Tredegar (US:TG)2025-11-07 13:06Financial Performance - Net income from continuing operations for Q3 2025 was $7.1 million ($0.20 per diluted share), compared to a loss of $3.4 million ($0.10 per diluted share) in Q3 2024 [101]. - For the first nine months of 2025, net income from continuing operations was $9.6 million, compared to $8.4 million in the same period of 2024 [115]. - Net sales for the three months ended September 30, 2025, increased to $194.9 million, up 33.5% from $146.1 million in the same period of 2024 [147]. - Net sales in the first nine months of 2025 increased by 27.2% to $444.5 million, driven by higher sales volume and the pass-through of increased metal costs [126]. - Net sales for PE Films in Q3 2025 increased by 4.0% to $25.883 million compared to Q3 2024, driven by a 10.9% increase in sales volume in surface protection films [136]. - Net sales in the first nine months of 2025 decreased by 3.5% to $76.017 million compared to the same period in 2024, attributed to a decrease in sales volume in surface protection and overwrap films [140]. Operational Metrics - EBITDA from ongoing operations for Aluminum Extrusions was $16.8 million in Q3 2025, up from $6.2 million in Q3 2024, with sales volume increasing to 41.3 million pounds from 34.6 million pounds [102]. - EBITDA from ongoing operations for PE Films was $7.2 million in Q3 2025, compared to $5.9 million in Q3 2024, with sales volume slightly increasing to 9.7 million pounds from 9.6 million pounds [102]. - EBITDA from ongoing operations increased by $10.6 million in the third quarter of 2025 compared to the same quarter in 2024 [131]. - EBITDA from ongoing operations in the first nine months of 2025 increased by $3.6 million compared to the same period in 2024, driven by a $12.7 million increase in contribution margin [132]. - EBITDA from ongoing operations for PE Films in Q3 2025 increased by 22.9% to $7.221 million compared to Q3 2024 [135]. Cost and Expense Management - Consolidated gross profit margin increased to 16.0% in Q3 2025 from 12.4% in Q3 2024, driven by higher volume and favorable pricing [106]. - Selling, general and administrative (SG&A) expenses as a percentage of sales decreased to 10.5% in Q3 2025 from 13.0% in Q3 2024, while SG&A spending increased by 8.3% [107]. - Interest expense decreased to $0.8 million in Q3 2025 from $1.2 million in Q3 2024, primarily due to lower average total debt and interest rates [108]. - Corporate expenses increased by $4.9 million in the first nine months of 2025 compared to the same period in 2024, primarily due to higher professional fees and employee-related compensation [143]. Taxation and Interest - The effective tax rate for Q3 2025 was 22.1%, compared to (32.3)% in Q3 2024, influenced by taxable discrete items [109]. - The effective tax rate for income taxes from continuing operations was 27.1% in the first nine months of 2025, slightly down from 27.5% in the prior year [119]. Debt and Financing - Average total outstanding debt decreased to $60.0 million in the first nine months of 2025 from $128.6 million in the same period of 2024, with the average interest rate dropping to 6.8% from 9.1% [123]. - Net cash used in financing activities was $13.7 million in the first nine months of 2025, compared to $3.6 million in the same period of 2024, primarily due to lower debt borrowings [153]. - The Company entered into Amendment No. 5 to the ABL Facility, extending the maturity date to May 6, 2030, with $72.5 million available to borrow as of September 30, 2025 [156]. - The Company has a $125 million senior secured asset-based revolving credit facility, with $72.5 million available to borrow as of September 30, 2025 [156]. Cash Flow and Liquidity - Net cash provided by operating activities was $17.3 million in the first nine months of 2025, compared to $6.1 million in the same period of 2024, driven by higher segment EBITDA [151]. - As of September 30, 2025, the Company had cash and cash equivalents of $13.3 million, including $2.0 million held outside the U.S. [154]. - The Company believes existing cash flow and borrowing availability will satisfy short-term cash requirements for at least the next 12 months [164]. Inventory and Receivables - Accounts and other receivables increased by $23.1 million (35.7%), with DSO for Aluminum Extrusions at approximately 44.2 days [155]. - Inventories rose by $10.6 million (20.7%), with DIO for Aluminum Extrusions at approximately 48.7 days [155]. - Accounts payable increased by $14.5 million (22.5%), with DPO at approximately 45.8 days for the 12 months ended September 30, 2025 [155]. Capital Expenditures - Capital expenditures for Bonnell Aluminum are projected to be $17 million in 2025, including $5 million for productivity projects [134]. - Projected capital expenditures for PE Films are $2 million in 2025, including $1 million for productivity projects [142]. - Projected depreciation expense for Bonnell Aluminum is $15 million in 2025, while amortization expense is projected to be $2 million [134].