* Third Quarter Fabricated Products Operating Income of $20 Million
   Before Non-Run-Rate Items

 * Modest Sequential Increase in Fabricated Products Shipments

 * Continued Improvement in Manufacturing Efficiencies and Underlying
   Cost Performance

 * Strong Cash Flow and Improved Balance Sheet

FOOTHILL RANCH, Calif., Oct. 28, 2009 (GLOBE NEWSWIRE) -- Kaiser Aluminum Corporation (Nasdaq:KALU) today reported net income of $23 million and earnings per diluted share of $1.14 for the third quarter ended September 30, 2009. Excluding the positive impact of approximately $30 million of pre-tax, non-run-rate items, adjusted net income was $5.5 million and earnings per diluted share were $0.27 for the third quarter ended September 30, 2009.

Year-to-date, reported net income was $46 million compared to $40 million in the prior year period. Earnings per diluted share were $2.31 for the nine months ended September 30, 2009 as compared to $1.93 for the prior year period. The year-to-date 2009 earnings results included approximately $31 million of pre-tax, non-run-rate gains compared to $15 million of pretax, non-run-rate losses in the comparable 2008 period.

Third Quarter Summary Comments

"Third quarter underlying operating results were consistent with the business outlook we provided last quarter and continue to reflect a challenging economic and market environment," said Jack A. Hockema, President, CEO and Chairman. "Although overall demand remained weak, we experienced a modest sequential increase in shipments as service center de-stocking moderated and automotive build rates increased during the quarter. Aerospace plate shipments remain solid, largely driven by higher contractual business facilitated by the Trentwood facility expansion. Shipments of aerospace plate during the third quarter, however, were negatively impacted by the timing of orders that shifted to the fourth quarter while shipments of all other aerospace products were comparable to the second quarter 2009."

"We continue to experience steady improvement in manufacturing efficiencies and underlying cost performance, and we are on track to achieve our cost improvement objective for the second half 2009, equivalent to our record 2007 baseline. Our efforts to realign inventories and prudently manage our balance sheet have further strengthened our already solid financial position, providing a competitive advantage going forward. Year-to-date, we have generated over $130 million of cash from operations and working capital improvements, increased our net cash position, continued to fund our strategic investment in Kalamazoo, and maintained our quarterly dividend," said Mr. Hockema.

 Third Quarter and Year-to-Date 2009 Consolidated Results
 (Non GAAP, Unaudited)*
 ($mm, except per share amounts)

                                      Quarter           Year-to-Date
                               ----------------------  --------------
                                3Q09    2Q09    3Q08    2009    2008
                               ------  ------  ------  ------  ------

 Net Sales                       $252    $232    $369    $750  $1,182

 Operating Income (Loss)
  before NRR(1)
 ----------------------
   Fabricated Products            $20     $20     $34     $68    $117
   Primary Aluminum(2)             $3      $3    ($11)    $15      $5
   Corporate                     ($10)    ($9)   ($12)   ($29)   ($37)

 Consolidated Operating
  Income before NRR(1),(3)        $13     $13     $11     $54     $85
                               ------  ------  ------  ------  ------

   Non-Run-Rate Items(4)          $30     $22    ($48)    $31    ($15)

 Reported Operating Income
  (Loss)(3)                       $43     $35    ($37)    $85     $70

 Net Income (Loss)                $23     $20    ($22)    $46     $40
 ----------------

   EPS (diluted, GAAP)          $1.14   $0.97  ($1.11)  $2.31   $1.93
   Adjusted EPS(5)              $0.27   $0.32   $0.29   $1.39   $2.35

 (1) NRR =  Non-Run-Rate, (2) 3Q08 included a ~$20 million impact from the
 Anglesey fire and resulting capacity curtailment, (3) Totals may not sum
 due to rounding, (4) Refer to Form 10-Q for more details, (5) Estimated
 EPS excluding NRR items, net of tax. 

 * Please refer to GAAP financial statements

The Company reported operating income of $43 million in the third quarter 2009 compared to $35 million in the second quarter 2009 and an operating loss of $37 million for the prior year quarter. Adjusted for non-run-rate items, consolidated operating income was $13 million for the third quarter 2009 compared to $13 million for the second quarter 2009 and $11 million for the prior year quarter.

