Tredegar (US:TG)2024-11-08 21:18Financial Performance - Third quarter 2024 net income was $(3.9) million ($(0.11) per diluted share), an improvement from $(50.4) million ($(1.47) per diluted share) in Q3 2023[1] - Net income for the nine months ended September 30, 2024, was $8.1 million, a significant improvement from a net loss of $70.3 million in the same period of 2023[27] - For the three months ended September 30, 2024, the net income reported under GAAP was a loss of $3.9 million, compared to a loss of $50.4 million for the same period in 2023, representing a 92.3% improvement[38] - The net income from ongoing operations for the nine months ended September 30, 2024, was $19.7 million, an increase of 18.5% compared to $16.0 million for the same period in 2023[38] Sales and Orders - Net sales in Q3 2024 increased 5.8% to $115.7 million, driven by higher sales volume and metal cost pass-through[4] - Net new orders for Aluminum Extrusions rose 27% in Q3 2024 versus Q3 2023, and increased 7% compared to Q2 2024[2] - Sales volume for Aluminum Extrusions increased 6.5% to 34.6 million pounds in Q3 2024 compared to 32.5 million pounds in Q3 2023[4] - Sales volume for Surface Protection films rose by 37.5% in the third quarter of 2024 compared to the same period in 2023, while it declined by 16.5% from the second quarter of 2024[9] EBITDA and Operational Performance - EBITDA from ongoing operations for Aluminum Extrusions was $6.2 million in Q3 2024, up 20.8% from $5.1 million in Q3 2023[2] - Consolidated EBITDA from ongoing operations for the three months ended September 30, 2024, was $10.1 million, significantly up from $4.1 million in the same period of 2023[43] - EBITDA from ongoing operations for the first nine months of 2024 increased by $16.2 million to $22.913 million, compared to $6.700 million in the first nine months of 2023[10] Debt and Cash Flow - Total debt decreased to $143.4 million as of September 30, 2024, down from $146.3 million at December 31, 2023[15] - The sale of Terphane resulted in a reduction of consolidated total debt and net debt by $78 million, with an additional $7 million expected from escrow funds[15] - Cash flows from operating activities provided $6.053 million, down from $44.238 million in the previous year, indicating a decrease of approximately 86.3%[27] - The company reported interest expense of $3.480 million in Q3 2024, an increase from $3.106 million in Q3 2023[24] Capital Expenditures - Capital expenditures for Bonnell Aluminum are projected to be $8 million in 2024, focusing on productivity and operational continuity[6] - Capital expenditures for PE Films are projected to be $2 million in 2024, including $1 million for productivity projects[12] - Capital expenditures for the nine months ended September 30, 2024, were $7.696 million, compared to $22.270 million in the same period of 2023, reflecting a reduction of approximately 65.5%[27] Goodwill and Impairments - The company recognized a goodwill impairment of $19.5 million for the three months ended September 30, 2023, reflecting challenges in the PE Films segment[34] - The company experienced a goodwill impairment of $27 million in the nine months ended September 30, 2023, which negatively affected financial performance[30] - The company’s reporting units with goodwill as of December 1, 2023, included Surface Protection in PE Films and Futura in Aluminum Extrusions, with goodwill amounts of $22.4 million and $13.3 million, respectively[48] Tax and Regulatory Matters - The effective tax rate increased to 30.5% in the first nine months of 2024, compared to 18.8% in the same period of 2023[14] - The effective tax rate for the three months ended September 30, 2024, was (31.6)%, compared to (20.9)% for the same period in 2023[38] - The USITC's recent decision indicated that the aluminum extrusions industry was not materially injured by imports, despite previous findings of unfair pricing[6] Other Notable Events - Tredegar completed the sale of Terphane for $60 million in cash, with an enterprise value of $78 million, reducing net leverage from 2.3x to 1.2x[2] - The company received $47.1 million from the sale of its investment interests in kaléo, with additional cash consideration of $0.4 million received in 2023 and 2024[35] - Following the sale of Terphane, the ABL Facility will be reduced from $180 million to $125 million, with a new minimum fixed charge coverage ratio of 1.00:1.00 implemented[48]