Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Kaiser Aluminum Corporation Fourth Quarter and Full Year 2022 Earnings Conference Call. [Operator Instructions].

It is now my pleasure to introduce your host, Kim Orlando, with Addo Investment Relations. Thank you.

You may begin.

Kimberly Orlando

you. Thank and Earnings Aluminum's Conference everyone, Full Quarter to XXXX Year Call. welcome morning, Fourth Kaiser and Good

If you of have earnings kaiseraluminum.com. release, not seen a visit Investor copy the Relations page our at please website of our

have for call. presentation We the this posted version a of also slide PDF

Keith Officer, Accounting Joining on Neal Vice and Chief Officer, West; Jennifer today Vice Huey. President and Chief are and me Executive President and Officer, call Executive the Harvey; Chief Financial President

the and first I'd and presentation like to contained are to management's expectations. statements our the refer Before based in forward-looking slides we presentation current X you remind statements begin, of made the this that you constitute on by that management information

XX, differ company's the filed December XX-K for the to including materially any will February please in statement refer to to duty For and undertakes forward-looking year release the report earnings statements, on today, to XXXX. from update Form statements that be expectations. summary or a specific to conform later full The risk forward-looking the of reports the changes company's annual results Commission, factors no the Securities filed company and the ended XXXX, actual with results which could cause company's XX,

to means provided which items unreasonable our reasonably non-run excludes required cannot outside adjusted have not predicted forward-looking provided the because of EBITDA, the financial provided GAAP release effort. reconciliations non-GAAP and Reconciliations the measures of In for without most addition, in EBITDA for today are are which presentation. certain we appendix. our our in be are financial to in in have reconciliations certain reference earnings discussion the included Any we of to comparable in financial measures and/or items measures discussion. Reconciliations information included GAAP financial or non-GAAP appendix such comparable rate the control

questions. At we the for call open will presentation, conclusion company's the of the

to Keith Harvey. the call now to like over Keith? would I turn

Keith Harvey

Thanks, review results. for quarter joining us Kim, a year all XXXX and for fourth our full of thank you and

Turning Slide X. to

certain today, announced change to of to the the begin everyone plant XX, to Please we our of discontinue I issued remind use on this as our release Before earnings well other consequential our details release impact wanted slide and further refer to LIFO non-GAAP the level on on presentation measures. of EBITDA XXXX, press press and adjusted supplemental adjustments presentation January our to recently for matter. as

position Kaiser supply remarkable While disruptions XXXX made was for a for pressures, success. and we year progress challenging the to chain amid unprecedented inflationary business cost highly ongoing

results. first Beginning with our

the prices anticipated, input fourth to some end by operations destocking, EBITDA at $XX to As our challenges with the increase in the the headwinds coupled was fourth the as Adjusted lower relatively the year. reflecting shipments packaging associated at weigh our costs, primarily at Warrick performance our higher quarter of beverage at with million, and consistent commodity primarily with ability quarter. packaging prior recover we quarter to experienced continue approximately on in customers

to significant mainly chain that full resolved. since declined supply have due been to year, $XXX at EBITDA For disruptions the million adjusted Warrick

compression our In in impact last XXXX. to to million imbalance half to cost quarter a an second in effort experienced due quarter in we minimize Additionally, we the of both due supply inventory which cost, led the year metal negatively the and second ongoing discounts disruptions year, on fourth unrecovered alloy lower at estimate the due half market-driven $XX to of scrap a to metal a impacted customers purchased of the cost. inventory scrap incremental We utilization. imbalance in and fourth higher XXXX

at freight total million due at to our outage along identified supply chain with Trentwood those incremental year, unusual costs facility. of included Warrick, For disruptions third previously $XX the full cost costs quarter and

expect majority several quarters. these dissipate to the costs with over actions resulting higher the the these next imbalances We of and associated

quarter as Trentwood resumed normal for destocking continued The the shipments the after facility major continued in challenges. as sharply was a its steady general demand quarter. completing to in mixed outage in the Automotive Aerospace third we our improve demand other increased the supply bar as operations engineering chain experienced successfully and industry recover from to quarter. remains in and the demand semiconductor environment and quarter rod packaging and

the Now turning success. significant to for now position I'd in progress XXXX made areas in Slide we've of to discuss which Kaiser X. like some to

hampered the best Beginning our with capitalize of in that XXXX, chain the ahead resolving growth various us. we After Warrick. XXXX issues and have long-term in on completing performance supply acquisition refined to our this transformative opportunity strategy

