Core Viewpoint - Tredegar Corporation's stock has significantly underperformed the market following disappointing earnings results for Q2 2025, with a notable decline in net income and EBITDA despite an increase in total sales [1][2]. Financial Performance - For Q2 2025, Tredegar reported net income from continuing operations of $1.8 million (5 cents per share), down from $9.2 million (27 cents per share) a year earlier [1][2]. - Total sales increased by 16.4% year over year to $179.1 million, primarily driven by higher revenues in Aluminum Extrusions, but offset by weaker performance in PE Films [2]. - Consolidated EBITDA from ongoing operations fell to $10 million, a decrease of 43.2% from $17.6 million in the previous year [2]. Segment Performance - In Aluminum Extrusions, sales volume rose 16.6% to 40.7 million pounds, with net sales climbing 24.2% to $148.4 million, benefiting from increased shipments in non-residential building and construction [3]. - However, EBITDA from ongoing operations in this segment dropped 28.1% to $9.3 million due to manufacturing inefficiencies and higher labor costs [3]. - PE Films experienced a 7.1% decline in sales volume to 9.8 million pounds and a 15.8% revenue drop to $24.6 million, with EBITDA decreasing 33.8% to $6.7 million [3]. Management Insights - CEO John Steitz highlighted that while sales volume in Aluminum Extrusions improved, profitability was impacted by manufacturing inefficiencies, which are believed to be resolved [4]. - A slowdown in new orders was noted following the increase in Section 232 tariffs on aluminum extrusions, as customers paused purchases [4]. - For PE Films, performance was solid but below last year's exceptional levels, with the business avoiding tariff-related demand impacts so far [4]. Influencing Factors - The earnings decline was attributed to segment-specific challenges, including unfavorable manufacturing costs and lower labor productivity in Aluminum Extrusions [5]. - In PE Films, a pullback from last year's extraordinary demand in Surface Protection significantly impacted results, although cost improvements provided some cushion [5]. - Corporate expenses increased due to higher professional fees and incentive compensation [5]. Future Guidance - The company projected capital expenditures of $17 million for Aluminum Extrusions and $2 million for PE Films in 2025, focusing on productivity and operational continuity [6]. - Management anticipates a moderation in PE Films' performance in the second half of 2025, with ongoing tariff impacts and demand uncertainty affecting Aluminum Extrusions' order flow [6]. Balance Sheet and Developments - As of June 30, 2025, Tredegar's balance sheet showed total debt of $62.6 million and cash of $9.8 million, with net debt slightly improved from year-end 2024 [7]. - The company completed a five-year, $125 million asset-based lending facility earlier in the year, with approximately $51 million available for borrowing at quarter-end [7]. - Tredegar received $9.8 million from the post-closing settlement of the Terphane divestiture during the first quarter [7].

[Executive Summary](index=1&type=section&id=Executive%20Summary) Tredegar Corporation reported a significant decline in net income from continuing operations and ongoing operations in Q2 2025, with both Aluminum Extrusions and PE Films segments experiencing decreased EBITDA [Overall Financial Performance](index=1&type=section&id=Overall%20Financial%20Performance) Tredegar Corporation reported a significant decline in net income from continuing operations for Q2 2025 compared to Q2 2024, with ongoing operations also showing a substantial decrease. The CEO highlighted improved sales volume for Bonnell but noted profit declines due to manufacturing inefficiencies and potential impacts from increased tariffs Net Income (Loss) from Continuing Operations | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net Income (Loss) | $1.8 | $9.2 | (80.4%) | | Diluted EPS | $0.05 | $0.27 | (81.5%) | Net Income (Loss) from Ongoing Operations (Non-GAAP) | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net Income (Loss) | $1.8 | $10.3 | (82.5%) | | Diluted EPS | $0.05 | $0.30 | (83.3%) | - Bonnell sales volume **improved significantly in Q2 2025** versus last year, but profits declined mainly due to manufacturing inefficiencies in April and May, which are believed to be resolved. Operating performance has since improved[5](index=5&type=chunk) - PE Films had another good quarter, though below the exceptional performance in Q2 2024, with expectations for moderation in H2 2025. No adverse impact on customer demand related to tariff actions has been experienced to date, but the situation remains fluid[5](index=5&type=chunk) - The balance sheet remains strong with **ample liquidity** from a new five-year **$125 million asset-based lending facility**[5](index=5&type=chunk) [Key Segment Highlights](index=1&type=section&id=Key%20Segment%20Highlights) Both Aluminum Extrusions and PE Films experienced a decrease in EBITDA from ongoing operations in Q2 2025 compared to Q2 2024. Aluminum Extrusions saw increased sales volume but a decline in net new orders post-tariff increase, while PE Films' sales volume decreased EBITDA from Ongoing Operations (Q2 2025 vs. Q2 2024) | Segment | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) | | :------------------ | :----------- | :----------- | :----------- | | Aluminum Extrusions | 9.3 | 12.9 | (27.9%) | | PE Films | 6.7 | 10.1 | (33.7%) | Sales Volume (Q2 2025 vs. Q2 2024) | Segment | Q2 2025 (million lbs) | Q2 2024 (million lbs) | Change (YoY) | | :------------------ | :-------------- | :-------------- | :----------- | | Aluminum Extrusions | 40.7 | 34.9 | 16.6% |\ | PE Films | 9.8 | 10.5 | (6.7%) | - Aluminum Extrusions' net new orders **increased 21% YoY in Q2 2025** but **declined 11% QoQ**, marking the first quarterly decline after 10 consecutive increases. Open orders at the end of Q2 2025 were **25 million pounds**, up from **14 million pounds in Q2 2024**[6](index=6&type=chunk) [Operations Review](index=2&type=section&id=OPERATIONS%20REVIEW) The operations review details the financial and operational performance of Aluminum Extrusions and PE Films, highlighting volume changes, cost impacts, and market dynamics [Aluminum Extrusions (Bonnell Aluminum)](index=2&type=section&id=Aluminum%20Extrusions) Bonnell Aluminum, producing custom aluminum extrusions for B&C, automotive, and specialty markets, saw significant sales volume and net sales increases in Q2 and H1 2025 compared to the prior year. However, EBITDA from ongoing operations declined due to manufacturing inefficiencies and higher costs. The segment experienced a decline in net new orders after the Section 232 tariff increase to 50%, indicating potential future demand challenges - Bonnell Aluminum produces high-quality, soft-alloy and medium-strength custom fabricated and finished aluminum extrusions primarily for building and construction (B&C), automotive, and specialty markets[8](index=8&type=chunk) [Financial Performance Summary (Q2 & H1 2025)](index=2&type=section&id=Aluminum%20Extrusions_Financial%20Performance%20Summary) This section summarizes Bonnell Aluminum's key financial metrics for Q2 and H1 2025, showing increased sales volume and net sales but decreased EBITDA from ongoing operations Aluminum Extrusions Key Financials (Q2 & H1 2025 vs. Prior Year) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | % Change | H1 2025 ($ thousands) | H1 2024 ($ thousands) | % Change | | :-------------------------- | :--------- | :--------- | :------- | :--------- | :--------- | :------- | | Sales volume (thousand lbs) | 40,690 | 34,906 | 16.6% | 78,608 | 68,747 | 14.3% | | Net sales | $148,367 | $119,413 | 24.2% | $281,999 | $233,636 | 20.7% | | Variable costs | $116,059 | $87,825 | (32.1)% | $219,582 | $172,610 | (27.2)% | | Manufacturing fixed costs | $11,760 | $9,881 | (19.0)% | $22,973 | $19,507 | (17.8)% | | SG&A costs | $10,129 | $8,972 | (12.9)% | $19,541 | $15,770 | (23.9)% | | EBITDA from ongoing operations | $9,283 | $12,907 | (28.1)% | $18,441 | $25,447 | (27.5)% | | EBIT from ongoing operations | $5,190 | $8,461 | (38.7)% | $10,122 | $16,459 | (38.5)% | | Capital expenditures | $2,386 | $1,463 | | $4,757 | $3,012 | | [Sales Volume by End-Use Market](index=2&type=section&id=Aluminum%20Extrusions_Sales%20Volume%20by%20End-Use%20Market) This section presents Bonnell Aluminum's sales volume breakdown by end-use market for Q2 and H1 2025, indicating growth across most segments Sales Volume by End-Use Market (Millions of lbs) | End-Use Market | Q2 2025 (million lbs) | Q2 2024 (million lbs) | % Change (YoY) | Q1 2025 (million lbs) | % Change (QoQ) | H1 2025 (million lbs) | H1 2024 (million lbs) | % Change (YoY) | | :---------------- | :------ | :------ | :------------- | :------ | :------------- | :------ | :------ | :------------- |\ | Non-residential B&C | 22.5 | 20.3 | 10.8% | 19.2 | 17.2% | 41.7 | 40.4 | 3.2% | | Residential B&C | 2.3 | 2.2 | 4.5% | 2.0 | 15.0% | 4.3 | 3.8 | 13.2% | | Automotive | 3.2 | 2.9 | 10.3% | 3.1 | 3.2% | 6.3 | 6.1 | 3.3% | | Specialty products | 12.7 | 9.5 | 33.7% | 13.6 | (6.6)% | 26.3 | 18.4 | 42.9% | | **Total** | **40.7**| **34.9**| **16.6%** | **37.9**| **7.4%** | **78.6**| **68.7**| **14.3%** | [Second Quarter 2025 vs. Second Quarter 2024 Analysis](index=2&type=section&id=Aluminum%20Extrusions_Q2_2025_vs_Q2_2024_Analysis) This analysis details the drivers behind Bonnell Aluminum's Q2 2025 performance, including sales growth, order trends, tariff impacts, and manufacturing cost inefficiencies - Net sales **increased 24.2% in Q2 2025** due to higher sales volume (**16.6% YoY, 7.4% QoQ**) and the pass-through of higher metal costs. Increased shipments were noted in non-residential B&C (curtainwall, storefront, institutional walkway covers) and specialty markets (solar panels, consumer durables)[11](index=11&type=chunk) - Net new orders **increased 21% YoY** but **decreased 11% QoQ**, marking the first quarterly decline after 10 consecutive increases. Open orders at quarter-end were **25 million pounds**, up from **14 million pounds in Q2 2024**[11](index=11&type=chunk)[12](index=12&type=chunk) - Section 232 tariffs **increased to 50% effective June 4, 2025**. Net new orders **declined by 20%** after this increase (from **3.4 million lbs/week to 2.7 million lbs/week**), attributed to lower U.S. demand and customers evaluating tariff permanency. The favorable shift in market share to U.S. producers has not offset this lower demand[13](index=13&type=chunk)[14](index=14&type=chunk) - EBITDA from ongoing operations **decreased by $3.6 million**, primarily due to approximately **$3 million in unfavorable manufacturing costs** in April and May from inefficiencies during production ramp-up and hiring, which are believed to be resolved[15](index=15&type=chunk) [First Six Months 2025 vs. First Six Months 2024 Analysis](index=4&type=section&id=Aluminum%20Extrusions_H1_2025_vs_H1_2024_Analysis) This section analyzes Bonnell Aluminum's H1 2025 performance, focusing on net sales growth, EBITDA decline, and the impact of various cost increases and sales mix shifts - Net sales **increased 20.7% in H1 2025**, driven by higher sales volume (**14.3%**) and the pass-through of higher metal costs, partially offset by a lower average conversion price add-on due to sales mix shift in Q1 2025[16](index=16&type=chunk) - EBITDA from ongoing operations decreased by $7.0 million, primarily due to[17](index=17&type=chunk) - A **$0.7 million increase in contribution margin**, offset by higher variable manufacturing costs (material yield, labor rates, labor productivity, externally produced billet, maintenance, utilities)[17](index=17&type=chunk) - A **$0.7 million charge from FIFO timing of aluminum raw materials costs** in Q2 2025 (vs. **$1.2 million benefit in Q2 2024**)[17](index=17&type=chunk) - Higher fixed costs (**$0.8 million**) from wage increases, compensation, maintenance, utilities, and added resources[17](index=17&type=chunk) - Higher SG&A expenses (**$0.7 million**) primarily from employee-related compensation[17](index=17&type=chunk) - Higher other expense (**$1.2 million**) for employee-related medical costs due to increased high-cost claims[17](index=17&type=chunk) - A **$1.4 million increase in contribution margin**, significantly offset by lower spread in Q1 2025 due to sales mix shift (**$2.1 million**)[18](index=18&type=chunk)[19](index=19&type=chunk) - Higher variable manufacturing costs (**$1.4 million unfavorable in H1 2025** vs. **$0.5 million favorable in H1 2024**) from material yield, labor rates, decreased labor productivity, higher maintenance (downed equipment, winter weather), higher die expense, higher externally produced billet expense, and higher utilities[18](index=18&type=chunk)[19](index=19&type=chunk) [Projected Capital Expenditures and Depreciation & Amortization](index=5&type=section&id=Aluminum%20Extrusions_Projected_Capital_Expenditures) This section outlines Bonnell Aluminum's projected capital expenditures, depreciation, and amortization for 2025, distinguishing between productivity and continuity projects Projected Capital Expenditures and Depreciation & Amortization for Bonnell Aluminum (2025) | Metric | Amount ($ million) | | :-------------------------- | :---------- | | Total Capital Expenditures | 17 | | - Productivity projects | 5 | | - Continuity of operations | 12 | | Depreciation expense | 15 | | Amortization expense | 2 | [PE Films](index=5&type=section&id=PE%20Films) PE Films experienced a decline in net sales and EBITDA from ongoing operations in Q2 and H1 2025, primarily due to lower sales volume in surface protection films. Despite this, overwrap films showed some volume increase in Q2. The segment's performance has been subject to significant cyclical swings, particularly from the display industry downturn - PE Films produces surface protection films, polyethylene overwrap films, and films for other markets[22](index=22&type=chunk) [Financial Performance Summary (Q2 & H1 2025)](index=5&type=section&id=PE%20Films_Financial%20Performance%20Summary) This section summarizes PE Films' key financial metrics for Q2 and H1 2025, showing declines in sales volume, net sales, and EBITDA from ongoing operations PE Films Key Financials (Q2 & H1 2025 vs. Prior Year) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | % Change | H1 2025 ($ thousands) | H1 2024 ($ thousands) | % Change | | :-------------------------- | :--------- | :--------- | :------- | :--------- | :--------- | :------- | | Sales volume (thousand lbs) | 9,798 | 10,548 | (7.1)% | 19,437 | 20,583 | (5.6)% | | Net sales | $24,596 | $29,197 | (15.8)% | $50,134 | $53,932 | (7.0)% | | Variable costs | $11,688 | $13,183 | 11.3% | $23,664 | $25,228 | 6.2% | | Manufacturing fixed costs | $3,243 | $3,115 | (4.1)% | $6,702 | $6,336 | (5.8)% | | SG&A costs | $2,867 | $2,791 | (2.7)% | $5,459 | $5,307 | (2.9)% | | EBITDA from ongoing operations | $6,711 | $10,133 | (33.8)% | $14,233 | $17,037 | (16.5)% | | EBIT from ongoing operations | $5,481 | $8,816 | (37.8)% | $11,753 | $14,392 | (18.3)% | | Capital expenditures | $295 | $216 | | $882 | $610 | | [Second Quarter 2025 vs. Second Quarter 2024 Analysis](index=6&type=section&id=PE%20Films_Q2_2025_vs_Q2_2024_Analysis) This analysis details the drivers behind PE Films' Q2 2025 performance, including decreased sales volume in surface protection, increased overwrap volume, and the impact of cyclical market swings - Net sales **decreased 15.8% in Q2 2025** due to lower sales volume in surface protection films, which **decreased 18.2% YoY and 10.1% QoQ**. Overwrap films volume **increased 6.1% YoY**[25](index=25&type=chunk) - Surface Protection has not experienced adverse impact from tariff actions, but the situation remains fluid, and impact on consumer electronics is uncertain[26](index=26&type=chunk) - EBITDA from ongoing operations **decreased by $3.4 million**, primarily due to a **$3.1 million decrease in contribution margin**, with Surface Protection seeing a **$3.3 million decrease from lower