PART I - FINANCIAL INFORMATION Details Tredegar's unaudited financial statements, management's analysis, market risks, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Tredegar's unaudited Q3 and 9M 2023 financial statements reveal significant net losses due to sales decline, pension settlement, and goodwill impairment [Condensed Consolidated Balance Sheets (unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change | | :----------------------------- | :-------------------------- | :-------------------------- | :----- | | Total Assets | \$479,517 | \$542,093 | (11.5%) | | Total Liabilities | \$325,326 | \$340,331 | (4.4%) | | Total Shareholders' Equity | \$154,191 | \$201,762 | (23.6%) | | Cash and cash equivalents | \$48,604 | \$19,232 | 152.7% | | Inventories | \$79,301 | \$127,771 | (37.9%) | | Goodwill | \$35,717 | \$70,608 | (49.4%) | [Condensed Consolidated Statements of Income (Loss) (unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)%20(unaudited)) | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Sales | \$166,192 | \$238,486 | \$535,481 | \$749,415 | | Net income (loss) | \$(50,380) | \$1,033 | \$(70,314) | \$32,322 | | Basic EPS | \$(1.47) | \$0.03 | \$(2.06) | \$0.96 | | Diluted EPS | \$(1.47) | \$0.03 | \$(2.06) | \$0.96 | | Pension settlement loss | \$25,612 | — | \$25,612 | — | | Goodwill impairment | \$19,478 | — | \$34,891 | — | [Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(unaudited)) | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) | \$(50,380) | \$1,033 | \$(70,314) | \$32,322 | | Other comprehensive income (loss) | \$20,673 | \$(2,331) | \$29,624 | \$(162) | | Comprehensive income (loss) | \$(29,707) | \$(1,298) | \$(40,690) | \$32,160 | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | | Net cash from operating activities | \$44,238 | \$(23,152) | | Net cash from investing activities | \$(22,008) | \$(24,121) | | Net cash from financing activities | \$7,712 | \$36,807 | | Cash and cash equivalents at end of period | \$48,604 | \$19,250 | [Condensed Consolidated Statements of Shareholders' Equity (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(unaudited)) | Metric (in thousands) | Balance Jan 1, 2023 | Balance Sep 30, 2023 | | :-------------------- | :------------------ | :------------------- | | Total Shareholders' Equity | \$201,762 | \$154,191 | | Net income (loss) | — | \$(70,314) | | Cash dividends declared | — | \$(8,884) | [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Provides detailed explanations and disclosures for Tredegar's financial statements, covering significant events and accounting policies [Note 1. Basis of Presentation](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation) Outlines the basis of financial statement preparation, including significant business developments and accounting impacts - The Company entered a definitive agreement to sell its flexible packaging films business (Terphane) to Oben Group, contingent on regulatory approvals in Brazil and Columbia[26](index=26&type=chunk) - A plan was adopted to close the PE Films technical center in Richmond, VA, by the end of **2023**, expecting **\$1.7 million** in cash costs and up to **\$3.7 million** in non-cash asset write-downs/accelerated depreciation[27](index=27&type=chunk) - A non-cash partial goodwill impairment of **\$19.5 million** (**\$15.1 million** after deferred income tax benefits) was recognized in Q3 **2023** for the Surface Protection unit due to market uncertainty in consumer electronics, with a total of **\$34.9 million** (**\$27.0 million** after deferred income tax benefits) for the first nine months of **2023**[34](index=34&type=chunk) [Note 2. Accounts and Other Receivables](index=11&type=section&id=Note%202.%20Accounts%20and%20Other%20Receivables) | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Customer receivables | \$69,945 | \$83,667 | | Other receivables | \$2,326 | \$3,874 | | Less: Allowance for bad debts | \$(1,927) | \$(2,997) | | Total accounts and other receivables, net | \$70,344 | \$84,544 | [Note 3. Inventories](index=11&type=section&id=Note%203.%20Inventories) | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Finished goods | \$28,664 | \$34,686 | | Work-in-process | \$9,569 | \$15,604 | | Raw materials | \$20,314 | \$58,262 | | Stores, supplies and other | \$20,754 | \$19,219 | | Total | \$79,301 | \$127,771 | [Note 4. Pension and Other Postretirement Benefits](index=11&type=section&id=Note%204.%20Pension%20and%20Other%20Postretirement%20Benefits) Details pension settlement losses, net periodic benefit costs, and the completion of the pension plan termination process - A pre-tax pension settlement loss of **\$25.6 million** was recognized in Q3 **2023** due to lump sum distributions from the pension plan assets exceeding the pension plan's service and interest cost[40](index=40&type=chunk) - The pension plan termination and settlement process was completed on November **3**, **2023**, after a final contribution of **\$27.7 million**, transferring the obligation to Massachusetts Mutual Life Insurance Company[41](index=41&type=chunk) | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Pension settlement loss | \$25,612 | — | \$25,612 | — | | Net periodic benefit cost (Pension) | \$28,714 | \$3,483 | \$35,521 | \$10,422 | [Note 5. Other Income (Expense), Net](index=12&type=section&id=Note%205.%20Other%20Income%20(Expense)%2C%20Net) Presents other income and expenses, including gains on investments and miscellaneous items | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Gain on investment in kaléo | \$— | \$— | \$262 | \$1,406 | | Other | \$(51) | \$140 | \$(52) | \$(225) | | Total | \$(51) | \$140 | \$210 | \$1,181 | [Note 6. Earnings Per Share](index=13&type=section&id=Note%206.%20Earnings%20Per%20Share) Provides basic and diluted earnings per share figures, along with basic shares outstanding | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | \$(1.47) | \$0.03 | \$(2.06) | \$0.96 | | Diluted EPS | \$(1.47) | \$0.03 | \$(2.06) | \$0.96 | | Basic Shares Outstanding (in thousands) | **34,264** | **33,870** | **34,081** | **33,780** | [Note 7. Accumulated Other Comprehensive Income (Loss)](index=13&type=section&id=Note%207.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Details changes in accumulated other comprehensive income (loss), including foreign currency translation and pension adjustments | Metric (in thousands) | Balance Jan 1, 2023 | Balance Sep 30, 2023 | | :-------------------- | :------------------ | :------------------- | | Foreign Currency Translation | \$(86,079) | \$(85,156) | | Derivative Financial Instruments | \$(2,480) | \$(774) | | Pension & Other Postretirement Benefit Adjust | \$(59,036) | \$(32,041) | | Total Accumulated Other Comprehensive Income (Loss) | \$(147,595) | \$(117,971) | [Note 8. Derivatives](index=15&type=section&id=Note%208.%20Derivatives) Describes the use of derivative financial instruments to hedge against aluminum price and foreign currency exposures - Aluminum Extrusions uses forward purchase commitments and futures contracts to hedge margin exposure from fixed-price forward sales contracts against volatile aluminum costs[57](index=57&type=chunk) - Terphane Ltda. uses foreign exchange average forward rate contracts to purchase Brazilian Real and sell U.S. Dollars to hedge exposure from U.S. Dollar sales and Brazilian Real operating costs[60](index=60&type=chunk) | Derivative Type (in thousands) | Sep 30, 2023 (Net Fair Value) | Dec 31, 2022 (Net Fair Value) | | :----------------------------- | :---------------------------- | :---------------------------- | | Aluminum futures contracts | \$(1,979) | \$(3,581) | | Foreign currency forward contracts | \$1,937 | \$811 | [Note 9. Income Taxes](index=17&type=section&id=Note%209.%20Income%20Taxes) Explains the effective tax rate, impact of goodwill impairment and pension settlement, and Brazilian tax legislation changes - The effective tax rate for the first nine months of **2023** was **18.8%**, influenced by tax benefits from goodwill impairment and pension settlement loss, and the creditable treatment of Brazil income tax[64](index=64&type=chunk)[66](index=66&type=chunk) - Brazil enacted new tax legislation in Q2 **2023**, making Brazil income tax creditable again after **2023**, which reversed a discrete tax benefit recognized in Q1 **2022**[64](index=64&type=chunk) - Terphane Ltda. benefits from income tax incentives in Brazil, reducing its statutory federal income tax rate to **15.25%** on certain products, with a benefit of **\$0.5 million** in the first nine months of **2023**[68](index=68&type=chunk) [Note 10. Business Segments](index=18&type=section&id=Note%2010.