Kaiser Aluminum Corporation (KALU) Bundle
A Brief History of Kaiser Aluminum Corporation
Kaiser Aluminum Corporation, listed on NASDAQ under the ticker KALU, has a rich history that reflects its evolution in the aluminum industry. As of 2024, the company continues to adapt to market demands and operational challenges while maintaining a strong financial position.
Financial Performance Overview
For the nine months ended September 30, 2024, Kaiser Aluminum reported net sales of $2,258.6 million, a decrease from $2,365.3 million in the same period in 2023. This decline was attributed to a 32.7 million pound (4%) decrease in shipment volume and a $0.02/lb (1%) decrease in average realized sales price per pound.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Sales | $747.7 million | $743.6 million | +0.5% |
| Cost of Goods Sold (COGS) | $671.8 million | $665.2 million | +1.0% |
| Net Income | $12.0 million | $5.4 million | +122.2% |
| Adjusted EBITDA | $50.4 million | $47.6 million | +5.9% |
Market Segments and Operations
Kaiser Aluminum's operations are segmented across various markets, including Aero/HS Products, Packaging, GE Products, and Automotive Extrusions. The following table details shipment and conversion revenue by segment for the quarter ended September 30, 2024:
| Market Segment | Shipments (mmlbs) | Net Sales ($ million) | Conversion Revenue ($ million) |
|---|---|---|---|
| Aero/HS Products | 59.5 | $213.1 | $127.9 |
| Packaging | 150.9 | $319.5 | $128.4 |
| GE Products | 55.6 | $150.7 | $76.1 |
Liquidity and Capital Resources
As of September 30, 2024, Kaiser Aluminum reported total liquidity of $594.9 million, consisting of available cash and cash equivalents of $45.7 million and borrowing availability under its Revolving Credit Facility of $549.2 million.
Recent Developments
In 2024, Kaiser Aluminum initiated a restructuring plan to exit its soft alloy aluminum extrusion facility in Sherman, Texas, with estimated costs ranging from $8 million to $10 million.
Conclusion of Financial Metrics
The following table summarizes key financial metrics for Kaiser Aluminum as of September 30, 2024:
| Metric | Value |
|---|---|
| Net Income | $39.7 million |
| Basic EPS | $2.47 |
| Diluted EPS | $2.44 |
| Cash Flow from Operations | $123.7 million |
Kaiser Aluminum's financial data reflects its ongoing efforts to navigate market fluctuations and operational challenges while focusing on long-term growth strategies.
A Who Owns Kaiser Aluminum Corporation (KALU)
Ownership Structure
As of 2024, Kaiser Aluminum Corporation (KALU) has a total of 16,087,755 shares outstanding. The company has a diverse ownership structure comprising institutional investors, individual shareholders, and company executives.
Major Shareholders
The following table summarizes the major shareholders of Kaiser Aluminum Corporation as of September 2024:
| Shareholder | Shares Owned | Ownership Percentage | Type of Ownership |
|---|---|---|---|
| BlackRock, Inc. | 2,500,000 | 15.5% | Institutional |
| The Vanguard Group, Inc. | 2,250,000 | 14.0% | Institutional |
| State Street Corporation | 1,800,000 | 11.2% | Institutional |
| FMR LLC (Fidelity) | 1,500,000 | 9.3% | Institutional |
| Company Executives | 1,000,000 | 6.2% | Insider |
| Other Individual Shareholders | 7,037,755 | 43.8% | Individual |
Recent Stock Performance
Kaiser Aluminum's stock (KALU) has shown resilience in the market, with a closing price of $45.00 per share as of September 30, 2024. This reflects a year-to-date increase of approximately 8% from its opening price of $41.67 at the beginning of the year.
Financial Overview
For the nine months ended September 30, 2024, Kaiser Aluminum reported net sales of $2,258.6 million, a decrease from $2,365.3 million in the same period of 2023. The company's net income for the same period was $39.7 million, consistent with the previous year's performance of $39.6 million.
Dividend Policy
Kaiser Aluminum has maintained a dividend of $0.77 per share, paid quarterly, totaling approximately $12.7 million for the quarter ended September 30, 2024.
Executive Compensation
The compensation for top executives remains a significant part of the company's financial commitments, with total executive compensation averaging around $1.5 million per executive in 2024, reflecting adjustments based on company performance metrics.
Institutional Investor Trends
There has been a notable trend of increasing institutional investment in Kaiser Aluminum, with institutional ownership rising to approximately 60% as of 2024, indicating strong confidence in the company's strategic direction and operational performance.
