Tredegar (TG) - 2024 Q1 - Quarterly Report

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].