volume**, partially offset by cost improvements and favorable pricing[26](index=26&type=chunk)[30](index=30&type=chunk) - PE Films has experienced **significant cyclical swings** in sales volume and EBITDA over the last 3.5 years, largely due to the downturn in the display industry[26](index=26&type=chunk) [First Six Months 2025 vs. First Six Months 2024 Analysis](index=6&type=section&id=PE%20Films_H1_2025_vs_H1_2024_Analysis) This section analyzes PE Films' H1 2025 performance, focusing on decreased net sales and EBITDA from ongoing operations due to lower sales volume and increased costs - Net sales **decreased 7.0% in H1 2025**, mainly due to a **7.8% decrease in Surface Protection sales volume**. Overwrap films sales volume **decreased 3.1%**[27](index=27&type=chunk) - EBITDA from ongoing operations decreased by $2.8 million, primarily due to[28](index=28&type=chunk) - A **$2.2 million decrease in contribution margin**, with Surface Protection seeing a **$1.8 million decrease from lower volume**, partially offset by cost improvements and favorable pricing[31](index=31&type=chunk) - Overwrap films experienced a **$0.5 million decrease** primarily due to lower volume, unfavorable mix and pricing, partially offset by cost improvements[31](index=31&type=chunk) - Higher fixed costs (**$0.4 million**) associated with wage increases and compensation-related costs[31](index=31&type=chunk) - Higher SG&A expenses (**$0.2 million**) primarily from increased R&D expenses[31](index=31&type=chunk) - Note: The original document contains a section (chunk 24) under PE Films that discusses 'aluminum raw material costs' and other general cost increases. While the general cost increases (fixed costs, SG&A, medical costs) could apply to PE Films, the specific mention of 'aluminum raw material costs' is inconsistent with PE Films' business and is likely a misplacement from the Aluminum Extrusions section[24](index=24&type=chunk) [Projected Capital Expenditures and Depreciation & Amortization](index=6&type=section&id=PE%20Films_Projected_Capital_Expenditures) This section outlines PE Films' projected capital expenditures, depreciation, and amortization for 2025, distinguishing between productivity and continuity projects Projected Capital Expenditures and Depreciation & Amortization for PE Films (2025) | Metric | Amount ($ million) | | :-------------------------- | :---------- | | Total Capital Expenditures | 2 | | - Productivity projects | 1 | | - Continuity of operations | 1 | | Depreciation expense | 5 | | Amortization expense | 0 | [Corporate Expenses, Interest, Taxes and Other](index=7&type=section&id=Corporate%20Expenses%2C%20Interest%2C%20Taxes%20and%20Other) This section reviews the changes in corporate expenses, interest expense, and the effective tax rate for H1 2025, highlighting key drivers for each [Summary](index=7&type=section&id=Corporate%20Expenses%2C%20Interest%2C%20Taxes%20and%20Other_Summary) Corporate expenses increased in H1 2025 due to higher professional fees, incentive compensation, and stock-based compensation, partially offset by a gain on land sale and lower audit/remediation fees. Interest expense rose due to deferred financing fee write-offs, and the effective tax rate significantly increased - Corporate expenses, net, **increased by $2.6 million in H1 2025** compared to H1 2024, primarily due to higher professional fees for business development (**$3.5 million**), employee-related incentive compensation (**$1.1 million**), and stock-based compensation (**$0.6 million**)[32](index=32&type=chunk) - These increases were partially offset by a **$1.5 million gain on the sale of corporate-owned land**, lower external and internal audit fees (**$0.7 million**), and reduced professional fees for internal control remediation (**$0.4 million**)[32](index=32&type=chunk) Interest Expense (H1 2025 vs. H1 2024) | Metric | H1 2025 ($ million) | H1 2024 ($ million) | Change (YoY) | | :-------------- | :----------- | :----------- | :----------- | | Interest expense | 2.8 | 2.3 | 21.7% | - The increase in interest expense was primarily due to an **$0.8 million write-off of deferred financing fees** related to an amendment to the credit agreement, partially offset by lower weighted average total debt and interest rates[33](index=33&type=chunk) Effective Tax Rate (H1 2025 vs. H1 2024) | Metric | H1 2025 | H1 2024 | Change (percentage points) | | :---------------- | :------ | :------ | :----------- | | Effective tax rate | 38.4% | 16.6% | 21.8 pp | - The **higher effective tax rate in H1 2025** was impacted by taxable discrete items, including stock-based compensation, and lower book income[34](index=34&type=chunk) [Debt, Financial Leverage, Debt Covenants and Debt Refinancing](index=7&type=section&id=Debt%2C%20Financial%20Leverage%2C%20Debt%20Covenants%20and%20Debt%20Refinancing) This section provides an overview of Tredegar's debt position, financial leverage, compliance with ABL Facility covenants, and available liquidity [Summary](index=7&type=section&id=Debt%2C%20Financial%20Leverage%2C%20Debt%20Covenants%20and%20Debt%20Refinancing_Summary) Tredegar's total debt slightly increased, while net debt decreased in H1 2025. The company remains in compliance with its $125 million ABL Facility covenants, maintaining significant borrowing availability and improved median daily liquidity Debt and Cash Position | Metric | June 30, 2025 ($ million) | Dec 31, 2024 ($ million) | Change ($ million) | | :---------------------- | :----------------- | :---------------- | :---------- | | Total debt | 62.6 | 61.9 | 0.7 | | Cash & cash equivalents | 9.8 | 7.1 | 2.7 | | Net debt (Non-GAAP) | 52.8 | 54.8 | (2.0) | - The decrease in net debt was due to **$9.8 million received from the post-closing settlement of the Terphane sale in Q1 2025**, partially offset by higher net working capital resulting from seasonally low levels at the end of 2024 and the impact of tariffs in 2025[36](index=36&type=chunk) - As of June 30, 2025, the Company was in **compliance with all covenants** under its **$125 million asset-based credit agreement (ABL Facility)**, which matures May 6, 2030[37](index=37&type=chunk) - Funds available to borrow under the ABL Facility were approximately **$51 million at June 30, 2025**. Median daily liquidity under the ABL Facility **improved to $54 million in Q2 2025** from **$44 million in Q1 2025**[37](index=37&type=chunk) [Forward-Looking and Cautionary Statements](index=7&type=section&id=FORWARD-LOOKING%20AND%20CAUTIONARY%20STATEMENTS) This section outlines the inherent risks and uncertainties associated with forward-looking statements, covering macroeconomic, operational, regulatory, and strategic factors [Summary](index=7&type=section&id=Forward-Looking%20and%20Cautionary%20Statements_Summary) This section highlights that certain statements in the press release are forward-looking and subject to various risks and uncertainties that could cause actual results to differ materially. Key risk factors include macroeconomic conditions, operating costs, compliance with debt covenants, talent retention, manufacturing disruptions, IT failures, international business risks, public health epidemics, regulatory factors, product development, tariffs, evasion of duties, ERP/MES implementation, customer dependence, intellectual property, and strategic transactions - The press release contains forward-looking statements, identified by words like 'believe,' 'estimate,' 'anticipate,' 'expect,' and 'project,' which are based on current expectations and subject to risks and uncertainties[39](index=39&type=chunk) - Impact of macroeconomic factors (inflation, interest rates, recession risks)[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Increase in operating costs (raw materials, energy)[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Noncompliance with financial and restrictive covenants in the ABL Facility[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Failure to attract, develop, and retain key officers or employees[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Disruptions to manufacturing facilities, including labor shortages[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Information technology system failure or breach[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Risks of doing business in countries outside the U.S[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Impact of public health epidemics (e.g., COVID-19)[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Political, economic, and regulatory factors concerning products[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Inability to develop, efficiently manufacture, and deliver new products at competitive prices[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Impact of tariffs and sanctions on imported aluminum ingot for Bonnell Aluminum[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Failure by governmental entities to prevent foreign companies from evading antidumping and countervailing duties[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Unanticipated problems or delays with ERP and MES implementation, or security breaches[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Loss of sales to significant customers or inability to achieve sales to new customers[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Failure of customers to achieve success or maintain market share[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Failure to protect intellectual property rights[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Inability to successfully complete strategic acquisitions or dispositions, or failure to realize expected benefits[39](index=39&type=chunk)[40](index=40&type=chunk)[45](index=45&type=chunk) - Readers are urged to review and consider carefully the disclosures Tredegar makes in its SEC filings, including the risk factors in Part I, Item 1A of the Company's Form 10-K for the year ended December 31, 2024[40](index=40&type=chunk) [Non-GAAP Financial Measures & Company Information](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Company%20Information) This section explains the use of non-GAAP financial measures, provides company information, and describes Tredegar's primary industrial manufacturing businesses [Summary](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Company%20Information_Summary) This section clarifies the use of non-GAAP financial measures, providing reconciliations to GAAP equivalents. It also states that Tredegar uses its website as a primary channel for distributing material company information and provides a brief overview of its industrial manufacturing businesses - The press release includes non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measures in the Notes to the Financial Tables and on the Company's website[42](index=42&type=chunk) - Tredegar Corporation is an industrial manufacturer with two primary businesses: custom aluminum extrusions for North American markets (building & construction, automotive, specialty) and surface protection films for high-technology applications in the global electronics industry[44](index=44&type=chunk) - The Company has approximately 1,600 employees and operates manufacturing facilities in North America and Asia[44](index=44&type=chunk) [Financial Tables](index=9&type=section&id=Financial%20Tables) This section presents the condensed consolidated financial statements, including statements of income, balance sheets, and cash flows, along with segment-level net sales and EBITDA [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The consolidated statements of income show a significant decrease in net income from continuing operations for Q2 and H1 2025 compared to the prior year, alongside a decrease in total net income. Diluted EPS from continuing operations also declined substantially Condensed Consolidated Statements of Income (Unaudited, In Thousands) | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | H1 2025 ($ thousands) | H1 2024 ($ thousands) | | :---------------------------------------- | :--------- | :--------- | :--------- | :--------- | | Sales | $179,116 | $153,940 | $343,853 | $297,912 | | Income (loss) from continuing operations before income taxes | $2,812 | $9,132 | $4,060 | $14,120 | | Income tax expense (benefit) | $984 | $(38) | $1,560 | $2,346 | | Net income (loss) from continuing operations | $1,828 | $9,170 | $2,500 | $11,774 | | Income (loss) from discontinued operations, net of tax | $(97) | $(378) | $9,332 | $306 | | Net income (loss) | $1,731 | $8,792 | $11,832 | $12,080 | | Diluted EPS (Continuing operations) | $0.05 | $0.27 | $0.07 | $0.34 | | Diluted EPS (Total) | $0.05 | $0.26 | $0.34 | $0.35 | [Net Sales and EBITDA from Ongoing Operations by Segment](index=10&type=section&id=Net%20Sales%20and%20EBITDA%20from%20Ongoing%20Operations%20by%20Segment) This segment-level breakdown highlights that while Aluminum Extrusions saw increased net sales, its EBITDA from ongoing operations decreased. PE Films experienced declines in both net sales and EBITDA from ongoing operations for both the quarter and six-month periods Net Sales by Segment (Unaudited, In Thousands) | Segment | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | H1 2025 ($ thousands) | H1 2024 ($ thousands) | | :------------------ | :--------- | :--------- | :--------- | :--------- | | Aluminum Extrusions | $148,367 | $119,413 | $281,999 | $233,636 | | PE Films | $24,596 | $29,197 | $50,134 | $53,932 | | Total net sales | $172,963 | $148,610 | $332,133 | $287,568 | EBITDA from Ongoing Operations by Segment (Unaudited, In Thousands) | Segment | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | H1 2025 ($ thousands) | H1 2024 ($ thousands) | | :------------------ | :--------- | :--------- | :--------- | :--------- | | Aluminum Extrusions | $9,283 | $12,907 | $18,441 | $25,447 | | PE Films | $6,711 | $10,133 | $14,233 | $17,037 | | Total | $10,615 | $15,548 | $20,651 | $27,451 | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet indicates an increase in total assets and shareholders' equity from December 31, 2024, to June 30, 2025, driven by higher cash, receivables, and inventories. Total current liabilities also saw a slight increase Condensed Consolidated Balance Sheets (Unaudited, In Thousands) | Metric | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | | :-------------------------------- | :------------ | :----------- | | Cash & cash equivalents | $9,795 | $7,062 | | Accounts & other receivables, net | $78,833 | $64,817 | | Inventories | $66,648 | $51,381 | | Total current assets | $163,753 | $139,827 | | Total assets | $371,585 | $356,357 | | Accounts payable | $68,181 | $64,704 | | Total current liabilities | $92,844 | $91,708 | | ABL revolving facility | $62,000 | $60,600 | | Shareholders' equity | $194,106 | $180,968 | | Total liabilities and shareholders' equity | $371,585 | $356,357 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities turned negative in H1 2025, a significant shift from positive flows in H1 2024, primarily due to changes in working capital. Investing activities provided net cash, largely from the sale of Terphane, while financing activities used less cash compared to the prior year Condensed Consolidated Statements of Cash Flows (Unaudited, In Thousands) | Metric | H1 2025 ($ thousands) | H1 2024 ($ thousands) | | :-------------------------------------- | :--------- | :--------- | | Net income (loss) | $11,832 | $12,080 | | Net cash provided by (used in) operating activities | $(2,852) | $7,329 | | Net cash provided by (used in) investing activities | $6,101 | $(4,555) | | Net cash provided by (used in) financing activities | $(569) | $(4,909) | | Increase (decrease) in cash and cash equivalents | $2,733 | $(4,786) | | Cash and cash equivalents at end of period | $9,795 | $8,669 | - Operating cash flow was **negatively impacted by changes in accounts and other receivables ($14.0 million)**, and **inventories ($15.3 million)** in H1 2025[53](index=53&type=chunk) - Investing cash flow **benefited from $9.8 million in proceeds from the sale of Terphane in H1 2025**[53](index=53&type=chunk) [Notes