Third quarter 2024 net income (loss) was
Third Quarter Financial Results and Other Highlights
-
Earnings before interest, taxes, depreciation and amortization ("EBITDA") from ongoing operations for Aluminum Extrusions was
$6.2 million in the third quarter of 2024 versus$5.1 million in the third quarter of last year and$12.9 million in the second quarter of 2024.- Sales volume was 34.6 million pounds in the third quarter of 2024 versus 32.5 million pounds in the third quarter of last year and 34.9 million pounds in the second quarter of 2024.
- Open orders at the end of the third quarter of 2024 were approximately 15.5 million pounds (versus 17 million pounds in the third quarter of 2023 and 14 million pounds at the end of the second quarter of 2024). Net new orders increased 27% in the third quarter of 2024 versus the third quarter of 2023 and increased 7% versus the second quarter of 2024.
-
EBITDA from ongoing operations for
PE Films was$5.9 million in the third quarter of 2024 versus$4.0 million in the third quarter of 2023 and$10.1 million in the second quarter of 2024. Sales volume was 9.6 million pounds in the third quarter of 2024 versus 7.2 million pounds in the third quarter of 2023 and 10.5 million pounds in the second quarter of 2024. -
On
November 1, 2024 , Tredegar completed the sale of Terphane, its flexible packaging films business headquartered inBrazil , toOben Group . At closing, Tredegar received$60 million in cash, which is net of Terphane debt assumed byOben Group of$20 million and Terphane cash retained byOben Group of$2 million . Accordingly, on a cash-free and debt-free basis, the enterprise value of the Terphane transaction at closing for Tredegar was$78 million . Tredegar anticipates receiving an additional$7 million in cash following the release of certain escrow funds within 120 days of closing. The cash proceeds received by Tredegar at closing are after deducting projectedBrazil withholding taxes, net working capital adjustments, escrow funds,U.S. capital gains taxes and transaction expenses. See "Flexible Packaging Films " below.
OPERATIONS REVIEW
Aluminum Extrusions
Aluminum Extrusions (also referred to as "
|
Three Months Ended |
|
Favorable/ (Unfavorable) % Change |
|
Nine Months Ended |
|
Favorable/ (Unfavorable) % Change |
||||||||||||
(In thousands, except percentages) |
|
|
|
|
|||||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
||||
Sales volume (lbs) |
|
34,556 |
|
|
|
32,457 |
|
|
6.5% |
|
|
103,303 |
|
|
|
105,511 |
|
|
(2.1)% |
Net sales |
$ |
115,717 |
|
|
$ |
109,410 |
|
|
5.8% |
|
$ |
349,353 |
|
|
$ |
364,607 |
|
|
(4.2)% |
Ongoing operations: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA |
$ |
6,177 |
|
|
$ |
5,113 |
|
|
20.8% |
|
$ |
31,624 |
|
|
$ |
29,968 |
|
|
5.5% |
Depreciation & amortization |
|
(4,404 |
) |
|
|
(4,683 |
) |
|
6.0% |
|
|
(13,392 |
) |
|
|
(13,252 |
) |
|
(1.1)% |
EBIT* |
$ |
1,773 |
|
|
$ |
430 |
|
|
NM** |
|
$ |
18,232 |
|
|
$ |
16,716 |
|
|
9.1% |
Capital expenditures |
$ |
1,449 |
|
|
$ |
4,489 |
|
|
|
|
$ |
4,461 |
|
|
$ |
17,862 |
|
|
|
* For a reconciliation of this non-GAAP measure to the most directly comparable measure calculated in accordance with GAAP, see the EBITDA from ongoing operations by segment statements in the Financial Tables in this press release. **Not meaningful ("NM") |
The following table presents the sales volume by end use market for the three and nine months ended
|
|
Three Months
|
|
Favorable/ |
|
Three Months
|
|
Favorable/ |
|
Nine Months
|
|
Favorable/ |
|||||||
(In millions of lbs) |
|
|
|
(Unfavorable) |
|
|
|
(Unfavorable) |
|
|
|
(Unfavorable) |
|||||||
|
2024 |
|
2023 |
|
% Change |
|
2024 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
||||
Sales volume by end-use market: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Non-residential B&C |
|
18.7 |
|
17.9 |
|
4.5 |
% |
|
20.3 |
|
(7.9 |
)% |
|
59.1 |
|
59.8 |
|
(1.2 |
)% |
Residential B&C |
|
2.4 |
|
1.6 |
|
50.0 |
% |
|
2.2 |
|
9.1 |
% |
|
6.2 |
|
6.2 |
|
— |
% |
Automotive |
|
3.2 |
|
3.9 |
|
(17.9 |
)% |
|
2.9 |
|
10.3 |
% |
|
9.3 |
|
10.6 |
|
(12.3 |
)% |
Specialty products |
|
10.3 |
|
9.1 |
|
13.2 |
% |
|
9.5 |
|
8.4 |
% |
|
28.7 |
|
28.9 |
|
(0.7 |
)% |
Total |
|
34.6 |
|
32.5 |
|
6.5 |
% |
|
34.9 |
|
(0.9 |
)% |
|
103.3 |
|
105.5 |
|
(2.1 |
)% |
Third Quarter 2024 Results vs. Third Quarter 2023 Results
Net sales (sales less freight) in the third quarter of 2024 increased 5.8% versus the third quarter of 2023 primarily due to higher sales volume and the pass-through of higher metal costs, partially offset by lower pricing associated with a shift in mix. Sales volume in the third quarter of 2024 increased 6.5% versus the third quarter of 2023 but decreased 0.9% versus the second quarter 2024.
Net new orders, which remain low compared to pre-pandemic levels, increased 27.3% in the third quarter of 2024 versus the third quarter of 2023 and increased 7% versus the second quarter of 2024. Since
Open orders at the end of the third quarter of 2024 were 15.5 million pounds (versus 14 million pounds at the end of the second quarter of 2024 and 17 million pounds at the end of the third quarter of 2023). This level is below the quarterly range of 21 to 27 million pounds in 2019 before pandemic-related disruptions (particularly starting in early 2021 with the re-opening of markets following the rollout of vaccines) that resulted in long lead times, driving a peak in open orders of approximately 100 million pounds during the first quarter of 2022.
The Company is part of a coalition of members of the
EBITDA from ongoing operations in the third quarter of 2024 increased
-
Higher volume (
$1.8 million ), favorable variable manufacturing costs ($1.7 million ), lower labor-related costs ($0.1 million ) and lower freight rates ($0.2 million ), partially offset by unfavorable net pricing after the pass-through of metal cost and changes associated with a shift in mix ($1.1 million ), manufacturing inefficiencies ($0.8 million ), higher maintenance expense ($0.4 million ) and higher selling, general and administrative ("SG&A") expenses, including other employee-related compensation ($0.8 million ); and -
The timing of the flow-through under the first-in first-out ("FIFO") method of aluminum raw material costs, which were previously acquired at higher prices in a quickly changing commodity pricing environment and passed through to customers, resulted in a charge of
$1.0 million in the third quarter of 2024 versus a charge of$1.2 million in the third quarter of 2023.