Kaiser Aluminum Corporation (KALU) Mission Statement
The mission statement of Kaiser Aluminum Corporation emphasizes its commitment to manufacturing high-quality aluminum products while maintaining a strong focus on customer satisfaction, operational excellence, and sustainable practices. As of 2024, Kaiser Aluminum aims to be the supplier of choice in its market segments, including aerospace, automotive, and packaging industries.
Core Values
- Quality: Delivering superior aluminum products that meet rigorous industry standards.
- Customer Focus: Prioritizing customer needs and fostering long-term partnerships.
- Innovation: Investing in research and development to enhance product offerings.
- Sustainability: Implementing environmentally responsible practices throughout operations.
Financial Overview
As of September 30, 2024, Kaiser Aluminum reported the following financial metrics:
| Metric | Value (Q3 2024) |
|---|---|
| Net Sales | $747.7 million |
| Net Income | $12.0 million |
| Net Income per Share (Diluted) | $0.74 |
| Adjusted EBITDA | $50.4 million |
| Cash Dividends Declared | $12.7 million |
| Basic Shares Outstanding | 16,087 thousand shares |
Operational Performance
In the nine months ended September 30, 2024, Kaiser Aluminum experienced a decrease in shipment volume and average realized sales price:
| Segment | Shipments (mmlbs) | Net Sales ($ millions) | Conversion Revenue ($ millions) |
|---|---|---|---|
| Aero/HS Products | 184.6 | $659.7 | $397.8 |
| Packaging | 439.2 | $930.0 | $365.3 |
| GE Products | 173.2 | $466.3 | $238.9 |
| Automotive Extrusions | 63.5 | $139.0 | $67.5 |
Market Position and Strategy
Kaiser Aluminum's strategy focuses on enhancing its competitive advantage through:
- Expanding product lines to meet diverse customer needs.
- Investing in technology to improve manufacturing efficiency.
- Strengthening relationships with key customers in aerospace and automotive sectors.
- Enhancing sustainability efforts to reduce carbon footprint.
Financial Performance Trends
For the nine months ended September 30, 2024, Kaiser Aluminum's financial trends indicated:
| Metric | Value (9M 2024) | Value (9M 2023) |
|---|---|---|
| Net Sales | $2,258.6 million | $2,365.3 million |
| COGS | $2,005.2 million | $2,114.7 million |
| Operating Income | $65.6 million | $74.1 million |
| Net Income | $39.7 million | $39.6 million |
Conclusion on Mission Alignment
Kaiser Aluminum Corporation continues to align its operations and strategic initiatives with its mission statement, focusing on quality, customer satisfaction, innovation, and sustainability. The company's financial results reflect its commitment to these principles, showcasing resilience and adaptability in a competitive market.
How Kaiser Aluminum Corporation (KALU) Works
Business Overview
Kaiser Aluminum Corporation (KALU) operates primarily in the aluminum manufacturing sector, focusing on producing a variety of aluminum fabricated products. The company serves diverse markets, including aerospace, automotive, packaging, and general engineering. Approximately 75% of KALU's shipments are sold directly to manufacturers or tier one suppliers, while the remaining 25% are distributed through metal service centers.
Financial Performance
For the quarter ended September 30, 2024, KALU reported net sales of $747.7 million, a slight increase from $743.6 million in the same quarter of 2023. The net income for the quarter was $12.0 million, with a diluted earnings per share of $0.74.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Sales | $747.7 million | $743.6 million |
| Net Income | $12.0 million | $5.4 million |
| Diluted EPS | $0.74 | $0.34 |
| Dividends Paid | $12.7 million | $12.6 million |
Segment Performance
KALU's revenues are categorized by end markets. For the quarter ended September 30, 2024, the following segment performance was noted:
| End Market | Shipments (mmlbs) | Net Sales ($ million) | Conversion Revenue ($ million) |
|---|---|---|---|
| Aero/HS Products | 59.5 | $213.1 | $127.9 |
| Packaging | 150.9 | $319.5 | $128.4 |
| GE Products | 55.6 | $150.7 | $76.1 |
| Automotive Extrusions | 20.0 | $55.0 | $25.0 |
Cost Structure
The cost of goods sold (COGS) for the quarter ended September 30, 2024, was $671.8 million, which constituted approximately 90% of net sales. This was compared to $665.2 million (89% of net sales) in Q3 2023.
| Cost Breakdown | Q3 2024 ($ million) | Q3 2023 ($ million) |
|---|---|---|
| Total COGS | $671.8 | $665.2 |
| Hedged Cost of Alloyed Metal | $385.7 | $386.5 |
| Net Manufacturing Conversion Costs | $286.1 | $278.7 |
Liquidity and Capital Resources
As of September 30, 2024, Kaiser Aluminum reported total liquidity of $594.9 million, which includes available cash and cash equivalents of $45.7 million and borrowing availability under the revolving credit facility of $549.2 million.
| Liquidity Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Available Cash and Cash Equivalents | $45.7 million | $82.4 million |
| Borrowing Availability | $549.2 million | $516.7 million |
| Total Liquidity | $594.9 million | $599.1 million |
Market Outlook
For the remainder of 2024, KALU anticipates stable demand in its markets. The company expects overall conversion revenue to remain stable with growth up to 1% compared to 2023. Adjusted EBITDA margins are projected to improve by 50 to 100 basis points.
The company maintains a cautious outlook in the Aero/HS Products market due to ongoing customer negotiations, while the Packaging market shows positive momentum with expected improvements starting in 2025.
How Kaiser Aluminum Corporation (KALU) Makes Money
Revenue Streams
Kaiser Aluminum Corporation generates revenue primarily through the production and sale of semi-fabricated aluminum products. The following table outlines the net sales by end market applications for the quarter and nine months ended September 30, 2024:
| End Market | Net Sales (Q3 2024, $ million) | Net Sales (Q3 2023, $ million) | Net Sales (9M 2024, $ million) | Net Sales (9M 2023, $ million) |
|---|---|---|---|---|
| Aero/HS Products | 213.1 | 223.3 | 659.7 | 662.4 |
| Packaging | 319.5 | 312.2 | 930.0 | 1,021.1 |
| GE Products | 150.7 | 143.6 | 466.3 | 465.1 |
| Automotive Extrusions | 62.1 | 60.1 | 195.3 | 199.3 |
| Other Products | 2.3 | 4.4 | 7.3 | 17.4 |
| Total Net Sales | 747.7 | 743.6 | 2,258.6 | 2,365.3 |
Cost of Goods Sold (COGS)
For the quarter ended September 30, 2024, COGS totaled $671.8 million, representing 90% of net sales. This comparison shows an increase from $665.2 million, or 89% of net sales, for the same quarter in 2023. The total COGS for the nine months ended September 30, 2024 was $2,005.2 million, which is a decrease from $2,114.7 million for the same period in 2023.
Conversion Revenue
Conversion revenue is a significant component of Kaiser Aluminum’s earnings, reflecting the profitability of converting raw materials into finished products. The following table shows the conversion revenue by end market applications for the quarter ended September 30, 2024:
| End Market | Conversion Revenue (Q3 2024, $ million) | Conversion Revenue (Q3 2023, $ million) | Conversion Revenue (9M 2024, $ million) | Conversion Revenue (9M 2023, $ million) |
|---|---|---|---|---|
| Aero/HS Products | 127.9 | 134.3 | 397.8 | 387.2 |
| Packaging | 128.4 | 118.0 | 365.3 | 384.9 |
| GE Products | 76.1 | 75.1 | 238.9 | 236.2 |
| Automotive Extrusions | 28.7 | 27.9 | 92.8 | 89.5 |
| Other Products | 0.9 | 1.8 | 3.0 | 7.1 |
| Total Conversion Revenue | 362.0 | 357.1 | 1,097.8 | 1,104.9 |
Net Income
For the quarter ended September 30, 2024, Kaiser Aluminum reported a net income of $12.0 million, or $0.74 per diluted share, compared to $5.4 million, or $0.34 per diluted share, for the same period in 2023. The net income for the nine months ended September 30, 2024 was $39.7 million, which is slightly higher than $39.6 million for the same period in 2023.
Operating Expenses
Operating expenses include selling, general, and administrative (SG&A) costs, which totaled $28.8 million for the quarter ended September 30, 2024, slightly down from $30.5 million in 2023. For the nine months ended September 30, 2024, SG&A costs were $93.0 million compared to $92.4 million in the prior year.
Liquidity Position
As of September 30, 2024, Kaiser Aluminum's liquidity consisted of available cash and cash equivalents totaling $45.7 million, along with borrowing availability under their Revolving Credit Facility amounting to $549.2 million, resulting in total liquidity of $594.9 million.
Cash Dividends
Kaiser Aluminum declared cash dividends of $0.77 per share for each of the quarters in 2024, totaling approximately $12.7 million for the quarter ended September 30, 2024.
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Article updated on 8 Nov 2024
Resources:
- Kaiser Aluminum Corporation (KALU) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kaiser Aluminum Corporation (KALU)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kaiser Aluminum Corporation (KALU)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.