Kaiser Aluminum Corporation (KALU) Q3 2021 Earnings Report, Transcript and Summary

Welcome to the Third Quarter 2021 Earnings Conference Call. My name is Jenny. I'll 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 turn the call over to Melinda Ellsworth. You may begin.

Thank you. Good afternoon, everyone, and welcome to Kaiser Aluminum's third quarter and first 9 months 2021 earnings conference call. If you've not seen a copy of our earnings release, please visit the Investor Relations page on our website at kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call. Joining me on the call today are President and Chief Executive Officer, Keith Harvey; Executive Vice President and Chief Financial Officer, Neal West; and Vice President and Chief Accounting Officer, Jennifer Huey. Before we begin, I'd like to refer you to the first three slides of our presentation. And remind you that the statements made by management and the information contained in this presentation that constitute forward-looking statements are based on management's current expectations. For a summary of specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to the company's earnings release and reports filed with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the full year ended December 31, 2020, and Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021. The company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the company's expectations. In addition, we've included non-GAAP financial information in our discussion. Reconciliations to the most comparable GAAP financial measures are included in the earnings release and in the appendix of the presentation. Reconciliations of certain forward-looking non-GAAP financial measures to comparable GAAP measures are not provided because certain items required for such reconciliations are outside of our control and or cannot be reasonably predicted or provided without unreasonable effort. Any reference in our discussion today to EBITDA means adjusted EBITDA, which excludes non-run rate items for which we've provided reconciliations in the appendix. At the conclusion of the company's presentation, we will open the call for questions. I would now like to turn the call over to Keith Harvey. Keith?