First Nine Months of 2024 Results vs. First Nine Months of 2023 Results
Net sales in the first nine months of 2024 decreased 4.2% versus the first nine months of 2023 primarily due to lower sales volume and the pass-through of lower metal costs. Sales volume in the first nine months of 2024 decreased 2.1% versus the first nine months of 2023.
EBITDA from ongoing operations in the first nine months of 2024 increased
-
Higher net pricing after the pass-through of metal cost changes and mix (
$2.0 million ), favorable variable manufacturing costs ($3.7 million ), lower utilities ($0.2 million ) and lower freight rates ($0.9 million ), partially offset by lower volume ($1.6 million ), manufacturing inefficiencies ($0.8 million ), higher labor and employee-related costs ($0.1 million ), and higher SG&A, including other employee-related compensation ($2.4 million ); and -
The timing of the flow-through under the FIFO method of aluminum raw material costs, which were previously acquired at higher prices in a quickly changing commodity pricing environment and passed through to customers, resulted in a charge of
$1.0 million in the first nine months of 2024 versus a charge of$0.8 million in the first nine months of 2023.
Refer to Item 3. Quantitative and Qualitative Disclosures About Market Risk in the Company's Quarterly Report on Form 10-Q for the period ended
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for
|
Three Months Ended |
|
Favorable/ (Unfavorable) % Change |
|
Nine Months Ended |
|
Favorable/ (Unfavorable) % Change |
||||||||||||
(In thousands, except percentages) |
|
|
|
|
|||||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
||||
Sales volume (lbs) |
|
9,640 |
|
|
|
7,224 |
|
|
33.4% |
|
|
30,223 |
|
|
|
20,837 |
|
|
45.0% |
Net sales |
$ |
24,879 |
|
|
$ |
19,938 |
|
|
24.8% |
|
$ |
78,811 |
|
|
$ |
56,036 |
|
|
40.6% |
Ongoing operations: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
EBITDA |
$ |
5,876 |
|
|
$ |
4,037 |
|
|
45.6% |
|
$ |
22,913 |
|
|
$ |
6,700 |
|
|
NM** |
Depreciation & amortization |
|
(1,299 |
) |
|
|
(2,111 |
) |
|
38.5% |
|
|
(3,944 |
) |
|
|
(5,305 |
) |
|
25.7% |
EBIT* |
$ |
4,577 |
|
|
$ |
1,926 |
|
|
NM** |
|
$ |
18,969 |
|
|
$ |
1,395 |
|
|
NM** |
Capital expenditures |
$ |
517 |
|
|
$ |
431 |
|
|
|
|
$ |
1,127 |
|
|
$ |
1,506 |
|
|
|
* For a reconciliation of this non-GAAP measure to the most directly comparable measure calculated in accordance with GAAP, see the EBITDA from ongoing operations by segment statements in the Financial Tables in this press release. **Not meaningful ("NM") |
Third Quarter 2024 Results vs. Third Quarter 2023 Results
Net sales in the third quarter of 2024 were 24.8% higher compared to the third quarter of 2023, with volume increases in Surface Protection and overwrap films. Surface Protection sales volume in the third quarter of 2024 increased 37.5% versus the third quarter of 2023 and declined 16.5% versus the second quarter of 2024. Surface Protection sales volume began to moderate during the third quarter of 2024, following extremely high sales volume in the second quarter associated with the restocking of Surface Protection customer inventories.
EBITDA from ongoing operations in the third quarter of 2024 increased
-
A
$2.4 million increase in Surface Protection primarily due to higher contribution margin associated with higher volume ($2.0 million ) and manufacturing costs savings ($1.1 million ), partially offset by unfavorable pricing ($0.2 million ) and higher SG&A ($0.1 million ); -
A foreign currency transaction loss of
$0.2 million in the third quarter of 2024 versus no gain or loss in the third quarter of 2023; -
The pass-through lag associated with resin costs (a charge of
$0.2 million in the third quarter of 2024 versus a benefit of$0.1 million in the third quarter of 2023); and -
A
$0.6 million decrease in overwrap films, primarily due to pricing and mix.
There have been significant cyclical swings in the sales volume and EBITDA from ongoing operations for
First Nine Months of 2024 Results vs. First Nine Months of 2023 Results
Net sales in the first nine months of 2024 increased 40.6% compared to the first nine months of 2023 primarily due to an increase in sales volume in Surface Protection, as a result of factors noted above. Sales volume increased 62.3% in Surface Protection in the first nine months of 2024 versus the first nine months of 2023.
EBITDA from ongoing operations in the first nine months of 2024 increased
-
A
$16.0 million increase in Surface Protection primarily due to higher contribution margin associated with substantially higher volume ($9.4 million ), operating efficiencies and manufacturing costs savings ($5.9 million ), favorable pricing ($0.3 million ), lower fixed costs ($0.2 million ) and lower SG&A, including lower costs associated with the closure of theRichmond Technical Center in 2023 ($1.2 million ); -
A foreign currency transaction loss of
$0.1 million in the first nine months of 2024 versus a gain of$0.3 million in the first nine months of 2023; -
The pass-through lag associated with resin costs (a charge of
$0.7 million in the first nine months of 2024 versus a charge of$0.1 million in the first nine months of 2023); and -
A
$0.2 million increase from overwrap films, primarily due to cost improvements ($1.0 million ), partially offset by a shift in mix ($0.8 million ).
Refer to Item 3. Quantitative and Qualitative Disclosures About Market Risk in the Third Quarter Form 10-Q for additional information on resin price trends.