to the Financial Tables](index=13&type=section&id=Notes%20to%20the%20Financial%20Tables) This section provides detailed reconciliations and definitions for non-GAAP financial measures, special items, effective tax rates, and debt-related metrics [Note (a): Net Income (Loss) from Ongoing Operations Reconciliation](index=13&type=section&id=Note%20%28a%29%3A%20Net%20Income%20%28Loss%29%20from%20Ongoing%20Operations%20Reconciliation) This note provides a reconciliation of GAAP net income from continuing operations to non-GAAP net income from ongoing operations, excluding special items like plant shutdowns, asset impairments, and gains/losses from asset sales, to offer a clearer view of core operating performance - Net income (loss) from ongoing operations is a non-GAAP measure that excludes effects of plant shutdowns, asset impairments, restructurings, asset sales, discontinued operations, and other special items[55](index=55&type=chunk) Net Income (Loss) from Ongoing Operations Reconciliation (In Millions) | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | H1 2025 ($ million) | H1 2024 ($ million) | | :---------------------------------------- | :------ | :------ | :------ | :------ | | Net income (loss) from continuing operations (GAAP) | $1.8 | $9.2 | $2.5 | $11.8 | | After-tax effects of: | | | | | | (Gains) losses associated with plant shutdowns, etc. | — | 0.1 | — | 0.5 | | (Gains) losses from sale of assets and other | — | 1.0 | 2.9 | 2.7 | | Net income (loss) from ongoing operations | $1.8 | $10.3 | $5.4 | $15.0 | | Diluted EPS from ongoing operations | $0.05 | $0.30 | $0.15 | $0.44 | [Note (b): EBITDA and EBIT from Ongoing Operations Definition](index=13&type=section&id=Note%20%28b%29%3A%20EBITDA%20and%20EBIT%20from%20Ongoing%20Operations%20Definition) This note defines EBITDA and EBIT from ongoing operations as key non-GAAP segment profitability metrics used by management and provided for investor analysis, emphasizing they are not GAAP alternatives - EBITDA from ongoing operations is the key segment profitability metric used by the Company's chief operating decision maker (CODM) to assess segment financial performance[55](index=55&type=chunk) - EBIT from ongoing operations is a non-GAAP financial measure provided as a widely understood and utilized metric for investors to analyze the Company's core operations[55](index=55&type=chunk) [Note (c): Gains and Losses from Special Items](index=14&type=section&id=Note%20%28c%29%3A%20Gains%20and%20Losses%20from%20Special%20Items) This note details the pre-tax and net-of-tax impacts of various special items, including consulting expenses for ERP/MES, legal fees, storm damage, aluminum premium charges, business development fees, and land sale proceeds, affecting both Aluminum Extrusions and Corporate segments Special Items for Aluminum Extrusions (H1 2025, In Millions) | Item | Pre-Tax ($ million) | Net of Tax ($ million) | | :---------------------------------------- | :------ | :--------- | | Consulting expenses for ERP/MES project | $0.8 | $0.6 | | Legal fees (Aluminum Extruders Trade Case) | $0.1 | $0.2 | | Storm damage to Newnan, Georgia plant | $(0.2) | $(0.1) | | Aluminum premium charge (unplanned maintenance) | $0.3 | $0.2 | | **Total for Aluminum Extrusions** | **$1.0**| **$0.9** | Special Items for Corporate (H1 2025, In Millions) | Item | Pre-Tax ($ million) | Net of Tax ($ million) | | :---------------------------------------- | :------ | :--------- | | Professional fees (business development) | $3.8 | $2.9 | | Professional fees (internal control remediation) | $0.2 | $0.1 | | Group annuity contract premium adjustment | $0.1 | $0.1 | | Professional fees (ABL Facility transition) | $0.2 | $0.2 | | Proceeds on the sale of corporate-owned land | $(1.5) | $(1.2) | | **Total for Corporate** | **$2.8**| **$2.1** | Special Items for Aluminum Extrusions (H1 2024, In Millions) | Item | Pre-Tax ($ million) | Net of Tax ($ million) | | :---------------------------------------- | :------ | :--------- | | Consulting expenses for ERP/MES project | $1.4 | $1.1 | | Storm damage to Newnan, Georgia plant | $0.3 | $0.2 | | Legal fees (Aluminum Extruders Trade Case) | $0.5 | $0.4 | | **Total for Aluminum Extrusions** | **$2.2**| **$1.7** | Special Items for PE Films (H1 2024, In Millions) | Item | Pre-Tax ($ million) | Net of Tax ($ million) | | :---------------------------------------- | :------ | :--------- | | Richmond, VA Technical Center closure expenses | $0.3 | $0.2 | | Richmond, VA Technical Center lease modification | $0.3 | $0.3 | | **Total for PE Films** | **$0.6**| **$0.5** | [Note (d): Effective Tax Rate Reconciliation](index=15&type=section&id=Note%20%28d%29%3A%20Effective%20Tax%20Rate%20Reconciliation) This note reconciles pre-tax and post-tax balances for net income from ongoing operations, illustrating the impact on the effective tax rate, which significantly increased in H1 2025 compared to H1 2024 Effective Tax Rate Reconciliation (In Millions) | Metric | Pre-Tax (a) ($ million) | Taxes Expense (b) ($ million) | After-Tax ($ million) | Effective Tax Rate (b)/(a) | | :---------------------------------------- | :---------- | :---------------- | :-------- | :------------------------- | | **Three Months Ended June 30, 2025** | | | | | | Net income (loss) from continuing operations (GAAP) | $2.8 | $1.0 | $1.8 | 35.0% | | Net income (loss) from ongoing operations | $2.8 | $1.0 | $1.8 | 35.0% | | **Three Months Ended June 30, 2024** | | | | | | Net income (loss) from continuing operations (GAAP) | $9.1 | $(0.1) | $9.2 | (0.4)% | | Net income (loss) from ongoing operations | $10.6 | $0.3 | $10.3 | 2.8% | | **Six Months Ended June 30, 2025** | | | | | | Net income (loss) from continuing operations (GAAP) | $4.1 | $1.6 | $2.5 | 38.4% | | Net income (loss) from ongoing operations | $7.9 | $2.5 | $5.4 | 31.3% | | **Six Months Ended June 30, 2024** | | | | | | Net income (loss) continuing operations (GAAP) | $14.1 | $2.3 | $11.8 | 16.6% | | Net income (loss) from ongoing operations | $18.3 | $3.3 | $15.0 | 18.0% | [Note (e): Net Debt Calculation](index=15&type=section&id=Note%20%28e%29%3A%20Net%20Debt%20Calculation) This note defines and calculates net debt as a non-GAAP measure, showing a decrease in net debt from December 31, 2024, to June 30, 2025, which management uses to evaluate financial leverage - Net debt is a non-GAAP financial measure calculated as total debt less cash and cash equivalents, used by management and investors to evaluate financial leverage[61](index=61&type=chunk) Net Debt Calculation (In Millions) | Metric | June 30, 2025 ($ million) | Dec 31, 2024 ($ million) | | :---------------------- | :------------ | :----------- | | Short-term debt | $0.6 | $1.3 | | ABL revolving facility | $62.0 | $60.6 | | Total debt | $62.6 | $61.9 | | Less: Cash and cash equivalents | $9.8 | $7.1 | | Net debt | $52.8 | $54.8 | [Note (f): Consolidated EBITDA from Ongoing Operations Reconciliation](index=16&type=section&id=Note%20%28f%29%3A%20Consolidated%20EBITDA%20from%20Ongoing%20Operations%20Reconciliation) This note provides a reconciliation of consolidated EBITDA from ongoing operations, a non-GAAP measure, to GAAP net income from continuing operations, excluding various non-operating items to reflect core operational performance - Consolidated EBITDA from ongoing operations is a non-GAAP measure that excludes special items, depreciation & amortization, stock option-based compensation, interest, and income taxes, used to gauge operating performance[63](index=63&type=chunk) Consolidated EBITDA from Ongoing Operations Reconciliation (In Millions) | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | H1 2025 ($ million) | H1 2024 ($ million) | | :---------------------------------------- | :------ | :------ | :------ | :------ | | Net income (loss) from continuing operations (GAAP) | $1.8 | $9.2 | $2.5 | $11.8 | | Net income (loss) from ongoing operations | $1.8 | $10.3 | $5.4 | $15.0 | | Plus: | | | | | | Depreciation and amortization | 5.4 | 5.9 | 10.9 | 11.8 | | Interest expense | 1.8 | 1.1 | 2.8 | 2.3 | | Income taxes from ongoing operations | 1.0 | 0.3 | 2.5 | 3.3 | | Consolidated EBITDA from ongoing operations | $10.0 | $17.6 | $21.6 | $32.4 | [Note (g): PE Films Technical Center Closure](index=16&type=section&id=Note%20%28g%29%3A%20PE%20Films%20Technical%20Center%20Closure) This note details the company's plan to close the PE Films technical center in Richmond, VA, and reduce efforts in the semiconductor market, consolidating R&D activities at the Pottsville, PA facility - In August 2023, the Company adopted a plan to close the PE Films technical center in Richmond, VA, and reduce efforts to develop and sell films supporting the semiconductor market[63](index=63&type=chunk) - Future research & development activities for PE Films will be performed at the production facility in Pottsville, PA. All activities ceased at the Richmond, VA technical center by the end of Q1 2024[63](index=63&type=chunk) [Note (h): Credit EBITDA and Fixed Charge Coverage Ratio](index=17&type=section&id=Note%20%28h%29%3A%20Credit%20EBITDA%20and%20Fixed%20Charge%20Coverage%20Ratio) This note presents the computation of Credit EBITDA, as defined in the ABL Facility, and the Fixed Charge Coverage Ratio, which are key metrics for assessing the Company's compliance with debt covenants and overall financial health - Credit EBITDA, as defined in the ABL Facility, is a non-GAAP measure used for debt covenant compliance and financial leverage assessment[65](index=65&type=chunk)[66](index=66&type=chunk) Credit EBITDA and Net Leverage Ratio (As of/for Twelve Months Ended June 30, 2025) | Metric | Amount ($ million) | | :---------------- | :---------- | | Net debt | 52.8 | | Credit EBITDA | 42.0 | | Net leverage ratio | 1.3 | Fixed Charge Coverage Ratio (As of/for Twelve Months Ended June 30, 2025) | Metric | Amount ($ million) | | :------------------------ | :---------- | | Credit EBITDA | 41.950 | | Unfinanced capital expenditures | 13.873 | | Fixed charges | 5.716 | | Fixed charge coverage ratio | 4.91 |

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Tredegar Corporation's unaudited condensed consolidated financial statements, including balance sheets, income statements, comprehensive income statements, cash flow statements, and statements of shareholders' equity, along with detailed notes explaining significant accounting policies, segment information, debt, and discontinued operations [Condensed Consolidated Balance Sheets (unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) Condensed Consolidated Balance Sheet Highlights (In Thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :-------------- | :---------------- | :----- | | Total Assets | $371,585 | $356,357 | $15,228 | | Total Liabilities | $177,479 | $175,389 | $2,090 | | Total Shareholders' Equity | $194,106 | $180,968 | $13,138 | | Cash and cash equivalents | $9,795 | $7,062 | $2,733 | | Accounts and other receivables, net | $78,833 | $64,817 | $14,016 | | Inventories | $66,648 | $51,381 | $15,267 | [Condensed Consolidated Statements of Income (Loss) (unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)%20(unaudited)) Condensed Consolidated Statements of Income (Loss) Highlights (In Thousands, Except Per Share Data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :-------------------------------- | :------------------------------- | :------------------------------- | :----- | | Sales | $179,116 | $153,940 | $25,176 | | Net income (loss) from continuing operations | $1,828 | $9,170 | $(7,342) | | Net income (loss) | $1,731 | $8,792 | $(7,061) | | Basic earnings (loss) per share | $0.05 | $0.26 | $(0.21) | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Sales | $343,853 | $297,912 | $45,941 | | Net income (loss) from continuing operations | $2,500 | $11,774 | $(9,274) | | Net income (loss) | $11,832 | $12,080 | $(248) | | Basic earnings (loss) per share | $0.34 | $0.35 | $(0.01) | [Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(unaudited)) Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (In Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | | :---------------------- | :------------------------------- | :------------------------------- | :----- | | Net income (loss) | $1,731 | $8,792 | $(7,061) | | Other comprehensive income (loss) | $595 | $(6,177) | $6,772 | | Comprehensive income (loss) | $2,326 | $2,615 | $(289) | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :---------------------- | :----------------------------- | :----------------------------- | :----- | | Net income (loss) | $11,832 | $12,080 | $(248) | | Other comprehensive income (loss) | $335 | $(8,656) | $8,991 | | Comprehensive income (loss) | $12,167 | $3,424 | $8,743 | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Condensed Consolidated Statements of Cash Flows Highlights (In Thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :------------------------------------ | :----------------------------- | :----------------------------- | :----- | | Net cash provided by (used in) operating activities | $(2,852) | $7,329 | $(10,181) | | Net cash provided by (used in) investing activities | $6,101 | $(4,555) | $10,656 | | Net cash provided by (used in) financing activities | $(569) | $(4,909) | $4,340 | | Increase (decrease) in cash and cash equivalents | $2,733 | $(4,786) | $7,519 | | Cash and cash equivalents at end of period | $9,795 | $8,669 | $1,126 | - Proceeds from the sale of Terphane contributed **$9,835 thousand** to investing activities in the first six months of 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(unaudited)) Total Shareholders' Equity (In Thousands) | Date | Amount | | :---------------- | :------- | | June 30, 2025 | $194,106 | | January 1, 2025 | $180,968 | | June 30, 2024 | $159,964 | | January 1, 2024 | $155,653 | - For the six months ended June 30, 2025, net income was **$11,832 thousand**, foreign currency translation adjustment was **$75 thousand**, and derivative financial instruments adjustment was **$398 thousand**[17](index=17&type=chunk) [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) [1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=1.%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The sale of the flexible packaging films business (Terphane) was completed on November 1, 2024, with all historical results presented as discontinued operations from the fourth quarter of 2024[24](index=24&type=chunk) - The PE Films technical center in Richmond, VA, was closed by the end of the first quarter of 2024, with R&D activities relocated to Pottsville, PA[25](index=25&type=chunk) - ASU 2023-09, effective for annual periods beginning after December 15, 2024, will require improved income tax disclosures, including disaggregation by federal, state, and foreign taxes[27](index=27&type=chunk)[28](index=28&type=chunk) [2. ACCOUNTS AND OTHER RECEIVABLES](index=10&type=section&id=2.%20ACCOUNTS%20AND%20OTHER%20RECEIVABLES) Accounts and Other Receivables, Net (In Thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Customer receivables | $78,646 | $64,094 | | Other receivables | $459 | $952 | | Less: Allowance for bad debts | $(272) | $(229) | | Total accounts and other receivables, net | $78,833 | $64,817 | [3. INVENTORIES](index=10&type=section&id=3.%20INVENTORIES) Components of Inventories (In Thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :---------------- | | Finished goods | $14,852 | $15,051 | | Work-in-process | $5,321 | $2,986 | | Raw materials | $22,856 | $12,158 | | Stores, supplies and other | $23,619 | $21,186 | | Total | $66,648 | $51,381 | [4. PENSION AND OTHER POSTRETIREMENT BENEFITS](index=10&type=section&id=4.%20PENSION%20AND%20OTHER%20POSTRETIREMENT%20BENEFITS) - The termination and settlement process for the frozen defined benefit pension plan was completed on November 3, 2023, with the remaining obligation transferred to Massachusetts Mutual Life Insurance Company[32](index=32&type=chunk) - A pre-tax pension settlement loss of **$92.3 million** was recognized in 2023[32](index=32&type=chunk) Net Periodic Benefit Cost for Pension Benefits (In Thousands) | Component | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :----------------------------- | :----------------------------- | | Service cost | $0 | $0 | | Interest cost | $39 | $38 | | Amortization of prior service costs, (gains) losses and net transition asset | $10 | $11 | | Net periodic benefit cost | $49 | $49 | [5. EARNINGS PER SHARE](index=11&type=section&id=5.