Kaiser's organizational to the into made operating combined our with we highly Warrick team changes to effect at existing structure went of into management Kaiser Warrick, the year, beginning accelerating the team seasoned augment which of integration on First, system. is this leadership The several members. focused at

customers and help progress packaging negotiate the in higher of material impact business. existing Second, price timing inflationary quarterly our mitigate and costs contained pass-through the the input contracts to on to higher our solid made of related customer with commodity we facilitating of working and alloy metal other costs improvements adjustments to

additional certain contracts While of have pleased we were are ongoing. with customers, to discussions our renegotiated successfully key

lower region. diversified our single or supplier reliance we Third, geographical to our on supply further base any

better new with our volumes Our demand. align to us to enabled flex contracts customer

for higher-margin through our expected project, And approximately is finally, of convert our coat XX% expansion products. which to growth we output to are capacity current coated roll prioritizing investments

With equipment operational fully early for mostly and being the to with are building completed beginning of goal mid the late site in XXXX. by to now readying arrive, XXXX, we the focused startup on

our Alcoa early progress our of sustainability of intend a continuing products. and increase Warrick anticipate use are packaging from at to recycled adjacent materials the increase finalizing make as raw we the materials smelter percentage facility plant, to physical we to addition, XXXX. separation we which term, power with Longer In of of our the Warrick by

litigation. our which led deliveries MAG, the to Lastly, damages cessation us year one of of force declare U.S. quarter of to third are actively from during the through following abrupt magnesium majeure suppliers, we pursuing last XXXX, Warrick

secured of long-term requirements through positive XXXX our magnesium been for into remain made as by partially XXXX. We have our on strides and and the guided outlook following Currently, strategy we refined all business, we our in the packaging bullish forward. XXXX move

to Moving Slide X.

planned well the third Beyond aerospace remaining following benefit from for our we back mill running, general of experiencing packaging at major continued is operations, engineering a the positioned up with outage in Trentwood in remained demand we've and XXXX. quarter our facility to extended. recovery products of The been times the completion long lead and

in and groundwork to we laid as disruptions pivotal for chain I necessary through our various supply long-term team company maintaining thank safety. commitment a growth. the was XXXX to Kaiser's for summary, and year for the dedication perseverance want evolution their to our position In sustainable a

performance we focus rates, achieved experienced turnover historically in more again, and safety and strong XXXX, high teams, processes. a strong even than training our hiring employees, to safety-minded XXX as Our testament

While labor us, many macroeconomic they uncertainty we that continue are and hurdles pressures, believe ongoing chain as will challenges relate inconsistencies marked inflationary supply turnover. behind now monumental by to broader

margins. stabilize, remain our operations, and to we focused in our pursue efficiencies operation reduction to efforts improve As our improving continued as continuing such, commercial actions cost on intently

supplier given growth in to markets manifest, as key strong and secular take our multiyear a our market key diverse and strategy customer efforts with go-forward in position confident strategic we to will solid our strong relationships contracts are While partners. end time execute, with characteristics, our ability

call the on turn more the now for I'll Neal over to detail quarter. Neal?

Neal West

Keith, good morning, Thank everyone. and you,

release, as Exchange XXXX full highlighted, discuss non-GAAP of XXXX results, press and discussions Keith our I to our quarter certain to and want changes year following fourth staff. Before the we financial of where measures Commission Securities announced the remind everyone January XX, with presentation I

income SEC discontinue operating VAR, discussion and rate of use identified release the to our the alloyed value-added presentation revenue full and staff, of item, XX, EBITDA, conversion renamed details. revised adjusted as or effective adjusted calculation our adjusted our with Separately, ended additional for to EPS slide to income, non-run plant-level metal Please adjusted presentation we the adjustment Part revised year for and to of revenue, refer hedge the January adjustment announcement, of XXXX. LIFO. December our earnings net costs for we

Slide to turn XX. let's Now

full of conversion comparison to in in XXXX the in more $X.X contained beginning we presentation fully metal $XXX year alloyed reflect was in historical conversion For instituted revenue million to pass-through XXXX. resulted the revenue metal changes the of roughly impact our that billion. Note our cost conversion revenue XXXX, hedge in reduction

strong revenue the conversion for and market. Turning to high-strength by plant our revenue of in driven fourth a in plate in an for metal, XXXX million third by improvement million adjustment shipments commercial on to after totaled Aero our aerospace Slide the Growth following facility. XX% was increase in quarter. outage our prior a reflecting incremental applications addition XX% $XXX year XX reviewing improving alloyed demand shipments at $X Trentwood conversion quarter end over quarter shipments