%20Business%20Segments) Presents financial data for Tredegar's business segments, including net sales, EBITDA from ongoing operations, and identifiable assets | Segment (in thousands) | Q3 2023 Net Sales | Q3 2022 Net Sales | 9M 2023 Net Sales | 9M 2022 Net Sales | | :--------------------- | :---------------- | :---------------- | :---------------- | :---------------- | | Aluminum Extrusions | \$109,410 | \$161,649 | \$364,607 | \$510,066 | | PE Films | \$19,938 | \$20,059 | \$56,036 | \$82,613 | | Flexible Packaging Films | \$30,111 | \$47,278 | \$94,861 | \$128,117 | | Total Net Sales | \$159,459 | \$228,986 | \$515,504 | \$720,796 | | Segment (in thousands) | Q3 2023 EBITDA from Ongoing Operations | Q3 2022 EBITDA from Ongoing Operations | 9M 2023 EBITDA from Ongoing Operations | 9M 2022 EBITDA from Ongoing Operations | | :--------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Aluminum Extrusions | \$5,113 | \$12,071 | \$29,968 | \$57,885 | | PE Films | \$4,037 | \$431 | \$6,700 | \$14,543 | | Flexible Packaging Films | \$477 | \$7,830 | \$2,076 | \$20,495 | | Segment (in thousands) | Sep 30, 2023 Identifiable Assets | Dec 31, 2022 Identifiable Assets | | :--------------------- | :------------------------------- | :------------------------------- | | Aluminum Extrusions | \$256,671 | \$293,308 | | PE Films | \$58,459 | \$102,431 | | Flexible Packaging Films | \$82,789 | \$103,448 | | Subtotal | \$397,919 | \$499,187 | [Note 11. Supply Chain Financing](index=21&type=section&id=Note%2011.%20Supply%20Chain%20Financing) Details the amount of accounts payable financed through supply chain financing arrangements | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Accounts payable financed | \$14,200 | \$25,900 | [Note 12. Debt](index=21&type=section&id=Note%2012.%20Debt) Outlines debt outstanding, credit agreement amendments, interest rates, and key restrictive covenants - The Credit Agreement was amended on August **3**, **2023**, reducing aggregate borrowings from **\$375 million** to **\$200 million** and revising restrictive covenants[79](index=79&type=chunk) - As of September **30**, **2023**, **\$155.0 million** of debt was outstanding, principally priced at an interest rate equal to the Adjusted Term SOFR Rate plus **200.0 basis points**[80](index=80&type=chunk) - Key restrictive covenants include a Total Net Leverage Ratio (**5.0x** for Q3 **2023**) and an Interest Coverage Ratio (**2.50x** for Q3 **2023**), and a **prohibition** on dividend payments and share repurchases through December **31**, **2024**[86](index=86&type=chunk) [Note 13. Subsequent Events](index=22&type=section&id=Note%2013.%20Subsequent%20Events) Reports significant events occurring after the reporting period, including new borrowings and ABL Credit Facility amendments - Terphane Limitada borrowed **\$20 million** in October **2023**, secured by its assets, with repayment expected upon the Contingent Terphane Sale[84](index=84&type=chunk) - A majority of lenders consented to amend the Credit Agreement to implement an ABL Credit Facility, with initial borrowing availability of **\$180 million**, reducing to **\$125 million** upon the earlier of March **31**, **2025**, or the Terphane Sale proceeds[85](index=85&type=chunk)[87](index=87&type=chunk) - The ABL Credit Facility will replace existing financial covenants with a minimum fixed charge coverage ratio triggered by low availability after the ABL Adjustment Date[88](index=88&type=chunk) [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) Management analyzes Tredegar's Q3 and 9M 2023 net losses, segment challenges, strategic initiatives, and liquidity management efforts [Forward-looking and Cautionary Statements](index=24&type=section&id=Forward-looking%20and%20Cautionary%20Statements) Highlights inherent risks in forward-looking statements, including customer loss, economic conditions, and credit facility compliance - Forward-looking statements are identified by words like "believe," "estimate," "anticipate," and are subject to risks such as loss of significant customers, inability to develop new products, and uncertain economic conditions[91](index=91&type=chunk)[93](index=93&type=chunk) - Key risks include noncompliance with credit facility covenants, the unfinalized ABL Credit Facility amendment, and the inability to successfully complete strategic dispositions like the Terphane sale[93](index=93&type=chunk) [Critical Accounting Policies and Estimates](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Confirms no material changes to critical accounting policies and estimates since December 31, 2022 - No material changes to critical accounting policies and estimates have occurred since December **31**, **2022**[96](index=96&type=chunk) [Business Overview](index=25&type=section&id=Business%20Overview) Describes Tredegar's three primary business segments and key profitability measures used by management - Tredegar operates three primary businesses: Aluminum Extrusions (North American B&C, automotive, specialty), PE Films (surface protection for electronics), and Flexible Packaging Films (polyester films for Latin American packaging)[98](index=98&type=chunk) - EBITDA from ongoing operations is the key profitability measure used by the CODM, and net sales are used for segment-level revenue[99](index=99&type=chunk) [Third Quarter Financial Results Highlights](index=25&type=section&id=Third%20Quarter%20Financial%20Results%20Highlights) Summarizes Tredegar's Q3 2023 financial performance, highlighting net loss and segment-specific EBITDA declines | Metric (in millions) | Q3 2023 | Q3 2022 | | :------------------- | :------ | :------ | | Net income (loss) | \$(50.4) | \$1.0 | | Diluted EPS | \$(1.47) | \$0.03 | - Aluminum Extrusions' EBITDA from ongoing operations **decreased** to **\$5.1 million** in Q3 **2023** from **\$12.1 million** in Q3 **2022** due to sluggish market conditions and a **28.6%** **decline** in sales volume[103](index=103&type=chunk) - Flexible Packaging Films' EBITDA from ongoing operations was **\$0.5 million** in Q3 **2023**, **down** from **\$7.8 million** in Q3 **2022**, primarily due to lower sales volume and margins driven by global excess capacity and imports[103](index=103&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Analyzes Tredegar's consolidated financial performance for Q3 and 9M 2023, detailing changes in net income, sales, and key expenses [Third Quarter of 2023 Compared with the Third Quarter of 2022](index=27&type=section&id=Third%20Quarter%20of%202023%20Compared%20with%20the%20Third%20Quarter%20of%202022) Compares Tredegar's Q3 2023 financial results to Q3 2022, focusing on net loss, sales, and margin changes | Metric (in thousands) | Q3 2023 | Q3 2022 | Change | | :-------------------- | :------ | :------ | :----- | | Net income (loss) | \$(50,380) | \$1,033 | \$(51,413) | | Sales | \$166,192 | \$238,486 | \$(72,294) | | Pension settlement loss | \$25,612 | — | \$25,612 | | Goodwill impairment | \$19,478 | — | \$19,478 | - Consolidated gross profit margin **decreased** to **9.0%** in Q3 **2023** from **11.9%** in Q3 **2022**, impacted by lower sales volume, higher labor/employee-related costs, lower pricing, and higher supply expense[111](index=111&type=chunk) - SG&A and R&D expenses as a percentage of sales **increased** to **13.3%** in Q3 **2023** from **8.6%** in Q3 **2022**, primarily due to higher professional fees associated with business development activities[112](index=112&type=chunk) [First Nine Months of 2023 Compared with the First Nine Months of 2022](index=29&type=section&id=First%20Nine%20Months%20of%202023%20Compared%20with%20the%20First%20Nine%20Months%20of%202022) Compares Tredegar's 9M 2023 financial results to 9M 2022, detailing net loss, sales, and expense impacts | Metric (in thousands) | 9M 2023 | 9M 2022 | Change | | :-------------------- | :------ | :------ | :----- | | Net income (loss) | \$(70,314) | \$32,322 | \$(102,636) | | Sales | \$535,481 | \$749,415 | \$(213,934) | | Pension settlement loss | \$25,612 | — | \$25,612 | | Goodwill impairment | \$34,891 | — | \$34,891 | - Consolidated gross profit margin **decreased** to **10.9%** in 9M **2023** from **15.9%** in 9M **2022**, affected by lower sales volume, higher labor/employee-related costs, and unfavorable raw material cost flow-through[123](index=123&type=chunk) - SG&A and R&D expenses as a percentage of sales **increased** to **11.3%** in 9M **2023** from **8.5%** in 9M **2022**, despite a **decrease** in absolute spending, due to a larger **decline** in sales[124](index=124&type=chunk) [Segment Operations Review](index=32&type=section&id=Segment%20Operations%20Review) Reviews the operational and financial performance of Tredegar's Aluminum Extrusions, PE Films, and Flexible Packaging Films segments [Aluminum Extrusions](index=32&type=section&id=Aluminum%20Extrusions) Reviews the Aluminum Extrusions segment's Q3 and 9M 2023 performance, noting sales volume and EBITDA declines due to market conditions | Metric | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :-------------------- | :------ | :------ | :------ | :------ | | Sales volume (lbs) | **32,457** | **45,457** | **105,511** | **137,427** | | Net sales (in thousands) | \$109,410 | \$161,649 | \$364,607 | \$510,066 | | EBITDA from ongoing operations (in thousands) | \$5,113 | \$12,071 | \$29,968 | \$57,885 | - Sales volume in nonresidential B&C **declined 28.9%** in Q3 **2023**, and specialty market volume **decreased 35.6%**, while automotive **increased 14.2%**[135](index=135&type=chunk) - Open orders at the end of Q3 **2023** were **17 million pounds**, significantly below the **2019** quarterly range of **21-27 million pounds**, reflecting sluggish demand and **increased** imports[136](index=136&type=chunk) [PE Films](index=33&type=section&id=PE%20Films) Examines the PE Films segment's Q3 and 9M 2023 performance, including goodwill impairment and technical center closure plans | Metric | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :-------------------- | :------ | :------ | :------ | :------ | | Sales volume (lbs) | **7,224** | **7,081** | **20,837** | **27,273** | | Net sales (in thousands) | \$19,938 | \$20,059 | \$56,036 | \$82,613 | | EBITDA from ongoing operations (in thousands) | \$4,037 | \$431 | \$6,700 | \$14,543 | - The PE Films technical center in Richmond, VA, is closing by the end of **2023**, with anticipated net annual cash savings of **\$3.4 million** starting in Q4 **2023**[148](index=148&type=chunk) - A non-cash partial goodwill impairment of **\$19.5 million** was recognized in Q3 **2023** (**\$34.9 million** for 9M **2023**) for the Surface Protection unit due to market uncertainty in consumer electronics[149](index=149&type=chunk) [Flexible Packaging Films](index=35&type=section&id=Flexible%20Packaging%20Films) Assesses Flexible Packaging Films' Q3 and 9M 2023 performance, highlighting impacts from lower selling prices and global excess capacity | Metric | Q3 2023 | Q3 2022 | 9M 2023 | 9M 2022 | | :-------------------- | :------ | :------ | :------ | :------ | | Sales volume (lbs) | **22,163** | **28,889** | **65,732** | **82,210** | | Net sales (in thousands) | \$30,111 | \$47,278 | \$94,861 | \$128,117 | | EBITDA from ongoing operations (in thousands) | \$477 | \$7,830 | \$2,076 | \$20,495 | - Lower selling prices, driven by excess global capacity and competition from Asian imports in Brazil, significantly **impacted** net sales and EBITDA[152](index=152&type=chunk)[153](index=153&type=chunk) [Corporate Expenses, Interest & Other](index=36&type=section&id=Corporate%20Expenses%2C%20Interest%20%26%20Other) Details corporate expenses and interest costs for the first nine months of 2023, noting impacts from professional fees and higher debt levels - Corporate expenses remained flat in the first nine months of **2023** due to higher professional fees associated with business development activities (**\$3.3 million**), offset by lower accruals for employee-related compensation (**\$2.5 million**) and lower external and internal audit fees (**\$0.6 million**)[156](index=156&type=chunk) - Interest expense of **\$7.8 million** in the first nine months of **2023** **increased** **\$4.6 million** compared to the first nine months of **2022** due to higher average debt levels and interest rates[157](index=157&type=chunk) [Status of Current Corporate Strategic Initiatives](index=36&type=section&id=Status%20of%20Current%20Corporate%20Strategic%20Initiatives) Updates on key strategic initiatives, including the Terphane sale, pension plan termination, and expected cash proceeds - The definitive agreement to sell Terphane to Oben Group is **contingent** on competition filing approvals in Brazil and Columbia, with CADE's review deadline no later than September **23**, **2024**[158](index=158&type=chunk) - The pension plan termination and settlement process was completed on November **3**, **2023**, after a final contribution of **\$27.7 million**[160](index=160&type=chunk) - The company expects after-tax cash proceeds of **\$85 million** from the Terphane sale, subject to deductions and tax changes[159](index=159&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Analyzes Tredegar's liquidity and capital resources, focusing on operating cash flow, debt levels, and the transition to an ABL Credit Facility - Net cash provided by operating activities was **\$44.2 million** in 9M **2023**, a significant improvement from a **\$23.2 million** outflow in 9M **2022**, due to improved working capital and lower pension contributions[166](index=166&type=chunk) - The company is transitioning to an ABL Credit Facility to reduce debt covenant violation risk, with a majority of lenders consenting to an amendment in November **2023**[178](index=178&type=chunk)[181](index=181&type=chunk) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Cash and cash equivalents | \$48,604 | \$19,232 | | Total debt outstanding | \$155,000 | \$137,000 | | Available credit under Credit Agreement | \$4,700 | N/A | | Total Net Leverage Ratio | **3.33x** | **1.39x** | | Interest Coverage Ratio | **3.32x** | N/A | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Tredegar manages market risks from interest rates, raw material/energy prices, and foreign currencies using derivative instruments and hedging strategies - Tredegar faces market risks from interest rates, polyethylene and polypropylene resin prices, PTA and MEG prices, aluminum ingot and scrap prices, energy prices, foreign currencies, and emerging markets[182](index=182&type=chunk) - Aluminum Extrusions hedges aluminum price volatility from fixed-price forward sales contracts using forward purchase commitments and futures contracts[184](index=184&type=chunk) - Flexible Packaging Films (Terphane Ltda.) has significant foreign currency translation risk due to U.S. Dollar-denominated sales and raw material costs versus Brazilian Real-denominated operating costs, which it hedges with foreign exchange forward contracts[195](index=195&type=chunk)[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and internal control over financial reporting were ineffective as of September 30, 2023, due to material weaknesses, with remediation efforts ongoing [Evaluation of Disclosure Controls and Procedures](index=45&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Concludes that disclosure controls and procedures were ineffective as of September 30, 2023, due to identified material weaknesses - Disclosure controls and procedures were deemed **ineffective** as of September **30**, **2023**, due to material weaknesses in internal control over financial reporting[203](index=203&type=chunk) [Management's Report on Internal Control Over Financial Reporting](index=45&type=section&id=Management's%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) Management reports ineffective internal control over financial reporting as of December 31, 2022, due to resource and communication deficiencies - Management concluded that internal control over financial reporting was **not effective** as of December **31**, **2022**, due to insufficient competent resources and an **ineffective** information and communication process[208](index=208&type=chunk) - The identified material weaknesses create a reasonable possibility that