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

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

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

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

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

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

Financial Performance - Third quarter 2024 net income was $(3.9) million ($(0.11) per diluted share), an improvement from $(50.4) million ($(1.47) per diluted share) in the third quarter of 2023[73]. - Net income for the nine months ended September 30, 2024, was $8.134 million, compared to a net loss of $70.314 million for the same period in 2023[84]. - Net sales increased by $15.9 million in Q3 2024 compared to Q3 2023, with Aluminum Extrusions contributing $6.3 million and PE Films contributing $4.9 million[76]. - Net sales in the first nine months of 2024 decreased by 4.2% compared to the same period in 2023, primarily due to lower sales volume and the pass-through of lower metal costs[94]. - For the twelve months ended September 30, 2024, the company reported a net loss of $27,456,000, with Credit EBITDA calculated at $59,098,000[112]. EBITDA and Profit Margins - EBITDA from ongoing operations for Aluminum Extrusions was $6.2 million in Q3 2024, up from $5.1 million in Q3 2023, with sales volume increasing to 34.6 million pounds[74]. - PE Films segment reported EBITDA of $5.9 million in Q3 2024, compared to $4.0 million in Q3 2023, with sales volume rising to 9.6 million pounds[74]. - Terphane's EBITDA was $3.7 million in Q3 2024, significantly up from $0.5 million in Q3 2023, with sales volume at 25.3 million pounds[74]. - Consolidated gross profit margin improved to 12.8% in Q3 2024 from 9.0% in Q3 2023, driven by higher volume and favorable manufacturing costs[76]. - EBITDA from ongoing operations in Q3 2024 increased by $3.3 million compared to Q3 2023, driven by lower variable costs ($1.5 million) and lower raw material costs ($1.1 million) among other factors[102]. Sales and Volume Growth - Net sales in Q3 2024 increased by 5.8% compared to Q3 2023, driven by a 6.5% increase in sales volume[91]. - Net sales for PE Films in Q3 2024 were 24.8% higher than Q3 2023, with a 37.5% increase in Surface Protection sales volume[97]. - Sales volume for Surface Protection increased by 62.3% in the first nine months of 2024 compared to the same period in 2023[98]. - Net sales for Flexible Packaging Films in Q3 2024 increased by 14.1% compared to Q3 2023, primarily due to higher sales volume[100]. - Net sales in the first nine months of 2024 increased by 40.6% compared to the same period in 2023, driven by a 62.3% increase in sales volume in Surface Protection[98]. Costs and Expenses - The company faced unfavorable costs in Aluminum Extrusions due to manufacturing inefficiencies and margin pressures from imports[75]. - Selling, general, and administrative (SG&A) and research and development (R&D) expenses remained consistent at 11.1% of sales in the first nine months of 2024 compared to the same period in 2023[85]. - Interest expense increased by $2.5 million to $10.3 million in the first nine months of 2024 due to higher average debt and interest rates[85]. - The gross profit margin in Aluminum Extrusions improved due to higher net pricing and favorable variable manufacturing costs[84]. - Corporate expenses decreased by $13.7 million in the first nine months of 2024, primarily due to lower pension expenses from a plan termination completed in 2023[104]. Tax and Debt - The effective tax rate for Q3 2024 was (31.6)%, compared to 20.9% in Q3 2023[78]. - The effective tax rate for income taxes was 30.5% in the first nine months of 2024, compared to 18.8% in the same period of 2023[85]. - Average total outstanding debt balance increased to $145.5 million in the first three months of 2024 from $138.2 million in the same period of 2023, with an average interest rate rising to 9.4% from 7.4%[82]. - The company has an outstanding ABL Facility debt of $122,000,000 as of September 30, 2024, maturing on June 30, 2026[115]. Liquidity and Cash Flow - Net cash provided by operating activities was $6.1 million in the first nine months of 2024, a decrease from $44.2 million in the same period of 2023, mainly due to lower working capital[106]. - The Company had cash, cash equivalents, and restricted cash of $6.6 million as of September 30, 2024, including $2.7 million held outside the U.S.[106]. - The ABL Facility provides a $180 million senior secured asset-based revolving credit facility, maturing on June 30, 2026[107]. - Minimum Liquidity as of September 30, 2024, was $45.1 million, exceeding the $10 million Minimum Liquidity financial covenant[107]. - Following the Terphane Sale, the company has enhanced its liquidity position, which will support future operational needs[116]. Future Projections and Capital Expenditures - Capital expenditures for Bonnell Aluminum are projected to be $8 million in 2024, with $4 million allocated for productivity projects[94]. - Capital expenditures for Flexible Packaging Films are projected to be $4 million in 2024, with depreciation expense projected at $3 million[102]. - Capital expenditures for PE Films are projected to be $2 million in 2024, with $1 million allocated for productivity projects[98]. - Minimum Credit EBITDA is projected to increase from $25,370,000 in September 2024 to $32,080,000 by September 2025, reflecting a growth of approximately 26.5%[109].

