Financial Data and Key Metrics Changes - Shipments were 372,000 tons, down 2% compared to Q1 2024 due to higher pulp shipments offset by lower A&T and AS&I shipments [6] - Revenue increased to $2 billion, a 5% rise compared to Q1 2024, primarily driven by higher metal prices [6] - Net income for the quarter was $38 million, up from $22 million in the same quarter last year [6] - Adjusted EBITDA was $186 million, including a positive noncash impact from metal price lag of $46 million; excluding this, adjusted EBITDA was $140 million, down from $160 million last year [7] - Free cash flow was negative $3 million, in line with expectations, but the company expects to generate positive free cash flow exceeding $120 million for the year [8][26] Business Line Data and Key Metrics Changes - A&T segment adjusted EBITDA decreased 14% to $75 million, with aerospace shipments down 11% and TID shipments down 7% [17][18] - Park segment adjusted EBITDA increased 25% to $60 million, with packaging shipments up 9% while automotive shipments decreased 15% [19][20] - AS&I segment adjusted EBITDA decreased 50% to $16 million, with automotive shipments down 14% and industry shipments down 4% [21][22] Market Data and Key Metrics Changes - Demand weakness was noted across most end markets outside of packaging, particularly in automotive [9] - Aerospace market backlogs remain robust, but supply chain challenges continue to impact deliveries [30] - Packaging demand remains healthy in North America and Europe, with expectations for low to mid single-digit growth [32] - Automotive production remains below pre-COVID levels, with expectations of continued weakness due to tariffs [33] Company Strategy and Development Direction - The company is focused on strong cost control, free cash flow generation, and capital discipline [9][36] - Accelerated cost reduction efforts under the Vision 25 program are in place to optimize capacity based on market conditions [16][24] - The company is working on mitigating tariff impacts through customer pass-throughs and exploring alternative sourcing [10][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term fundamentals driving aerospace demand despite near-term challenges [30] - The company remains cautious about the automotive market outlook due to tariff impacts and reduced production forecasts [54] - Management believes that current market conditions will eventually improve, and the company is well-positioned for long-term success [36][89] Other Important Information - The company returned $15 million to shareholders through share repurchases during the quarter [8][36] - Net debt at the end of Q1 was $1.8 billion, with leverage at 3.3 times, expected to trend down by year-end [28][29] Q&A Session Summary Question: What drove the better-than-expected performance in Q1? - Management attributed the performance to improvements at the Muscle Shoals plant and progress on the Vision 25 cost reduction program [41][42] Question: Is the inventory issue in aerospace resolved? - Management indicated that while their inventories are controlled, the supply chain is still struggling to ramp up [45] Question: What is the outlook for aerospace and automotive markets? - Aerospace is expected to remain choppy, while automotive demand is softening, particularly due to tariffs [52][54] Question: What is the expected cost impact from tariffs? - The gross impact from tariffs is estimated at $20 million for the rest of the year, with efforts to mitigate this through customer pass-throughs [55] Question: How is the company managing scrap costs? - Management noted that scrap costs are becoming more favorable, and they are working to optimize their sourcing strategies [66][69] Question: What is the outlook for the packaging segment? - The packaging segment is expected to benefit from improved demand and operational performance, particularly at the Muscle Shoals facility [72][74]