%20EARNINGS%20PER%20SHARE) Shares Used to Compute Earnings (Loss) Per Share (In Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Weighted average shares outstanding (basic) | 34,775 | 34,378 | 34,694 | 34,350 | | Incremental dilutive shares attributable to stock options and restricted stock | — | — | — | — | | Shares used to compute diluted earnings per share | 34,775 | 34,378 | 34,694 | 34,350 | - Average out-of-the-money options excluded from diluted EPS calculation were **1,245,367** for the three months and **1,285,628** for the six months ended June 30, 2025[36](index=36&type=chunk) [6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=12&type=section&id=6.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) Total Accumulated Other Comprehensive Income (Loss) (In Thousands) | Date | Amount | | :---------------- | :------- | | June 30, 2025 | $6,534 | | January 1, 2025 | $6,199 | | June 30, 2024 | $(90,353) | | January 1, 2024 | $(81,697) | - For the six months ended June 30, 2025, other comprehensive income (loss) components included a **$75 thousand** increase from foreign currency translation and a **$398 thousand** increase from derivative financial instruments, offset by a **$(138) thousand** decrease from pension and other postretirement benefit adjustments[39](index=39&type=chunk) [7. DERIVATIVES](index=13&type=section&id=7.%20DERIVATIVES) - Tredegar uses aluminum futures contracts as cash flow hedges to manage margin exposure from fixed-price forward sales contracts in its Aluminum Extrusions segment[43](index=43&type=chunk) Notional Amount of Aluminum Futures Contracts (In Millions) | Date | Amount | | :---------------- | :------- | | June 30, 2025 | $7.9 | | December 31, 2024 | $4.3 | - The net asset value of aluminum futures contracts increased from **$115 thousand** at December 31, 2024, to **$857 thousand** at June 30, 2025[45](index=45&type=chunk) - The Company expects **$0.6 million** of unrealized after-tax gains on aluminum derivative instruments to be reclassified to earnings within the next 12 months[46](index=46&type=chunk) [8. INCOME TAXES](index=14&type=section&id=8.%20INCOME%20TAXES) - The effective tax rate for the first six months of 2025 was **38.4%**, significantly higher than **16.6%** in the first six months of 2024, primarily due to taxable discrete items (e.g., stock-based compensation) and lower book income[47](index=47&type=chunk) - New U.S. tax legislation (the "One Big Beautiful Bill Act" or "OBBBA") was signed on July 4, 2025, making permanent many 2017 tax provisions and changing corporate tax provisions, but is not expected to have a material impact on results of operations[48](index=48&type=chunk) [9. BUSINESS SEGMENTS](index=15&type=section&id=9.%20BUSINESS%20SEGMENTS) - Tredegar operates two business segments: Aluminum Extrusions (Bonnell Aluminum) and PE Films, producing custom aluminum extrusions and surface protection films, respectively[49](index=49&type=chunk) - EBITDA from ongoing operations is the key profitability measure used by the chief operating decision maker (CODM) for assessing financial performance and allocating resources[50](index=50&type=chunk)[51](index=51&type=chunk) Segment Net Sales and EBITDA from Ongoing Operations (Three Months Ended June 30, In Thousands) | Segment | Net Sales 2025 | Net Sales 2024 | EBITDA 2025 | EBITDA 2024 | | :------------------ | :------------- | :------------- | :---------- | :---------- | | Aluminum Extrusions | $148,367 | $119,413 | $9,283 | $12,907 | | PE Films | $24,596 | $29,197 | $6,711 | $10,133 | | Total | $172,963 | $148,610 | $15,994 | $23,040 | Segment Net Sales and EBITDA from Ongoing Operations (Six Months Ended June 30, In Thousands) | Segment | Net Sales 2025 | Net Sales 2024 | EBITDA 2025 | EBITDA 2024 | | :------------------ | :------------- | :------------- | :---------- | :---------- | | Aluminum Extrusions | $281,999 | $233,636 | $18,441 | $25,447 | | PE Films | $50,134 | $53,932 | $14,233 | $17,037 | | Total | $332,133 | $287,568 | $32,674 | $42,484 | Identifiable Assets by Segment (In Thousands) | Segment | June 30, 2025 | December 31, 2024 | | :------------------ | :-------------- | :---------------- | | Aluminum Extrusions | $266,886 | $247,205 | | PE Films | $54,905 | $55,081 | | General corporate | $39,999 | $46,883 | | Cash and cash equivalents | $9,795 | $7,062 | | Total | $371,585 | $356,357 | [10. DEBT](index=21&type=section&id=10.%20DEBT) - Amendment No. 5 to the ABL Facility, entered in May 2025, extended the maturity date of the **$125 million** senior secured asset-based revolving credit facility to May 6, 2030[66](index=66&type=chunk) - As of June 30, 2025, funds available to borrow under the ABL Facility were **$50.6 million**, representing **40.5%** of the aggregate commitment[66](index=66&type=chunk) - The PE Films Guangzhou business had a **9.5 million Chinese Yuan** revolving loan that matured on July 3, 2025, with an interest rate of **2.90%** as of June 30, 2025, secured by the factory building[75](index=75&type=chunk) - The Company was in compliance with all debt covenants as of June 30, 2025[74](index=74&type=chunk) [11. DISCONTINUED OPERATIONS](index=22&type=section&id=11.%20DISCONTINUED%20OPERATIONS) - The sale of the Terphane flexible packaging films business was completed on November 1, 2024, for a net cash-free and debt-free base consideration of **$116 million**[76](index=76&type=chunk)[77](index=77&type=chunk) - Tredegar received **$60 million** in cash at closing and an additional **$9.8 million** from post-closing settlement in February 2025[77](index=77&type=chunk) - A pre-tax loss of **$74.9 million** was recognized for the year ended December 31, 2024, related to the sale, including the realization of **$102.3 million** in other comprehensive losses on foreign currency translation adjustments[78](index=78&type=chunk) Income (Loss) from Discontinued Operations, Net of Tax (In Thousands) | Period | 2025 | 2024 | | :----------------------------- | :--- | :--- | | Three Months Ended June 30, | $(97) | $(378) | | Six Months Ended June 30, | $9,332 | $306 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Tredegar's financial condition and operational results, analyzing performance for the second quarter and first six months of 2025 compared to 2024, highlighting segment-specific drivers, and discussing liquidity and capital resources [Forward-looking and Cautionary Statements](index=25&type=section&id=Forward-looking%20and%20Cautionary%20Statements) - The report contains forward-looking statements, identified by words like "believe," "estimate," "anticipate," and "expect," which are subject to risks and uncertainties that could cause actual results to differ materially[85](index=85&type=chunk) - Key risk factors include macroeconomic conditions (inflation, interest rates), increased operating costs, noncompliance with debt covenants, labor shortages, IT failures, international business risks, and the impact of tariffs[89](index=89&type=chunk) - The Company expressly disclaims any duty to update forward-looking statements, except as required by applicable law[87](index=87&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes in the Company's critical accounting policies or estimates since December 31, 2024[91](index=91&type=chunk) [Business Overview](index=26&type=section&id=Business%20Overview) - Tredegar Corporation is an industrial manufacturer with two primary businesses: Aluminum Extrusions (custom aluminum extrusions for B&C, automotive, and specialty markets in the U.S.) and PE Films (surface protection films for high-technology applications globally)[93](index=93&type=chunk) - The Company employs approximately **1,600 people** and operates manufacturing facilities in the U.S. and China[93](index=93&type=chunk) - EBITDA from ongoing operations is the key profitability measure used by management to assess financial performance and allocate resources[94](index=94&type=chunk) [Second Quarter Financial Results Highlights](index=26&type=section&id=Second%20Quarter%20Financial%20Results%20Highlights) - Net income (loss) from continuing operations for Q2 2025 was **$1.8 million** (**$0.05 per diluted share**), down from **$9.2 million** (**$0.27 per diluted share**) in Q2 2024[96](index=96&type=chunk) Segment EBITDA from Ongoing Operations (Q2, In Millions) | Segment | Q2 2025 | Q2 2024 | | :------------------ | :------ | :------ | | Aluminum Extrusions | $9.3 | $12.9 | | PE Films | $6.7 | $10.1 | - Aluminum Extrusions sales volume increased to **40.7 million pounds** in Q2 2025 from **34.9 million pounds** in Q2 2024, with net new orders up **21%** YoY but down **11%** QoQ[97](index=97&type=chunk) - PE Films sales volume decreased to **9.8 million pounds** in Q2 2025 from **10.5 million pounds** in Q2 2024[97](index=97&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) [Second Quarter of 2025 Compared with the Second Quarter of 2024 Results](index=27&type=section&id=Second%20Quarter%20of%202025%20Compared%20with%20the%20Second%20Quarter%20of%202024%20Results) - Sales increased by **$25.2 million** in Q2 2025 compared to Q2 2024, driven by Aluminum Extrusions' higher volume and metal cost pass-through, partially offset by lower PE Films sales[100](index=100&type=chunk) - Consolidated gross profit margin decreased from **19.2%** in Q2 2024 to **13.6%** in Q2 2025, primarily due to higher variable manufacturing costs, unfavorable labor productivity, and FIFO timing issues in Aluminum Extrusions, and lower contribution margin in PE Films[101](index=101&type=chunk) - Interest expense increased to **$1.8 million** in Q2 2025 from **$1.1 million** in Q2 2024, mainly due to a **$0.8 million** write-off of deferred financing fees related to the ABL Facility amendment[103](index=103&type=chunk) - The effective tax rate for continuing operations was **35.0%** in Q2 2025, compared to **(0.4)%** in Q2 2024, impacted by taxable discrete items and lower book income[104](index=104&type=chunk) [First Six Months of 2025 Compared with the First Six Months of 2024 Results](index=29&type=section&id=First%20Six%20Months%20of%202025%20Compared%20with%20the%20First%20Six%20Months%20of%202024%20Results) - Sales increased by **$45.9 million** in the first six months of 2025 compared to 2024, primarily due to higher sales volume and metal cost pass-through in Aluminum Extrusions, partially offset by decreased PE Films sales[110](index=110&type=chunk) - Consolidated gross profit margin decreased from **17.9%** in H1 2024 to **13.9%** in H1 2025, attributed to lower spread, higher variable manufacturing costs, and increased fixed costs in Aluminum Extrusions, and lower volume in PE Films[111](index=111&type=chunk) - Interest expense increased to **$2.8 million** in H1 2025 from **$2.3 million** in H1 2024, mainly due to a **$0.8 million** write-off of deferred financing fees[113](index=113&type=chunk) - The effective tax rate for continuing operations was **38.4%** in H1 2025, compared to **16.6%** in H1 2024, influenced by taxable discrete items and lower book income[114](index=114&type=chunk) [Segment Operations Review](index=31&type=section&id=Segment%20Operations%20Review) [Aluminum Extrusions](index=31&type=section&id=Aluminum%20Extrusions) Aluminum Extrusions Performance (In Thousands, Except Percentages) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :-------------------------- | :------ | :------ | :------- | :------ | :------ | :------- | | Sales volume (lbs) | 40,690 | 34,906 | 16.6% | 78,608 | 68,747 | 14.3% | | Net sales | $148,367 | $119,413 | 24.2% | $281,999 | $233,636 | 20.7% | | EBITDA from ongoing operations | $9,283 | $12,907 | (28.1)% | $18,441 | $25,447 | (27.5)% | | Capital expenditures | $2,386 | $1,463 | - | $4,757 | $3,012 | - | - Net new orders increased **21%** in Q2 2025 versus Q2 2024, but declined **11%** versus Q1 2025, marking the first quarterly decline after 10 consecutive increases[121](index=121&type=chunk) - The increase in Section 232 tariffs to **50%** (effective June 4, 2025) led to a **20%** decline in net new orders, attributed to lower demand and customer evaluation of tariff permanency[123](index=123&type=chunk)[124](index=124&type=chunk) - EBITDA from ongoing operations decreased due to higher variable manufacturing costs (material yield, labor rates, productivity), higher fixed costs, increased SG&A, and higher employee-related medical costs[128](index=128&type=chunk)[129](index=129&type=chunk) - Projected capital expenditures for Bonnell Aluminum in 2025 are **$17 million**[131](index=131&type=chunk) [PE Films](index=33&type=section&id=PE%20Films) PE Films Performance (In Thousands, Except Percentages) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :-------------------------- | :------ | :------ | :------- | :------ | :------ | :------- | | Sales volume (lbs) | 9,798 | 10,548 | (7.1)% | 19,437 | 20,583 | (5.6)% | | Net sales | $24,596 | $29,197 | (15.8)% | $50,134 | $53,932 | (7.0)% | | EBITDA from ongoing operations | $6,711 | $10,133 | (33.8)% | $14,233 | $17,037 | (16.5)% | | Capital expenditures | $295 | $216 | - | $882 | $610 | - | - Surface protection films volume decreased **18.2%** in Q2 2025 versus Q2 2024, while overwrap films volume increased **6.1%**[133](index=133&type=chunk) - EBITDA from ongoing operations decreased primarily due to a **$3.1 million** decrease in contribution margin in Q2 2025, mainly from lower surface protection volume, partially offset by cost improvements[134](index=134&type=chunk)[135](index=135&type=chunk) - Projected capital expenditures for PE Films in 2025 are **$2 million**[138](index=138&type=chunk) [Corporate Expenses](index=34&type=section&id=Corporate%20Expenses) - Corporate expenses, net, increased by **$2.6 million** in the first six months of 2025 compared to 2024[139](index=139&type=chunk) - This increase was driven by higher professional fees for business development (**$3.5 million**), increased employee incentive compensation (**$1.1 million**), and higher stock-based compensation (**$0.6 million**)[139](index=139&type=chunk) - Offsetting factors included a gain on the sale of corporate-owned land (**$1.5 million**), lower external and internal audit fees (**$0.7 million**), and reduced professional fees for internal control remediation (**$0.4 million**)[139](index=139&type=chunk) [Reconciliation of Net Sales and EBITDA from Ongoing Operations by Segment](index=35&type=section&id=Reconciliation%20of%20Net%20Sales%20and%20EBITDA%20from%20Ongoing%20Operations%20by%20Segment) Reconciliation of Net Sales (In Thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------ | :------ | :------ | :------ | :------ | | Aluminum Extrusions | $148,367 | $119,413 | $281,999 | $233,636 | | PE Films | $24,596 | $29,197 | $50,134 | $53,932 | | Total net sales | $172,963 | $148,610 | $332,133 | $287,568 | | Add back freight | $6,153 | $5,330 | $11,720 | $10,344 | | Sales (consolidated) | $179,116 | $153,940 | $343,853 | $297,912 | Reconciliation of EBITDA from Ongoing Operations (In Thousands) | Segment | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------------------------- | :------ | :------ | :------ | :------ | | Aluminum Extrusions EBITDA | $9,283 | $12,907 | $18,441 | $25,447 | | PE Films EBITDA | $6,711 | $10,133 | $14,233 | $17,037 | | Total EBITDA from Ongoing Operations | $15,994 | $23,040 | $32,674 | $42,484 | | Income (loss) from continuing operations before income taxes | $2,812 | $9,132 | $4,060 | $14,120 | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash used in operating activities was **$2.9 million** in H1 2025, a decrease from **$7.3 million** provided in H1 2024, primarily due to higher working capital and lower segment EBITDA[147](index=147&type=chunk) - Net cash provided by