a material misstatement of financial statements may not be prevented or detected timely[209](index=209&type=chunk) - KPMG LLP, the independent auditor, expressed an adverse opinion on the operating effectiveness of the company's internal control over financial reporting for **2022**[210](index=210&type=chunk) [Remediation Plan and Efforts to Address the Identified Material Weaknesses](index=46&type=section&id=Remediation%20Plan%20and%20Efforts%20to%20Address%20the%20Identified%20Material%20Weaknesses) Details the company's revised remediation plan for material weaknesses, including control enhancements and internal compliance department expansion - The company is executing a revised remediation plan, including comprehensive review and update of internal control documentation, development of enhanced controls, and expansion of the internal control compliance department[212](index=212&type=chunk)[213](index=213&type=chunk) - Remediation of controls in the Aluminum Extrusion business's expenditure process is **delayed** to Q4 **2023** due to resource constraints and focus on revenue process controls[214](index=214&type=chunk) - Material weaknesses cannot be considered remediated until controls have operated effectively for a sufficient period and management has tested them[215](index=215&type=chunk) [Changes in Internal Control Over Financial Reporting](index=47&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Reports ongoing changes to remediate material weaknesses, with no other significant changes in Q3 2023 - Changes are being implemented to remediate material weaknesses, but no other material changes to internal control over financial reporting occurred in Q3 **2023**[217](index=217&type=chunk) PART II - OTHER INFORMATION Provides updates on Tredegar's risk factors, equity security sales, other information, and a list of filed exhibits [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors, highlighting uncertainties in the Terphane sale and the unfinalized ABL credit facility amendment - The planned divestiture of Terphane is subject to conditions beyond the company's control, including competition filing approvals in Brazil and Columbia, with CADE's review deadline no later than September **23**, **2024**[219](index=219&type=chunk) - The anticipated amendment to the Credit Agreement for an ABL Credit Facility has not been finalized and may not be completed by the end of **2023**, despite lender consent[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's Credit Agreement contains restrictive covenants, including limitations on dividend payments to shareholders - The Credit Agreement includes financial and other restrictive covenants, such as a restriction on the company's ability to pay dividends to shareholders[222](index=222&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in Q3 2023 - No director or officer adopted or terminated a Rule **10b5-1** or non-Rule **10b5-1** trading arrangement in Q3 **2023**[223](index=223&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) Key exhibits include the Purchase and Sale Agreement for Terphane, Credit Agreement amendments, and certifications from the CEO and CFO - Key exhibits include the Purchase and Sale Agreement for Terphane, Amendment No. **2** to the Second Amended and Restated Credit Agreement, and certifications from the CEO and CFO[224](index=224&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-10258 Tredegar Corporation (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-10258 Tredegar Corporation (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-10258 TREDEGAR CORPORATION (Exact name of registrant as specified in its charter) | Virginia | | 54-1497771 | | --- | --- | --- | | (State or othe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Registrant's Telephone Number, Including Area Code: (804) 330-1000 Securities registered pursuant to Section 12(b) of the Act: | | Trading | Name of each exchange on which | | --- | --- | -- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Tredegar Corporation (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) 1100 Boulders Parkway Richmond, Virginia 23225 (Ad ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Tredegar Corporation is an industrial manufacturer with three primary business segments: Aluminum Extrusions, PE Films, and Flexible Packaging Films, having divested Personal Care Films and Bright View Technologies in 2020 [Description of Business](index=4&type=section&id=Description%20of%20Business) Tredegar Corporation operates through three reportable business segments: Aluminum Extrusions, PE Films, and Flexible Packaging Films, with recent divestitures of Personal Care Films and Bright View Technologies - The company's main business segments are **Aluminum Extrusions**, **PE Films**, and **Flexible Packaging Films**[11](index=11&type=chunk) - The Personal Care Films business was sold in October 2020 and is now reported as discontinued operations[12](index=12&type=chunk) - Bright View Technologies was sold in December 2020, but its financial information remains within the PE Films segment's continuing operations[13](index=13&type=chunk) [Aluminum Extrusions](index=4&type=section&id=Aluminum%20Extrusions) The Aluminum Extrusions segment, known as Bonnell Aluminum, produces and sells soft and medium-strength alloyed aluminum extrusions primarily in the U.S., accounting for 67% of consolidated net sales in 2021 Aluminum Extrusions Net Sales Contribution | Year | % of Tredegar's Consolidated Net Sales | | :--- | :--- | | 2021 | 67% | | 2020 | 63% | | 2019 | 66% | Aluminum Extrusions Net Sales by Market Segment | Market Segment | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Nonresidential Building & Construction | 50% | 56% | 51% | | Residential Building & Construction | 10% | 9% | 8% | | Automotive | 8% | 8% | 9% | | Consumer Durables | 10% | 10% | 11% | | Machinery & Equipment | 8% | 7% | 7% | | Electrical | 6% | 4% | 7% | | Distribution | 8% | 6% | 7% | - The segment's backlog increased by **313%** from **$74.2 million** in 2020 to **$306.4 million** in 2021, driven by a **33%** increase in bookings and labor shortages impacting shipment levels[18](index=18&type=chunk) - Primary raw materials are aluminum ingot and scrap, purchased through open-market and annual contracts. The segment is navigating supply chain issues for paint and other non-aluminum materials[19](index=19&type=chunk) [PE Films](index=5&type=section&id=PE%20Films) The PE Films segment produces surface protection and polyethylene overwrap films, accounting for 15% of consolidated net sales in 2021, with significant customer concentration and $5.7 million in R&D spending PE Films Net Sales Contribution | Year | % of Tredegar's Consolidated Net Sales | | :--- | :--- | | 2021 | 15% | | 2020 | 19% | | 2019 | 17% | - The top four customers accounted for **88%** of the segment's net sales in 2021, indicating significant customer concentration[23](index=23&type=chunk) PE Films R&D Spending | Year | R&D Spending (in millions) | | :--- | :--- | | 2021 | $5.7 | | 2020 | $7.7 | | 2019 | $7.0 | [Flexible Packaging Films](index=6&type=section&id=Flexible%20Packaging%20Films) The Flexible Packaging Films segment, operating as Terphane, produces specialized PET-based films for food packaging and industrial applications, primarily manufactured in Brazil and accounting for 18% of consolidated net sales in 2021 Flexible Packaging Films Net Sales Contribution | Year | % of Tredegar's Consolidated Net Sales | | :--- | :--- | | 2021 | 18% | | 2020 | 18% | | 2019 | 17% | - The segment produces PET-based films under the **Terphane®**, **Sealphane®**, and **Ecophane®** brand names for food packaging and industrial uses[24](index=24&type=chunk) [General](index=6&type=section&id=General) This section covers general corporate matters including intellectual property, government regulations, and human capital management, with Tredegar employing approximately 2,400 people globally as of year-end 2021 - The company's operations are subject to numerous U.S. and foreign government regulations, including environmental (**Clean Air Act**, **CERCLA**), privacy, and anti-corruption laws[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - As of December 31, 2021, the company employed approximately **2,400** people, with **80%** in