Kaiser Aluminum Corporation reports second quarter and first half 2014 financial results

Highlights:

Second Quarter 2014 - Operating Income $46 Million; Adjusted EBITDA $46 Million; Adjusted EBITDA Margin 24%

Third Consecutive Quarterly Record for Heat Treat Plate Shipments

Strong Growth in Automotive Extrusions Generated Second Consecutive Quarterly Record

Strategic Investments Driving Improving Manufacturing Efficiency

Kaiser Aluminum Corporation KALU -1.04% today reported net income of $25 million or $1.33 earnings per diluted share for the second quarter 2014, increasing from $16 million or $0.85 earnings per diluted share for the first quarter 2014 and $19 million or $0.98 earnings per diluted share for the second quarter 2013. Excluding the impact of non-run-rate items adjusted net income was $19 million or $1.05 per diluted share for the second quarter 2014, compared to adjusted net income of $13 million or $0.72 per diluted share for the first quarter 2014 and $17 million or $0.91 per diluted share for the prior year second quarter.

Net income for the first half 2014 was $40 million or $2.18 earnings per diluted share. For the prior year period, net income of $52 million or $2.70 earnings per diluted share reflected a lower effective tax rate as a result of an $8 million Canadian tax benefit. First half 2014 adjusted net income of $33 million and adjusted earnings per diluted share of $1.76 were down compared to adjusted net income of $37 million and adjusted earnings per diluted share of $1.93 in the first half of 2013. Stronger shipments and value added revenue were offset by higher major maintenance and weather related energy costs during the first half 2014 compared to the prior year period.

Value added revenue of $190 million for the second quarter 2014 was up from $186 million in the first quarter 2014 and $184 million in the second quarter 2013. For the first six months of 2014, value added revenue of $375 million was up slightly from $371 million for the prior year period.

Adjusted consolidated EBITDA was $46 million or 24.4% of value added revenue in the second quarter 2014 compared to adjusted consolidated EBITDA of $37 million or 19.7% of value added revenue in the first quarter 2014, and $44 million or 24.0% of value added revenue for the prior year quarter. For the first six months of 2014, adjusted consolidated EBITDA decreased $9 million to $83 million compared to the prior year period reflecting approximately $5 million of higher major maintenance expense and weather related energy costs. In addition, the first six months of 2013 benefited from a $4.5 million customer payment received in lieu of minimum contractual aerospace volumes.

"We are pleased to report strong second quarter 2014 value added revenue, adjusted EBITDA, and adjusted EBITDA margin," said Jack A. Hockema, President, CEO and Chairman. "In the second quarter we posted another record for heat treat plate and automotive shipments, which, along with improving manufacturing efficiencies, more than offset the impact of lower heat treat plate prices. The throughput and efficiency gains from the Phase 5 expansion at our Spokane (Trentwood), Washington facility exceeded our initial expectations and were key factors driving our improved performance in the quarter."