Financial Performance - Third quarter 2024 net income was $(3.9) million ($(0.11) per diluted share), an improvement from $(50.4) million ($(1.47) per diluted share) in Q3 2023[1] - Net income for the nine months ended September 30, 2024, was $8.1 million, a significant improvement from a net loss of $70.3 million in the same period of 2023[27] - For the three months ended September 30, 2024, the net income reported under GAAP was a loss of $3.9 million, compared to a loss of $50.4 million for the same period in 2023, representing a 92.3% improvement[38] - The net income from ongoing operations for the nine months ended September 30, 2024, was $19.7 million, an increase of 18.5% compared to $16.0 million for the same period in 2023[38] Sales and Orders - Net sales in Q3 2024 increased 5.8% to $115.7 million, driven by higher sales volume and metal cost pass-through[4] - Net new orders for Aluminum Extrusions rose 27% in Q3 2024 versus Q3 2023, and increased 7% compared to Q2 2024[2] - Sales volume for Aluminum Extrusions increased 6.5% to 34.6 million pounds in Q3 2024 compared to 32.5 million pounds in Q3 2023[4] - Sales volume for Surface Protection films rose by 37.5% in the third quarter of 2024 compared to the same period in 2023, while it declined by 16.5% from the second quarter of 2024[9] EBITDA and Operational Performance - EBITDA from ongoing operations for Aluminum Extrusions was $6.2 million in Q3 2024, up 20.8% from $5.1 million in Q3 2023[2] - Consolidated EBITDA from ongoing operations for the three months ended September 30, 2024, was $10.1 million, significantly up from $4.1 million in the same period of 2023[43] - EBITDA from ongoing operations for the first nine months of 2024 increased by $16.2 million to $22.913 million, compared to $6.700 million in the first nine months of 2023[10] Debt and Cash Flow - Total debt decreased to $143.4 million as of September 30, 2024, down from $146.3 million at December 31, 2023[15] - The sale of Terphane resulted in a reduction of consolidated total debt and net debt by $78 million, with an additional $7 million expected from escrow funds[15] - Cash flows from operating activities provided $6.053 million, down from $44.238 million in the previous year, indicating a decrease of approximately 86.3%[27] - The company reported interest expense of $3.480 million in Q3 2024, an increase from $3.106 million in Q3 2023[24] Capital Expenditures - Capital expenditures for Bonnell Aluminum are projected to be $8 million in 2024, focusing on productivity and operational continuity[6] - Capital expenditures for PE Films are projected to be $2 million in 2024, including $1 million for productivity projects[12] - Capital expenditures for the nine months ended September 30, 2024, were $7.696 million, compared to $22.270 million in the same period of 2023, reflecting a reduction of approximately 65.5%[27] Goodwill and Impairments - The company recognized a goodwill impairment of $19.5 million for the three months ended September 30, 2023, reflecting challenges in the PE Films segment[34] - The company experienced a goodwill impairment of $27 million in the nine months ended September 30, 2023, which negatively affected financial performance[30] - The company’s reporting units with goodwill as of December 1, 2023, included Surface Protection in PE Films and Futura in Aluminum Extrusions, with goodwill amounts of $22.4 million and $13.3 million, respectively[48] Tax and Regulatory Matters - The effective tax rate increased to 30.5% in the first nine months of 2024, compared to 18.8% in the same period of 2023[14] - The effective tax rate for the three months ended September 30, 2024, was (31.6)%, compared to (20.9)% for the same period in 2023[38] - The USITC's recent decision indicated that the aluminum extrusions industry was not materially injured by imports, despite previous findings of unfair pricing[6] Other Notable Events - Tredegar completed the sale of Terphane for $60 million in cash, with an enterprise value of $78 million, reducing net leverage from 2.3x to 1.2x[2] - The company received $47.1 million from the sale of its investment interests in kaléo, with additional cash consideration of $0.4 million received in 2023 and 2024[35] - Following the sale of Terphane, the ABL Facility will be reduced from $180 million to $125 million, with a new minimum fixed charge coverage ratio of 1.00:1.00 implemented[48]

