Kaiser Aluminum Corporation Reports First Quarter 2022 Financial Results
First Quarter 2022 Highlights:
Net Sales $949 Million ; Value Added Revenue$370 Million - Net Income
$8 Million ; Net Income per Diluted Share$0.51 - Adjusted Net Income
$11 Million ; Adjusted Earnings per Diluted Share$0.66 - Adjusted EBITDA
$55 Million ; Adjusted EBITDA Margin 14.8% - Strong Demand for
General Engineering and Packaging ; Aerospace Recovery Continues As Expected - Higher Freight Costs of
~$6 Million Due to Rail and Port Shipping Constraints - Lingering Supply Chain Issues Related to Metal and Magnesium Continue to Impact Results
Management Summary
First quarter 2022 results reflect continued strength in demand for the Company’s general engineering and packaging applications, and steadily improving demand for its aerospace/high strength applications, while the Company’s automotive business remains muted due to the continued shortage of semiconductor chips that have limited North American vehicle production. Value added revenue increased approximately 17% on a sequential basis as pricing initiatives, including contained metal and commodity surcharges implemented in the latter part of 2021, have largely mitigated the impact of rising metal, freight, energy and other costs to date. However, costs are continuing to increase. In addition, the Company incurred approximately
“While we continue to navigate through an inflationary cost environment and manage supply chain challenges, we remain confident in the initiatives we are taking to further improve manufacturing efficiencies and operating performance,” said
First Quarter 2022 Consolidated Results |
(Unaudited)* |
(In millions of dollars, except shipments, realized price and per share amounts)
Quarterly | ||||||||||||||||||||
1Q22 | 4Q21 | 3Q21 | 2Q21 | 1Q21 | ||||||||||||||||
Shipments (millions of lbs.) | 335 | 333 | 315 | 337 | 137 | |||||||||||||||
Net sales | $ | 949 | $ | 806 | $ | 751 | $ | 741 | $ | 324 | ||||||||||
Less hedged cost of alloyed metal1 | (578 | ) | (490 | ) | (445 | ) | (423 | ) | (152 | ) | ||||||||||
Value added revenue | $ | 370 | $ | 316 | $ | 305 | $ | 318 | $ | 172 | ||||||||||
Realized price per pound ($/lb.) | ||||||||||||||||||||
Net sales | $ | 2.83 | $ | 2.42 | $ | 2.38 | $ | 2.20 | $ | 2.37 | ||||||||||
Less hedged cost of alloyed metal | (1.73 | ) | (1.47 | ) | (1.41 | ) | (1.26 | ) | (1.12 | ) | ||||||||||
Value added revenue | $ | 1.10 | $ | 0.95 | $ | 0.97 | $ | 0.94 | $ | 1.25 | ||||||||||
As reported | ||||||||||||||||||||
Operating income | $ | 25 | $ | 17 | $ | 20 | $ | 11 | $ | 17 | ||||||||||
Net income (loss) | $ | 8 | $ | 2 | $ | (2 | ) | $ | (22 | ) | $ | 5 | ||||||||
Net income (loss) per share, diluted2 | $ | 0.51 | $ | 0.11 | $ | (0.14 | ) | $ | (1.42 | ) | $ | 0.28 | ||||||||
Adjusted3 | ||||||||||||||||||||
Operating income | $ | 28 | $ | 19 | $ | 26 | $ | 33 | $ | 24 | ||||||||||
EBITDA4 | $ | 55 | $ | 46 | $ | 50 | $ | 59 | $ | 38 | ||||||||||
EBITDA margin5 | 14.8 | % | 14.5 | % | 16.5 | % | 18.5 | % | 21.8 | % | ||||||||||
Net income | $ | 11 | $ | 3 | $ | 9 | $ | 16 | $ | 10 | ||||||||||
EPS, diluted2 | $ | 0.66 | $ | 0.20 | $ | 0.57 | $ | 1.00 | $ | 0.64 |
1 | Hedged cost of alloyed metal is our Midwest transaction price of aluminum plus the price of alloying elements plus any realized gains and/or losses on settled hedges, related to the metal sold in the referenced period. |
2 | Diluted shares for EPS are calculated using the treasury stock method. |
3 | Adjusted numbers exclude non-run-rate items. For all Adjusted numbers and EBITDA refer to Reconciliation of Non-GAAP Measures. |
4 | Adjusted EBITDA = Consolidated operating income, excluding operating non-run-rate items, plus Depreciation and amortization. |
5 | Adjusted EBITDA margin = Adjusted EBITDA as a percent of Value Added Revenue. |
* | Please refer to GAAP financial statements. |
Totals may not sum due to rounding. |
First Quarter 2022
Net sales for the first quarter 2022 increased to
Value added revenue for the first quarter 2022 increased 116% to
Adjusted EBITDA of
Reported operating income for the first quarter 2022 was approximately
Reported net income for the first quarter 2022 was
Cash Flow and Liquidity
Adjusted EBITDA of
As of
Conference Call
Company Description
Available Information
For more information, please visit the Company’s website at www.kaiseraluminum.com. The website includes a section for investor relations under which the Company provides notifications of news or announcements regarding its financial performance, including
Non-GAAP Financial Measures
This earnings release contains certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets, or statements of cash flow of the Company. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying tables.
