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Item 7. Management’s Discussion and Analysis

2026-03-11 compared with 2025-03-12 · 124 added, 304 removed, 265 unchanged (62% of the section changed)

2 unchanged sentences

This discussion should be read in conjunction with, and is qualified by reference to, the other related information including, but not limited to, the audited consolidated financial statements (including the notes thereto) and the description of our business, all as set forth in this Form 10-K, as well as the risk factors discussed above in Item 1A.

This section provides discussion and a year-to-year comparison for the years ended December 31, 2024 and 2023 and for the years ended December 31, 2023 and 2022.

This section provides discussion and a year-to-year comparison for the years ended December 31, 2025 and 2024.

Business Overview

Tredegar Corporation is an industrial manufacturer with two primary businesses:

custom aluminum extrusions for the B&C, automotive and specialty end-use markets in the United States through its Aluminum Extrusions segment (with exports comprising less than 5% of total sales volume) and surface protection films for high-technology applications in the global electronics industry through its PE Films segment.

custom aluminum extrusions for the B&C, automotive and specialty end-use markets in the United States through its Aluminum Extrusions segment (with exports comprising less than 5% of total sales volume) and surface protection films for high-end technology applications in the global electronics industry and packaging films for consumer and industrial products through its High Performance Films segment.

With approximately 1,700 employees, the Company operates manufacturing facilities in the U.S.

9 unchanged sentences

• EBITDA from ongoing operations for Aluminum Extrusions of $51.0 million was $9.6 million higher than the year of 2024.

• EBITDA from ongoing operations for PE Films of $30.5 million was $19.3 million higher than the year of 2023.

• EBITDA from ongoing operations for High Performance Films of $27.1 million was $3.3 million lower than the year of 2024.

Gains and losses associated with exit and disposal activities, plant shutdowns, asset impairments, restructurings and other items are described in Results of Operations below.

7 unchanged sentences

Change in income (loss) from increases (decreases) in the following items:

Sales 124,839

Other income (expense), net 2,351

Total 127,190

Change in income (loss) from (increases) decreases in the following items:

Cost of goods sold (108,363)

Freight (3,122)

Selling, general and administrative (6,060)

Research and development 2,183

Pension and postretirement benefits 10,627

Interest expense 661

Asset impairments and costs associated with exit and disposal

activities, net of adjustments 4,447

Pension settlement loss 92,291

OPEB termination gain 6,265

Goodwill impairment 13,271

4 unchanged sentences

Sales in 2025 increased by 20.9% compared with 2024.

Net sales were relatively flat in Aluminum Extrusions primarily due to flat sales volume and the pass-through of higher metal costs, partially offset by a lower average conversion price add-on to metal costs associated with a shift in sales mix.

Net sales increased 37.0% in PE Films primarily due to higher net sales and volume in Surface Protection, with extremely high sales in the first half of 2024 associated with the restocking of Surface Protection customers’ inventories.

Overwrap films volume increased 14% versus 2023, primarily due to volume increases associated with lower margin business.

Net sales increased 27.0% in Aluminum Extrusions primarily due to higher sales volume and the pass-through of higher metal costs.

Net sales decreased 5.2% in High Performance Films primarily due to lower net sales in Surface Protection and advanced packaging films.

For more information on changes in net sales and volume, see the Segment Operations Review section below.

Other income (expense), net was $1.4 million in 2025 compared to $(1.0) million in 2024.

The amount in other income (expense), net for 2025 was primarily related to a gain on the sale of corporate-owned land of $1.5 million.

The amount in other income (expense), net for 2024 was primarily related to $1.3 million of deferred and discretionary incentive payments made in 2024 subsequent to the sale of Terphane.

The amount in other income (expense), net for 2023 was primarily related to a $2.0 million charge to adjust the initial purchase price of the nonparticipating single premium group annuity contract as a result of the routine administrative process to transition the pension plan.

Consolidated gross profit (sales minus cost of goods sold and freight) as a percentage of sales (gross profit margin) was 15.1% in 2025 versus 16.1% in 2024.

• The gross profit margin in Aluminum Extrusions increased primarily due to favorable variable manufacturing costs, higher labor productivity and higher volume, partially offset by higher labor and employee-related costs and lower spread (the difference between selling prices and metal costs) associated with a shift in sales mix.

Additionally, inventories accounted for under the last-in first-out (“LIFO”) inventory method resulted in a charge of $1.2 million in 2024 versus a benefit of $0.9 million in 2023.

the pass through to customers included in sales, resulted in a benefit of $1.4 million in 2024 versus a charge of $1.0 million in 2023.

• The gross profit margin in PE Films increased primarily due to higher contribution margin (net sales less variable costs) from Surface Protection associated with substantially higher volume, favorable pricing, operating efficiencies and variable cost savings in 2024 versus 2023.

