Kaiser Aluminum(KALU) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second Quarter 2025 Highlights 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] - Second quarter results exceeded expectations, driven by continued strength in underlying business fundamentals and favorable metal tailwinds[3] - Sustained margin levels above 19% for the first half of 2025[3] - Raising full year 2025 Adjusted EBITDA outlook[3][4] Key Financial Metrics (Q2 2025) 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 Second Quarter 2025 Consolidated Results Overview 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] - Metal price lag favorably impacted Adjusted EBITDA by approximately $14.0 million in Q2 2025 and $36.0 million in H1 2025[10] Statements of Consolidated Income 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 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 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 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][35] - Metal price lag favorably impacted Adjusted EBITDA by approximately $14.0 million in Q2 2025 and $36.0 million in H1 2025[37] Segment Performance & Revenue Analysis Net Sales and Conversion Revenue Overview 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] - Conversion Revenue for Q2 2025 was $374 million, reflecting a 1% increase compared to the prior year period[11] Shipments and Conversion Revenue by End Market 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][12] Cash Flow and Liquidity Cash Flow Utilization 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] - 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] Liquidity Position 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] - Consisted of cash and cash equivalents of $13 million and borrowing availability under the Company's Revolving Credit Facility of $525 million[14] - There were $33 million of outstanding borrowings under the Revolving Credit Facility as of June 30, 2025[14] Dividend Declaration 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] - The dividend will be paid on August 15, 2025, to stockholders of record as of the close of business on July 25, 2025[15] Outlook Full Year 2025 Outlook 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] - Raises the Adjusted EBITDA outlook to improve 10% to 15% year-over-year for the full year 2025[16] Additional Information Conference Call Details 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] - Dial-in: (877) 423-9813 (U.S. and Canada), (201) 689-8573 (International). Conference call ID: 13754454[17] - Webcast link available on the Company's website: https://investors.kaiseraluminum.com[17](index=17&type=chunk) Company Description 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] - Leading producer of semi-fabricated specialty aluminum products, serving aerospace and high-strength, packaging, general engineering, automotive extrusions, and other industrial applications[18] - North American facilities produce value-added plate, sheet, coil, extrusions, rod, bar, tube, and wire products[18] - Company's stock is included in the Russell 2000® index and the S&P Small Cap 600® index[18] Available Information 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] - 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] Non-GAAP Financial Measures Explanation 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] - Non-GAAP measures used include Conversion Revenue, Adjusted operating income, Adjusted EBITDA, Adjusted net income, and Adjusted earnings per diluted share[21] - 'Non-run-rate' items are material, impact costs due to external market factors, and may not occur in future periods[21] - Management uses this information to monitor and evaluate financial results and trends, and believes it is useful for investors[21] Forward-Looking Statements 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] - Involve known and unknown risks and uncertainties that may cause actual results to be materially different[22] - 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] - Company undertakes no duty to update any forward-looking statement[22] Investor Relations and Public Relations Contact Contact information for investor and public relations is provided through Addo Investor Relations - Investor Relations and Public Relations Contact: Addo Investor Relations[23] - Email: Investors@KaiserAluminum.com, Phone: (949) 614-1769[23]