Tredegar Corporation (NYSE:TG, also the "Company" or "Tredegar")
today reported second quarter financial results for the period
ended June 30, 2023.
Second quarter 2023 net income (loss) was $(18.9) million
($(0.56) per diluted share) compared to net income (loss) of $14.9
million ($0.44 per diluted share) in the second quarter of 2022.
Net income (loss) from ongoing operations, which excludes special
items, was $(2.0) million ($(0.06) per diluted share) in the second
quarter of 2023 compared with $17.2 million ($0.51 per diluted
share) in the second quarter of 2022. A reconciliation of net
income (loss), a financial measure calculated in accordance with
U.S. generally accepted accounting principles (“GAAP”), to net
income (loss) from ongoing operations, a non-GAAP financial
measure, for the three and six months ended June 30, 2023 and 2022,
is provided in Note (a) to the Financial Tables in this press
release.
Second Quarter Financial Results Highlights
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") from ongoing operations for Aluminum Extrusions was
$10.2 million in the second quarter of 2023 versus $21.9 million in
the second quarter of last year. EBITDA from ongoing operations
during the last four quarters has been weak, in a range of $8.9 to
$14.6 million.
- Sales volume of 35.5 million pounds in the second quarter of
2023 was relatively consistent with the first quarter of 2023 and
the fourth quarter of 2022 but declined significantly versus 49.0
million pounds in the second quarter of last year.
- Open orders at the end of the second quarter of 2023 were 20
million pounds (versus 27 million pounds at the end of the first
quarter of 2023), which is below the quarterly range of 21 to 27
million pounds in 2019 before pandemic-related disruptions that
resulted in excessive open orders, which peaked in the first
quarter of 2022 at approximately 100 million pounds.
- While open orders have declined over the past year, Aluminum
Extrusions has realized three sequential quarters of net booking
growth.
- EBITDA from ongoing operations for PE Films was $0.8 million in
the second quarter of 2023 versus $7.1 million in the second
quarter of 2022 as very weak conditions persisted in the consumer
electronics market. EBITDA from ongoing operations during the last
four quarters has been low with a range of negative $2.6 million to
positive $1.8 million.
- EBITDA from ongoing operations for Flexible Packaging Films was
$0.2 million during the second quarter of 2023 versus $7.6 million
in the second quarter of 2022 primarily due to lower sales volume,
which the Company believes is mainly due to customer inventory
corrections, lower margins and unfavorable cost variances.
John Steitz, Tredegar’s president and chief executive officer,
said, “We recognized a loss for the quarter with each of our
businesses suffering from depressed conditions in their markets,
which we believe can mostly be traced to the residual impact of the
pandemic. The timing of a recovery for them remains uncertain.
Significant spending controls are in place. Debt, net of cash,
declined by $20 million during the quarter from much-needed
improvement in working capital. Further working capital improvement
is anticipated by year end.”
Mr. Steitz continued, “But what we need most is a recovery in
sales, profits and operating cash flow across all business
segments, which has been slow in occurring. Meanwhile, we have a
pension plan settlement obligation due in the fourth quarter
estimated at $30 million. We have suspended our quarterly dividend
and recently amended our credit facility to provide some 'breathing
room'. We’re thankful for our dedicated employees who are working
hard to help drive a turnaround.”
OPERATIONS REVIEW
Aluminum Extrusions
Aluminum Extrusions (or Bonnell Aluminum) produces high-quality,
soft-alloy and medium-strength custom fabricated and finished
aluminum extrusions primarily for the following markets: building
and construction (B&C), automotive and specialty (which
consists of consumer durables, machinery and equipment, electrical
and renewable energy, and distribution end-use products). A summary
of results for Aluminum Extrusions is provided below:
Three Months Ended
Favorable/
(Unfavorable)
% Change
Six Months Ended
Favorable/
(Unfavorable)
% Change
(In thousands, except percentages)
June 30,
June 30,
2023
2022
2023
2022
Sales volume (lbs)
35,492
48,960
(27.5
)%
73,054
91,970
(20.6
)%
Net sales
$
121,827
$
190,308
(36.0
)%
$
255,197
$
348,417
(26.8
)%
Ongoing operations:
EBITDA
$
10,217
$
21,895
(53.3
)%
$
24,855
$
45,814
(45.7
)%
Depreciation & amortization
(4,158
)
(4,169
)
0.3
%
(8,569
)
(8,430
)
(1.6
)%
EBIT*
$
6,059
$
17,726
(65.8
)%
$
16,286
$
37,384
(56.4
)%
Capital expenditures
$
5,631
$
3,989
$
13,373
$
6,870
* 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.
Second Quarter 2023 Results vs. Second
Quarter 2022 Results
Net sales (sales less freight) in the second quarter of 2023
decreased 36.0% versus the second quarter of 2022 primarily due to
lower sales volume and the pass-through of lower metal costs,
partially offset by an increase in prices to cover higher operating
costs. Sales volume in the second quarter of 2023 declined 27.5%
versus the second quarter of 2022. Nonresidential B&C sales
volume, which represented 53% of 2022 volume, declined 23.8% in the
second quarter of 2023 versus the second quarter of 2022. Sales
volume in the specialty market, which represented 29% of total
volume in 2022, decreased 32.7% in the second quarter of 2023
versus the second quarter of 2022. Sales volume in the automotive
market, which represented 8% of total volume in 2022, decreased
7.8% in the second quarter of 2023 versus the second quarter of
2022.
Beginning in the third quarter of 2022, the Company observed
slowing order input and order cancellations as customers continued
to report high inventory levels, which carried into 2023. Open
orders at the end of the second quarter of 2023 were 20 million
pounds (versus 27 million pounds at the end of the first quarter of
2023 and 86 million pounds at the end of the second quarter 2022).
This level is below the quarterly range of 21 to 27 million pounds
in 2019 before pandemic-related disruptions that resulted in long
lead times driving a peak in open orders of approximately 100
million pounds during the first quarter of 2022. In addition, data
indicates that aluminum extrusion imports have increased
significantly in recent years, and some of Bonnell Aluminum’s
customers may have sourced, and continue to source, aluminum
extrusions from producers outside of the United States. The Company
is closely monitoring the situation and is prepared to work with
the U.S. Government to ensure a fairly traded market. Nonetheless,
Bonnell Aluminum has experienced three sequential quarters of net
booking growth. Net bookings were 16.9, 19.0, 20.4 and 28.2 million
pounds in the third quarter of 2022 through the second quarter of
2023, respectively.
EBITDA from ongoing operations in the second quarter of 2023
decreased $11.7 million or 53.3% versus the second quarter of 2022
primarily due to:
- Lower volume ($11.9 million), higher labor and employee-related
costs ($0.7 million), lower labor productivity ($0.5 million),
lower pricing ($1.0 million) and higher supply expense associated
with inflationary costs ($0.8 million), partially offset by lower
utility costs ($1.0 million), lower freight rates ($0.3 million)
and lower selling, general and administrative ("SG&A") expenses
($1.6 million); and
- The timing of the flow-through under the first-in first-out
method of aluminum raw material costs passed through to customers,
previously acquired at higher prices in a quickly changing
commodity pricing environment, resulted in a charge of $1.3 million
in the second quarter of 2023 versus a charge of $1.6 million in
the second quarter of 2022.
First Six Months of 2023 Results vs. First
Six Months of 2022 Results
Net sales in the first six months of 2023 decreased 26.8% versus
the first six months of 2022 primarily due to lower sales volume
and the pass-through of lower metal costs, partially offset by an
increase in prices to cover higher operating costs. Sales volume in
the first six months of 2023 decreased by 20.6% versus the first
six months of 2022.
EBITDA from ongoing operations in the first six months of 2023
decreased $21.0 million or 45.7% in comparison to the first six
months of 2022 primarily due to:
- Lower volume ($16.1 million), higher labor and employee-related
costs ($2.4 million), lower labor productivity ($1.0 million) and
higher supply expense, including higher paint expense associated
with a shift to more painted product in the first six months of
2023, and inflationary costs for other supplies ($3.0 million),
partially offset by higher pricing ($5.6 million), lower utility
costs ($0.6 million) and lower SG&A expenses ($0.8 million);
and
- The timing of the flow-through under the first-in first-out
method of aluminum raw material costs passed through to customers,
previously acquired at lower prices in a quickly changing commodity
pricing environment, resulted in a benefit of $0.4 million in the
first six months of 2023 versus a benefit of $5.5 million in the
first six months of 2022.
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 June 30, 2023 ("Second Quarter Form 10-Q") for
additional information on aluminum price trends.
Projected Capital Expenditures and
Depreciation & Amortization
Capital expenditures for Bonnell Aluminum are projected to be
$19 million in 2023 versus the previously disclosed projection of
$26 million. The Company has implemented stringent spending
measures to control its financial leverage (see “Net Debt,
Financial Leverage and Debt Covenants” section for more
information). In this regard, Bonnell Aluminum has reduced
projected capital expenditures in the second half of 2023 to $5
million to mainly support continuity of current operations versus
broader spending of $14 million during the first half of the year.
The most significant reduction relates to the multi-year
implementation of new enterprise resource planning and
manufacturing execution systems ("ERP/MES"). This project is being
reorganized with an extended implementation period that increases
the utilization of existing dedicated internal resources over a
longer period in place of more costly external consultants. As a
result, the earliest “go-live” date for the new ERP/MES is likely
in 2025. The ERP/MES project commenced in 2022, with spending
to-date of approximately $21 million. Depreciation expense is
projected to be $15 million in 2023. Amortization expense is
projected to be $2 million in 2023.
PE Films
PE Films produces surface protection films for high-technology
applications in the global electronics industry and polyethylene
overwrap and polypropylene films for other markets. A summary of
results for PE Films, which does not include the goodwill
impairment discussed in the "Goodwill Impairment in Surface
Protection" section, is provided below:
Three Months Ended
Favorable/
(Unfavorable)
% Change
Six Months Ended
Favorable/
(Unfavorable)
% Change
(In thousands, except percentages)
June 30,
June 30,
2023
2022
2023
2022
Sales volume (lbs)
6,245
9,639
(35.2
)%
13,613
20,192
(32.6
)%
Net sales
$
15,918
$
31,424
(49.3
)%
$
36,099
$
62,555
(42.3
)%
Ongoing operations:
EBITDA
$
814
$
7,065
(88.5
)%
$
2,663
$
14,112
(81.1
)%
Depreciation & amortization
(1,552
)
(1,559
)
0.4
%
(3,195
)
(3,154
)
(1.3
)%
EBIT*
$
(738
)
$
5,506
(113.4
)%
$
(532
)
$
10,958
(104.9
)%
Capital expenditures
$
360
$
1,163
$
1,075
$
1,744
* 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.
Second Quarter 2023 Results vs. Second
Quarter 2022 Results
Net sales in the second quarter of 2023 decreased 49.3% compared
to the second quarter of 2022. Sales volume in the second quarter
of 2023 decreased in both Surface Protection and overwrap films
versus the second quarter of 2022. Surface Protection sales volume
in the second quarter of 2023 declined 54.2% versus the second
quarter of 2022 and 26.9% versus the first quarter of 2023. Surface
Protection sales continue to be adversely impacted by weak market
demand for consumer electronics which began in the third quarter of
last year. Manufacturers in the supply chain are experiencing
reduced capacity utilization and inventory corrections. In
addition, these market conditions are adversely impacting mix
through reduced sales to our highest value-added customers. The
timing of a recovery in Surface Protection remains uncertain.
EBITDA from ongoing operations in the second quarter of 2023
decreased $6.3 million versus the second quarter of 2022, primarily
due to:
- A $7.7 million decrease from Surface Protection:
- Lower contribution margin associated with a market slowdown and
customer inventory corrections ($8.6 million), partially offset by
lower SG&A and operating efficiencies ($0.7 million); and
- The pass-through lag associated with resin costs ($0.1 million
charge in the second quarter of 2023 versus a charge of $0.3
million in the second quarter of 2022).
- A $1.4 million increase from overwrap films primarily due to
cost improvements.
First Six Months of 2023 Results vs. First
Six Months of 2022 Results
Net sales in the first six months of 2023 decreased 42.3%
compared to the first six months of 2022 primarily due to a
decrease in sales volume in Surface Protection, as a result of the
factors noted above. Sales volume declined 45.4% in Surface
Protection in the first six months of 2023.
EBITDA from ongoing operations in the first six months of 2023
decreased by $11.4 million versus the first six months of 2022,
primarily due to:
- A $12.6 million decrease from Surface Protection:
- Lower contribution margin for non-transitioning products
associated with a market slowdown and customer inventory
corrections ($12.7 million) and for previously disclosed customer
product transitions ($0.7 million), partially offset by lower
SG&A and other employee-related expenses and operating
efficiencies ($1.2 million); and
- The pass-through lag associated with resin costs ($0.2 million
charge in the second quarter of 2023 versus a benefit of $0.2
million in the second quarter of 2022).
- A $1.1 million increase from overwrap films primarily due to
cost improvements ($1.5 million), partially offset by the
pass-through lag associated with resin costs (a charge of $0.2
million in the first six months of 2023 versus a benefit of $0.2
million in the first six months of 2022).
Refer to Item 3. Quantitative and Qualitative Disclosures About
Market Risk in the Second Quarter Form 10-Q for additional
information on resin price trends.
Closure of PE Films Technical
Center
On August 3, 2023, the Company adopted a plan to close the PE
Films technical center in Richmond, VA and reduce its efforts to
develop and sell films supporting the semiconductor market. Future
research & development activities for PE Films will be
performed at the facility in Pottsville, PA. PE Films continues to
have new business opportunities primarily relating to surface
protection films that protect components of flat panel and flexible
displays. The Company anticipates all activities to cease at the PE
Films technical center in Richmond, VA, by the end of 2023. The
Company expects to recognize cash costs associated with exit
activities of $1.8 million for: (i) severance and related costs
($0.9 million), (ii) vacating the facility lease ($0.6 million
payable through June 2025), and (iii) building closure costs ($0.3
million). In addition, the Company expects non-cash asset
write-offs and accelerated depreciation of up to $4.5 million. Net
annual cash savings of $3.4 million are anticipated, beginning in
the fourth quarter of 2023.
Goodwill Impairment in Surface
Protection
Manufacturers in the supply chain for consumer electronics
continue to experience reduced capacity utilization and inventory
corrections. In light of the continued uncertainty about the timing
of a recovery for this market and the expected adverse future
impact to the Surface Protection business, the Company performed a
goodwill impairment analysis of the Surface Protection component of
PE Films using projections that contemplate the expected market
recovery and business conditions. The analysis concluded that the
fair value of Surface Protection was less than its carrying value,
thus a non-cash partial goodwill impairment of $15.4 million ($11.9
million after deferred income tax benefits) was recognized during
the second quarter of 2023.
Projected Capital Expenditures and
Depreciation & Amortization
Capital expenditures for PE Films are projected to be $3 million
in 2023, including $1 million for productivity projects and $2
million for capital expenditures required to support continuity of
current operations. Depreciation expense is projected to be $6
million in 2023. There is no amortization expense for PE Films.
Flexible Packaging Films
Flexible Packaging Films produces polyester-based films for use
in packaging applications that have specialized properties, such as
heat resistance, strength, barrier protection and the ability to
accept high-quality print graphics. A summary of results for
Flexible Packaging Films is provided below:
Three Months Ended
Favorable/
(Unfavorable)
% Change
Six Months Ended
Favorable/
(Unfavorable)
% Change
(In thousands, except percentages)
June 30,
June 30,
2023
2022
2023
2022
Sales volume (lbs)
23,724
27,315
(13.1
)%
43,569
53,321
(18.3
)%
Net sales
$
33,223
$
41,595
(20.1
)%
$
64,750
$
80,839
(19.9
)%
Ongoing operations:
EBITDA
$
249
$
7,631
(96.7
)%
$
1,599
$
12,665
(87.4
)%
Depreciation & amortization
(711
)
(583
)
(22.0
)%
(1,411
)
(1,132
)
(24.6
)%
EBIT*
$
(462
)
$
7,048
(106.6
)%
$
188
$
11,533
(98.4
)%
Capital expenditures
$
878
$
3,264
$
1,483
$
4,809
* 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.
Second Quarter 2023 Results vs. Second
Quarter 2022 Results
Net sales in the second quarter of 2023 decreased 20.1% compared
to the second quarter of 2022 primarily due to lower sales volume,
lower selling prices from the pass-through of lower resin costs and
unfavorable product mix. The Company believes that lower sales
volume was primarily due to customer inventory corrections. While
sales volume in the second quarter of 2023 was still below expected
normalized levels, it improved 20% over the first quarter of the
year.
EBITDA from ongoing operations in the second quarter of 2023
decreased $7.4 million versus the second quarter of 2022, primarily
due to:
- Lower selling prices from the pass-through of lower resin costs
and margin pressures ($2.9 million), lower sales volume ($1.9
million), higher fixed costs ($1.1 million, primarily due to under
absorption from lower production volumes), higher variable costs
($1.8 million, including higher costs resulting from quality issues
and other costs associated with the shutdown of production lines to
adjust production volumes to sales levels) and unfavorable product
mix ($0.6 million), partially offset by lower raw material costs
($1.3 million) and lower SG&A expenses ($0.1 million);
- Foreign currency transaction losses ($0.2 million) in the
second quarter of 2023 compared to foreign currency transaction
gains ($0.6 million) in the second quarter of 2022; and
- Net favorable foreign currency translation of Real-denominated
operating costs ($0.2 million).
First Six Months of 2023 Results vs. First
Six Months of 2022 Results
Net sales in the first six months of 2023 decreased 19.9%
compared to the first six months of 2022 primarily due to lower
sales volume and lower selling prices from the pass-through of
lower resin costs, partially offset by favorable product mix.
EBITDA from ongoing operations in the first six months of 2023
decreased $11.1 million versus the first six months of 2022
primarily due to:
- Lower sales volume ($4.9 million), lower selling prices from
the pass-through of lower resin costs and margin pressures ($3.6
million), higher fixed costs ($2.1 million, primarily due to under
absorption from lower production volumes), higher variable costs
($0.7 million, including higher costs resulting from quality
issues) and unfavorable product mix ($1.3 million), partially
offset by lower raw material costs ($1.6 million) and lower
SG&A expenses ($0.1 million);
- Net unfavorable foreign currency translation of
Real-denominated operating costs ($0.1 million); and
- Foreign currency transaction losses ($0.2 million) in the
second quarter of 2023 compared to foreign currency transaction
losses ($0.3 million) in the second quarter of 2022.
Refer to Item 3. Quantitative and Qualitative Disclosures About
Market Risk in the Second Quarter Form 10-Q for additional
information on polyester fiber and component price trends.
Projected Capital Expenditures and
Depreciation & Amortization
Capital expenditures for Flexible Packaging Films are projected
to be $6 million in 2023, including $2 million for new capacity for
value-added products and productivity projects and $4 million for
capital expenditures required to support continuity of current
operations. Depreciation expense is projected to be $3 million in
2023. Amortization expense is projected to be $0.1 million in
2023.
Corporate Expenses, Interest, Taxes & Other
Corporate expenses, net in the first six months of 2023
decreased $2.0 million compared to the first six months of 2022
primarily due to lower accruals for employee-related compensation
($2.1 million) and lower stock-based compensation ($0.4 million),
partially offset by higher professional fees associated with
business development activities ($0.6 million).
Interest expense of $4.7 million in the first six months of 2023
increased $2.7 million compared to the first six months of 2022 due
to higher average debt levels and interest rates.
The effective tax rate used to compute income tax expense
(benefit) in the first six months of 2023 was 13.1%, compared to
16.9% in the first six months of 2022. The change in the effective
tax rate is primarily due to a pre-tax loss in first six months of
2023 versus pre-tax income in first six months of 2022, lower
Brazil tax incentives, a discrete charge in the second quarter of
2023 for a Brazil tax law change and a large discrete benefit
recorded in the first quarter of 2022, resulting from the
implementation of new U.S. tax regulations associated with foreign
tax credits published by the U.S. Treasury and Internal Revenue
Service on January 4, 2022. The effective tax rate from ongoing
operations comparable to the earnings reconciliation table provided
in Note (a) to the Financial Tables in this press release was 79.2%
for the first six months of 2023 versus 26.2% for the first six
months of 2022 (see also Note (e) to the Financial Tables). Refer
to Note 9 to the Company's Condensed Consolidated Financial
Statements in the Second Quarter Form 10-Q for an explanation of
differences between the effective tax rate for income (loss) and
the U.S. federal statutory rate for 2023 and 2022.
Pension expense under GAAP of $6.8 million in the first six
months of 2023 remained consistent with the first six months of
2022. In February 2022, Tredegar announced the initiation of a
process to terminate and settle its frozen defined benefit pension
plan. In connection therewith, the Company borrowed funds under its
revolving credit agreement ("Credit Agreement") and made a $50
million contribution to the pension plan (the “Special
Contribution”) to reduce its underfunding and as part of a program
within the pension plan to hedge or fix the expected future
contributions that will be needed by the Company through the
settlement process. The funds borrowed for the Special Contribution
were effectively made available with proceeds received in December
2021 from the sale of the Company’s investment in kaleo, Inc.
("kaléo"). In addition, the Company realized income tax cash
benefits on the Special Contribution of $11 million in the fourth
quarter of 2022.
During the second quarter of 2023, the Company received a
favorable IRS determination letter, and government agencies and the
Company expect the completion of the settlement process on or about
October 31, 2023. Administrative costs for the entire settlement
process with respect to the pension plan are estimated at $4 to $5
million.
The estimated underfunding of Tredegar’s frozen defined benefit
pension plan was approximately $30 million at June 30, 2023. As of
December 31, 2022, the estimated underfunding of $28 million was
comprised of investments at fair value of $218 million and a
projected benefit obligation (“PBO”) of $246 million. GAAP
accounting requires adjustment for changes in values of assets and
the PBO only at the end of each year, even though these values
change daily. The ultimate underfunded amount at settlement may
differ from the current amounts, depending on changes in market
factors, including with respect to buyers of pension obligations at
the time of settlement.
Prior to the Special Contribution, GAAP pension expense was a
reasonable proxy for the Company’s required minimum cash
contribution to the pension plan. The Company expects there will be
no required minimum cash contributions until final settlement.
Pension expense under GAAP is projected to be approximately $14
million in 2023, which is mainly comprised of non-cash amortization
of deferred net actuarial losses reflected in the Company’s
shareholders’ equity as accumulated other comprehensive losses.
Beginning in 2022, and consistent with no expected required minimum
cash contributions, no pension expense is included in calculating
earnings before interest, taxes, depreciation and amortization as
defined in the Credit Agreement (“Credit EBITDA”), which is used to
compute certain borrowing ratios and to compute non-GAAP net income
(loss) from ongoing operations.
The impact on earnings from pension expense is reflected in
“Corporate expenses, net” in the accompanying net sales and EBITDA
from ongoing operations by segment tables. However, beginning in
2022 and consistent with excluding GAAP pension expense from Credit
EBITDA as described above, GAAP pension expense has been presented
separately and removed from net income (loss) and diluted earnings
(loss) per share as reported under GAAP for purposes of determining
Tredegar’s non-GAAP presentation of net income (loss) and diluted
earnings (loss) per share from ongoing operations (see related
reconciliation in Note (a) to the Financial Tables in this press
release for more information).
Net Debt, Financial Leverage and Debt Covenants
Total debt was $141.0 million at June 30, 2023 compared to total
debt of $137.0 million at December 31, 2022. Net debt (debt in
excess of cash and cash equivalents), a non-GAAP financial measure
but a key measure used to compute the net leverage ratio under the
Credit Agreement, was $119.8 million at June 30, 2023 compared to
$140.0 million at March 31, 2023 and $117.8 million at December 31,
2022. The Company has been very focused on reducing net working
capital to normal operating levels and managing its costs during
the current slowdown in business. The $20.2 million decline in net
debt from March 31, 2023 to June 30, 2023, was primarily driven by
an improvement in net working capital. Further working capital
improvement is anticipated in the third and fourth quarters of
2023.
See Note (f) to the Financial Tables in this press release for a
reconciliation of net debt to the most directly comparable GAAP
financial measure.
Tredegar has a five-year, revolving, secured credit facility
that matures on June 29, 2027. To reduce the risk of potential
violations of the primary financial restrictive covenants in the
Credit Agreement while the Company's businesses and markets are
experiencing a downturn, the Company (i) suspended its regular
quarterly dividend (which had an annual cash outlay of
approximately $17.7 million) and (ii) amended the Credit Agreement,
effective August 3, 2023, to:
- Change the fiscal quarter maximum Total Net Leverage Ratio
covenant from 4.0x to: (i) 5.0x for the quarters ending September
30, 2023 through March 31, 2024, (ii) 4.75x for the quarter ending
June 30, 2024, (iii) 4.25 for the quarter ending September 30,
2024, and (iv) 4.0x for the quarter ending December 31, 2024 and
thereafter.
- Change the fiscal quarter minimum Interest Coverage Ratio
covenant from 3.0x to: (i) 2.50x for the quarters ending September
30, 2023 through June 30, 2024, (ii) 2.75x for the quarter ending
September 30, 2024, and (iii) 3.0x for the quarter ending December
31, 2024 and thereafter.
- Reduce the maximum borrowing availability from $375 million to
$200 million.
- Increase the drawn spread by 25 basis points across all levels
of the interest rate pricing grid, beginning the quarter ending
September 30, 2023.
- Amend the restricted payments covenant to prohibit dividends
and share repurchases during fiscal quarters ending September 30,
2023 through December 31, 2024.
The Company had Credit EBITDA and a Total Net Leverage Ratio
(calculated in the "Liquidity and Capital Resources" section of the
Second Quarter Form 10-Q) of $43.5 million and 2.76x, respectively,
at June 30, 2023, which had significantly deteriorated from the
Credit EBITDA and Total Net Leverage Ratio at December 31, 2022 of
$84.4 million and 1.39x, respectively. In addition, the Company’s
projections indicate further deterioration of the Total Net
Leverage Ratio without paying dividends to between 4.0x and 5.0x
through the quarter ending March 31, 2024.
To further decrease the risk of a debt covenant violation during
a severe cyclical downturn, the Company is investigating the
replacement of the existing EBITDA-based credit facility by the end
of 2023 with other financing alternatives, including borrowings
that would be permitted based on the level of secured receivables,
inventories and machinery and equipment and sale and leaseback of
existing Company-owned property.
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:
- loss or gain 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;
- inability to develop, efficiently manufacture and deliver new
products at competitive prices;
- 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;
- uncertain economic conditions in countries in which the Company
does business, including continued high inflation and the effects
of the Russian invasion of Ukraine;
- competition from other manufacturers, including manufacturers
in lower-cost countries and manufacturers benefiting from
government subsidies;
- impact of fluctuations in foreign exchange rates;
- movement of pension plan assets and liabilities relating to
differences between the ultimate settlement benefit obligation and
the projected benefit obligation, census data, administrative
costs, and the effectiveness of hedging activities;
- an increase in the operating costs incurred by the Company’s
business units, including, for example, the cost of raw materials
and energy;
- unanticipated problems or delays with the implementation of an
enterprise resource planning and manufacturing executions systems,
or security breaches and other disruptions to the Company's
information technology infrastructure;
- 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;
- disruptions to the Company’s manufacturing facilities,
including those resulting from labor shortages;
- failure to continue to attract, develop and retain certain key
officers or employees;
- noncompliance with any of the financial and other restrictive
covenants in the Company's revolving credit facility;
- the impact of public health epidemics on employees, production
and the global economy, such as the COVID-19 pandemic;
- an information technology system failure or breach;
- the impact of the imposition of tariffs and sanctions on
imported aluminum ingot used by Bonnell Aluminum;
- the impact of new tariffs, duties or other trade restrictions
imposed as a result of trade tensions between the U.S. and other
countries;
- the termination of anti-dumping duties on products imported to
Brazil that compete with products produced by Flexible
Packaging;
- impairment of the Surface Protection reporting unit's
goodwill;
- failure to establish and maintain effective internal control
over financial reporting;
and the other factors discussed in the reports Tredegar files
with or furnishes to the Securities and Exchange Commission (the
“SEC”) from time to time, including the risks and important factors
set forth in additional detail in “Risk Factors” Part I, Item 1A of
the Company's Form 10-K for the year ended December 31, 2022 and
Part II, Item 1A of the Company's Form 10-Q for the quarter ended
June 30, 2023. Readers are urged to review and consider carefully
the disclosures Tredegar makes in its filings with the SEC.
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.
Tredegar Corporation is an industrial manufacturer with three
primary businesses: custom aluminum extrusions for the North
American building & construction, automotive and specialty
end-use markets; surface protection films for high-technology
applications in the global electronics industry; and specialized
polyester films primarily for the Latin American flexible packaging
market. Tredegar had 2022 sales of $939 million. With approximately
1,800 employees, the Company operates manufacturing facilities in
North America, South America, and Asia.
Tredegar Corporation
Condensed Consolidated
Statements of Income (Loss)
(In Thousands, Except
Per-Share Data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Sales
$
178,167
$
274,363
$
369,289
$
510,929
Other income (expense), net (c)(d)
(20
)
1,342
260
1,041
178,147
275,705
369,549
511,970
Cost of goods sold (c)
153,267
218,088
312,792
401,348
Freight
7,199
11,036
13,243
19,118
Selling, R&D and general expenses
(c)
18,265
20,616
38,475
43,421
Amortization of intangibles
464
666
968
1,329
Pension and postretirement benefits
3,418
3,506
6,837
6,982
Interest expense
2,374
1,234
4,686
2,020
Asset impairments and costs associated
with exit and disposal activities, net of adjustments (c)
—
134
69
126
Goodwill impairment
15,413
—
15,413
—
Total
200,400
255,280
392,483
474,344
Income (loss) before income taxes
(22,253
)
20,425
(22,934
)
37,626
Income tax expense (benefit) (c)
(3,331
)
5,556
(3,000
)
6,334
Net income (loss)
$
(18,922
)
$
14,869
$
(19,934
)
$
31,292
Earnings (loss) per share:
Basic
$
(0.56
)
$
0.44
$
(0.59
)
$
0.93
Diluted
$
(0.56
)
$
0.44
$
(0.59
)
$
0.93
Shares used to compute earnings (loss) per
share:
Basic
34,079
33,814
33,988
33,734
Diluted
34,079
33,854
33,988
33,776
Tredegar Corporation
Net Sales and EBITDA from
Ongoing Operations by Segment
(In Thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Net Sales
Aluminum Extrusions
$
121,827
$
190,308
$
255,197
$
348,417
PE Films
15,918
31,424
36,099
62,555
Flexible Packaging Films
33,223
41,595
64,750
80,839
Total net sales
170,968
263,327
356,046
491,811
Add back freight
7,199
11,036
13,243
19,118
Sales as shown in the condensed
consolidated statements of income
$
178,167
$
274,363
$
369,289
$
510,929
EBITDA from Ongoing Operations
Aluminum Extrusions:
Ongoing operations:
EBITDA (b)
$
10,217
$
21,895
$
24,855
$
45,814
Depreciation & amortization
(4,158
)
(4,169
)
(8,569
)
(8,430
)
EBIT (b)
6,059
17,726
16,286
37,384
Plant shutdowns, asset impairments,
restructurings and other (c)
155
16
(339
)
(89
)
PE Films:
Ongoing operations:
EBITDA (b)
814
7,065
2,663
14,112
Depreciation & amortization
(1,552
)
(1,559
)
(3,195
)
(3,154
)
EBIT (b)
(738
)
5,506
(532
)
10,958
Plant shutdowns, asset impairments,
restructurings and other (c)
—
(50
)
2
(153
)
Goodwill impairment
(15,413
)
—
(15,413
)
—
Flexible Packaging Films:
Ongoing operations:
EBITDA (b)
249
7,631
1,599
12,665
Depreciation & amortization
(711
)
(583
)
(1,411
)
(1,132
)
EBIT (b)
(462
)
7,048
188
11,533
Plant shutdowns, asset impairments,
restructurings and other (c)
(1
)
(37
)
(79
)
(80
)
Total
(10,400
)
30,209
113
59,553
Interest income
30
3
74
32
Interest expense
2,374
1,234
4,686
2,020
Gain on investment in kaleo, Inc. (d)
—
1,406
262
1,406
Stock option-based compensation costs
—
251
231
882
Corporate expenses, net (c)
9,509
9,708
18,466
20,463
Income (loss) before income taxes
(22,253
)
20,425
(22,934
)
37,626
Income tax expense (benefit)
(3,331
)
5,556
(3,000
)
6,334
Net income (loss)
$
(18,922
)
$
14,869
$
(19,934
)
$
31,292
Tredegar Corporation
Condensed Consolidated Balance
Sheets
(In Thousands)
(Unaudited)
June 30, 2023
December 31, 2022
Assets
Cash & cash equivalents
$
21,193
$
19,232
Accounts & other receivables, net
79,139
84,544
Income taxes recoverable
1,216
733
Inventories
86,692
127,771
Prepaid expenses & other
10,214
10,304
Total current assets
198,454
242,584
Net property, plant and equipment
189,892
186,411
Right-of-use leased assets
12,794
14,021
Identifiable intangible assets, net
10,785
11,690
Goodwill
55,195
70,608
Deferred income taxes
14,610
13,900
Other assets
3,139
2,879
Total assets
$
484,869
$
542,093
Liabilities and Shareholders’
Equity
Accounts payable
$
82,290
$
114,938
Accrued expenses
23,501
31,603
Lease liability, short-term
2,163
2,035
Income taxes payable
579
1,137
Total current liabilities
108,533
149,713
Lease liability, long-term
11,991
12,738
Long-term debt
141,000
137,000
Pension and other postretirement benefit
obligations, net
35,747
35,046
Other non-current liabilities
4,449
5,834
Shareholders’ equity
183,149
201,762
Total liabilities and shareholders’
equity
$
484,869
$
542,093
Tredegar Corporation
Condensed Consolidated
Statements of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended June 30,
2023
2022
Cash flows from operating activities:
Net income (loss)
$
(19,934
)
$
31,292
Adjustments for noncash items:
Depreciation
12,387
11,536
Amortization of intangibles
968
1,329
Reduction of right-of-use lease asset
1,075
1,072
Goodwill impairment
15,413
—
Deferred income taxes
(3,731
)
2,516
Accrued pension income and post-retirement
benefits
6,837
7,013
Stock-based compensation expense
521
1,842
Gain on investment in kaléo
(262
)
(1,406
)
Changes in assets and liabilities:
Accounts and other receivables
6,190
(24,172
)
Inventories
43,013
(31,495
)
Income taxes recoverable/payable
(1,060
)
(6,129
)
Prepaid expenses and other
2,976
(516
)
Accounts payable and accrued expenses
(39,629
)
47,388
Lease liability
(1,095
)
(1,166
)
Pension and postretirement benefit plan
contributions
(279
)
(50,314
)
Other, net
(692
)
1,781
Net cash provided by (used in) operating
activities
22,698
(9,429
)
Cash flows from investing activities:
Capital expenditures
(15,907
)
(13,514
)
Proceeds on sale of investment in
kaléo
262
1,406
Net cash provided by (used in) investing
activities
(15,645
)
(12,108
)
Cash flows from financing activities:
Borrowings
41,250
221,250
Debt principal payments
(37,250
)
(192,750
)
Dividends paid
(8,884
)
(8,135
)
Debt financing fees
—
(1,245
)
Other
—
(396
)
Net cash provided by (used in) financing
activities
(4,884
)
18,724
Effect of exchange rate changes on
cash
(208
)
(246
)
Increase (decrease) in cash and cash
equivalents
1,961
(3,059
)
Cash and cash equivalents at beginning of
period
19,232
30,521
Cash and cash equivalents at end of
period
$
21,193
$
27,462
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 six months ended June 30, 2023 and
2022 is shown below:
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in millions, except per share data)
2023
2022
2023
2022
Net income (loss) as reported under
GAAP1
$
(18.9
)
$
14.9
$
(19.9
)
$
31.3
After-tax effects of:
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
—
0.1
0.1
0.1
(Gains) losses from sale of assets and
other:
Gain associated with the investment in
kaléo
—
(1.0
)
(0.2
)
(1.0
)
Tax expense (benefit) from adjustments to
deferred income tax liabilities under new U.S. tax regulations
related to foreign tax credits
0.8
—
0.8
(3.8
)
Other
1.6
0.5
2.5
2.1
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination2
2.6
2.7
5.3
5.4
Goodwill impairment3
11.9
—
11.9
—
Net income (loss) from ongoing
operations1
$
(2.0
)
$
17.2
$
0.5
$
34.1
Earnings (loss) per share as reported
under GAAP (diluted)
$
(0.56
)
$
0.44
$
(0.59
)
$
0.93
After-tax effects per diluted share
of:
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
—
—
—
—
(Gains) losses from sale of assets and
other:
Gain associated with the investment in
kaléo
—
(0.03
)
(0.01
)
(0.03
)
Tax expense (benefit) from adjustments to
deferred income tax liabilities under new U.S. tax regulations
related to foreign tax credits
0.02
—
0.02
(0.11
)
Other
0.05
0.02
0.08
0.06
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination2
0.08
0.08
0.16
0.16
Goodwill impairment3
0.35
—
0.35
—
Earnings (loss) per share from ongoing
operations (diluted)
$
(0.06
)
$
0.51
$
0.01
$
1.01
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 "Corporate
Expenses, Interest, Taxes & Other" section of this press
release.
3. For more information, see "PE Films"
section of this press release.
(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 10 to the Company's Condensed Consolidated Financial
Statements in the Second 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 six months ended June 30, 2023 and 2022 detailed
below are shown in the statements of net sales and EBITDA from
ongoing operations by segment and are included in “Asset
impairments and costs associated with exit and disposal activities,
net of adjustments” in the condensed consolidated statements of
income, unless otherwise noted.
Three Months Ended
June 30, 2023
Six Months Ended
June 30, 2023
($ 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:
Storm damage to the Newnan, Georgia
plant1
$
(0.2
)
$
(0.2
)
$
0.4
$
0.2
Total for Aluminum Extrusions
$
(0.2
)
$
(0.2
)
$
0.4
$
0.2
PE Films:
Goodwill impairment4
15.4
11.9
15.4
11.9
Total for PE Films
$
15.4
$
11.9
$
15.4
$
11.9
Flexible Packaging Films:
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings:
Other restructuring costs - severance
$
—
$
—
$
0.1
$
0.1
Total for Flexible Packaging Films
$
—
$
—
$
0.1
$
0.1
Corporate:
(Gain) losses from sale of assets,
investment writedowns and other items:
Professional fees associated with business
development activities1
1.6
1.3
$
1.9
$
1.5
Professional fees associated with
remediation activities related to internal control over financial
reporting1
0.5
0.4
1.0
0.8
Write-down of investment in Harbinger
Capital Partners Special Situations Fund2
0.2
0.1
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
(0.1
)
—
(0.2
)
(0.1
)
Tax expense from adjustments to deferred
income tax liabilities under new U.S. tax regulations related to
foreign tax credits5
—
0.8
—
0.8
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination3
3.4
2.6
6.8
5.3
Total for Corporate
$
5.6
$
5.2
$
9.7
$
8.4
1. Included in “Selling, R&D and
general expenses” in the condensed consolidated statements of
income.
