Core Insights - The Zacks Equity Research team has highlighted key stocks including Alphabet Inc., Tesla, and Sony Group Corp., along with micro-cap stocks Tredegar Corp. and CVD Equipment Corp. [1][2] Alphabet Inc. (GOOGL) - Alphabet's shares have outperformed the Zacks Internet - Services industry over the past year, gaining 63.8% compared to the industry's 59% [4] - The company is experiencing accelerated growth in AI infrastructure, Google Cloud, and Search, with Google Cloud's backlog reaching $155 billion, up 46% sequentially [4] - New Google Cloud Platform customers increased by approximately 34% year-over-year, and 70% of these customers are utilizing Alphabet's AI products [5] - Revenues from products based on Alphabet's generative AI models grew over 200% year-over-year, indicating strong adoption [5] - Search growth is supported by AI features, while YouTube benefits from increased demand for shorts, although competition in cloud computing remains a concern [6] Tesla, Inc. (TSLA) - Tesla's shares have increased by 11.3% over the past year, underperforming the Zacks Automotive - Domestic industry, which gained 13.9% [7] - The company achieved a new delivery record in Q3, largely due to buyers taking advantage of the expiring $7,500 EV tax credit, but Q4 deliveries are expected to decline due to the withdrawal of incentives and increased competition from Chinese EV manufacturers [7] - Automotive margins are under pressure, but the Energy Generation & Storage unit is performing well, and the Supercharger network is expanding [8] - Tesla's robotaxi service is operational in Austin and San Francisco, with driverless tests recently initiated, although significant results from AI and autonomous projects may take years [9] Sony Group Corp. (SONY) - Sony's shares have outperformed the Zacks Audio Video Production industry, rising 26.5% compared to 24.4% for the industry [10] - The company's performance is driven by strong results in Game & Network Services, Music, and Imaging & Sensing Solutions, despite challenges in Pictures and Entertainment, and Technology & Services [10] - Increased engagement in PlayStation and higher streaming in Recorded Music are contributing to growth, while Imaging & Sensing Solutions benefits from higher image sensor sales [11] - The acquisition of STATSports is expected to enhance sports analytics capabilities, although there are concerns about business volatility and a slowdown in the imaging market [12] Tredegar Corp. (TG) - Tredegar's shares have underperformed the Zacks Chemical - Plastic industry, declining 1.6% compared to the industry's 23.8% gain [13] - The company reported a strong Q3 2025 rebound, with Aluminum Extrusions EBITDA surging 172% year-over-year, driven by higher volumes and improved pricing [14] - Net income improved to $7.1 million from a loss of $3.4 million in Q3 2024, supported by stronger operating cash flow [14] - Despite facing challenges such as elevated corporate costs and high customer concentration, Tredegar maintained its market position through pricing flexibility and achieved 34% year-over-year volume growth in specialty products [15] CVD Equipment Corp. (CVV) - CVD Equipment's shares have gained 9.3% over the past six months, slightly underperforming the Zacks Manufacturing - General Industrial industry's gain of 10.5% [16] - The company is positioned for long-term growth in advanced materials for aerospace and EV batteries, supported by differentiated CVD/CVI platforms [16] - Key growth drivers include the adoption of ceramic matrix composites in aerospace and alignment with the shift to 200mm SiC wafers in power electronics [17] - Recent margin improvements and a restructuring plan targeting $2 million in annual cost savings are expected to enhance operating leverage, although risks include order volatility and customer concentration [18]

Monte Independent Investment Research: Michael Del Monte is a buy-side equity analyst with expertise in the technology, energy, industrials, and materials sectors. Prior to working in the investment management industry, Michael spent over a decade in professional services working across industries that include O&G, OFS, Midstream, Industrials, Information Technology, EPC Services, and consumer discretionary.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companie ...

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Nov 20, 2025 4:47 PM Eastern Standard Time Tredegar Announces Retirement of John M. Steitz Share Arijit (Bapi) DasGupta Elected as President and Chief Executive Officer and to the Board of Directors; Frasier W. Brickhouse II Elected as Vice President and Chief Financial Officer RICHMOND, Va.--(BUSINESS WIRE)--Tredegar Corporation (NYSE:TG) today announced the retirement of John M. Steitz as its President and Chief Executive Officer and as a member of its Board of Directors (Board), effective December 31, 20 ...

Core Insights - Tredegar Corporation's shares have increased by 33.2% since the earnings report for the quarter ended September 30, 2025, significantly outperforming the S&P 500 index, which grew by 2% during the same period [1] - The company reported an adjusted net income of 26 cents per share, a substantial increase from 1 cent per share in the prior-year period [1] Financial Performance - Consolidated revenues rose by 33.5% to $194.9 million, up from $146.1 million in the same quarter last year, primarily driven by the Aluminum Extrusions segment, which saw a 40.4% increase in net sales to $162.5 million [2] - Net income from continuing operations was $7.1 million, compared to a net loss of $3.4 million in the third quarter of 2024, with non-GAAP net income from ongoing operations at $9.2 million, up from $0.2 million in the prior-year period [3] Segment Performance - In the Aluminum Extrusions segment, EBITDA from ongoing operations reached $16.8 million, a 172.1% increase from $6.2 million in the third quarter of 2024, driven by a 19.5% growth in sales volume to 41.3 million pounds [4] - The PE Films segment's EBITDA increased by 22.9% to $7.2 million, up from $5.9 million in the third quarter of 2024, with net sales rising 4% year over year to $25.9 million [6] Operational Highlights - The Aluminum Extrusions segment benefited from an inventory flow-through timing effect due to aluminum price trends, contributing $4.3 million to earnings, reversing a $1 million charge from the previous year [5] - The PE Films segment experienced a volume decline of 11% in overwrap films, negatively impacting performance, although surface protection films saw a 10.9% year-over-year increase [7] Management Commentary - CEO John Steitz described the quarter as "good" across both business units, noting improvements in manufacturing efficiencies at Bonnell despite net new orders remaining at "depressed levels" due to increased tariffs [8] - Encouraging order activity was observed in October, with weekly averages reaching 3 million pounds, indicating potential stabilization [9] Factors Influencing Performance - The Aluminum Extrusions segment's earnings increase was supported by a $12.7 million boost in contribution margin, higher sales volumes, and improved pricing, despite cost pressures from labor and maintenance [10] - The PE Films segment's improvement was driven by a $1.8 million margin increase from surface protection films, aided by higher volume and productivity gains [11] Future Guidance - Management is evaluating cost-reduction initiatives expected to yield results in 2026, with projected capital expenditures of $17 million for Bonnell Aluminum and $2 million for PE Films in 2025 [12] Other Developments - Tredegar recorded a $9.8 million cash inflow related to the post-closing settlement of the sale of its Terphane business, contributing to debt reduction in 2025 [13] - The company also completed the sale of corporate-owned land during the third quarter, resulting in a $1.5 million gain [13]

Financial Performance - Third quarter 2025 net income from continuing operations was $7.1 million ($0.20 per diluted share), compared to a loss of $3.4 million in the same quarter of 2024[3]. - Tredegar Corporation reported Q3 2025 net sales of $194,942,000, a 33.5% increase from $146,064,000 in Q3 2024[47]. - The company achieved a net income of $7,074,000 in Q3 2025, compared to a net loss of $3,946,000 in Q3 2024[49]. - For the nine months ended September 30, 2025, net income from ongoing operations was $14.6 million, a decrease from $15.3 million in the same period of 2024[55]. - The net income from continuing operations as reported under GAAP for the three months ended September 30, 2025, was $7.1 million, compared to a loss of $3.4 million in the same period of 2024[55]. Sales and Volume - Sales volume for Aluminum Extrusions was 41.3 million pounds in Q3 2025, a 19.5% increase from 34.6 million pounds in Q3 2024[8]. - Net sales for Aluminum Extrusions reached $162.5 million in Q3 2025, a 40.4% increase compared to $115.7 million in Q3 2024[11]. - Net sales for PE Films in Q3 2025 increased by 4.0% to $25.883 million compared to Q3 2024, driven by a 10.9% increase in sales volume of surface protection films[25]. - Net sales for the first nine months of 2025 decreased by 3.5% to $76.017 million compared to the same period in 2024, attributed to lower sales volume in surface protection and overwrap films[27]. - Sales volume in the first nine months of 2025 increased 16.1% compared to the same period in 2024[16]. EBITDA and Profitability - EBITDA from ongoing operations for Aluminum Extrusions increased to $16.8 million in Q3 2025, up 172.1% from $6.2 million in Q3 2024[6]. - EBITDA from ongoing operations for PE Films in Q3 2025 increased by $1.4 million to $7.221 million compared to Q3 2024, primarily due to higher sales volume and cost improvements[26]. - Consolidated EBITDA from ongoing operations for the nine months ended September 30, 2025, is $39.7 million, slightly up from $39.3 million in the same period of 2024[65]. - Tredegar's EBITDA from ongoing operations is a key profitability metric used to assess segment financial performance, with net sales as the measure of revenues from external customers[55]. Debt and Financial Position - Net debt decreased from $54.8 million at the beginning of 2025 to $36.2 million by September 30, 2025[5]. - Total debt decreased by $12.4 million to $49.5 million as of September 30, 2025, compared to $61.9 million at December 31, 2024[35]. - The net leverage ratio is 0.7, indicating a strong financial leverage position[64]. - The fixed charge coverage ratio is 6.86, indicating strong coverage of fixed charges[69]. Operational Changes and Future Outlook - The company is evaluating cost reduction opportunities expected to begin realizing in 2026[5]. - The company plans to close the PE Films technical center in Richmond, VA, and will shift R&D activities to Pottsville, PA, effective Q1 2024[66]. - Future business opportunities for PE Films will focus on surface protection films for flat panel and flexible displays[66]. Customer Concentration and Risks - The top four customers accounted for 88% of net sales for PE Films in the first nine months of 2025, indicating a high customer concentration risk[26]. Tax and Expenses - The effective tax rate for income taxes from continuing operations in the first nine months of 2025 was 27.1%, a slight decrease from 27.5% in the same period of 2024[34]. - Corporate expenses increased by $4.9 million in the first nine months of 2025, primarily due to higher professional fees and employee-related compensation[32]. - Total income tax expense for continuing operations is $235,000[69].

Financial Performance - Net income from continuing operations for Q3 2025 was $7.1 million ($0.20 per diluted share), compared to a loss of $3.4 million ($0.10 per diluted share) in Q3 2024 [101]. - For the first nine months of 2025, net income from continuing operations was $9.6 million, compared to $8.4 million in the same period of 2024 [115]. - Net sales for the three months ended September 30, 2025, increased to $194.9 million, up 33.5% from $146.1 million in the same period of 2024 [147]. - Net sales in the first nine months of 2025 increased by 27.2% to $444.5 million, driven by higher sales volume and the pass-through of increased metal costs [126]. - Net sales for PE Films in Q3 2025 increased by 4.0% to $25.883 million compared to Q3 2024, driven by a 10.9% increase in sales volume in surface protection films [136]. - Net sales in the first nine months of 2025 decreased by 3.5% to $76.017 million compared to the same period in 2024, attributed to a decrease in sales volume in surface protection and overwrap films [140]. Operational Metrics - EBITDA from ongoing operations for Aluminum Extrusions was $16.8 million in Q3 2025, up from $6.2 million in Q3 2024, with sales volume increasing to 41.3 million pounds from 34.6 million pounds [102]. - EBITDA from ongoing operations for PE Films was $7.2 million in Q3 2025, compared to $5.9 million in Q3 2024, with sales volume slightly increasing to 9.7 million pounds from 9.6 million pounds [102]. - EBITDA from ongoing operations increased by $10.6 million in the third quarter of 2025 compared to the same quarter in 2024 [131]. - EBITDA from ongoing operations in the first nine months of 2025 increased by $3.6 million compared to the same period in 2024, driven by a $12.7 million increase in contribution margin [132]. - EBITDA from ongoing operations for PE Films in Q3 2025 increased by 22.9% to $7.221 million compared to Q3 2024 [135]. Cost and Expense Management - Consolidated gross profit margin increased to 16.0% in Q3 2025 from 12.4% in Q3 2024, driven by higher volume and favorable pricing [106]. - Selling, general and administrative (SG&A) expenses as a percentage of sales decreased to 10.5% in Q3 2025 from 13.0% in Q3 2024, while SG&A spending increased by 8.3% [107]. - Interest expense decreased to $0.8 million in Q3 2025 from $1.2 million in Q3 2024, primarily due to lower average total debt and interest rates [108]. - Corporate expenses increased by $4.9 million in the first nine months of 2025 compared to the same period in 2024, primarily due to higher professional fees and employee-related compensation [143]. Taxation and Interest - The effective tax rate for Q3 2025 was 22.1%, compared to (32.3)% in Q3 2024, influenced by taxable discrete items [109]. - The effective tax rate for income taxes from continuing operations was 27.1% in the first nine months of 2025, slightly down from 27.5% in the prior year [119]. Debt and Financing - Average total outstanding debt decreased to $60.0 million in the first nine months of 2025 from $128.6 million in the same period of 2024, with the average interest rate dropping to 6.8% from 9.1% [123]. - Net cash used in financing activities was $13.7 million in the first nine months of 2025, compared to $3.6 million in the same period of 2024, primarily due to lower debt borrowings [153]. - The Company entered into Amendment No. 5 to the ABL Facility, extending the maturity date to May 6, 2030, with $72.5 million available to borrow as of September 30, 2025 [156]. - The Company has a $125 million senior secured asset-based revolving credit facility, with $72.5 million available to borrow as of September 30, 2025 [156]. Cash Flow and Liquidity - Net cash provided by operating activities was $17.3 million in the first nine months of 2025, compared to $6.1 million in the same period of 2024, driven by higher segment EBITDA [151]. - As of September 30, 2025, the Company had cash and cash equivalents of $13.3 million, including $2.0 million held outside the U.S. [154]. - The Company believes existing cash flow and borrowing availability will satisfy short-term cash requirements for at least the next 12 months [164]. Inventory and Receivables - Accounts and other receivables increased by $23.1 million (35.7%), with DSO for Aluminum Extrusions at approximately 44.2 days [155]. - Inventories rose by $10.6 million (20.7%), with DIO for Aluminum Extrusions at approximately 48.7 days [155]. - Accounts payable increased by $14.5 million (22.5%), with DPO at approximately 45.8 days for the 12 months ended September 30, 2025 [155]. Capital Expenditures - Capital expenditures for Bonnell Aluminum are projected to be $17 million in 2025, including $5 million for productivity projects [134]. - Projected capital expenditures for PE Films are $2 million in 2025, including $1 million for productivity projects [142]. - Projected depreciation expense for Bonnell Aluminum is $15 million in 2025, while amortization expense is projected to be $2 million [134].

Core Insights - Tredegar Corporation reported its third quarter 2025 financial results, highlighting significant performance metrics and strategic initiatives [1] Financial Performance - The company achieved a revenue of $XXX million for the third quarter, representing a Y% increase compared to the same period last year [1] - Net income for the quarter was reported at $XX million, reflecting a Z% growth year-over-year [1] - Earnings per share (EPS) increased to $X.XX, up from $X.XX in the previous year [1] Strategic Initiatives - Tredegar has implemented cost-saving measures that are expected to enhance operational efficiency and profitability [1] - The company is focusing on expanding its product lines to meet evolving market demands [1] Market Outlook - The management expressed optimism about future growth prospects, citing strong demand in key markets [1] - Tredegar plans to invest in new technologies to drive innovation and maintain competitive advantage [1]

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 |