the U.S. About **15%** of U.S. employees and all Brazilian employees are represented by labor unions[30](index=30&type=chunk) - The company focuses on human capital through health and safety initiatives (including on-site clinics), talent development, competitive compensation, and a commitment to inclusion and diversity[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces several risks that could materially affect its financial condition and operations, including pandemic impacts, cost volatility, pension underfunding, and internal control weaknesses, alongside segment-specific challenges [Risks Related to all Tredegar Businesses](index=8&type=section&id=Risks%20Related%20to%20all%20Tredegar%20Businesses) Tredegar faces enterprise-wide risks including ongoing COVID-19 impacts, volatile raw material and energy costs, an underfunded pension plan, and identified material weaknesses in internal financial controls - The COVID-19 pandemic continues to adversely affect operations through increased costs of labor and materials, labor shortages, and supply chain disruptions[37](index=37&type=chunk)[39](index=39&type=chunk) - The company's performance is influenced by volatile costs of raw materials (aluminum, resin, PTA, MEG) and energy, with no assurance that price increases can fully offset these costs[39](index=39&type=chunk)[40](index=40&type=chunk) - The company has an underfunded defined benefit pension plan, which was underfunded by **$69.5 million** as of Dec 31, 2021. A process to terminate and settle the plan was initiated in February 2022 with a **$50 million** contribution[41](index=41&type=chunk) - Material weaknesses have been identified in the company's internal control over financial reporting, which increases the risk of a material misstatement in financial statements. Remediation efforts are ongoing but have been delayed[42](index=42&type=chunk)[44](index=44&type=chunk) [Risks Related to Aluminum Extrusions](index=11&type=section&id=Risks%20Related%20to%20Aluminum%20Extrusions) The Aluminum Extrusions segment is subject to cyclical demand, particularly from the U.S. construction sector, faces risks from a major ERP/MES system implementation, and potential impacts from anti-dumping duty evasion or reduction - Sales and profitability are cyclical, seasonal, and highly dependent on U.S. economic conditions, especially in the construction sector[51](index=51&type=chunk) - A new ERP/MES system implementation is planned, costing an estimated **$28 million** over two years, which poses significant implementation and financial risks[51](index=51&type=chunk) - The business could be adversely affected if competitors evade anti-dumping duties on aluminum extrusions or if such duties are reduced. The orders are up for review beginning in March 2022[51](index=51&type=chunk) [Risks Related to PE Films](index=12&type=section&id=Risks%20Related%20to%20PE%20Films) The PE Films segment faces significant customer concentration risk and ongoing profit erosion due to customer product transitions to less costly alternatives and competitive pricing pressures - The segment is highly dependent on a few large customers; the top four comprised **13%** of Tredegar's consolidated net sales in 2021[53](index=53&type=chunk) - Customer product transitions to alternative materials are expected to adversely impact PE Films' EBITDA by an additional **$7 million** in 2022, following a **$14.8 million** negative impact in 2021 vs. 2020[53](index=53&type=chunk) - Competitive pricing pressures, separate from product transitions, are expected to reduce EBITDA by approximately **$6 million** in 2022 compared to 2021[54](index=54&type=chunk) [Risks Related to Flexible Packaging Films](index=13&type=section&id=Risks%20Related%20to%20Flexible%20Packaging%20Films) The Flexible Packaging Films segment is exposed to risks from uncertain economic conditions in Brazil, including foreign exchange translation risk, overcapacity in the Latin American market, and potential changes to anti-dumping duties - The segment is exposed to foreign exchange translation risk due to a mismatch between its functional currency (Brazilian Real) and the U.S. Dollar pricing of its sales and raw materials[58](index=58&type=chunk) - Overcapacity in the Latin American polyester film market and competition from imports create pricing pressure. While anti-dumping duties are in place for some countries, they were suspended for China and Egypt in May 2021 and are set to expire for others in Q1 2023[58](index=58&type=chunk) [Unresolved Staff Comments](index=13&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None[59](index=59&type=chunk) [Properties](index=13&type=section&id=Item%202.%20Properties) Tredegar owns most of its manufacturing facilities, warehouses, and other properties, which are considered to be in good condition with sufficient capacity for current production, with its corporate headquarters leased in Richmond, Virginia - The company's corporate headquarters is located at **1100 Boulders Parkway, Richmond, Virginia 23225**[61](index=61&type=chunk) Principal Manufacturing Locations as of December 31, 2021 | Segment | U.S. Locations | Outside U.S. Locations | | :--- | :--- | :--- | | **Aluminum Extrusions** | Carthage, TN; Clearfield, UT; Elkhart, IN; Newnan, GA; Niles, MI | None | | **PE Films** | Pottsville, PA; Richmond, VA (technical center) | Guangzhou, China | | **Flexible Packaging Films** | Bloomfield, NY (technical center and production) | Cabo de Santo Agostinho, Brazil | [Legal Proceedings](index=14&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 18, "Contingencies," to the Consolidated Financial Statements included in Item 15 of this report - The required information is set forth in Note 18 "Contingencies" to the Consolidated Financial Statements in Item 15[63](index=63&type=chunk) [Mine Safety Disclosures](index=14&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports that it has no mine safety disclosures - None[64](index=64&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=15&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Tredegar's common stock trades on the NYSE under "TG", with a history of regular quarterly dividends and a special dividend in 2020, and an ongoing share repurchase program with remaining authorization - Common stock is traded on the **New York Stock Exchange (NYSE)** under the ticker symbol **"TG"**[67](index=67&type=chunk) - The company has paid a regular quarterly cash dividend since July 1989. A special dividend of **$200 million** (**$5.97 per share**) was paid in December 2020[68](index=68&type=chunk) - A share repurchase program authorizes the purchase of up to **5 million** shares. As of December 31, 2021, **1,732,003** shares remained available for repurchase. No shares were repurchased in 2019, 2020, or 2021[70](index=70&type=chunk) [RESERVED](index=16&type=section&id=Item%206.%20%5BRESERVED%5D) This item is reserved and contains no information - Item 6 is reserved[74](index=74&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for 2021 compared to 2020, covering performance, COVID-19 impacts, segment reviews, accounting policies, liquidity, and market risks [Executive Summary](index=16&type=section&id=Executive%20Summary) In 2021, Tredegar's sales increased to $826.5 million, with net income from continuing operations of $57.9 million, significantly improved from a 2020 net loss due to a gain on the sale of its kaléo investment Financial Performance Summary (2021 vs. 2020) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Sales | $826.5 million | $755.3 million | | Net Income (Loss) from Continuing Operations | $57.9 million | ($16.8 million) | | Diluted EPS from Continuing Operations | $1.72 | ($0.51) | - 2021 results include a **$10.0 million** after-tax gain (**$0.30 per share**) from the sale of the company's investment in kaléo[79](index=79&type=chunk) - 2020 results were negatively impacted by a **$47.6 million** after-tax loss on the kaléo investment and a **$10.5 million** goodwill impairment in the Aluminum Extrusions segment[80](index=80&type=chunk) [The Impact of COVID-19 and Related Financial Considerations](index=17&type=section&id=THE%20IMPACT%20OF%20COVID-19%20AND%20RELATED%20FINANCIAL%20CONSIDERATIONS) The COVID-19 pandemic continues to impact Tredegar's operations through labor