investing activities was **$6.1 million** in H1 2025, compared to **$4.6 million** used in H1 2024, driven by **$9.8 million** from the Terphane sale settlement and **$1.9 million** from corporate land sale[148](index=148&type=chunk) - Net cash used in financing activities decreased to **$0.6 million** in H1 2025 from **$4.9 million** in H1 2024, mainly due to lower debt principal payments[149](index=149&type=chunk) - Cash and cash equivalents stood at **$9.8 million** as of June 30, 2025, including **$1.8 million** held outside the U.S[150](index=150&type=chunk) - The Company believes existing borrowing availability, current cash balances, and cash flow from operations will be sufficient to satisfy short-term material cash requirements for at least the next 12 months[160](index=160&type=chunk) [Debt and Credit Agreements](index=37&type=section&id=Debt%20and%20Credit%20Agreements) - The ABL Facility's maturity was extended to May 6, 2030, with **$50.6 million** available for borrowing as of June 30, 2025[152](index=152&type=chunk) - The financial covenant requires a minimum fixed charge coverage ratio of **1.00:1.00**, triggered if availability falls below certain thresholds[153](index=153&type=chunk) - The Company was in compliance with all debt covenants as of June 30, 2025[154](index=154&type=chunk) Credit EBITDA and Fixed Charge Coverage Ratio (Twelve Months Ended June 30, 2025, In Thousands) | Metric | Amount | | :-------------------------- | :------- | | Credit EBITDA | $41,950 | | Unfinanced capital expenditures | $13,873 | | Fixed charges | $5,716 | | Fixed charge coverage ratio | 4.91 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details Tredegar's exposure to various market risks, including interest rate fluctuations, raw material price volatility (aluminum, polyethylene, polypropylene resin), energy costs, and foreign currency exchange rates, outlining strategies to manage these exposures - Tredegar is exposed to market risks from interest rates, polyethylene and polypropylene resin prices, aluminum ingot and scrap prices, energy prices (natural gas), and foreign currencies (Chinese Yuan)[161](index=161&type=chunk) - Aluminum Extrusions hedges its exposure to aluminum price volatility for fixed-price forward sales contracts (generally no longer than 12 months) using forward purchase commitments and futures contracts[163](index=163&type=chunk) - PE Films utilizes index-based raw material cost pass-through arrangements with customers, with some agreements having a **90-day lag** for resin price changes, and implemented a quarterly resin cost pass-through for Surface Protection effective July 1, 2021[173](index=173&type=chunk) - Foreign currency changes had an unfavorable impact of **$0.1 million** on PE Films' EBITDA from ongoing operations for both the second quarter and first six months of 2025 compared to the same periods in 2024[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=42&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[182](index=182&type=chunk) [Changes in Internal Control Over Financial Reporting](index=42&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) - There has been no material change in the Company's internal control over financial reporting during the quarter ended June 30, 2025[184](index=184&type=chunk) PART II - OTHER INFORMATION [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the previously disclosed risk factors in the 2024 Form 10-K, stating that there are no material updates or changes - There are no material updates or changes to the risk factors previously disclosed in the 2024 Form 10-K[185](index=185&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) This section reports that no director or officer engaged in or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025 - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025[186](index=186&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including key credit agreement amendments and certifications - Exhibit 10.1 is Amendment No. 5, dated May 6, 2025, to the Second Amended and Restated Credit Agreement[187](index=187&type=chunk) - Exhibits 31.1 and 31.2 are certifications of the President and CEO and Executive Vice President and CFO, respectively, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002[187](index=187&type=chunk) - Exhibits 32.1 and 32.2 are certifications of the President and CEO and Executive Vice President and CFO, respectively, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002[187](index=187&type=chunk)

Core Insights - Tredegar Corporation's shares have increased by 3.8% since the earnings report for Q1 2025, underperforming compared to the S&P 500's 4.5% growth during the same period [1] - The stock has shown a significant increase of 15.8% over the past month, outperforming the S&P 500's 8.8% growth [1] Financial Performance - For Q1 2025, Tredegar reported a net income from continuing operations of $0.02 per share, down from $0.08 per share in Q1 2024 [2] - Adjusted net income from ongoing operations decreased to $0.10 per share from $0.14 per share year-over-year [2] - Net sales reached $164.7 million, marking a 14.4% increase from $144 million in the same quarter last year [2] Segment Performance - **Aluminum Extrusions (Bonnell Aluminum)**: - Net sales increased by 17% year-over-year to $133.6 million, driven by a 12% rise in sales volume and higher metal costs [4] - EBITDA from ongoing operations fell by 27% to $9.2 million due to unfavorable sales mix, increased input costs, and higher labor and maintenance expenses [4] - Specialty products saw a volume growth of 52.8%, primarily from solar panel applications [4] - **PE Films**: - EBITDA improved by 8.9% to $7.5 million despite a 4% drop in sales volume [5] - Net sales increased by 3.2% to $25.5 million, supported by strong performance in surface protection films [5] Management Commentary - CEO John Steitz highlighted a recovery in Bonnell Aluminum, with a 36% year-over-year increase in net new orders, reaching the highest open orders in two years [6] - The new Section 232 tariffs on aluminum imports are expected to help regain market share lost to underpriced imports [6] - On PE Films, management anticipates normalization in demand in subsequent quarters, remaining cautious about global trade developments [7] Cost and Expense Analysis - The decline in Aluminum Extrusions' EBITDA was attributed to a lower spread between selling prices and metal costs, unfavorable manufacturing yields, and increased labor and maintenance expenses [8] - SG&A costs in this segment rose by 38.5%, primarily due to compensation, travel, and consulting fees [9] Guidance and Financial Position - For 2025, Tredegar forecasts capital expenditures of $17 million for Bonnell Aluminum and $3 million for PE Films [11] - Total debt decreased to $56.6 million as of March 31, 2025, from $61.9 million at the end of 2024, with a net leverage ratio of 1.1x [12] Other Developments - The company completed the sale of its Terphane business, resulting in a $9.4 million gain from discontinued operations [13] - Restructuring activities included the closure of the Richmond, VA, PE Films technical center [13]

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Overall Financial Performance](index=1&type=section&id=Overall%20Financial%20Performance) Tredegar Corporation's net income from continuing operations for Q1 2025 was $0.7 million, down from $2.6 million in Q1 2024, with adjusted net income from continuing operations also decreasing to $3.6 million from $4.7 million 2025 Q1 Key Financial Metrics (Continuing Operations) | Metric | Q1 2025 | Q1 2024 | | :--------------------------------- | :--------------- | :--------------- | | Net Income from Continuing Operations (million USD) | 0.7 | 2.6 | | Diluted EPS from Continuing Operations | 0.02 | 0.08 | | Net Income from Continuing Operations (Non-GAAP, million USD) | 3.6 | 4.7 | | Diluted EPS from Continuing Operations (Non-GAAP) | 0.10 | 0.14 | [CEO Commentary & Strategic Highlights](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Highlights) CEO John Steitz noted Bonnell Aluminum's sales, net new orders, and backlog recovery, benefiting from new Section 232 aluminum tariffs, while PE Films performed well with full-year normalization expected, and the company maintained a strong balance sheet with a 1.1x net leverage ratio and a five-year extension of its $125 million ABL facility - Bonnell Aluminum's sales volume, net new orders, and backlog continue to recover, with the company believing it has moved past the Q3 2023 trough, further benefiting from new Section 232 aluminum import tariffs implemented without country or product-specific exclusions[5](index=5&type=chunk) - PE Films performed exceptionally well in the first quarter, with expectations for normalization throughout the remainder of the year, and has not yet experienced adverse customer demand impacts from potential tariff actions[5](index=5&type=chunk) - The company's balance sheet remains strong, with a **net leverage ratio of 1.1x** as of March-end, and on May 6, the company successfully extended its **$125 million asset-backed loan facility** for five years to support business needs[5](index=5&type=chunk) 2025 Q1 EBITDA and Volume Highlights by Business Segment | Business Segment | Metric | Q1 2025 | Q1 2024 | Q4 2024 | Change (YoY) | Change (QoQ) | | :--------- | :--- | :------------- | :------------- | :------------- | :---------- | :---------- | | **Aluminum Extrusions** | EBITDA (million USD) | 9.2 | 12.5 | 9.7 | (26.4%) | (5.2%) | | | Volume (million lbs) | 37.9 | 33.8 | - | 12.1% | - | | | Net New Orders (YoY) | 36% | - | - | - | - | | | Net New Orders (QoQ) | 24% | - | - | - | - | | | Backlog (million lbs) | 25 | 15 | 17 | 66.7% | 47.1% | | **PE Films** | EBITDA (million USD) | 7.5 | 6.9 | 7.6 | 8.7% | (1.3%) | | | Volume (million lbs) | 9.6 | 10.0 | - | (4.0%) | - | [Operations Review](index=2&type=section&id=OPERATIONS%20REVIEW) [Aluminum Extrusions](index=2&type=section&id=Aluminum%20Extrusions) Bonnell Aluminum achieved $133.6 million in net sales for Q1 2025, up 17.0% with a 12.0% volume increase, but EBITDA from continuing operations declined 27.0% to $9.2 million due to lower price-cost spread, increased variable manufacturing costs, and higher fixed and SG&A expenses, despite recovering solar market share and new tariff benefits Aluminum Extrusions Financial Summary | Metric (thousand USD, except percentages) | March 31, 2025 | March 31, 2024 | % Change | | :--------------------------- | :------------- | :------------- | :------- | | Volume (lbs) | 37,918 | 33,841 | 12.0% | | Net Sales | 133,635 | 114,222 | 17.0% | | Variable Costs | 103,523 | 84,786 | (22.1)% | | EBITDA from Continuing Operations | 9,160 | 12,540 | (27.0)% | | Depreciation & Amortization | (4,225) | (4,542) | 7.0% | | EBIT from Continuing Operations | 4,935 | 7,998 | (38.3)% | | Capital Expenditures | 2,370 | 1,550 | - | [Financial Performance](index=2&type=section&id=Aluminum%20Extrusions_Financial%20Performance) Aluminum Extrusions Financial Summary | Metric (thousand USD, except percentages) | March 31, 2025 | March 31, 2024 | % Change | | :--------------------------- | :------------- | :------------- | :------- | | Volume (lbs) | 37,918 | 33,841 | 12.0% | | Net Sales | 133,635 | 114,222 | 17.0% | | Variable Costs | 103,523 | 84,786 | (22.1)% | | EBITDA from Continuing Operations | 9,160 | 12,540 | (27.0)% | | Depreciation & Amortization | (4,225) | (4,542) | 7.0% | | EBIT from Continuing Operations | 4,935 | 7,998 | (38.3)% | | Capital Expenditures | 2,370 | 1,550 | - | [Sales Volume and Market Trends](index=2&type=section&id=Aluminum%20Extrusions_Sales%20Volume%20and%20Market%20Trends) Aluminum Extrusions Volume by End Market (million lbs) | End Market | March 31, 2025 | March 31, 2024 | % Change (YoY) | December 31, 2024 | % Change (QoQ) | | :------------------- | :------------- | :------------- | :------------ | :------------- | :------------ | | Non-Residential Building & Construction | 19.2 | 20.1 | (4.5)% | 18.2 | 5.5% | | Residential Building & Construction | 2.0 | 1.6 | 25.0% | 2.4 | (16.7)% | | Automotive | 3.1 | 3.2 | (3.1)% | 2.6 | 19.2% | | Specialty Products | 13.6 | 8.9 | 52.8% | 12.6 | 7.9% | | **Total** | **37.9** | **33.8** | **12.0%** | **35.8** | **5.9%** | - Net sales increased by **17.0% year-over-year** in Q1 2025, primarily due to higher sales volume and the pass-through of increased metal costs, partially offset by a lower average fabrication add-on due to changes in sales mix[11](index=11&type=chunk) - Sales volume increased by **12.0% year-over-year** and **5.9% quarter-over-quarter**, driven by higher shipments in specialty markets (particularly solar panels) and TSLOTS aluminum framing systems, with the company estimating solar market growth is partly due to regaining market share previously lost to imported aluminum extrusions[11](index=11&type=chunk) - Net new orders increased by **36% year-over-year** and **24% quarter-over-quarter**, benefiting from improved selling opportunities and strong demand for solar products, curtain wall, and institutional sidewalk covers in non-residential building and construction, marking the tenth consecutive quarter of growth for this metric, supporting the company's view of a steady recovery[11](index=11&type=chunk) - Backlog volume at the end of Q1 2025 was **25 million pounds**, up from **15 million pounds** at the end of Q1 2024 and **17 million pounds** at the end of Q4 2024, reaching its highest level in nearly two years[12](index=12&type=chunk) - On February 10, 2025, Section 232 tariffs on all aluminum imports increased from 10% to 25%, with certain country and product-specific exclusions eliminated, leading the company to believe it has begun to regain some previously import-related market share, especially in specialty markets[13](index=13&type=chunk) [Operational Costs and Profitability Drivers](index=3&type=section&id=Aluminum%20Extrusions_Operational%20Costs%20and%20Profitability%20Drivers) - EBITDA from continuing operations decreased by **$3.4 million year-over-year** in Q1 2025, primarily due to flat contribution margin (a **$2.4 million reduction** from changes in sales mix leading to lower price-cost spread, and increased variable manufacturing costs for material utilization, labor, maintenance, dies, and utilities), and a **$1.7 million benefit** from the timing of aluminum raw material cost flow under the FIFO method (compared to a **$1.3 million charge** in the prior year period)[14](index=14&type=chunk)[16](index=16&type=chunk) - Fixed costs increased by **$1.0 million**, mainly due to higher wages and increased resources to support sales volume growth[16](index=16&type=chunk) - Selling, general, and administrative (SG&A) expenses increased by **$2.6 million**, primarily related to employee compensation (**$1.7 million**), travel and consulting fees (**$0.3 million**), and routine environmental compliance costs (**$0.4 million**)[16](index=16&type=chunk) [Capital Expenditures and Depreciation](index=3&type=section&id=Aluminum%20Extrusions_Capital%20Expenditures%20and%20Depreciation) - Bonnell Aluminum's projected capital expenditures for 2025 are **$17 million**, with **$5 million** allocated for productivity projects and **$12 million** for capital expenditures to support ongoing operations[15](index=15&type=chunk) - Expected depreciation expense for 2025 is **$16 million**, and amortization expense is **$2 million**[15](index=15&type=chunk) [PE Films](index=4&type=section&id=PE%20Films) PE Films' Q1 2025 net sales grew 3.2% to $25.5 million, driven by surface protection film, while EBITDA from continuing operations increased 8.9% to $7.5 million, primarily due to higher surface protection film contribution margin, partially offset by lower encapsulation film volume and unfavorable sales mix, with projected 2025 capital expenditures of $3 million PE Films Financial Summary | Metric (thousand USD, except percentages) | March 31, 2025 | March 31, 2024 | % Change | | :--------------------------- | :------------- | :------------- | :------- | | Volume (lbs) | 9,639 | 10,036 | (4.0)% | | Net Sales | 25,537 | 24,735 | 3.2% | | Variable Costs | 11,977 | 12,024 | 0.4% | | EBITDA from Continuing Operations | 7,520 | 6,904 | 8.9% | | Depreciation & Amortization | (1,250) | (1,329) | 5.9% | | EBIT from Continuing Operations | 6,270 | 5,575 | 12.5% | | Capital Expenditures | 587 | 394 | - | [Financial Performance](index=4&type=section&id=PE%20Films_Financial%20Performance) PE Films Financial Summary | Metric (thousand USD, except percentages) | March 31, 2025 | March 31, 2024 | % Change | | :--------------------------- | :------------- | :------------- | :------- | | Volume (lbs) | 9,639 | 10,036 | (4.0)% | | Net Sales | 25,537 | 24,735 | 3.2% | | Variable Costs | 11,977 | 12,024 | 0.4% | | EBITDA from Continuing Operations | 7,520 | 6,904 | 8.9% | | Depreciation & Amortization | (1,250) | (1,329) | 5.9% | | EBIT from Continuing Operations | 6,270 | 5,575 | 12.5% | | Capital Expenditures | 587 | 394 | - | [Sales Volume and Market Trends](index=4&type=section&id=PE%20Films_Sales%20Volume%20and%20Market%20Trends) - Net sales increased by **3.2% year-over-year** in Q1 2025, primarily due to higher net sales of surface protection films, with surface protection film volume increasing by **4% year-over-year** but decreasing by **5.6% quarter-over-quarter**[19](index=19&type=chunk) - The company believes some display volumes may have been pulled forward due to anticipated U.S. tariffs on imported televisions and mobile devices, and while surface protection films have not yet experienced adverse customer demand impacts from potential tariff actions, the situation remains unclear[19](index=19&type=chunk) - Encapsulation film volume decreased by **11.9% year-over-year**, following a strong performance in Q1 2024[19](index=19&type=chunk) [Operational Costs and Profitability Drivers](index=4&type=section&id=PE%20Films_Operational%20Costs%20and%20Profitability%20Drivers) - EBITDA from continuing operations increased by **$0.6 million year-over-year** in Q1 2025, primarily due to a **$0.9 million increase** in contribution margin[20](index=20&type=chunk) - Surface protection film contribution margin increased by **$1.5 million**, driven by higher volume, favorable sales mix and pricing (**$0.7 million**), and cost improvements (**$0.8 million**)[23](index=23&type=chunk) - Encapsulation film contribution margin decreased by **$0.7 million**, primarily due to lower volume, unfavorable sales mix (**$0.5 million**), and unfavorable pricing (**$0.1 million**)[23](index=23&type=chunk) - PE Films' volume and EBITDA from continuing operations have fluctuated significantly over the past three years, largely due to an unprecedented downturn in the display industry during the second half of 2022 and the first half of 2023, with the average quarterly EBITDA from continuing operations over the past 3.25 years (Q1 2025, full years 2024, 2023, and 2022) being approximately **$4.7 million**[20](index=20&type=chunk) [Capital Expenditures and Depreciation](index=4&type=section&id=PE%20Films_Capital%20Expenditures%20and%20Depreciation) - PE Films' projected capital expenditures for 2025 are **$3 million**, with **$2 million** allocated for productivity projects and **$1 million** for capital expenditures to support ongoing operations[22](index=22&type=chunk) - Expected depreciation expense for 2025 is **$5 million**, with no amortization expense for PE Films[22](index=22&type=chunk) [Corporate Financials & Debt Management](index=5&type=section&id=Corporate%20Financials%20%26%20Debt%20Management) [Corporate Expenses, Interest, and Taxes](index=5&type=section&id=Corporate%20Expenses%2C%20Interest%2C%20and%20Taxes) Q1 2025 corporate net expenses increased by $2.0 million due to business development professional fees and incentive compensation, partially offset by reduced audit and software maintenance costs, while interest expense decreased due to lower debt and rates, and the effective tax rate was influenced by taxable discrete items and a lower estimated annual rate - Corporate net expenses increased by **$2.0 million year-over-year** for the first three months of 2025, primarily due to higher professional fees related to business development (**$2.2 million**) and employee incentive compensation (**$1.0 million**), partially offset by lower external and internal audit fees (**$0.4 million**), professional fees related to internal control over financial reporting remediation activities (**$0.4 million**), and software maintenance fees (**$0.1 million**)[24](index=24&type=chunk) - Interest expense for the first three months of 2025 was **$1.0 million**, down from **$1.2 million** in the prior year period, mainly due to a lower weighted average total debt and reduced interest rates[25](index=25&type=chunk) - The effective tax rate for income from continuing operations was **46.2%** for the first three months of 2025, lower than **47.8%** in the prior year period, influenced by taxable discrete items and a lower estimated annual effective tax rate, partially offset by lower book income[26](index=26&type=chunk) [Debt, Financial Leverage, and Refinancing](index=5&type=section&id=Debt%2C%20Financial%20Leverage%2C%20and%20Refinancing) As of March 31, 2025, total debt was $56.6 million and net debt was $52.9 million, both down from year-end 2024, with the company remaining compliant with all debt covenants and successfully extending its $125 million asset-backed loan facility for five years to ensure long-term liquidity Debt and Cash Position (million USD) | Metric | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :------------- | | Total Debt | 56.6 | 61.9 | | Cash and Cash Equivalents | 3.7 | 7.1 | | Net Debt | 52.9 | 54.8 | - Total debt decreased by **$5.3 million** and net debt decreased by **$1.9 million** during the first three months of 2025, primarily due to **$9.8 million** in settlement proceeds from the Terphane sale and an increase in net working capital after a seasonal low[28](index=28&type=chunk) - As of March 31, 2025, the company was in compliance with all covenants under its **$125 million asset-backed loan agreement**, which was originally set to mature on June 30, 2026[29](index=29&type=chunk) - Approximately **$51 million** was available for borrowing under the asset-backed loan agreement as of March 31, 2025, with the median daily liquidity under the agreement being **$44 million** in Q1 2025, up from **$42 million** in Q4 2024[29](index=29&type=chunk) - On May 6, 2025, the company entered into the Fifth Amendment, extending its **$125 million senior secured asset-backed loan facility** for five years, maturing on May 6, 2030[30](index=30&type=chunk) Net Leverage Ratio (Twelve Months Ended March 31, 2025) | Metric | Amount (million USD) | | :------------- | :--------------- | | Net Debt | 52.9 | | Credit EBITDA | 47.8 | | Net Leverage Ratio | 1.1 | [Forward-Looking Statements & Company Information](index=5&type=section&id=Forward-Looking%20Statements%20%26%20Company%20Information) [Forward-Looking and Cautionary Statements](index=5&type=section&id=FORWARD-LOOKING%20AND%20CAUTIONARY%20STATEMENTS) This press release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially, including macroeconomic factors, increased operating costs, debt covenant non-compliance, loss of key personnel, production disruptions, IT system failures, international business risks, tariff impacts, failure to prevent tariff evasion, ERP/MES implementation issues, customer loss, intellectual property protection failures, and M&A risks, with no obligation to update these statements - This press release contains forward-looking statements that could cause actual results to differ materially due to various risks and uncertainties[32](index=32&type=chunk) - Risk factors include macroeconomic factors (such as inflation, interest rates, and recession risks), increased operating costs (raw material and energy costs), non-compliance with financial and other restrictive covenants of the ABL facility, failure to continuously attract and retain key personnel, manufacturing facility disruptions (including labor shortages), information technology system failures or breaches, risks of overseas operations, the impact of tariffs and sanctions, failure of governmental entities to prevent foreign companies from circumventing anti-dumping and countervailing duties, ERP and MES system implementation issues, loss of sales to significant customers, failure to obtain new customers to offset lost business, customer failure to succeed or maintain market share, failure to protect intellectual property, and failure to successfully complete strategic acquisitions or dispositions[32](index=32&type=chunk)[38](index=38&type=chunk) - The company undertakes no obligation to update any forward-looking statements in this press release, except as required by applicable law[34](index=34&type=chunk) [Company Overview](index=6&type=section&id=Company%20Overview) Tredegar Corporation is an industrial manufacturer specializing in custom aluminum extrusions for North American construction, automotive, and specialty markets, and surface protection films for global high-tech electronics, employing approximately 1,500 people across North America and Asia - Tredegar Corporation is an industrial manufacturer with primary businesses including: 1) custom aluminum extrusions for North American building and construction, automotive, and specialty end markets; and 2) surface protection films for high-tech applications in the global electronics industry[37](index=37&type=chunk) - The company employs approximately **1,500 people** and operates manufacturing facilities in North America and Asia[37](index=37&type=chunk) [Financial Tables (Unaudited)](index=7&type=section&id=Financial%20Tables%20%28Unaudited%29) [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) In Q1 2025, the company's sales increased to $164.7 million, but net income from continuing operations decreased to $0.7 million, while total net income reached $10.1 million due to income from discontinued operations Condensed Consolidated Statements of Income Summary | Metric (thousand USD, except per share data) | March 31, 2025 | March 31, 2024 | | :----------------------------- | :------------- | :------------- | | Sales | 164,738 | 143,972 | | Income (Loss) from Continuing Operations Before Income Taxes | 1,248 | 4,988 | | Income Tax Expense (Benefit) from Continuing Operations | 577 | 2,384 | | Net Income (Loss) from Continuing Operations | 671 | 2,604 | | Net Income (Loss) from Discontinued Operations, Net of Tax | 9,430 | 684 | | Net Income (Loss) | 10,101 | 3,288 | | Diluted Earnings (Loss) Per Share: | | | | Continuing Operations | 0.02 | 0.08 | | Discontinued Operations | 0.27 | 0.02 | | Total Diluted Earnings (Loss) Per Share | 0.29 | 0.10 | [Net Sales and EBITDA from Ongoing Operations by Segment](index=8&type=section&id=Net%20Sales%20and%20EBITDA%20from%20Ongoing%20Operations%20by%20Segment) Q1 2025 saw increased net sales and EBITDA from continuing operations for Aluminum Extrusions, while PE Films experienced net sales growth but a slight EBITDA decline, resulting in overall continuing operations EBITDA decreasing from $14.9 million in Q1 2024 to $11.5 million Net Sales and EBITDA from Ongoing Operations by Segment | Metric (thousand USD) | March 31, 2025 | March 31, 2024 | | :------------------------- | :------------- | :------------- | | **Net Sales** | | | | Aluminum Extrusions | 133,635 | 114,222 | | PE Films | 25,537 | 24,735 | | **Total Net Sales** | **159,172** | **138,957** | | **EBITDA from Continuing Operations** | | | | Aluminum Extrusions | 9,160 | 12,540 | | PE Films | 7,520 | 6,904 | | **Total** | **10,038** | **11,902** | | Corporate Expenses, Net | 7,782 | 5,750 | | Income (Loss) from Continuing Operations Before Income Taxes | 1,248 | 4,988 | | Net Income (Loss) from Continuing Operations | 671 | 2,604 | | Net Income (Loss) from Discontinued Operations | 9,430 | 684 | | **Net Income (Loss)** | **10,101** | **3,288** | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $374.2 million and total liabilities to $103.8 million, with cash and cash equivalents decreasing while accounts receivable and inventory rose Condensed Consolidated Balance Sheets Summary | Metric (thousand USD) | March 31, 2025 | December 31, 2024 | | :------------------------- | :------------- | :------------- | | **Assets** | | | | Cash and Cash Equivalents | 3,657 | 7,062 | | Accounts and Other Receivables, Net | 79,749 | 64,817 | | Inventories | 68,895 | 51,381 | | Total Current Assets | 161,727 | 139,827 | | Property, Plant, and Equipment, Net | 134,535 | 137,032 | | Total Assets | 374,217 | 356,357 | | **Liabilities and Stockholders' Equity** | | | | Accounts Payable | 83,190 | 64,704 | | Short-Term Debt | 627 | 1,322 | | Total Current Liabilities | 103,803 | 91,708 | | ABL Revolving Credit Facility | 56,000 | 60,600 | | Stockholders' Equity | 191,370 | 180,968 | | Total Liabilities and Stockholders' Equity | 374,217 | 356,357 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw a $5.0 million cash outflow from operating activities, a $6.9 million inflow from investing activities primarily from the Terphane sale, and a $5.3 million outflow from financing activities, resulting in cash and cash equivalents ending at $3.7 million Condensed Consolidated Statements of Cash Flows Summary | Metric (thousand USD) | March 31, 2025 | March 31, 2024 | | :------------------------- | :------------- | :------------- | | Net Income (Loss) | 10,101 | 3,288 | | Net Cash from Operating Activities | (5,006) | (7,719) | | Net Cash from Investing Activities | 6,878 | (2,378) | | Net Cash from Financing Activities | (5,297) | 2,008 | | Cash and Cash Equivalents, End of Period | 3,657 | 4,792 | - Cash inflow from investing activities primarily includes **$9.8 million** from the sale of Terphane[46](index=46&type=chunk) [Notes to the Financial Tables](index=11&type=section&id=Notes%20to%20the%20Financial%20Tables) [Non-GAAP Financial Measures Reconciliation (Net Income/EPS from Ongoing Operations)](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation%20%28Net%20Income%2FEPS%20from%20Ongoing%20Operations%29) This section reconciles non-GAAP net income and diluted EPS from continuing operations to GAAP reported figures, excluding after-tax impacts of plant shutdowns, asset impairments, restructuring, asset sale gains/losses, goodwill impairment, discontinued operations, and other special items to better measure ongoing operational performance Reconciliation of Net Income (Loss) from Continuing Operations (million USD, except per share data) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------------- | :------------- | :------------- | | GAAP Reported Net Income (Loss) from Continuing Operations | 0.7 | 2.6 | | After-Tax Impact of: | | | | (Gains) Losses Related to Plant Shutdowns, Asset Impairments, and Restructuring | — | 0.4 | | (Gains) Losses Related to Asset Sales and Other | 2.9 | 1.7 | | Net Income (Loss) from Continuing Operations | 3.6 | 4.7 | | Diluted Earnings (Loss) Per Share: | | | | GAAP Reported Continuing Operations | 0.02 | 0.08 | | After-Tax Impact of: | | | | (Gains) Losses Related to Plant Shutdowns, Asset Impairments, and Restructuring | — | 0.01 | | (Gains) Losses Related to Asset Sales and Other | 0.08 | 0.05 | | Diluted Earnings (Loss) Per Share from Continuing Operations | 0.10 | 0.14 | [Segment Profitability Metrics (EBITDA/EBIT from Ongoing Operations)](index=11&type=section&id=Segment%20Profitability%20Metrics%20%28EBITDA%2FEBIT%20from%20Ongoing%20Operations%29) EBITDA from continuing operations serves as a key profitability metric for the company's Chief Operating Decision Maker to assess segment financial performance, while EBIT from continuing operations provides investors with useful information for analyzing core operations as a non-GAAP financial measure - EBITDA from continuing operations is a key profitability metric used by the company's Chief Operating Decision Maker (CODM) to assess the financial performance of its business segments[48](index=48&type=chunk) - EBIT (Earnings