Tredegar (US:TG) ZACKSยท2025-11-13 14:46Core Insights - Tredegar Corporation's shares have increased by 33.2% since the earnings report for the quarter ended September 30, 2025, significantly outperforming the S&P 500 index, which grew by 2% during the same period [1] - The company reported an adjusted net income of 26 cents per share, a substantial increase from 1 cent per share in the prior-year period [1] Financial Performance - Consolidated revenues rose by 33.5% to $194.9 million, up from $146.1 million in the same quarter last year, primarily driven by the Aluminum Extrusions segment, which saw a 40.4% increase in net sales to $162.5 million [2] - Net income from continuing operations was $7.1 million, compared to a net loss of $3.4 million in the third quarter of 2024, with non-GAAP net income from ongoing operations at $9.2 million, up from $0.2 million in the prior-year period [3] Segment Performance - In the Aluminum Extrusions segment, EBITDA from ongoing operations reached $16.8 million, a 172.1% increase from $6.2 million in the third quarter of 2024, driven by a 19.5% growth in sales volume to 41.3 million pounds [4] - The PE Films segment's EBITDA increased by 22.9% to $7.2 million, up from $5.9 million in the third quarter of 2024, with net sales rising 4% year over year to $25.9 million [6] Operational Highlights - The Aluminum Extrusions segment benefited from an inventory flow-through timing effect due to aluminum price trends, contributing $4.3 million to earnings, reversing a $1 million charge from the previous year [5] - The PE Films segment experienced a volume decline of 11% in overwrap films, negatively impacting performance, although surface protection films saw a 10.9% year-over-year increase [7] Management Commentary - CEO John Steitz described the quarter as "good" across both business units, noting improvements in manufacturing efficiencies at Bonnell despite net new orders remaining at "depressed levels" due to increased tariffs [8] - Encouraging order activity was observed in October, with weekly averages reaching 3 million pounds, indicating potential stabilization [9] Factors Influencing Performance - The Aluminum Extrusions segment's earnings increase was supported by a $12.7 million boost in contribution margin, higher sales volumes, and improved pricing, despite cost pressures from labor and maintenance [10] - The PE Films segment's improvement was driven by a $1.8 million margin increase from surface protection films, aided by higher volume and productivity gains [11] Future Guidance - Management is evaluating cost-reduction initiatives expected to yield results in 2026, with projected capital expenditures of $17 million for Bonnell Aluminum and $2 million for PE Films in 2025 [12] Other Developments - Tredegar recorded a $9.8 million cash inflow related to the post-closing settlement of the sale of its Terphane business, contributing to debt reduction in 2025 [13] - The company also completed the sale of corporate-owned land during the third quarter, resulting in a $1.5 million gain [13]