Financial Performance - Net income for Q2 2024 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 Q2 2023[74]. - Net income for the first six months of 2024 was $12.1 million, compared to a net loss of $19.9 million in the same period of 2023[83]. - Net sales in Q2 2024 decreased by 2.0% compared to Q2 2023, primarily due to lower sales volume and pricing pressure[88]. - Net sales for the first six months of 2024 decreased by 8.4% compared to the same period in 2023, primarily due to lower sales volume and the pass-through of lower metal costs[89]. - Net sales for PE Films in Q2 2024 increased by 83.4% compared to Q2 2023, with sales volume up 68.9%[91]. - For the first six months of 2024, net sales rose by 49.4% compared to the same period in 2023, with Surface Protection sales volume increasing by 77%[93]. EBITDA and Profit Margins - EBITDA from ongoing operations for Aluminum Extrusions was $12.9 million in Q2 2024, up from $10.2 million in Q2 2023, with sales volume at 34.9 million pounds[74]. - EBITDA from ongoing operations for PE Films increased to $10.1 million in Q2 2024 from $0.8 million in Q2 2023, driven by a sales volume of 10.5 million pounds[74]. - EBITDA from ongoing operations for Flexible Packaging Films rose to $3.2 million in Q2 2024 from $0.2 million in Q2 2023, with sales volume at 25.1 million pounds[74]. - Consolidated gross profit margin improved to 18.1% in Q2 2024, compared to 9.9% in Q2 2023, reflecting better pricing and cost management[75]. - Gross profit margin increased to 16.8% in the first six months of 2024 from 11.7% in the same period of 2023[83]. - EBITDA from ongoing operations in Q2 2024 increased by $2.7 million compared to Q2 2023, driven by higher net pricing and manufacturing cost improvements[88]. - EBITDA from ongoing operations increased by $3.6 million in the first six months of 2024 compared to the same period in 2023, driven by lower raw material costs and higher sales volume[97]. Expenses and Costs - Selling, general, and administrative (SG&A) and research and development (R&D) expenses remained consistent at 10.6% of sales in the first six months of 2024[83]. - Interest expense increased by $2.1 million to $6.8 million in the first six months of 2024 due to higher average debt levels and interest rates[83]. - Corporate expenses decreased by $8.7 million in the first six months of 2024, mainly due to lower pension expenses from the pension plan termination[98]. - The company incurred $2.2 million in professional fees associated with business development activities in the first six months of 2024[84]. Debt and Liquidity - Average total outstanding debt balance was $150.0 million in the first six months of 2024, with an average interest rate of 9.4%[85]. - The company entered into a $180 million senior secured asset-based revolving credit facility, maturing on June 30, 2026, with a minimum liquidity requirement of $10 million[103]. - Minimum Credit EBITDA requirements for the ABL Facility are projected to increase from $19.45 million in June 2024 to $32.08 million by September 2025[105]. - As of June 30, 2024, the Company reported a Minimum Liquidity of $45.1 million, exceeding the $10 million Minimum Liquidity financial covenant[111]. - The Company is in compliance with all debt covenants as of June 30, 2024[111]. Sales and Orders - Open orders for Aluminum Extrusions at the end of Q2 2024 were approximately 14 million pounds, down from 20 million pounds in Q2 2023[74]. - Net new orders increased by 17% in Q2 2024 versus Q2 2023, but remain low compared to pre-pandemic levels[88]. - Sales volume in Q2 2024 decreased by 1.7% year-over-year but increased by 3.3% compared to Q1 2024[88]. Future Projections and Developments - The company expects to realize after-tax net debt-free cash proceeds of $85 million from the potential sale of Terphane, pending regulatory approvals[100]. - Capital expenditures for Bonnell Aluminum are projected to be $9 million in 2024, with $4 million allocated for productivity projects[90]. - Capital expenditures for PE Films are projected to be $2 million in 2024, including $1 million for productivity projects[93]. - The completion of the Contingent Terphane Sale is expected to provide additional liquidity for the Company[112].

Core Insights - Tredegar is significantly affected by the volatility of key material prices, including aluminum ingot, polyethylene resin, and natural gas, which can severely impact profit margins [1] - The company operates in competitive sectors like flexible packaging and aluminum extrusion, facing pressure from both domestic and international competitors, leading to declines in net sales due to lower selling prices and increased global capacity [2] - Despite challenges, Tredegar reported a profit from ongoing operations in Q1 2024 for the first time since the previous year, indicating a recovery and improved financial outlook with sequential increases in net new orders [3] - Tredegar's stock has underperformed over the past year, with a significant decline contrasting broader market trends, yet its current valuation suggests potential undervaluation compared to industry averages [4] - As of March 31, 2024, Tredegar's net debt was $143.5 million, reflecting an increase from the end of 2023, raising financial strain and limiting growth opportunities [6] - The company's business segments are closely tied to economic cycles, with the building and construction market being particularly sensitive to economic conditions [7] - The sale of Terphane to Oben Group is expected to enhance Tredegar's credit profile and liquidity, supporting strategic initiatives and financial health [8] - Tredegar faces significant challenges from rising material costs, high debt, intense competition, and economic sensitivity, despite a financial rebound and product innovations [9] - Government regulations and trade policies present additional risks, with Tredegar involved in a trade case against unfairly priced aluminum imports, which could impact its competitive position [11]

Financial Performance - First quarter 2024 net income was $3.3 million ($0.10 per diluted share), compared to a net loss of $(1.0) million ($(0.03) per diluted share) in Q1 2023[3] - Net income for Q1 2024 was $3,288 thousand, compared to a net loss of $1,009 thousand in Q1 2023[45] - For the three months ended March 31, 2024, net income from ongoing operations was $5.6 million, compared to $2.5 million for the same period in 2023, representing a 124% increase[67] - The effective tax rate for Q1 2024 was 16.7%, a significant change from (48.8)% in Q1 2023, due to a shift from a pre-tax loss to pre-tax income[29] - The effective tax rate for net income from ongoing operations was 19.0% for Q1 2024, compared to 34.2% for Q1 2023[64] Sales and Orders - Net new orders for aluminum extruded products increased by 61% in Q1 2024 compared to Q1 2023, marking the sixth consecutive quarterly increase[11] - Total net sales for the three months ended March 31, 2024, were $169.07 million, an increase of 18% compared to the same period in 2023[47] - Net sales decreased by 4.5% to $30,113 thousand in Q1 2024 from $31,527 thousand in Q1 2023, primarily due to lower selling prices and unfavorable product mix[24] - Sales volume for Flexible Packaging Films increased by 10.7% to 21,973 thousand lbs in Q1 2024 compared to 19,845 thousand lbs in Q1 2023[23] - Surface Protection sales volume increased by 43% in Q1 2024 compared to Q1 2023, indicating a recovery in the consumer electronics market[19] EBITDA and Operational Metrics - EBITDA from ongoing operations for Aluminum Extrusions was $12.5 million in Q1 2024, down from $14.6 million in Q1 2023, with sales volume decreasing by 9.9%[6] - PE Films achieved EBITDA of $6.9 million in Q1 2024, significantly up from $1.8 million in Q1 2023, driven by a 36.2% increase in sales volume[20] - EBITDA from ongoing operations rose by 45.4% to $1,963 thousand in Q1 2024, up from $1,350 thousand in Q1 2023[23] - Consolidated EBITDA from ongoing operations for Q1 2024 was $17.1 million, up from $13.1 million in Q1 2023, indicating a 30.6% growth[67] Debt and Liquidity - Total debt increased to $148.3 million as of March 31, 2024, up from $146.3 million at December 31, 2023[32] - The company reported a net debt of $143.5 million as of March 31, 2024, an increase from $132.8 million at the end of 2023[64] - The company remains in compliance with all covenants under its $180 million asset-based credit agreement maturing June 30, 2026[34] - The liquidity available under the new asset-based lending facility has met expectations, supporting the company through the downturn[5] Capital Expenditures and Future Projections - Projected capital expenditures for Bonnell Aluminum in 2024 are $9 million, including $4 million for productivity projects[16] - Capital expenditures for Flexible Packaging Films are projected to be $4 million in 2024, with depreciation expense projected at $3 million[26] - The company expects depreciation expense of $16 million and amortization expense of $2 million in 2024[16] Corporate Developments - The company is advancing the sale of Terphane, with the process including reviews by competition authorities in Brazil[5] - The company expects to realize after-tax net debt-free cash proceeds of $85 million from the potential sale of Terphane, pending regulatory approvals[31] - The company received $47.1 million from the sale of its investment interests in kaléo, with an additional $0.3 million received in January 2023[63] Cash Flow and Working Capital - Cash and cash equivalents decreased to $3.49 million from $9.66 million at the end of December 2023[49] - Accounts receivable increased to $73.03 million, up from $67.94 million at the end of 2023[49] - Inventories rose to $86.82 million, compared to $82.04 million at the end of December 2023[49] - Total current liabilities decreased to $239.43 million from $249.10 million at the end of 2023[49] - The company reported a net cash used in operating activities of $7.72 million for the quarter, an improvement from $9.11 million in the prior year[51] Operational Focus - The company plans to continue focusing on operational improvements and cost management strategies to enhance profitability moving forward[53] - The company has not included pension expense in calculating EBITDA since 2022, which may affect future financial metrics[66]

Financial Performance - First quarter 2024 net income was $3.3 million ($0.10 per diluted share), compared to a net loss of $(1.0) million ($(0.03) per diluted share) in the first quarter of 2023[84]. - EBITDA from ongoing operations for Aluminum Extrusions was $12.5 million in Q1 2024, down from $14.6 million in Q1 2023, with sales volume decreasing to 33.8 million pounds from 37.6 million pounds[86]. - EBITDA from ongoing operations for PE Films increased significantly to $6.9 million in Q1 2024 from $1.8 million in Q1 2023, with sales volume rising to 10.0 million pounds from 7.4 million pounds[86]. - EBITDA from ongoing operations for Flexible Packaging Films was $2.0 million in Q1 2024, up from $1.4 million in Q1 2023, with sales volume increasing to 22.0 million pounds from 19.8 million pounds[86]. - Consolidated gross profit margin improved to 15.4% in Q1 2024 from 13.4% in Q1 2023, driven by higher net pricing and lower costs[93]. - The effective tax rate for Q1 2024 was 16.7%, compared to (48.8)% in Q1 2023[96]. Sales and Orders - Net new orders in Aluminum Extrusions increased by 61% compared to Q1 2023 and 12% compared to Q4 2023[86]. - Net sales for Aluminum Extrusions decreased by 14.4% to $114.2 million in Q1 2024 compared to $133.4 million in Q1 2023, with sales volume down 9.9%[102]. - PE Films reported a 22.6% increase in net sales to $24.7 million in Q1 2024, up from $20.2 million in Q1 2023, with sales volume rising by 36.2%[109]. - Flexible Packaging Films experienced a 4.5% decline in net sales to $30.1 million in Q1 2024, down from $31.5 million in Q1 2023, despite a 10.7% increase in sales volume[114]. Expenses and Costs - Selling, general and administrative (SG&A) and research and development (R&D) expenses as a percentage of sales remained stable at 10.6% in Q1 2024 compared to Q1 2023[95]. - Interest expense increased to $3.5 million in Q1 2024, up $1.1 million from Q1 2023, due to higher average debt levels and interest rates[96]. - Corporate expenses decreased by $3.2 million in Q1 2024, primarily due to lower pension expenses from the pension plan termination completed in 2023[118]. Cash Flow and Debt - Net cash used in operating activities decreased to $7.7 million in Q1 2024 from $9.1 million in Q1 2023, attributed to improved working capital[127]. - Net cash used in investing activities decreased to $2.4 million in Q1 2024 from $8.8 million in Q1 2023, primarily due to lower capital expenditures[128]. - The Company had cash, cash equivalents, and restricted cash of $4.8 million as of March 31, 2024[130]. - The Company believes existing borrowing availability and cash flow will be sufficient to meet short-term cash requirements for at least the next 12 months[144]. - The Company reported a net loss of $101,608,000 for the twelve months ended March 31, 2024, with a Credit EBITDA of $38,067,000[137]. Capital Expenditures - Projected capital expenditures for Bonnell Aluminum in 2024 are $9 million, with $4 million allocated for productivity projects and $5 million for continuity of operations[108]. - Projected capital expenditures for Flexible Packaging Films are $4 million in 2024, with depreciation expense projected at $3 million[117]. Regulatory and Legal Matters - The company is advancing the process to complete the sale of Terphane, including necessary reviews by competition authorities in Brazil[88]. - The company is involved in a trade case against 15 countries regarding unfairly priced imports of aluminum extrusions, with preliminary determinations expected by the end of Q3 2024[106]. - As of March 31, 2024, the Company expects to realize after-tax net debt-free cash proceeds of $85 million from the potential sale of Terphane[122].

TREDEGAR REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS Mr. Steitz further stated, "We continue to make progress on our corporate strategic initiatives. The process to complete the sale of Terphane is advancing as planned, including the review required by competition authorities in Brazil. In early November, we settled our pension plan. In late December, we executed an amendment of our credit agreement and conversion to an asset-based lending facility to support us during what has been an unprecedented c ...

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, 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) | Virginia | | 54-1497771 | | --- | --- | --- | | (State or othe ...

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 ...