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Item 5. Market for Registrant’s Common Equity

2022-03-11 compared with 2021-03-16 · 0 added, 164 removed, 26 unchanged (86% of the section changed)

25 unchanged sentences

SELECTED FINANCIAL DATA

The tables that follow present certain selected financial and segment information for the five years ended December 31, 2020.

All historical results for Personal Care Films have been presented as discontinued operations.

The surface protection component of the PE Films segment now includes Pottsville Packaging.

FIVE-YEAR SUMMARY

Tredegar Corporation and Subsidiaries

Years Ended December 31 2020 2019 2018 2017 2016

(In thousands, except per-share data)

Results of Operations:

Sales $ 755,290 $ 826,324 $ 851,834 $ 725,867 $ 595,665

Other income (expense), net (g) (67,294) (a) 28,371 (a) 30,455 (a) 51,718 (b) 2,225 (b)

Total 687,996 854,695 882,289 777,585 597,890

Cost of goods sold (i) 558,967 (a) 641,140 (a) 679,665 (a) 579,545 (b) 472,767 (b)

Freight 25,686 28,980 27,170 22,273 17,864

Selling, general & administrative (i) 84,246 (a) 76,598 (a) 67,929 (a) 65,189 (b) 58,334 (b)

Research and development 8,398 7,893 6,672 6,189 6,877

Amortization of identifiable intangibles 3,017 13,601 3,976 6,198 3,978

Pension and postretirement benefits (i) 14,720 9,642 10,406 10,193 11,047

Interest expense 2,587 4,051 5,702 6,170 3,806

Asset impairments and costs associated with exit and disposal activities, net of adjustments 1,725 (a) 784 (a) 398 (a) 102,114 (b) 302 (b)

Goodwill impairment 13,696 (c) — — — —

Total 713,042 782,689 801,918 797,871 574,975

Income (loss) from continuing operations before income taxes (25,046) 72,006 80,371 (20,286) 22,915

Income tax expense (benefit) (8,213) 13,545 18,807 (57,753) 4,786

Income (loss) from continuing operations (16,833) 58,461 61,564 37,467 18,129

Income (loss) from discontinued operations, net of tax (58,611) (10,202) (36,722) 784 6,337

Net income (loss) $ (75,444) $ 48,259 $ 24,842 $ 38,251 $ 24,466

Diluted earnings (loss) per share:

Continuing operations $ (0.51) $ 1.76 $ 1.86 $ 1.14 $ 0.55

Discontinued operations (1.75) (0.31) (1.11) 0.02 0.20

Diluted earnings (loss) per share $ (2.26) $ 1.45 $ 0.75 $ 1.16 $ 0.75

Refer to Notes to Financial Tables that follow these tables.

FIVE-YEAR SUMMARY

Tredegar Corporation and Subsidiaries

Years Ended December 31 2020 2019 2018 2017 2016

(In thousands, except per-share data)

Equity per share (h) $ 3.26 $ 11.29 $ 10.70 $ 10.41 $ 9.44

Cash dividends declared per share (n) $ 6.45 $ 0.46 $ 0.44 $ 0.44 $ 0.44

Weighted average common shares outstanding during the period 33,402 33,236 33,068 32,946 32,762

Shares used to compute diluted earnings (loss) per share during the period 33,402 33,258 33,092 32,951 32,775

Shares outstanding at end of period 33,457 33,365 33,176 33,017 32,934

Closing market price per share:

High $ 22.32 $ 23.31 $ 26.25 $ 25.00 $ 25.55

Low $ 11.32 $ 15.59 $ 15.00 $ 14.85 $ 11.68

End of year $ 16.70 $ 22.35 $ 15.86 $ 19.20 $ 24.00

Total return to shareholders (d)(n) 3.6 % 43.8 % (15.1) % (18.2) % 79.4 %

Financial Position:

Total assets $ 514,870 $ 712,668 $ 707,373 $ 755,743 $ 651,162

Cash and cash equivalents $ 11,846 $ 31,422 $ 34,397 $ 36,491 $ 29,511

Debt $ 134,000 $ 42,000 $ 101,500 $ 152,000 $ 95,000

Shareholders’ equity $ 109,055 $ 376,749 $ 354,857 $ 343,780 $ 310,783

Equity market capitalization (e) $ 558,735 $ 745,709 $ 526,172 $ 633,935 $ 790,411

Refer to Notes to Financial Tables that follow these tables.

SEGMENT TABLES

Tredegar Corporation and Subsidiaries

Net Sales (f)

Years Ended December 31 2020 2019 2018 2017 2016

(In thousands)

Aluminum Extrusions $ 455,711 $ 529,602 $ 573,126 $ 466,833 $ 360,098

PE Films 139,288 133,807 127,708 128,406 109,674

Flexible Packaging Films 134,605 133,935 123,830 108,355 108,028

Total net sales 729,604 797,344 824,664 703,594 577,800

Add back freight 25,686 28,980 27,170 22,273 17,864

Sales as shown in Consolidated Statements of Income $ 755,290 $ 826,324 $ 851,834 $ 725,867 $ 595,664

Identifiable Assets

As of December 31 2020 2019 2018 2017 2016

(In thousands)

Aluminum Extrusions $ 244,560 $ 265,027 $ 281,372 $ 268,127 $ 147,639

PE Films 119,013 124,269 118,496 123,507 117,307

Flexible Packaging Films 66,453 74,016 58,964 49,915 156,836

Subtotal 430,026 463,312 458,832 441,549 421,782

General corporate 71,508 109,655 99,570 109,882 37,345

Cash and cash equivalents 11,846 31,422 34,397 36,491 29,511

Discontinued operations 1,490 108,279 114,574 167,821 162,524

Total $ 514,870 $ 712,668 $ 707,373 $ 755,743 $ 651,162

Refer to Notes to Financial Tables that follow these tables.

SEGMENT TABLES

Tredegar Corporation and Subsidiaries

EBITDA from Ongoing Operations (l)

Years Ended December 31 2020 2019 2018 2017 2016

(In thousands)

Aluminum Extrusions:

Ongoing operations:

EBITDA $ 55,137 $ 65,683 $ 65,479 $ 58,524 $ 46,967

Depreciation & amortization (j) (17,403) (16,719) (16,866) (15,070) (9,173)

EBIT (m) 37,734 48,964 48,613 43,454 37,794

Plant shutdowns, asset impairments, restructurings and other (3,506) (a) (561) (a) (505) (a) 321 (b) (741) (b)

Goodwill impairment charge (13,696) (c) — — — —

Trade name accelerated amortization — (10,040) (j) — — —

Ongoing operations:

EBITDA 45,107 41,133 32,404 37,029 21,535

Depreciation & amortization (6,762) (5,860) (6,201) (6,117) (5,718)

EBIT (m) 38,345 35,273 26,203 30,912 15,817

Plant shutdowns, asset impairments, restructurings and other (1,974) (a) (733) (a) (186) (a) (157) (b) (1) (b)

Flexible Packaging Films:

Ongoing operations:

EBITDA 30,645 14,737 11,154 7,817 11,279

Depreciation & amortization (1,761) (1,517) (1,262) (10,443) (9,505)

EBIT (m) 28,884 13,220 9,892 (2,626) 1,774

Plant shutdowns, asset impairments, restructurings and other (18) — (a) (45) (a) (89,398) (b) (214) (b)

Total 85,769 86,123 83,972 (17,494) 54,429

Interest income 44 66 146 54 106

Interest expense 2,587 4,051 5,702 6,170 3,806

Gain (loss) on investment in kaléo accounted for under the fair value method (g) (60,900) 28,482 30,600 33,800 1,600

Loss on sale of Bright View (o) (2,299) — — — —

Loss on sale of investment property — — (38) — —

Unrealized loss on investment property — — (186) — (1,032)

Stock option-based compensation expense 2,161 4,132 1,156 245 81

Corporate expenses, net (k) 42,912 (a) 34,482 (a) 27,265 (a) 30,231 (b) 28,301 (b)

Income (loss) from continuing operations before income taxes (25,046) 72,006 80,371 (20,286) 22,915

Income tax expense (benefit) (8,213) 13,545 18,807 (57,753) 4,786

Income (loss) from continuing operations (16,833) 58,461 61,564 37,467 18,129

Income (loss) from discontinued operations, net of tax (58,611) (10,202) (36,722) 784 6,337 (g)

Net income (loss) $ (75,444) $ 48,259 $ 24,842 $ 38,251 $ 24,466

Refer to Notes to Financial Tables that follow these tables.

SEGMENT TABLES

Tredegar Corporation and Subsidiaries

Depreciation and Amortization

Years Ended December 31 2020 2019 2018 2017 2016

(In thousands)

Aluminum Extrusions $ 17,403 $ 26,759 $ 16,866 $ 15,070 $ 9,173

PE Films 6,762 5,860 6,201 6,117 5,716

Flexible Packaging Films 1,761 1,517 1,262 10,443 9,505

Subtotal 25,926 34,136 24,329 31,630 24,394

General corporate (k) 520 186 163 155 141

Discontinued operations 5,511 9,962 9,312 8,492 7,937

Total depreciation and amortization expense $ 31,957 $ 44,284 $ 33,804 $ 40,277 $ 32,472

Capital Expenditures

Years Ended December 31 2020 2019 2018 2017 2016

(In thousands)

Aluminum Extrusions $ 10,260 $ 17,855 $ 12,966 $ 25,653 $ 15,918

PE Films 6,024 8,567 2,523 4,648 9,411

Flexible Packaging Films 4,959 8,866 5,423 3,619 3,391

Subtotal 21,243 35,288 20,912 33,920 28,720

General corporate 200 223 427 61 389

Discontinued operations 1,912 15,353 19,475 10,381 16,348

Total capital expenditures $ 23,355 $ 50,864 $ 40,814 $ 44,362 $ 45,457

Refer to Notes to Financial Tables that follow these tables.

NOTES TO FINANCIAL TABLES

(a) For a description of plant shutdowns, asset impairments, restructurings and other charges for 2020, 2019, and 2018, see the plant shutdowns, asset impairments, restructurings and other tables for the respective periods in Results of Operations in Item 7.

(b) For a description of plant shutdowns, asset impairments, restructurings and other charges for 2017 and 2016, see Item 6.

“Selected Financial Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

(c) Results for 2020 included a goodwill impairment charge of $13.7 million ($10.5 million after taxes) recognized in Bonnell Aluminum in the first quarter of 2020 upon completion of an impairment analysis performed as of March 31, 2020.

(d) Total return to shareholders is defined as the change in stock price during the year plus dividends per share, divided by the stock price at the beginning of the year.

(e) Equity market capitalization is the closing market price per share for the period multiplied by the shares outstanding at the end of the period.

(f) Net sales represents gross sales less freight.

The Company uses net sales as its measure of revenues from external customers at the segment level.

(g) The gains and losses on the Company’s investment in kaléo are included in “Other income (expense), net” in the consolidated statements of income.

See Note 4 to the Consolidated Financial Statements in Item 15 for more details for the years 2020, 2019 and 2018.

(h) Equity per share is computed by dividing shareholders’ equity at year end by the shares outstanding at year end.

(i) For the year ended December 31, 2017, the pension and postretirement benefit expenses recorded in Cost of goods sold and Selling, general and administrative expenses were reclassified to a new line item, Pension and postretirement benefits, on the consolidated statements of income, due to the retrospective adoption of Accounting Standards Update (“ASU”) 2017-07.

(j) Depreciation and amortization (“D&A”) in 2019 for Aluminum Extrusions excludes $10.0 million for accelerated amortization of trade names as a result of a rebranding initiative.

(k) Corporate depreciation and amortization is included in Corporate expenses, net, on the EBITDA from ongoing operations table above.

(l) In the fourth quarter of 2019, the Company changed its segment measure of profit and loss from operating profit from ongoing operations to EBITDA (earnings before interest, taxes, depreciation and amortization) from ongoing operations.

EBITDA from ongoing operations is the key profitability metric used by the Company’s chief operating decision maker to assess segment financial performance.

See Note 5 to the Consolidated Financial Statements in Item 15 for additional business segment information.

(m) EBIT (earnings before interest and taxes) from ongoing operations is a non-GAAP financial measure included in the reconciliation of segment financial information to consolidated results for the Company.

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 as defined by GAAP.

EBIT is a widely understood and utilized metric that is meaningful to certain investors.

We believe 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.

(n) On December 1, 2020, the Board declared a special cash dividend of $200 million or $5.97 per share on the Company’s common stock.

The special cash dividend was payable on December 18, 2020 to shareholders of record at the close of business on December 11, 2020.

(o) In December 2020, the Company entered into a definitive agreement and completed the sale of Bright View.

See Note 2 to the Consolidated Financial Statements in Item 15 for more details.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity