Kaiser Aluminum(US:KALU)2025-10-23 20:32Financial Performance - Consolidated net sales for the nine months ended September 30, 2025, totaled $2,444.0 million, with approximately 834.2 million pounds shipped [119]. - For the quarter ended September 30, 2025, net sales were $843.5 million, reflecting a 13% increase compared to the same quarter in 2024 [123]. - For the nine months ended September 30, 2025, net sales increased by $185.4 million (8%) compared to the same period in 2024 [125]. - The Aero/HS Products segment saw a 30% decrease in net sales for the quarter, while the GE Products segment experienced a 28% increase [123]. - The Packaging segment's net sales increased by 23% for the quarter, despite a 5% decrease in shipment volume [123]. - Net income for the quarter ended September 30, 2025, was $39.5 million, with a net income per diluted share of $2.38 [126]. - The net income for Q3 2025 was $39.5 million, significantly higher than $8.8 million in Q3 2024, indicating improved profitability [135]. Costs and Expenses - COGS for Q3 2025 totaled $728.8 million, representing 86% of net sales, an increase of 8% from $676.0 million (90% of net sales) in Q3 2024 [127]. - COGS for the nine months ended September 30, 2025 totaled $2,125.0 million, or 87% of net sales, compared to $1,997.1 million (88% of net sales) for the same period in 2024, marking a 6% increase [129]. - SG&A and R&D expenses for Q3 2025 were $33.9 million, an 18% increase from $28.8 million in Q3 2024, driven by a 22% rise in employee costs [130]. - The increase in Hedged Cost of Alloyed Metal was $107.1 million, primarily due to a $136.1 million rise in hedged metal prices, partially offset by a $29.0 million decrease from lower shipment volume [128]. - The increase in Hedged Cost of Alloyed Metal for the nine months was $195.1 million, with $255.4 million attributed to higher hedged metal prices, offset by a $60.3 million decrease from lower shipment volume [129]. Liquidity and Capital Management - Total liquidity as of September 30, 2025, was $577.6 million, slightly up from $571.8 million as of December 31, 2024 [143]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $132.0 million, compared to $123.7 million for the same period in 2024 [146]. - The company had no outstanding borrowings under the Revolving Credit Facility as of September 30, 2025, after repaying $290.4 million during the nine months ended September 30, 2025 [145]. - The company believes it has sufficient liquidity to fund operations and meet financial obligations, supported by cash flows from operations and available credit [150]. - Total capital spending is anticipated to be approximately $130.0 million in 2025, focusing on capacity expansion and operational efficiency [158]. - At September 30, 2025, $93.1 million remained authorized for future repurchases of common stock under the stock repurchase program [163]. Dividends and Shareholder Returns - The company paid cash dividends of $0.77 per share, totaling $12.8 million during the quarter ended September 30, 2025 [126]. - The company has consistently paid quarterly cash dividends since Q2 2007, but future payments will depend on various financial factors [160]. Operational Highlights - The company experienced a 22.0 million pound (8%) decrease in shipment volume for the quarter, primarily due to a planned partial outage at Trentwood [123]. - Shipments for Aero/HS Products were 41.8 million pounds in Q3 2025, a decrease from 59.5 million pounds in Q3 2024, while net sales increased to $182.2 million from $213.1 million [141]. - Net sales for Packaging products increased to $393.9 million in Q3 2025 from $319.5 million in Q3 2024, with shipments at 144.1 million pounds [141]. - Conversion Revenue for Aero/HS Products was $99.5 million in Q3 2025, up from $127.9 million in Q3 2024, with revenue per pound at $2.38 compared to $2.15 [141]. - Conversion Revenue for Packaging products was $137.8 million in Q3 2025, compared to $128.4 million in Q3 2024, with revenue per pound at $0.96 versus $0.85 [141]. Market and Risk Factors - A $0.10/lb decrease in the LME market price of aluminum would have resulted in an unrealized mark-to-market loss of $4.1 million as of September 30, 2025 [171]. - A $1.00 per mmbtu decrease in natural gas prices would have resulted in an unrealized mark-to-market loss of $3.3 million as of September 30, 2025 [173]. - A 10% decrease in the exchange rate of hedged foreign currencies would have resulted in an unrealized mark-to-market loss of $0.2 million as of September 30, 2025 [174]. - As of September 30, 2025, the company had derivative contracts hedging approximately 34.6 million pounds of aluminum sales for the remainder of 2025 [170]. Restructuring and Other Charges - Restructuring costs for Q3 2025 were $0.0 million, down from $0.7 million in Q3 2024, and totaled $1.9 million for the nine months ended September 30, 2025, compared to $7.6 million in the same period of 2024 [130]. - The company reported no other operating charges for Q3 2025, contrasting with $0.4 million in charges for the nine months ended September 30, 2024 [131].