* Solid Underlying Operating Results Despite Challenging Market Conditions   * Consolidated Operating Income of $28 million Excluding Non-Run-Rate    Items    * Higher Shipments and Value-Added Revenue for Aerospace and High    Strength Applications    * Improving Manufacturing Cost Performance   * Continued Financial Strength and Liquidity  

FOOTHILL RANCH, Calif., April 29, 2009 (GLOBE NEWSWIRE) -- Kaiser Aluminum Corporation (Nasdaq:KALU) today reported net income of $4 million and earnings per diluted share of $0.19 for the first quarter ended March 31, 2009. Excluding the negative impact of approximately $20 million of pre-tax non-run-rate and predominately non-cash charges, adjusted net income and earnings per diluted share were $16 million or $0.81, respectively. Consolidated operating income, adjusted for non-run-rate items, was $28 million for the first quarter 2009 compared to $38 million for the first quarter 2008.

First Quarter Summary Comments

"We reported solid underlying operating results for the quarter, largely in line with our expectations in this very challenging market environment. Our shipments of aerospace and high strength products exceeded record fourth quarter 2008 shipments due to continued strong demand for aerospace and defense products and increased heavy gauge plate shipments related to our expansion of capabilities and capacity at our Trentwood facility. In contrast, weak demand exacerbated by aggressive de-stocking drove significantly lower shipments for ground transportation and industrial applications compared to the fourth quarter 2008. Despite the lowest level of shipments in over five years, we experienced good overall operating leverage on lower costs and a rich product mix," said Jack A. Hockema, President, CEO and Chairman.

"We made additional progress toward improving manufacturing efficiencies, while continuing to reduce inventory and strengthen our balance sheet. During the first quarter, we increased our net cash position, repaying revolver borrowings and ending the quarter with very little debt. The investment in our new Kalamazoo facility is proceeding on plan, as we continue to position the Company as a low-cost producer," said Mr. Hockema.

    First Quarter 2009 Consolidated Results  (Non GAAP, Unaudited)*  (in $mm, except per share amounts)                                                           First Quarter                                                          -------------                                                          2009     2008                                                          ----     ----   Net Sales                                               $266     $399   Operating Income (OI) before NRR (1)  ---------------------------------   Fabricated Products                                     $28      $41   Primary Aluminum                                         $9      $10   Corporate                                              ($10)    ($13)   Consolidated OI before NRR (1)(2)                         $28      $38                                                         =====    =====       NRR Items (1)                                       ($20)     $30   Reported Operating Income                                 $7      $68   Net Income                                                $4      $39  ----------    EPS (diluted, GAAP)                                   $0.19    $1.90   Adjusted EPS (3)                                      $0.81    $1.04   (1) NRR = Non Run Rate  (2) Totals may not sum due to rounding   (3) Estimated EPS excluding NRR items, net of tax   * Please refer to GAAP financial statements 

The Company reported operating income of $7 million in the first quarter 2009, compared to operating income of $68 million in the prior year period. Consolidated operating income before non-run-rate items decreased to $28 million in the first quarter of 2009, compared to $38 million reported in the prior year quarter. First quarter 2009 results were negatively impacted by approximately $20 million of pre-tax non-run-rate items, primarily comprised of a lower of cost-or-market inventory write-down of $9 million as a result of a modest, albeit continued decline in metal prices, and mark-to-market losses of $4 million on derivative positions. This compares to non-run-rate items of $30 million reported in the first quarter 2008, primarily related to reported mark-to-market gains.

Although the Company does not consider net sales to be indicative of the true underlying business performance, consolidated net sales for the first quarter ended March 31, 2009 were $266 million, compared to $399 million reported in the prior year quarter. The decline in net sales was driven in part by lower Fabricated Products shipments and the impact of significantly lower metal prices in the first quarter 2009 compared to the prior year quarter. The Company manages its Fabricated Products business to be neutral to fluctuations in metal prices by passing on the underlying metal cost to customers. As such, although metal prices impacted reported sales during the quarter, there is no correspondingly negative impact of metal prices on reported operating income.

    Fabricated Products Segment Results  (Non GAAP, Unaudited)*                                                          First Quarter                                                          -------------                                                          2009     2008                                                          ----     ----   Shipments (lbs, mm)                                      109      152   Net Sales (in $ mm)                                      241      349   Average Realized Price ($/lb)  ----------------------   Metal Price (1)                                       $0.86    $1.13   Value-Added Revenue(2)                                $1.35    $1.17                                                         -----    -----   Total                                                 $2.21    $2.30   Operating Income ($ mm)  ----------------    Operating Income before NRR(3)(4)                       $28      $41                                                         =====    =====    Non-Run-Rate items                                     ($14)     ($1)   Reported Operating Income (3)                            $14      $40   (1) The hedged cost of alloyed metal  (2) Value added revenue = Net Sales - Metal Price  (3) Totals may not sum due to rounding  (4) NRR = Non Run Rate   * Please refer to GAAP financial statements 

The Fabricated Products segment reported operating income of $14 million in the first quarter 2009 compared to $40 million in the prior year period. Operating income before non-rate-run items was $28 million in the first quarter 2009 compared to $41 million in the first quarter 2008, representing a 31% quarter-over-quarter decline which approximated the 28% decline in shipments during the quarter. Operating income, excluding non-run-rate items, increased $3 million compared to the fourth quarter 2008 despite lower shipments as the Company leveraged cost improvements.

Although total shipments of Fabricated Products declined during the quarter, shipments of aerospace and high strength products increased approximately 17% over the prior year quarter while shipments for ground transportation and industrial applications declined approximately 44%, a dramatic reduction from the prior year period due to weak demand and aggressive de-stocking.

Despite the quarter-over-quarter decline in metal prices, the weighted average realized price per pound was favorably impacted by a higher percentage of aerospace and high strength shipments, which drove the increase in value-added revenue per pound during the quarter.

    Primary Aluminum Segment Results  (Non GAAP, Unaudited)*                                                          First Quarter                                                          -------------                                                           2009    2008                                                          -----   -----  Shipments (lbs, mm)                                        36      37   Net Sales (in $mm)                                        $25     $50   Average Realized Price ($/lb)                           $0.69   $1.35   Operating Income ($mm)  ----------------    Operating Income before NRR (2)                           $9     $10    NRR Items (1)                                            ($5)    $31                                                          -----   -----   Reported Operating Income (2)                              $4     $41   (1) NRR = Non Run Rate  (2) Totals may not sum due to rounding   * Please refer to GAAP financial statements 

Operating income for the Primary Aluminum segment, excluding non-run-rate, mark-to-market losses on metal and currency derivative positions, was $9 million in the first quarter 2009 as a result of realized gains on derivative positions.

As previously announced, the Company expects Anglesey to fully curtail its smelter operations in September 2009. As a result, the Company assessed its ability to recognize earnings from Anglesey through the receipt of dividends and recorded an impairment charge of $0.6 million against the first quarter 2009 results. The Company is not required to make any future cash investments in Anglesey.

Corporate Highlights

During the quarter, the Company strengthened its balance sheet as working capital improvements, driven primarily by targeted reductions in inventory, and the repayment of borrowings under the revolving credit facility resulted in a net cash increase of $39 million as of March 31, 2009.

In addition, the Company invested $22 million during the quarter in capital projects specifically focused on improving operating performance. Projects include the Company's strategic investment in its new Kalamazoo, Mich. facility which is expected to yield significant efficiencies in the rod and bar value stream. The project remains on plan to become operational in early 2010.