What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-16 compared with 2022-03-11 · 42 added, 25 removed, 126 unchanged (35% of the section changed)

4 unchanged sentences

On October 30, 2020, the Company completed the sale of its personal care films business (“Personal Care Films”).

The transaction excluded the packaging film lines and related operations located at the Pottsville, Pennsylvania manufacturing site (“Pottsville Packaging”), which are now being reported within the Surface Protection component of PE Films.

Commencing in the third quarter of 2020, all historical results for Personal Care Films have been presented as discontinued operations.

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

The sale did not represent a strategic shift nor did it have a major effect on the Company’s historical and ongoing operations, thus all financial information for Bright View has been presented as continuing operations within the PE Films segment.

For more information on these transactions, see Note 15 “Discontinued Operations” to the Consolidated Financial Statements included in Item 15.

For more information on this transaction, see Note 15 “Discontinued Operations” to the Consolidated Financial Statements included in Item 15.

“Exhibits and Financial Statement Schedules” (“Item 15”) of this Annual Report on Form 10-K for the year ended December 31, 2022 (“Form 10-K”).

2 unchanged sentences

Bonnell Aluminum has manufacturing facilities located in the United States (“U.S.”).

Aluminum Extrusions manufactures mill (unfinished), machined, anodized and painted (finished) and fabricated aluminum extrusions for sale directly to fabricators and distributors.

It also sells branded aluminum flooring trims under its Futura Transitions TM line and aluminum framing systems under its TSLOTS TM line.

Aluminum Extrusions manufactures mill (unfinished), machined, anodized and painted, and thermally improved aluminum extrusions for sale directly to fabricators and distributors.

It also manufactures and sells branded product lines:

Futura Transitions TM by Bonnell Aluminum (flooring trims) and TSLOTS TM by Bonnell Aluminum (structural aluminum framing systems).

Aluminum Extrusions competes primarily on the basis of product quality, service and price.

3 unchanged sentences

Major Markets End-Uses

Building & construction nonresidential Commercial windows and doors, curtain walls, storefronts and entrances, automatic entry doors, walkway covers, ducts, louvers and vents, office wall panels, partitions and interior enclosures, acoustical walls and ceilings, point of purchase displays, pre-engineered structures, and flooring trims (Futura Transitions TM )

Building & construction - nonresidential Commercial windows and doors, curtain walls, storefronts and entrances, automatic entry doors, walkway covers, ducts, louvers and vents, office wall panels, partitions and interior enclosures, acoustical walls and ceilings, point of purchase displays, pre-engineered structures, and flooring trims (Futura Transitions TM by Bonnell Aluminum)

Building & construction - residential Residential windows and doors, shower and tub enclosures, railing and support systems, venetian blinds, and swimming pools

Automotive and transportation Automotive and light truck structural components, spare parts, after-market automotive accessories, grills for heavy trucks, travel trailers and recreation vehicles

Automotive & transportation Automotive and light truck structural components, battery enclosures for electric vehicles, after-market automotive accessories, grills for heavy trucks, travel trailers and recreation vehicles

Consumer durables Office furniture, pleasure boats, refrigerators and freezers, appliances and sporting goods

Machinery & equipment Material handling equipment, conveyors and conveying systems, medical equipment, industrial fans and aluminum framing systems (TSLOTS TM )

Machinery & equipment Material handling equipment, conveyor systems, medical equipment, industrial fans and aluminum framing systems (TSLOTS TM by Bonnell Aluminum)

Distribution (metal service centers specializing in stock and release programs and custom fabrications to small manufacturers) Various custom profiles including storm shutters, pleasure boat accessories, theater set structures and various standard profiles (including rod, bar, tube and pipe)

Electrical and renewable energy Lighting fixtures, electronic apparatus, solar panel brackets and rigid and flexible conduits

Electrical & renewable energy Lighting fixtures, electronic apparatus, solar panel brackets and rigid and flexible conduits

Aluminum Extrusions’ net sales (sales less freight) by market segment for the years ended December 31, 2022, 2021 and 2020 is shown below:

10 unchanged sentences

Total 100% 100% 100%

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

For more business segment information, see Note 13 “Business Segments” to the Consolidated Financial Statements in Item 15.

In 2022, 2021 and 2020, Aluminum Extrusions net sales accounted for approximately 71%, 67% and 63% of Tredegar’s consolidated net sales, respectively.

Overall backlog in Aluminum Extrusions was approximately $306.4 million at December 31, 2021 compared to approximately $74.2 million at December 31, 2020, an increase of $232.2 million, or approximately 313%.

The increased backlog in 2021 compared to 2020 is primarily due to increased demand (33% increase in bookings), while experiencing a shortage of labor to meet existing demand and desired shipment levels.

Net sales for Aluminum Extrusions, which the Company believes are cyclical in nature due to the seasonal nature of end-use markets, were $539.3 million in 2021, $455.7 million in 2020 and $529.6 million in 2019.

Open Orders .

Overall open orders in Aluminum Extrusions was approximately $136.0 million, or 41 million pounds, at December 31, 2022 compared to approximately $306.4 million, or 97 million pounds, at December 31, 2021, a decrease of $170.4 million, or approximately 56%.

The reduction in open orders in 2022 compared to 2021 is primarily due to order cancellations as customers report high inventory levels.

During the second half of 2022, the Company has observed order cancellations as customers report high inventory levels.

Aluminum Extrusions expects the confluence of orders, cancellations and shipments to drive open orders to pre-COVID-19, normalized levels during the first half of 2023.

The outlook for demand and shipments in 2023 remains uncertain given recessionary concerns.

Sales volume for Aluminum Extrusions, which the Company believes is cyclical and seasonal in nature due to its end-use markets, was 174.7 million pounds in 2022, 183.4 million pounds in 2021 and 186.4 million pounds in 2020.

Raw Materials .

The primary raw materials used by Aluminum Extrusions consist of aluminum ingot, aluminum scrap and various alloys, which are purchased from domestic and foreign producers in open-market purchases and under annual contracts.

Refer to Quantitative and Qualitative Disclosures About Market Risk in Item 7.

"Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K (“Item 7”) for additional information on aluminum price trends.

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.

Aluminum Extrusions continues to navigate through supply chain issues for paint and other non-aluminum raw materials.

Refer to Item 7a.

"Quantitative and Qualitative Disclosures About Market Risk” of this Form 10-K (“Item 7a”) for additional information on aluminum price trends.

Aluminum Extrusions believes that it has adequate supply agreements for aluminum raw materials in 2023 despite continued supply chain cost increases related to paint, chemicals, packaging and other non-aluminum raw materials.

PE Films produces surface protection films, polyethylene overwrap films and films for other markets.

Tredegar’s Surface Protection unit produces single- and multi-layer surface protection films sold under the UltraMask®, ForceField™, ForceField PEARL ® and Pearl A™ brand names.

Tredegar’s Surface Protection unit produces single- and multi-layer surface protection films sold under the UltraMask®, ForceField™, ForceField PEARL ® , Pearl A™, Lithyn™ and Obsidian™ brand names.

These films, which are manufactured at facilities in the U.S.

and China, support manufacturers of optical and other specialty substrates used in high-technology applications, most notably protecting high-value components of flat panel and flexible displays used in televisions, monitors, notebooks, smartphones, tablets, e-readers, automobiles and digital signage, during the manufacturing and transportation process.

and China, support manufacturers of optical and other specialty substrates used in high-technology applications, most notably protecting high-value components of flat panel and flexible displays used in televisions, monitors, notebooks, smartphones, tablets, e-readers, digital signage, semiconductors and automobiles during the manufacturing and transportation process.

Tredegar’s Lithyn™ Series represents a new class of tapes for wafer thinning, singulation and transportation designed to enable customers’ to overcome processing challenges and reduce costs.

The Obsidian™ series of products is designed for usage in automotive applications.

In 2022, 2021 and 2020, PE Films accounted for approximately 11%, 15% and 19% of Tredegar’s consolidated net sales, respectively.

4 unchanged sentences

These raw materials are obtained from domestic and foreign suppliers at competitive prices.

Refer to Quantitative and Qualitative Disclosures About Market Risk in Item 7 for additional information on resin price trends.

Refer to Item 7a for additional information on resin price trends.

PE Films believes that there will be an adequate supply of polyethylene and polypropylene resins in the foreseeable future.

17 unchanged sentences

The primary raw materials used by Flexible Packaging Films to produce polyester resins are purified terephthalic acid (“PTA”) and monoethylene glycol (“MEG”).

Flexible Packaging Films also purchases additional polyester resins directly from suppliers.

Flexible Packaging Films also purchases other polyester resins directly from suppliers.

These raw materials are obtained from Brazilian and foreign suppliers at competitive prices.

Terphane c ontinues to monitor cost escalations to adjust selling prices as market dynamics permit and believes that there will be an adequate supply of polyester resins, PTA and MEG in the foreseeable future.

Refer to Item 7a for additional information on resin price trends.

Intellectual Property .

21 unchanged sentences

Like environmental regulations, current or future privacy and anti-corruption and anti-bribery legislation or regulations may subject the Company to additional capital expenditures, operating expenses or other compliance costs, the amounts and timing of which are not presently determinable but could be significant.

Any failure to comply with current or future laws and regulations, including environmental, privacy and anti-corruption and anti-bribery laws and regulations, could subject Tredegar to substantial penalties, fines, costs and expenses.

Any failure to comply with current or future laws and regulations, including environmental, privacy and anti-corruption and anti-bribery laws and regulations, could subject Tredegar

to substantial penalties, fines, costs and expenses.

For further discussion regarding certain environmental, privacy and anti-corruption and anti-bribery laws and regulations to which the Company is subject, see Item 1A below.

8 unchanged sentences

Tredegar has continuously exceeded the industry standards for safety.

The Company uses various forms of employee safety metrics to assess the health and safety performance of its Aluminum Extrusions, PE Films and Flexible Packaging operations, including employee safety data which is available on the Company’s website at https://tredegar.com/about-tredegar/committed-to-our-employees .

Tredegar has also instituted additional safety precautions during the ongoing COVID-19 pandemic as described in "The Impact of COVID-19" included in Item 7.

Additionally, Aluminum Extrusions has on-site health clinics at its Carthage and Clearfield facilities.

26 unchanged sentences

Tredegar’s website address is www.tredegar.com .

The Company makes available, through its website, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”).

with, or furnished to, the Securities and Exchange Commission (“SEC”).

Information filed electronically with the SEC can be accessed on its website at www.sec.gov .

1 unchanged sentence

The information on or that can be accessed through the Company’s website is not, and shall not be deemed to be, a part of this Form 10-K or incorporated into other filings it makes with the SEC.

Forward-looking and Cautionary Statements

Some of the information contained in this Form 10-K 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.

For risks and important factors that could cause actual results to differ from expectations, refer to the reports that Tredegar files with or furnishes the SEC from time-to-time, including the risks and important factors set forth in Item 1A.

Readers are urged to review and consider carefully the disclosures Tredegar makes in the reports Tredegar files with or furnishes to the SEC.

Tredegar does not undertake, and expressly disclaims any duty, to update any forward-looking statement 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.

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 1. Business