Thanks, Melinda. And thank you for joining us and a review of our third quarter 2021 results. I want to begin by acknowledging and thanking the Kaiser team who continue to execute on our strategies to position us for long-term growth while working safely and diligently during the quarter to meet customer requirements in the face of increasingly dynamic market conditions and a very challenging operating environment. As we discussed during our second quarter earnings call, we entered the third quarter aggressively addressing labor challenges in several of our locations and working to mitigate the impact of inflationary costs as we prepared to continue to meet improving demand. While demand remained robust during the quarter, adverse conditions impacting operations proved to be even more challenging than we anticipated. In particular, continued challenges in the labor market, rapidly rising material and other inflationary costs as well as supply chain issues, reduced efficiencies in our facilities and contributed to results that fell well short of our expectations going into the quarter. We have made significant progress addressing our labor challenges, enabling an increase in output and efficiencies in our operations as of the third quarter. However, we expect these other transitory issues to persist at least through the end of the year. Supply chain disruptions and labor inefficiencies in the quarter accounted for approximately $8 million of negative impact to EBITDA. These headwinds included delayed shipments and plant inefficiencies resulting from the disruptions. Higher per unit cost for raw material, labor and other manufacturing costs, negatively impacted the quarter an additional $5 million. These costs were partially offset by lower G&A incentives and other costs in the quarter by approximately $5 million. Collectively, these costs led to a further EBITDA margin compression of approximately 200 basis points in the third quarter results as compared to the second quarter. We are aggressively passing through these additional costs through price increases where we can in our transactional businesses and through the terms of our supply agreements. While these increases and adjustments provide a pathway to mitigate our exposure to these additional costs, there is generally a lag effect before these higher costs can be reflected in increased prices. Looking now at each of our end markets and turning to Slide 7 in the presentation. Our aerospace and high-strength shipments in the first half of 2021 were up 31% from the second half of 2020. And we expect shipments will continue to increase in the second half of 2021 compared to the first half of the year. Although we are pleased to see the recovery in the aero and high strength underway, the challenging operating environment impacted our ability to meet demand in the third quarter. Earlier in the year, we projected our aero and high-strength value-added revenue would be down approximately 5% to 8% year-over-year compared to the 2020 results. We now expect value-added revenue for aerospace will be down approximately 10% to 15% year-over-year, slightly worse than initially anticipated or 35% to 40%, down from our record year in 2019. This slight decline in our projected value-added revenue is attributed primarily to staffing challenges and supply chain issues I previously noted, which created inefficiencies at our facilities and resulted in increased lead times and some shipment delays. Turning to Slide 8. With respect to our automotive markets, the expected recovery did not occur in the third quarter due to the continuing global impact of insufficient supply of semiconductor chips. Shipments and value-added revenue for the quarter declined by 17% and 15%, respectively from the second quarter. The updated IHS industry forecast for North America vehicle builds has declined from 16.3 million vehicles to 13 vehicles for the year due specifically to the chip shortage. While auto value-added revenue is a smaller portion of our overall portfolio, our automotive facilities have been fully staffed for the better part of 2021 in anticipation of meeting previously forecasted strong customer demand. And while we have been able to pivot and divert a good deal of this capacity to meet the strong general engineering demand, the higher staffing levels negatively impacted our manufacturing cost and hampered the efficient operation of those facilities, which support the automotive market. Our current outlook for full year 2021 has automotive value-added revenue now up 15% to 20% year-over-year compared to our outlook in the first half of the year, when we had anticipated year-over-year growth in our automotive applications of 35% to 45% increase. Although current OEM production has been significantly curtailed, the automotive programs we support remain in place and are moving to the right until our customers return to normal operations. Now turning to Slide 9. On a more positive note, general engineering demand continues to be robust. And we are well positioned to continue to capture these opportunities in both long and flat rolled products. We initially anticipated value-added revenue would be up 10% to 15% year-over-year compared to 2020. However, with continued strength in demand, we are now on pace for a greater than 25% increase of value-added revenue year-over-year due to heavy restocking and restoring of OEM supply chains and strength of our KaiserSelect products. Shipments and value-added revenue were down slightly from the second quarter due partly to labor inefficiencies at the beginning of the quarter in larger amount than normal of in-transit material at the end of the quarter, which we could not recognize from an accounting perspective. Demand for these products remain very strong through the entire quarter and is continuing into the fourth quarter. Turning now to Slide 10. The addition of packaging to our portfolio with our acquisition of the Warrick Rolling Mill continues to demonstrate strong strategic growth opportunities beyond what we had anticipated at the time of the acquisition as demand for our packaging products continues to increase. We remain confident in our ability to deliver significant margin expansion and long-term profitability in this business. During the third quarter, however, our performance was negatively impacted by supply chain issues and labor inefficiencies, which resulted in lower planned volume output and higher material and operating costs, representing approximately $9 million of the total cost impact to EBITDA mentioned in my earlier comments. We faced a myriad of challenges in the quarter, including higher staffing and training, unplanned outages at one of our outside converters, two unplanned power outages at the site and metal supply disruptions from one of our sources. We anticipate some of these supply chain issues will continue into the fourth quarter as we continue to execute countermeasures to mitigate the impact of the business. With continued strength in demand, our outlook for packaging, value-added revenue for the full year 2021 currently remains in the $375 million to $400 million range. We continue to make good progress integrating Warrick into the company and are on track to exit most of the transition service agreements by the end of 2021 with 1 or 2 potential IT-related transition service agreements running into the first quarter of next year. Turning now to Slide 11. Summarizing our outlook for the fourth quarter 2021, we anticipate total consolidated value-added revenue will be up in the low-single digits from the third quarter results with adjusted EBITDA margins similar to the third quarter, recognizing that continuing uncertainty remains around some material costs and ongoing supply chain disruptions likely through the balance of the year. Magnesium in particular, has recently emerged as a headwind for us in the fourth quarter. And we have included the expected impact of those headwinds in our fourth quarter outlook. However, the situation remains fluid. The recent force majeure declaration from one of the domestic magnesium suppliers due to an equipment failure and worsening industry supply issues with production from China together could further impact our fourth quarter results. We are working with our suppliers to better understand the situation as well as discussing with our customers' potential supply and cost implications associated with these interruptions for the balance of the quarter and potentially beyond the quarter. I'll now turn the call over to Neal to provide more color on our earnings for the quarter. And I'll be back to discuss our outlook for our markets and opportunities later in the presentation. Neal?