For the XXXX, strong conversion in increase and revenue defense a aero driven up totaled applications. improving after XX% adjustment the commercial year, aerospace full for a jet over prior XX% million million, metals, year demand demand and shipments $XX $XXX biz reflecting alloyed high-strength by for continuing our

Packaging lower we force third fourth operation majeure adjustment quarter million XXXX, normalized Shipments was were alloyed beverage more work declaration addition a in work to million X% for lower destocking markets. return to year-over-year of the quarter, $XXX year-over-year XX. shipments to due the conversion revenue to the as of $XX Moving after XX% in operation the to a in can following Slide metal. up at in our

year for up on increase metal was XXXX. million full XXXX, for a in the alloyed after packaging million, $XXX revenue over adjusting shipments For $XX conversion XX% XX%

only reminder, activity XXXX acquisition on reflected of XX, of the our March shipments XXXX. closed packaging Warrick a months in As as X

year due full magnesium negatively to occurred XXXX the In million XXXX. impacted quarter that force of addition, were XX event approximately majeure during our the third GBP related shipments by

alloyed $XX XX. and with bar to in moving centers the seasonality a Slide quarter million metal million of X% products. revenue predominantly our was the reduction revenue destocking XX%, coupled to by normal shipments, conversion after conversion for extruded products at impact fourth and rod General service higher $X for due up pricing, was Now engineering General was driven adjustment. which engineering

the the a pricing given and for alloyed extruded outage. third destocking full For metal, impact in conversion after $XX quarter up bar shipments, the year year-over-year $XXX of X% rod engineering by of the revenue million products general increase treatment our modest impact XX% million, was and a led XXXX, planned and higher

million Slide a revenue $X after up improved to $XX fourth the moving by quarter metal, million XX. was increase and driven X% And conversion in shipments a adjustment for pricing. XXXX, alloyed Auto over XX%

persistent a on a year-over-year $XX flat increase industry metal, to year supply the $X XXXX, shipments relatively million adjustment auto revenue amid XXXX issues. modest For remain full compared was chain million conversion as for shipments X% stable alloyed after in

detail Additional by on of revenue found conversion can market the end be applications presentation. shipments in appendix and this

was predominantly and turning Reported of other $XX restructuring XX% year million $XX Slide charge corporate related including impairment million charges, Trentwood depreciation intangibles acquisition, year-over-year. our reserves $XX related related million operating to to adjusting the PCB to operating million, XX. at goodwill environmental adjusted for a our to a facility of to $X activity our our Warrick noncash related income $XX full acquisition. down for relocation, to million non-run-rate including adjustment $X Warrick and Now was million, office cleanup After income a of additional historical XXXX million expense $X the

our to our we at the Warrick integration are of initiating addition structure flexing relocation operations plant we of highly cost overhead corporate to variable into structure forward, Franklin. in as and finalize complete in current match staffing full headquarters our reductions Moving corporate demand,

take the as charges we we and result, restructuring over reduction to initiate additional year course of a next actions. As these the additional identify cost expect

million. $X for was quarter operating For rate charges of million, XX% adjusted the I was million $XX operating fourth just After of year-over-year. down loss the $XX XXXX, discussed, reporting non-run adjusting income

full our tax rate year compared XXXX. the XX.X% For was to XXXX, effective in XX.X%

and full the under before items regulations. mid-XX% low our the tax in discrete the range over tax For XXXX to long year be effective current rate to term, expect we

of was XXXX. million $XX remain income mid-single of a of million NOLs, XXXX, will for XXXX. or digits taxes $XX rate which, net $X.XX Further, diluted loss or noted, low loss for was of million in adjusting diluted After compared loss until the or that we year $X net million full for adjusted as $X.XX per we anticipate loss non-run net in items the share per share the of adjusted adjusted share loss federal share cash net $X.XX to compared $XXX million. consume per our to XXXX $XX loss a in our per of diluted Reported a were to year-end 'XX diluted or adjusted $X.XX

noted diluted million $X.XX rate prior fourth share to the per non-run loss income loss for for XXXX the of in of per loss items quarter net to $X.XX in above, or or quarter. million year Reported XXXX $X share net of share per adjusted diluted the net fourth compared compared period. million for per income adjusted $X.XX $X.XX net $X loss prior or was income diluted adjusted of million quarter $XX was $X the Adjusted adjusted year share diluted or