Before Interest and Taxes) from continuing operations is a non-GAAP financial measure that the company believes is meaningful to certain investors and provides useful information for analyzing the company's core operations[48](index=48&type=chunk) [Details of Special Items and Adjustments](index=12&type=section&id=Details%20of%20Special%20Items%20and%20Adjustments) This section details pre-tax and after-tax gains and losses for Q1 2025 and 2024 related to plant shutdowns, asset impairments, restructuring, and other items, including ERP/MES project consulting fees, legal fees, aluminum premium charges, business development professional fees, and internal control remediation costs Special Items and Adjustments for the Three Months Ended March 31, 2025 (million USD) | Item | Pre-Tax | After-Tax | | :--------------------------------------- | :--- | :--- | | **Aluminum Extrusions:** | | | | ERP/MES Project Consulting Fees | 0.4 | 0.3 | | Legal Fees for Aluminum Extruders Trade Cases and Other Matters | 0.3 | 0.3 | | Aluminum Premium Charges Due to Unplanned Maintenance Disruptions | 0.3 | 0.2 | | **Total Aluminum Extrusions** | **1.0** | **0.8** | | **Corporate:** | | | | Professional Fees Related to Business Development Activities | 2.5 | 2.0 | | Professional Fees Related to Internal Control Over Financial Reporting Remediation Activities | 0.2 | 0.1 | | Group Annuity Contract Premium Adjustment | 0.1 | — | | Professional Fees Related to ABL Facility Transition | 0.1 | 0.1 | | Gain on Initial Installment Payment for Sale of Corporate Land | (0.1) | (0.1) | | **Total Corporate** | **2.8** | **2.1** | Special Items and Adjustments for the Three Months Ended March 31, 2024 (million USD) | Item | Pre-Tax | After-Tax | | :--------------------------------------- | :--- | :--- | | **Aluminum Extrusions:** | | | | ERP/MES Project Consulting Fees | 0.6 | 0.4 | | Storm Damage at New South Georgia Facility | 0.1 | 0.1 | | Legal Fees for Aluminum Extruders Trade Cases | 0.2 | 0.2 | | **Total Aluminum Extrusions** | **0.9** | **0.7** | | **PE Films:** | | | | Richmond, Virginia Technical Center Closure Costs | 0.2 | 0.1 | | Richmond, Virginia Technical Center Lease Modification | 0.3 | 0.3 | | **Total PE Films** | **0.5** | **0.4** | | **Corporate:** | | | | Professional Fees Related to Business Development Activities | 0.2 | 0.2 | | Professional Fees Related to Internal Control Over Financial Reporting Remediation Activities | 0.9 | 0.7 | | Professional Fees Related to ABL Facility Transition | 0.2 | 0.1 | | **Total Corporate** | **1.3** | **1.0** | [Effective Tax Rate Reconciliation](index=13&type=section&id=Effective%20Tax%20Rate%20Reconciliation) This section provides a reconciliation of pre-tax and after-tax balances for net income from continuing operations (non-GAAP) to illustrate its impact on the effective tax rate, showing an effective tax rate of 28.0% for Q1 2025 net income from continuing operations, lower than the GAAP reported 46.2% Effective Tax Rate Reconciliation for Net Income (Loss) from Continuing Operations (million USD) | Metric | Pre-Tax | Income Tax Expense (Benefit) | After-Tax | Effective Tax Rate | | :--------------------------------------- | :--- | :----------------- | :--- | :------- | | **Three Months Ended March 31, 2025** | | | | | | GAAP Reported Net Income (Loss) from Continuing Operations | 1.2 | 0.5 | 0.7 | 46.2% | | (Gains) Losses Related to Asset Sales and Other | 3.8 | 0.9 | 2.9 | | | Net Income (Loss) from Continuing Operations | 5.0 | 1.4 | 3.6 | 28.0% | | **Three Months Ended March 31, 2024** | | | | | | GAAP Reported Net Income (Loss) from Continuing Operations | 5.0 | 2.4 | 2.6 | 47.8% | | (Gains) Losses Related to Plant Shutdowns, Asset Impairments, and Restructuring | 0.5 | 0.1 | 0.4 | | | (Gains) Losses Related to Asset Sales and Other | 2.2 | 0.5 | 1.7 | | | Net Income (Loss) from Continuing Operations | 7.7 | 3.0 | 4.7 | 39.0% | [Net Debt and Net Leverage Ratio Reconciliation](index=13&type=section&id=Net%20Debt%20and%20Net%20Leverage%20Ratio%20Reconciliation) This section provides the calculation and reconciliation of net debt and net leverage ratio, which are non-GAAP financial measures used to assess the company's financial leverage, with net debt at $52.9 million and a net leverage ratio of 1.1x as of March 31, 2025 Net Debt Calculation (million USD) | Metric | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :------------- | | Short-Term Debt | 0.6 | 1.3 | | ABL Revolving Credit Facility | 56.0 | 60.6 | | Total Debt | 56.6 | 61.9 | | Less: Cash and Cash Equivalents | 3.7 | 7.1 | | Net Debt | 52.9 | 54.8 | - Net debt and net leverage ratio are non-GAAP financial measures used by management to assess the company's financial leverage[55](index=55&type=chunk)[56](index=56&type=chunk) Net Leverage Ratio Calculation (Twelve Months Ended March 31, 2025) | Metric | Amount (million USD) | | :------------- | :--------------- | | Net Debt | 52.9 | | Credit EBITDA | 47.8 | | Net Leverage Ratio | 1.1 | [Consolidated EBITDA from Ongoing Operations Reconciliation](index=14&type=section&id=Consolidated%20EBITDA%20from%20Ongoing%20Operations%20Reconciliation) This section provides a reconciliation of consolidated EBITDA from ongoing operations, a non-GAAP financial metric used to measure the company's performance from continuing operations, excluding items such as depreciation and amortization, share-based compensation, interest, and income taxes Reconciliation of Consolidated EBITDA from Ongoing Operations (million USD) | Metric | March 31, 2025 | March 31, 2024 | | :--------------------------------------- | :------------- | :------------- | | GAAP Reported Net Income (Loss) from Continuing Operations | 0.7 | 2.6 | | After-Tax Impact of: | | | | (Gains) Losses Related to Plant Shutdowns, Asset Impairments, and Restructuring | — | 0.4 | | (Gains) Losses Related to Asset Sales and Other | 2.9 | 1.7 | | Net Income (Loss) from Continuing Operations | 3.6 | 4.7 | | Add: Depreciation and Amortization | 5.5 | 6.0 | | Add: Interest Expense | 1.0 | 1.2 | | Add: Income Taxes from Continuing Operations | 1.4 | 3.0 | | **Consolidated EBITDA from Ongoing Operations** | **11.5** | **14.9** | - Consolidated EBITDA from ongoing operations is a non-GAAP financial measure used to assess the company's performance from continuing operations, excluding the impact of plant shutdowns, asset impairments, restructuring, asset sale gains/losses, goodwill impairment, discontinued operations, net periodic benefit cost for pensions, and other items, while also excluding depreciation and amortization, share-based compensation costs, interest, and income taxes[58](index=58&type=chunk) [PE Films Technical Center Closure](index=14&type=section&id=PE%20Films%20Technical%20Center%20Closure) The company decided in August 2023 to close its PE Films Technical Center in Richmond, Virginia, and reduce development and sales efforts for semiconductor market films, with all activities ceasing by the end of Q1 2024, and future R&D to be conducted at the Pottsville, Pennsylvania, manufacturing facility - In August 2023, the company decided to close its PE Films Technical Center in Richmond, Virginia, and reduce development and sales efforts for films related to the semiconductor market[58](index=58&type=chunk) - All activities ceased by the end of Q1 2024, with future research and development activities to be conducted at the Pottsville, Pennsylvania, manufacturing facility[58](index=58&type=chunk) - New business opportunities for the PE Films segment remain, primarily related to surface protection films for protecting flat and flexible display components[58](index=58&type=chunk) [Credit EBITDA Computation](index=15&type=section&id=Credit%20EBITDA%20Computation) This section provides the computation of Credit EBITDA as defined by the ABL facility, a metric used to assess the company's financial condition and fixed charge coverage, with Credit EBITDA at $47.8 million and a fixed charge coverage ratio of 6.44 for the twelve months ended March 31, 2025 Credit EBITDA Computation (Twelve Months Ended March 31, 2025, thousand USD) | Item | Amount | | :--------------------------------------- | :------- | | Net Income (Loss) | (57,752) | | Add: Loss from Discontinued Operations, Net of Tax | 56,864 | | Add: Total Income Tax Expense from Continuing Operations | — | | Add: Interest Expense | 4,493 | | Add: Depreciation and Amortization Expense from Continuing Operations | 22,784 | | Add: Non-Cash Losses and Expenses from Continuing Operations, and Cash Losses and Expenses Not Exceeding $10,000, Classified as Extraordinary, Unusual, or Related to Plant Shutdowns, Asset Impairments, and/or Restructuring | 23,389 | | Add: Share-Based Compensation Expense | — | | Less: Total Income Tax Benefit from Continuing Operations | (1,972) | | Less: Interest Income | (21) | | Less: Income Related to Fair Value Adjustments of Assets | (144) | | Less: Pension Expense Adjustment | (181) | | **Credit EBITDA** | **47,815** | | **Fixed Charge Coverage Ratio:** | | | Credit EBITDA | 47,815 | | Unfinanced Capital Expenditures | 12,871 | | Fixed Charges | 5,424 | | **Fixed Charge Coverage Ratio** | **6.44** | - Credit EBITDA is a non-GAAP financial measure as defined by the ABL facility, and it does not represent net income (loss) or cash flow from operating activities as defined by GAAP[60](index=60&type=chunk) - The fixed charge coverage ratio is calculated as (Credit EBITDA minus unfinanced capital expenditures) divided by fixed charges[60](index=60&type=chunk)

[Part I - Financial Information](index=3&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Total assets increased to $374.2 million, with Q1 2025 sales up to $164.7 million, while net income from continuing operations declined, offset by a $9.4 million gain from discontinued operations [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $374.2 million, driven by increased current assets, with liabilities rising to $182.8 million and shareholders' equity to $191.4 million Condensed Consolidated Balance Sheet Highlights (In Thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $161,727 | $139,827 | | Inventories | $68,895 | $51,381 | | **Total assets** | **$374,217** | **$356,357** | | **Total current liabilities** | $103,803 | $91,708 | | ABL revolving facility | $56,000 | $60,600 | | **Total liabilities** | **$182,847** | **$175,389** | | **Total shareholders' equity** | **$191,370** | **$180,968** | [Condensed Consolidated Statements of Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) Q1 2025 sales increased to $164.7 million, but net income from continuing operations decreased to $0.7 million, significantly boosted by a $9.4 million gain from discontinued operations to a total net income of $10.1 million Q1 2025 vs Q1 2024 Income Statement (In Thousands, Except Per Share Data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sales | $164,738 | $143,972 | | Cost of goods sold | $135,643 | $115,106 | | Income from continuing operations before tax | $1,248 | $4,988 | | **Net income from continuing operations** | **$671** | **$2,604** | | Income from discontinued operations, net of tax | $9,430 | $684 | | **Net income (loss)** | **$10,101** | **$3,288** | | **Diluted earnings (loss) per share** | **$0.29** | **$0.10** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities used $5.0 million in cash, an improvement from Q1 2024, while investing activities provided $6.9 million, primarily from the Terphane sale, leading to a $3.4 million decrease in cash and equivalents Q1 2025 vs Q1 2024 Cash Flows (In Thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(5,006) | $(7,719) | | Net cash provided by (used in) investing activities | $6,878 | $(2,378) | | Net cash provided by (used in) financing activities | $(5,297) | $2,008 | | **Increase (decrease) in cash and cash equivalents** | **$(3,405)** | **$(8,663)** | | **Cash and cash equivalents at end of period** | **$3,657** | **$4,792** | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the Terphane sale as discontinued operations, segment performance showing varied EBITDA, and the subsequent amendment of the ABL Facility extending its maturity to 2030 * On **November 1, 2024**, the company completed the sale of its flexible packaging films business (Terphane), with all historical results now presented as discontinued operations[23](index=23&type=chunk) * In Q1 2025, the company received **$9.8 million** from the post-closing settlement of the Terphane transaction, recorded as income from discontinued operations[67](index=67&type=chunk)[70](index=70&type=chunk) * On **May 6, 2025**, the company amended its ABL Facility, extending the maturity date to **May 6, 2030**, reducing interest rate margins and modifying the borrowing base calculation[65](index=65&type=chunk)[129](index=129&type=chunk) Segment EBITDA from Ongoing Operations (In Thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Aluminum Extrusions | $9,160 | $12,540 | | PE Films | $7,520 | $6,904 | | **Total** | **$16,680** | **$19,444** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a decrease in Q1 2025 income from continuing operations, driven by lower Aluminum Extrusions EBITDA despite volume growth, while PE Films EBITDA improved, with overall liquidity supported by an amended ABL facility [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Consolidated sales increased by $20.8 million in Q1 2025, primarily from Aluminum Extrusions, though gross profit margin declined to 14.3% and SG&A expenses rose due to higher professional fees and incentive compensation * Sales in Q1 2025 increased by **$20.8 million** compared to Q1 2024, mainly due to a **$19.4 million** increase in net sales from the Aluminum Extrusions segment[91](index=91&type=chunk) * Consolidated gross profit margin decreased to **14.3%** in Q1 2025 from **16.6%** in Q1 2024, primarily due to lower spread and higher costs in Aluminum Extrusions, despite a favorable FIFO timing impact of **$1.7 million**[92](index=92&type=chunk) * SG&A expenses as a percentage of sales increased to **12.6%** in Q1 2025 from **11.6%** in Q1 2024, driven by higher professional fees and increased employee-related incentive compensation[93](index=93&type=chunk) [Segment Operations Review](index=24&type=section&id=Segment%20Operations%20Review) Aluminum Extrusions saw increased sales volume but a 27% EBITDA decline due to lower spreads, while PE Films' EBITDA rose by 8.9% driven by Surface Protection films, with strong demand noted in aluminum Aluminum Extrusions Performance - Q1 2025 vs Q1 2024 | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Sales volume (lbs in thousands) | 37,918 | 33,841 | 12.0% | | Net sales (in thousands) | $133,635 | $114,222 | 17.0% | | EBITDA from ongoing operations (in thousands) | $9,160 | $12,540 | (27.0)% | * Aluminum Extrusions' net new orders increased **36%** in Q1 2025, with open orders rising to **25 million pounds**, indicating a steady market recovery[102](index=102&type=chunk)[103](index=103&type=chunk) PE Films Performance - Q1 2025 vs Q1 2024 | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Sales volume (lbs in thousands) | 9,639 | 10,036 | (4.0)% | | Net sales (in thousands) | $25,537 | $24,735 | 3.2% | | EBITDA from ongoing operations (in thousands) | $7,520 | $6,904 | 8.9% | * PE Films' EBITDA improvement was driven by a **$1.5 million** increase in contribution from Surface Protection films, attributed to increased volume, favorable mix, and cost improvements[117](index=117&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company used $5.0 million in cash from operations, while investing activities provided $6.9 million, with working capital increasing due to higher receivables and inventories, and liquidity enhanced by an amended ABL facility extending to 2030 * Net cash used in operating activities was **$5.0 million** in Q1 2025, compared to **$7.7 million** used in Q1 2024[122](index=122&type=chunk) * Inventories increased by **$17.5 million** and accounts receivable by **$14.9 million** from December 31, 2024, reflecting higher business activity and raw material costs[126](index=126&type=chunk) * On **May 6, 2025**, the company amended its credit agreement, extending the ABL facility's maturity to **May 6, 2030**, and reducing interest rate margins[129](index=129&type=chunk) * As of **March 31, 2025**, **$50.9 million** was available to borrow under the ABL Facility[58](index=58&type=chunk)[128](index=128&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate, foreign currency, and commodity price volatility, utilizing hedging strategies for aluminum and pass-through mechanisms for raw material costs, though time lags can impact short-term profitability * The company has exposure to volatility in interest rates, polyethylene and polypropylene resin prices, aluminum ingot and scrap prices, energy prices, and foreign currencies[135](index=135&type=chunk) * The Aluminum Extrusions segment uses forward purchase commitments and futures contracts to hedge its exposure to aluminum price volatility for fixed-price forward sales contracts, generally with a duration of no more than **12 months**[137](index=137&type=chunk) * The PE Films segment has index-based pass-through arrangements for raw material costs, but some agreements have a **90-day** lag before price changes are passed through[147](index=147&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2025, the company's disclosure controls and procedures were deemed effective by management, with no material changes to internal control over financial reporting during Q1 2025 * The Company's Chief Executive Officer and Chief Financial Officer concluded that, as of **March 31, 2025**, the company's disclosure controls and procedures were effective[156](index=156&type=chunk) * There were no material changes in the Company's internal control over financial reporting during the quarter ended **March 31, 2025**[158](index=158&type=chunk) [Part II - Other Information](index=34&type=section&id=Part%20II%20-%20Other%20Information) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) No material updates or changes to the company's risk factors were reported from those previously disclosed in the 2024 Form 10-K * There are no material updates or changes to our risk factors previously disclosed in the **2024 Form 10-K**[159](index=159&type=chunk) [Other Information](index=34&type=section&id=Item%205.