Inventories accounted for under the LIFO method resulted in a benefit of $0.2 million in 2024 versus a benefit of $1.3 million in 2023, and the pass-through lag associated with resin costs resulted in a charge of $1.0 million in 2024 versus a charge of $0.5 million in 2023.

• The gross profit margin in Aluminum Extrusions remained flat primarily due to higher volume, favorable pricing and lower manufacturing costs associated with material yield, offset by higher labor rates, unfavorable productivity, higher maintenance and supply expense, partially due to the impact of tariffs and severe weather and downed equipment in the first half of 2025, higher expense for externally produced billet associated with the increase in volume and higher die expense associated with timing of purchases and increasing volume.

Additionally, inventories accounted for under the last-in first-out (“LIFO”) inventory method resulted in a net benefit of $2.6 million in 2025 compared to a net benefit of $0.1 million in 2024 due to a favorable current cost adjustment associated with higher metal prices ($9.3 million benefit in 2025 and $1.3 million benefit 2024), partially offset by a corresponding increase in the LIFO reserve, which resulted in a charge of $6.7 million in the fourth quarter 2025 versus a charge of $1.2 million in the fourth quarter 2024.

The timing of the flow-through under the first-in first-out (“FIFO”) method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $8.7 million in 2025 versus a benefit of $0.1 million in 2024.

• The gross profit margin in High Performance Films slightly decreased primarily due to lower contribution margin (net sales less variable costs) from Surface Protection associated with lower volume, unfavorable mix, partially offset by favorable pricing, variable cost savings and operating efficiencies.

Inventories accounted for under the LIFO method

resulted in a charge of $0.2 million in 2025 versus a benefit of $0.2 million in 2024, and the pass-through lag associated with resin costs resulted in a charge of $0.3 million in 2025 versus a charge of $1.0 million in 2024.

For more information on changes in operating costs and expenses, see the Segment Operations Review section below.

As a percentage of sales, selling, general and administrative (“SG&A”) and R&D expenses were 12.3% in 2024 compared with 11.9% in 2023.

While SG&A expense increased 11.6% and R&D decreased 75.4% year-over-year, sales increased $24.7 million or 4.3% compared with the prior year period.

As a percentage of sales, selling, general and administrative (“SG&A”) and research and development (“R&D”) expenses were 11.0% in 2025 compared with 12.3% in 2024.

While SG&A expense increased 8.3% and R&D remained flat year-over-year, sales increased $124.8 million or 20.9% compared with the prior year period.

Higher SG&A spending was primarily due to higher employee-related compensation and higher professional fees associated with business development activities.

Lower R&D spending was primarily due to lower costs associated with the closure of the PE Films technical center in Richmond, VA in 2023.

Pension and postretirement benefits was $0.2 million in 2024 compared to $10.8 million in 2023.

The change in pension and postretirement benefits was primarily due to lower pension expense as a result of the pension plan termination completed in 2023.

During 2023, the Company settled the pension plan, which resulted in a pre-tax pension settlement loss in the consolidated results of operation of $92.3 million.

On November 3, 2023, the pension plan termination and settlement process was completed, and the Company’s relevant pension plan obligation was transferred to Massachusetts Mutual Life Insurance Company.

See Note 8 “Retirement Plans and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15 for more information.

During 2025, the Company terminated the Other Post-Retirement Benefits (“OPEB”) program.

The OPEB total obligation and unrecognized pre-tax actuarial gain reported in the consolidated balance sheets was $5.0 million and $1.3 million, respectively, which was realized in the income statement during the fourth quarter of 2025.

See Note 8 “Retirement Benefits and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15 for more information.

During 2024, a non-cash goodwill impairment of $13.3 million was recognized associated with the Clearfield, Utah operation reporting unit in Aluminum Extrusions.

During 2023, a non-cash partial goodwill impairment of $34.9 million was recognized associated with the Surface Protection reporting unit in PE Films.

See Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for more information.

The effective tax rate used to compute income taxes from continuing operations for the year of 2024 was (18.8)%, compared to 34.1% in 2023.

The decrease in the effective tax rate is primarily due to pre-tax income from continuing operations in 2024 versus a pre-tax loss from continuing operations in 2023.

The tax rate in 2023 was significantly impacted by tax benefits previously recorded in other comprehensive income (loss) that were released in 2023 as a result of the pension plan termination.

The stranded taxes released with the termination of the pension plan represent the effect of the change in federal and state tax rates on pension-related deferred tax items initially recorded in other comprehensive income.

The related stranded taxes were released in full in 2023.

The effective tax rate from continuing operations for 2025 was 21.5%, compared to (18.8)% in 2024.

The increase in the effective tax rate was primarily due to higher pre-tax income from continuing operations in 2025 than in 2024.

The tax rate in 2024 was impacted by the release of valuation allowance on deferred taxes.

See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.

