact of new tax legislation Income Tax Provision | Income Tax Provision | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (As Adjusted, Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (As Adjusted, Millions $) | | :------------------- | :------------------------------------- | :---------------------------------------------------- | :------------------------------------------ | :---------------------------------------------------- | | Domestic | (6.0) | (5.1) | (12.6) | (10.1) | | Foreign | (0.7) | (0.6) | (1.3) | (1.1) | | **Total** | **(6.7)** | **(5.7)** | **(13.9)** | **(11.2)** | - The income tax provision increased to **$6.7 million** for the quarter and **$13.9 million** for the six months ended June 30, 2025, with effective tax rates of **22% and 24%**, respectively[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - The Company is evaluating the impact of the **One Big Beautiful Bill Act (OBBBA)**, signed on July 4, 2025, which makes permanent key elements of the Tax Cuts and Jobs Act, and will reflect results in the Q3 2025 10-Q[96](index=96&type=chunk) [Note 11. Earnings Per Share](index=29&type=section&id=Note%2011%20Earnings%20Per%20Share) This note details the computation of basic and diluted earnings per share, which increased year-over-year Earnings Per Share Calculation | EPS Metric | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 (As Adjusted) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (As Adjusted) | | :--------------------------------------- | :-------------------------- | :---------------------------------------- | :----------------------------- | :---------------------------------------- | | Net income available to common shareholders (Millions $) | 23.2 | 18.9 | 44.8 | 37.1 | | Basic EPS | 1.44 | 1.18 | 2.77 | 2.31 | | Diluted EPS | 1.41 | 1.15 | 2.72 | 2.27 | - Diluted EPS **increased to $1.41** for the quarter and **$2.72** for the six months ended June 30, 2025, compared to $1.15 and $2.27, respectively, in the prior year periods[98](index=98&type=chunk) - Approximately **565 and 241 shares** were excluded from the diluted EPS computation for the quarter and six months ended June 30, 2025, respectively, as their inclusion would have been anti-dilutive[100](index=100&type=chunk) [Note 12. Supplemental Cash Flow Information](index=30&type=section&id=Note%2012%20Supplemental%20Cash%20Flow%20Information) This note provides additional details on cash flow items, including non-cash activities and a reconciliation of cash balances Supplemental Cash Flow Data | Supplemental Cash Flow Item | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | | Interest paid | 22.1 | 21.0 | | Unpaid purchases of PPE | 22.9 | 32.5 | | Operating lease liabilities | 1.0 | 0.5 | | Finance lease liabilities | 0.7 | 2.0 | Reconciliation of Cash | Cash Components | As of June 30, 2025 (Millions $) | As of June 30, 2024 (Millions $) | | :---------------- | :------------------------------- | :------------------------------- | | Cash & equivalents | 13.1 | 70.4 | | Restricted cash | 19.8 | 18.3 | | **Total** | **32.9** | **88.7** | - Restricted cash, held as collateral for workers' compensation and other agreements, **increased to $19.8 million** as of June 30, 2025[101](index=101&type=chunk) [Note 13. Business, Product, and Geographical Area Information](index=30&type=section&id=Note%2013%20Business,%20Product,%20and%20Geographical%20Area%20Information) This note provides a breakdown of net sales by end market, showing strong growth in Packaging and GE Products - The Company operates as a **single reportable segment**, producing semi-fabricated specialty aluminum mill products for Aero/HS Products, Packaging, GE Products, and Automotive Extrusions end markets[102](index=102&type=chunk)[121](index=121&type=chunk) Net Sales by End Market | End Market | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | | :------------------ | :------------------------------------- | :------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Aero/HS Products | 227.9 | 226.1 | 442.6 | 446.6 | | Packaging | 340.9 | 312.4 | 655.1 | 610.5 | | GE Products | 185.4 | 162.6 | 367.0 | 315.6 | | Automotive Extrusions | 68.9 | 69.7 | 135.8 | 133.2 | | **Total Net Sales** | **823.1** | **773.4** | **1,600.5** | **1,510.9** | - **Packaging and GE Products** showed strong net sales growth for both the quarter and six months ended June 30, 2025, while Aero/HS Products