2. Included in “Other income (expense),
net” in the condensed consolidated statements of income.
3. For more information, see "Corporate
Expenses, Interest, Taxes & Other" section of this press
release.
4. For more information, see "PE Films"
section of this press release.
5. Included in "Income tax expense
(benefit)" in the condensed consolidated statements of income.
Three Months Ended
June 30, 2022
Six Months Ended
June 30, 2022
($ 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:
COVID-19-related expenses, net of
relief1
$
—
$
—
$
0.1
$
0.1
Total for Aluminum Extrusions
$
—
$
—
$
0.1
$
0.1
PE Films:
(Gains) losses from sale of assets,
investment writedowns and other items:
COVID-19-related expenses1
$
0.1
$
—
$
0.2
$
0.1
Total for PE Films
$
0.1
$
—
$
0.2
$
0.1
Corporate:
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings:
Other restructuring costs - severance
$
0.1
$
0.1
$
0.1
$
0.1
(Gain) losses from sale of assets,
investment writedowns and other items:
Professional fees associated with business
development activities2
0.1
0.1
$
1.6
$
1.2
Professional fees associated with
remediation activities related to internal control over financial
reporting2
0.8
0.5
1.2
0.8
Stock-based compensation expense
associated with the fair value remeasurement of awards granted at
the time of the 2020 Special Dividend2
(0.2
)
(0.1
)
(0.2
)
(0.1
)
Tax benefit from adjustments to deferred
income tax liabilities under new U.S. tax regulations related to
foreign tax credits4
—
—
—
(3.8
)
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination3
3.5
2.7
6.9
5.4
Total for Corporate
$
4.3
$
3.3
$
9.6
$
3.6
1. Included in "Other income (expense),
net" in the condensed consolidated statements of income.
2. Included in "Selling, R&D and
general expenses" in the condensed consolidated statements of
income.
3. For more information, see "Corporate
Expenses, Interest, Taxes & Other" section of this press
release.
4. Included in "Income tax expense
(benefit)" in the condensed consolidated statements of income.
(d)
On December 27, 2021, the Company
completed the sale of its investment interests in kaléo and
received closing cash proceeds of $47.1 million. Subsequently, in
May 2022 and January 2023, additional cash consideration of $1.4
million and $0.3 million, respectively, was received related to
customary post-closing adjustments, which is reported in “Other
income (expense), net” in the condensed consolidated statements of
income.
(e)
Tredegar’s presentation of net income
(loss) from ongoing operations is a non-GAAP financial measure that
excludes the effects of gains or losses associated with plant
shutdowns, asset impairments and restructurings, gains or losses
from the sale of assets, goodwill impairment charges, net periodic
benefit cost for the frozen defined benefit pension plan and other
items (which includes unrealized gains and losses for an investment
accounted for under the fair value method), which has been
presented separately and removed from net income (loss) as reported
under GAAP. Net income (loss) from ongoing operations is a key
financial and analytical measure used by management to gauge the
operating performance of Tredegar’s ongoing operations. It is not
intended to represent the stand-alone results for Tredegar’s
ongoing operations under GAAP and should not be considered as an
alternative to net income (loss) as defined by GAAP. It excludes
items that we believe do not relate to Tredegar’s ongoing
operations.
Reconciliations of the pre-tax and
post-tax balances attributed to net income (loss) from ongoing
operations for the three and six months ended June 30, 2023 and
2022 are presented below in order to show the impact on the
effective tax rate:
($ in millions)
Pre-tax
Tax Expense
(Benefit)
After-Tax
Effective
Tax Rate
Three Months Ended June 30,
2023
(a)
(b)
(b)/(a)
Net income (loss) reported under GAAP
$
(22.3
)
$
(3.4
)
$
(18.9
)
15.0
%
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
—
—
—
(Gains) losses from sale of assets and
other
2.0
(0.4
)
2.4
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination
3.4
0.8
2.6
Goodwill impairment
15.4
3.5
11.9
Net income (loss) from ongoing
operations
$
(1.5
)
$
0.5
$
(2.0
)
(33.3
)%
Three Months Ended June 30,
2022
Net income (loss) reported under GAAP
$
20.4
$
5.5
$
14.9
27.3
%
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
0.1
$
—
0.1
(Gains) losses from sale of assets and
other
(0.6
)
(0.1
)
(0.5
)
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination
3.5
0.8
2.7
Net income (loss) from ongoing
operations
$
23.4
$
6.2
$
17.2
26.6
%
Six Months Ended June 30, 2023
Net income (loss) reported under GAAP
$
(22.9
)
$
(3.0
)
$
(19.9
)
13.1
%
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
0.1
—
0.1
(Gains) losses from sale of assets and
other
3.0
(0.1
)
3.1
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination
6.8
1.5
5.3
Goodwill impairment
15.4
3.5
11.9
Net income (loss) from ongoing
operations
$
2.4
$
1.9
$
0.5
79.2
%
Six Months Ended June 30, 2022
Net income (loss) reported under GAAP
$
37.6
$
6.3
$
31.3
16.9
%
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
0.1
—
0.1
(Gains) losses from sale of assets and
other
1.5
4.2
(2.7
)
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination
6.9
1.5
5.4
Net income (loss) from ongoing
operations
$
46.1
$
12.0
$
34.1
26.2
%
(f)
Net debt is calculated as follows:
June 30,
December 31,
(in millions)
2023
2022
Debt
$
141.0
$
137.0
Less: Cash and cash equivalents
21.2
19.2
Net debt
$
119.8
$
117.8
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809072611/en/
Tredegar Corporation Neill Bellamy, 804-330-1211
neill.bellamy@tredegar.com
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