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0.3 (0.2) — (0.1) —

Resolution of customer quality complaint 3

Aluminum extrusion press fire at Newnan, Georgia Plant 1

— — 0.1 — 0.1

Goodwill impairment 4

Aluminum premium charge as a result of unplanned maintenance interruptions 3

0.3 — — — 0.3

Total for Aluminum Extrusions $ 1.0 $ — $ 0.9 $ 0.6 $ 2.5

(Gains) losses associated with plant shutdowns, asset impairments and restructurings:

Richmond, Virginia Technical Center closure expenses, including severance 4

$ 0.2 $ 0.1 $ — $ (0.1) $ 0.2

Richmond, Virginia Technical Center lease modification 4

0.3 — — (0.1) 0.2

Total for PE Films $ 0.5 $ 0.1 $ — $ (0.2) $ 0.4

(Gain) losses from sale of assets, investment writedowns and other items:

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0.1 0.1 — 0.1 0.3

Deferred and discretionary incentive payments made subsequent to the sale of Terphane 2

Professional fees associated with the OPEB termination 4

— — 0.1 0.3 0.4

1 unchanged sentence

0.1 — — — 0.1

Total for Corporate $ 1.3 $ 0.2 $ 0.5 $ 1.8 $ 3.8

Included in “Selling, general and administrative expenses” in the consolidated statements of income.

Included in “Other income (expense), net” in the consolidated statements of income.

Included in “Sales” in the consolidated statements of income.

For more information, see Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15.

For more information, see Note 8 “Retirement Plans and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15.

Average total debt outstanding and interest rates were as follows:

(In millions, except percentages) 2024 2023

Floating-rate debt with interest charged on a rollover basis plus a credit spread:

Average total outstanding debt balance $ 117.7 $ 148.9

Average interest rate 8.9 % 7.1 %

2023 versus 2022

The following table presents a bridge of consolidated net income (loss) from the year of 2022 to the year of 2023 with related management’s discussion and analysis below the table.

(In thousands)

Net income (loss) from continuing operations for the year ended December 31, 2022

Income tax expense (benefit) (3,021)

Income (loss) from continuing operations before income taxes for the year ended December 31, 2022

Change in income (loss) from increases (decreases) in the following items:

Sales (188,662)

Other income (expense), net (3,209)

Total (191,871)

Change in income (loss) from (increases) decreases in the following items:

Cost of goods sold 150,109

Freight 4,785

Selling, general and administrative 4,223

Research and development 2,429

Interest expense (2,175)

Pension settlement loss (92,291)

Goodwill impairment (34,891)

Income (loss) from continuing operations before income taxes for the year ended December 31, 2023

Income tax expense (benefit) (51,300)

Net income (loss) from continuing operations for the year ended December 31, 2023

Sales in 2023 decreased by 24.8% compared with 2022.

Net sales decreased 25.6% in Aluminum Extrusions primarily due to lower sales volume and the pass-through of lower metal costs.

Net sales decreased 21.3% in PE Films primarily due to lower volume in Surface Protection, resulting from weak demand in the consumer electronics market and customer inventory corrections during 2023.

For more information on changes in net sales and volume, see the Segment Operations Review section below.

Other income (expense), net was $(2.1) million in 2023 compared to $1.1 million in 2022.

The change in other income (expense), net was primarily due to a $2.0 million charge to adjust the initial purchase price of the nonparticipating single premium group annuity contract as a result of the routine administrative process to transition the pension plan.

Also, there was cash consideration of $0.3 million received in January 2023 compared to $1.4 million received in May 2022 related to customary post-closing adjustments on the sale of the investment in kaleo, Inc., which was sold in December 2021.

Consolidated gross profit (sales minus cost of goods sold and freight) as a percentage of sales (gross profit margin) was 12.4% in 2023 versus 13.8% in 2022.

• The gross profit margin in Aluminum Extrusions decreased primarily due to lower volume, lower labor productivity in the first half of 2023, higher supply expense, including higher paint expense associated with a shift to more painted product throughout 2023 and inflationary costs for other supplies, partially offset by lower utility costs and unfavorable LIFO inventory adjustments.

The timing of the flow through under the FIFO method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a charge of $1.0 million in 2023 versus a benefit of $0.1 million in 2022.

There were lower fixed manufacturing costs primarily due to lower non-production utility costs, and lower employee compensation.

In addition, the Company recorded an unfavorable out-of-period adjustment of $0.4 million related to inventory and accrued labor costs in 2022.

• The gross profit margin in PE Films increased primarily due to higher overwrap films contribution margin associated with higher volume, favorable mix and favorable pricing, operating efficiencies and cost improvements and favorable LIFO inventory adjustments for both Surface Protection and overwrap films in 2023 versus 2022, partially offset by lower contribution margin for Surface Protection associated with a market slowdown, customer

inventory corrections and for previously disclosed customer product transitions.

