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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 |

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]