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for
On
Corporate Expenses, Interest & Taxes
Corporate expenses, net in the first nine months of 2024 decreased
Interest expense of
The effective tax rate was 30.5% in the first nine months of 2024 compared to 18.8% in the first nine months of 2023. The change in effective tax rate was primarily due to pre-tax income in the first nine months of 2024 versus a pre-tax loss in the first nine months of 2023. The change in effective tax rate was primarily due to pre-tax income in the first nine months of 2024 versus a pre-tax loss in the first nine months of 2023. During the first nine months of 2024, Tredegar increased the valuation allowance on existing deferred tax assets as a result of the sale of Terphane by
Total Debt, Financial Leverage and Debt Covenants
Total debt was
The sale of Terphane resulted in a reduction of consolidated total debt and net debt of
The Company has been focused on stringent management of net working capital, capital expenditures and costs since a slowdown in business began in 2023. Total debt decreased
As of
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Some of the information contained in this press release may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. When the Company uses the words “believe,” “estimate,” “anticipate,” “appear to,” “expect,” “project,” “plan,” “likely,” “may” and similar expressions, it does so to identify forward-looking statements. Such statements are based on the Company's then current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. Factors that could cause actual results to differ materially from expectations include, without limitation, the following:
- inability to successfully complete strategic dispositions, failure to realize the expected benefits of such dispositions and assumption of unanticipated risks in such dispositions;
- failure by governmental entities to prevent foreign companies from evading anti-dumping and countervailing duties;
- noncompliance with any of the financial and other restrictive covenants in the Company's asset-based credit facility;
- the impact of macroeconomic factors, such as inflation, interest rates, recession risks and other lagging effects of the COVID-19 pandemic;
- an increase in the operating costs incurred by the Company’s business units, including, for example, the cost of raw materials and energy;
- failure to continue to attract, develop and retain certain key officers or employees;
- disruptions to the Company’s manufacturing facilities, including those resulting from labor shortages;
- inability to develop, efficiently manufacture and deliver new products at competitive prices;
-
the impact of the imposition of tariffs and sanctions on imported aluminum ingot used by
Bonnell Aluminum ; - unanticipated problems or delays with the implementation of the enterprise resource planning and manufacturing executions systems, or security breaches and other disruptions to the Company's information technology infrastructure;
- loss of sales to significant customers on which the Company’s business is highly dependent;
- inability to achieve sales to new customers to replace lost business;
- failure of the Company’s customers to achieve success or maintain market share;
- failure to protect our intellectual property rights;
-
risks of doing business in countries outside the
U.S. that affect our international operations; - political, economic and regulatory factors concerning the Company’s products;
- competition from other manufacturers, including manufacturers in lower-cost countries and manufacturers benefiting from government subsidies;
- impact of fluctuations in foreign exchange rates;
- an information technology system failure or breach;
- the impact of public health epidemics on employees, production and the global economy, such as the COVID-19 pandemic;
- inability to successfully identify, complete or integrate strategic acquisitions; failure to realize the expected benefits of such acquisitions and assumption of unanticipated risks in such acquisitions;
- impairment of the Surface Protection reporting unit's goodwill;
and the other factors discussed in the reports Tredegar files with or furnishes to the
Tredegar does not undertake, and expressly disclaims any duty, to update any forward-looking statement made in this press release to reflect any change in management’s expectations or any change in conditions, assumptions or circumstances on which such statements are based, except as required by applicable law.
To the extent that the financial information portion of this press release contains non-GAAP financial measures, it also presents both the most directly comparable financial measures calculated and presented in accordance with GAAP and a quantitative reconciliation of the difference between any such non-GAAP measures and such comparable GAAP financial measures. Reconciliations of non-GAAP financial measures are provided in the Notes to the Financial Tables included with this press release and can also be found within “Presentations” in the “Investors” section of our website, www.tredegar.com.
Tredegar uses its website as a channel of distribution of material Company information. Financial information and other material information regarding Tredegar is posted on and assembled in the “Investors” section of its website.
|
|||||||||||||||
Condensed Consolidated Statements of Income (Loss) |
|||||||||||||||
(In Thousands, Except Per-Share Data) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
|
|||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||
|
|
|
|
|
|||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Sales |
|
$ |
182,051 |
|
|
$ |
166,192 |
|
|
$ |
548,022 |
|
$ |
535,481 |
|
Other income (expense), net (c)(d) |
|
|
(22 |
) |
|
|
(51 |
) |
|
|
310 |
|
|
210 |
|
|
|
|
182,029 |
|
|
|
166,141 |
|
|
|
548,332 |
|
|
535,691 |
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of goods sold (c) |
|
|
151,676 |
|
|
|
144,539 |
|
|
|
442,384 |
|
|
457,332 |
|
Freight |
|
|
7,085 |
|
|
|
6,733 |
|
|
|
20,833 |
|
|
19,977 |
|
Selling, R&D and general expenses (c) |
|
|
22,270 |
|
|
|
22,144 |
|
|
|
60,934 |
|
|
60,619 |
|
Amortization of intangibles |
|
|
462 |
|
|
|