Thank you, Keith. Good morning, everyone. Turning to Slide 13. Value-added revenue for the third quarter of 2021 of $305 million increased $151 million or 98% compared to the prior year period, reflecting $126 million of value-added revenue from the addition of our packaging business which was completed at the end of the first quarter. Continued strength in underlying demand for our general engineering applications contributed $20 million of year-over-year increase, while aero high strength improved approximately $8 million, partially offset by a $3 million decline in value-added revenue for our automotive applications due to the ongoing impact of the semiconductor chip shortages of North America vehicle production, as Keith mentioned. As a reminder, the third quarter of 2020 results for aero high strength included approximately $15 million of additional revenue related to the modifications of 2020 customer declarations under multi-year contracts. On a quarterly sequential basis, third quarter 2021 value-added revenue declined approximately $13 million from the second quarter of 2021, driven by labor and supply chain challenges that impacted our ability to produce to demand as Keith noted, and the continued impact of the chip shortages on our automotive applications. Value-added revenue of $795 million for the first nine months of 2021 increased $249 million or 46% compared to the first months of 2020, primarily reflecting $258 million of value-added revenue contributed from the Warrick acquisition. Demand for our general engineering patients have remained strong and continue to improve from 2020, increasing $46 million year-over-year, while value-added revenue for our automotive applications increased $16 million reflecting new program launches and recovery from the COVID-19-related supply chain curtailments that occurred in the second quarter of 2020. Value-added revenue for our aero high strength applications declined $73 million from the first nine months of 2020 as the impact of COVID-19 pandemic impacted commercial aerospace demand while demand for our defense applications has remained strong. Additional detail on value-added revenue and shipments by end market applications can be found in the appendix of this presentation. Turning to Slide 14. Adjusted EBITDA for the third quarter of 2021 increased $19 million compared to the prior year quarter, reflecting the addition of packaging and improvement in our aerospace, high strength and general engineering applications as previously noted, offset by the higher costs and inefficiencies. As a reminder, the third quarter 2020 adjusted EBITDA includes the previously noted $15 million revenue related to the modifications to customer declarations. Third quarter 2021 EBITDA margins of 16.5% declined from 20.4% in the prior year period, reflecting the impact of the higher unit costs, labor inefficiencies and supply chain disruptions as previously quantified by Keith. On a sequential basis, third quarter 2021 EBITDA of $50 million declined $8 million from the second quarter of 2021, impacted by the cost and inefficiencies as discussed. Adjusted EBITDA for the first 9 months of 2021 was $147 million and an increase of $21 million, up 17% compared to the first 9 months of 2020. The increase reflects the higher value-added revenue as discussed, offset by higher costs across our platform specifically freight, labor, benefits and incentives and other manufacturing costs in addition to approximately $1.5 million of redundant overhead costs as we continue to incorporate Warrick operations into our systems. For the first nine months of 2021, our EBITDA margin of 18.4% and compared to 23% adjusted EBITDA margin for the first 9 months of 2020, which reflected a record first quarter 2020 pre-COVID adjusted EBITDA margin of 27.4%. And the benefit of the additional $15 million related to modification to customer declarations in the third quarter of 2020, as previously noted. As Keith discussed, our operations and commercial teams are working diligently to identify and pass through inflationary costs in our transactional businesses through price increases, and to our contract customers through provisions included in our supply agreements. We are also working with our vendors to minimize disruptions in our supply channels to stabilize cost and ensure supply. As an example, we have increased our order lead times and minimum reorder points. And are in the process of qualifying additional suppliers to further mitigate the potential impact to our production schedules. In addition, while we have significantly improved our staffing levels. We will continue to hurt some additional labor costs and manufacturing inefficiencies into the fourth quarter as we train, integrate new staff into our workforce. Moving on to Slide 15. Reported operating income for the third quarter of 2021 was $20 million, Adjusting for $6 million of non-run rate charges including $1 million of additional Warrick integration costs related to professional services and $3 million of non-cash purchase accounting hedging related charges. Adjusted operating income was $26 million, up 37% from the $19 million in the prior year third quarter primarily due to the increase in EBITDA, as previously discussed. In addition, operating income includes $13 million of incremental depreciation and amortization charges, primarily reflecting the impact of purchase accounting and the inclusion of the Warrick operation. Reported net loss for the third quarter of 2021 was approximately $2 million compared to $400,000 of net income in the prior year quarter. Adjusting for the non-run rate items noted above, adjusted net income for the third quarter of 2021 was approximately $9 million compared to adjusted net income of $6 million in the prior year quarter. For the third quarter 2021, we recorded a tax expense of approximately $8 million, reflecting the impact of required tax adjustments. For the full year 2021 and over the longer term, we continue to believe our annual effective tax rate before discrete items to be in the low to mid-20% range under the current tax regulations. We anticipate that our cash tax rate will remain in the low single digits until we consume our federal NOLs, which as of year-end 2020, were approximately $95 million. As reported, earnings per diluted share were a loss of $0.14 in the third quarter of 2021 compared to earnings per dilute share of $0.02 in the prior quarter. Adjusting for the non-run rate items, adjusted earnings per diluted share was $0.57 for the third quarter of 2021 compared to the adjusted earnings per diluted share of $0.39 for the third quarter of 2020. As of September 30, cash of approximately $296 million and more than $367 million of borrowing availability in our revolving credit facility provided total liquidity of approximately $663 million. There were no borrowings under revolving credit facility during the quarter and the facility remains undrawn. We have lowered our planned capital spending for the full year of 2021 to approximately $70 million to $80 million due to supply chain challenges and the timing of certain projects. Our integration of Warrick back office and IT support operations continues as planned. And we continue to work with Alcoa to exit several transition support agreements or TSAs by year-end. Higher overhead costs associated with the TSAs while also ramping up our staffing and other fees to be prepared for the handoff will continue effective for the exit of these TSAs. In addition to some higher corporate overhead costs, as previously noted, we anticipate an additional approximately $4 million to $5 million of non-run rate charges related to professional support services and non-cash purchase accounting-related hedging charges to also occur through the end of this year. And now I'll turn the call back over to Keith to discuss our 2021 and beyond business outlook. Keith?

