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]

Group 1 - Kaiser Aluminum reported quarterly earnings of $1.21 per share, significantly exceeding the Zacks Consensus Estimate of $0.49 per share, representing an earnings surprise of +146.94% [1] - The company posted revenues of $823.1 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.07% and showing an increase from $773.4 million year-over-year [2] - Over the last four quarters, Kaiser has surpassed consensus EPS estimates two times and topped consensus revenue estimates twice [2] Group 2 - The stock has gained approximately 31.5% since the beginning of the year, outperforming the S&P 500's gain of 7.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.88 on revenues of $855.09 million, and for the current fiscal year, it is $4.17 on revenues of $3.3 billion [7] - The Zacks Industry Rank for Metal Products - Procurement and Fabrication is in the top 15% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Kaiser Aluminum Corporation reported second quarter 2025 results that exceeded expectations, driven by strong business fundamentals and favorable metal tailwinds, leading to sustained margins above 19% for the first half of 2025 and a raised full-year Adjusted EBITDA outlook - Kaiser Aluminum Corporation, a leading producer of semi-fabricated specialty aluminum products, announced second quarter 2025 results[2](index=2&type=chunk) - Second quarter results exceeded expectations, driven by continued strength in underlying business fundamentals and favorable metal tailwinds[3](index=3&type=chunk) - Sustained margin levels **above 19%** for the first half of 2025[3](index=3&type=chunk) - Raising full year 2025 Adjusted EBITDA outlook[3](index=3&type=chunk)[4](index=4&type=chunk) [Key Financial Metrics (Q2 2025)](index=1&type=section&id=Key%20Financial%20Metrics%20(Q2%202025)) Key financial metrics for Q2 2025 include Net Sales of $823 million, Conversion Revenue of $374 million, Net Income of $23 million, and Adjusted EBITDA of $68 million with an 18.1% margin Second Quarter 2025 Key Financial Metrics | Metric | Amount | | :--- | :--- | | Net Sales | $823 Million | | Conversion Revenue | $374 Million | | Net Income | $23 Million | | Net Income per Diluted Share | $1.41 | | Adjusted Net Income | $20 Million | | Adjusted Net Income per Diluted Share | $1.21 | | Adjusted EBITDA | $68 Million | | Adjusted EBITDA Margin | 18.1% | [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) [Second Quarter 2025 Consolidated Results Overview](index=2&type=section&id=Second%20Quarter%202025%20Consolidated%20Results%20Overview) For Q2 2025, shipments were 288 million lbs, Net Sales reached $823 million, and Conversion Revenue was $374 million. Operating income was $38 million, and Net Income was $23 million. Adjusted EBITDA stood at $68 million with an 18.1% margin Consolidated Results (Q2 2025 vs. Q2 2024 & H1 2025 vs. H1 2024) | Metric | Q2 2025 | Q2 2024 (As Adjusted) | H1 2025 | H1 2024 (As Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Shipments (millions of lbs) | 288 | 297 | 564 | 588 | | Net sales | $823 | $773 | $1,601 | $1,511 | | Conversion revenue | $374 | $369 | $737 | $736 | | Realized price per pound (Conversion revenue) | $1.30 | $1.24 | $1.31 | $1.25 | | Operating income | $38 | $36 | $79 | $61 | | Net income | $23 | $19 | $45 | $37 | | Net income per share, diluted | $1.41 | $1.15 | $2.72 | $2.27 | | Adjusted Operating income | $38 | $45 | $82 | $70 | | Adjusted EBITDA | $68 | $74 | $141 | $128 | | Adjusted EBITDA margin | 18.1% | 20.1% | 19.2% | 17.4% | - Hedged Cost of Alloyed Metal for Q2 2025 was **$449.5 million**, including **$0.6 million** in realized gains upon settlement of hedges[10](index=10&type=chunk) - Metal price lag favorably impacted Adjusted EBITDA by approximately **$14.0 million** in Q2 2025 and **$36.0 million** in H1 2025[10](index=10&type=chunk) [Statements of Consolidated Income](index=8&type=section&id=Statements%20of%20Consolidated%20Income) The consolidated income statement shows Net Sales of $823.1 million for Q2 2025, with a Net Income of $23.2 million and Diluted EPS of $1.41. For the six months, Net Sales were $1,600.5 million and Net Income was $44.8 million Statements