Year-to-date, reported operating income increased to $85 million compared to $70 million in the prior year period. However, reported operating income adjusted for non-run-rate items declined to $54 million for the nine months ended September 30, 2009 compared to $85 million for the prior year period. Consolidated operating income adjusted for non-run-rate items for the quarter and year-to-date 2009 periods, as compared to prior year periods reflect lower Fabricated Products shipments due to the significant deterioration in economic and market conditions. Additionally, the 2008 third quarter and year-to-date periods reflected a $20 million adverse operating income impact due to the June 2008 fire at Anglesey and the resulting partial curtailment of its smelter capacity. Non-run-rate items for the third quarter and year-to-date periods primarily relate to mark-to-market gains on derivative positions in 2009 compared to mark-to-market losses on derivative positions in 2008.

Overall comparison of the second and third quarters of 2009 reflects performance under similar economic and market conditions. As a result, additional quarterly comments will focus on a sequential analysis of results rather than on a year-over-year basis.

Consolidated net sales for the third quarter ended September 30, 2009 increased sequentially to $252 million from $232 million in the second quarter 2009 based primarily on a modest increase in shipments. Year-to-date consolidated net sales were $750 million compared to $1,182 million reported in 2008. The decrease reflects the overall decline in economic and market conditions and is primarily related to lower Fabricated Products shipments and the impact of significantly lower underlying metal prices compared to the prior year. Although net sales reflect the impact in underlying metal prices, the Company manages its Fabricated Products business to significantly neutralize fluctuations in metal prices, passing on the underlying metal cost to customers through various pricing mechanisms.

As previously announced, Anglesey fully curtailed its smelter operations as of the end of the third quarter 2009. Although Anglesey now operates as a remelt and casting facility, the Company does not anticipate it will realize, through receipt of dividends, its share of earnings from the Anglesey operation any time in the foreseeable future and has suspended equity accounting for its ownership interest. The Company has no obligation to make any cash investments in Anglesey.

 Fabricated Products Segment Results
 (Non GAAP, Unaudited)*

                                      Quarter           Year-to-Date
                               ----------------------  --------------
                                3Q09    2Q09    3Q08    2009    2008
                               ------  ------  ------  ------  ------

 Shipments (lbs, mm)              106     101     135     316     436

 Net Sales ($mm)                 $215    $205    $335    $661  $1,043

 Average Realized Price ($/lb)
   Metal Price(1)               $0.91   $0.84   $1.28   $0.87   $1.23
   Value Added Revenue(2)       $1.12   $1.18   $1.20   $1.22   $1.17
                               ------  ------  ------  ------  ------
   Total                        $2.03   $2.02   $2.48   $2.09   $2.40

 Operating Income before NRR(3)   $20     $20     $34     $68    $117
                               ------  ------  ------  ------  ------

   Non-Run-Rate Items(4)          $ 7     ($1)   ($14)   ($9)    ($15)

 Reported Operating Income(5)     $26     $19     $20     $59    $102

 (1) Hedged cost of alloyed metal, (2) Value Added Revenue = Net Sales -
 Metal Price, (3) NRR = Non-Run-Rate, (4) Refer to Form 10-Q for additional
 details, (5) Totals may not sum due to rounding.

 * Please refer to GAAP financial statements

The Fabricated Products segment reported operating income of approximately $26 million in the third quarter 2009, an increase sequentially from $19 million in the second quarter 2009. Operating income excluding non-run-rate items in third quarter 2009 was $20 million, comparable to second quarter 2009 results as improved manufacturing efficiencies and underlying cost performance offset a leaner product mix and pricing pressure on certain products.

Year-to-date, Fabricated Products reported operating income of $59 million compared to $102 million in the prior year period. Excluding non-run-rate items, year-to-date operating income was $68 million compared to $117 million in the prior year period. Lower operating income was driven by a significant decline in overall shipments, partially offset by lower energy-related costs. The decline in shipments reflects weaker demand and significant de-stocking throughout the supply chain.

Corporate Highlights

During the quarter the Company continued to drive significant improvement in its underlying cost performance, cash flow and overall financial strength. Strong cash flow year-to-date has funded capital spending on its new Kalamazoo, Michigan extrusion facility, dividends and other operating requirements while improving the overall net cash position by $71 million. Total cash and borrowing availability exceeded $190 million as of the quarter ended September 30, 2009.

The Company continued to return cash to its shareholders in the third quarter through its quarterly dividend program. Additionally, as previously announced, the Board declared a dividend of $0.24 per share, or approximately $5 million, which will be paid on November 13, 2009 to shareholders of record on October 23, 2009.

Outlook

"Despite ongoing challenges presented by the weak global economy, we are encouraged that our shipment level has stabilized over the past several months, and we remain very optimistic regarding the long-term prospects for our Company," said Mr. Hockema.