Kaiser Aluminum (KALU) 22 Jul 212021 Q2 Earnings call transcript

Welcome to the Second Quarter 2021 Earnings Conference Call. My name is Jackie and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] I will now like to turn the call over to Melinda Ellsworth. Ms. begin. you Ellsworth,

afternoon, quarter Good welcome Kaiser to Thank first everyone, half second and call. XXXX Aluminum's you. and earnings conference

have We’ve presentation also for copy a a PDF visit page not call. the earnings posted our you slide of on kaiseraluminum.com. please Relations the of at website this version release, Investor If our seen

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

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

factors refer Annual the to with company's reports summary for and cause those the Exchange specific could Securities changes statement from expectations. quarters Form materially and to including Form company a any results the the the statements please no in June results company's and differ of the statements, and Report filed expressed on risk that XX-K earnings release actual duty forward-looking XX-Q XX, to For company's XXXX. undertakes XX, forward-looking XXXX December March XX the to ended conform for in update year the to or ended full Commission, The

now such are the items outside for predicted of effort. because will to are the At in in which comparable certain open call in items information conclusion reasonably questions. of appendix. of measures the not to In of the call would non-GAAP control for provided included discussion non-run-rate comparable release the we've to the financial Harvey. EBITDA, adjusted are Any over turn to financial for have be certain and/or we our measures discussion. like company's the today reference which forward-looking Reconciliations our reconciliations addition, provided measures the non-GAAP I unreasonable provided to Keith excludes Reconciliations or in required included we the cannot EBITDA most and means Keith? GAAP reconciliations presentation. GAAP financial appendix earnings in our without presentation,

and Melinda, earnings Kaiser call. quarter second Aluminum to XXXX Thanks, the welcome

Slide to X. Turning

first impact Our the our results Warrick have revenue included revenue, the adjusted associated the quarter. the including EBITDA second $XX time business expenses value-added Mill into acquisition, delivered reflect We we and quarter of Kaiser. with financial million of Rolling operating integrating for strong million $XXX of and costs

the and demand markets once quarter see We labor sales production. working again been continue by today's freight, American operations being chips, rising end for diligently of and ongoing all inflationary costs computer automotive our materials. that to exception teams as pass-through the improving of with conditions strong in was offset associated North In vehicle with commercial to light have and our identify environment, impacted shortages

slightly while are labor risen demand, attract has employers, addition, demand, to to of higher same the efficiently the workforce challenge to increasing our and other as labor which has facing In the including to costs. add that challenges meet led ability meeting we

to market from to high-strength aerospace on second Moving the continued and of year. the conditions, sales current last improve half sequentially

XXXX the continue normalized this on recovery back fall, travel As levels full the to barriers air for business of track. record to remains

customers center demand into XXXX through and and from of our customers XXXX offset XXXX second of sequentially slower continued our for the this with quarter the steady XXXX, to gains time results Demand category compared period. general the We they and engineering continues products sales plate commercial half be shortfalls. and We see have aerospace automotive the continuing robust. third through the year and in expect production rose prior XXXX. service fourth serve from Shipments better extruded quarter to balance the in strong quarters

affecting chain stated and previously, challenge for supply mainly sales sales continues to industry automotive We feel in will experienced ship begin lower we applications remained recover, dynamic. to should extrusion situation first this abate and third shortages robust. while the compared be automotive due I but quarter to quarter second quarter as As the in to the all slightly demand stabilize

value-added Our projection intact of for of automotive XX% this year-over-year XXXX revenue XX% increase in time. at remains to sales

multiple customers business with discussions supply. packaging Our remains robust future underway for with

strategic integration detail long-term to will decision Neal shareholders. And with Kaiser combined volumes, long-term our profitable now for We second will in quarter afterwards, financial and its packaging we packaging services my discuss from we commentary beverage reinforces support at outlook of color business short- full additional by to to markets additional actions into discussions provide These and teams completely our our Alcoa in take outlook mix our the maximize are long-term and The as on integration will are working growth Kaiser go year. well, to supply support provide right strong The and the in later Warrick the years. and an Kaiser the more the price evaluating I was remarks. have of to-date food Neal? end options Warrick. transfer I for position markets seamless the intend of Warrick our future results. on and regarding diligently transaction of our to results major continues further opportunities.