Turning to Slide XX.

earnings have As Keith of metal in was impact XXXX. XXXX hot issues, operation, discussed $XX chain to EBITDA year calls. of The to compared million, significant and supply quarter for predominantly supply magnesium decrease decline our in which adjusted prior reflects we specifically highlighted, the full packaging extensively million a $XXX the related

plate magnesium further coupled in third third at our release. we the quarter quarter outage our force and planned third shipments the discussed results related as took in Trentwood operation, to with the earnings majeure, packaging Reduced we due quarter, impacted

improvement In further revenue a addition, offset higher and the reduction inflationary driven actions, XX.X% through in efficiency as impacted efforts projects conversion cost EBITDA XXXX. to working which was results. of year, pricing are Adjusted we percentage costs aggressively during

for Moving to the was quarter Adjusted EBITDA Slide XX. $XX million. XXXX fourth

as costs impact businesses. relatively of approximately offset pricing fourth across identified $XX A was our inflationary anticipated year in which labor, EBITDA costs costs, with the higher mix third down we XXXX million was consistent quarter million employee-related including and in Our $XX and improvement prior year-over-year quarter adjusted energy, the manufacturing the helped of quarter. operating supplies. from and

to Keith, million. supply by indicated $XX chain from purchase quarter work higher the was at continue approximately volume operation recover and unrecovered as in disruption which, by higher impacted However, lower costs, utilization scrap alloy as of our the and was get we

end offset pricing will commercial as impact XXXX. conversion we as percentage that us of in towards teams in Our contract assist further X.X% a to quarter inflationary higher on XXXX. of costs the through additional improving fourth higher revisions the environment a EBITDA have was the move achieved revenue remain and focused of Adjusted already in of operating XXXX cost

on discussion our Slide on sheet a to turning Now flow XX. balance and cash

underneath the total revolving of XX, cash $XX fourth facility of $XXX are December of provide credit revolving and million during million no facility $XXX There approximately on approximately more As quarter. credit XXXX, total than of availability a our borrowing liquidity million. the borrowings

projects, Subsequent approximately with coat continue elected revolver total to We down year-end, to draw our in liquidity we to packaging. stockholders. our invest line of growth in on available to remaining further by we ability to giving confidence growth valued and roll the capital $XX million million and $XX our continue and our returns our specifically million on able $XXX believe as our our us strong remains strategy cash, to be revolver

costs interest note XXXX. senior debt fixed no our annually, have reminder, until a we maturing are and $XX at As million

XXXX, $XXX our funded predominantly million working build. of million available capital which million $XXX to usage, year full cash $XXX inventory and of the For related of EBITDA

capital, interest, $XX addition, of cash million million of of $XXX dividends million $XX of paid and In million $X taxes.

the to we capital strategy and underscoring quarterly supply and over be working XX, a quarters announced On share, business on expect for confidence a our a common inventory per chain increasing dividend next of our rationalization, shareholder the $X.XX the of source We few Board declared management January normalized of focuses adjusting Directors have value. as more to environment. in long-term growth Board funds our profitable

to back call XXXX the Keith? turn our to just I'll Keith discuss over now outlook. And

Keith Harvey

Neal. Thanks,

aerospace first XXXX. turn with XX. eginning I'll Slide to outlook our of on the quarter Now for

should high-strength the the higher and commercial by sequentially X% pre-pandemic XXXX. believe year-end continued in the shipments in shipments as in quarter expect of for quarter, with which to approximately levels, attainable strong first by be fourth quarter We same continues X% we in recovery the improving the the revenue first aerospace versus period XXXX. conversion momentum XX% aero And towards

single support supply with framers for next several each production XXXX. grow year air chains years. airline production set year increases are jets declarations to remains business being Rate jet robust, the wide-body stronger and passenger the a planned remains increase over increases for demand to for for and miles strong and The this as jet by backlog aisle continue improve, business the

holding Defense to positioned is for strong a other continue Kaiser expected support. legacy has and of as been demand platforms, increasing F-XX which and well to result the is

aerospace incremental demand and mill quarter facilities and strength markets, Following our to other at position end the the servicing service the competitive high our we first beyond. our expected bullish the upgrades remain Trentwood on in and ability of

Slide XX, to packaging. now in Turning

challenges With more pass anticipate normalized lag of fully Warrick the rolling costs now price experienced XXXX a in a at contracts. return chain most existing or through mill higher with our and behind supply we X with lingering continued us, some adjustments costs and in metal X impacts XXXX operations significant albeit certain to in to

being We in destocking quarter in flat of fourth customers with first same the be quarter expected balance comparison to those to in revenue an moved expected due orders to X% the Shipments the mix. some are a quarter continued down first XXXX. to with of slightly XXXX, unfavorable the into X% period with conversion expect

previously, in excited Accordingly, we capacity is fully the investment growth positioning committed, a expected and fully targeted and remains potential for market. line our packaging our Warrick's long-term in new in remain XXXX operational to As about roll indicated become very coat XXXX. competitive

pull to engineering slowed fourth bar metal as distributors fourth XX. further last the on taking with inventories has the engineering to lower orders advantage and during plate turning year. general quarter increased ahead of distributor prices Now of quarter in Demand for Slide products general and rod

which softening semiconductor was at our demand restrictions strong in rising the plate of from resulted China, demand, our highlighting Biden opened previous levels. facility in unique benefit capacity administration's to That for aerospace Also a slowdown on plate the announced chip exports said, the semiconductor last to diversification semiconductor has strategy. year late accommodate Trentwood key

Longer revenue the semiconductors, supply of steady, these be first shipments stable approximately compared for products, and the quarter end-use towards of conversion expect continued and industrial we remains fourth demand Pricing down X% term, quarter domestic by sequentially believe to led will machine trend remain for reshoring to the we XXXX. tool X% and in to applications.

Despite XX vehicles and mid- automotive. Slide I'll America industry. in to expect for pent-up we and rates to we don't and XXXX, Now this until North challenges Currently, market in continue to in slow expected the due build a facing trucks light review recovery a on XXXX. turn meaningful higher to late recovery demand expect a persistent

shipments up driven with XX% certain to improved the XX% revenue up fourth pass-through versus X%, the by in expect We be first sequentially conversion of quarter to quarter costs pricing X% XXXX, on and programs. to

summary the Kaiser demand will optimistic are of Slide margins more cautiously basis commercial we are markets. expected current now first cost, to continue Turning quarter our is and the improve return to throughout the EBITDA in year the Holistically, in normalized EBITDA outlook. environment of efficiencies points XXX we to previous margins XXXX approximately and we improved my actions. quarter, well-positioned to and navigate a over and prevailing continued strengthen to XX end move as believe our

adjusted be and However, the will full margins providing our strong year concerns, for given ongoing uncertainty we and for EBITDA XXXX. outlook not inflationary pressures, recessionary macroeconomic continued

margins trough the EBITDA and as move In forward addition, year full we the XXXX we represent into adjusted XXXX. believe

the the economic structure. prudent taking debt for time, managing our while returns believe our same us, of opportunities are we delivering is to solid ability given of our we to long-standing and it ahead and well-prepared growth Further, continuing our focus adversity to liquidity flex At variable strong shareholders. advantage to cost continually position address

for Looking without or in we business capital quarterly remain strategy. which returns to reduction concurrently consecutive our growth XXXX, suspension. supporting dividends, at stockholder committed while the cash XX continuing record years our have allocation of We of our paid track through

and in coat to maintenance with million, $XX Our including growth $XXX total spending approximately is approximately our to to our at for first projects spending #X roll Major packaging operations capacity, expansion million quarter. CapEx the planned to $XXX our that dedicated is other and approximately quality sustainability. of for that to XXXX approximately initiatives, be occur XX% with improve the year, million XX% expected of our

made Now I'm the turning summary, for pleased stronger XX. In position future. to to very Kaiser Slide we've a with progress

remains to of to conversion timing strategy we deliver longer-term we continue XX% remains and our and believe the revenue mid- $X and subject range, macroeconomic conditions. billion Importantly, margin investments can EBITDA expected of to an the which intact, approximately in high

any call now that, you may to I'll questions have. With the open Operator?

Operator

Instructions]. [Operator

comes question Wolfe with from first the line Timna Our of Tanners Research.

Timna Tanners

factors achieving handle I'm on the you keep from a margin trying get in XXXX kind ultimate to that goal. EBITDA of the

packaging/destocking, one I to to one that. color just trying a bit abate. more little just like is So one, go being through supposed on by I'd which, think,

chain The some other lingering and end being markets? any supply issues with

you But are you on And could -- from that and try EBITDA progress goal? some things provide us challenges? a to the plans the kind how go the color more to bit achieving keeping of those of through to little margin expect through you

Keith Harvey

question. I appreciate Sure. your

So let's with Warrick. start

'XX, costs at So going obviously, XX% about not as -- $XX hit moving XXXX, we and million of -- incremental those costs we to we've looking to forward in those believe that can reoccur. we of XX% are had in costs us identified a

and So to it we that's expect happen in 'XX. us, behind wouldn't

some Remainder cost quarters in brought our last force year sure weren't abate through that customers quarters. smoothing And the majeure our and associated next be over go we'll to to to disadvantaged. several of out We inventories. next we make inventory expect that period normalized of that we a through costs, lot those lagging we because as that and with pass continue we several through alloys, the rebalanced

throughout back to we occur expect thing tremendous rates. now facility. And disruptions that All a inefficiencies the year, go improve. starting those Warrick to created got will operation the continue year those last and more to in we've more Those but resume second to as down is we stable we're the The at those see normal operations. settle

and so on million anticipate through more an million on focus that we'll a that's focus as we're we cost $X reduction. on to get high that And efficient, we $XX we'll On going able believe cost reduction. on. to And be production, that producing cost to have out. area we pull the And year

you discussions our had, packaging, on contract our look we've and especially to contracts. pass-through improved to around current conditions those X over improve roughly at by above. that look And if you'll sales the back XX% we've been several you continued mix, quarters, improving last have all pricing, X -- Our if the see that we've margins

So you It's MAX been that we've focus prices, we're getting issue and our what improve And your around part about is an those And destocking the costs so expected additional occur. through. of another really really these okay? -- we question around talked to experienced, area. was that

habit lot inventory that know of is in think was I -- phenomena. material have a some there a a that We use, the There it's transitory those destocking believe that short-term taken if and consumer don't but changes word to we place. were

Our that's that, back customers, basically, moved to end the of being year. the feel

the generally one from quarters First perspective. packaging quarter is slowest a of

up So be quite to third experienced we to first strong year. we that quarter and quarter last levels of the back second the back expect in the into to the and to heat

us getting start to if hold pricing cost. relatively market stabilization outlook. our will our got good help in conditions we've the continues of We think good that's still, increases operations place, So and

Timna Tanners

helpful. really That's

that closer that for we sequential that could you targeted you reasons described So see to assume exit the the just improvement and could you margin EBITDA you XXXX? if be that gave,

Keith Harvey

Timna. year, Well, EBITDA. XXXX, we a but had delivered If million in I us at I take checks we of this at no some and look $XXX what gut it way, happened last look to question.

you XX% if roll a impact which back we for $XX million roughly cost, that would would in made, million that at $XXX million the EBITDA delivered adjustment roughly a to this and year, then impact roughly business which to have equate of this was incremental margin. If EBITDA $XX look you LIFO

business anticipated to year, last we XX% us -- of was business beginning knew the deliver before in we at margin. XX% the going a that this front this And to our all of was

just the So things track. those I had of impacting We think on number us. unique right we're a

with a slowdown any 'XX, And to versus hard we've uncertainty whether first what the on the type like. seen looks landing of of going uncertain in year to The as quarter recession. soft the identified, rest be obviously, landing we've a but there's a not is as slight

so go in our was are. the QX And where trough -- we we mentioned we as we statement, as forward, prepared feel really felt we

margins. year back we digging We're out to back if to progresses expect it And as this. continually we our expect, as improve of the progresses, historic

Timna Tanners

squeeze Okay. in. detail MAG provide Helpful. on against lawsuit there? the If I insurance could potential U.S. one one last Can you any your mentioned further and recovery

Keith Harvey

that's up can't underway. Timna, while in the Really any -- make That's comments, starting right now.

there force accepted that. our impacted it those definitive not company. toward we conditions, We recover going and expect more the that majeure to explanation under we're have the But damages. that damages end certainly, of fight were to to some felt the year And for was

Operator

with from Goldman question the line Sachs. comes next Our Emily Chieng of

Emily Chieng

now. that roll around building Warrick right My first question line -- roll is the mill you're just coat

to think come does take supply time As of online? you issues the impact then need chain online, Warrick when installed starting up. that to starting have And thoughts that any may around that of time that about and just to at secondly, Do that you ahead commissioned? off-line -- coming that line

