What changed in this filing

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Item 1. Business

2025-03-12 compared with 2024-03-15 · 25 added, 55 removed, 108 unchanged (43% of the section changed)

Description of Business

Tredegar Corporation (“Tredegar”) is engaged, through its subsidiaries, in the manufacture of aluminum extrusions, polyethylene (“PE”) plastic films and polyester (“PET”) films.

Tredegar Corporation is engaged, through its subsidiaries, in the manufacture of aluminum extrusions and polyethylene and polypropylene (“PE”) plastic films.

Unless the context requires otherwise, all references herein to “Tredegar,” “the Company,” “we,” “us” or “our” are to Tredegar Corporation and its consolidated subsidiaries.

The Company's reportable business segments are Aluminum Extrusions, PE Films and Flexible Packaging Films (also referred to as “Terphane”).

On September 1, 2023, the Company announced that it had entered into a definitive agreement to sell Terphane to Oben Group (the “Contingent Terphane Sale”).

Completion of the sale is contingent upon the satisfaction of customary closing conditions, including the receipt of certain competition filing approvals by authorities in Brazil and Columbia.

For more information see “ Status of Current Corporate Strategic Initiatives - Agreement to Sell Terphane ” in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for the year ended December 31, 2023 (“Form 10-K”).

The Company's reportable business segments are Aluminum Extrusions and PE Films.

On November 1, 2024, the Company completed the sale of its flexible packaging films business (also referred to as “Terphane”) headquartered in Brazil to Oben Group (“Oben”).

Commencing in the fourth quarter of 2024, all historical results for Terphane have been presented as discontinued operations.

For more information on this transaction, see Note 16.

“Divestitures” to the Consolidated Financial Statements included in Item 15.

“Exhibits and Financial Statement Schedules” of this Form 10-K (“Item 15”).

Aluminum Extrusions

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The Company uses net sales 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 included in Item 15.

“Exhibits and Financial Statement Schedules” of this Form 10-K (“Item 15”).

For more business segment information, see Note 12 “Business Segments” to the Consolidated Financial Statements included in Item 15 of this Form 10-K.

In 2024, 2023 and 2022, Aluminum Extrusions net sales accounted for approximately 82%, 86% and 87% of Tredegar’s consolidated net sales, respectively.

Open Orders .

Overall open orders in Aluminum Extrusions were approximately $48.0 million, or 14 million pounds, at December 31, 2023 compared to approximately $136.0 million, or 41 million pounds, at December 31, 2022, a decrease of $88.0 million, or approximately 65%.

Overall open orders in Aluminum Extrusions were approximately $55.0 million, or 17 million pounds, at December 31, 2024 compared to approximately $48.0 million, or 14 million pounds, at December 31, 2023, an increase of $7.0 million, or approximately 15%.

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.

We believe that current open orders are below pre-pandemic levels due to higher interest rates, tighter lender requirements and the increase in remote working, which particularly impacts the non-residential B&C end-use market.

In addition, data indicates that aluminum extrusion imports increased significantly in recent years, especially during the pandemic, and some of Aluminum Extrusions’ customers may have sourced, and continue to source, aluminum extrusions from producers outside the U.S.

Sales volume for Aluminum Extrusions, which the Company believes is cyclical and seasonal in nature due to its end-use markets, was 139.2 million pounds in 2024, 138.5 million pounds in 2023 and 174.7 million pounds in 2022.

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"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 2024.

Aluminum Extrusions believes that it has adequate supply agreements for aluminum and other product cost components in 2025.

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

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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, digital signage, semiconductors and automobiles 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, electronic shelf labels and automobiles during the manufacturing and transportation processes.

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

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

Research and Development .

Tredegar’s spending for research and development (“R&D”) activities in 2023, 2022 and 2021 was primarily related to PE Films.

During the third quarter of 2023, the Company adopted a plan to close the PE Films technical center in Richmond, VA.

Future R&D activities will be performed at the facility in Pottsville, PA.

R&D spending by the PE Films was approximately $2.9 million, $5.3 million and $5.7 million in 2023, 2022 and 2021, respectively.

PE Films’ products are sold primarily in the U.S.

and Asia, with the top four customers, collectively, comprising 87% of its net sales in 2023 and 88% in 2022 and 2021.

and Asia, with the top four customers, collectively, comprising 88% of its net sales in 2024, 87% in 2023 and 88% in 2022.

No single PE Films customer exceeds 10% of Tredegar’s consolidated net sales.

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“Risk Factors” of this Form 10-K (“Item 1A”).

Flexible Packaging Films

Flexible Packaging Films produces PET-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.

These differentiated, high-value films are primarily manufactured in Brazil and sold in Latin America and the U.S.

under the Terphane ® , Sealphane ® and Ecophane ® brand names.

Major end uses include food packaging and industrial applications.

Flexible Packaging Films competes in all of its markets on the basis of product quality, service and price.

In 2023, 2022 and 2021, Terphane accounted for approximately 19%, 19% and 18% of Tredegar’s consolidated net sales, respectively.

Raw Materials .

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 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 .

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registered trademarks).

Flexible Packaging Films held 1 U.S.

patent and 17 registered trademarks (including 4 U.S.

registered trademarks).

Aluminum Extrusions held no U.S.

patents and 3 U.S.

registered trademarks.

As of December 31, 2024, these patents had remaining terms of 5 to 16 years.

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Therefore, in order to comply with current or future environmental legislation or regulations, the Company may be subject to additional capital expenditures, operating expenses or other compliance costs, the amounts and timing of which are not presently determinable, but which could be significant, including constructing new facilities or modifying existing facilities.

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.

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.

Like environmental regulations, current or future workplace safety, 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, workplace safety, 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, health and safety, privacy and anti-corruption and anti-bribery laws and regulations to which the Company is subject, see Item 1A below.

Human Capital Management.

Tredegar employed approximately 1,900 people at December 31, 2023 located in the U.S., Brazil, and Asia, of which 75% are located in the U.S.

Tredegar had approximately 1,500 employees at December 31, 2024 located in the U.S.

and Asia, of which 96% are located in the U.S.

Approximately 20% of the Company’s employees are represented by labor unions located in the U.S.

under various collective bargaining agreements with varying durations and expiration dates, none of which expire before 2025.

All of Tredegar’s Brazilian employees are represented by a national labor union.

Generally, the total number of employees of Tredegar does not significantly fluctuate throughout the year.

However, acquisition or divestiture activity, or changes in the level of business activity may impact employee levels.

under two collective bargaining agreements with varying durations and expiration dates.

The labor union representing employees at Bonnell Aluminum’s Newnan Plant ratified a new collective bargaining agreement in January 2025.

Tredegar will negotiate with the labor union representing employees in PE Films’s Pottsville Plant later in 2025.

Health and Safety

Tredegar has continuously exceeded the industry standards for safety in each of its respective manufacturing sectors.

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 www.tredegar.com/about-tredegar/our-broader-commitments/committed-to-our-employees/ .

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

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

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The Company seeks to retain employees by offering competitive wages, benefits and training opportunities.

To assess and monitor employee retention and engagement, the Company surveys employees and takes actions to address areas of employee concern.

The annual employee engagement survey results are presented to Tredegar’s Board of Directors (“Board”).

Additionally, the objectives of our executive compensation programs are to attract, motivate and retain highly qualified executive officers.

The objectives of our executive compensation programs are to attract, motivate and retain highly qualified executive officers.

To accomplish these objectives, the Company relies on a pay strategy that emphasizes performance-based compensation through annual and long-term incentives.

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• Providing opportunities for community outreach and supporting programs that enhance the lives of children and families.

Inclusion and Diversity

Tredegar strictly complies with all applicable state, local and international laws governing nondiscrimination in employment in every location where Tredegar and its businesses have facilities to ensure healthy and positive working conditions.

Tredegar strictly complies with all applicable federal, state, local and international laws governing non-discrimination in employment in every location where Tredegar and its businesses have facilities to ensure healthy and positive working conditions.

This applies to all terms and conditions of employment, including recruiting, hiring, job assignments, promotion, termination, layoff, recall, transfer, leaves of absence, compensation and training.

All applicants and employees are treated with the same high level of respect regardless of their race, creed, color, religion, sex, sexual orientation, gender identity, age, pregnancy, national origin, ethnicity, political affiliation, union membership, marital status, citizenship status, veteran status, disability or other protected category.

All applicants and employees are treated with the same high level of respect regardless of their race, creed, color, religion, sex, sexual orientation, gender identity, age, pregnancy, national origin, ethnicity, political affiliation, union membership, family status, citizenship status, veteran status, disability or other protected category.

Employees who experience or witness discriminatory behavior are encouraged to report such behavior to their supervisor, Human Resources or Tredegar’s toll-free anonymous reporting hotline.

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

In addition, the Company’s Corporate Governance Guidelines, Code of Conduct, the

charters of the Audit, Executive Compensation, Nominating and Governance Committees and Climate Change Risk Assessment and many other corporate policies are available on Tredegar’s website and are available in print to any shareholder upon request by contacting Tredegar’s Corporate Secretary at 1100 Boulders Parkway, Richmond, Virginia 23225.

In addition, the Company’s Corporate Governance Guidelines, Code of Conduct, the charters of the Audit, Executive Compensation, Nominating and Governance Committees and Climate Change Risk Assessment and many other corporate policies are available on Tredegar’s website and are available in print to any shareholder upon request by contacting Tredegar’s Corporate Secretary at 1100 Boulders Parkway, Richmond, Virginia 23225.

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.

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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