In addition, fixed manufacturing costs were lower primarily due to employee compensation and fixed cost savings.

For more information on changes in operating costs and expenses, see the Segment Operations Review section below.

As a percentage of sales, SG&A and R&D expenses were 11.9% in 2023 compared with 9.8% in 2022.

While SG&A and R&D expenses decreased 6.1% and 45.6% year-over-year, sales decreased $188.7 million or 24.8% compared with the prior year period.

Lower SG&A spending was primarily due to lower employee-related compensation and lower stock-based compensation.

Lower R&D spending was primarily due to the closure of the technical center in Richmond, VA.

For more information on changes in interest expense, see the “Corporate Expenses, Interest and Other” section of the Segment Operations Review section below.

During 2023, the Company settled the pension plan, which resulted in a pre-tax pension settlement loss in the consolidated results of operation of $92.3 million.

See Note 8 “Retirement Plans and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15 for more information.

During 2023, a non-cash partial goodwill impairment of $34.9 million was recognized associated with the Surface Protection reporting unit in PE Films, see Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for more information.

The effective tax rate used to compute income taxes from continuing operations for the year of 2023 was 34.1%, compared to (31.6)% in 2022.

The increase in the effective tax rate is primarily due to tax benefits previously recorded in other comprehensive income (loss) that were released as a result of the pension plan termination, partially offset by a reduction in Brazilian tax incentives as a percentage of income.

The related stranded taxes were released in full in 2023.

See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.

Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items in 2023 detailed below are shown in the reconciliation of net sales and EBITDA from ongoing operations by segment table in the Segment Operations Review below and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the consolidated statements of income, unless otherwise noted.

($ in millions) Q1 Q2 Q3 Q4 2023

Aluminum Extrusions:

(Gains) losses associated with plant shutdowns, asset impairments and restructurings:

Other restructuring costs - severance $ — $ — $ 0.1 $ — $ 0.1

(Gains) losses from sale of assets, investment writedowns and other items:

Consulting expenses for ERP/MES project 1

— — 1.2 0.6 1.8

Storm damage to the Newnan, Georgia plant 1

0.6 (0.2) 0.1 — 0.5

Legal fees associated with the Aluminum Extruders Trade Case 1

— — — 0.5 0.5

Total for Aluminum Extrusions $ 0.6 $ (0.2) $ 1.4 $ 1.1 $ 2.9

(Gains) losses associated with plant shutdowns, asset impairments and restructurings:

Impairment of Richmond, Virginia Technical Center assets 3

$ — $ — $ 3.4 $ 0.1 $ 3.5

Richmond, Virginia Technical Center closure expenses, including severance 3

— — 1.2 0.1 1.3

Richmond, Virginia Technical Center accelerated depreciation 3

— — — 0.3 0.3

Richmond, Virginia Technical Center lease modification 3

— — — (0.1) (0.1)

Goodwill impairment 3

— 15.4 19.5 — 34.9

Total for PE Films $ — $ 15.4 $ 24.1 $ 0.4 $ 39.9

(Gain) losses from sale of assets, investment writedowns and other items:

Professional fees associated with business development activities 1

$ (0.1) $ (0.1) $ 0.1 $ 0.3 $ 0.2

Professional fees associated with remediation activities related to internal control over financial reporting 1

0.5 0.5 0.2 0.8 2.0

Write-down of investment in Harbinger Capital Partners Special Situations Fund 2

— 0.2 — — 0.2

Group annuity contract premium expense 2

— — — 2.0 2.0

Net periodic benefit cost for the frozen defined benefit pension plan in process of termination 4

Proceeds on the sale of corporate-owned land 2

(0.1) (1.4) — — (1.5)

Pension settlement loss 4

OPEB termination gain 4

— — — (6.3) (6.3)

2 unchanged sentences

Included in “Other income (expense), net” in the consolidated statements of income.

For more information, see Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15.

Included in “Cost of good sold” in the consolidated statements of income.

For more information, see Note 8 “Retirement Plans and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15.

30 unchanged sentences

*Not meaningful (“NM”)

Net sales in 2024 were relatively flat v ersu s 2023 primarily due to flat sales volume and the pass-through of higher metal costs, partially offset by a lower average conversion price add-on to metal costs associated with a shift in sales mix.

Net sales in 2025 increased 27.0% versus 2024 primarily due to higher sales volume and the pass-through of higher metal costs.

Sales volume increased 12.9% versus 2024.

EBITDA from ongoing operations increased $9.6 million in 2025 versus 2024, primarily due to:

• A $27.3 million increase in contribution margin associated with:

◦ Favorable variable manufacturing costs ($4.8 million), higher labor productivity ($2.5 million) and higher volume ($0.5 million), partially offset by higher labor and employee-related costs ($2.2 million) and lower spread associated with a shift in sales mix ($1.4 million);

◦ The timing of the flow-through under the FIFO method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $1.4 million in 2024 versus a charge of $1.0 million in 2023.

