Greetings, and welcome to the Kaiser Aluminum Corporation Third Quarter 2025 Earnings Conference Call. 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 Third Quarter 2025 Earnings Conference Call. If you have not seen a copy of our earnings release, please visit the Investor Relations page on 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, Neal West. Before we begin, I'd like to refer you to the first 4 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 5 contains definitions of terms and measures that 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 good morning, everyone. I'll begin on Slide 7 for our third quarter update. We're pleased to report another strong quarter, marking our fourth consecutive period of performance ahead of our expectations. As a result, we're once again raising our full year EBITDA outlook. During the quarter, we incurred approximately $20 million in start-up costs tied to our two key strategic investments for aerospace and packaging, offset by the impact of metal pricing on inventory, which continued to provide a favorable tailwind. In total, we delivered 23% EBITDA margins in the third quarter and over 20% year-to-date. Now let's turn to the status of our key investments. At our Trentwood rolling mill, the installation of our Phase 7 plate capacity expansion project for aerospace and general engineering applications is nearly complete. It remains on time and on budget. As expected, the 12-week outage impacted our third quarter sales, reducing conversion revenue for aerospace and general engineering plate collectively by approximately $15 million to $20 million. The investment timing, however, aligns well with the short- and long-term growth expectations from our aerospace and general engineering customers. At our Warrick packaging rolling mill, the fourth coating line is steadily progressing through its qualification phase. September marked our strongest output to date on the new line with momentum continuing into October. We anticipate reaching full run rate in time to support 2026 shipments. Customer feedback has been overwhelmingly positive regarding product quality and performance, fully aligning with the expectations we set when initiating this investment nearly three years ago. This project remains central to our strategy of shifting the majority of the mill's output to coated products, a segment where Warrick already holds a market-leading position. As we approach full run rate, increased throughput will begin to satisfy our customers' demand needs, and start-up costs will begin to taper off. Turning to our key end markets. Demand remains solid. Aerospace is trending positively, though not yet fully reflected in our results. Packaging supply remains tight with strong demand expected to continue for the foreseeable future. General engineering continues to outperform the traditional 2% CAGR, reflecting solid demand from our customers. However, month-to-month demand has shown an uneven cadence, which has made it challenging to operate with normal efficiencies. Despite this variability, the overall trajectory remains strong. Automotive rebounded meaningfully late summer after a volatile start to the year. I'll touch more on our markets in a moment when we discuss the outlook. With that market backdrop in mind, as we near the end of our major investment cycle, we have a renewed focus on managing our cost, restoring operating efficiencies, and regaining our best-in-class operating metrics that have historically defined Kaiser. With that, I'll turn the call over to Neal to walk through the financials. Neal?