The non-GAAP financial measures used within this earnings release are value added revenue, adjusted operating income, adjusted EBITDA, adjusted net income, and adjusted earnings per diluted share which exclude non-run-rate items and ratios related thereto. As more fully described in these reports, “non-run-rate” items are items that, while they may occur from period to period, are particularly material to results, impact costs primarily as a result of external market factors and may not occur in future periods if the same level of underlying performance were to occur. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors. Reconciliations of certain forward looking non-GAAP financial measures to comparable GAAP 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.
Forward-Looking Statements
This press release contains statements which constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management based on information available to it at the time such statements are made.
Investor Relations and Public Relations Contact: | |
(949) 614-1757 |
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED) (1)
Quarter Ended |
||||||||
2022 | 2021 | |||||||
(In millions of dollars, except share and per share amounts) | ||||||||
Net sales | $ | 948.8 | $ | 324.0 | ||||
Costs and expenses: | ||||||||
Cost of products sold, excluding depreciation and amortization and other items | 865.9 | 262.5 | ||||||
Depreciation and amortization | 27.5 | 13.5 | ||||||
Selling, general, administrative, research and development | 30.2 | 31.8 | ||||||
Restructuring costs (benefit) | — | (0.7 | ) | |||||
Total costs and expenses | 923.6 | 307.1 | ||||||
Operating income | 25.2 | 16.9 | ||||||
Other expense: | ||||||||
Interest expense | (12.2 | ) | (12.3 | ) | ||||
Other expense, net | (1.6 | ) | (0.4 | ) | ||||
Income before income taxes | 11.4 | 4.2 | ||||||
Income tax (provision) benefit | (3.3 | ) | 0.3 | |||||
Net income | $ | 8.1 | $ | 4.5 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.51 | $ | 0.28 | ||||
Diluted2 | $ | 0.51 | $ | 0.28 | ||||
Weighted-average number of common shares outstanding (in thousands): | ||||||||
Basic | 15,866 | 15,805 | ||||||
Diluted2 | 16,038 | 15,987 |
1 | Please refer to the Company's Form 10-Q for the quarter ended |
2 | Diluted shares for EPS are calculated using the treasury stock method. |
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (1)
As of |
As of |
|||||||
(In millions of dollars, except share and per share amounts) |
||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 261.0 | $ | 303.2 | ||||
Receivables: | ||||||||
Trade receivables, net | 432.2 | 332.7 | ||||||
Other | 50.6 | 53.0 | ||||||
Contract assets | 74.9 | 63.2 | ||||||
Inventories | 431.5 | 404.6 | ||||||
Prepaid expenses and other current assets | 71.2 | 48.7 | ||||||
Total current assets | 1,321.4 | 1,205.4 | ||||||
Property, plant and equipment, net | 960.2 | 955.2 | ||||||
Operating lease assets | 44.9 | 46.2 | ||||||
Deferred tax assets, net | 3.2 | 3.4 | ||||||
Intangible assets, net | 64.2 | 67.7 | ||||||
39.3 | 39.3 | |||||||
Other assets | 108.2 | 105.2 | ||||||
Total | $ | 2,541.4 | $ | 2,422.4 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | 442.8 | $ | 351.4 | |||||
Accrued salaries, wages and related expenses | 40.9 | 46.9 | ||||||
Other accrued liabilities | 70.9 | 58.4 | ||||||
Total current liabilities | 554.6 | 456.7 | ||||||
Long-term portion of operating lease liabilities | 40.5 | 40.8 | ||||||
Pension and other postretirement benefits | 88.7 | 92.5 | ||||||
Net liabilities of Salaried VEBA | 20.3 | 20.6 | ||||||
Deferred tax liabilities | 17.9 | 10.5 | ||||||
Long-term liabilities | 74.4 | 72.5 | ||||||