%20Other%20Information) During Q1 2025, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement * During the three months ended **March 31, 2025**, no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement[160](index=160&type=chunk) [Exhibits](index=35&type=section&id=Item%206.%20Exhibits) The report includes required CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, along with interactive data files (XBRL) * Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections **302** and **906**, as well as XBRL data files[161](index=161&type=chunk)

Core Insights - Tredegar Corporation's shares have increased by 8.3% since the earnings report for Q4 2024, outperforming the S&P 500's 1.2% growth during the same period [1] - The company reported a narrower net loss from continuing operations of $0.21 per share in Q4 2024, compared to a loss of $1.00 per share in the same quarter last year [2][3] - Total revenues for Q4 2024 rose by 13.1% to $154 million, driven by growth in the Aluminum Extrusions and PE Films segments [3] Financial Performance - The Aluminum Extrusions segment's revenues grew by 11.1% year over year to $122.5 million, with sales volume increasing by 8.8% to 35.8 million pounds [4] - The PE Films segment saw revenues jump by 27.3% to $26.4 million, with a 6.8% increase in sales volume, largely due to a 43% surge in Surface Protection films [5] - For the full year 2024, total revenues increased by 4.3% to $598 million, with the PE Films segment reporting a 37% revenue surge to $105.2 million [8][9] Management Commentary - CEO John Steitz highlighted strong performance in both segments during a typically weak quarter and noted growth in net new orders for Bonnell Aluminum in early 2025 [6] - The company improved its balance sheet, reducing its net leverage ratio to 1.1X from 3.7X at the end of 2023, primarily due to a cyclical recovery and the sale of Terphane [6][7] Debt and Divestiture - Total debt decreased to $61.9 million as of Dec. 31, 2024, down from $126.3 million a year earlier, reflecting disciplined cash management and proceeds from the Terphane divestiture [7][11] - The divestiture of the Terphane flexible packaging business was completed, with an additional $9.8 million received in post-closing settlement proceeds, which were used to pay down debt [11] Future Outlook - Tredegar projects capital spending of $17 million for Aluminum Extrusions and $3 million for PE Films in 2025, expecting continued improvements in demand trends [10] - Management acknowledges uncertainties related to raw material costs, trade policy changes, and macroeconomic conditions [10]

Financial Performance - Fourth quarter 2024 net income from continuing operations was $(7.3) million ($(0.21) per diluted share), an improvement from $(34.1) million ($(1.00) per diluted share) in Q4 2023[3]. - Full year 2024 net income from ongoing operations was $17.2 million ($0.50 per diluted share), compared to $(2.0) million ($(0.07) per diluted share) in 2023[4]. - The company reported a net loss of $72.70 million for Q4 2024, compared to a loss of $35.59 million in Q4 2023, highlighting ongoing challenges[44]. - Net income for the year ended December 31, 2024, was a loss of $64.565 million, an improvement from a loss of $105.905 million in 2023, representing a 39% reduction in losses[50]. - As of December 31, 2024, the company reported a net loss from continuing operations of $7.3 million, compared to a loss of $34.1 million in 2023[70]. Sales and Revenue - Tredegar Corporation reported 2024 sales of $598 million, an increase from $573.3 million in 2023, representing a growth of approximately 4.7%[44]. - For Q4 2024, net sales were $154.05 million, compared to $136.17 million in Q4 2023, reflecting a year-over-year increase of about 13.1%[44]. - The Aluminum Extrusions segment generated $471.82 million in sales for 2024, while the PE Films segment saw sales rise to $105.20 million, up from $76.76 million in 2023, indicating a significant growth in the latter segment[46]. - PE Films' net sales for Q4 2024 increased by 27.3% to $26.4 million compared to Q4 2023, driven by a 43% increase in surface protection sales volume[21][23]. - Full year 2024 net sales increased by 37.0% compared to 2023, with surface protection films sales volume up 57%[25]. EBITDA and Operational Performance - EBITDA from ongoing operations for Aluminum Extrusions increased to $9.7 million in Q4 2024, up 21.5% from $8.0 million in Q4 2023[7]. - EBITDA from ongoing operations increased by $3.4 million in 2024 versus 2023, driven by higher contribution margin and favorable variable manufacturing costs[17]. - EBITDA from ongoing operations for the Aluminum Extrusions segment was $41.36 million for 2024, an increase from $37.98 million in 2023, while the PE Films segment's EBITDA rose to $30.49 million from $11.22 million[46]. - Consolidated EBITDA from ongoing operations for the year ended December 31, 2024, was $50.5 million, up from $30.3 million in 2023, reflecting a 66% increase[70]. Debt and Financial Ratios - The company reported a net leverage ratio of 1.1x at the end of 2024, significantly improved from 3.7x at the end of 2023[6]. - Total debt decreased from $126.3 million at the end of 2023 to $61.9 million at the end of 2024, with net debt also decreasing significantly[33][34]. - The fixed charge coverage ratio was reported at 7.80, indicating strong coverage of fixed charges by Credit EBITDA[73]. - The company believes the likelihood of lenders exercising the subjective acceleration clause is remote, as it was in compliance with all debt covenants as of December 31, 2024[68]. Impairments and Goodwill - The Company recognized a non-cash goodwill impairment of $13.3 million related to the Clearfield operation, which fell below its carrying value due to lower sales and profitability projections[19]. - The company experienced a goodwill impairment of $13.27 million in Q4 2024, which contributed to the overall net loss[46]. - The company recognized a goodwill impairment of $34.9 million for the year ended December 31, 2023[63]. - The company reported a goodwill impairment of $13.271 million in 2024, down from $34.891 million in 2023, showing a 62% decrease in impairment charges[50]. Capital Expenditures - Projected capital expenditures for Bonnell Aluminum in 2025 are $17 million, including $5 million for productivity projects and $12 million for continuity of operations[20]. - Projected capital expenditures for PE Films in 2025 are $3 million, with no amortization expense expected[27]. - Capital expenditures decreased to $14.347 million in 2024 from $26.446 million in 2023, reflecting a 45.6% reduction[50]. Tax and Corporate Expenses - The effective tax rate for 2024 was (18.8)%, a decrease from 34.1% in 2023, primarily due to a pre-tax income in 2024 compared to a pre-tax loss in 2023[31]. - Corporate expenses decreased by $9.2 million in 2024 compared to 2023, mainly due to lower pension expenses following a plan termination[29]. Other Notable Events - The Company completed the sale of its flexible packaging films business for $9.8 million, which was $2.8 million higher than expected due to higher cash held at the sold entity[32]. - The company adopted a plan in August 2023 to close the PE Films technical center in Richmond, VA, and will shift future R&D activities to the Pottsville, PA facility[72].

Financial Performance - Sales increased by 4.3% in 2024, reaching $598.0 million compared to $573.3 million in 2023[79]. - Net income from continuing operations was $1.0 million ($0.03 per diluted share) in 2024, a significant recovery from a net loss of $(99.2) million ($(2.91) per diluted share) in 2023[79]. - EBITDA from ongoing operations for Aluminum Extrusions was $41.4 million, an increase of $3.4 million from 2023, while PE Films saw EBITDA of $30.5 million, up $19.3 million year-over-year[81]. - Gross profit margin improved to 16.1% in 2024 from 12.4% in 2023, driven by favorable manufacturing costs and higher labor productivity[86]. - PE Films net sales increased by 37.0% in 2024, attributed to higher sales volume and restocking activities[84]. - The company reported a net loss of $64,565,000 in 2024, an improvement from a net loss of $105,905,000 in 2023[136]. - Net cash provided by operating activities increased to $25.5 million in 2024 from $24.0 million in 2023, driven by a $22.7 million increase in EBITDA from ongoing operations[139]. - Net cash provided by investing activities was $40.5 million in 2024, a significant increase from net cash used of $26.2 million in 2023, primarily due to $54.6 million from the sale of Terphane[140]. Expenses and Costs - Selling, general and administrative expenses increased by 11.6% year-over-year, while research and development expenses decreased by 75.4%[88]. - Pension and postretirement benefits expense dropped to $0.2 million in 2024 from $10.8 million in 2023, following the completion of a pension plan termination[89]. - Interest expense reduced to $4.7 million in 2024 from $6.3 million in 2023, attributed to lower total debt outstanding[126]. - Corporate expenses decreased by $9.2 million in 2024, primarily due to lower pension expenses following the pension plan termination[125]. Tax and Debt - The effective tax rate for 2024 was (18.8)%, a decrease from 34.1% in 2023, primarily due to a shift from a pre-tax loss to pre-tax income[91]. - Average total debt outstanding decreased to $117.7 million in 2024 from $148.9 million in 2023, with an increase in average interest rate from 7.1% to 8.9%[96]. - As of December 31, 2024, the Company had outstanding debt under the ABL Facility of $60.6 million, with contractual payments due in June 2026[153]. Goodwill and Impairments - A non-cash goodwill impairment of $13.3 million was recognized in 2024, compared to a $34.9 million impairment in 2023[90]. - The Company recognized a non-cash goodwill write-off of $13.3 million ($10.4 million after deferred income tax benefits) related to the Clearfield operation due to lower-than-expected recovery in customer volumes[165]. - The Company performed a goodwill impairment analysis in Q4 2024, indicating that the fair value of Clearfield was below its carrying value by more than the amount of goodwill[165]. Sales and Volume Trends - Sales in 2023 decreased by 24.8% compared to 2022, with net sales in Aluminum Extrusions down 25.6% and PE Films down 21.3% due to lower sales volume and weak demand[99]. - PE Films sales volume decreased by 10.7% in 2023, resulting in net sales of $76,763,000, down from $97,571,000 in 2022[131]. - Sales volume for surface protection films surged by 57% in 2024, driven by high demand and inventory restocking[121]. Future Projections and Plans - Projected capital expenditures for Bonnell Aluminum are $17 million in 2025, including $5 million for productivity projects[119]. - Capital expenditures for PE Films are projected to be $3 million in 2025, with $2 million allocated for productivity projects[124]. - The Company believes it has adequate supply agreements for aluminum and other product cost components in 2025[117]. Employee and Compliance - Approximately 20% of the Company's employees are represented by labor unions in the U.S., with a new collective bargaining agreement ratified in January 2025[26]. - The Company has on-site health clinics at its Carthage and Clearfield facilities, serving over 600 employees[28]. - Tredegar's compliance with environmental regulations may require significant future capital expenditures, although current compliance has not necessitated such costs[24].

Core Viewpoint - Tredegar Corporation reported a narrower net loss in Q3 2024 compared to the same quarter in 2023, with increased revenues driven by its Aluminum Extrusions and PE Films segments [1][2] Financial Performance - The company incurred a net loss of $0.11 per share, an improvement from a loss of $1.47 per share in Q3 2023 [1] - Revenues increased to $182.1 million, a 9.5% rise from $166.2 million in Q3 2023 [1] - Net income from ongoing operations was slightly positive at $0.2 million, compared to a net loss of $5.1 million in the prior-year quarter [1] Business Segment Performance - **Aluminum Extrusions**: Revenues reached $115.7 million, a 5.8% increase year over year, with a 6.5% rise in sales volume. EBITDA rose to $6.2 million from $5.1 million in Q3 2023 [4] - **PE Films**: Sales volume surged 33.4% year over year, with revenues rising to $24.9 million, a 24.8% improvement. EBITDA jumped 45.6% to $5.9 million [6] Challenges and Cost Management - The Aluminum Extrusions segment faced increased operational costs and competitive pressures, impacting margins despite higher sales volumes [2][8] - Higher metal costs affected Aluminum Extrusions, but efficient cost management helped mitigate some impacts [8] Balance Sheet Position - As of September 30, 2024, cash and cash equivalents were $2.7 million, down from $9.7 million at the end of 2023 [8] - Total assets were $442.5 million, slightly lower than $446.5 million at year-end 2023, with long-term debt steady at $20 million [9] Cash Flows - Net cash from operations in the first nine months of 2024 was $6.1 million, significantly lower than $44.2 million in the same period of 2023 [10] Management Guidance - Management expects ongoing cost pressures and competitive challenges in the Aluminum Extrusions segment, with capital expenditure controls projected at $8 million for Aluminum Extrusions and $2 million for PE Films in 2024 [11] Other Developments - The divestiture of Terphane, completed on November 1, 2024, yielded an immediate cash inflow of $60 million, streamlining the company's focus on core segments [12] - An adverse ruling by the U.S. International Trade Commission on tariffs for imported aluminum extrusions poses ongoing competitive pressure [13]