Thank you, Keith, and good morning, everyone. I'll now turn to Slide 9 for an overview of our shipments and conversion revenue. Conversion revenue for the third quarter was $351 million, a decline of approximately $11 million or 3% compared to the prior year period. Looking at each of our end markets in detail. Aerospace and high-strength conversion revenue totaled $100 million, down $28 million or approximately 22%. This was primarily due to a 30% decline in shipments driven by the planned 12-week partial outage we took at the Trentwood facility to finalize our Phase 7 expansion projects as well as ongoing destocking in commercial aircraft OEM production. We anticipate improved demand conditions ahead as destocking appears to be easing, along with improved shipments as we return to full production following the outage. Demand has remained strong across our other aerospace and high-strength applications, including business jet, defense, and space markets. Packaging conversion revenue totaled $138 million, up $9 million or approximately 7% year-over-year on stronger pricing and mix. Shipments for the quarter, while up 2% sequentially, declined 5% over the prior year period, reflecting the mix shift in product deliveries away from bare products as we continue to ramp the new roll coat line and qualify products with customers. As discussed, the underlying demand environment is strong, and we're working closely with our customers as we ramp the new coating line to full run rate levels by year-end 2025. General engineering conversion revenue for the third quarter was $81 million, up $5 million or 6% year-over-year on a 7% increase in shipments. Reshoring activity continues to create a favorable demand backdrop, supporting both volumes and pricing. And finally, automotive conversion revenue of $32 million increased 10% year-over-year on a 5% decrease in shipments, primarily due to tariff-related customer uncertainty affecting the automotive industry. Improved pricing and product mix more than offset the lower shipments. Additional details on conversion revenue and shipments by end market applications can be found in the appendix of this presentation. Now moving to Slide 10. Reported operating income for the third quarter was $49 million, an increase of approximately $36 million from $13 million in the prior year quarter. As a reminder, the third quarter of 2024 included operating non-run rate charges of approximately $4 million, primarily related to an increase in legacy environmental reserves. After adjusting for these charges, our third quarter 2025 adjusted operating income was up $32 million from the prior year quarter, reflecting a $35 million year-over-year improvement in EBITDA, partially offset by $3 million of higher depreciation expense, primarily associated with the commissioning of our new coating line at Warrick. Our effective tax rate for the third quarter was 17% compared to 21% in the third quarter of 2024. For the full year 2025, we expect our effective tax rate before discrete items to be in the low to mid-20% range, including the impacts related to the new tax bill recently signed into law. Additionally, we anticipate that the 2025 cash tax payments for federal, state, and foreign taxes will be in the $5 million to $7 million range. Reported net income for the third quarter was $40 million or $2.38 net income per diluted share compared to net income of $9 million or $0.54 net income per diluted share in the prior year quarter. After adjusting for net pre-tax non-run rate income of approximately $11 million, primarily related to legacy land sales and insurance settlements associated with prior year claims, adjusted net income for the third quarter of 2025 was $31 million or $1.86 adjusted net income per diluted share, and this compares to adjusted net income of $5 million or $0.31 adjusted net income per diluted share in the prior year period, which excludes a net pre-tax non-run rate income of $4 million. Now turning to Slide 11. Adjusted EBITDA for the third quarter was $81 million, up approximately $35 million from the prior year period. Importantly, this result was achieved despite the 8% year-over-year reduction in our shipments. The true momentum in the business earnings power is becoming increasingly clear, driven by the stronger mix of higher value-added products and strong underlying fundamentals across our business and end markets. Additionally, during the quarter, we incurred approximately $20 million of higher operating costs and inefficiencies associated with the Trentwood Phase 7 outage and the ongoing Warrick Roll Coat ramp-up, which we don't expect to continue. These discrete costs were offset by a year-over-year increase in metal lag gains, primarily attributed to the continuing increase in metal price during the quarter. Now turning to a discussion of our balance sheet and cash flow. As of September 30, 2025, we had $577 million in total liquidity, including $17 million in cash and $560 million in availability on the revolver. Importantly, as of the end of the third quarter, our net debt leverage ratio improved to 3.6x from 4.3x at the end of 2024. Earlier this month, we announced the extension of our $575 million revolving credit facility, underscoring the continued strength of our financial position and the confidence our lending partners place in our long-term strategy. The extended facility is set to mature in October 2030, subject to certain conditions. We generated cash flow from operations of $59 million during the third quarter with our capital expenditures totaling $25 million. We expect capital expenditures for the full year 2025 to be approximately $130 million, with free cash flow anticipated to be in the range of $30 million to $50 million, reflecting temporary working capital impacts tied to higher metal costs. Importantly, we remain on track to complete our major growth capital projects this year and continue funding our quarterly dividend of $0.77 per share, reinforcing our commitment to returning value to our shareholders. With that, I'll turn the call back over to Keith to discuss our outlook. Keith?

Thanks, Neal. We continue to be encouraged by the momentum and visibility we're seeing across our markets. Let me now walk you through our full year outlook by end market on Slide 13. Starting with aerospace and high strength. Commercial aircraft recovery remained on pace throughout the third quarter, with build rates strengthening and the supply chain normalization progressing, providing us with greater confidence of growing demand heading into 2026. As build rates ramp, we expect elevated aluminum inventory levels in the channel to be rapidly absorbed. Demand in defense, space, and business jet remains steady at strong levels. Looking ahead, we're confident in our position as a leading global supplier of aluminum products in these end markets. Our capital investments continue to strengthen that leadership and position us well for the long term. As a result of our planned 12-week partial outage for our Phase 7 investment at Trentwood and the resulting lower sales in Q3, we now expect full year aerospace shipments and conversion revenue to be down approximately 10% year-over-year as destocking works through the system and shipments recover in the fourth quarter. Let's move on to packaging. We remain confident in the long-term outlook and the strength of our customer pipeline, with the full ramp-up of our coating line on pace for late fourth quarter of 2025. North American demand continues to far outpace available supply, and we expect that dynamic to persist well beyond 2025. Our team is fully focused on accelerating capacity and throughput across our value stream to meet the growing needs of our customers. Due mainly to the previously discussed delay in the start-up of our new roll coat line, we now expect conversion revenue for the year to be up 12% to 15% as the mix shift to higher-margin coated products continues to build. Shipments are still expected to decline approximately 3% to 5% year-over-year as we finalize the ramp of our new roll coating line, ahead of fully benefiting from the mix shift in volumes. We expect a higher output from the new roll coat line in the fourth quarter as we improve line speeds and realize the full capabilities of the line. Turning to general engineering. Our strong momentum from the first half carried into the third quarter with shipments up mid-single digits and solid pricing supporting growth in conversion revenue. Looking ahead, we expect shipments to remain strong for the remainder of the year, driven by a favorable mix shift towards plate products, which will further support conversion revenue growth. We continue to expect full year shipments and conversion revenue to be up approximately 5% to 10% year-over-year. Finally, turning to automotive. Our outlook for the remainder of the year remains stable. Auto production forecasts have varied throughout the year, hitting a low point post-tariffs in mid-summer before expectations improved into the fall. The resilience of our portfolio and favorable mix toward SUVs and light truck ICE vehicles has kept us steady. As a result, we continue to expect our full year conversion revenue to increase approximately 3% to 5% year-over-year on approximately 5% to 7% lower shipments. Now turning to our summary outlook on Slide 14. Our end market fundamentals remain strong, and our operational execution continues to improve. Based on our year-to-date performance in 2025 and our updated expectations for aerospace and high strength and packaging, we're updating our full year conversion revenue guidance to be flat to up 5% year-over-year. And raising our full year EBITDA outlook by 10%, now expecting 20% to 25% year-over-year growth over our recasted 2024 EBITDA of $241 million. We remain firmly focused on our long-term objective of achieving mid- to high 20% EBITDA margins. And we see clear tangible progress toward that goal as our investments come fully online and end market demand continues to improve. With that, I will now open the call to any questions you may have. Operator?

The first question is from Bill Peterson from JPMorgan.

On the aerospace and high strength sector, shipments decreased by 30% quarter-on-quarter. It appears that a significant portion of this decline was due to the Trentwood and planned maintenance. Can you clarify the distinction between the planned maintenance and the ongoing weakness you've been experiencing? Based on your updated guidance, it seems you expect a recovery back to the first and second quarter levels in Q4. However, with your comments about the reduction in destocking, how should we view the trajectory of your aerospace high strength segment in 2026? How quickly can we anticipate a recovery?

Yes. Bill, your assessment of our expectations for Q4 is accurate. Considering the run rate from the first half of the year, we anticipate returning very close to those levels. We are still finalizing Phase 7 at Trentwood, which may slightly affect the fourth quarter, but I wouldn't expect it to reduce shipments by more than 5% to 10% compared to the first half. Regarding destocking and our outlook for 2026, we will provide a clearer perspective in February next year. However, as we anticipated, we are starting to see an increase in ramp rates. As these rates improve, they help to expedite inventory conditions. I believe Boeing and others are progressing well. As you've noticed, we implemented another rate increase, typically around 5 shipsets increments. I expect to see two or three more of these increases as we move into 2026. Overall, we are speeding up our current situation, and I expect continued improvement. We will share more detailed information in February.

Okay. Yes, fair enough. On packaging, it sounds like you're prioritizing more higher value add. But I guess in terms of your contract negotiations, where do the last, I guess, renegotiations stand? And when these new packaging contracts kick in, how should we think about the magnitude of the pricing uplift as we look into next year?

Yes, we are maintaining our forecast of a 300 to 400 basis points increase in EBITDA margin. We have made significant progress this year in securing contracts, and I'm pleased with how that's going. We only have one major long-term customer left to finalize, which is Kaiser, and that process is advancing well. I expect to have everything wrapped up before the year ends, leading to increased volume. Our conversion rate per pound has shown substantial growth over the last four to five quarters, and that’s before adding new capacities, so I anticipate even faster growth there. Regarding capacity, often asked, we will not operate at full run rate next year. Instead, we'll utilize about 75% to 80% of our capacity to ensure we maintain excellent delivery performance for our customers, who have faced some delays this year. However, I believe the end results will be very satisfactory, and we are eager to ramp up operations at the beginning of the year.

Maybe just a housekeeping. You talked about the commissioning charge. How much of that was between the roll coat line versus Phase 7? And is there any more that we should expect in the fourth quarter?

I would say it's reasonable to assume that the majority of the costs were related to the start-up of the Warrick roll coat line. As we've discussed previously, while these start-ups can be challenging and carry some uncertainty, Trentwood, having successfully managed six before, handled this one quite well. Therefore, only a small portion of that $20 million was affected by those costs. I should also mention that we anticipate lower costs for the remainder of the year, and as I indicated earlier, we are positioned to execute effectively in January of next year.

The next question is from Timna Tanners from Wells Fargo.

Keith, it's great to connect. I would like to learn more about how tariffs have influenced your operations as we are a few quarters into their implementation. Have you experienced any resistance regarding price increases from your customers? Additionally, do you have any insights on your potential to gain market share from imports or any other related details would be appreciated.

Yes, it's great to hear from you again. Regarding the tariffs, we view their impact as neutral to slightly positive. All of our facilities are located in North America, including one extrusion facility in Canada. The effects on our business are, as I've mentioned, neutral to slightly positive. The positive aspects you've highlighted in your opening comments are noteworthy. Firstly, there has been a significant increase in the premiums tied to the LME, and since our business has a straightforward pass-through mechanism for these costs, we are able to transfer those increases to our customers. While we acknowledge that these premiums could decrease, we'll have to wait and see how negotiations with USMCA evolve. On the positive side, it has become somewhat more challenging for imports, which means they are less able to quickly reduce their prices below ours due to the premium. Consequently, we are noticing stronger demand for domestic products. Our extensive range of offerings for service centers and other customers is driving this demand, particularly in our general engineering business, which has remained robust not just in terms of demand but also pricing. There are opportunities ahead. Our capacity at Trentwood is expected to bolster our general engineering side, and if we see some momentum starting in 2026, I anticipate a surge in demand for general engineering products along with potential for price improvements in our business. We are at the forefront of this trend and are navigating it successfully, and I am very pleased with how well our operations are meeting current demand.

Okay. I wanted to touch base, particularly on the packaging side. I know you said that was strong, but we're hearing from our colleague who covers the space that there's some concern about cost inflation impacting demand. I wonder if maybe you're shielded from that a bit, given that you're doing more of the ends and tabs or any thoughts on the impact on packaging?

Yes. Timna, we're seeing still overall good demand on our products. And I think there some industry incidents can exasperate some of the supply scenario at different times. I know we had our challenges at the beginning of the year. I think others have had some challenges. But overall, I feel the demand for aluminum substrate products and packaging are very strong. I'll remind you that a good portion of our business is food related, and that's held up very strong. And we still continue to see that, quite frankly, outpace the demand for beverage. And so we may be insulated from that somewhat based on the markets that we serve. But overall, we're not seeing anyone reduce or wanting to reduce the capacities that we're contracted for. As a matter of fact, we continue to have customers asking for more. So that's really the basis behind our comments and where we see our business.

Okay. That makes sense. Along those same lines, actually, one of your competitors had an outage recently that's caused some attention to the space and where there might be spare capacity. So I don't think you're a player in the auto sheet market, but do you have spare capacity if needed to fill in for can sheet?

We're currently quite full, Timna. It's challenging for me to understand others' difficulties because I've faced similar situations before. Often, we're in a position to assist our customers. Our customers expect us to fulfill our commitments, and we're starting to meet those expectations as our equipment scales up. We aren't really in a position to do much beyond that. Much of this is likely related to bare product entering the market, and we've been focused on reallocating our capacity to the coated side. Therefore, we're not significantly able to assist with bare product.

Okay. I'll ask one last question, which is more about the bigger picture. I know you've mentioned guidance for 2025, and that's appreciated. However, as we near the end of this year and look to 2026, how should we consider the pace of the ramp-up for the new facilities? Will we see full run rate in Q1, or will there be gradual improvements throughout the year?

Yes, that's a great question. To ensure we meet customer expectations, we'll be implementing a gradual increase in our outlook for the first half of the year. These increases are expected to be modest, but given the strong demand, we anticipate that our major growth investments will be behind us. We're ready to accelerate our progress as soon as possible. We will provide more clarity on our projections for the first and second halves of the year. It's reasonable to expect that in the second half, as demand grows, we will see an increase in aerospace activities and our packaging operations ramping up fully. Additionally, if general engineering strengthens next year, we should start to see the rates we expected for this business. I am grateful that we have established these growth assets to fully capitalize on the opportunities next year, and I'm quite excited about what lies ahead.

There are no further questions at this time. I would like to turn the floor back over to Keith Harvey, CEO, for closing comments.

Thank you, operator. Thank you for your time and interest in Kaiser. We're excited about our future, and we look forward to sharing our full year 2025 results in February of next year. Have a good rest of your day, and thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.