everyone. Thanks, and morning, good Keith,

of other general previously to of by to million or quarter for Value-added each to in Slide revenue and $XXX of second $XXX of Warrick applications. XXXX, end value-added the to full to the revenue $XXX increased half our reflecting contributed continuing for million improvement $XXX million second revenue XXXX the XX% and in automotive half $XXX of first market from continued first XXXX in Value-added period, the year applications compared million addition the increased primarily mentioned the X. XX% our driven million engineering for acquisition packaging Turning applications. of prior to compared improvement our of the quarter the

XXXX $XX million million improved of first on high-strength half or Turning X. value-added a second to for compared to XX% shipments increase Aerospace in Slide XXXX. $XXX XX% revenue the half the

demand million approximately additional contracts. improving our to customer continued increase in of shipments partially aerospace half or offset $XX the applications defense-related travel. air and COVID-XX revenue As compared million high-strength the in reflect for in prior for when by XXXX to XX% value-added declined and continue to commercial year as strength a and our shipments the applications. defense-related continuing Aerospace The $XX multi-year related period, the second quarter on reminder, revenue the demand, XXXX of our million XXXX $XX the under demand decline and in the commercial see XX% declarations a reflecting demand value-added on we second impact included revenue of for aerospace modifications recovery for strength

for XXXX. the to COVID-XX-related XXXX. on of quarter Automotive revenue value-added of million continued of due quarter, the shortage a to are the automotive by semiconductor the with increasing Compared reflecting $XX or production in the XXX% the shutdown the of improvement first second half being half second XX. ramp continuing million the increase demonstrated driven industry. automotive million, impact of Moving programs value-added in to was impact in XXXX demand increase XXX% $XX shipments $X second ongoing million XXXX increasing quarter automotive shipments slight quarter in temporarily $XX during impacted new a for of the to prior-year Slide The the on compared up or revenue second the X% and improvements launch

underlying to XX. Turning second tool in machine supply a to strong half shipments industrial XX% compared half XXXX, increase $XXX a first XXXX million chain. million of increased XX% restocking in semi-conductor, reflecting or automotive and the to $XX applications. engineering along increase strong Slide center demand for on General in compared shipments chain, growth increased semiconductor in and the restocking revenue quarter second of million the General revenue XXXX, the the value-added $XX XXXX second continuing engineering million of XX% the service with $XX in reflecting or supply demand, demand on value-added of quarter XX% underlying in

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

second for first offset million, of the costs work incentive costs freight additional in reflects and operations higher EBITDA was to systems. the the addition up into of incorporate $XX Adjusted our discussed, increase higher the half increase by revenue of The $XX overhead XX. Slide to XXXX to benefit half value-added to million, XX% as compared as Moving continue an XXXX. we

packaging For products overhead agreements. other EBITDA $XX in of year XXXX, manufacturing under quarter, noted the and the prior of of million for the existing items improvements reflecting lower packaging costs. second improved compared end quarter of to higher and corporate offset by markets, reflecting our first half the our EBITDA was the impact margin the current to XXXX above addition margin contribution slightly Adjusted the XX.X%, in impact

product XX.X% a Second reflecting operating XXXX down prior year XX.X% quarter and of in was margin from portfolio margin mix. quarter EBITDA increased EBITDA costs

the and noted the to by overhead with and acquisition. diligently the moderate Keith, year to of we teams incremental to Warrick identify will costs. working previously Alcoa expect transitionary continue begin pass-through as the exit costs Furthermore, manufacturing agreements rising inflationary-driven, As we freight related to approach operation end and our transition are that commercial service

