First Quarter 2020:

l  Net Sales$369 Million; Value Added Revenue $217 Million, Down 1% Year-over-Year

l  Net Income $29 Million; Net Income per Diluted Share $1.81

l  Adjusted Net Income $30 Million; Adjusted Earnings per Diluted Share $1.90

l  Record Adjusted EBITDA $59 Million; Record Adjusted EBITDA Margin 27.4%

Current Situation and Strategy:

l  Health and Safety of Our Employees is Our Top Priority

l  Included in the Critical Manufacturing Sector and Recognized as an Essential Business

l  All Facilities Continue to Operate, Following CDC Guidelines and Protocols

l  Solid Financial Position - Total Liquidity $688 Million, 0.7x Net Debt to Adjusted EBITDA

l  Able to Flex Highly Variable Conversion Costs and Capital Spending

l  Focused on Successful Execution of Our Longstanding Business Cycle Strategy

First Quarter 2020

Net sales for the first quarter 2020 were $369 million compared to $395 million in the prior year period, reflecting a 4% decrease in shipments and a 2% decrease in average selling price. The decrease in average selling price reflected an approximately 4% increase in value added revenue per pound and a 10% decrease in underlying contained metal costs.

Value added revenue for the first quarter 2020 decreased to $217 million from $218 million in the prior year period, reflecting a 4% decrease in shipments driven by a planned reduction of other non-strategic applications and lower automotive shipments as customers began suspending operations late in the quarter. Value added revenue for the Company’s aerospace/high strength applications increased 4% to $130 million and shipments decreased 1% reflecting favorable pricing and a strong aerospace mix. Value added revenue for automotive extrusions decreased 7% to $24 million, reflecting a 5% decrease in shipments, as automotive customers temporarily suspended their operations due to the COVID-19 pandemic. Value added revenue and shipments for general engineering applications were essentially flat with prior year period.

Record adjusted EBITDA of $59 million in the first quarter 2020 increased $3 million compared to the prior year period reflecting favorable aerospace pricing and mix and cost improvement despite inefficiencies from pandemic-related reductions in volume, and costs related to unplanned downtime at its Trentwood facility in the prior year period that were not repeated in the first quarter 2020. Adjusted EBITDA as a percentage of value added revenue was a record 27.4% in the first quarter 2020 as compared to 25.7% in the prior year period.

Reported net income for the first quarter 2020 was $29 million, or $1.81 per diluted share, compared to net income and diluted earnings per share of $28 million and $1.71, respectively, for the prior year period. Excluding the impact of non-run-rate items, adjusted net income was $30 million or $1.90 per diluted share for the first quarter 2020, compared to adjusted net income of $30 million or $1.85 per diluted share for the first quarter 2019.

Table 1: First Quarter 2020 Consolidated Results

(In millions of dollars, except shipments, realized price and per share amounts)

Source: Kaiser Aluminum