• Inventories accounted for under the LIFO method resulted in a charge of $1.2 million in 2024 versus a benefit of $0.9 million in 2023;

• Lower manufacturing fixed costs of $0.9 million primarily due to lower employee-related compensation and reduced outside services ($1.2 million);

• Higher SG&A expenses of $3.9 million primarily due to employee-related incentive compensation ($2.7 million) and headquarters rent expenses ($0.6 million).

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

◦ Higher volume ($14.6 million), favorable pricing ($5.6 million) and lower manufacturing costs associated with material yield ($0.8 million favorable in 2025 versus $0.5 million favorable in 2024), partially offset by:

higher labor rates ($3.1 million);

unfavorable productivity ($1.2 million);

higher maintenance and supply expense, partially due to the impact of tariffs and severe weather and downed equipment in the first half of 2025 ($2.2 million);

higher expense for externally produced billet associated with the increase in volume ($0.9 million);

higher die expense associated with timing of purchases and increasing volumes ($1.0 million), and higher utilities ($0.9 million);

◦ The timing of the flow-through under the FIFO method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $8.7 million in 2025 versus a benefit of $0.1 million in 2024.

• Inventories accounted for under the LIFO method resulted in a net benefit of $2.6 million in 2025 compared to a net benefit of $0.1 million in 2024 due to a favorable current cost adjustment associated with higher metal prices ($9.3 million benefit in 2025 and $1.3 million benefit in 2024), partially offset by a corresponding increase in the LIFO reserve, which resulted in a charge of $6.7 million in 2025 versus a charge of $1.2 million in 2024.

• Higher fixed costs primarily associated with wage increases and compensation-related costs ($2.9 million), higher maintenance and utilities expenses ($1.5 million) and added resources to support increasing volume ($1.2 million).

• Higher SG&A expenses primarily due to employee-related compensation ($3.2 million), employee training and onboarding expense ($0.5 million) and routine environmental compliance expense ($0.3 million).

• Higher other expense for employee-related medical costs caused by an increase in the number of high-cost medical claims versus favorable experience in recent years ($1.1 million).

The Company is self-insured for medical claims with stop loss coverage for claims of over $0.3 million.

Given recent increased geopolitical tensions in the Middle East, Aluminum Extrusions is monitoring potential implications for the availability of certain aluminum‑related raw materials in 2026 and evaluating whether diversifying its sourcing may be warranted.

Aluminum Extrusions maintains robust supply agreements that support the continuity of aluminum and other key cost components.

See discussion of quantitative and qualitative disclosures about market risk in Item 7A in this Form 10-K for additional information on aluminum price trends.

Goodwill Impairment at Bonnell

During the fourth quarter of 2024, the Company recognized a non-cash write-off of goodwill of $13.3 million ($10.4 million after deferred income tax benefits) associated with the Clearfield, Utah operation ("Clearfield") acquired in February 2017 (formerly Futura).

Clearfield exceeded expectations in performance, including exceptional customer service, from the date of acquisition until before pandemic-related disruptions that resulted in long lead times during periods of 2021 and 2022.

Long lead times resulted in customers seeking supply from other sources to meet their demand, including imports.

Some business lost at Clearfield during this time has been regained during the recovery underway, but not at the level that the Company previously anticipated would eventually replicate the EBITDA and net cash flow generation that existed prior to the pandemic-related disruptions.

As a consequence, using projections that assume the continuation of lower sales and profitability, the estimated fair value of Clearfield during the fourth quarter of 2024 fell below its carrying value by more than the amount of goodwill causing the write-off.

Projected Capital Expenditures and Depreciation & Amortization

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Amortization expense is projected to be $2 million in 2026.

A summary of results for PE Films is provided below:

Year Ended Favorable/

(In thousands, except percentages) December 31, (Unfavorable)

2024 2023 % Change

Sales volume (lbs) 39,324 29,355 34.0%

Net sales $ 105,199 $ 76,763 37.0%

Variable costs 50,289 40,824 (23.2)%

LIFO inventory adjustment (174) (1,333) (86.9)%

Manufacturing fixed costs 1

13,248 13,793 4.0%

Selling, general and administrative costs 1

11,245 12,106 7.1%

105 156 32.7%

EBITDA from ongoing operations $ 30,486 $ 11,217 171.8%

Depreciation & amortization (5,200) (6,522) 20.3%

EBIT from ongoing operations 3

$ 25,286 $ 4,695 NM*

Capital expenditures $ 1,761 $ 1,772

Excludes related depreciation and amortization

Includes segment allocated employee compensation benefit expenses

See the reconciliation below of this non-GAAP measure to the most comparable measure calculated in accordance with GAAP.