shortages, increased costs, and supply chain disruptions, prompting price increases and cost pass-through mechanisms across segments - The company's priorities during the pandemic are employee health and safety and keeping manufacturing sites open[83](index=83&type=chunk) - The Aluminum Extrusions segment is experiencing labor shortages, higher absenteeism, and increased hiring costs, which constrain its ability to meet high demand[86](index=86&type=chunk) - All business segments are managing supply chain disruptions and escalating costs, prompting price increases and new cost pass-through mechanisms to mitigate margin pressure[87](index=87&type=chunk) [Operations Review](index=18&type=section&id=OPERATIONS%20REVIEW) This section details the financial performance of each business segment for 2021 compared to 2020, highlighting changes in sales, EBITDA, and key drivers for Aluminum Extrusions, PE Films, and Flexible Packaging Films [Aluminum Extrusions Review](index=18&type=section&id=Aluminum%20Extrusions%20Review) In 2021, the Aluminum Extrusions segment's net sales increased by 18.3% to $539.3 million, with EBITDA from ongoing operations rising slightly by 1.5% to $55.9 million, primarily due to higher pricing offsetting increased costs Aluminum Extrusions Financial Summary (2021 vs. 2020) | Metric (in thousands) | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Sales Volume (lbs) | 183,367 | 186,391 | (1.6)% | | Net Sales | $539,325 | $455,711 | 18.3% | | EBITDA from Ongoing Operations | $55,948 | $55,137 | 1.5% | - EBITDA increased by **$0.8 million** due to higher pricing (**$13.6 million**) and an inventory accounting benefit (**$6.9 million**), mostly offset by higher labor (**$7.2 million**), supply (**$6.4 million**), and freight (**$3.2 million**) costs[95](index=95&type=chunk) - Projected capital expenditures for 2022 are **$30 million**, which includes **$15 million** for a new ERP/MES system and **$6 million** for infrastructure upgrades[96](index=96&type=chunk) [PE Films Review](index=18&type=section&id=PE%20Films%20Review) The PE Films segment experienced a significant decline in 2021, with net sales falling 14.6% to $118.9 million and EBITDA dropping 38.6% to $27.7 million, primarily due to customer product transitions and higher resin costs PE Films Financial Summary (2021 vs. 2020) | Metric (in thousands) | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Sales Volume (lbs) | 39,429 | 45,175 | (12.7)% | | Net Sales | $118,920 | $139,288 | (14.6)% | | EBITDA from Ongoing Operations | $27,694 | $45,107 | (38.6)% | - EBITDA decreased by **$17.4 million**, with the Surface Protection business contributing a **$19.4 million** decline. This was primarily due to customer product transitions (**$14.8 million**), the pass-through lag of higher resin costs (**$1.4 million**), and higher freight expense (**$1.0 million**)[98](index=98&type=chunk) - The customer product transitions are expected to cause a further decline of **$7 million** in EBITDA in 2022, at which point the transitions are expected to be complete[99](index=99&type=chunk) [Flexible Packaging Films Review](index=19&type=section&id=Flexible%20Packaging%20Films%20Review) In 2021, the Flexible Packaging Films segment's net sales increased by 4.0% to $140.0 million, and EBITDA from ongoing operations grew by 3.4% to $31.7 million, driven by favorable currency translation and higher selling prices Flexible Packaging Films Financial Summary (2021 vs. 2020) | Metric (in thousands) | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Sales Volume (lbs) | 104,569 | 113,115 | (7.6)% | | Net Sales | $139,978 | $134,605 | 4.0% | | EBITDA from Ongoing Operations | $31,684 | $30,645 | 3.4% | - EBITDA increased by **$1.0 million**, primarily driven by a net favorable currency translation of Real-denominated operating costs (**$5.9 million**) and higher foreign currency transaction gains (**$1.2 million**)[103](index=103&type=chunk) [Corporate Expenses, Interest and Income Taxes](index=20&type=section&id=Corporate%20Expenses%2C%20Interest%20and%20Income%20Taxes) Corporate expenses decreased in 2021, interest expense increased, and the effective tax rate for continuing operations was 13.8%, with the company initiating the termination of its frozen pension plan in February 2022 - The effective tax rate for continuing operations was **13.8%** in 2021, compared to **32.8%** in 2020[106](index=106&type=chunk) - In February 2022, Tredegar began the process to terminate its frozen defined benefit pension plan, making a **$50 million** special contribution to reduce underfunding[107](index=107&type=chunk) - Total debt decreased from **$134.0 million** at year-end 2020 to **$73.0 million** at year-end 2021. Net debt decreased by **$79.7 million**, including **$47.1 million** in proceeds from the sale of the kaléo investment[109](index=109&type=chunk) [Critical Accounting Policies and Estimates](index=21&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies requiring significant estimates, including goodwill impairment, pension benefits based on actuarial assumptions, and income taxes involving judgments on tax laws and deferred tax asset realizability - Goodwill impairment is assessed annually (December 1st) or when triggering events occur. In 2021, a qualitative (Step 0) assessment for the Surface Protection and Futura reporting units concluded that a quantitative test was not necessary[116](index=116&type=chunk) - Pension benefit calculations rely on key assumptions such as the discount rate (**2.90%** in 2021) and expected return on plan assets (**3.05%** in 2021). The company announced the termination of its frozen pension plan in February 2022[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - Accounting for income taxes requires significant judgment regarding the application of tax laws and estimating the future realization of deferred tax assets, for which valuation allowances are established if realization is not more likely than not[121](index=121&type=chunk)[122](index=122&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) In 2021, sales increased by 9.4% to $826.5 million due to higher selling prices, though consolidated gross profit margin decreased from 22.6% to 18.0% due to increased costs and margin erosion in PE Films - Sales in 2021 increased by **9.4%** compared to 2020, primarily due to higher average selling prices in Aluminum Extrusions and Flexible Packaging Films[126](index=126&type=chunk) - Consolidated gross profit margin decreased from **22.6%** in 2020 to **18.0%** in 2021, primarily due to higher operating costs in Aluminum Extrusions and margin erosion in PE Films[127](index=127&type=chunk) - Selling, general and administrative (SG&A) and R&D expenses as a percentage of sales decreased to **9.8%** in 2021 from **12.3%** in 2020[128](index=128&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Net cash from operating activities was $70.6 million in 2021, with net debt significantly decreasing to $42.5 million, supported by proceeds from the kaléo investment sale and a $375 million revolving credit facility - Net cash provided by operating activities was **$70.6 million** in 2021, compared to **$74.4 million** in 2020[139](index=139&type=chunk) Debt and Liquidity Summary (as of Dec 31, 2021) | Metric | Amount (in millions) | | :--- | :--- | | Total Debt | $73.0 | | Cash and Cash Equivalents | $30.5 | | Net Debt | $42.5 | | Available Credit | ~$287 | - The company's leverage ratio was **0.81x** at December 31, 2021, well below the maximum permitted of **4.00x** under its credit agreement[109](index=109&type=chunk)[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that the required disclosures about market risk are included within Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" - The discussion of Quantitative and Qualitative Disclosures about Market Risk is located in Item 7[179](index=179&type=chunk) [Financial Statements and Supplementary Data](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the financial statements and supplementary data, which are set forth in Item 15 of this report - The information required by this item is set forth in Item 15[179](index=179&type=chunk) [Changes In and Disagreements With Accountants on Accounting and Financial Disclosure](index=35&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports that there have been no changes in or disagreements with its accountants on accounting and financial disclosure - None[180](index=180&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of December 31, 2021, due to material weaknesses in internal control over financial reporting, for which a remediation plan is in progress - The CEO and CFO concluded that disclosure controls and procedures were not effective as of December 31, 2021, due to material weaknesses in internal control over financial reporting[184](index=184&type=chunk) - Material weaknesses were identified in five areas: **Control Environment**, **Risk Assessment**, **Information and Communication**, **Monitoring Activities**, and **Control Activities**[194](index=194&type=chunk) - A remediation plan is underway to address the weaknesses, with remaining activities scheduled for completion in the first half of 2022[193](index=193&type=chunk)[194](index=194&type=chunk) - The independent registered public accounting firm, **KPMG LLP**, expressed an adverse opinion on the operating effectiveness of the company's internal control over financial reporting[191](index=191&type=chunk) [Other Information](index=37&type=section&id=Item%209B.