income and hedging up inventory. with charges, work operating costs due XX. $XX non-cash prior to services, charges Slide operating for million and second $X purchase EBITDA additional million, LIFO primarily $XX quarter non-run-rate from $XX the million; income adjustments $XX the to year Adjusted of million previously increase legal XXXX related million adjusting integration to for in XX% Moving as predominantly one-time of quarter second related Reported discussed. $XX was IT in was including a associated and million accounting to of

for net reflecting year Warrick noted $XX income the and adjusted X.X% of of XXXX and impact associated for inclusion of compared In $X million million with of net XXXX the for impact approximately the the $XX quarter depreciation income million operations. million above charges to year rate quarter. and accounting $X pretax refinancing of compared incremental senior the the in Adjusting $XX of net adjusted $XX prior loss was was second million prior million includes the non-run addition, note, purchase operating income net in quarter $XXX our to Reported of amortization million quarter. second items loss

$XX.X our For under that at effective single the of effective continue the range driven to mid-XX% tax federal NOLs an digits of of million the recorded a we consume anticipate remain will approximately year the we our the our Long-term, tax believe second of items. will until of regulations. rate XXXX. benefit by tax tax discrete rate current $XX be cash we rate in tax quarter tax as in end XX% million low XXXX, We

$X.XX senior was per share the loss the $X diluted per the of for the loss tax quarter. As of earnings a share earnings to non-run to compared rate $X.XX XXXX adjusted second items, in for of per per including Adjusting $X.XX share the quarter quarter impact related were quarter a year second after diluted $X.XX reported, in to the prior compared share refinancing, note second for of diluted XXXX. earnings XXXX adjusted of the

financial manage maintain We support ongoing our continue strength to business to and growth flexibility. to and liquidity

second of in and XXXX. serve The the providing $XXX $XXX our During increased of notes refinanced due reduced with XXXX, the issuance unsecured significantly unsecured quarter in million, new we new financing X.X% extend maturity a million due $XXX of X.X% rate, with proceeds the net interest million. proactively liquidity, XXXX notes

$XXX $XXX the XX, approximately on million. undrawn. facility revolving our the borrowings million borrowing underneath were credit and were approximately revolving remains facility million facility no of availability than June credit of cash and There provided liquidity quarter during total more $XXX of the As

growth With for $XX be further be to discussed to to revised business by initiatives year in have $XX million our full the capital spending the the XXXX of Warrick, including addition we outlook. million Keith anticipated

we affect year. will manage the work hand-off through remainder with transition prepared we us other end. As through costs to while year Higher Warrick support acquisition, integration for through operations service continue up staffing agreements associated of overhead our several fees the back-office the with TFAs, the continue Alcoa under and to ramping also be of to

And an our $X the anticipate IT $X million project In over turn additional and related beyond to also costs to the through management addition previously Keith? call I'll outlook. business integration back of end of overhead corporate Keith year. non-run the occur costs higher million as XXXX we and to support rate to the some to discuss now to discussed,

Neal. Thanks

Slide turn XX. So to let's

is beginning So we're pandemic we key to momentum now as future recovery travel bookings commercial from the recover. in markets the increase have Aerospace build all started as shipments and begins strong serve. seeing to to air our

XXXX levels its to the expect the to pre-pandemic compound pandemic, growth to rate. recover we annual As or XXXX resume we have and by stated of since then aerospace the X% onset X% record market XXXX

of expect aerospace this Trentwood and engineering expected customers. strong X% Phase for heat driven that recovery timing growth at with Automotive And to VII mill treat anticipated our increase. plate growth major annual remain to the rolling restarting compound of that expected expansion rate the for our initiatives support for be announced to we a catalyst recovery we with to the aligns general previously is Our that our continues customers. greater light-weighting to growth by expect than be our