Thanks, Neal. Turning to Slide 17 in the deck. Looking forward, we continue to remain very optimistic about the long-term potential for our portfolio of businesses focused on aerospace, packaging, automotive and general engineering. And believe they provide a strong platform for investment and continued growth. There is an increasing clarity for improving demand for aerospace and high-strength products. And we expect demand in 2022 to be significantly above 2021 levels as we have now received declarations and forecast for next year's requirements from our customers. Our contracts are being extended into the back half of the decade, and we are gaining a better understanding of future requirements needed by the large commercial airframers over the next several years. Once we have a better understanding of the total requirements of our aerospace and general engineering customers, we will determine when we launched the Phase 7 expansion at Trentwood, discussed during our second quarter earnings call. Included in our outlook is the expectation that we will be in a destocking environment for our products in the large commercial jet supply chain for at least the next year or so, as the markets continue to recover back to the 2019 levels. That said, we continue to anticipate a return to record 2019 demand levels for our products in the 2023 to 2024 time frame. Our confidence in our market position and the strength of our contracts provide a strong support for our outlook. The diversity of our participation in military, business jets and other industrial categories has also aided in the recovery and confidence in our outlook. Military aerospace demand remains as expected and has continued to provide a solid foundation for aerospace plate demand for us. And business jet demand for our products is recovering faster than large commercial jets. And we expect demand in these markets to return to 2019 levels sooner than the 2023-2024 period. We are engaged in discussions with our automotive customers on a regular basis to assess the temporary production cuts related to continued chip shortages. As I previously noted, IHS forecast North American build rates for 2021 will be down approximately 20% from their prior forecast for the full year. The programs we support remain intact, long-term demand remains strong, and we expect a rebound in build rates once bottlenecks in the supply of critical components become alleviated. Current IHS forecast show build rates growing to 15.2 million vehicles in 2022 and over 17 million vehicles now in 2023. In the interim, we will continue to operate as we have historically, flexing our operations with changes in the market environment, pivoting where we can shift additional production to meet general engineering demand or adjusting our production and operations to the lower levels of demand. Given the labor challenges we've had in 2021, we're more inclined to shift production at the automotive facilities to meet strong demand for our general engineering products where possible in order to retain our skilled employee base and to ensure supplier readiness when automotive build rates begin to ramp up. Our automotive mix remains strong. And our contracts ensure our supplier position once the chip supply disruption abates. In particular, interest from our customers on EV development continues to be a major initiative as demand for our long products in these vehicles is expected to be high. We are working on multiple new EV programs, utilizing our products in chassis and structural, safety and crash management and battery trade systems and anticipate this will contribute to further growth in the years ahead. In general engineering, we expect demand for our products to remain strong well into 2022. Our mills have extended lead times for these products. And we have been negotiating 2022 supply positions with our service center customers. We expect restocking to continue into early next year as our customers continue to experience heavy demand. We also expect these strong markets to support additional price increases, which will allow us to further offset some of the higher costs incurred in 2021. As we stated earlier, with the planned capacity expansion project at our Trentwood facility, we will be well positioned to support increased general engineering levels and expected demand as commercial aerospace recovers in the next several years. Finally, in packaging, the market through 2025 appears to be growing at an even faster pace 5% to 7% versus our previous 3% to 5% outlook. And customers remain concerned regarding the availability of domestic supply. Over 75% of new drinks introduced since 2020, utilized an aluminum container. And aluminum remains the material of choice of consumers, in part due to its infinite recyclability. Can makers are importing billions of empty cans to meet North American demand with no signs that this will end any time soon. Warrick's outlook for 2022 is very strong. And as we continue to talk with customers and assess demand growth, we are confident that the Warrick acquisition will exceed our expectations. As we discussed during our second quarter earnings call, we are proceeding with the $150 million investment in a new role coat line, which will allow us to shift a larger portion of our mix towards higher-margin coated products as the equipment becomes operational in early 2024. We have been successful in securing new long-term contracts with our customers for the new RollCo [ph] capacity for 2024 and beyond at improved margins further supporting the investment and outlook for our packaging business. Turning to Slide 19 and a summary of today's discussion. As we look forward, notwithstanding near-term challenges, our view of the longer-term potential for this platform remains intact and we are excited about the opportunities ahead. We will continue to manage our business as we have consistently done, execute our strategy, flex our operations as business conditions change and deploy our capital thoughtfully to ensure that our CapEx decisions are aligned with anticipated demand across our end markets. Our approach has allowed us to create significant value over the long-term, steadily increase dividends and maintain financial flexibility, which is a cornerstone of our business model. I'll now open the call for questions.