and Automotive Extrusions experienced slight declines or minimal growth[107](index=107&type=chunk) [Note 14. Change in Accounting Principle](index=32&type=section&id=Note%2014%20Change%20in%20Accounting%20Principle) This note details the significant positive impact on reported income from changing the inventory valuation method from LIFO to WAC - The Company retrospectively **changed its inventory valuation from LIFO to WAC**, impacting Cost of Products Sold, Operating Income, Net Income, and EPS across all presented periods[108](index=108&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) Impact of WAC Change on Q2 2024 Results | Metric (Q2 2024) | Previously Reported (LIFO, Millions $) | Effect of WAC Change (Millions $) | As Adjusted (WAC, Millions $) | | :--------------------------------------- | :------------------------------------- | :-------------------------------- | :---------------------------- | | Cost of products sold, excl. D&A | 690.5 | (20.7) | 669.8 | | Operating income | 15.5 | 20.7 | 36.2 | | Net income | 3.1 | 15.8 | 18.9 | | Diluted EPS | 0.19 | 0.96 | 1.15 | Impact of WAC Change on Q2 2025 Results | Metric (Q2 2025) | Computed (using LIFO, Millions $) | Effect of Change (Millions $) | As Reported (using WAC, Millions $) | | :--------------------------------------- | :-------------------------------- | :---------------------------- | :---------------------------------- | | Cost of products sold, excl. D&A | 745.5 | (22.7) | 722.8 | | Operating income | 15.3 | 22.7 | 38.0 | | Net income | 5.0 | 18.2 | 23.2 | | Diluted EPS | 0.30 | 1.11 | 1.41 | [Note 15. Subsequent Events](index=34&type=section&id=Note%2015%20Subsequent%20Events) This note discloses the declaration of a quarterly cash dividend subsequent to the reporting period - On July 15, 2025, the Board of Directors declared a quarterly cash dividend of **$0.77 per common share**, totaling approximately $12.8 million, payable around August 15, 2025[112](index=112&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides its perspective on financial performance, key operational drivers, liquidity, and capital resources, including the impact of accounting changes [Forward-Looking Statements](index=35&type=section&id=Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties associated with the report's forward-looking statements - The report contains forward-looking statements, which are **not guarantees of future performance** and involve significant risks and uncertainties, with actual results potentially varying due to factors like economic conditions, strategic execution, and market dynamics[113](index=113&type=chunk) [Basis of Presentation](index=35&type=section&id=Basis%20of%20Presentation) The discussion reflects a retrospective change in inventory valuation from LIFO to WAC, impacting all periods presented - The Company retrospectively applied a change in inventory valuation methodology from **LIFO to WAC**, effective January 1, 2025, impacting both current and prior period financial information presented in this discussion[115](index=115&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Conversion Revenue and Adjusted EBITDA to provide additional insight into financial performance - The Company uses non-GAAP financial measures, including **Conversion Revenue** (Net sales less Hedged Cost of Alloyed Metal) and **Adjusted EBITDA**, to monitor and evaluate financial results and trends, believing they provide useful information to investors[116](index=116&type=chunk) - **Non-run-rate items**, which may recur but are material and affected by external market factors, are highlighted to allow users to consider results both with and without their impact[117](index=117&type=chunk) [Metal Pricing Policies](index=37&type=section&id=Metal%20Pricing%20Policies) The company's business model aims for metal price neutrality by passing through costs, using hedging to mitigate timing risks - The Company's business model aims for **metal price neutrality**, earning profit primarily from the conversion of aluminum, by passing through underlying index costs to customers[119](index=119&type=chunk) - Metal price risk arises from lagged pass-through on spot sales and firm-price customer agreements, which the Company **mitigates through hedging programs**[119](index=119&type=chunk) - **Conversion Revenue**, defined as Net sales less Hedged Cost of Alloyed Metal, is disclosed to show