OEMs internal As conversions to for continue to content higher combustion demand shift additional have extrusions. extrusion, we an more these EVs even as electrical to are of from to engines drive expect vehicles, expected aluminum

stronger our restocking to customer continues from the flat strong with rolled, center reflect strongest entire hard of and and Our seen activity as pandemic. portfolio recover along demand the Demand across our markets the at engineering the years, general we alloy end customers, have in soft extruded by led service products. is business

of we’ve material are seeing significant strategies larger believe have stated, lines in with we As portion needs a their that previously a rethinking domestically. structural sourced of supply we OEM's North America re-shoring supply

Kaiser, OEM manufacturer, re-shoring U.S.-based offer center to customers. throughout a of significant to and service continue invest and capacity believe the we expect to demands upside in our for meet As the increasing we portfolio

Our into beverage to packaging expectations exceeded as packaging in consumer to growing to continues shift our aluminum for food re-entry and demand. response has demand

which supply North the is the preferred foreseeable is In American for in marketplace future. outweigh addition demand to packaging, expected for aluminum strongly

customers are efficiencies options position Rolling market customer and are create strategic our Mill continued improved domestic our to for support substantial strategically suppliers We've to value demand. and Our like seeking collaborate additional with see Kaiser, to Warrick meet investments investments, the willing in investments capacity growing new through to demand. who to synergies review grow to making and significant and make and needed the opportunities

portfolio aerospace, stated have that provided investment on growth. general engineering of all our automotive We platform strong along focused for and continued businesses a and

acquisition major with Warrick markets transformative in markets significant the cyclical the that strong packaging strongly adding in Rolling position would growth believe of upside also with leg be We our less its Mill aluminum another potential.

and position, growth continued impact in the several opportunities the aerospace strong our growing of other over see acquisition, balance years. Warrick significant in As the we businesses consider the strength next The time XXXX-XXXX sheet anticipated period. recovery our we in investments our for the businesses and

to our plan significant needs Turning XX, market the by Slide strategic series meet current a environment. contracts, facilitated long-term to margin strong we of backed increasing rapidly of packaging customers reflecting improvement by with the investments,

anticipate roll capacity Warrick. initial expected and coat will provide that applications. our at coated continue efficiencies to additional facility Warrick can to line integrate synergies and new improved investment as end, also We our for beverage To food be a we

long-term pricing be the and margins equipment expect We and this our supported This products. million will an investment XXXX. by investment to $XXX coated and early for qualified with agreements by operational to be approximately be improved

you XXXX recall, million announced Trentwood we at expansion five-year launch and aerospace expected in capacity approximately mill’s as Trentwood rolling to $XXX our to our VII our quality our in aerospace, project, may plans increase initiative next improvements plate Phase A provide facility. and to XX% efficiencies. by Turning planned

to ready we improving VII shelf hold when the remained was placed project demand. on launch Phase and the While by supported entered the on pandemic, when

aerospace project We by spending benefits XXXX, $XXX, period. the recovery still and the million continued re-engineering previously been expected achieving we have from finishing reduce approximately the our the plate during to the achieved During $XXX to from this refining capacity planned investment. existing while able planned

needs the warranted customers. ability general to rolled meet and decade. remainder planned We expect the flat continue engineering we the this investment Phase of our aerospace VII our investment Phase restart their VII to the into And to to when expect needs to facilitate of well meet

growth an per support along goal to in $XXX positions several told, general the smaller the in over operations our invest the strong we provided within million All years, Finally, with to are investments. EBITDA expect with planned sustaining to spending. expected by years. as expected and we improve next million to growth these automotive will initiatives and on supported continue those targeted approximately markets balance target these with in the $XX of meeting our of two our Funding three investments be our continued debt-to-adjusted next net by for year sheet CapEx times two engineering

outlined, in XX%. major Turning markets and billion the have with XX, now value Slide mid-to-high to our investments planned deliver the portfolio revenue, of well margins adjusted Kaiser recovery is $X positioned we expected long-term added the EBITDA to expected rates approaching the with