Thank you. [Operator Instructions] And our first question comes from Emily Chieng from Goldman Sachs. Please go ahead.

Good morning Keith and Neal. Thanks for taking the time today. My first question is just around some of the supply chain issues that you've been flagging. Are they specifically related to silicon and magnesium shortages? Or is there anything else there? And then in relation to that, what assumption in the supply chain issues alleviating? Are you baking into the assumptions that value-added revenue is going to be higher quarter-over-quarter in the mid-single digits?

Okay. Yes. Good morning, Emily. Thank you. For the third quarter impact, the supply chain disruptions really we've been referencing did not entail magnesium or silicon shortages or disruptions. They were really around the metal supply and power outages, I mentioned at our Warrick facility. The chip shortage, which impacted the fab auto plants. There was actually a strike it for Rio Tinto, Kitimat in British Columbia, which impacted some of our supply at Trentwood facility. And then we've dealt with a number of issues still dealing with the Delta variant. So we had absenteeism and quarantining, which continued well into the third quarter. One of our largest challenges for the quarter, and I referred to it multiple times was our labor inefficiencies. And those inefficiencies were around areas, and we discussed that somewhat in the second quarter. During the quarter, we hired approximately 273 new employees. And about 80% of those were hourly. So we had roughly 8% to 10% of our workforce during the quarter that were training on new jobs. That led to quite a number of inefficiencies and output challenges for the quarter for us. With respect to the second part of your question, we continue to aggressively pass through costs and increases due to the inflationary rises that we've seen. Those haven't all hit the ground yet so to speak. There are already announced increases that will be in effect for the first quarter of next year beginning. So yes, we do continue to expect expansion in our value-added revenue per pound as we go forward. We have just been inundated with a number of these costs and interruptions in the third quarter. And so we're seeing some of that, but we expect that to continue as we go out into 2022.

Got it. That's really helpful color. And then maybe just as a follow-up. You mentioned that some of these be passed through via higher pricing. Does that include the likes of some of the labor costs and when some of the supply chain issues? All of that can be passed through even some of the raw material costs, including magnesium and silicon as well? I'll leave it at that thing.