of Consolidated Income (Q2 2025 vs. Q2 2024 & H1 2025 vs. H1 2024) | Metric | Q2 2025 | Q2 2024 (As Adjusted) | H1 2025 | H1 2024 (As Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $823.1 | $773.4 | $1,600.5 | $1,510.9 | | Cost of products sold, excluding D&A | $722.8 | $669.8 | $1,396.2 | $1,321.1 | | Depreciation and amortization | $29.6 | $29.0 | $59.6 | $57.8 | | Selling, general, administrative, R&D | $32.6 | $31.6 | $63.4 | $64.2 | | Restructuring costs | $0.1 | $6.8 | $1.9 | $6.9 | | Operating income | $38.0 | $36.2 | $79.4 | $60.5 | | Interest expense | $(12.5) | $(11.1) | $(23.7) | $(22.6) | | Other income (expense), net | $4.4 | $(0.5) | $3.0 | $10.4 | | Income before income taxes | $29.9 | $24.6 | $58.7 | $48.3 | | Income tax provision | $(6.7) | $(5.7) | $(13.9) | $(11.2) | | Net income | $23.2 | $18.9 | $44.8 | $37.1 | | Diluted EPS | $1.41 | $1.15 | $2.72 | $2.27 | [Summary of Cash Flows](index=8&type=section&id=Summary%20of%20Cash%20Flows) For the six months ended June 30, 2025, cash provided by operating activities was $72.9 million, while investing activities used $81.9 million, and financing activities provided $4.0 million Summary of Cash Flows (Six Months Ended June 30, 2025 vs. 2024) | Activity | H1 2025 | H1 2024 (As Adjusted) | | :--- | :--- | :--- | | Operating activities | $72.9 | $89.6 | | Investing activities | $(81.9) | $(73.6) | | Financing activities | $4.0 | $(28.0) | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $2,512.8 million, with total liabilities of $1,736.8 million and total stockholders' equity of $776.0 million Consolidated Balance Sheets (As of June 30, 2025 vs. Dec 31, 2024) | Metric | June 30, 2025 | Dec 31, 2024 (As Adjusted) | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $13.1 | $18.4 | | Trade receivables, net | $378.7 | $319.7 | | Inventories | $595.6 | $601.9 | | Total current assets | $1,150.6 | $1,074.6 | | Property, plant and equipment, net | $1,204.9 | $1,161.2 | | Total assets | $2,512.8 | $2,409.9 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Accounts payable | $317.8 | $266.9 | | Total current liabilities | $426.2 | $400.5 | | Long-term debt, net | $1,075.2 | $1,041.6 | | Total liabilities | $1,736.8 | $1,666.8 | | Total stockholders' equity | $776.0 | $743.1 | [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Reconciliation shows that for Q2 2025, GAAP net income of $23.2 million was adjusted to $19.9 million for Adjusted net income and $67.7 million for Adjusted EBITDA, after accounting for non-run-rate items Reconciliation of Non-GAAP Measures (Q2 2025 vs. Q2 2024 & H1 2025 vs. H1 2024) | Metric | Q2 2025 | Q2 2024 (As Adjusted) | H1 2025 | H1 2024 (As Adjusted) | | :--- | :--- | :--- | :--- | :--- | | GAAP net income | $23.2 | $18.9 | $44.8 | $37.1 | | GAAP operating income | $38.0 | $36.2 | $79.4 | $60.5 | | Operating income, excluding operating NRR items | $38.1 | $45.2 | $81.5 | $70.4 | | Depreciation and amortization | $29.6 | $29.0 | $59.6 | $57.8 | | Adjusted EBITDA | $67.7 | $74.2 | $141.1 | $128.2 | | Adjusted net income | $19.9 | $26.7 | $43.6 | $36.8 | | Adjusted earnings per diluted share | $1.21 | $1.63 | $2.65 | $2.25 | - Non-run-rate (NRR) items include mark-to-market loss on derivative instruments, restructuring costs, non-cash asset impairment charges, and other operating NRR items[34](index=34&type=chunk)[35](index=35&type=chunk) - Metal price lag favorably impacted Adjusted EBITDA by approximately **$14.0 million** in Q2 2025 and **$36.0 million** in H1 2025[37](index=37&type=chunk) [Segment Performance & Revenue Analysis](index=4&type=section&id=Segment%20Performance%20%26%20Revenue%20Analysis) [Net Sales and Conversion Revenue Overview](index=4&type=section&id=Net%20Sales%20and%20Conversion%20Revenue%20Overview) Net sales for Q2 2025 increased to $823 million from $773 million in the prior year, primarily due to an increase in average realized sales price. Conversion Revenue saw a modest 1% increase to $374 million - Net sales for Q2 2025 increased to **$823 million** compared to **$773 million** in the prior year period, driven primarily by an increase in average realized sales price[11](index=11&type=chunk) - Conversion Revenue for Q2 2025 was **$374 million**, reflecting a **1% increase** compared to the prior year period[11](index=11&type=chunk) [Shipments and Conversion Revenue by End Market](index=4&type=section&id=Shipments%20and%20Conversion%20Revenue%20by%20End%20Market) Analysis of Q2 2025 performance by end market shows varied trends: Aero/HS and Packaging saw slight declines in shipments but increases in net sales and conversion revenue per pound, while GE Products experienced shipment growth. Automotive Extrusions saw declines in both shipments and conversion revenue Shipments and Conversion Revenue by End Market (Q2 2025 vs. Q2 2024) | End Market | Shipments (mmlbs) Q2 2025 | Shipments (mmlbs) Q2 2024 | Conversion Revenue Q2 2025 | Conversion Revenue Q2 2024 | | :--- | :--- | :--- | :--- | :--- | | Aero/HS Products | 59.9 | 62.2 | $127.2 | $133.4 | | Packaging | 141.1 | 145.9 | $129.7 | $118.9 | | GE Products | 63.4 | 59.5 | $85.7 | $82.6 | | Automotive Extrusions | 24.0 | 28.1 | $31.6 | $33.0 | | Other Products | — | 1.1 | — | $1.0 | | **Total** | **288.4** | **296.8** | **$374.2** | **$368.9** | - Hedged Cost of Alloyed Metal for Q2 2025 was **$448.9 million**, up from **$404.5 million** in Q2 2024[11](index=11&type=chunk)[12](index=12&type=chunk) [Cash Flow and Liquidity](index=5&type=section&id=Cash%20Flow%20and%20Liquidity) [Cash Flow Utilization](index=5&type=section&id=Cash%20Flow%20Utilization) In the first half of 2025, Kaiser Aluminum generated $141 million in Adjusted EBITDA, which was primarily used to fund working capital ($53 million), capital investments ($82 million), interest payments ($22 million), and return $26 million to stockholders through dividends - Adjusted EBITDA of **$141 million** reported in the first half of 2025[13](index=13&type=chunk) - Funded **$53 million** of working capital, **$82 million** of capital investments, **$22 million** of interest payments, and **$26 million** of cash returned to stockholders through quarterly dividends[13](index=13&type=chunk) [Liquidity Position](index=5&type=section&id=Liquidity%20Position) As of June 30, 2025, the company maintained strong liquidity with $538 million, comprising $13 million in cash and $525 million in borrowing availability under its Revolving Credit Facility - Total liquidity of **$538 million** as of June 30, 2025[14](index=14&type=chunk) - Consisted of cash and cash equivalents of **$13 million** and borrowing availability under the Company's Revolving Credit Facility of **$525 million**[14](index=14&type=chunk) - There were **$33 million** of outstanding borrowings under the Revolving Credit Facility as of June 30, 2025[14](index=14&type=chunk) [Dividend Declaration](index=5&type=section&id=Dividend%20Declaration) On July 15, 2025, Kaiser Aluminum declared a quarterly cash dividend of $0.77 per share, payable on August 15, 2025, to stockholders of record as of July 25, 2025 - On July 15, 2025, the Company announced the declaration of a quarterly cash dividend of **$0.77 per share**[15](index=15&type=chunk) - The dividend will be paid on August 15, 2025, to stockholders of record as of the close of business on July 25, 2025[15](index=15&type=chunk) [Outlook](index=5&type=section&id=Outlook) [Full Year 2025 Outlook](index=5&type=section&id=Full%20Year%202025%20Outlook) Kaiser Aluminum maintains its full-year 2025 outlook for a 5% to 10% year-over-year increase in Conversion Revenue and has raised its Adjusted EBITDA outlook to improve 10% to 15% year-over-year - Maintains an outlook for a **5% to 10%** year-over-year increase in Conversion Revenue for the full year 2025[16](index=16&type=chunk) - Raises the Adjusted EBITDA outlook to improve **10% to 15%** year-over-year for the full year 2025[16](index=16&type=chunk) [Additional Information](index=6&type=section&id=Additional%20Information) [Conference Call Details](index=6&type=section&id=Conference%20Call%20Details) Kaiser Aluminum will host a conference call on July 24, 2025, at 10:00 am ET to discuss its Q2 2025 results, with dial-in and webcast options available - Conference call on Thursday, July 24, 2025, at 10:00 am (Eastern Time) to discuss second quarter 2025 results[17](index=17&type=chunk) - Dial-in: (877) 423-9813 (U.S. and Canada), (201) 689-8573 (International). Conference