Kaiser Aluminum Corp.

Kaiser Aluminum Corp. (NASDAQ, CIK 811596) — Kaiser Aluminum produces semi-fabricated aluminum (plate, extrusions, rod) — downstream aluminum for aerospace, auto, and conductor applications.

Kaiser Aluminum Corporation (“KALU”) is a specialty aluminum mill, not a primary aluminum smelter. It buys primary aluminum, scrap, and alloying materials, then converts them through rolling, extruding, drawing, forging, and heat-treating into semi-fabricated aluminum products. Its economic model is built on value-added revenue (VAR) — the revenue it earns from conversion, shape, alloy, heat-treat, and customer qualification — rather than on the London Metal Exchange (LME) aluminum price, which is largely passed through to customers.

The company’s own filing describes its business around three segments:

1. Aerospace / High Strength — aerospace plate, sheet, extrusions, rod/bar, tube, and forging stock for commercial aerospace, defense, and other high-strength applications.
2. Packaging — aluminum sheet for beverage and food can body, end, and tab stock, plus other packaging applications.
3. General Engineering — rod, bar, tube, wire, profile, billet, and machined products for automotive, industrial, semiconductor, construction, and other end markets.

Source: Kaiser Aluminum Corporation, Form 10-K for fiscal year ended December 31, 2023, filed February 22, 2024, CIK 0000811596, Accession No. 0000811596-24-000007, Item 1 and Item 7. Accessed April 26, 2026. URL:

https://www.sec.gov/Archives/edgar/data/811596/000081159624000007/kalu-20231231.htm

KALU’s reported net sales for fiscal 2023 were $3,087.6 million, down from $3,427.7 million in 2022. The decline was driven by lower average realized price per pound, partially offset by higher shipments.

The segment-level revenue mix below is reconstructed from the 10-K segment table and MD&A. Segment net sales include metal pass-through, so they are not a pure measure of value added.

Segment dollar values are cited to the 10-K Item 7 segment table. The exact unrounded segment net sales values are available in the filing; the percentages and VAR-per-pound figures are calculations from the filing. Treat any segment-level rounding as needs primary source validation if precise decimals are required. The total net sales, total VAR, and total shipments are directly cited from the 10-K.

Source: Kaiser Aluminum 10-K FY2023, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” segment table and value-added revenue discussion. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

Kaiser reports total value-added revenue of $1,160.4 million for 2023. Value-added revenue is the company’s preferred top-line metric because it strips out the volatile LME-linked metal cost.

The relationship:

\[

\text{Net sales} = \text{metal pass-through} + \text{value-added revenue}

\]

Using the total figures:

\[

\$3,087.6\text{M net sales} - \$1,160.4\text{M VAR} = \$1,927.2\text{M metal pass-through}

\]

That means roughly 62.4% of 2023 net sales was metal pass-through, and only the remaining 37.6% reflected Kaiser’s actual conversion value. This is the central fact of the business model: Kaiser can look like a multi-billion-dollar revenue company, but its economic engine is the value-added revenue line, not the headline revenue.

Source: Kaiser Aluminum 10-K FY2023, Item 7. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

Kaiser monetizes through three linked mechanisms:

1. Conversion pricing — customers pay for the alloy, shape, tolerance, heat-treat, and qualification requirements. The most technical products, especially aerospace plate, carry much higher VAR per pound than commodity packaging sheet.
2. Metal pass-through — customers either buy metal from Kaiser or supply their own; if Kaiser buys metal, it generally passes the LME-plus-premium cost through, reducing margin risk but not eliminating timing/working-capital risk.
3. Long-term contracts and qualification stickiness — aerospace products are sold under multi-year agreements or against OEM-approved supply chains. Switching a qualified aerospace incumbent is costly, creating repeat revenue.

The company does not charge subscriptions or licenses; it monetizes physical product shipments per pound. Pricing is per pound, alloy, and end-use specification.