465 |
|
|
|
1,410 |
|
|
1,433 |
|
Pension and postretirement benefits |
|
|
54 |
|
|
|
3,118 |
|
|
|
163 |
|
|
9,955 |
|
Interest expense |
|
|
3,480 |
|
|
|
3,106 |
|
|
|
10,314 |
|
|
7,791 |
|
Asset impairments and costs associated with exit and disposal activities, net of adjustments (c) |
|
|
— |
|
|
|
4,633 |
|
|
|
587 |
|
|
4,702 |
|
Pension settlement loss |
|
|
— |
|
|
|
25,612 |
|
|
|
— |
|
|
25,612 |
|
|
|
|
— |
|
|
|
19,478 |
|
|
|
— |
|
|
34,891 |
|
Total |
|
|
185,027 |
|
|
|
229,828 |
|
|
|
536,625 |
|
|
622,312 |
|
Income (loss) before income taxes |
|
|
(2,998 |
) |
|
|
(63,687 |
) |
|
|
11,707 |
|
|
(86,621 |
) |
Income tax expense (benefit) (c) |
|
|
948 |
|
|
|
(13,307 |
) |
|
|
3,573 |
|
|
(16,307 |
) |
Net income (loss) |
|
$ |
(3,946 |
) |
|
$ |
(50,380 |
) |
|
$ |
8,134 |
|
$ |
(70,314 |
) |
|
|
|
|
|
|
|
|
|
|||||||
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
$ |
(0.11 |
) |
|
$ |
(1.47 |
) |
|
$ |
0.24 |
|
$ |
(2.06 |
) |
Diluted |
|
$ |
(0.11 |
) |
|
$ |
(1.47 |
) |
|
$ |
0.24 |
|
$ |
(2.06 |
) |
|
|
|
|
|
|
|
|
|
|||||||
Shares used to compute earnings (loss) per share: |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
|
34,391 |
|
|
|
34,264 |
|
|
|
34,364 |
|
|
34,081 |
|
Diluted |
|
|
34,391 |
|
|
|
34,264 |
|
|
|
34,364 |
|
|
34,081 |
|
|
|||||||||||||||
|
|||||||||||||||
(In Thousands) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
||||||||
Aluminum Extrusions |
$ |
115,717 |
|
|
$ |
109,410 |
|
|
$ |
349,353 |
|
|
$ |
364,607 |
|
|
|
24,879 |
|
|
|
19,938 |
|
|
|
78,811 |
|
|
|
56,036 |
|
|
|
34,370 |
|
|
|
30,111 |
|
|
|
99,025 |
|
|
|
94,861 |
|
Total net sales |
|
174,966 |
|
|
|
159,459 |
|
|
|
527,189 |
|
|
|
515,504 |
|
Add back freight |
|
7,085 |
|
|
|
6,733 |
|
|
|
20,833 |
|
|
|
19,977 |
|
Sales as shown in the condensed consolidated statements of income |
$ |
182,051 |
|
|
$ |
166,192 |
|
|
$ |
548,022 |
|
|
$ |
535,481 |
|
EBITDA from Ongoing Operations (i) |
|
|
|
|
|
|
|
||||||||
Aluminum Extrusions: |
|
|
|
|
|
|
|
||||||||
Ongoing operations: |
|
|
|
|
|
|
|
||||||||
EBITDA (b) |
$ |
6,177 |
|
|
$ |
5,113 |
|
|
$ |
31,624 |
|
|
$ |
29,968 |
|
Depreciation & amortization |
|
(4,404 |
) |
|
|
(4,683 |
) |
|
|
(13,392 |
) |
|
|
(13,252 |
) |
EBIT (b) |
|
1,773 |
|
|
|
430 |
|
|
|
18,232 |
|
|
|
16,716 |
|
Plant shutdowns, asset impairments, restructurings and other (c) |
|
(2,170 |
) |
|
|
(1,483 |
) |
|
|
(4,986 |
) |
|
|
(1,821 |
) |
|
|
|
|
|
|
|
|
||||||||
Ongoing operations: |
|
|
|
|
|
|
|
||||||||
EBITDA (b) |
|
5,876 |
|
|
|
4,037 |
|
|
|
22,913 |
|
|
|
6,700 |
|
Depreciation & amortization |
|
(1,299 |
) |
|
|
(2,111 |
) |
|
|
(3,944 |
) |
|
|
(5,305 |
) |
EBIT (b) |
|
4,577 |
|
|
|
1,926 |
|
|
|
18,969 |
|
|
|
1,395 |
|
Plant shutdowns, asset impairments, restructurings and other (c) |
|
— |
|
|
|
(4,566 |
) |
|
|
(584 |
) |
|
|
(4,565 |
) |
|
|
— |
|
|
|
(19,478 |
) |
|
|
— |
|
|
|
(34,891 |
) |
|
|
|
|
|
|
|
|
||||||||
Ongoing operations: |
|
|
|
|
|
|
|
||||||||
EBITDA (b) |
|
3,749 |
|
|
|
477 |
|
|
|
8,915 |
|
|
|
2,076 |
|
Depreciation & amortization |
|
(708 |
) |
|
|
(704 |
) |
|
|
(2,191 |
) |
|
|
(2,115 |
) |
EBIT (b) |
|
3,041 |
|
|
|
(227 |
) |
|
|
6,724 |
|
|
|
(39 |
) |
Plant shutdowns, asset impairments, restructurings and other (c) |
|
(103 |
) |
|
|
— |
|
|
|
(103 |
) |
|
|
(79 |
) |
Total |
|
7,118 |
|
|
|
(23,398 |
) |
|
|
38,252 |
|
|
|
(23,284 |
) |
Interest income |
|
8 |
|
|
|
62 |
|
|
|
36 |
|
|
|
135 |
|
Interest expense |
|
3,480 |
|
|
|
3,106 |
|
|
|
10,314 |
|
|
|
7,791 |
|
Gain on investment in kaleo, Inc. ("kaléo") (d) |
|
— |
|
|
|
— |
|
|
|
144 |
|
|
|
262 |
|
Stock option-based compensation costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
231 |
|
Pension settlement loss |
|
— |
|
|
|
25,612 |
|
|
|
— |
|
|
|
25,612 |
|
Corporate expenses, net (c) |
|
6,644 |
|
|
|
11,633 |
|
|
|
16,411 |
|
|
|
30,100 |
|
Income (loss) before income taxes |
|
(2,998 |
) |
|
|
(63,687 |
) |
|
|
11,707 |
|
|
|
(86,621 |
) |
Income tax expense (benefit) |
|
948 |
|
|
|
(13,307 |
) |
|
|
3,573 |
|
|
|
(16,307 |
) |
Net income (loss) |
$ |
(3,946 |
) |
|
$ |
(50,380 |
) |
|
$ |
8,134 |
|
|
$ |
(70,314 |
) |
|
||||||
Condensed Consolidated Balance Sheets |
||||||
(In Thousands) |
||||||
(Unaudited) |
||||||
|
|
|
|
|
||
|
|
|
|
|
||
Assets |
|
|
|
|
||
Cash & cash equivalents |
|
$ |
2,724 |
|
$ |
9,660 |
Restricted cash |
|
|
3,864 |
|
|
3,795 |
Accounts & other receivables, net |
|
|
81,636 |
|
|
67,938 |
Income taxes recoverable |
|
|
954 |
|
|
1,182 |
Inventories |
|
|
88,058 |
|
|
82,037 |
Prepaid expenses & other |
|
|
11,026 |
|
|
12,065 |
Total current assets |
|
|
188,262 |
|
|
176,677 |
Net property, plant and equipment |
|
|
168,688 |
|
|
183,455 |
Right-of-use leased assets |
|
|
15,663 |
|
|
11,848 |
Identifiable intangible assets, net |
|
|
8,361 |
|
|
9,851 |
|
|
|
35,717 |
|
|
35,717 |
Deferred income taxes |
|
|
22,765 |
|
|
25,034 |
Other assets |
|
|
3,085 |
|
|
3,879 |
Total assets |
|
$ |
442,541 |
|
$ |
446,461 |
Liabilities and Shareholders’ Equity |
|
|
|
|
||
Accounts payable |
|
$ |
89,070 |
|
$ |
95,023 |
Accrued expenses |
|
|
24,000 |
|
|
24,442 |
Lease liability, short-term |
|
|
2,824 |
|
|
2,107 |
Short-term debt |
|
|
1,356 |
|
|
— |
ABL revolving facility (matures on |
|
|
122,000 |
|
|
126,322 |
Income taxes payable |
|
|
8 |
|
|
1,210 |
Total current liabilities |
|
|
239,258 |
|
|
249,104 |
Lease liability, long-term |
|
|
13,963 |
|
|
10,942 |
Long-term debt |
|
|
20,000 |
|
|
20,000 |
Pension and other postretirement benefit obligations, net |
|
|
6,464 |
|
|
6,643 |
Other non-current liabilities |
|
|
4,408 |
|
|
4,119 |
Shareholders’ equity |
|
|
158,448 |
|
|
155,653 |
Total liabilities and shareholders’ equity |
|
$ |
442,541 |
|
$ |
446,461 |
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(In Thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
|
Nine Months Ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
||||
Net income (loss) |
|
$ |
8,134 |
|
|
$ |
(70,314 |
) |
Adjustments for noncash items: |
|
|
|
|
||||
Depreciation |
|
|
18,372 |
|
|
|
19,516 |
|
Amortization of intangibles |
|
|
1,410 |
|
|
|
1,433 |
|
Reduction of right-of-use lease asset |
|
|
1,735 |
|
|
|
1,633 |
|
|
|
|
— |
|
|
|
34,891 |
|