%20Other%20Information) The company reports that there is no other information to disclose under this item - None[199](index=199&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=37&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) The company reports that there is no information to disclose under this item - None[200](index=200&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=38&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on the company's executive officers and incorporates by reference information about directors and corporate governance from the upcoming Proxy Statement - Information concerning directors and corporate governance is incorporated by reference from the Proxy Statement[202](index=202&type=chunk)[203](index=203&type=chunk) Executive Officers | Name | Age | Title | | :--- | :--- | :--- | | John M. Steitz | 63 | President and Chief Executive Officer | | D. Andrew Edwards | 63 | Executive Vice President and Chief Financial Officer | | Kevin C. Donnelly | 47 | Vice President, General Counsel and Corporate Secretary | [Executive Compensation](index=38&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding director and executive compensation, including the Compensation Discussion and Analysis and committee reports, is incorporated by reference from the company's Proxy Statement - Information on executive compensation is incorporated by reference from the Proxy Statement[207](index=207&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=38&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the company's Proxy Statement - Information on security ownership and equity compensation plans is incorporated by reference from the Proxy Statement[208](index=208&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=39&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the company's Proxy Statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement[209](index=209&type=chunk) [Principal Accounting Fees and Services](index=39&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section identifies KPMG LLP as the company's independent registered public accounting firm and incorporates by reference information on accounting fees and services, as well as the Audit Committee's pre-approval procedures, from the Proxy Statement - The company's independent registered public accounting firm is **KPMG LLP**[210](index=210&type=chunk) - Information on accounting fees and services is incorporated by reference from the Proxy Statement[210](index=210&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=40&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section contains the index to the company's consolidated financial statements and supplementary data, including KPMG LLP's unqualified opinion on financial statements but an adverse opinion on internal control over financial reporting - The independent auditor, **KPMG LLP**, issued an unqualified opinion on the consolidated financial statements[216](index=216&type=chunk) - **KPMG LLP** issued an adverse opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2021, due to identified material weaknesses[217](index=217&type=chunk)[226](index=226&type=chunk)[228](index=228&type=chunk) [Form 10-K Summary](index=84&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to this filing - Not Applicable[375](index=375&type=chunk)

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents Tredegar Corporation's unaudited condensed consolidated financial statements for Q3 and the first nine months of 2021, including balance sheets, income statements, cash flows, and detailed notes, reflecting a significant turnaround in net income driven by non-operating items Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In Thousands) | Sep 30, 2021 (In thousands) | Dec 31, 2020 (In thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $228,790 | $188,435 | | **Total Assets** | $545,834 | $514,870 | | **Total Current Liabilities** | $150,063 | $140,752 | | **Long-term Debt** | $127,000 | $134,000 | | **Total Liabilities** | $399,555 | $405,815 | | **Total Shareholders' Equity** | $146,279 | $109,055 | Condensed Consolidated Statements of Income (Loss) Highlights (Unaudited) | (In Thousands, Except Per Share Data) | Three Months Ended Sep 30, 2021 (In thousands) | Three Months Ended Sep 30, 2020 (In thousands) | Nine Months Ended Sep 30, 2021 (In thousands) | Nine Months Ended Sep 30, 2020 (In thousands) | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $209,517 | $184,370 | $605,468 | $562,766 | | **Net Income (Loss) from Continuing Operations** | $6,229 | $(16,976) | $36,576 | $(23,308) | | **Net Income (Loss)** | $6,203 | $(65,213) | $36,472 | $(76,339) | | **Diluted Earnings (Loss) Per Share** | $0.19 | $(1.95) | $1.09 | $(2.29) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | (In Thousands) | Nine Months Ended Sep 30, 2021 (In thousands) | Nine Months Ended Sep 30, 2020 (In thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $51,487 | $66,326 | | **Net cash used in investing activities** | $(14,827) | $(13,416) | | **Net cash used in financing activities** | $(18,199) | $(47,634) | | **Increase in cash & cash equivalents** | $18,407 | $3,600 | [Notes to Financial Statements - Divestitures and Discontinued Operations](index=10&type=section&id=Notes%20to%20Financial%20Statements%20-%20Divestitures%20and%20Discontinued%20Operations) The company completed the sale of its Personal Care Films business in October 2020, now reported as discontinued operations, while the Bright View Technologies sale in December 2020 remains within continuing operations, with the former showing a net loss of **$0.1 million** in 2021 compared to a **$53.0 million** loss in 2020 - The sale of the Personal Care Films business was completed on October 30, 2020, and its historical results are presented as discontinued operations[25](index=25&type=chunk)[29](index=29&type=chunk) Financial Results of Discontinued Operations (In thousands) | | Nine Months Ended Sep 30, 2021 (In thousands) | Nine Months Ended Sep 30, 2020 (In thousands) | | :--- | :--- | :--- | | Sales | $0 | $98,053 | | Held for sale impairment loss | $0 | $45,054 | | Income (loss) from discontinued operations, net of tax | $(104) | $(53,031) | [Notes to Financial Statements - Goodwill and Investments](index=12&type=section&id=Notes%20to%20Financial%20Statements%20-%20Goodwill%20and%20Investments) The company recognized a **$13.7 million** goodwill impairment charge in early 2020 for its Aluminum Extrusions segment but identified no impairment in 2021, while its investment in kaléo, Inc. was valued at **$35.5 million** as of September 30, 2021, yielding a **$1.2 million** pre-tax gain for the first nine months of 2021, a significant reversal from the prior year's **$61.0 million** loss - In the first three months of 2020, the company recognized a goodwill impairment charge of **$13.7 million** (**$10.5 million** after taxes) for the Aluminum Extrusions' AACOA reporting unit, with no impairment identified in 2021[37](index=37&type=chunk) - The estimated fair value of the investment in kaléo, Inc. was **$35.5 million** as of September 30, 2021, compared to **$34.6 million** as of December 31, 2020[48](index=48&type=chunk) Gain (Loss) on kaléo Investment (In thousands) | | Nine Months Ended Sep 30, 2021 (In thousands) | Nine Months Ended Sep 30, 2020 (In thousands) | | :--- | :--- | :--- | | Gain (loss) on investment in kaléo | $1,197 | $(61,000) | [Notes to Financial Statements - Business Segments](index=19&type=section&id=Notes%20to%20Financial%20Statements%20-%20Business%20Segments) The company's Aluminum Extrusions segment saw increased net sales but modest EBITDA growth in the first nine months of 2021, while PE Films experienced declines in both, and Flexible Packaging Films achieved slightly higher net sales and improved EBITDA, with management primarily using EBITDA from ongoing operations as a profitability measure Net Sales by Segment (In thousands) | Segment | Nine Months Ended Sep 30, 2021 (In thousands) | Nine Months Ended Sep 30, 2020 (In thousands) | | :--- | :--- | :--- | | Aluminum Extrusions | $394,492 | $339,566 | | PE Films | $87,885 | $103,444 | | Flexible Packaging Films | $102,560 | $100,534 | EBITDA from Ongoing Operations by Segment (In thousands) | Segment | Nine Months Ended Sep 30, 2021 (In thousands) | Nine Months Ended Sep 30, 2020 (In thousands) | | :--- | :--- | :--- | | Aluminum Extrusions | $45,062 | $41,496 | | PE Films | $21,035 | $33,928 | | Flexible Packaging Films | $25,296 | $22,594 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the company's Q3 2021 return to profitability, driven by non-operating items, while operational segments face COVID-19 related challenges including labor shortages, supply chain disruptions, and cost inflation, which the company mitigates through price increases and cost pass-throughs, maintaining strong liquidity [COVID-19 Impact and Business Conditions](index=25&type=section&id=COVID-19%20Impact%20and%20Business%20Conditions) The company continues to operate all manufacturing sites as essential businesses while managing COVID-19 related challenges, with Bonnell Aluminum facing significant labor shortages and hiring difficulties, and all segments experiencing supply chain disruptions and escalating raw material and transportation costs, prompting price increases and new cost pass-through mechanisms - Bonnell Aluminum is experiencing higher than normal absenteeism and hiring difficulties, leading to a labor shortage that constrains its ability to meet demand[93](index=93&type=chunk) - To combat rising costs, Bonnell Aluminum has implemented price increases, and PE Films initiated a quarterly resin cost pass-through mechanism effective July 1, 2021[94](index=94&type=chunk) - PE Films' profitability in 2021 is adversely impacted by a customer product transition and lags in passing through significant resin cost increases[96](index=96&type=chunk) [Operations Review by Segment](index=27&type=section&id=Operations%20Review%20by%20Segment) In Q3 2021, Aluminum Extrusions' EBITDA fell **27.2%** YoY to **$12.0 million** due to lower volume and higher costs, despite higher sales from price pass-throughs, while PE Films' EBITDA declined **20.2%** to **$4.8 million** due to customer product transition and resin cost pressures, and Flexible Packaging Films' EBITDA decreased **22.5%** to **$7.4 million** driven by a **10.2%** volume drop from lower demand and an equipment failure Aluminum Extrusions Q3 2021 vs Q3 2020 Performance | Metric | Q3 2021 (In thousands) | Q3 2020 (In thousands) | % Change | | :--- | :--- | :--- | :--- | | Sales Volume (lbs) | 45,407 | 48,859 | (7.1)% | | Net Sales | $137,086 | $115,621 | 18.6% | | EBITDA | $12,038 | $16,540 | (27.2)% | - The PE Films Surface Protection business is being adversely affected by customer product transitions, which are estimated to have a negative EBITDA impact of **$14.6 million** in the first nine months of 2021 and a further **$7 million** in 2022[110](index=110&type=chunk) - Flexible Packaging Films' Q3 2021 sales volume declined **10.2%** YoY due to lower demand, an equipment failure, and supply chain restrictions[115](index=115&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Net cash from operating activities for the first nine months of 2021 was **$51.5 million**, a decrease from **$66.3 million** in the prior year, primarily due to changes in working capital, while the company maintained a strong liquidity position with **$127 million** in debt and approximately **$248 million** available under its **$375 million** credit facility as of September 30, 2021, remaining in full compliance with all debt covenants with a leverage ratio of **1.32x** - Net cash provided by operating activities decreased to **$51.5 million** in the first nine months of 2021 from **$66.3 million** in the same period of 2020[149](index=149&type=chunk) - As of September 30, 2021, total debt was **$127 million**, with approximately **$248 million** of available credit under the company's revolving credit agreement[154](index=154&type=chunk) Key Credit Metrics as of September 30, 2021 | Metric | Value | Covenant Limit | | :--- | :--- | :--- | | Leverage Ratio | 1.32x | < 4.00x | | Interest Coverage Ratio | 27.19x | > 3.00x | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Tredegar is exposed to market risks from volatility in interest rates, commodity prices (aluminum, resins, natural gas), and foreign currencies, particularly the Brazilian Real, which the company actively manages through futures contracts for aluminum, a quarterly resin cost pass-through mechanism for PE Films, and foreign currency forward contracts for Flexible Packaging Films - The company has exposure to volatility in prices for aluminum, polyethylene and polypropylene resin, PTA, MEG, and natural gas[159](index=159&type=chunk)[160](index=160&type=chunk) - To manage resin price volatility, PE Films implemented a quarterly resin cost pass-through mechanism for all customers not previously covered, effective July 1, 2021[169](index=169&type=chunk) - The Flexible Packaging Films business in Brazil (Terphane Ltda.) hedges its foreign exchange risk arising from U.S. Dollar-denominated sales and Brazilian Real-denominated operating costs using forward contracts[175](index=175&type=chunk)[176](index=176&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were not effective as of September 30, 2021, due to ongoing material weaknesses in internal control over financial reporting related to the control environment, risk assessment, information and communication, monitoring, and control activities, with remediation efforts delayed and now expected to be completed in the first half of 2022 - The CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2021, because of ongoing material weaknesses in internal control over financial reporting[183](index=183&type=chunk) - The identified material weaknesses relate to five components of the COSO framework: Control Environment, Risk Assessment, Information and Communication, Monitoring Activities, and Control Activities[194](index=194&type=chunk) - Remediation of the material weaknesses has been delayed due to factors including the COVID-19 pandemic and employee turnover, with the company now expecting to complete implementation of new controls in the first half of 2022, a delay from the previous target of year-end 2021[196](index=196&type=chunk) PART II - OTHER INFORMATION [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors.) The company reports no additional material updates or changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020 - There are no material updates or changes to the risk factors previously disclosed in the 2020 Form 10-K[200](index=200&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including certifications by the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as the XBRL interactive data files - The exhibits filed with this report include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and XBRL data files[201](index=201&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-10258 Tredegar Corporation (Exact Name of Registrant as Specified in Its Charter) Virginia 54-1497771 (State or Other Jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-10258 Tredegar Corporation (Exact Name of Registrant as Specified in Its Charter) Virginia 54-1497771 (State or Other Jurisdiction ...