Tredegar Corporation (NYSE:TG, also the "Company" or "Tredegar")
today reported second quarter financial results for the period
ended June 30, 2022.
Second quarter 2022 net income (loss) from continuing operations
was $14.8 million (0.44 per diluted share) compared to net income
(loss) from continuing operations of $20.7 million ($0.61 per
diluted share) in the second quarter of 2021. Net income (loss)
from ongoing operations, which excludes special items, was $17.1
million ($0.51 per diluted share) in the second quarter of 2022
compared with $16.1 million ($0.48 per diluted share) in the second
quarter of 2021. A reconciliation of net income (loss) from
continuing operations, a financial measure calculated in accordance
with U.S. generally accepted accounting principles (“GAAP”), to net
income from ongoing operations, a non-GAAP financial measure, for
the three and six months ended June 30, 2022 and 2021, 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 of $21.9
million was $2.2 million higher than the second quarter of
2021
- EBITDA from ongoing operations for PE Films of $7.1 million was
$1.9 million lower than the second quarter of 2021
- EBITDA from ongoing operations for Flexible Packaging Films of
$7.6 million was $0.6 million lower than the second quarter of
2021
John Steitz, Tredegar’s president and chief executive officer,
said, “Bonnell had another exceptional quarter. Backlog, which is
still very high by historical standards, peaked in March and has
been dropping since then, with a combination of higher productivity
from an improved labor situation and lower bookings. Our strong
backlog should help drive solid performance for the balance of
2022. While lower bookings are a sign of a possible downturn, it
could be the result of orders being placed by customers earlier
than normal due to the industry’s extended lead times. In addition,
a leading indicator of nonresidential construction activity for
June which was reported in mid-July still shows growth.”
Mr. Steitz continued, “PE Films performed as expected for the
quarter with a continued focus on generating growth from new
products and markets while working through the final stages of a
profit decline from previously disclosed customer product
transitions. Recent market indicators imply a possible slowdown
resulting from customer inventory corrections in the second half of
2022. Terphane continues to deliver results as planned.”
Mr. Steitz further stated, “We had strong cash generation during
the second quarter with debt net of cash declining by $32
million.”
OPERATIONS REVIEW
Aluminum Extrusions
Aluminum Extrusions, which is also referred to as 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,
2022
2021
2022
2021
Sales volume (lbs)
48,960
49,021
(0.1)%
91,970
93,387
(1.5)%
Net sales
$
190,308
$
139,281
36.6%
$
348,417
$
257,405
35.4%
Ongoing operations:
EBITDA
$
21,895
$
19,723
11.0%
$
45,814
$
33,024
38.7%
Depreciation & amortization
(4,169
)
(4,032
)
(3.4)%
(8,430
)
(8,162
)
(3.3)%
EBIT*
$
17,726
$
15,691
13.0%
$
37,384
$
24,862
50.4%
Capital expenditures
$
3,989
$
4,326
$
6,870
$
6,773
* See the net sales and EBITDA
from ongoing operations by segment statements in the Financial
Tables in this press release for a reconciliation of this non-GAAP
measure to the most directly comparable measure calculated in
accordance with GAAP.
Second Quarter 2022 Results vs. Second
Quarter 2021 Results
Net sales (sales less freight) in the second quarter of 2022
increased by 36.6% versus 2021 primarily due to an increase in
average selling prices to cover significantly higher aluminum raw
material costs and higher operating costs. Sales volume in the
second quarter of 2022 was flat versus 2021. Sales volume in the
specialty market, which represented 34% of total volume in 2021,
decreased 8.8% in the second quarter of 2022 versus 2021. Sales
volume in the automotive market, which represented 8% of total
volume in 2021, declined 6.6% versus the second quarter of 2021.
Nonresidential B&C sales volume, which represented 51% of 2021
volume, increased 5.6% in the second quarter of 2022 versus 2021.
The Company believes that actual sales volume during the first six
months of 2022 was lower than demand due to pandemic-related labor
shortages and resulting production inefficiencies. While the
average number of direct labor employees at Bonnell Aluminum
facilities increased approximately 9% in the second quarter of 2022
compared to the second quarter of 2021, the estimated average labor
shortage levels were 101, 171 and 203 workers in the second and
first quarters of 2022 and second quarter of 2021, respectively.
Moreover, onboarding new employees has resulted in higher hiring
and training costs in 2022 versus last year. Although bookings have
slowed in the second quarter of 2022 versus the first quarter of
2022 and the second quarter of 2021, backlog remains at
historically high levels.
EBITDA from ongoing operations in the second quarter of 2022
increased by $2.2 million in comparison to the second quarter of
2021 primarily due to:
- Higher pricing ($20.1 million, net of the pass-through of
aluminum raw material costs), partially offset by: higher labor and
employee-related costs ($2.6 million) and lower labor productivity
($2.2 million); higher supply expense, including significant price
increases in paint, chemicals, packaging and other supplies ($2.5
million); higher utility costs ($1.7 million); higher freight rates
($2.9 million); and increased selling, general and administrative
("SG&A") expenses ($1.2 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 $1.6 million
in the second quarter of 2022 versus a benefit of $3.1 million in
the second quarter of 2021. The charge in the second quarter of
2022 was net of a favorable impact from the lag in pricing ($0.3
million), in which products committed to customers at a specified
price were shipped in a later period.
First Six Months of 2022 Results vs. First
Six Months of 2021 Results
Net sales in the first six months of 2022 increased by 35.4%
versus 2021 primarily due to an increase in average selling prices
to cover significantly higher aluminum raw material costs and
higher operating costs, partially offset by lower sales volume.
Sales volume in the first six months of 2022 decreased by 1.5%
versus 2021.
EBITDA from ongoing operations in the first six months of 2022
increased by $12.8 million in comparison to the first six months of
2021 primarily due to:
- Higher pricing ($34.8 million, net of the pass-through of
aluminum raw material costs), partially offset by: lower volume
($0.7 million); higher labor and employee-related costs ($3.9
million) and lower labor productivity ($3.3 million); higher
maintenance costs ($1.4 million); higher supply expense, including
significant price increases in paint, chemicals, packaging and
other supplies ($5.9 million); higher utilities ($1.7 million);
higher freight rates ($4.1 million); and increased SG&A
expenses ($2.4 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 $5.5 million in the
first six months of 2022 versus a benefit of $4.2 million in the
first six months of 2021. The benefit in the first six months of
2022 was net of an adverse impact from the lag in pricing ($1.5
million), in which products committed to customers at a specified
price were shipped in a later period.
Aluminum Extrusions believes that it has adequate supply
agreements for aluminum raw materials in 2022 and is in the process
of securing supply sources to meet expected needs in 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
June 30, 2022 ("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
$31 million in 2022, including $15 million for new enterprise
resource planning and manufacturing execution systems ("ERP/MES"),
$6 million for infrastructure upgrades at the facilities located in
Niles, Michigan, Carthage, Tennessee and Newnan, Georgia and $3
million for other strategic projects. The ERP/MES project is
expected to cost $28 million over a two-year time span. In addition
to strategic projects, approximately $7 million will be required to
support continuity of current operations. Depreciation expense is
projected to be $15 million in 2022. Amortization expense is
projected to be $2 million in 2022.
PE Films
PE Films produces surface protection films, polyethylene
overwrap and polypropylene films for other markets. A summary of
results for PE Films is provided below:
Three Months Ended
Favorable/
(Unfavorable)
% Change
Six Months Ended
Favorable/
(Unfavorable)
% Change
(In thousands, except percentages)
June 30,
June 30,
2022
2021
2022
2021
Sales volume (lbs)
9,639
10,538
(8.5)%
20,192
20,782
(2.8)%
Net sales
$
31,424
$
31,430
—%
$
62,555
$
59,384
5.3%
Ongoing operations:
EBITDA
$
7,065
$
9,001
(21.5)%
$
14,112
$
16,213
(13.0)%
Depreciation & amortization
(1,559
)
(1,671
)
6.7%
(3,154
)
(3,090
)
(2.1)%
EBIT*
$
5,506
$
7,330
(24.9)%
$
10,958
$
13,123
(16.5)%
Capital expenditures
$
1,163
$
500
$
1,744
$
1,733
* See the net sales and EBITDA
from ongoing operations by segment statements in the Financial
Tables in this press release for a reconciliation of this non-GAAP
measure to the most directly comparable measure calculated in
accordance with GAAP.
Second Quarter 2022 Results vs. Second
Quarter 2021 Results
Net sales were flat in the second quarter of 2022 compared to
the second quarter of 2021; sales volume decreased in both Surface
Protection and overwrap films versus the second quarter of
2021.
EBITDA from ongoing operations in the second quarter of 2022
decreased by $1.9 million versus the second quarter of 2021,
primarily due to:
- A $1.6 million decrease from Surface Protection associated with
lower contribution margin related to previously disclosed customer
product transitions ($2.2 million) and competitive pricing
pressures for products unrelated to the customer product
transitions ($1.9 million), partially offset by higher sales
related to non-transitioning products ($1.8 million) and a foreign
currency transaction gain of $0.5 million in the second quarter of
2022 versus a charge of $0.1 million in the second quarter of 2021;
and
- A $0.3 million decrease from overwrap films primarily due to
lower sales volume ($0.3 million) and higher SG&A expenses
($0.4 million), partially offset by a benefit from the pass-through
lag associated with resin costs (charge of $0.2 million in the
second quarter of 2022 versus a charge of $0.6 million in the
second quarter of 2021).
First Six Months of 2022 Results vs. First
Six Months of 2021 Results
Net sales increased by $3.2 million in the first six months of
2022 versus the first six months of 2021 primarily due to an
increase in average selling prices associated with the pass-through
of higher market-driven raw material costs. Sales volume declined
in overwrap films and revenue and volume in Surface Protection were
flat versus the first six months of 2021.
EBITDA from ongoing operations in the first six months of 2022
decreased by $2.1 million versus the first six months of 2021,
primarily due to:
- A $2.5 million decrease from Surface Protection associated with
lower contribution margin related to previously disclosed customer
product transitions ($3.7 million) and competitive pricing
pressures for products unrelated to the customer product
transitions ($3.3 million), partially offset by higher contribution
margin for non-transitioning products ($2.5 million), lower
SG&A expenses ($0.3 million), foreign currency transaction gain
($0.5 million) in the first six months of 2022 versus a charge
($0.1 million) in the first six months of 2021, and the
pass-through lag associated with resin costs (benefit of $0.3
million in the first six months of 2022 versus a charge of $0.7
million in the first six months of 2021); and
- A $0.4 million increase from overwrap films primarily related
to a benefit from the pass-through lag associated with resin costs
(benefit of $0.2 million in the first six months of 2022 versus a
charge of $0.9 million in the first six months of 2021), partially
offset by lower sales volume ($0.3 million) and higher freight and
other operating expenses ($0.3 million).
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.
Customer Product Transitions and Other Factors in Surface
Protection
The Surface Protection component of PE Films supports
manufacturers of optical and other specialty substrates used in
flat panel display products. These films are primarily used by
customers to protect components of displays in the manufacturing
and transportation processes and then discarded.
The Company previously reported the risk that a portion of its
film products used in surface protection applications would be made
obsolete by customer product transitions to less costly alternative
processes or materials. The Company estimates that these
transitions, which principally relate to one customer, adversely
impacted pre-tax income from continuing operations as reported
under GAAP and EBITDA from ongoing operations for PE Films by $14.8
million during 2021 versus 2020. A total decline of $7 million in
pre-tax income from continuing operations as reported under GAAP
and EBITDA from ongoing operations due to the transitions is
expected in 2022 versus 2021, at which time the transitions are
expected to be complete.
The Surface Protection business is continuing to experience
competitive pricing pressures, unrelated to the customer product
transitions, that are expected to adversely impact pre-tax income
from continuing operations as reported under GAAP and EBITDA from
ongoing operations by approximately $6 million for full year 2022
versus 2021. To offset the expected adverse impact of the customer
transitions and pricing pressures, the Company is aggressively
pursuing and making progress in generating contribution from sales
of new surface protection products, applications and customers and
driving production efficiencies and cost savings.
Projected Capital Expenditures and
Depreciation & Amortization
Capital expenditures for PE Films are projected to be $4 million
in 2022, including $2 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 2022. There is no amortization expense for PE Films.
Flexible Packaging Films
Flexible Packaging Films, which is also referred to as Terphane,
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,
2022
2021
2022
2021
Sales volume (lbs)
27,315
24,230
12.7%
53,321
51,638
3.3%
Net sales
$
41,595
$
33,374
24.6%
$
80,839
$
65,895
22.7%
Ongoing operations:
EBITDA
$
7,631
$
8,277
(7.8)%
$
12,665
$
17,901
(29.2)%
Depreciation & amortization
(583
)
(506
)
(15.2)%
(1,132
)
(972
)
(16.5)%
EBIT*
$
7,048
$
7,771
(9.3)%
$
11,533
$
16,929
(31.9)%
Capital expenditures
$
3,264
$
1,117
$
4,809
$
2,388
* See the net sales and EBITDA
from ongoing operations by segment statements in the Financial
Tables in this press release for a reconciliation of this non-GAAP
measure to the most directly comparable measure calculated in
accordance with GAAP.
Second Quarter 2022 Results vs. Second
Quarter 2021 Results
Net sales in the second quarter of 2022 increased 24.6% compared
to the second quarter of 2021, primarily due to higher sales volume
and higher selling prices from the pass-through of higher resin
costs.
EBITDA from ongoing operations in the second quarter of 2022
decreased by $0.6 million versus the second quarter of 2021
primarily due to:
- Higher raw material costs ($5.4 million), higher SG&A
expenses ($0.7 million), and higher fixed ($0.6 million) and
variable costs ($0.3 million), partially offset by higher selling
prices ($4.2 million) from the pass-through of higher resin costs,
higher sales volume ($1.7 million), and favorable product mix ($0.5
million);
- Net unfavorable foreign currency translation of
Real-denominated operating costs ($1.2 million); and
- Foreign currency transaction gains ($0.6 million) in the second
quarter of 2022 compared to foreign currency transaction losses
($0.5 million) in the second quarter of 2021.
First Six Months of 2022 Results vs. First
Six Months of 2021 Results
Net sales in the first six months of 2022 increased 22.7%
compared to the first six months of 2021, primarily due to higher
selling prices from the pass-through of higher resin costs,
favorable product mix and higher sales volume.
EBITDA from ongoing operations in the first six months of 2022
decreased by $5.2 million versus the first six months of 2021
primarily due to:
- Higher raw material costs ($10.8 million), higher fixed ($0.3
million) and variable costs ($1.5 million), and higher SG&A
expenses ($0.7 million), partially offset by higher selling prices
($8.0 million) from the pass-through of higher resin costs, higher
sales volume ($0.9 million) and favorable product mix ($0.8
million);
- Net unfavorable foreign currency translation of
Real-denominated operating costs ($1.5 million); and
- Foreign currency transaction losses ($0.3 million) in the first
six months of 2022 compared to foreign currency transaction losses
($0.1 million) in the first six months of 2021.
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 $8 million in 2022, including $4 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 $2 million in
2022. Amortization expense is projected to be $0.4 million in
2022.
Corporate Expenses, Interest, Taxes & Other
Corporate expenses, net in the first six months of 2022
decreased $1.4 million compared to first six months of 2021
primarily due to lower stock-based compensation ($1.0 million) and
lower professional fees associated with remediation activities
related to the Company's previously disclosed material weaknesses
in internal control over financial reporting ($0.5 million).
Interest expense of $2.0 million in the first six months of 2022
increased $0.3 million compared to the first six months of 2021 due
to higher average interest rates during the second quarter of 2022,
partially offset by lower average debt levels.
The effective tax rate used to compute income tax expense
(benefit) for continuing operations in the first six months of 2022
was 16.9%, compared to 22.5% in the first six months of 2021. The
decrease in the effective tax rate for continuing operations is
primarily due to a 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.
These regulations overhaul various components of the foreign tax
credit regime including the determination of creditable foreign
taxes and limit the amount of foreign taxes that are creditable
against U.S. income taxes. This one-time discrete benefit is
expected to reduce the effective tax rate for the remainder of
2022, which will be offset by an expected increase to the effective
tax rate as the result of Brazilian income tax no longer being
creditable in the U.S. for the foreseeable future. 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 26.2% for the first six months of 2022
versus 22.3% for the first six months of 2021 (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) from continuing operations and the U.S. federal
statutory rate for 2022 and 2021.
Pension expense under GAAP of $6.9 million in the first six
months of 2022 remained consistent with the first six months of
2021. On February 10, 2022, Tredegar announced the initiation of a
process to terminate and settle its frozen defined benefit pension
plan, which could take up to 24 months to complete. In connection
therewith, the Company borrowed funds under its revolving 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 Company expects to realize income tax cash
benefits on the Special Contribution of approximately $11 million
in 2022. Administrative costs for the pension plan through the
settlement process are estimated at $4 to $5 million.
Tredegar’s frozen defined benefit pension plan was underfunded
on a GAAP basis by $69 million at December 31, 2021, comprised of
investments at fair value of $245 million and a projected benefit
obligation (“PBO”) of $314 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
Company estimates that the Special Contribution and changes to the
values of pension plan assets and liabilities resulted in a
decrease in the underfunding on a GAAP basis from $69 million at
December 31, 2021 to approximately $12 million at June 30, 2022.
The ultimate settlement benefit obligation may differ from the PBO,
depending on market factors for 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 estimates that, with
the Special Contribution, there will be no required minimum cash
contributions until final settlement. Pension expense under GAAP is
projected to be approximately $14 million in 2022, 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 Company’s revolving
credit agreement (“Credit EBITDA”), which is used to compute
certain borrowing ratios and a significant consideration for
computing 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) from continuing
operations 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).
Total debt was $101.5 million at June 30, 2022 compared to total
debt of $73.0 million at December 31, 2021. Net debt (debt in
excess of cash and cash equivalents), a non-GAAP financial measure,
was $74.0 million at June 30, 2022 compared to $42.5 million at
December 31, 2021. On June 29, 2022, Tredegar entered into a Second
Amended and Restated Credit Agreement (the “Credit Agreement”) that
replaced its existing $375 million five-year, secured revolving
credit facility that was due to expire on June 28, 2024. The Credit
Agreement is a five-year, revolving, secured credit facility that
permits aggregate borrowings of $375 million and matures on June
29, 2027. The Company believes that its most restrictive covenant
(computed quarterly) is the Total Net Leverage Ratio, which permits
maximum borrowings of up to 4x Credit EBITDA for the trailing four
quarters. 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 $101.0 million and .73x,
respectively, at June 30, 2022. See Note (h) to the Financial
Tables in this press release for a reconciliation of net debt to
the most directly comparable GAAP financial measure.
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. In addition, the Company's current
projections for its businesses could be materially affected by the
highly uncertain impact of the COVID-19 pandemic. As a consequence,
the Company's results could differ materially from its projections,
depending on, among other things, the ultimate impact of the
pandemic on employees, supply chains, customers and the U.S. and
world economies. 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 rising 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 up through
initiating hedging activities to fix underfunding amounts and
assumptions thereafter relating to differences between the ultimate
settlement benefit obligation and the projected benefit obligation,
census data, administrative costs, the effectiveness of hedging
activities and discounts required to liquidate non-public
securities held by the plan;
- an increase in the operating costs incurred by the Company’s
business units, including, for example, the cost of raw materials
and energy;
- 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;
- 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;
- 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 Form 10-K for the year ended December 31, 2021. 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 2021 sales from continuing operations of $826
million. With approximately 2,400 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,
2022
2021
2022
2021
Sales
$
274,363
$
211,129
$
510,929
$
395,951
Other income (expense), net (c)(d)(i)
1,261
8,122
994
8,882
275,624
219,251
511,923
404,833
Cost of goods sold (c)
218,088
158,692
401,348
299,977
Freight
11,036
7,044
19,118
13,267
Selling, R&D and general expenses
(c)
20,616
21,711
43,421
41,816
Amortization of intangibles
666
723
1,329
1,446
Pension and postretirement benefits
3,506
3,540
6,982
7,080
Interest expense
1,234
891
2,020
1,713
Asset impairments and costs associated
with exit and disposal activities, net of adjustments (c)
134
199
126
368
Total
255,280
192,800
474,344
365,667
Income (loss) from continuing operations
before income taxes
20,344
26,451
37,579
39,166
Income tax expense (benefit) (c)
5,556
5,723
6,334
8,820
Net income (loss) from continuing
operations
14,788
20,728
31,245
30,346
Income (loss) from discontinued
operations, net of tax
81
508
47
(79
)
Net income (loss)
$
14,869
$
21,236
$
31,292
$
30,267
Earnings (loss) per share:
Basic:
Continuing operations
$
0.44
$
0.62
$
0.93
$
0.91
Discontinued operations
—
0.02
—
—
Basic earnings (loss) per share
$
0.44
$
0.64
$
0.93
$
0.91
Diluted:
Continuing operations
$
0.44
$
0.61
$
0.93
$
0.90
Discontinued operations
—
0.02
—
—
Diluted earnings (loss) per share
$
0.44
$
0.63
$
0.93
$
0.90
Shares used to compute earnings (loss) per
share:
Basic
33,814
33,594
33,734
33,500
Diluted
33,854
33,740
33,776
33,692
Tredegar Corporation
Net Sales and EBITDA from
Ongoing Operations by Segment
(In Thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Net Sales
Aluminum Extrusions
$
190,308
$
139,281
$
348,417
$
257,405
PE Films
31,424
31,430
62,555
59,384
Flexible Packaging Films
41,595
33,374
80,839
65,895
Total net sales
263,327
204,085
491,811
382,684
Add back freight
11,036
7,044
19,118
13,267
Sales as shown in the condensed
consolidated statements of income
$
274,363
$
211,129
$
510,929
$
395,951
EBITDA from Ongoing Operations
Aluminum Extrusions:
Ongoing operations:
EBITDA (b)
$
21,895
$
19,723
$
45,814
$
33,024
Depreciation & amortization
(4,169
)
(4,032
)
(8,430
)
(8,162
)
EBIT (b)
17,726
15,691
37,384
24,862
Plant shutdowns, asset impairments,
restructurings and other (c)
16
(246
)
(89
)
(63
)
PE Films:
Ongoing operations:
EBITDA (b)
7,065
9,001
14,112
16,213
Depreciation & amortization
(1,559
)
(1,671
)
(3,154
)
(3,090
)
EBIT (b)
5,506
7,330
10,958
13,123
Plant shutdowns, asset impairments,
restructurings and other (c)
(50
)
(151
)
(153
)
(275
)
Flexible Packaging Films:
Ongoing operations:
EBITDA (b)
7,631
8,277
12,665
17,901
Depreciation & amortization
(583
)
(506
)
(1,132
)
(972
)
EBIT (b)
7,048
7,771
11,533
16,929
Plant shutdowns, asset impairments,
restructurings and other (c)
(37
)
8,452
(80
)
8,414
Total
30,209
38,847
59,553
62,990
Interest income
3
25
32
32
Interest expense
1,234
891
2,020
1,713
Gain on investment in kaléo (d)
1,406
200
1,406
918
Stock option-based compensation costs
251
675
882
1,144
Corporate expenses, net (c)
9,789
11,055
20,510
21,917
Income (loss) from continuing operations
before income taxes
20,344
26,451
37,579
39,166
Income tax expense (benefit)
5,556
5,723
6,334
8,820
Net income (loss) from continuing
operations
14,788
20,728
31,245
30,346
Net income (loss) from discontinued
operations, net of tax
81
508
47
(79
)
Net income (loss)
$
14,869
$
21,236
$
31,292
$
30,267
Tredegar Corporation
Condensed Consolidated Balance
Sheets
(In Thousands)
(Unaudited)
June 30, 2022
December 31, 2021
Assets
Cash & cash equivalents
$
27,462
$
30,521
Accounts & other receivables, net
127,995
103,312
Income taxes recoverable
641
2,558
Inventories
121,369
88,569
Prepaid expenses & other
8,180
11,275
Current assets of discontinued
operations
151
178
Total current assets
285,798
236,413
Net property, plant and equipment
173,775
170,381
Right-of-use leased assets
13,111
13,847
Identifiable intangible assets, net
12,879
14,152
Goodwill
70,608
70,608
Deferred income taxes
12,220
15,723
Other assets
3,423
2,460
Total assets
$
571,814
$
523,584
Liabilities and Shareholders’
Equity
Accounts payable
$
174,646
$
123,760
Accrued expenses
32,680
33,104
Lease liability, short-term
2,205
2,158
Income taxes payable
1,362
9,333
Current liabilities of discontinued
operations
71
193
Total current liabilities
210,964
168,548
Lease liability, long-term
11,954
12,831
Long-term debt
101,500
73,000
Pension and other postretirement benefit
obligations, net
28,415
78,265
Other non-current liabilities
7,196
6,218
Shareholders’ equity
211,785
184,722
Total liabilities and shareholders’
equity
$
571,814
$
523,584
Tredegar Corporation
Condensed Consolidated
Statements of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended
2022
2021
Cash flows from operating activities:
Net income (loss)
$
31,292
$
30,267
Adjustments for noncash items:
Depreciation
11,536
10,875
Amortization of intangibles
1,329
1,446
Reduction of right-of-use lease asset
1,072
1,066
Deferred income taxes
2,516
2,477
Accrued pension income and post-retirement
benefits
7,013
7,080
Stock-based compensation expense
1,842
2,444
Gain on investment in kaléo
(1,406
)
(600
)
Changes in assets and liabilities:
Accounts and other receivables
(24,172
)
(12,840
)
Inventories
(31,495
)
(14,020
)
Income taxes recoverable/payable
(6,129
)
2,680
Prepaid expenses and other
(516
)
7,267
Accounts payable and accrued expenses
47,388
8,040
Lease liability
(1,166
)
(1,051
)
Pension and postretirement benefit plan
contributions
(50,314
)
(4,020
)
Other, net
1,781
396
Net cash (used in) provided by operating
activities
(9,429
)
41,507
Cash flows from investing activities:
Capital expenditures
(13,514
)
(11,324
)
Proceeds from the sale of kaléo
1,406
—
Net cash used in investing activities
(12,108
)
(11,324
)
Cash flows from financing activities:
Borrowings
221,250
34,000
Debt principal payments
(192,750
)
(51,000
)
Dividends paid
(8,135
)
(8,070
)
Debt financing fees
(1,245
)
—
Other
(396
)
915
Net cash provided by (used in) financing
activities
18,724
(24,155
)
Effect of exchange rate changes on
cash
(246
)
424
Increase (decrease) in cash and cash
equivalents
(3,059
)
6,452
Cash and cash equivalents at beginning of
period
30,521
11,846
Cash and cash equivalents at end of
period
$
27,462
$
18,298
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) from continuing operations 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) from continuing
operations 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, 2022 and 2021 is shown
below:
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in millions, except per share data)
2022
2021
2022
2021
Net income (loss) from continuing
operations as reported under GAAP1
$
14.8
$
20.7
$
31.2
$
30.3
After-tax effects of:
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
0.1
0.1
0.1
0.3
(Gains) losses from sale of assets and
other:
Gain associated with the investment in
kaléo
(1.0
)
(0.1
)
(1.0
)
(0.7
)
Tax benefit from adjustments to deferred
income tax liabilities under new U.S. tax regulations related to
foreign tax credits
—
—
(3.8
)
—
One-time tax credit in Brazil for
unemployment/social security insurance non-income taxes resulting
from a favorable decision by Brazil's Supreme court regarding the
calculation of such tax3
—
(6.6
)
—
(6.6
)
Other
0.5
2.0
2.1
2.9
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination2
2.7
—
5.4
—
Net income (loss) from ongoing
operations1
$
17.1
$
16.1
$
34.0
$
26.2
Earnings (loss) per share from continuing
operations as reported under GAAP (diluted)
$
0.44
$
0.61
$
0.93
$
0.90
After-tax effects per diluted share
of:
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
—
—
—
0.01
(Gains) losses from sale of assets and
other:
Gain associated with the investment in
kaléo
(0.03
)
—
(0.03
)
(0.02
)
Tax benefit from adjustments to deferred
income tax liabilities under new U.S. tax regulations related to
foreign tax credits
—
—
(0.11
)
—
One-time tax credit in Brazil for
unemployment/social security insurance non-income taxes resulting
from a favorable decision by Brazil's Supreme court regarding the
calculation of such tax3
—
(0.20
)
—
(0.20
)
Other
0.02
0.07
0.06
0.09
Net periodic benefit cost for the frozen
defined benefit pension plan in process of termination2
0.08
—
0.16
—
Earnings (loss) per share from ongoing
operations (diluted)
$
0.51
$
0.48
$
1.01
$
0.78
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
(j) in this press release.
3. For more information, see Note
(i) in 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. 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) from continuing operations 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, 2022 and 2021 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, 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 relief
1
$
—
$
—
$
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 activities and other2
0.1
0.1
1.6
1.2
Professional fees associated with 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 Note
(j) in this press release.
4. Included in "Income tax
expense (benefit)" in the condensed consolidated statements of
income.
Three Months Ended
June 30, 2021
Six Months Ended
June 30, 2021
($ 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
$
0.3
$
0.2
$
0.1
$
0.1
Total for Aluminum Extrusions
$
0.3
$
0.2
$
0.1
$
0.1
PE Films:
(Gains) losses from sale of assets,
investment writedowns and other items:
COVID-19-related expenses1
$
0.1
$
0.1
$
0.3
$
0.2
Total for PE Films
$
0.1
$
0.1
$
0.3
$
0.2
Flexible Packaging Films:
(Gain) losses from sale of assets,
investment writedowns and other items:
One-time tax credit in Brazil for
unemployment/social security insurance non-income taxes resulting
from a favorable decision by Brazil's Supreme Court regarding the
calculation of such taxes1,3
$
(8.5
)
$
(6.6
)
$
(8.5
)
$
(6.6
)
COVID-19-related expenses1
—
—
0.1
0.1
Total for Flexible Packaging Films
$
(8.5
)
$
(6.6
)
$
(8.4
)
$
(6.5
)
Corporate:
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings:
(Gain), net of costs associated with the
sale of the Lake Zurich manufacturing facility assets
$
0.2
$
0.1
$
0.4
$
0.3
(Gain) losses from sale of assets,
investment writedowns and other items:
Professional fees associated with business
development activities and other2
0.8
0.9
1.5
1.4
Professional fees associated with internal
control over financial reporting2
0.9
0.7
1.1
0.8
Transition service fees, net of corporate
costs associated with the divested Personal Care Films
business1
(0.3
)
(0.2
)
(0.6
)
(0.4
)
Write-down of investment in Harbinger
Capital Partners Special Situations Fund1
0.4
0.3
0.5
0.4
Stock-based compensation expense
associated with the fair value remeasurement of awards granted at
the time of the 2020 Special Dividend2
0.1
—
0.5
0.3
Total for Corporate
$
2.1
$
1.8
$
3.4
$
2.8
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 Note
(i) in this press release.
(d)
In the first six months ended June 30,
2021, a pre-tax gain of $0.9 million was recognized on the
Company’s investment in kaleo, Inc. ("kaléo"), which included a
$0.3 million dividend received from kaléo. 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, additional cash consideration of $1.4 million was
received related to customary post-closing adjustments, which is
reported in “Other income (expense), net” in the condensed
consolidated statements of income.
(e)
Tredegar’s presentation of net income
(loss) from ongoing operations is a non-GAAP financial measure that
excludes the effects of gains or losses associated with plant
shutdowns, asset impairments and restructurings, gains or losses
from the sale of assets, goodwill impairment charges, net periodic
benefit cost for the frozen defined benefit pension plan and other
items (which includes unrealized gains and losses for an investment
accounted for under the fair value method), which has been
presented separately and removed from net income (loss) from
continuing operations as reported under GAAP. Net income (loss)
from ongoing operations is a key financial and analytical measure
used by management to gauge the operating performance of Tredegar’s
ongoing operations. It is not intended to represent the stand-alone
results for Tredegar’s ongoing operations under GAAP and should not
be considered as an alternative to net income (loss) from
continuing operations as defined by GAAP. It excludes items that we
believe do not relate to Tredegar’s ongoing operations.
Reconciliations of the pre-tax and
post-tax balances attributed to net income (loss) from ongoing
operations for the three and six months ended June 30, 2022 and
2021 are presented below in order to show the impact on the
effective tax rate:
($ in millions)
Pre-tax
Tax Expense
(Benefit)
After-Tax
Effective
Tax Rate
Three Months Ended June 30,
2022
(a)
(b)
(b)/(a)
Net income (loss) from continuing
operations reported under GAAP
$
20.3
$
5.5
$
14.8
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
$
23.3
$
6.2
$
17.1
26.6
%
Three Months Ended June 30,
2021
Net income (loss) from continuing
operations reported under GAAP
$
26.5
$
5.8
$
20.7
21.9
%
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
0.2
$
0.1
0.1
(Gains) losses from sale of assets and
other
(6.4
)
(1.7
)
(4.7
)
Net income (loss) from ongoing
operations
$
20.3
$
4.2
$
16.1
20.7
%
Six Months Ended June 30, 2022
Net income (loss) from continuing
operations reported under GAAP
$
37.6
$
6.4
$
31.2
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
$
12.1
$
34.0
26.2
%
Six Months Ended June 30, 2021
Net income (loss) from continuing
operations reported under GAAP
$
39.2
$
8.9
$
30.3
22.5
%
(Gains) losses associated with plant
shutdowns, asset impairments and restructurings
0.4
0.1
0.3
(Gains) losses from sale of assets and
other
(5.9
)
(1.5
)
(4.4
)
Net income (loss) from ongoing
operations
$
33.7
$
7.5
$
26.2
22.3
%
(h)
Net debt is calculated as follows:
June 30,
December 31,
(in millions)
2022
2021
Debt
$
101.5
$
73.0
Less: Cash and cash equivalents
27.5
30.5
Net debt
$
74.0
$
42.5
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.
(i)
Represents a one-time tax credit in Brazil
for unemployment/social security insurance non-income taxes
("PIS/COFINS") resulting from a favorable decision by Brazil’s
Supreme Court regarding the calculation of such tax. In May 2021,
the Brazil Supreme Court ruled in a leading case related to the
amount of Brazilian value-added tax to exclude from the calculation
of PIS/COFINS. As a result, in the second quarter of 2021, the
Company recorded a pre-tax gain of $8.5 million for certain excess
PIS/COFINS paid from 2003 to 2021, plus applicable interest, which
the Company applied to required Brazilian federal tax payments
during 2021. The pretax gain was recorded in “Other income
(expense), net” in the condensed consolidated statements of
income.
(j)
Prior to the Special Contribution (see
"Corporate Expenses, Interest, Taxes & Other" section of this
press release), GAAP pension expense was a reasonable proxy for the
Company’s required minimum cash contribution to the pension plan.
The Company estimates that, with the Special Contribution, there
will be no required minimum cash contributions until final
settlement. Pension expense under GAAP is projected to be
approximately $14 million in 2022, 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 Company’s revolving
credit agreement, which is used to compute certain borrowing ratios
and a significant consideration for computing non-GAAP net income
(loss) from ongoing operations. Accordingly, beginning in 2022,
GAAP pension expense has been presented separately and removed from
net income (loss) from continuing operations 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220808005208/en/
Tredegar Corporation Neill Bellamy, 804-330-1211
neill.bellamy@tredegar.com
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