Tredegar (TG) - 2024 Q2 - Quarterly Report

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$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$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].