TREDEGAR CORP 10-Q

Item 1. Financial Statements. Tredegar Corporation Condensed Consolidated Balance Sheets (In Thousands, Except Share Data) (Unaudited) March 31, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 3,657 $ 7,062 Accounts and other receivables, net 79,749 64,817 Income taxes recoverable 301 — Inventories 68,895 51,381 Prepaid expenses and other 9,125 16,567 Total current assets 161,727 139,827 Property, plant and equipment, at cost 501,741 499,426 Less: accumulated depreciation ( 367,206 ) ( 362,394 ) Net property, plant and equipment 134,535 137,032 Right-of-use leased assets 14,267 14,635 Identifiable intangible assets, net 6,887 7,326 Goodwill 22,446 22,446 Deferred income taxes 32,330 32,517 Other assets 2,025 2,448 Noncurrent assets of discontinued operations — 126 Total assets $ 374,217 $ 356,357 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 83,190 $ 64,704 Accrued expenses 16,960 22,168 Lease liability, short-term 2,476 2,453 Short-term debt 627 1,322 Income taxes payable 550 320 Current liabilities of discontinued operations — 741 Total current liabilities 103,803 91,708 Lease liability, long-term 12,514 12,993 ABL revolving facility 56,000 60,600 Pension and other postretirement benefit obligations, net 5,870 5,914 Deferred income tax liabilities 69 69 Other non-current liabilities 4,591 4,105 Total liabilities 182,847 175,389 Shareholders’ equity: Common stock, no par value (authorized shares 150,000,000 , issued and outstanding 34,903,429 shares at March 31, 2025 and 34,661,272 shares at December 31, 2024) 64,151 63,590 Common stock held in trust for savings restoration plan ( 118,543 shares at March 31, 2025 and December 31, 2024) ( 2,233 ) ( 2,233 ) Accumulated other comprehensive income (loss): Foreign currency translation adjustment 5,132 5,105 Gain (loss) on derivative financial instruments 70 268 Pension and other postretirement benefit adjustments 737 826 Retained earnings 123,513 113,412 Total shareholders’ equity 191,370 180,968 Total liabilities and shareholders’ equity $ 374,217 $ 356,357 See accompanying notes to the condensed consolidated financial statements. 2 Tredegar Corporation Condensed Consolidated Statements of Income (Loss) (In Thousands, Except Per Share Data) (Unaudited) Three Months Ended March 31, 2025 2024 Revenues and other items: Sales $ 164,738 $ 143,972 Other income (expense), net ( 10 ) 6 164,728 143,978 Costs and expenses: Cost of goods sold 135,643 115,106 Freight 5,566 5,015 Selling, general and administrative 20,660 16,533 Research and development 165 151 Amortization of identifiable intangibles 440 440 Pension and postretirement benefits ( 25 ) 54 Interest expense 1,013 1,184 Asset impairments and costs associated with exit and disposal activities, net of adjustments 18 507 Total 163,480 138,990 Income (loss) from continuing operations before income taxes 1,248 4,988 Income tax expense (benefit) 577 2,384 Net income (loss) from continuing operations 671 2,604 Income (loss) from discontinued operations, net of tax 9,430 684 Net income (loss) $ 10,101 $ 3,288 Earnings (loss) per share: Basic: Continuing operations $ 0.02 $ 0.08 Discontinued operations 0.27 0.02 Basic earnings (loss) per share $ 0.29 $ 0.10 Diluted: Continuing operations $ 0.02 $ 0.08 Discontinued operations 0.27 0.02 Diluted earnings (loss) per share $ 0.29 $ 0.10 Shares used to compute earnings (loss) per share: Basic 34,612 34,323 Diluted 34,612 34,323 See accompanying notes to the condensed consolidated financial statements. 3 Tredegar Corporation Condensed Consolidated Statements of Comprehensive Income (Loss) (In Thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Net income (loss) $ 10,101 $ 3,288 Other comprehensive income (loss): Unrealized foreign currency translation adjustment ($ 0 tax in 2025 and net of tax expense of $ 221 in 2024) 27 ( 1,948 ) Derivative financial instruments adjustment (net of tax benefit of $ 68 in 2025 and net of tax benefit of $ 140 in 2024) ( 198 ) ( 504 ) Amortization of prior service costs and net gains or losses (net of tax benefit of $ 25 in 2025 and net of tax benefit of $ 8 in 2024) ( 89 ) ( 27 ) Other comprehensive income (loss) ( 260 ) ( 2,479 ) Comprehensive income (loss) $ 9,841 $ 809 See accompanying notes to the condensed consolidated financial statements. 4 Tredegar Corporation Condensed Consolidated Statements of Cash Flows (In Thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Cash flows from operating activities: Net income (loss) $ 10,101 $ 3,288 Adjustments for noncash items: Depreciation 5,086 6,252 Amortization of identifiable intangibles 440 464 Reduction of right-of-use lease asset 529 610 Deferred income taxes 407 623 Accrued pension and post-retirement benefits 80 54 Stock-based compensation expense 472 686 (Gain) loss on the sale of divested business ( 9,657 ) — Changes in assets and liabilities: Accounts and other receivables ( 14,931 ) ( 5,337 ) Inventories ( 17,513 ) ( 5,481 ) Income taxes recoverable/payable ( 71 ) ( 580 ) Prepaid expenses and other 7,174 1,890 Accounts payable and accrued expenses 12,687 ( 10,306 ) Lease liability ( 616 ) ( 689 ) Pension