Tredegar (TG) Q3 2024 earnings summary

Executive summary

• Q3 2024 net loss was $3.9 million ($0.11/share), a significant improvement from $50.4 million loss ($1.47/share) in Q3 2023, driven by higher sales and lower non-recurring charges.

• Sale of the Flexible Packaging Films business (Terphane) to Oben Group completed Nov 1, 2024, for $60 million cash; historical results for Terphane will be reported as discontinued operations.

• EBITDA from ongoing operations improved across all segments year-over-year, with notable volume and margin gains in PE Films and Flexible Packaging Films.

• Ongoing operations at break-even due to low profitability at Bonnell Aluminum, impacted by manufacturing inefficiencies and margin pressures.

Financial highlights

• Q3 2024 sales rose to $182.1 million, up from $166.2 million in Q3 2023; nine-month sales reached $548.0 million, up from $535.5 million.

• Gross profit margin improved to 12.8% in Q3 2024 from 9.0% in Q3 2023; nine-month margin was 15.5% vs. 10.9% prior year.

• Q3 2024 consolidated EBITDA from ongoing operations was $10.1 million vs. $4.1 million in Q3 2023.

• Net debt at September 30, 2024, was $136.8 million; total debt $143.4 million; cash $6.6 million.

• Q3 2024 EPS was $(0.11) vs. $(1.47) in Q3 2023; nine-month EPS was $0.24 vs. $(2.06) prior year.

Outlook and guidance

• Management expects sufficient liquidity for at least the next 12 months, supported by Terphane sale proceeds and borrowing capacity.

• Capital expenditures for 2024 projected at $8 million for Aluminum Extrusions and $2 million for PE Films.

• Depreciation and amortization for 2024 projected at $16 million for Aluminum Extrusions and $5 million for PE Films.

• Company expects continued margin pressures in Aluminum Extrusions due to imports and excess capacity.