Deferred income taxes |
|
|
2,975 |
|
|
|
(16,820 |
) |
Accrued pension income and post-retirement benefits |
|
|
163 |
|
|
|
9,955 |
|
Pension settlement loss |
|
|
|
|
25,612 |
|
||
Stock-based compensation expense |
|
|
1,950 |
|
|
|
1,196 |
|
Gain on investment in kaléo |
|
|
(144 |
) |
|
|
(262 |
) |
Write-down of |
|
|
— |
|
|
|
3,387 |
|
Changes in assets and liabilities: |
|
|
|
|
||||
Accounts and other receivables |
|
|
(14,683 |
) |
|
|
14,630 |
|
Inventories |
|
|
(8,711 |
) |
|
|
49,589 |
|
Income taxes recoverable/payable |
|
|
(952 |
) |
|
|
(1,688 |
) |
Prepaid expenses and other |
|
|
(286 |
) |
|
|
(142 |
) |
Accounts payable and accrued expenses |
|
|
(3,454 |
) |
|
|
(27,970 |
) |
Lease liability |
|
|
(2,118 |
) |
|
|
(1,669 |
) |
Pension and postretirement benefit plan contributions |
|
|
(455 |
) |
|
|
(455 |
) |
Other, net |
|
|
2,117 |
|
|
|
1,716 |
|
Net cash provided by (used in) operating activities |
|
|
6,053 |
|
|
|
44,238 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(7,696 |
) |
|
|
(22,270 |
) |
Proceeds on sale of investment in kaléo |
|
|
144 |
|
|
|
262 |
|
Proceeds from the sale of assets |
|
|
83 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
(7,469 |
) |
|
|
(22,008 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings |
|
|
519,274 |
|
|
|
87,000 |
|
Debt principal payments |
|
|
(522,240 |
) |
|
|
(69,000 |
) |
Dividends paid |
|
|
— |
|
|
|
(8,884 |
) |
Debt financing fees |
|
|
(587 |
) |
|
|
(1,404 |
) |
Net cash provided by (used in) financing activities |
|
|
(3,553 |
) |
|
|
7,712 |
|
Effect of exchange rate changes on cash |
|
|
(1,898 |
) |
|
|
(570 |
) |
Increase (decrease) in cash, cash equivalents and restricted cash |
|
|
(6,867 |
) |
|
|
29,372 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
13,455 |
|
|
|
19,232 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
6,588 |
|
|
$ |
48,604 |
|
Notes to the Financial Tables
(Unaudited) |
||
(a) |
Tredegar’s presentation of net income (loss) and diluted earnings (loss) per share from ongoing operations are non-GAAP financial measures that exclude the effects of gains or losses associated with plant shutdowns, asset impairments and restructurings, gains or losses from the sale of assets, goodwill impairment charges, net periodic benefit cost for the frozen defined benefit pension plan and other items (which includes gains and losses for an investment accounted for under the fair value method), which have been presented separately and removed from net income (loss) and diluted earnings (loss) per share as reported under GAAP. Net income (loss) and diluted earnings (loss) per share from ongoing operations are key financial and analytical measures used by management to gauge the operating performance of Tredegar’s ongoing operations. They are not intended to represent the stand-alone results for Tredegar’s ongoing operations under GAAP and should not be considered as an alternative to net income (loss) or earnings (loss) per share as defined by GAAP. They exclude items that management believes do not relate to Tredegar’s ongoing operations. A reconciliation to net income (loss) and diluted earnings (loss) per share from ongoing operations for the three and nine months ended |
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
($ in millions, except per share data) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) as reported under GAAP1 |
|
$ |
(3.9 |
) |
|
$ |
(50.4 |
) |
|
$ |
8.1 |
|
|
$ |
(70.3 |
) |
After-tax effects of: |
|
|
|
|
|
|
|
|
||||||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
|
— |
|
|
|
3.7 |
|
|
|
0.5 |
|
|
|
3.8 |
|
(Gains) losses from sale of assets and other: |
|
|
|
|
|
|
|
|
||||||||
Gain associated with the investment in kaléo |
|
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.2 |
) |
Tax expense (benefit) from adjustments to deferred income tax liabilities under new |
|
|
— |
|
|
|
0.7 |
|
|
|
— |
|
|
|
1.5 |
|
Valuation allowance on existing deferred tax assets as a result of the sale of Terphane |
|
|
1.8 |
|
|
|
— |
|
|
|
1.8 |
|
|
|
— |
|
Other |
|
|
2.3 |
|
|
|
3.4 |
|
|
|
5.7 |
|
|
|
6.0 |
|
Net periodic benefit cost for the frozen defined benefit pension plan in process of termination2 |
|
|
— |
|
|
|
2.4 |
|
|
|
— |
|
|
|
7.6 |
|
Pension settlement loss2 |
|
|
— |
|
|
|
20.0 |
|
|
|
— |
|
|
|
20.0 |
|
|
|
|
— |
|
|
|
15.1 |
|
|
|
— |
|
|
|
27.0 |
|
Net income (loss) from ongoing operations1 |
|
$ |
0.2 |
|
|
$ |
(5.1 |
) |
|
$ |
16.0 |
|
|
$ |
(4.6 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share as reported under GAAP (diluted) |
|
$ |
(0.11 |
) |
|
$ |
(1.47 |
) |
|
$ |
0.24 |
|
|
$ |
(2.06 |
) |
After-tax effects per diluted share of: |
|
|
|
|
|
|
|
|
||||||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
|
— |
|
|
|
0.11 |
|
|
|
0.01 |
|
|
|
0.11 |
|
(Gains) losses from sale of assets and other: |
|
|
|
|
|
|
|
|
||||||||
Gain associated with the investment in kaléo |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Tax expense (benefit) from adjustments to deferred income tax liabilities under new |
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.04 |
|
Valuation allowance on existing deferred tax assets as a result of the sale of Terphane |
|
|
0.05 |
|
|
|
— |
|
|
|
0.05 |
|
|
|
— |
|
Other |
|
|
0.07 |
|
|
|
0.10 |
|
|
|
0.17 |
|
|
|
0.18 |
|
Net periodic benefit cost for the frozen defined benefit pension plan in process of termination2 |
|
|
— |
|
|
|
0.07 |
|
|
|
— |
|
|
|
0.23 |
|
Pension settlement loss2 |
|
|
— |
|
|
|
0.58 |
|
|
|
— |
|
|
|
0.59 |
|
|
|
|
— |
|
|
|
0.44 |
|
|
|
— |
|
|
|
0.79 |
|
Earnings (loss) per share from ongoing operations (diluted) |
|
$ |
0.01 |
|
|
$ |
(0.15 |
) |
|
$ |
0.47 |
|
|
$ |
(0.13 |
) |
1. Reconciliations of the pre-tax and post-tax balances attributed to net income (loss) are shown in Note (e). 2. For more information, see Note (g). 3. For more information, see Note (k). |
(b) |
EBITDA (earnings before interest, taxes, depreciation and amortization) from ongoing operations is the key segment profitability metric used by the Company’s chief operating decision maker to assess segment financial performance. The Company uses sales less freight ("net sales") as its measure of revenues from external customers. For more business segment information, see Note 9 to the Company's Condensed Consolidated Financial Statements in the Third Quarter Form 10-Q. |
|
EBIT (earnings before interest and taxes) from ongoing operations is a non-GAAP financial measure included in the accompanying tables and the reconciliation of segment financial information to consolidated results for the Company in the net sales and EBITDA from ongoing operations by segment statements. It is not intended to represent the stand-alone results for Tredegar’s ongoing operations under GAAP and should not be considered as an alternative to net income (loss) as defined by GAAP. The Company believes that EBIT is a widely understood and utilized metric that is meaningful to certain investors and that including this financial metric in the reconciliation of management’s performance metric, EBITDA from ongoing operations, provides useful information to those investors that primarily utilize EBIT to analyze the Company’s core operations. |
||
(c) |
Gains and losses associated with plant shutdowns, asset impairments, restructurings and other items for the three and nine months ended |
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
($ in millions) |
Pre-Tax |
Net of Tax |
Pre-Tax |
Net of Tax |
||||||||
Aluminum Extrusions: |
|
|
|
|
||||||||
(Gains) losses from sale of assets, investment writedowns and other items: |
|
|
|
|
||||||||
Consulting expenses for ERP/MES project1 |
$ |
0.7 |
$ |
0.5 |
|
2.1 |
|
|
1.6 |
|
||
Storm damage to the |
|
— |
|
— |
|
0.3 |
|
|
0.2 |
|
||
Legal fees associated with the Aluminum Extruders Trade Case1 |
|
0.4 |
|
0.3 |
|
0.9 |
|
|
0.7 |
|
||
Resolution of customer quality complaint4 |
|
0.8 |
|
0.6 |
|
0.8 |
|
|
0.6 |
|
||
Total for Aluminum Extrusions |
$ |
1.9 |
$ |
1.4 |
$ |
4.1 |
|
$ |
3.1 |
|
||
|
|
|
|
|
||||||||
(Gains) losses from sale of assets, investment writedowns and other items: |
|
|
|
|
||||||||
|
$ |
— |
$ |
— |
|
0.3 |
|
|
0.2 |
|
||
|
|
— |
|
— |
|
0.3 |
|
|
0.3 |
|
||
Total for |
$ |
— |
$ |
— |
$ |
0.6 |
|
$ |
0.5 |
|
||
|
|
|
|
|
||||||||
(Gains) losses from sale of assets, investment writedowns and other items: |
|
|
|
|
||||||||
Professional fees associated with business development activities1 |
$ |
0.1 |
$ |
0.1 |
$ |
0.1 |
|
$ |
0.1 |
|
||
Total for |
$ |
0.1 |
$ |
0.1 |
$ |
0.1 |
|
$ |
0.1 |
|
||
Corporate: |
|
|
||||||||||
(Gain) losses from sale of assets, investment writedowns and other items: |
|
|
|
|
||||||||
Professional fees associated with business development activities1 |
$ |
0.7 |
$ |
0.5 |
$ |
1.6 |
|
$ |
1.3 |
|
||
Professional fees associated with remediation activities related to internal control over financial reporting1 |
|
0.3 |
|
0.2 |
|
1.6 |
|
|
1.2 |
|
||
Professional fees associated with the transition to the ABL Facility1 |
|
0.1 |
|
0.1 |
|
0.3 |
|
|
0.2 |
|
||
Group annuity contract premium expense adjustment3 |
|
— |
|
— |
|
(0.2 |
) |
|
(0.2 |
) |
||
Valuation allowance on existing deferred tax assets as a result of the sale of Terphane5 |
|
— |
|
1.8 |
|
— |
|
|
1.8 |
|
||
Total for Corporate |
$ |
1.1 |
$ |
2.6 |
$ |
3.3 |
|
$ |
4.3 |
|
||
1. Included in “Selling, R&D and general expenses” in the condensed consolidated statements of income. 2. For more information, refer to Note 1 to the Company's Condensed Consolidated Financial Statements in the Third Quarter Form 10-Q. 3. Included in “Other income (expense), net” in the condensed consolidated statements of income. For more information, see Note (g). 4. Included in “Sales” in the condensed consolidated statements of income. 5. Included in “Income tax expense (benefit)” in the condensed consolidated statements of income. |
|
Three Months Ended
|
Nine Months Ended
|
||||||||||
($ in millions) |
Pre-Tax |
Net of Tax |
Pre-Tax |
Net of Tax |
||||||||
Aluminum Extrusions: |
|
|
|
|
||||||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings: |
|
|
|
|
||||||||
Other restructuring costs - severance |
$ |
0.1 |
$ |
0.1 |
$ |
0.1 |
|
$ |
0.1 |
|
||
(Gains) losses from sale of assets, investment writedowns and other items: |
|
|
|
|
||||||||
Consulting expenses for ERP/MES project1 |
|
1.2 |
|
0.9 |
|
1.2 |
|
|
0.9 |
|
||
Storm damage to the |
|
0.1 |
|
0.1 |
|
0.5 |
|
|
0.3 |
|
||
Total for Aluminum Extrusions |
$ |
1.4 |
$ |
1.1 |
$ |
1.8 |
|
$ |
1.3 |
|
||
|
|
|
|
|
||||||||
(Gain) losses from sale of assets, investment writedowns and other items: |
|
|
|
|
||||||||
Write-down of |
$ |
3.4 |
$ |
2.6 |
$ |
3.4 |
|
$ |
2.6 |
|
||
|
|
1.1 |
|
1.0 |
|
1.1 |
|
|
1.0 |
|
||
|
|
19.5 |
|
15.1 |
|
34.9 |
|
|
27.0 |
|
||
Total for |
$ |
24.0 |
$ |
18.7 |
$ |
39.4 |
|
$ |
30.6 |
|
||
|
|
|
|
|
||||||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings: |
|
|
|
|
||||||||
Other restructuring costs - severance |
$ |
— |
$ |
— |
$ |
0.1 |
|
$ |
0.1 |
|
||
Total for |
$ |
— |
$ |
— |
$ |
0.1 |
|
$ |
0.1 |
|
||
Corporate: |
|
|
|
|
||||||||
(Gain) losses from sale of assets, investment writedowns and other items: |
|
|
|
|
||||||||
Professional fees associated with business development activities1 |
$ |
2.9 |
$ |
2.2 |
$ |
4.8 |
|
$ |
3.8 |
|
||
Professional fees associated with remediation activities related to internal control over financial reporting1 |
|
0.2 |
|
0.2 |
|
1.2 |
|
|
1.0 |
|
||
Write-down of investment in |
|
— |
|
— |
|
0.2 |
|
|
0.1 |
|
||
Stock-based compensation expense associated with the fair value remeasurement of awards granted at the time of the 2020 Special Dividend1 |
|
— |
|
— |
|
(0.2 |
) |
|
(0.1 |
) |
||
Tax benefit from adjustments to deferred income tax liabilities under new |
|
— |
|
0.7 |
|
— |
|
|
1.5 |
|
||
Net periodic benefit cost for the frozen defined benefit pension plan in process of termination3 |
|
3.1 |
|
2.4 |
|
9.9 |
|
|
7.6 |
|
||
Pension settlement loss3 |
|
25.6 |
|
20.0 |
|
25.6 |
|
|
20.0 |
|
||
Total for Corporate |
$ |
31.8 |
$ |
25.5 |
$ |
41.5 |
|
$ |
33.9 |
|
||
|
(d) |
On |
|
(e) |
Tredegar’s presentation of net income (loss) from ongoing operations is a non-GAAP financial measure that excludes the effects of gains or losses associated with plant shutdowns, asset impairments and restructurings, gains or losses from the sale of assets, goodwill impairment charges, net periodic benefit cost for the frozen defined benefit pension plan and other items (which includes unrealized gains and losses for an investment accounted for under the fair value method), which has been presented separately and removed from net income (loss) as reported under GAAP. Net income (loss) from ongoing operations is a key financial and analytical measure used by management to gauge the operating performance of Tredegar’s ongoing operations. It is not intended to represent the stand-alone results for Tredegar’s ongoing operations under GAAP and should not be considered as an alternative to net income (loss) as defined by GAAP. It excludes items that we believe do not relate to Tredegar’s ongoing operations. |
|
Reconciliations of the pre-tax and post-tax balances attributed to net income (loss) from ongoing operations for the three and nine months ended |
($ in millions) |
Pre-tax |
|
Tax Expense
|
|
After-Tax |
|
Effective
|
|||||||
Three Months Ended |
(a) |
|
(b) |
|
|
|
(b)/(a) |
|||||||
Net income (loss) reported under GAAP |
$ |
(3.0 |
) |
|
$ |
0.9 |
|
|
$ |
(3.9 |
) |
|
(31.6 |
)% |
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
(Gains) losses from sale of assets and other |
|
3.1 |
|
|
|
(1.0 |
) |
|
|
4.1 |
|
|
|
|
Net income (loss) from ongoing operations |
$ |
0.1 |
|
|
$ |
(0.1 |
) |
|
$ |
0.2 |
|
|
NM* |
|
Three Months Ended |
|
|
|
|
|
|
|
|||||||
Net income (loss) reported under GAAP |
$ |
(63.7 |
) |
|
$ |
(13.3 |
) |
|
$ |
(50.4 |
) |
|
20.9 |
% |
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
4.6 |
|
|
|
0.9 |
|
|
|
3.7 |
|
|
|
|
(Gains) losses from sale of assets and other |
|
4.4 |
|
|
|
0.3 |
|
|
|
4.1 |
|
|
|
|
Net periodic benefit cost for the frozen defined benefit pension plan in process of termination |
|
3.1 |
|
|
|
0.7 |
|
|
|
2.4 |
|
|
|
|
Pension settlement loss |
|
25.6 |
|
|
|
5.6 |
|
|
|
20.0 |
|
|
|
|
|
|
19.5 |
|
|
|
4.4 |
|
|
|
15.1 |
|
|
|
|
Net income (loss) from ongoing operations |
$ |
(6.5 |
) |
|
$ |
(1.4 |
) |
|
$ |
(5.1 |
) |
|
21.7 |
% |
Nine Months Ended |
|
|
|
|
|
|
|
|||||||
Net income (loss) reported under GAAP |
$ |
11.7 |
|
|
$ |
3.6 |
|
|
$ |
8.1 |
|
|
30.5 |
% |
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
0.6 |
|
|
|
0.1 |
|
|
|
0.5 |
|
|
|
|
(Gains) losses from sale of assets and other |
|
7.4 |
|
|
|
— |
|
|
|
7.4 |
|
|
|
|
Net income (loss) from ongoing operations |
$ |
19.7 |
|
|
$ |
3.7 |
|
|
$ |
16.0 |
|
|
18.5 |
% |
Nine Months Ended |
|
|
|
|
|
|
|
|||||||
Net income (loss) reported under GAAP |
$ |
(86.6 |
) |
|
$ |
(16.3 |
) |
|
$ |
(70.3 |
) |
|
18.8 |
% |
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
4.7 |
|
|
|
0.9 |
|
|
|
3.8 |
|
|
|
|
(Gains) losses from sale of assets and other |
|
7.4 |
|
|
|
0.1 |
|
|
|
7.3 |
|
|
|
|
Net periodic benefit cost for the frozen defined benefit pension plan in process of termination |
|
9.9 |
|
|
|
2.3 |
|
|
|
7.6 |
|
|
|
|
Pension settlement loss |
|
25.6 |
|
|
|
5.6 |
|
|
|
20.0 |
|
|
|
|
|
|
34.9 |
|
|
|
7.9 |
|
|
|
27.0 |
|
|
|
|
Net income (loss) from ongoing operations |
$ |
(4.1 |
) |
|
$ |
0.5 |
|
|
$ |
(4.6 |
) |
|
(12.0 |
)% |
* Not meaningful ("NM") |
|
|
|
|
|
|
|
(f) Net debt is calculated as follows: |
||||||
|
|
|
|
|
||
($ in millions) |
|
|
2024 |
|
|
2023 |
Short-term debt |
|
$ |
1.4 |
|
$ |
— |
ABL revolving facility (matures on |
|
|
122.0 |
|
|
126.3 |
Long-term debt |
|
|
20.0 |
|
|
20.0 |
Total debt |
|
|
143.4 |
|
|
146.3 |
Less: Cash and cash equivalents |
|
|
2.7 |
|
|
9.7 |
Less: Restricted cash |
|
|
3.9 |
|
|
3.8 |
Net debt |
|
$ |
136.8 |
|
$ |
132.8 |
Net debt is not intended to represent total debt as defined by GAAP. Net debt is utilized by management in evaluating the Company’s financial leverage and equity valuation, and management believes that investors also may find net debt to be helpful for the same purposes. |
||
(g) |
Beginning in 2022, and consistent with no expected required minimum cash contributions, no pension expense has been included in calculating earnings before interest, taxes, depreciation and amortization as defined in the Company's Second Amended and Restated Credit Agreement, which is used to compute certain borrowing ratios and to compute non-GAAP net income (loss) from ongoing operations. During the third quarter of 2023, the Company remeasured the pension plan, which resulted in a pre-tax pension settlement loss in the condensed consolidated results of operation of |
|
(h) |
The ABL Facility has customary representations and warranties including, as a condition to each borrowing, that all such representations and warranties are true and correct in all material respects (including a representation that no Material Adverse Effect (as defined in the ABL Facility) has occurred since |
|
In accordance with the ABL Facility, the lenders have been provided with the Company’s financial statements, covenant compliance certificates and projections to facilitate their ongoing assessment of the Company. Accordingly, the Company believes the likelihood that lenders would exercise the subjective acceleration clause whereby prohibiting future borrowings is remote. As of |
||
(i) |
Tredegar’s presentation of Consolidated EBITDA from ongoing operations is a non-GAAP financial measure that excludes the effects of gains or losses associated with plant shutdowns, asset impairments and restructurings, gains or losses from the sale of assets, goodwill impairment charges, net periodic benefit cost for the frozen defined benefit pension plan and other items (which includes gains and losses for an investment accounted for under the fair value method). Consolidated EBITDA from ongoing operations also excludes depreciation & amortization, stock option-based compensation costs, interest and income taxes. Consolidated EBITDA is a key financial and analytical measure used by management to gauge the operating performance of Tredegar’s ongoing operations. It is not intended to represent the stand-alone results for Tredegar’s ongoing operations under GAAP and should not be considered as an alternative to net income (loss) or earnings (loss) per share as defined by GAAP. It excludes items that management believes do not relate to Tredegar’s ongoing operations. A reconciliation of Consolidated EBITDA from ongoing operations for the three and nine months ended |