and postretirement benefit plan contributions ( 152 ) ( 158 ) Other, net 958 965 Net cash provided by (used in) operating activities ( 5,006 ) ( 7,719 ) Cash flows from investing activities: Capital expenditures ( 2,957 ) ( 2,461 ) Proceeds from the sale of Terphane 9,835 — Proceeds from the sale of assets — 83 Net cash provided by (used in) investing activities 6,878 ( 2,378 ) Cash flows from financing activities: Borrowings 33,750 179,248 Debt principal payments ( 39,047 ) ( 177,240 ) Net cash provided by (used in) financing activities ( 5,297 ) 2,008 Effect of exchange rate changes on cash 20 ( 574 ) Increase (decrease) in cash and cash equivalents ( 3,405 ) ( 8,663 ) Cash and cash equivalents at beginning of period 7,062 13,455 Cash and cash equivalents at end of period $ 3,657 $ 4,792 See accompanying notes to the condensed consolidated financial statements. 5 Tredegar Corporation Condensed Consolidated Statements of Shareholders’ Equity (In Thousands, Except Share and Per Share Data) (Unaudited) The following summarizes the changes in shareholders’ equity for the three month period ended March 31, 2025: Common Stock Retained Earnings Trust for Savings Restoration Plan Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Balance January 1, 2025 $ 63,590 $ 113,412 $ ( 2,233 ) $ 6,199 $ 180,968 Net income (loss) — 10,101 — — 10,101 Foreign currency translation adjustment — — — 27 27 Derivative financial instruments adjustment — — — ( 198 ) ( 198 ) Amortization of prior service costs and net gains or losses — — — ( 89 ) ( 89 ) Stock-based compensation expense 561 — — — 561 Balance March 31, 2025 $ 64,151 $ 123,513 $ ( 2,233 ) $ 5,939 $ 191,370 The following summarizes the changes in shareholders’ equity for the three month period ended March 31, 2024: Common Stock Retained Earnings Trust for Savings Restoration Plan Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity Balance at January 1, 2024 $ 61,606 $ 177,977 $ ( 2,233 ) $ ( 81,697 ) $ 155,653 Net income (loss) — 3,288 — — 3,288 Foreign currency translation adjustment — — — ( 1,948 ) ( 1,948 ) Derivative financial instruments adjustment — — — ( 504 ) ( 504 ) Amortization of prior service costs and net gains or losses — — — ( 27 ) ( 27 ) Stock-based compensation expense 579 — — — 579 Repurchase of employee common stock for tax withholdings ( 226 ) — — — ( 226 ) Balance at March 31, 2024 $ 61,959 $ 181,265 $ ( 2,233 ) $ ( 84,176 ) $ 156,815 See accompanying notes to the condensed consolidated financial statements. 6 TREDEGAR CORPORATION NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In the opinion of management, the accompanying condensed consolidated financial statements of Tredegar Corporation and its subsidiaries (“Tredegar,” “the Company,” “we,” “us” or “our”) contain all adjustments necessary to state fairly, in all material respects, Tredegar’s condensed consolidated financial position as of March 31, 2025, the condensed consolidated results of operations for the three months ended March 31, 2025 and 2024, the condensed consolidated cash flows for the three months ended March 31, 2025 and 2024, and the condensed consolidated changes in shareholders’ equity for the three months ended March 31, 2025 and 2024, in accordance with U.S. generally accepted accounting principles (“GAAP”). All such adjustments, unless otherwise detailed in the notes to the condensed consolidated financial statements, are deemed to be of a normal, recurring nature. The Company operates on a calendar fiscal year except for the Aluminum Extrusions segment, which operates on a 52/53-week fiscal year basis. As such, the fiscal first quarter for 2025 and 2024 for this segment references 13-week periods ended March 30, 2025 and March 31, 2024, respectively. The Company does not believe the impact of reporting the results of this segment as stated above is material to the consolidated financial results. The Company may fund or receive cash from the Aluminum Extrusions segment based on Aluminum Extrusion’s cash flows from operations during the intervening period from Aluminum Extrusion’s fiscal quarter end and the Company’s fiscal quarter end. As a result, the Company’s cash and cash equivalents declined by $ 3.6 million as of December 31, 2024 since the Company made payments to the Aluminum Extrusions segment to fund its working capital during the intervening period. The condensed consolidated financial statements as of December 31, 2024 that is included herein was derived from the audited consolidated financial statements provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the 2024 Form 10-K. The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results to be expected for the full year. Sale of Flexible Packaging 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 11. Closure of PE Films Technical Center In August 2023, the Company adopted a plan to close the PE Films technical center in Richmond, VA and reduce its efforts to develop and sell films supporting the semiconductor market. Research & development activities for PE Films are now being performed at the production facility in Pottsville, PA. PE Films continues to have new business opportunities primarily relating to surface protection films that protect components of flat panel and flexible displays. All activities ceased at the PE Films technical center in Richmond, VA as of the end of the first quarter of 2024. Accounting standards not yet adopted In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06 to amend various paragraphs in the Accounting Standards Codification ("ASC") to primarily reflect the issuance of U.S. Securities and Exchange Commission ("SEC") Staff Bulletin No. 33-10532. ASU 2023-06 will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets. The amendments in this ASU 2023-06 will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is not permitted. The Company does not expect a material impact from the adoption of this standard on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09 to improve the income tax disclosures related to the rate reconciliation and income taxes paid information and to improve the effectiveness of income tax disclosures. The amendments in this ASU will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024; early 7 adoption is permitted. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03 to improve the disclosures about public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this ASU will require the Company to disclose specified information about certain costs and expenses in the notes to the financial statements. This ASU is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. 2. ACCOUNTS AND OTHER RECEIVABLES As of March 31, 2025 and December 31, 2024, accounts and other receivables, net include the following: (In thousands) March 31, 2025 December 31, 2024 Customer receivables $ 79,654 $ 64,094 Other receivables 357 952 Total accounts and other receivables 80,011 65,046 Less: Allowance for bad debts ( 262 ) ( 229 ) Total accounts and other receivables, net $ 79,749 $ 64,817 3. INVENTORIES The components of inventories are as follows: (In thousands) March 31, 2025 December 31, 2024 Finished goods $ 14,245 $ 15,051 Work-in-process 5,006 2,986 Raw materials 26,135 12,158 Stores, supplies and other 23,509 21,186 Total $ 68,895 $ 51,381 4. PENSION AND OTHER POSTRETIREMENT BENEFITS Tredegar sponsored a noncontributory defined benefit (pension) plan covering certain current and former U.S. employees. As of January 31, 2018, the plan no longer accrued benefits associated with crediting employees for service, thereby freezing all future benefits under the plan. On February 10, 2022, Tredegar announced the initiation of a process to terminate and settle its frozen defined benefit pension plan through lump sum distributions and the purchase of annuity contracts. On November 3, 2023, the pension plan termination and settlement process for the Company was completed, and the remaining pension plan obligation was transferred to Massachusetts Mutual Life Insurance Company. During 2023, the Company recognized a total pre-tax pension settlement loss of $ 92.3 million. Tredegar also has a non-qualified supplemental pension plan covering certain employees. Effective December 31, 2005, further participation in this plan was terminated and benefit accruals for existing participants were frozen. Pension expense recognized for this plan was immaterial in the three months ended March 31, 2025 and 2024. This information has been included in the pension benefit table below. 8 The components of net periodic benefit cost for the pension and other postretirement benefit programs reflected in the condensed consolidated statements of income for the three months ended March 31, 2025 and 2024, are shown below: Pension Benefits Other Post-Retirement Benefits Three Months Ended March 31, Three Months Ended March 31, (In thousands) 2025 2024 2025 2024 Service cost $ — $ — $ 2 $ 3 Interest cost 19 19 68 67 Amortization of prior service costs, (gains) losses and net transition asset 5 5 ( 119 ) ( 40 ) Net periodic benefit cost $ 24 $ 24 $ ( 49 ) $ 30 Pension and other postretirement liabilities were $ 6.5 million and $ 6.6 million at March 31, 2025 and December 31, 2024, respectively ($ 0.6 million included in “Accrued expenses” at March 31, 2025 and December 31, 2024 with the remainder included in “Pension and other postretirement benefit obligations, net” in the condensed consolidated balance sheets). Tredegar funds its other postretirement benefits on a claims-made basis; for 2025, the Company anticipates the amount will be consistent with amounts paid for the year ended December 31, 2024, or approximately $ 0.4 million. 5. EARNINGS PER SHARE Basic earnings per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income (loss) by the weighted average common and potentially dilutive common equivalent shares outstanding, determined as follows: Three Months Ended March 31, (In thousands) 2025 2024 Weighted average shares outstanding used to compute basic earnings per share 34,612 34,323 Incremental dilutive shares attributable to stock options and restricted stock — — Shares used to compute diluted earnings per share 34,612 34,323 Incremental shares attributable to stock options and restricted stock are computed under the treasury stock method using the average market price during the related period. Average out-of-the-money options to purchase shares that were excluded from the calculation of incremental shares attributable to stock options and restricted stock were 1,325,890 for the three months ended March 31, 2025. Average out-of-the-money options to purchase shares that were excluded from the calculation of incremental shares attributable to stock options and restricted stock were 2,870,670 for the three months ended March 31, 2024. 6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2025. (In thousands) Foreign Currency Translation Gain (Loss) on Derivative Financial Instruments Pension & Other Postretirement Benefit Adjust Total Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2025 $ 5,105 $ 268 $ 826 $ 6,199 Other comprehensive income (loss) 27 ( 381 ) — ( 354 ) Income tax (expense) benefit — 83 — 83 Other comprehensive income (loss), net of tax 27 ( 298 ) — ( 271 ) Reclassification adjustment to net income (loss) — 115 ( 114 ) 1 Income tax (expense) benefit — ( 15 ) 25 10 Reclassification adjustment to net income (loss), net of tax — 100 ( 89 ) 11 Other comprehensive income (loss), net of tax 27 ( 198 ) ( 89 ) ( 260 ) Balance at March 31, 2025 $ 5,132 $ 70 $ 737 $ 5,939 9 The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2024. (In thousands) Foreign Currency Translation Gain (Loss) on Derivative Financial Instruments Pension & Other Postretirement Benefit Adjust Total Accumulated Other Comprehensive Income (Loss) Balance at January 1, 2024 $ ( 83,037 ) $ 801 $ 539 $ ( 81,697 ) Other comprehensive income (loss) ( 1,727 ) 282 — ( 1,445 ) Income tax (expense) benefit ( 221 ) ( 112 ) — ( 333 ) Other comprehensive income (loss), net of tax ( 1,948 ) 170 — ( 1,778 ) Reclassification adjustment to net income (loss) — ( 927 ) ( 35 ) ( 962 ) Income tax (expense) benefit — 253 8 261 Reclassification adjustment to net income (loss), net of tax — ( 674 ) ( 27 ) ( 701 ) Other comprehensive income (loss), net of tax ( 1,948 ) ( 504 ) ( 27 ) ( 2,479 ) Balance at March 31, 2024 $ ( 84,985 ) $ 297 $ 512 $ ( 84,176 ) The amounts reclassified out of accumulated other comprehensive income (loss) related to pension and other postretirement benefits is included in the computation of net periodic pension costs. See Note 4 for additional details. 7. DERIVATIVES Tredegar uses derivative financial instruments for the purpose of hedging margin exposure from fixed-price forward sales contracts in Aluminum Extrusions. These derivative financial instruments are designated as and qualify as cash flow hedges and are recognized in the condensed consolidated balance sheet at fair value. The fair value of derivative instruments recorded on the consolidated balance sheets is based upon Level 2 inputs. If individual derivative instruments with the same counterparty can be settled on a net basis, the Company records the corresponding derivative fair values as a net asset or net liability. In the normal course of business, Aluminum Extrusions enters into fixed-price forward sales contracts with a small subset of its customers for the future sale of fixed quantities of aluminum extrusions at scheduled intervals. In order to hedge margin exposure created from the fixing of future sales prices relative to volatile raw material (aluminum) costs, Aluminum Extrusions enters into a combination of forward purchase commitments and futures contracts to acquire or hedge aluminum, based on the scheduled purchases for the firm sales commitments. The fixed-price firm sales commitments and related hedging instruments have durations generally no longer than 12 months. The notional amount of aluminum futures contracts that hedged future purchases of aluminum to meet fixed-price forward sales contract obligations was $ 4.5 million ( 2.8 million pounds of aluminum) at March 31, 2025 and $ 4.3 million ( 3.1 million pounds of aluminum) at December 31, 2024. The table below summarizes the location and gross amounts of aluminum futures contract fair values (Level 2) in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024: March 31, 2025 December 31, 2024 (In thousands) Balance Sheet Account Fair Value Balance Sheet Account Fair Value Derivatives Designated as Hedging Instruments Asset derivatives: Aluminum futures contracts Prepaid expenses and other $ 254 Prepaid expenses and other $ 172 Liability derivatives: Aluminum futures contracts Accrued expenses ( 137 ) Accrued expenses ( 57 ) Aluminum futures contracts Other non-current liabilities ( 23 ) Other non-current liabilities — Net asset (liability) $ 94 $ 115 In the event that a counterparty to an aluminum fixed-price forward sales contract chooses not to take delivery of its aluminum extrusions, the customer is contractually obligated to compensate Aluminum Extrusions for any losses on the related aluminum futures and/or forward contracts through the date of cancellation. 10 The pre-tax effect on net income (loss) and other comprehensive income (loss) of derivative instruments classified as cash flow hedges and described in the previous paragraphs for the three month periods ended March 31, 2025 and 2024 is summarized in the table below: Cash Flow Derivative Hedges Three Months Ended March 31, Aluminum Futures Contracts (In thousands) 2025 2024 Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) $ ( 38 ) $ 721 Location of gain (loss) reclassified from accumulated other comprehensive income (loss) into net income (effective portion) Cost of goods sold Cost of goods sold Amount of pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) to net income (effective portion) $ ( 18 ) $ 519 As of March 31, 2025, the Company expects $ 0.1 million of unrealized after-tax gains on aluminum derivative instruments reported in accumulated other comprehensive income (loss) to be reclassified to earnings within the next 12 months. For the three month periods ended March 31, 2025 and 2024, net gains or losses realized, from previously unrealized net gains or losses on hedges that had been discontinued, were not material. 8. INCOME TAXES Tredegar recorded tax expense (benefit) of $ 0.6 million on pre-tax income (loss) from continuing operations of $ 1.2 million in the first three months of 2025. The effective tax rate in the first three months of 2025 was 46.2 % and 47.8 % in the first three months of 2024. The effective tax rate in the first three months of 2025 was impacted by lower taxable discrete items and a lower projected annual effective tax rate offset by the impact of lower book income. 9. BUSINESS SEGMENTS The Company's business segments are Aluminum Extrusions and PE Films. Aluminum Extrusions, also referred to as Bonnell Aluminum, produces high-quality, soft and medium strength alloyed aluminum extrusions, custom fabricated and finished, for the building and construction, automotive and transportation, consumer durables goods, machinery and equipment, electrical and renewable energy, and distribution markets. PE Films produces surface protection films, polyethylene overwrap films and films for other markets. The Company’s reportable segments are based on its method of internal reporting, which is generally segregated by differences in products. Accounting standards for presentation of segments require an approach based on the way the Company organizes the segments for making operating decisions and how the chief operating decision maker (“CODM”) assesses performance. EBITDA from ongoing operations is the key profitability measure used by the CODM (Tredegar’s President and Chief Executive Officer) for purposes of assessing financial performance. EBITDA from ongoing operations used by the CODM excludes certain non-recurring items, such as restructuring costs, asset impairments and other items, which are reported separately. The CODM uses EBITDA from ongoing operations to evaluate the operating performance of Tredegar’s ongoing operations, monitor budget versus actual results, establish management’s compensation and allocate resources. EBITDA from ongoing operations is the primary measure of segment performance and is consistent with how the business is managed internally, in addition to being a key financial and analytic metric for borrowing capacity and estimated enterprise value. The Company uses sales less freight (“net sales”) as its measure of revenues from external customers at the segment level. This measure is separately included in the financial information regularly provided to the CODM. The following tables present segment revenue, segment profit (loss), and significant expenses for the three months ended March 31, 2025 and 2024: 11 Three Months Ended March 31, 2025 (In thousands) Aluminum Extrusions PE Films Total Net Sales $ 133,635 $ 25,537 $ 159,172 Reconciliation of revenue: Add back freight 5,566 Sales as shown in the consolidated statements of income (loss) $ 164,738 Less: Variable costs $ 103,523 $ 11,977 $ 115,500 Manufacturing fixed costs 1 11,214 3,459 14,673 Selling, general and administrative costs 1 9,412 2,592 12,004 Other 2 326 ( 11 ) 315 EBITDA from ongoing operations $ 9,160 $ 7,520 $ 16,680 Reconciliation of profit (loss): Depreciation and amortization 5,475 Plant shutdowns, asset impairments, restructurings and other 1,167 Interest income 5 Interest expense 1,013 Corporate expenses, net 3 7,782 Income (loss) from continuing operations before income tax 1,248 Income tax expense (benefit) 577 Net income (loss) from continuing operations 671 Income (loss) from discontinued operations, net of tax 9,430 Net income (loss) $ 10,101 1. Excludes related depreciation and amortization. 2. Includes segment allocated employee compensation benefit expenses. 3. Includes corporate depreciation and amortization. 12 Three Months Ended March 31, 2024 (In thousands) Aluminum Extrusions PE Films Total Net Sales $ 114,222 $ 24,735 $ 138,957 Reconciliation of revenue: Add back freight 5,015 Sales as shown in the consolidated statements of income (loss) $ 143,972 Less: Variable costs $ 84,786 $ 12,024 $ 96,810 Manufacturing fixed costs 1 9,625 3,243 12,868 Selling, general and administrative costs 1 6,798 2,516 9,314 Other 2 473 48 521 EBITDA from ongoing operations $ 12,540 $ 6,904 $ 19,444 Reconciliation of profit (loss): Depreciation and amortization 5,871 Plant shutdowns, asset impairments, restructurings and other 1,671 Interest income 20 Interest expense 1,184 Corporate expenses, net 3 5,750 Income (loss) from continuing operations before income tax 4,988 Income tax expense (benefit) 2,384 Net income (loss) from continuing operations 2,604 Income (loss) from discontinued operations, net of tax 684 Net income (loss) $ 3,288 1. Excludes related depreciation and amortization. 2. Includes segment allocated employee compensation benefit expenses. 3. Includes corporate depreciation and amortization. The following table presents identifiable assets by segment at March 31, 2025 and December 31, 2024: (In thousands) March 31, 2025 December 31, 2024 Aluminum Extrusions $ 272,161 $ 247,205 PE Films 56,231 55,081 Subtotal 328,392 302,286 General corporate 42,168 46,883 Cash and cash equivalents 3,657 7,062 Discontinued operations — 126 Total $ 374,217 $ 356,357 The following table presents depreciation and amortization for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, (In thousands) 2025 2024 Aluminum Extrusions $ 4,225 $ 4,542 PE Films 1,250 1,329 Subtotal 5,475 5,871 General corporate 51 94 Discontinued operations — 751 Total $ 5,526 $ 6,716 13 The following table presents capital expenditures for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, (In thousands) 2025 2024 Aluminum Extrusions $ 2,370 $ 1,550 PE Films 587 394 Subtotal 2,957 1,944 Discontinued operations — 517 Total $ 2,957 $ 2,461 The following tables disaggregate the Company’s revenue by geographic area and product group for the three months ended March 31, 2025 and 2024: Net Sales by Geographic Area (a) Three Months Ended March 31, (In thousands) 2025 2024 United States $ 144,357 $ 124,981 Exports from the United States to: Asia 10,836 8,814 Latin America 1,579 1,311 Canada 2,173 3,664 Europe 7 25 Operations outside the United States: Asia 220 162 Total $ 159,172 $ 138,957 (a) Export sales relate mostly to PE Films. The Company’s facilities in Pottsville, PA (“PV”) and Guangzhou, China (“GZ”) have a tolling arrangement whereby certain surface protection films are manufactured in GZ for a fee with raw materials supplied from PV that are then shipped by GZ directly to customers principally in the Asian market, but paid by customers directly to PV. Amounts associated with this intercompany tolling arrangement are reported in the table above as export sales from the U.S. to Asia, and include net sales of $ 6.6 million and $ 6.1 million in the first quarter of 2025 and 2024, respectively. Net Sales by Product Group Three Months Ended March 31, (In thousands) 2025 2024 Aluminum Extrusions: Nonresidential building & construction $ 67,601 $ 68,228 Consumer durables 11,667 7,670 Automotive 10,998 10,189 Residential building & construction 8,998 7,591 Electrical 15,341 5,607 Machinery & equipment 15,283 11,716 Distribution 3,747 3,221 Subtotal 133,635 114,222 PE Films: Surface protection films 18,770 17,011 Overwrap packaging 6,767 7,724 Subtotal 25,537 24,735 Total $ 159,172 $ 138,957 14 10. DEBT ABL Facility In December 2023, the Company entered into Amendment No. 3 to the Second Amended and Restated Credit Agreement (the "Credit Agreement”), which, prior to the ABL Adjustment Date (as defined below), provided the Company with a $ 180 million senior secured asset-based revolving credit facility. In April 2024, the Company entered into Amendment No. 4 to the Credit Agreement (as amended by Amendment No. 3 and Amendment No. 4, the “ABL Facility”) that, among other items: (i) moved the ABL Adjustment Date (defined below) from March 31, 2025 to September 30, 2025 and (ii) required weekly reporting of the borrowing base financial covenant until the ABL Adjustment Date. The ABL Facility is secured by substantially all assets of the Company and its domestic subsidiaries, including equity in certain material first-tier foreign subsidiaries. Availability for borrowings under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including a portion of trade accounts receivable, inventory, cash and cash equivalents, owned real properties, and owned machinery and equipment. Upon the earlier of September 30, 2025 or the date the Company received the proceeds from the sale of Terphane (the “ABL Adjustment Date”), the $ 180 million ABL Facility was to be reduced to $ 125 million. On November 1, 2024, with the closing of the sale of Terphane, the ABL Adjustment Date occurred. The ABL Facility was to expire on June 30, 2026. As of March 31, 2025, funds available to borrow under the ABL Facility was $ 50.9 million, or 40.7 % of the aggregate commitment of $ 125 million. Outstanding borrowings accrue interest at the rates elected by the Company depending on the type of loan and denomination of such borrowing. With respect to revolving loans denominated in U.S. Dollars, the Company may elect interest rates at: • Alternate Base Rate (“ABR”) Spread (as defined in the ABL Facility) is determined in accordance with an excess availability-based pricing grid. ABR is defined, in part, as the greater of (a) the Prime Rate in effect on such day, (b) the Federal Reserve Bank of New York Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term Secured Overnight Financing Rate ("SOFR Rate") (defined below) for a one-month period plus 1 %; or • The Term Benchmark Spread (as defined in the ABL Facility) is determined in accordance with an excess availability-based pricing grid. Adjusted Term SOFR Rate is defined as the Term SOFR Rate plus 0.10 %, subject to an initial Floor (as defined in the ABL Facility) of 0 %. Based upon the quarterly average of daily availability under the ABL Facility, the interest rate pricing grid applicable after the ABL Adjustment Date is as follows: Pricing under the ABL Facility (Basis Points) Quarter Average of Daily Availability Term Benchmark Spread ABR Spread Commitment Fee > 66% of $125 million aggregate commitment 225.0 125.0 40.0 ≤ 66% but > 33% of $125 million aggregate commitment 250.0 150.0 40.0 ≤ 33% of $125 million aggregate commitment 275.0 175.0 40.0 The financial covenant is a minimum fixed charge coverage ratio (as defined in the ABL Facility) of 1.00:1.00 that will be triggered in the event that availability is less than 10 % of the $ 125 million commitment amount and continuing thereafter until availability is greater than 10 % of the $ 125 million commitment amount for 30 consecutive days. If at any time the availability under the ABL Facility is less than 20 % of the maximum aggregate principal amount in effect at such time or an Event of Default occurs, the Company’s current monthly reporting requirements to lenders changes to a weekly cadence until the Event of Default is waived, cured or the availability under the ABL Facility is above 20 % of the maximum aggregate principal amount for 30 consecutive days. A Cash Dominion Period goes into effect if availability under the ABL Facility falls below 12.5 % of the aggregate commitment or an Event of Default (as defined in the ABL Facility) occurs. The Company would then be subject to the Cash Dominion Period until the Event of Default is waived, cured or the availability under the ABL Facility is above 12.5 % of the maximum aggregate principal amount for 30 consecutive days. During a Cash Dominion Period, receipts that have not yet been applied to the ABL Facility are classified as restricted cash in the Company’s consolidated balance sheets. The ABL Facility has customary representations and warranties including, as a condition to each borrowing, that all such representations and warranties are true and correct in all material respects (including a representation that no Material Adverse Effect (as defined in the ABL Facility) has occurred since December 31, 2022). In the event that the Company cannot certify that all conditions to the borrowing have been met, the lenders can restrict the Company’s future borrowings under the ABL Facility. 15 In accordance with the ABL Facility, the lenders have been provided with the Company’s financial statements, covenant compliance certificates and projections to facilitate their ongoing assessment of the Company. Accordingly, the Company believes the likelihood that lenders would exercise the subjective acceleration clause whereby prohibiting future borrowings is remote. As of March 31, 2025, the Company was in compliance with all debt covenants. On May 6, 2025, the Company entered into Amendment No. 5 (the "Amended ABL Facility") to the Credit Agreement. The material terms of the Amended ABL Facility include the following: • Provides for a $ 125 million asset-based facility. • The maturity date was extended to May 6, 2030. • The interest rate margins were reduced to a range between 1.75 %- 2.25 % for any Term Benchmark Loan and any RFR Loan (each as defined in the Amended ABL Facility) and 0.75 %- 1.25 % for any ABR Loan (as defined in the Amended ABL Facility), in each case, based on average quarterly availability. • The commitment fee was decreased from 0.40 % to (i) 0.25 % if the Average Usage (as defined in the Amended ABL Facility) is greater than or equal to 50 % and (ii) 0.375 % if Average Usage is less than 50 %. • The borrowing base calculation was amended as follows: (i) real property is no longer eligible to be included in the borrowing base, (ii) the PP&E Component (as defined in the Amended ABL Facility), as included in the borrowing base, was changed to the lesser of (a) 60 % of the Net Orderly Liquidation Value (as defined in the Amended ABL Facility) in place of eligible equipment and (b) 30 % of the borrowing base and (iii) the amount of eligible cash included in the borrowing base is now capped at 15 % of the borrowing base. • A Cash Dominion Period is now triggered when (x) availability falls below the greater of (i) 12.5 % of the Line Cap (as defined in the Amended ABL Facility) and (ii) $ 12.6 million or (y) during the continuation of an event of default and continuing until (x) availability is above the greater of (i) 12.5 % of the Line Cap and (ii) $ 12.6 million for 30 consecutive days and (y) no events of default are continuing. • Compliance with the fixed charge coverage ratio of 1.00 to 1.00 is now triggered