Turning today's continue and opportunities key to XX in of summary growth see markets recover significant our to we portfolio. Slide and a remarks, our

those remain to priorities potential well-positioned deliver approximately excess to of our We consolidated dividend, to with an base value commitment our business, be to We and XX%. revenue of for billion identified of maximizing shareholders. adhere where expected to blue in earnings mid-to-high margin to goals our the to organic with added cash planned businesses, customer approximately for along growth those that we EBITDA our the are committed million investments chip inorganic in investment The have then return capital $XXX our will the our adjusted markets. initiatives support within and to $X positioned

two it back year weather strong finally, and will significant the the debt a markets. the I Our I'll questions. to And outlook with to our times turn balance open Jackie. now downturn EBITDA liquidity to disciplined better, unchanged business a or service first growth With call in that, quarter sheet sufficient of debt-to-adjusted any And outlook. the to any for net with at the to from approach remains management, and remainder of our then targets

Thank you.

our Please Suisse. Instructions] Credit from first begin Curt comes with the question-and-answer Woodworth go will We session. question now ahead. And [Operator

Yes. afternoon. Thank you. Good

Hi, Curt.

smelter My Warrick, detail with with capacity get the take how the question end substrate, some respect you provide of you'll Is expectation kind that you facility from product first then you'll going And too? from looking of I to of terms more much that how is Warrick on that wondered talk or the if the do at respect more see mix you to And material? to incremental can more forward? mill. metal in you expansion new in recycled could are the sourcing

focus is coated mixed in participating this the volume for that facility. of of a products. is Sure. A portion here, already mill focus Well, more good that

very customers a with as significant see have in many the and area We the position opportunity. continues be continue strong food an to And of coated overall to our there. that growth see we beverage, ramp we side

During we try opportunity this as to acquisition going diligence the growth strategy to the highlighted this we're determined forward. of due process, and part initiate

provides of mix a this coated, for which a amount, is significant opportunity. higher more So for us margin us

a will take as the expectations greenhouse business the far to the are so. Curt, a to manage As to requiring scrap more more end we smelter bring we're period time the of goes, sustainability; of our The for material, that. portion But substrate customers gas, and more are from that we in continue obligated do Alcoa is carbon long-term will UBCs footprint. footprint,

message is very So the clear.

that me substrate. you two – And that, tell And do third a moving your then purchase be items outside. of in me more Curt, question type remind on other the some we third will than and we part, with scrap-based was? get years over what We typically can part more manage the the understanding. you the towards And other and the

the mix… Well, product just how

mix? product Around the

Yes.

the business desire And demand, the continue out really as to need especially for And material. large the more customers covers coated products. beverage, the not see talk to only stock we but half continue the not Yes. other Currently, but of all of food food that they of domestic focuses And and growing it only the our relate stock, items, also also portion the covers cans. and a with with, we're to over the materials body that in facility. coated participants on significant

advantage that I we're that best opportunity. suited of to So take and demand seeing we're think, probably,

customers to in try provide of and so in sync domestic more applications. that shore moving And our to we're with product up those that major

becoming So Warrick mix total we mix out a see the that share facility. of operating larger of our

obviously talk respect say, know you That's And the Thank your bottom. with operating rates wondering, you. capacity types to helpful. I system? aerospace able been Okay, your across footprint, markets basically that some can is And aero have got to current, with you current how was spare be into great. chip other then guess, plates? artificial issues near you've we other I at auto shortage to like with some utilization the GE, successful redeploy, of to and

you And breakout we're Yes. can Actually, look see that we've you markets the shipments and if in the the been that very various in. successful. in

shipments substantially are very two meet XXXX. You'll the Trentwood the up in comes engineering the which expect general aerospace see ability facility, that situation areas; that we continue. demand in our general the we We're we demand seeing to products. is that one strong through period engineering in the demand where into the and That general engineering and couldn't is ran

so last and just to at early expand every pivoted And we quarter that Trentwood. continues year