earnings predominantly associated with the fabrication process, excluding metal price fluctuations[120](index=120&type=chunk) [Business Overview](index=37&type=section&id=Business%20Overview) The company manufactures specialized aluminum products for key industrial markets, focusing on technically demanding applications - Kaiser Aluminum manufactures semi-fabricated specialty aluminum mill products for **Aero/HS Products, Packaging, GE Products, and Automotive Extrusions**, focusing on technically challenging applications requiring high strength and specific properties[121](index=121&type=chunk)[123](index=123&type=chunk) - The Company operates **10 extrusion/drawing facilities** in North America and a multi-material advanced manufacturing facility in Columbia, New Jersey, serving blue-chip customers[123](index=123&type=chunk)[124](index=124&type=chunk) - The manufacturing process, taking one to four months, can result in **'Metal Price Lag'** where inventory costs lag current metal selling prices, leading to favorable impacts when prices increase and adverse impacts when prices decrease[127](index=127&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's consolidated financial performance and key operational metrics [Consolidated Results of Operations](index=39&type=section&id=Consolidated%20Results%20of%20Operations) This analysis details the drivers of changes in sales, costs, and expenses for the quarter and six-month periods Consolidated Operating Results Summary | Metric | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (As Adjusted, Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (As Adjusted, Millions $) | | :--------------------------------------- | :------------------------------------- | :---------------------------------------------------- | :------------------------------------------ | :---------------------------------------------------- | | Net Sales | 823.1 | 773.4 | 1,600.5 | 1,510.9 | | COGS (excl. D&A) | 722.8 | 669.8 | 1,396.2 | 1,321.1 | | SG&A and R&D | 32.6 | 31.6 | 63.4 | 64.2 | | Restructuring costs | 0.1 | 6.8 | 1.9 | 6.9 | - Net sales **increased by 6%** for both the quarter and six months, driven by a higher average realized sales price per pound, despite a decrease in shipment volume[129](index=129&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - COGS **increased by 8%** for the quarter and **6%** for the six months, primarily due to an 11% increase in Hedged Cost of Alloyed Metal, partially offset by lower shipment volume and favorable metal consumption[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - SG&A and R&D expenses remained relatively stable, with a slight increase for the quarter due to higher incentive compensation and a slight decrease for the six months due to lower legal and consulting fees[136](index=136&type=chunk)[137](index=137&type=chunk) [Selected Operational and Financial Information](index=42&type=section&id=Selected%20Operational%20and%20Financial%20Information) This section reconciles Net Income to Adjusted EBITDA and breaks down shipments and Conversion Revenue by end market Reconciliation of Net Income to Adjusted EBITDA | Metric | Quarter Ended June 30, 2025 (Millions $) | Quarter Ended June 30, 2024 (As Adjusted, Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (As Adjusted, Millions $) | | :--------------------------------------- | :------------------------------------- | :---------------------------------------------------- | :------------------------------------------ | :---------------------------------------------------- | | Net income | 23.2 | 18.9 | 44.8 | 37.1 | | Total non-run-rate items | 0.1 | 9.0 | 2.1 | 9.9 | | **Adjusted EBITDA** | **67.7** | **74.2** | **141.1** | **128.2** | - **Adjusted EBITDA** for the quarter ended June 30, 2025, **decreased by $6.5 million to $67.7 million**, primarily due to higher manufacturing and major maintenance costs, partially offset by improved product pricing and mix[146](index=146&type=chunk) - **Adjusted EBITDA** for the six months ended June 30, 2025, **increased by $12.9 million to $141.1 million**, driven by improved product pricing and mix and favorable metal costs, despite higher manufacturing and major maintenance costs[147](index=147&type=chunk) Operational Metrics by End Market (Q2 2025) | End Market (Q2 2025) | Shipments (mmlbs) | Net Sales (Millions $) | Conversion Revenue (Millions $) | Conversion Revenue per lb ($/lb) | | :------------------- | :---------------- | :--------------------- | :------------------------------ | :------------------------------- | | Aero/HS Products | 59.9 | 227.9 | 127.2 | 2.12 | | Packaging | 141.1 | 340.9 | 129.7 | 0.92 | | GE Products | 63.4 | 185.4 | 85.7 | 1.35 | | Automotive Extrusions | 24.0 | 68.9 | 31.6 | 1.32 | | **Total** | **288.4** | **823.1** | **374.2** | **1.30** | [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's liquidity position, cash flows, and capital allocation strategies [Summary](index=45&type=section&id=Summary) The company's total liquidity decreased slightly due to reduced availability under its Revolving Credit Facility Liquidity Summary | Metric | As of June 30, 2025 (Millions $) | As of December 31, 2024 (Millions $) | | :---------------------------------------------------- | :------------------------------- | :----------------------------------- | | Available cash and cash equivalents | 13.1 | 18.4 | | Borrowing availability under Revolving Credit Facility | 524.6 | 553.4 | | **Total liquidity** | **537.7** | **571.8** | - Total liquidity **decreased to $537.7 million** as of June 30, 2025, from $571.8 million at December 31, 2024, primarily due to a decrease in borrowing availability under the Revolving Credit Facility[151](index=151&type=chunk) [Cash Flows](index=45&type=section&id=Cash%20Flows) Operating cash flow decreased due to working capital changes, while financing cash flow improved from net borrowings Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (As Adjusted, Millions $) | | :------------------------- | :------------------------------------------ | :---------------------------------------------------- | | Operating activities | 72.9 | 89.6 | | Investing activities | (81.9) | (73.6) | | Financing activities | 4.0 | (28.0) | - Cash provided by operating activities **decreased by $16.7 million**, mainly due to an increase in trade and other receivables and a decrease in accrued liabilities, partially offset by an increase in accounts payable and a decrease in inventory[155](index=155&type=chunk) - Cash used in investing activities **increased by $8.3 million**, primarily due to higher capital expenditures[154](index=154&type=chunk) - Cash provided by financing activities **improved significantly by $32.0 million**, driven by net borrowings under the Revolving Credit Facility[154](index=154&type=chunk) [Sources of Liquidity](index=47&type=section&id=Sources%20of%20Liquidity) The company relies on cash, its credit facility, and operations for liquidity, which are deemed sufficient for future obligations - Key liquidity sources include available cash, borrowing availability under the Revolving Credit Facility, and funds generated from operations, which are **believed to be sufficient** for short-term and long-term obligations[158](index=158&type=chunk) - The Revolving Credit Facility and Senior Notes covenants are **not expected to limit** the Company's ability to operate or raise additional debt/equity in the next 12 months[159](index=159&type=chunk) - Customer-based supply chain financing programs, where receivables are sold without recourse, constituted approximately **27% of Net sales** for the quarter ended June 30, 2025[161](index=161&type=chunk) [Material Cash Requirements](index=47&type=section&id=Material%20Cash%20Requirements) No material changes in cash requirements have occurred since year-end, outside of the ordinary course of business - **No material changes** in material cash requirements from significant contractual obligations, commercial commitments, or off-balance sheet arrangements have occurred since December 31, 2024, other than in the ordinary course of business[163](index=163&type=chunk) [Capital Expenditures and Investments](index=47&type=section&id=Capital%20Expenditures%20and%20Investments) The company's capital investment strategy focuses on capacity expansion, efficiency, and product quality - Capital investment plans focus on supporting demand growth, sustaining operations, enhancing product quality, and increasing operating efficiencies, with significant past investments in modernization at **Trentwood** and capacity expansion at **Warrick**[164](index=164&type=chunk)[165](index=165&type=chunk) - Anticipated total capital spending for 2025 is approximately **$120.0 million to $130.0 million**, to be funded by cash from operations, available cash, and borrowings[165](index=165&type=chunk)[167](index=167&type=chunk) [Dividends](index=49&type=section&id=Dividends) The company maintains a consistent quarterly dividend policy, subject to Board discretion and financial performance - The Company has consistently paid a **quarterly cash dividend since Q2 2007**, with future declarations subject to Board discretion based on financial results, liquidity, and contractual restrictions[168](index=168&type=chunk) - Quarterly dividend equivalents are paid to holders of restricted stock units, while performance share holders receive a one-time payment upon vesting[169](index=169&type=chunk) [Repurchases of Common Stock](index=49&type=section&id=Repurchases%20of%20Common%20Stock) Share repurchases remain suspended, with significant authorization still available under the existing program - Share repurchases have been **suspended since March 2020**, with **$93.1 million** remaining authorized and available for future repurchases under the stock repurchase program as of June 30, 2025[171](index=171&type=chunk) [Critical Accounting Estimates and Policies](index=49&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) No material changes have been made to the company's critical accounting estimates and policies since year-end 2024 - The Company's financial statements are prepared using GAAP, requiring management to make assumptions and estimates that affect reported amounts, with **no material changes** in critical accounting estimates and policies since December 31, 2024[173](index=173&type=chunk)[174](index=174&type=chunk) [New Accounting Pronouncements](index=49&type=section&id=New%20Accounting%20Pronouncements) Information regarding new accounting pronouncements is detailed in the notes to the financial statements - Information regarding new accounting pronouncements is included in **Note 1** of the Interim Consolidated Financial Statements[175](index=175&type=chunk) [Availability of Information](index=51&type=section&id=Availability%20of%20Information) The company's SEC filings are publicly available on its corporate and the SEC's websites - The Company's SEC filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, are available **free of charge** on its website and the SEC's website[176](index=176&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks from commodity prices and foreign currency, along with its hedging strategies [Aluminum](index=51&type=section&id=Aluminum) The company uses derivative contracts to hedge against aluminum price fluctuations for its sales commitments - The Company uses derivative contracts to hedge aluminum price risk for sales, with **61.5 million pounds hedged** during the six months ended June 30, 2025[178](index=178&type=chunk) - A **$0.10/lb decrease** in LME aluminum price would result in an unrealized mark-to-market loss of **$4.4 million**, and a **$0.05/lb decrease** in Midwest premium would result in a **$2.1 million loss**, as of June 30, 2025[179](index=179&type=chunk) [Alloying Metals](index=51&type=section&id=Alloying%20Metals) The company hedges against price fluctuations for key alloying metals like copper, zinc, and magnesium - The Company is exposed to fluctuating prices of alloying metals (copper, zinc, magnesium) and uses **forward swap contracts** to mitigate this risk[180](index=180&type=chunk) - A **$0.10/lb decrease** in zinc and copper market prices would result in an unrealized mark-to-market loss of **$0.6 million** as of June 30, 2025[180](index=180&type=chunk) [Energy](index=51&type=section&id=Energy) The company uses hedging transactions and firm-price commitments to manage exposure to volatile energy prices - The Company hedges against fluctuating natural gas and electricity prices using **hedging transactions and firm-price physical delivery commitments**[181](index=181&type=chunk) - A **$1.00 per mmbtu decrease** in natural gas prices would result in an unrealized mark-to-market loss of **$3.4 million** as of June 30, 2025[181](index=181&type=chunk) [Foreign Currency](index=51&type=section&id=Foreign%20Currency) The company hedges foreign currency risk associated with Euro-denominated transactions using forward swap contracts - The Company hedges foreign currency exchange rate risk for **Euro-denominated lease transactions and equipment purchases** using forward swap contracts[182](index=182&type=chunk) - A **10% decrease** in the exchange rate of hedged foreign currencies to U.S. dollars would result in an unrealized mark-to-market loss of **$0.4 million** as of June 30, 2025[183](index=183&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of disclosure controls and procedures and notes no material changes to internal controls over financial reporting - The Company's disclosure controls and procedures were evaluated and **deemed effective** as of June 30, 2025, at the reasonable assurance level[184](index=184&type=chunk) - **No material changes** in internal control over financial reporting occurred during the six months ended June 30, 2025[185](index=185&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms no material developments in legal proceedings have occurred since the last annual report - **No material developments** in legal proceedings have occurred since December 31, 2024[187](index=187&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section states there have been no material changes to the company's risk factors since the last annual report - **No material changes** in risk factors have occurred since December 31, 2024[188](index=188&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details minor share repurchases for tax withholding purposes under the company's equity incentive plan Issuer Purchases of Equity Securities | Period | Total Number of Shares Purchased (Equity Incentive Plan) | Average Price per Share ($) | Maximum Dollar Value of Shares that May Yet Be Purchased (Millions $) | | :-------------------------- | :------------------------------------------------------- | :-------------------------- | :-------------------------------------------------------------------- | | April 1, 2025 - April 30, 2025 | — | — | 93.1 | | May 1, 2025 - May 31, 2025 | 38 | 69.16 | 93.1 | | June 1, 2025 - June 30, 2025 | 181 | 75.73 | 93.1 | | **Total** | **219** | **74.59** | **n/a** | - **219 common shares** were purchased during the quarter ended June 30, 2025, at an average price of $74.59 per share, primarily to cover tax withholdings under the equity incentive plan[189](index=189&type=chunk) - **$93.1 million remained authorized** for future repurchases under the stock repurchase program as of June 30, 2025[189](index=189&type=chunk) [Item 3. Defaults Upon Senior Securities](index=54&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities - There were **no defaults** upon senior securities[190](index=190&type=chunk) [Item 4. Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are **not applicable** to the Company[191](index=191&type=chunk) [Item 5. Other Information](index=54&type=section&id=Item%205.%20Other%20Information) This section confirms no insider trading plans were adopted, modified, or terminated during the quarter - No director or officer adopted, modified, or terminated a **Rule 10b5-1 or non-Rule 10b5-1 trading arrangement** during the quarter ended June 30, 2025[192](index=192&type=chunk) [Item 6. Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents - The report includes certifications from the principal executive and financial officers (Exhibits 31.1, 31.2, 32.1, 32.2) and **Inline XBRL documents** (Exhibits 101.INS, 101.SCH, 104)[193](index=193&type=chunk) [Signatures](index=56&type=section&id=SIGNATURES) This section contains the certifying signatures of the company's executive officers - The report is signed by Neal E. West, Executive Vice President and Chief Financial Officer, and Vijai Narayan, Vice President and Chief Accounting Officer, on **July 24, 2025**[196](index=196&type=chunk)

Financial Data and Key Metrics Changes - Kaiser Aluminum reported second quarter conversion revenue of $374 million, an increase of approximately $5 million or 1% compared to the prior year period [12] - Adjusted EBITDA for the second quarter was $68 million, down approximately $6 million from the prior year period [18] - Reported net income for the second quarter was $23 million or $1.41 net income per diluted share, compared to net income of $19 million or $1.15 net income per diluted share in the prior year quarter [17] - Free cash flow for full year 2025 is now projected to be between $50 million and $70 million, revised down from an initial expectation of $100 million [20] Business Line Data and Key Metrics Changes - Aerospace and high strength conversion revenue totaled $127 million, down $6 million or approximately 5%, primarily due to a 4% decline in shipments [12] - Packaging conversion revenue totaled $130 million, up $11 million or approximately 9% year over year, despite a 3% decline in shipments [13] - General engineering conversion revenue for the second quarter was $86 million, up $3 million or 3% year over year on a 5% increase in shipments [13] - Automotive conversion revenue of $32 million declined 4% year over year on a 15% decrease in shipments [14] Market Data and Key Metrics Changes - Demand for aerospace and high strength applications, including business jet, defense, and space, remained strong despite a decline in commercial aircraft OEM production patterns [12][13] - Broader market factors, including reshoring opportunities, continue to create a favorable operating environment in the general engineering end market [13] - North American demand for packaging far exceeds available supply, expected to continue beyond 2025 [24] Company Strategy and Development Direction - Kaiser Aluminum is focused on long-term goals to achieve mid to high 20% EBITDA margins, with expectations for continued progress as demand cycles advance [6] - Investments in Trentwood and Warrick rolling mills are seen as foundational for margin expansion, with completion of the Trentwood Phase seven investment expected in the fourth quarter [9] - The company is committed to quality and maintaining its position as North America's leading coated supplier for aluminum packaging solutions [10] Management's Comments on Operating Environment and Future Outlook - Management noted that customer sentiment was impacted by tariff-related uncertainty, particularly in the automotive segment, but conditions improved late in the second quarter [7] - The broader policy and geopolitical landscape remains fluid, introducing volatility in ordering patterns [8] - The outlook for total conversion revenue for 2025 remains unchanged at a 5% to 10% year-over-year improvement, with a raised full-year EBITDA outlook of 10% to 15% growth [29] Other Important Information - The company finalized a key multiyear packaging customer contract for coated products, reflecting customer confidence and market strength [11] - Total cash as of June 30, 2025, was approximately $13 million, with a strong liquidity position of approximately $538 million [19] Q&A Session Summary Question: What is driving the delay in the commissioning of the packaging line? - The delay is attributed to typical startup issues with complex equipment, with multiple coatings being qualified simultaneously [33] Question: When do you foresee the destocking in aerospace inventory coming to an end? - The destocking is expected to dissipate by the end of the year, with a healthier supply chain anticipated in 2026 [40] Question: How should we think about the cadence of EBITDA in the back half of the year? - The second half is expected to align with previous predictions, with a slight decline in aerospace but an increase in packaging offsetting it [42] Question: How exposed is the company to specific defense programs? - The company is well-positioned across various platforms, maintaining a consistent supply to multiple defense programs [56]

Financial Performance Highlights - Second Quarter 2025 EBITDA was $68 million, with an EBITDA margin of 18.1%[18] - First Half 2025 EBITDA margin improved by 180 basis points year-over-year compared to First Half 2024[30] - Kaiser Aluminum is raising its full year 2025 EBITDA expectations, anticipating a 10% - 15% year-over-year increase[16, 18] End Market Analysis - Aero/HS shipments decreased by 4% from 2Q24 to 2Q25[22] - Aero/HS conversion revenue decreased by 5% from 2Q24 to 2Q25[24] - Packaging shipments increased by 3% from 2Q24 to 2Q25[22] - Packaging conversion revenue increased by 9% from 2Q24 to 2Q25[24] - General Engineering shipments increased by 5% from 2Q24 to 2Q25[22] - General Engineering conversion revenue increased by 3% from 2Q24 to 2Q25[24] - Automotive shipments decreased by 15% from 2Q24 to 2Q25[22] - Automotive conversion revenue decreased by 4% from 2Q24 to 2Q25[24] Outlook and Investments - Full run-rate for the Warrick roll coat line is expected in late 4Q 2025[18, 40] - Trentwood Phase VII is on track for completion in early 4Q 2025[18] - Kaiser Aluminum anticipates capital expenditures for FY 2025 to be in the range of $120 to $130 million[50] - Free Cash Flow for FY 2025 is expected to be in the range of $50 to $70 million[50]