upon the occurrence of availability being less than the greater of (x) 10 % of the Line Cap and (y) $ 10 million and will continue until availability is equal to or greater than the greater of (x) 10 % of the Line Cap and (y) $ 10 million for 30 consecutive days, as long as no events of default are continuing. PE Films Guangzhou Loan On June 25, 2024, PE Films' business location in Guangzhou, China, Guangzhou Tredegar Film Products Co., Ltd. (“Guangzhou Tredegar”), entered into a 9.5 million Chinese Yuan revolving loan with the Industrial and Commercial Bank of China. The loan matures on July 3, 2025. The interest rate is the one year loan prime rate published by the National Interbank Funding Center for the working day immediately preceding the drawdown date, minus 0.45 %. As of March 31, 2025, the interest rate on the outstanding loan balance was 2.90 %. The revolving loan is secured by a mortgage contract listing the Guangzhou Tredegar factory building as collateral. The mortgage contract has a maximum value of 30 million Chinese Yuan and is effective from June 25, 2024 through May 31, 2027. As of March 31, 2025 and December 31, 2024, this loan is presented as current debt on the consolidated balance sheets. 11. DISCONTINUED OPERATIONS Flexible Packaging Films On September 1, 2023, the Company entered into an agreement to sell Terphane, headquartered in Brazil, to Oben for net cash-free and debt-free base consideration of $ 116 million. On November 1, 2024, Tredegar completed the sale of Terphane to Oben. At closing, Tredegar received $ 60 million in cash, which was net of Terphane debt assumed by Oben of $ 20 million and estimated Terphane cash retained by Oben of $ 2 million. The cash proceeds received by Tredegar at closing were after deducting net working capital adjustments and closing indebtedness ($ 20.5 million), escrow funds ($ 19.8 million), projected Brazil withholding taxes ($ 10.8 million), and transaction expenses ($ 4.4 million). On February 28, 2025, the Company received $ 9.8 million from post-closing settlement of the transaction. The proceeds from the sale of Terphane were required to be used to pay down debt outstanding under the ABL Facility. Upon completion of the sale, the Company recognized a pre-tax loss of $ 74.9 million for the year ended December 31, 2024, which included the realization of other comprehensive losses on foreign currency translation adjustments, net of gains on derivative financial instruments of $ 102.3 million previously reflected in accumulated other comprehensive income (loss). 16 The following table summarizes the financial results of discontinued operations reflected in the Condensed Consolidated Statements of Income (Loss) for the three months ended March 31, 2025 and 2024: Three Months Ended March 31, (In thousands) 2025 2024 Revenue and other items Sales $ — $ 31,764 Other income (expense), net — 2 — 31,766 Costs and expenses Cost of goods sold — 26,936 Freight — 1,652 Selling, general and administrative 227 1,724 Research and development — 201 Amortization of intangibles — 25 Interest expense 1 — 2,271 (Gain) loss on sale of business ( 9,657 ) — Total ( 9,430 ) 32,809 Income (loss) from discontinued operations before income tax 9,430 ( 1,043 ) Income tax expense (benefit) 2 — ( 1,727 ) Income (loss) from discontinued operations, net of tax $ 9,430 $ 684 1. For the three months ended March 31, 2024, interest expense includes $ 0.6 million directly related to the $ 20 million of outstanding Terphane debt assumed by Oben. 2. An inconsequential income tax expense (benefit) was recognized during the three months ended March 31, 2025 primarily due to foreign tax credits generated from the final Brazilian withholding tax payment made during the period, which offset the tax liability on the income from discontinued operations. Interest expense allocated to discontinued operations was determined by applying the ABL Facility weighted-average interest rate to the Terphane sale proceeds, as the sale proceeds were required to be used to pay down debt outstanding under the ABL Facility. The assets and liabilities of the discontinued operations reflected in the Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024, respectively were as follows: (In thousands) March 31, 2025 December 31, 2024 Assets Deferred income taxes $ — $ 126 Total noncurrent assets of discontinued operations $ — $ 126 Liabilities 1 Accounts payable $ — $ 161 Accrued expenses — 580 Total current liabilities of discontinued operations $ — $ 741 1. The consolidated balance sheet of discontinued operations as of December 31, 2024 includes $ 0.6 million of severance and $ 0.2 million of miscellaneous accrued expenses. 17 The following table provides significant operating, investing and financing cash flow information for discontinued operations: Three Months Ended March 31, (In thousands) 2025 2024 Operating activities: Depreciation and amortization $ — $ 751 Gain (loss) on the sale of divested business ( 9,657 ) — Total $ ( 9,657 ) $ 751 Investing activities: Proceeds from the sale of Terphane $ 9,835 $ — Capital expenditures — 517 Total $ 9,835 $ 517 18