Source: Kaiser Aluminum 10-K FY2023, Item 1, Item 7. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

Kaiser’s 10-K does not present a simple “gross profit” line in the same way a retailer would; it reports cost of products sold excluding depreciation and amortization, depreciation and amortization, and SG&A. Therefore, this deep-dive does not fabricate a clean gross margin.

What can be calculated directly from the filing is an implied EBITDA-to-VAR conversion margin:

\[

\text{Adjusted EBITDA / value-added revenue} = \frac{\$212.1\text{M}}{\$1,160.4\text{M}} = 18.3\%

\]

This means that for every dollar of value-added revenue Kaiser earned in 2023, it converted about 18.3 cents into adjusted EBITDA. That is a useful normalized margin because it excludes metal pass-through noise.

Net income attributable to Kaiser Aluminum Corporation for 2023 was $47.2 million, so net income-to-VAR was only about 4.1%, reflecting interest, taxes, depreciation, and corporate costs.

Source: Kaiser Aluminum 10-K FY2023, Item 7, adjusted EBITDA reconciliation. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

Customers pay Kaiser directly. The buyer classes are:

• Aerospace OEMs and their tier-one suppliers — commercial aircraft manufacturers, defense primes, and aerospace distributors. The filing names Boeing as a significant customer; exact concentration percentage is discussed below.
• Beverage and food can manufacturers — large packaging converters. The 10-K describes them as major beverage and food can manufacturers but does not name individual customers in the segment table.
• General engineering distributors, automotive suppliers, and industrial OEMs — service centers, automotive component makers, construction, semiconductor equipment, and general industrial users.

Source: Kaiser Aluminum 10-K FY2023, Item 1 and Item 7. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

KALU’s 10-K risk factor on customer concentration states that a small number of customers account for a significant portion of sales. The filing names The Boeing Company as a significant customer. The exact percentage is presented in the 10-K; for this note, the precise concentration percentage is marked needs primary source validation because it should be read directly from the customer-concentration risk factor rather than approximated.

No other single customer is named in the filing with the same prominence. Packaging customers are not individually named.

Source: Kaiser Aluminum 10-K FY2023, Item 1A, Risk Factors, customer concentration. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

From the 10-K, customer classes are:

• Commercial aerospace OEMs and subcontractors — Boeing, Airbus, and their tier-one suppliers are the core aerospace/high-strength buyers. The filing names Boeing as a significant customer.
• Defense and government-related buyers — military aircraft, missile, and defense programs.
• Beverage and food can manufacturers — large North American and global can makers that convert sheet into can body, end, and tab stock.
• Automotive OEMs and tier suppliers — lightweighting components, structural parts, and machined products.
• General industrial distributors and manufacturers — service centers, semiconductor equipment makers, construction, and general engineering.

Source: Kaiser Aluminum 10-K FY2023, Item 1, Item 7. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

• Aerospace OEM procurement organizations — long qualification cycles, demanding quality, multi-year pricing, and supply-security focus. They buy from Kaiser because switching threatens production lines.
• Aerospace tier-one machinists/forgers — buy plate, rod, bar, tube, and forging stock, then machine or forge into parts. They rely on Kaiser’s certified tempers and on-time delivery.
• Packaging converters — high-volume, low-margin customers that run continuous can lines. They value supply reliability, consistent gauge, and surface quality. Switching costs are lower than aerospace but not zero due to qualification and line tuning.
• Automotive and industrial buyers — price-sensitive but still require tight tolerances and just-in-time delivery. Switching costs are moderate.

Source: Kaiser Aluminum 10-K FY2023, Item 1, Item 7. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

The 10-K risk factors disclose customer concentration. Boeing is named as a significant customer. If Boeing slowed orders or dual-sourced away from Kaiser, it would materially affect the aerospace/high-strength segment. Exact percentage: needs primary source validation — read from Item 1A in the filing.

Source: Kaiser Aluminum 10-K FY2023, Item 1A. Accession No. 0000811596-24-000007. Accessed April 26, 2026.

_Pending primary-source deep-dive (SEC 10-K); enqueued to company lane._

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