XXXX. So that on continuing we see into

The the we're good other job, job excellent teams is are doing the automotive on side very side. a doing an that

them have we also think the the service I business participate, of that they their engineering facilities to general also our where on a customers. every one automotive supply we center So to of component

to pivoted And the through that – volume moved so presses many has And a capacity in just as seen that the and levels pretty we we've stated, to supply general to we've that have I provide that. chain over meet auto years, be demand engineering. to good as supply continued than stronger able from our those

been side well. up an been it's been have as freight there, costs too. passing general through ratcheting and the prices have around stated that and we with very those profitable that The it's others, to we've and increasing area been able as seamless engineering through opportunity been So and do we've that's been rapidly fairly costs, where that

chain been position one. in – know then the within Do – final you like feel excellent like you go? there great. had has some point? this the for varies at have I supply product, Did issues end start you but there is you. like feel And has restocking thank distribution. you the know inventory of Or excess aero year, Okay, it your we more one what's among stand? chain restocked feel but to supply at the where sense just clearly the do I

it and does. follow the watch in mills Yes, to this Jack bar would road We centers. But the when and answer we the Curt, the MSCI. from past, from would – and inventories question, shipments there would sales look service at

in we the up call, levels not we know the haven't that, the we seeing inventory third sales had shipments as of a the watched months, quarter we last but ramp We of part the seen quarter that, of started I and that first inventory a in look, couple And December, time levels, as mentioned year, significant to even quarter. are – the have our in maybe last we're we centers. fourth up coming our in at watched but bookings, in service increase saw

chain know well. from anticipate and pandemic restocking clearly the the seeing whole as – I supply So but mode, strong rebound in a that we're as we is

in to you're will our category XX out. products balance think we our out through the to restocking products that but things we'll weeks, XX-plus continue feelers XXXX, of long I now, are times on I keep continued out our for But we're of going times So year. in see strong be XX in to then and to with And the think weeks. lead flat-rolled lead some and – think

And is to very a we've handle the and So the got think of very pretty year be strong balance on good forward. going demand tight. we that going

of Thanks Best color. very luck. much. great That's

Thank you, Curt.

Thank you.

next comes ahead. question Please Benchmark. go Our Josh with Sullivan from

afternoon. good Hey,

Josh. Hi,

planning, Just freight labor any you're on then some the the on was long-term? automation inflationary these in the what And pressures, what just are labor inflation you quarter? can of to more in labor capital ways combat side, was or designing you detail and investments

Yes.

cost. the combine you So

an where of about roughly inefficiencies. some compare we between we roughly and we you margins, first were overhead our as the XX%, up, the quarter and on If planned and freight XX% That's difference came around this EBITDA the mainly additional in margins, ramp quarter XX.X%.

conditions? So components have there market then the – that really are category. any to in we is we identified be remained to that investment. evaluated in And launch at the more the frankly, some launch in to And second, One, quite are when We’ll AI lower the part do we the looking what we just to the we of and on major improve we're figure. very And very at. be are to to how with have will efficiencies at and take the be get return look productivity a automation Phase look, continuing these lower investment of on here not investment? get have what the is support opportunity. investments. in be and at that those for, absolutely difference commercial upfront VII and look a the So opportunities how have disciplined we apply evaluated assertive, those continuing to able So be and/or look every the investment do out cost? we we is then

at with look evaluating every then a and take investment that. doing we’ll component that And So we're potential. another is everything final the we're sustainment

our we good You investment governance impact what to achieve every idea then to can what help a does be get of So business. How on be to environmental, know, our the questions addressed we're those one how our help with trying us does of toward that that focus? carbon and on type have every footprint? of objectives move social the overall

the guidance, any Airbus something giving the plate and how related into, aerospace but Curt's between out your OEMs know here some then longer-term teeth with question, service the you can to sink their then of outlook, with plate demand this to you just level, the kind but it you detect that, point? directly commercial it. between to And OEMs? industry Got come then that with And just at on has aerospace to might've answered discrepancies breakdown regard pull-through does distributor

Well.

