Kaiser Aluminum Corporation

Greetings, and welcome to the Kaiser Aluminum Corporation's second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Orlando with Addo Investor Relations. Thank you. You may begin.

Thank you. Hello, everyone, and welcome to Kaiser Aluminum's second quarter 2025 earnings conference call. If you have not seen a copy of our earnings release, please visit the investor relations page of our website at kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call. Joining me on the call today are Chairman, President, and Chief Executive Officer Keith Harvey, and Executive Vice President and Chief Financial Officer, Neil West. Before we begin, I'd like to refer you to the first four slides of our presentation and remind you that the statements made by management and the information contained in this presentation that constitute forward-looking statements are based on management's current expectations. For a summary of specific risk factors that could cause results to differ materially from the forward-looking statements, Please refer to the company's earnings release and reports filed with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the full year ended December 31, 2024. The company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the company's expectations. In addition, we have included non-GAAP financial information in our discussion. Reconciliations to the most comparable GAAP financial measures are included in the earnings release and in the appendix of the presentation. Reconciliations of certain forward-looking non-GAAP financial measures to comparable GAAP financial measures are not provided because certain items required for such reconciliations are outside of our control and or cannot be reasonably predicted or provided without unreasonable effort. Any reference to EBITDA in our discussion today means adjusted EBITDA, which excludes non-run rate items for which we have provided reconciliations in the appendix. Further, slide five contains definitions of terms and measures that we will be commonly used throughout today's presentation. At the conclusion of the company's presentation, we will open the call for questions. I would now like to turn the call over to Keith Harvey. Keith?

Thanks, Kim, and thank you all for joining us today. Turning to slide seven for our second quarter update. I'm pleased to report that Kaiser delivered second quarter results that exceeded our expectations, leading us to increase our full year EBITDA outlook. While favorable metal pricing provided a positive tailwind, Our performance reflects deeper strength in our underlying business fundamentals, which continue to improve across the board. Importantly, our performance in our key end markets remained in line with our projections, and we sustained margin levels above 19% in the first half of 2025, roughly 180 basis points stronger than in the prior year same period. Continued strong pricing and an improving product mix were the primary drivers of strength, along with our persistent emphasis on enhancing operating efficiencies and cost management. We remain focused on our long-term goal for our consolidated businesses to deliver mid to high 20% EBITDA margins, and we expect continued progress towards that goal to become increasingly evident as we advance through demand cycles and bring our investments fully online over the next several quarters. It's important to note that our working capital requirements, especially those tied to metal pricing, came in above what we anticipated when we originally provided guidance in February. Neil will speak in more detail shortly, but based on current projections, we now expect free cash flow for full year 2025 to be between $50 and $70 million. Meanwhile, customer sentiment was impacted by tariff-related uncertainty during the quarter, particularly in our automotive segment. That said, conditions moderated late in second quarter, and we saw improvements in overall demand. We do recognize, however, that the broader policy and geopolitical landscape remains fluid. and continues to introduce pockets of volatility in ordering patterns throughout the business. Given this uncertainty, especially as it relates to tariffs, we continue to believe the impact of projected tariff levels will continue to have a neutral to slightly favorable impact on our earnings. Let's now turn to our growth strategy. As we look ahead, we continue to make meaningful progress on our strategic initiatives at our Trentwood and Warwick rolling mills. These two platforms represent a significant portion of our total conversion revenue dollars, and the outlook across our aerospace, packaging, and general engineering end markets continues to be strong. Each investment is foundational to the next phase of Kaiser's margin expansion, which we anticipate will continue to improve in 2026. Starting with the Trentwood Phase 7 investment, the project is advancing on schedule, on budget, and its completion remains closely aligned with supporting the growing demand for both aerospace and general engineering plate products in 2026 and beyond. We expect the additional production capacity to come online early in the fourth quarter of this year. Next. I'll turn to an update on our new coating line investment at our Warwick rolling mill. We have moved to the material qualifications phase of the startup process, albeit later than initially planned. And while the line is not yet running at full slated capacity, we expect continued improvement in line speeds and customer qualifications throughout the remainder of the year. Accordingly, we now anticipate reaching our full run rate in late fourth quarter of this year and expect the revised timing of qualifications to have a slightly negative impact on our second half 2025 packaging shipments and conversion revenue dollars outlook, which I will discuss later in the call. Above all, I want to reaffirm our unwavering commitment to quality and being a best-in-class supplier for coated products. The equipment we've deployed at our Warwick operations is instrumental to maintaining our position as North America's leading coated supplier for aluminum packaging solutions. While we are all anxious for the new capacity to become fully available, We will not compromise on our standards or bypass any critical steps during the qualification phase with customers. Finally, I'm proud to share that we finalized one of our key outstanding multi-year packaging customer contracts for coated products. This agreement reflects not only the confidence our customers place in us, but also the strength of the underlying market and our leadership position within it. In summary, operations continue to improve, we are strengthening our position in our key markets, and we continue to invest for long-term value creation. With that, let me hand the call over to Neil for further detail on our second quarter results. Neil?