call ID: **13754454**[17](index=17&type=chunk) - Webcast link available on the Company's website: https://investors.kaiseraluminum.com[17](index=17&type=chunk) [Company Description](index=6&type=section&id=Company%20Description) Kaiser Aluminum Corporation, headquartered in Franklin, Tenn., is a leading global producer of highly-engineered semi-fabricated specialty aluminum products for diverse end markets including aerospace, packaging, general engineering, and automotive extrusions - Kaiser Aluminum Corporation is headquartered in Franklin, Tenn[18](index=18&type=chunk) - Leading producer of semi-fabricated specialty aluminum products, serving aerospace and high-strength, packaging, general engineering, automotive extrusions, and other industrial applications[18](index=18&type=chunk) - North American facilities produce value-added plate, sheet, coil, extrusions, rod, bar, tube, and wire products[18](index=18&type=chunk) - Company's stock is included in the Russell 2000® index and the S&P Small Cap 600® index[18](index=18&type=chunk) [Available Information](index=6&type=section&id=Available%20Information) Investors can access company news, financial performance notifications, SEC filings (10-K, 10-Q, 8-K), and webcasts of earnings calls through the company's investor relations website and the SEC's website - Company website (www.kaiseraluminum.com) includes an investor relations section for news, announcements, SEC filings, investor events, and press releases[19](index=19&type=chunk) - All SEC filings (Form 10-K, 10-Q, 8-K, Proxy Statements) are available via a link to www.sec.gov[19](index=19&type=chunk) - Webcasts of quarterly earnings calls and other investor events are provided[19](index=19&type=chunk) [Non-GAAP Financial Measures Explanation](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) This section defines non-GAAP financial measures as numerical measures differing from GAAP, used by management to evaluate performance and considered useful for investors. It lists specific non-GAAP measures like Conversion Revenue, Adjusted operating income, Adjusted EBITDA, Adjusted net income, and Adjusted EPS, which exclude "non-run-rate" items - A 'non-GAAP financial measure' is a numerical measure of financial performance that excludes or includes amounts different from GAAP[20](index=20&type=chunk) - Non-GAAP measures used include Conversion Revenue, Adjusted operating income, Adjusted EBITDA, Adjusted net income, and Adjusted earnings per diluted share[21](index=21&type=chunk) - 'Non-run-rate' items are material, impact costs due to external market factors, and may not occur in future periods[21](index=21&type=chunk) - Management uses this information to monitor and evaluate financial results and trends, and believes it is useful for investors[21](index=21&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements based on management's current expectations, subject to known and unknown risks and uncertainties that could cause actual results to differ materially. These factors include strategic execution, economic conditions, market demand, pricing, and regulatory changes - Press release contains 'forward-looking statements' based on management's current expectations, estimates, and projections[22](index=22&type=chunk) - Involve known and unknown risks and uncertainties that may cause actual results to be materially different[22](index=22&type=chunk) - Factors include effectiveness of strategies, general economic and business conditions, market demand drivers (aerospace/high strength, packaging, general engineering, automotive extrusions), pricing, technology, regulatory requirements, and successful integration of acquisitions[22](index=22&type=chunk) - Company undertakes no duty to update any forward-looking statement[22](index=22&type=chunk) [Investor Relations and Public Relations Contact](index=7&type=section&id=Investor%20Relations%20and%20Public%20Relations%20Contact) Contact information for investor and public relations is provided through Addo Investor Relations - Investor Relations and Public Relations Contact: Addo Investor Relations[23](index=23&type=chunk) - Email: Investors@KaiserAluminum.com, Phone: (949) 614-1769[23](index=23&type=chunk)