talking been we've with the Josh, the very at of onset along beginning all the the stated we've As pandemic. of OEMs

that some and announced looking with speaking we're them. And have also

that were this from one customers general as I as XXXX. be and our at the big really And it back for there to and time, area I VII to in that ramp – and the aerospace. of plate. And get confidence to the engineering up and of We're we we that as levels record discussed are to away We our expect in us are overall looking to of going of that turning weren't have for. demand their Phase in, out be already stated for business seeing we our putting a then into XXXX year able for volumes bit clarity we're major extensions more and So next little we seeing give going gives that what needs. at contracts, the And more business. the that needs place so XXXX time and we saw with intend in their meet be But stands in more us the required address clear a of to urgency are we forward. needs we needs some think – the that At go positioning satisfy way. in

general aerospace, the we're not engineering for center to So service with return but customers. preparing to we're our preparing specifically grow supply continue and just participation for the

that's making Phase with So and area another our quite substantially that's the with And investment frankly, the backed orders. commitment be intent sure going VII of – is our expansion. up to the

yet. We haven't that launched

that the when needs, approved. We demand markets. it's evaluating And we'll had be domestic to engineering for the recovery. do growing for but going looking the pull going plate. again We're to so. We're We're be at aerospace we're time shot to looking evaluating plate the general at haven't

long-term you're putting that that think And it. I Got or get there, together, outlook about should all to the we guess cadence guidance taking the out timeline how or that? to

Well, we've behave outlined, expect. and if you as the if follow – we the markets how

the for VI Phase squeezed impetus XXXX it capacity launching to for We back Phase the VII, VII. levels And expect which be was time at on at really the Phase we were for to time.

general need if we believe. pushed change get grow indeed intend we suspect the be continues XXXX, as in That may and engineering to domestic So we if for to supply. with a been there as there's back up XXXX,

when So or for that XX to look XX to equipment be in forth, to have back XXXX. the take place orders at we demand and to to we'll that, months XXXX a begin prepared up so

see So over timing here next to months XX that be evaluating the and for we'll six this will be. what the

line, On need had the I day coat wish had is started ground. the we wish it the It's in I Warrick urgent. we started on roll that I $XXX the million our talks. this for immediate.

not we're we sustain reason and are customers us. side, on been is that, in packaging with could The aware. a the not and demand supportive we supply exited bit little very going market Our investments XXXXs have – the was the

long-term being it, that for stated, very So as and we we're commitments. customers are see XXXX, we've that we're cognizant asking with through of But extremely going sold capacity And more forward. up willing back XXXX, looks out to growth for XXXX strong. are our

already operational We've it, and to XXXX. started that. it early ground So and and to the in are to we're beginning begin that are start process and going plans have we it hope

we're being as to the when and disciplined – demand we're approach, can our very there in it's and act up going accordingly. usual, we we're justify by investments So backed that's

the you Got as times OEM it. on lead like the on do XQ times aerospace. the what side that just look then And just ramp automotive the XQ, automotive the mentioned for And picks up? on side lead side,

morning, out extremely And but to have quarter. the interesting growth, watch, Motors seeing and that, of continues the to third have launched anticipation, moment, light-truck more general to the comparatively point, number our continued this meet automotive, programs and their engineering We're new this be lot quickly I long if this can thing is prior robust good and comfortable but on but at chip on a try and going call to speaking. more in which need, for to times shutdowns we're us continues is talking customers, a this been shortage we and came for with they're anticipating decline go we're see TX which the lead came and plants strong, those over announced still was evaluate, around. an line It's Josh those we General before morning successful

capacity adjust we'll that general so engineering. meet the needs And to in

time. the you Thank Okay. for

Josh. you, Thank

you. Thank

further to no closing like at have questions Keith I We for the time. remarks. Harvey call would this to over turn

in We interest you thank company. Well, to and forward quarter interest appreciate talking for We your your here look Okay. on our outlook. Aluminum. your Kaiser attendance next in you with third the quarter

a and So have thank you day. good

concludes gentlemen, ladies Thank Thank today's you, this for conference. you participating. and

disconnect. now may You