Keith Harvey

Emily, thanks your question. for

timing. line now, roll things on on have been track for But these So challenging. anything, inflationary of on coat the and we're quite any Warrick timing is

the and are that things within can of costs, to realm we Inflationary push on of steel price budgets, have expected. imagine, but those you continued as those other some the upward pressure

Timing is the to have equipment.

is beginning is in we're on have building that time in the equipment early expectation XXXX. erected, the and mentioned, in I to As come to some place in,

against the of all If layout completely the to other segregated operation, you were operations. Emily, see our it's

the any So of there no impact operations day-to-day in they as should stand. be place to

have us get late by a to supply XXXX. We qualification plan to to operational ready mid- and there, fully begin

all So is to online. in that we expect

two there's happen us we're saw excited areas One reason XXXX. those reminder a And in And so looking on what and look those we and we're on adjust those as could to to perspective. for the costs, in at about so to influx, is get Warrick. that, that quickly

part allow coated top going line investment, is Xx. second growth is once than business. we've the on But before margins mentioned products versus non-coated us improve greater the on this And for to that delivered, to as

will a roughly the existing significant enhancement us, be that's for and capacity. that of So XX% on

amount under -- the is Any is volume that of significant money already contract.

that's for earnings to not that only So the think but the going in of We and end place. very to get have decade. the shorter our through impact excited we're term, to significant

So things our on track there. and situation, current remain that's

Emily Chieng

a follow-up. maybe any around progress contract improved if these more cost of pricing made I'd of pass-throughs bit your to love color incremental Great. a then and been hear on there's sort and on just getting couple a items And little different discussions, there.

has What then progressed embed What And hedged start you about into what the should the should think metals? last we alloys how components more of we closely? are that update? quarter tracking alloyed since specifically do new that are there the this cost

Keith Harvey

Yes.

XXXX, XX% as contracts, the negotiations, we're we -- some pricing on We're shorter-term seeing improved over existing to have the quarters. for and increases per current on X contracts, we So the opportunities And saw over we contract saw Emily. those revenue go seen continued indeed, improvement. we've -- even last conversion started so purchased we in pound in on very even well,

us seeing the we're mix. help improved expected to and XXXX of some we challenges opportunities. We're in at impacted improved seeing inflationary We're further pass-throughs as out, us negate then this pricing look year. looking And that

businesses in and with and would intact. say we after what low-cost the high and pass-throughs improvement I for go areas our ability to that do niche and do mixes there the margins very operations better us environment are So for and

very there. pleased we're So progress about the

Now these the progress and made moving on identified our challenge XXXX, at help system forward with -- some with that a at things these costs really impacts look on quarterly basis. costs to us those in through customers we look those we annual moving we've quicker we are great a an on done customers And done basis. how our in generally,

pass-throughs. entire with then And contracts high we're commodity through couple as of commodity of passing increases, lot magnesium. our identified couple importantly, a through disconnects more a a discovery more number not we the our things even But of those of of cost found of a these, where these especially such we've

those really adjustments line customers where we're remainder our back with and make to of And contracts are. get those with the in working

bit little that what we're a that's you are So at we're talking of looking we point And the of we to get alloys at? What lag the looking everything. are then about. -- when

at looking alloys. we're mean I all

manganese. of all but copper cost. our we metal our metal We're products, So the copper magnesium, looking of for lines, at We're following We're for list, looking prices those. input aluminum. obviously product other being the and other at following also on top follow We're energy.

because we scrap impacts us, especially year, large of of half in of of the supply those us disruptions, the the as to second it in of price bringing go-forward the one types right which those So costs paid costs, such more got called off is out, as in will some the we'll into our higher really materials, and we affect that have and the forced better lower-cost which our input managing -- much forward costs, for. but handle move we as And those on a units us game

Operator

to closing I'd have Keith the we like hand remarks. is for it That to for questions. Harvey all Mr. back time

Keith Harvey

us operating in you Okay. look I April. thank more profitable you conditions Well, returning to We your forward progress with growth stronger a to a normalized XXXX. in on for great Have joining updating forward look And today. day. to

Operator

participation. today's for Thank conclude teleconference. this Ladies your does and you gentlemen,

You your wonderful day. time, have may a and this disconnect lines at

Kaiser Aluminum (KALU) 23 Feb 232022 Q4 Earnings call transcript