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
($ in millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) as reported under GAAP1 |
$ |
(3.9 |
) |
|
$ |
(50.4 |
) |
|
$ |
8.1 |
|
|
$ |
(70.3 |
) |
After-tax effects of: |
|
|
|
|
|
|
|
||||||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
— |
|
|
|
3.7 |
|
|
|
0.5 |
|
|
|
3.8 |
|
Gain associated with the investment in kaléo |
|
— |
|
|
|
— |
|
|
|
(0.1 |
) |
|
|
(0.2 |
) |
(Gains) losses from sale of assets and other |
|
2.3 |
|
|
|
3.4 |
|
|
|
5.7 |
|
|
|
6.0 |
|
Tax expense (benefit) from adjustments to deferred income tax liabilities under new |
|
— |
|
|
|
0.7 |
|
|
|
— |
|
|
|
1.5 |
|
Valuation allowance on existing deferred tax assets as a result of the sale of Terphane |
|
1.8 |
|
|
|
— |
|
|
|
1.8 |
|
|
|
— |
|
Net periodic benefit cost for the frozen defined benefit pension plan in process of termination2 |
|
— |
|
|
|
2.4 |
|
|
|
— |
|
|
|
7.6 |
|
Pension settlement loss2 |
|
— |
|
|
|
20.0 |
|
|
|
— |
|
|
|
20.0 |
|
|
|
— |
|
|
|
15.1 |
|
|
|
— |
|
|
|
27.0 |
|
Net income (loss) from ongoing operations1 |
|
0.2 |
|
|
|
(5.1 |
) |
|
|
16.0 |
|
|
|
(4.6 |
) |
Depreciation and amortization |
|
6.5 |
|
|
|
7.6 |
|
|
|
19.8 |
|
|
|
20.9 |
|
Stock option-based compensation costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.2 |
|
Interest expense |
|
3.5 |
|
|
|
3.1 |
|
|
|
10.3 |
|
|
|
7.8 |
|
Interest income |
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
Income taxes from ongoing operations1 |
|
(0.1 |
) |
|
|
(1.4 |
) |
|
|
3.7 |
|
|
|
0.5 |
|
Consolidated EBITDA from ongoing operations |
$ |
10.1 |
|
|
$ |
4.1 |
|
|
$ |
49.8 |
|
|
$ |
24.7 |
|
1. Reconciliations of the pre-tax and post-tax balances attributed to net income (loss) are shown in Note (e). 2. For more information, see Note (g). |
(j) |
The following tables represent unaudited supplemental pro forma consolidated net sales and Consolidated EBITDA from ongoing operations for the three and nine months ended |
|
Three Months Ended
|
|
Nine Months Ended
|
||
($ in thousands) |
|
2024 |
|
|
2024 |
Pro forma net sales |
|
|
|
||
Aluminum Extrusions |
$ |
115,717 |
|
$ |
349,353 |
|
|
24,879 |
|
|
78,811 |
Total pro forma net sales |
|
140,596 |
|
|
428,164 |
Add back freight |
|
7,085 |
|
|
20,833 |
Add back pro forma discontinued operation net sales1 |
|
34,370 |
|
|
99,205 |
Sales as shown in the condensed consolidated statements of income |
$ |
182,051 |
|
$ |
548,202 |
1. Reflects the Company's current best estimate of pre-tax revenue and expenses of the Terphane business prepared in accordance with discontinued operations guidance set forth in Accounting Standards Codification ("ASC") 205 Presentation of Financial Statements. |
|
Three Months Ended
|
|
Nine Months Ended
|
||||
($ in millions) |
|
2024 |
|
|
|
2024 |
|
Pro forma consolidated EBITDA from ongoing operations |
|
|
|
||||
Net income (loss) as reported under GAAP1 |
$ |
(3.9 |
) |
|
$ |
8.1 |
|
Income tax expense (benefit)1 |
|
0.9 |
|
|
|
3.6 |
|
Income (loss) before income taxes as shown in the condensed consolidated statements of income |
|
(3.0 |
) |
|
|
11.7 |
|
Discontinued operations before taxes2 |
|
|
|
||||
EBIT from ongoing operations |
|
(3.0 |
) |
|
|
(6.7 |
) |
Interest expense |
|
1.8 |
|
|
|
5.5 |
|
Plant shutdowns, asset impairments, restructurings and other |
|
0.1 |
|
|
|
0.1 |
|
Corporate expenses, net |
|
1.1 |
|
|
|
(0.4 |
) |
Pro forma income (loss) from continuing operations before income tax |
|
(3.0 |
) |
|
|
10.2 |
|
Pre-tax effects of: |
|
|
|
||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
— |
|
|
|
0.6 |
|
Gain associated with the investment in kaléo |
|
— |
|
|
|
(0.1 |
) |
(Gains) losses from sale of assets and other |
|
2.4 |
|
|
|
6.1 |
|
Pro forma net income (loss) from ongoing operations before income tax |
|
(0.6 |
) |
|
|
16.8 |
|
Depreciation and amortization |
|
5.8 |
|
|
|
17.6 |
|
Interest expense |
|
1.6 |
|
|
|
4.8 |
|
Pro forma consolidated EBITDA from ongoing operations |
$ |
6.8 |
|
|
$ |
39.2 |
|
1. Reconciliations of the pre-tax and post-tax balances attributed to net income (loss) are shown in Note (e). 2. Reflects the Company's current best estimate of pre-tax revenue and expenses of the Terphane business prepared in accordance with discontinued operations guidance set forth in ASC 205 Presentation of Financial Statements. |
|
As of or for Twelve
|
||
($ in millions) |
|||
Net leverage ratio |
|
||
Net debt(1) |
$ |
136.8 |
|
Credit EBITDA(2) |
$ |
59.1 |
|
Net leverage ratio |
|
2.3 |
|
|
|
||
Pro forma net debt |
|
||
Net debt(1) |
$ |
136.8 |
|
Debt reduction associated with the sale of Terphane(3) |
|
(78.0 |
) |
Pro forma net debt |
$ |
58.8 |
|
|
|
||
Pro forma Credit EBITDA |
|
||
Credit EBITDA(2) |
$ |
59.1 |
|
Discontinued operations EBITDA from ongoing operations(4) |
|
(11.2 |
) |
Discontinued operations corporate expenses, net(4) |
|
(0.8 |
) |
Pro forma Credit EBITDA |
$ |
47.1 |
|
|
|
||
Pro forma net leverage ratio |
|
||
Pro forma net debt |
$ |
58.8 |
|
Pro forma Credit EBITDA |
$ |
47.1 |
|
Pro forma net leverage ratio |
|
1.2 |
|
1. For more information, see Note (f). 2. For more information, refer to the "Liquidity and Capital Resources" section in the Third Quarter From 10-Q.
3. On 4. Reflects the Company's current best estimate of pre-tax revenue and expenses of the Terphane business prepared in accordance with discontinued operations guidance set forth in ASC 205 Presentation of Financial Statements.
5. Actual and pro forma Credit EBITDA amounts are for the twelve months ended |
Upon the earlier of |
||
(k) |
During 2023, uncertainty about the timing of a recovery in the consumer electronics market persisted, and manufacturers in the supply chain for consumer electronics continued to experience reduced capacity utilization and inventory corrections. In light of the limited visibility on the timing of a recovery and the expected adverse future impact to the Surface Protection business, coupled with a cautious outlook on new product development opportunities, the Company performed a Step 1 goodwill impairment analysis, as of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241108045204/en/
neill.bellamy@tredegar.com
Source: