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Thursday, Aug 11, 2022
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26. KAISER ALUMINUM CORP.

Kaiser Aluminum Corp. is back.

More than a year after its bankruptcy reorganization, the Foothill Ranch-based company has emerged as one of the fastest-growing public companies in Orange County, ranking at No. 26.

The company posted a 103% gain in revenue during the past three years, with record sales of $1.4 billion for the 12 months through June. It now counts a market value of about $1.6 billion.

Shares of Kaiser are up more than 100% since the stock began trading again after emerging from bankruptcy. In August, the company announced it would pay a dividend to shareholders.

Chief Executive Jack Hockema said the company’s balance sheet was strong enough that it could take on more debt, allowing it to potentially buy another company.

“We’re in a good financial position to grow by investing back in the company and through acquisition,” Hockema said.

In July, Hockema said it could potentially issue more shares to finance an acquisition.

Bogged down with legal bills from asbestos lawsuits, Kaiser struggled with losses under Chapter 11 bankruptcy for four years before re-emerging.

The company once held about $4.7 billion in debt, but now says it owes $274 million.

Strong demand from the aerospace and defense industries for its products has allowed it to recover and thrive. Demand from foreign companies also has pushed recent growth.

Kaiser produces more than 500 million pounds a year of aluminum pieces in the form of sheets, plates, extrusions, forgings, rods, bars and tubes.

About 40% of its products are designed for the aerospace and defense industries. It makes custom wing pieces for major players such as Chicago-based Boeing Co., Europe-based Airbus SAS and Maryland-based Lockheed Martin Corp.

It also makes antilock brakes and water heaters for automakers and appliance companies. Clients include Honda Motor Co., BSH Bosch and Paccar Inc. Additionally, Kaiser makes armor for Humvees.

Shipbuilding industrialist Henry J. Kaiser, who’s known for building Hoover Dam and founding healthcare provider Kaiser Permanente, started Kaiser Aluminum in 1946.

In its early days the company was based in mining, refining and smelting. Its focus has changed to creating fabricated products. Houston-based Maxxam Inc., which is a mix of businesses from real estate to horse racing, once owned two-thirds of the company.

In 2005, Kaiser Aluminum moved its headquarters from Houston to Orange County.

Hockema became chief executive in 2002,about the time it went bankrupt. As former head of its Laguna Niguel division he opted to move its headquarters to the county.

Locally, the company employs about 60, and companywide it has more than 2,400 at 11 plants throughout North America. It also owns a 49% stake in an aluminum smelter in Britain.

The company recently said it would invest about $230 million to expand its Trentwood, Wash., operations, and would also spend about $91 million to build a facility in the Midwest as it improves operations.

“We expect these investments to significantly enhance the market position of our broad product offerings,” Hockema said.

Possible acquisitions for Kaiser would be businesses that complement the company, Hockema said.

Analysts have cited Canadian-based Alcan Inc.’s aerospace division as a strong candidate. But bets may be off as London-based Rio Tinto Group recently bought out the whole company. The deal is still subject to shareholder approval.


THE NUMBERS

Three-year growth: 103%

Yearly sales through June 30: $1.4 billion

Yearly profit: $78 million

Market value: $1.6 billion

Employees: 2,400, 60 in OC

Company: aluminum products distributor

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