Core Viewpoint - Tredegar Corporation reported a significant financial turnaround in Q2 2024, achieving a net income of $8.8 million compared to a net loss of $18.9 million in Q2 2023, driven by strategic cost management and operational improvements [1][2]. Financial Performance - Revenues for Q2 2024 reached $190.2 million, an increase from $178.2 million in the same quarter of the previous year [1]. - The company’s net income per share was 26 cents, a recovery from a loss of 56 cents per share in Q2 2023 [1]. Business Segments Performance - **Aluminum Extrusions (Bonnell Aluminum)** - EBITDA increased to $12.9 million from $10.2 million year-over-year [3]. - Sales volume slightly decreased to 34.9 million pounds from 35.5 million pounds [3]. - Net sales were $119.4 million, down 2% from $121.8 million in the prior year [3]. - **PE Films** - EBITDA surged to $10.1 million from $0.8 million year-over-year [5]. - Sales volume rose significantly to 10.5 million pounds from 6.2 million pounds [5]. - Net sales increased by 83.4% to $29.2 million from $15.9 million in the previous year [5]. - **Flexible Packaging Films (Terphane)** - EBITDA improved to $3.2 million from $0.2 million year-over-year [6]. - Sales volume increased to 25.1 million pounds from 23.7 million pounds [6]. - Net sales rose 4% to $34.5 million from $33.2 million in the prior year [6]. Orders and Market Conditions - Net new orders increased by 17% year-over-year, although open orders remain below pre-pandemic levels [4]. Balance Sheet Position - As of June 30, 2024, cash and cash equivalents were $3.5 million, down from $10 million at the end of 2023 [7]. - Total assets increased slightly to $450.4 million from $446.5 million at the end of 2023 [7]. - Shareholders' equity rose to $160 million from $155.7 million [7]. Cash Flows - Operating cash flows for the first half of 2024 were $7.3 million, a decrease from $22.7 million in the same period of 2023 [8]. Other Developments - Tredegar is in the process of selling its Terphane business to Oben Group, with expected after-tax net cash proceeds of $85 million pending regulatory approval [9].

Financial Performance - Second quarter 2024 net income was $8.8 million ($0.26 per diluted share), a significant improvement from a net loss of $(18.9) million ($(0.56) per diluted share) in the same quarter of 2023[1]. - Net income for the three months ended June 30, 2024, was $8.8 million, compared to a net loss of $18.9 million in the same period of 2023[23]. - Net income for the six months ended June 30, 2024, was $12,080 thousand, compared to a net loss of $19,934 thousand in the same period last year[29]. - The company reported a net income of $14.7 million for the six months ended June 30, 2024, with an effective tax rate of 17.9%[39]. - For the three months ended June 30, 2024, net income from ongoing operations was $10.3 million, with an effective tax rate of 18.9%[39]. Sales and Orders - Sales volume for Aluminum Extrusions decreased by 1.7% to 34.9 million pounds in Q2 2024 compared to 35.5 million pounds in Q2 2023[4]. - Net new orders increased by 17% in Q2 2024 compared to Q2 2023, although they remain low compared to pre-pandemic levels[4]. - Open orders at the end of Q2 2024 were approximately 14 million pounds, down from 20 million pounds at the end of Q2 2023[4]. - Net sales for PE Films in Q2 2024 increased by 83.4% to $29.2 million compared to Q2 2023, driven by a 123% increase in Surface Protection sales volume[9]. - For the first six months of 2024, net sales for PE Films rose by 49.4% to $53.9 million, with Surface Protection sales volume increasing by 77% compared to the same period in 2023[11]. - Flexible Packaging Films reported a 4.0% increase in net sales to $34.5 million in Q2 2024, attributed to higher sales volume and favorable product mix[13]. - For the first six months of 2024, net sales for Flexible Packaging Films remained consistent with the same period in 2023, impacted by lower selling prices due to excess global capacity[14]. EBITDA and Operational Performance - EBITDA from ongoing operations for Aluminum Extrusions was $12.9 million in Q2 2024, up 26.3% from $10.2 million in Q2 2023[2]. - EBITDA from ongoing operations for PE Films was $10.1 million in Q2 2024, a substantial increase from $0.8 million in Q2 2023[2]. - EBITDA from ongoing operations for PE Films in Q2 2024 was $10.1 million, a significant increase of $9.3 million compared to Q2 2023, primarily due to restocking of customer inventories[9]. - EBITDA from ongoing operations for Flexible Packaging Films in Q2 2024 increased by $3.0 million compared to Q2 2023, mainly due to lower raw material costs and fixed costs[13]. - Consolidated EBITDA from ongoing operations for the three months ended June 30, 2024, was $22.6 million, compared to $7.4 million for the same period in 2023[42]. Capital Expenditures and Liquidity - The company expects capital expenditures of $9 million in 2024, including $4 million for productivity projects[6]. - Capital expenditures for PE Films are projected to be $2 million in 2024, including $1 million for productivity projects[11]. - The liquidity available under the new asset-based lending facility has exceeded expectations, aiding in cost management and capital spending[2]. - The median daily liquidity under the asset-based lending facility was $27 million in Q2 2024, up from $16 million in Q1 2024[19]. - Total current assets increased to $190,765 thousand as of June 30, 2024, from $176,677 thousand at the end of 2023[27]. Debt and Compliance - Total debt decreased to $142.0 million as of June 30, 2024, from $146.3 million at December 31, 2023, while net debt increased slightly to $133.3 million[19]. - The company was in compliance with all covenants under its $180 million asset-based credit agreement as of June 30, 2024[19]. - The company was in compliance with all debt covenants as of June 30, 2024[41]. - The ABL revolving facility matures on June 30, 2026, with total debt reported at $142.0 million as of June 30, 2024[40]. Strategic Initiatives and Future Outlook - The company expects to realize after-tax net cash proceeds of $85 million from the potential sale of Terphane, pending regulatory approvals[18]. - The company is undergoing a review process for the sale of Terphane, with a maximum deadline set for November 18, 2024[2]. - The company expects to continue focusing on market expansion and new product development as part of its strategic initiatives moving forward[34]. - The Surface Protection business is facing a cautious outlook on new product development opportunities due to market uncertainties[44]. Other Financial Metrics - Corporate expenses decreased by $8.7 million in the first six months of 2024, primarily due to lower pension expenses and foreign currency transaction gains[15]. - The effective tax rate for the first six months of 2024 was 17.9%, up from 13.1% in the same period of 2023, due to pre-tax income compared to a pre-tax loss in 2023[15]. - Interest expense increased to $3.4 million for the three months ended June 30, 2024, compared to $2.4 million in the same period of 2023[23]. - The company reported a basic earnings per share of $0.26 for the three months ended June 30, 2024, compared to a loss of $0.56 per share in the same period of 2023[23]. - The company reported a gain of $144 thousand on investment in kaléo, Inc. for the three months ended June 30, 2024[25].