Long-term debt | 1,036.8 | 1,036.3 | ||||||
Total liabilities | 1,833.2 | 1,729.9 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, 5,000,000 shares authorized at both |
— | — | ||||||
Common stock, par value 15,904,116 shares outstanding at issued and 15,865,118 shares outstanding at |
0.2 | 0.2 | ||||||
Additional paid in capital | 1,081.0 | 1,078.9 | ||||||
Retained earnings | 88.6 | 93.0 | ||||||
(475.9 | ) | (475.9 | ) | |||||
Accumulated other comprehensive income (loss) | 14.3 | (3.7 | ) | |||||
Total stockholders' equity | 708.2 | 692.5 | ||||||
Total | $ | 2,541.4 | $ | 2,422.4 |
1 | Please refer to the Company's Form 10-Q for the quarter ended |
Reconciliation of Non-GAAP Measures - Consolidated
(Unaudited)
(In millions of dollars, except share and per share amounts)
Quarterly | |||||||||||||||||||
1Q22 | 4Q21 | 3Q21 | 2Q21 | 1Q21 | |||||||||||||||
GAAP net income (loss) | $ | 8.1 | $ | 1.7 | $ | (2.3 | ) | $ | (22.4 | ) | $ | 4.5 | |||||||
Interest expense | 12.2 | 12.3 | 12.5 | 12.4 | 12.3 | ||||||||||||||
Other expense, net | 1.6 | 0.7 | 1.2 | 36.6 | 0.4 | ||||||||||||||
Income tax provision (benefit) | 3.3 | 1.9 | 8.4 | (15.5 | ) | (0.3 | ) | ||||||||||||
GAAP operating income | 25.2 | 16.6 | 19.8 | 11.1 | 16.9 | ||||||||||||||
Mark-to-market (gain) loss1 | (1.0 | ) | (0.7 | ) | 2.0 | 0.4 | (0.3 | ) | |||||||||||
Restructuring costs (benefits) | — | — | — | (0.1 | ) | (0.7 | ) | ||||||||||||
Acquisition costs2 | 0.6 | 5.8 | 3.8 | 7.4 | 11.0 | ||||||||||||||
Other operating NRR loss (gain)3,4 | 2.7 | (3.0 | ) | (0.1 | ) | 14.1 | (2.9 | ) | |||||||||||
Operating income, excluding operating NRR items | 27.5 | 18.7 | 25.5 | 32.9 | 24.0 | ||||||||||||||
Depreciation and amortization | 27.5 | 27.3 | 24.9 | 25.8 | 13.5 | ||||||||||||||
Adjusted EBITDA5 | $ | 55.0 | $ | 46.0 | $ | 50.4 | $ | 58.7 | $ | 37.5 | |||||||||
GAAP net income (loss) | $ | 8.1 | $ | 1.7 | $ | (2.3 | ) | $ | (22.4 | ) | $ | 4.5 | |||||||
Operating NRR Items | 2.3 | 2.1 | 5.7 | 21.8 | 7.1 | ||||||||||||||
Non-operating NRR Items6 | 0.9 | 0.6 | 0.5 | 36.4 | 0.6 | ||||||||||||||
Tax impact of above NRR Items | (0.7 | ) | (1.2 | ) | 5.3 | (19.9 | ) | (1.9 | ) | ||||||||||
Adjusted net income | $ | 10.6 | $ | 3.2 | $ | 9.2 | $ | 15.9 | $ | 10.3 | |||||||||
Net income (loss) per share, diluted7 | $ | 0.51 | $ | 0.11 | $ | (0.14 | ) | $ | (1.42 | ) | $ | 0.28 | |||||||
Adjusted earnings per diluted share7 | $ | 0.66 | $ | 0.20 | $ | 0.57 | $ | 1.00 | $ | 0.64 |
1 | Mark-to-market (gain) loss on derivative instruments represents: (i) the reversal of mark-to-market (gain) loss on hedges entered into prior to the adoption of Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities and settled in the periods presented above and (ii) (gain) loss on non-designated commodity hedges. Adjusted EBITDA reflects the realized (gain) loss of such settlements. |
2 | Acquisition costs are non-run-rate acquisition-related transaction costs, which include professional fees, as well non-cash hedging charges recorded in connection with our Warrick acquisition. |
3 | NRR is an abbreviation for Non-Run-Rate; NRR items are pre-tax. |
4 | Other operating NRR items primarily represent the impact of adjustments to plant-level LIFO and environmental expenses. |
5 | Adjusted EBITDA = Consolidated operating income, excluding operating NRR items, plus Depreciation and amortization. |
6 | Non-operating NRR items represents the impact of non-cash net periodic benefit cost related to the Salaried VEBA excluding service cost and debt refinancing charges. |
7 | Diluted shares for EPS are calculated using the treasury stock method. |

Source: Kaiser Aluminum Corporation