Certainly. Yes, our intent, our commercial and manufacturing teams work closely together in analyzing and understanding what cost and how those should be passed forward. We focus on our margins very carefully. And we're actively underway in moving those forward. Considering the mag shortages and issues that have been well in the news lately here. We have anticipated some of those in the fourth quarter, as I mentioned in my discussion points. There is been a confluence of factors around mag especially as we enter into the fourth quarter. We've had these ongoing challenges, especially in China around the supply of mag. Domestically, we had a source to player force majeure late in the third quarter, which really would start to begin to be impacting us in the fourth quarter. So those highlights some of the areas that we've already had discussion with. We are discussing with our customers about pass-through of those costs. We have that type of language in our contracts to do that. Some of those you can pass through that cost on a cost-for-cost basis. Others contain formulas of which we can pass those costs through over time. However, due to the immediacy and the urgency of the event, we are discussing with our customers the availability and the cost of those issues and are planning accordingly going into 2022.

Great. That’s helpful. Thank you.

[Operator Instructions] Our next question comes from Josh Sullivan from the Benchmark. Please go ahead.

Good afternoon.

Hey, Joshua.

Just on the aerospace declarations that you received for '22. Can you just expand a little bit on those? Did they come this quarter? Were they ahead of expectations? Just a little more color on that would be great.

Sure. As we talked in the earlier calls of the year, we have been in discussion about how do we manage through. And we knew that the OEMs have been concerned, long concerned about what the COVID impact and the other delays that have occurred. What that means to their supply base. So we've been having meaningful discussions through the balance of the year about what that means for us, not only this year but in 2022 all the way through towards the end of the decade. So we have a lot more clarity now. And it gives us a lot more confidence in declaring that. We're on the path to our outlook towards the full recovery as measured by 2019 standards through the '23-'24. So we have confidence that now with more visibility, '22 will be a significant demand over what we've enjoyed in '21. And we'll be talking more in February about what that dramatically means for 2022. But our outlook right now has it continuing to grow more favorable as we have been discussing.

And then just what is the domestic magnesium supplier telling you guys about how long it might take them to repair their equipment and maybe get mag flowing?

Well, we're currently working through the situation now. We understand that there was an issue around some of their equipment. We don't have a lot of details at this point. And we're obviously seeking to better understand the underlying cause and the appropriate timeliness of the repair of this equipment. We feel we're covered through in the fourth quarter unless something else takes place. We do have an allocation from that supplier, which we can bank on. And we've also supplemented our other needs with other supply at this point. Going into 2022, we have a pretty good outlook. We feel we're covered in the majority of our businesses for next year with possibly an exception there at Warrick. Warrick also has an allocation from the supplier, but they're a significant supplier to us and especially at Warrick. So we'll be dealing with this supplier and looking at others and talking with our customers about the impacts if any, as we go forward on 2022. That helps?

Yes, it does. And then just on the KaiserSelect products. Does that use any more or less alloying agents, magnesium or silicon, the non-KaiserSelect aluminum products?

No, they do not. What we do there -- it's more a process development work that goes on there, Joshua. That's what differentiates those products. It's how they react and how well they machine. But from that perspective, in the 2000 and 7000 series alloys, which are typically the aerospace, you've got more around a 1% or so mag content. So there's less impact from what you might experience on 5,000 series, which is what we do a good bit at the -- for all the end and tab and food can products at Warrick.

Got it. And then just one last one on the automotive demand dynamics, the semi shortages. Are there any noticeable differences between which products the automotive OEMs are accepting versus what maybe they're saying to hold off on until the shortage clears up a little bit?

Well, as you can imagine, it's -- they're hottest selling vehicles and the ones that are most profitable tend to get the nod on the priority for the products. So we know what platforms we're on in each of our products. And we're heavily on the truck, light truck side of the vehicle. So we will see movement there over time. We see various weekly releases accordingly. But even those have been disrupted during the shortage. So when the alloy, the highest margin products are on delay you know they're having problems gaining supply. But we do watch that, and we know the platforms accordingly. But right now, it appears to go across all the platforms on an irregular basis.

Got it. Thank you for the time.

Thanks, Joshua.

We have no further questions at this time. I will turn the call over to CEO, Keith Harvey.

Thank you, Jenny. All right. Thank you for your time and interest in Kaiser Aluminum. And I look forward to updating you on our fourth quarter and full year results for 2021 as well as our outlook and plans for 2022 during our call in February of 2022. Have a good day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.