Kaiser Aluminum Corporation Reports
Third Quarter and First Nine Months 2018 Financial Results
Third Quarter 2018 Highlights:
Net Sales $393 Million; Value Added Revenue $205 Million
Net Income $22 Million; Adjusted EBITDA $47 Million; Adjusted EBITDA Margin 23.1%
Moderating Headwinds from Aerospace Supply Chain Destocking
Full Realization of Price Increases Implemented in Second Quarter 2018
Temporary Tariff Costs Incurred on Internal Cross-border Transactions
Completed Installation of Material Handling Equipment for Thin Gauge Plate at Trentwood
Acquired Imperial Machine and Tool, a Leader in Multi-Material Additive Manufacturing
First Nine Months 2018 Highlights:
Net Sales $1.2 Billion; Value Added Revenue $618 Million
Net Income $68 Million; Adjusted EBITDA $150 Million; Adjusted EBITDA Margin 24.3%
Higher Underlying Metal and Freight Costs Had a Significant Adverse Impact on Margins
FOOTHILL RANCH, Calif., October 17, 2018 - Kaiser Aluminum Corporation (NASDAQ:KALU) today announced third quarter 2018 results, reporting net income of $22 million, or $1.29 per diluted share, compared to net income and earnings per diluted share of $20 million and $1.16, respectively for the prior year period. Excluding the impact of non-run-rate items, adjusted net income was $24 million or $1.43 per diluted share, for the third quarter 2018, compared to adjusted net income of $16 million, or $0.90 per diluted share, for the third quarter 2017. The improved year-over-year results primarily reflected the impact of a lower corporate tax rate in 2018, partially offset by temporary tariff costs on internal cross-border transactions.
For the first nine months of 2018, the Company reported net income of $68 million, or $4.03 per diluted share, compared to net income of $61 million, or $3.49 per diluted share, in the prior year period. Excluding the impact of non-run-rate items, adjusted net income increased to $80 million, or $4.72 per diluted share, for the first nine months of 2018 compared to adjusted net income of $68 million, or $3.89 per diluted share, for the prior year period. The year-on-year improvement was primarily due to the impact of a lower corporate tax rate in 2018.
Third Quarter and First Nine Months 2018 Summary
“Third quarter 2018 results reflected higher aerospace shipments as supply chain destocking continues to moderate and from the full realization of price increases implemented in the second quarter 2018. Strong operating leverage and improved sales margins more than offset the temporary impact of tariffs on our internal cross-border shipments. We are awaiting government approvals of certain countermeasures that we have initiated to eliminate nearly all our cross-border tariff costs and retroactively recover costs incurred. Although the tariffs have negatively impacted short-term results, we continue to anticipate that the long-term impact to us will be neutral to slightly positive should the tariffs remain in place,” said Jack A. Hockema, Chairman and Chief Executive Officer.
“During the quarter another significant portion of the Trentwood modernization project was completed with the installation of handling equipment at the light gauge plate furnace. Going forward, our focus will continue to be on implementing practice changes to extract the full benefit of the new equipment that will drive continuing improvements in efficiency, capacity and product quality.
“In addition, as previously announced, we recently made a $43 million investment in the acquisition of Imperial Machine and Tool Co., ('IMT') a leader in multi-material additive manufacturing and machining technologies for demanding aerospace and defense, automotive, high-tech and general industrial applications. IMT maintains a similar culture of quality and customer satisfaction through which it has developed a strong customer base and well-established collaborative relationships to continue to drive innovation.
The following information was filed by Kaiser Aluminum Corp (KALU) on Wednesday, October 17, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.