*Not meaningful (“NM”)

Net sales in 2024 increased 37.0% versus 2023 due to higher net sales in Surface Protection.

Sales volume in 2024 for surface protection films increased 57% versus 2023, with extremely high sales volumes in the first half of 2024 associated with the restocking of Surface Protection customers’ inventories.

Overwrap films volume increased 14% versus 2023, primarily due to volume increases associated with lower margin business.

EBITDA from ongoing operations in 2024 increased $19.3 million versus 2023 primarily due to:

• Higher contribution margin of $19.0 million resulting from:

◦ A $19.4 million increase from Surface Protection associated with substantially higher volume and favorable pricing ($13.4 million), and operating efficiencies and variable cost savings ($6.0 million);

◦ Relatively flat contribution margin from overwrap films, associated with a shift in sales mix and unfavorable pricing ($1.0 million), offset by operating efficiencies and variable cost savings ($1.0 million);

◦ The pass-through lag associated with resin costs ($1.0 million charge in 2024 versus a charge of $0.5 million in 2023).

• Inventories accounted for under the LIFO method that resulted in a benefit of $0.2 million in 2024 versus a benefit of $1.3 million in 2023.

• Lower SG&A of $0.9 million primarily due to decreased research and development costs ($1.6 million), partially offset by increased employee-related incentive compensation ($1.2 million).

See discussion of quantitative and qualitative disclosures about market risk in Item 7A in this Form 10-K for additional information on resin price trends.

Projected Capital Expenditures and Depreciation & Amortization

Capital expenditures for PE Films are projected to be $3 million in 2025, including $2 million for productivity projects and $1 million for capital expenditures required to support continuity of current operations.

Depreciation expense is projected to be $5 million in 2025.

There is no amortization expense for PE Films.

Corporate Expenses and Interest

Corporate expenses, net in 2024 decreased by $9.2 million compared to 2023, primarily due to lower pension expense as a result of the pension plan termination completed in 2023 ($10.7 million), a non-recurring charge in 2023 associated with the pension plan transition ($2.3 million) and lower software maintenance fees ($0.6 million), partially offset by higher employee-related incentive compensation ($4.7 million).

Interest expense was $4.7 million in 2024 in comparison to $6.3 million in 2023, primarily due to lower weighted average total debt outstanding, partially offset by higher interest rates.

2023 versus 2022

A summary of operating results for 2023 versus 2022 for each of the Company’s reporting segments is shown below.

Aluminum Extrusions

A summary of results for Aluminum Extrusions is provided below:

Year Ended Favorable/

(In thousands, except percentages) December 31, (Unfavorable)

2023 2022 % Change

Sales volume (lbs) 138,451 174,670 (20.7)%

Net sales $ 474,803 $ 637,872 (25.6)%

Variable costs 365,320 503,374 27.4%

LIFO inventory adjustment (944) (5,402) (82.5)%

Manufacturing fixed costs 1

41,028 43,073 4.7%

Selling, general and administrative costs 1

29,725 31,641 6.1%

1,698 (1,614) NM*

EBITDA from ongoing operations $ 37,976 $ 66,800 (43.1)%

Depreciation & amortization (17,927) (17,414) (2.9)%

EBIT from ongoing operations 3

$ 20,049 $ 49,386 (59.4)%

Capital expenditures $ 20,339 $ 23,664

Excludes related depreciation and amortization

Includes segment allocated employee compensation benefit expenses

See the reconciliation below of this non-GAAP measure to the most comparable measure calculated in accordance with GAAP.

*Not meaningful (“NM”)

Net sales in 2023 decreased 25.6% versus 2022 primarily due to lower sales volume and the pass-through of lower metal costs.

EBITDA from ongoing operations decreased $28.8 million in 2023 versus 2022, primarily due to:

• A 25.0 million decrease in contribution margin associated with:

◦ Lower volume ($27.6 million), lower labor productivity in the first half of 2023 ($0.9 million), higher supply expense, including higher paint expense associated with a shift to more painted product throughout 2023 and inflationary costs for other supplies ($1.6 million), partially offset by lower utility costs ($2.3 million);

the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a charge of $1.0 million in 2023 versus a benefit of $0.1 million in 2022;

• Inventories accounted for under the LIFO method resulted in a benefit of $0.9 million in 2023 versus a benefit of $5.4 million in 2022.

• Lower manufacturing fixed costs of $2.0 million primarily due to lower non-production utility costs ($0.9 million) and lower employee-related compensation ($0.5 million).

In addition, the Company recorded an unfavorable out-of-period adjustment of $0.4 million related to inventory and accrued labor costs in 2022.

• Lower SG&A expenses of $1.9 million primarily due to lower employee incentive-based compensation ($2.5 million) and lower expense for allowance for bad debt ($0.8 million), partially offset by other employee-related compensation ($0.9 million) and increased information technology expenses ($0.4 million).

A summary of results for PE Films is provided below:

The Company anticipates capital spending to increase from the levels of the past two years and return to a pattern more closely aligned with depreciation and amortization, consistent with long-term historical patterns.

This approach supports ongoing maintenance and efficiency initiatives while maintaining disciplined capital allocation.

High Performance Films

A summary of results for High Performance Films is provided below:

Year Ended Favorable/

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11,618 11,245 (3.3)%

156 (316) NM*

EBITDA from ongoing operations $ 27,137 $ 30,486 (11.0)%

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*Not meaningful (“NM”)

Net sales in 2023 decreased 21.3% versus 2022, primarily due to lower volume in Surface Protection, resulting from weak demand in the consumer electronics market and customer inventory corrections during 2023.

Sale s volume in 2023 for surface protection fil ms declined 22% and increased 2% fo r overwrap films versus 2022.

Net sales in 2025 decreased 5.2% versus 2024 due to a decrease of 4% in s ales volume in 2025 for surface protection films versus 2024.

Advanced packaging films volume decreased 1%.

EBITDA from ongoing operations in 2025 decreased $3.3 million versus 2024 primarily due to:

• Lower contribution margin of $1.8 million resulting from:

◦ An $8.6 million decrease from Surface Protection associated with a market slowdown and customers’ inventory corrections ($11.1 million) and for previously disclosed customer product transitions ($0.7 million), partially offset by favorable pricing ($0.5 million) and operating efficiencies ($2.6 million);

◦ A $4.5 million increase from overwrap films associated with higher volume, favorable mix and favorable pricing ($1.3 million) and operating efficiencies and cost improvements ($3.2 million);

◦ The pass-through lag associated with resin costs (a charge of $0.5 million in 2023 versus a benefit of $0.9 million in 2022).

• Inventories accounted for under the LIFO method, which resulted in a benefit of $1.3 million versus a charge of $0.5 million in 2022;

• Lower fixed manufacturing costs of $1.4 million primarily due to employee compensation expenses ($1.0 million) and other fixed cost savings ($0.2 million).

• Lower SG&A of $2.0 million primarily due to lower research and development ($2.0 million) from the closure of the technical center in Richmond, VA.

◦ A $1.0 million decrease from Surface Protection associated with lower volume, unfavorable mix and favorable pricing ($4.5 million), partially offset by variable cost savings and operating efficiencies ($3.1 million) and the pass-through lag associated with resin costs (a charge of $0.2 million in 2025 versus a charge of $0.7 in 2024);

◦ A $0.8 million decrease from advanced packaging films associated with lower volume, unfavorable shift in sales mix and unfavorable pricing ($1.0 million) and unfavorable operating efficiencies ($0.5 million), partially offset by variable cost savings ($0.5 million) and the pass-through lag associated with resin costs (a charge of $0.1 million in 2025 versus a charge of $0.3 million in 2024).

• Inventories accounted for under the LIFO method that resulted in a charge of $0.2 million in 2025 versus a benefit of $0.2 million in 2024.

• Higher fixed costs primarily associated with wage increases and compensation-related costs ($0.9 million).

• Lower SG&A of $0.2 million primarily due to lower administrative costs.

• A foreign currency transaction loss of $0.3 million in 2025 versus a gain of $0.3 million in 2024.

See discussion of quantitative and qualitative disclosures about market risk in Item 7A in this Form 10-K for additional information on resin price trends.

Projected Capital Expenditures and Depreciation & Amortization

Capital expenditures for High Performance Films are projected to be $3 million in 2026, including $1 million for productivity projects and $2 million for capital expenditures required to support continuity of current operations.

Depreciation expense is projected to be $4 million in 2026.

There is no amortization expense for High Performance Films.

Corporate Expenses and Interest

Corporate expenses, net in 2023 decreased by $6.7 million compared to 2022, primarily due to lower pension expense as a result of the pension plan termination completed in 2023 ($3.7 million), lower accruals for employee-related compensation ($2.1 million), lower stock-based compensation ($1.3 million), lower professional fees associated with business development activities ($0.8 million), and lower external and internal audit fees ($1.0 million), partially offset by a charge to adjust the initial purchase price of the nonparticipating single premium group annuity contract as a result of the routine administrative process to transition the pension plan ($2.0 million).

Interest expense was $6.3 million in 2023 in comparison to $4.1 million in 2022, primarily due to higher weighted average total debt outstanding and higher interest rates.

Corporate expenses, net in 2025 increased by $0.9 million compared to 2024, primarily due to higher professional fees associated with business development activities ($5.9 million) and higher stock based compensation ($0.5 million), partially offset by lower employee-related incentive compensation ($2.1 million), a gain on the sale of corporate owned land ($1.5 million), lower internal and external audit fees ($0.9 million), lower professional fees associated with remediation activities related to internal control over financial reporting ($0.3 million) and lower professional fees associated with the transition to the ABL Facility (as defined below) ($0.2 million).

The Company does not expect significant expenses from business development activities in 2026.

Interest expense was $4.0 million in 2025 in comparison to $4.7 million in 2024, primarily due to lower weighted average total debt outstanding and lower interest rates, partially offset by the write-off of deferred financing fees related to the May 2025 amendment to the ABL Facility of $0.8 million.

Reconciliation of Net Sales and EBITDA from Ongoing Operations by Segment

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Aluminum Extrusions $ 598,975 $ 471,815 $ 474,803

PE Films 105,199 76,763 97,571

High Performance Films 99,756 105,199 76,763

Total net sales 698,731 577,014 551,566

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Goodwill impairment — (13,271) —

High Performance Films:

Ongoing operations:

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Gain on investment in kaleo, Inc.

144 262 1,406

Stock option-based compensation costs — — 231

OPEB termination gain 6,265 — —

Pension settlement loss — — 92,291

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• Accounts and other receivables increased $17.0 million or 26.2%.

◦ Accounts and other receivables in Aluminum Extrusions increased $8.3 million primarily due to higher sales volume and the pass-through of higher metal costs, partially offset by a lower average conversion price add-on to metal costs associated with a shift in sales mix in the fourth quarter of 2024 versus the fourth quarter of 2023.

DSO (computed using trailing 12 months net sales and a rolling 12-month average of accounts and other receivables balances) was approximately 44.7 days in 2024 and 45.1 days in 2023.

◦ Accounts and other receivables in PE Films increased $0.9 million primarily due to higher sales volume in surface protection films.

◦ Accounts and other receivables in Aluminum Extrusions increased $17.3 million primarily due to higher sales volume and the pass-through of higher metal costs.

DSO (computed using trailing 12 months net sales and a rolling 12-

month average of accounts and other receivables balances) was approximately 44.8 days in 2025 and 44.7 days in 2024.

◦ Accounts and other receivables in High Performance Films decreased $0.1 million primarily due to lower sales volume in surface protection films.

DSO was approximately 25.4 days in 2025 and 24.9 days in 2024.

• Inventories increased $13.6 million or 26.4%.

◦ Inventories in Aluminum Extrusions remained consistent with prior year.

◦ Inventories in Aluminum Extrusions increased $12.7 million primarily due to the timing of raw material purchases and higher metal costs.

DIO (computed using trailing 12 months costs of goods sold calculated on a FIFO basis and a rolling 12-month average of inventory balances calculated on the FIFO basis) was approximately 48.8 days in 2025 and 47.4 days in 2024.

◦ Inventories in PE Films increased $1.4 million due to higher raw materials costs and higher finished goods.

◦ Inventories in High Performance Films increased $0.9 million due to higher raw materials and finished goods.

The DIO was approximately 54.6 days in 2025 and 50.3 days in 2024.

• Net property, plant and equipment decreased by $14.1 million or 9.3% primarily due to depreciation expense ($21.4 million), partially offset by capital expenditures ($8.3 million).

• Net property, plant and equipment decreased by $4.1 million or 3.0% primarily due to depreciation expense ($20.0 million) and production equipment impairment ($0.8 million), partially offset by capital expenditures ($17.1 million).

• Identifiable intangible assets, net decreased by $1.8 million or 24.0% primarily due to amortization expense.

• Deferred income tax assets, net increased $9.3 million or 40.1% primarily due to an increase in tax credit carryforwards offset by the utilization of net operating loss and interest limitation carryforwards.

Deferred tax liabilities related to intangible amortization, depreciation and foregone tax credits on foreign branch income decreased $6.3 million while deferred taxes assets related to capitalized R&D and asset write-offs, divestitures and environmental accruals increased $4.3 million.

• Deferred income tax assets, net decreased $6.2 million or 18.9% primarily due to a decrease in tax credit carryforwards and a decrease in deferred tax assets related to divestitures and employee benefits.

The decrease in these deferred tax assets was partially offset by a decrease in deferred tax liabilities related to property, plant and equipment.

See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.

• Accounts payable decreased by $4.6 million or 6.7%.

◦ Accounts payable in Aluminum Extrusions decreased $3.9 million, primarily due to the timing of payments.

• Accounts payable increased by $11.1 million or 17.1%.

◦ Accounts payable in Aluminum Extrusions increased $12.0 million, primarily due to the timing of payments and higher metal costs.

DPO (computed using trailing 12 months costs of goods sold calculated on a FIFO basis and a rolling 12-month average of accounts payable balances) was approximately 46.6 days in 2025 and 44.5 days in 2024.

◦ Accounts payable in PE Films remained relatively flat.

The DPO was approximately 41.3 days in 2024 and 43.4 days for 2023.

◦ Accounts payable in High Performance Films decreased $1.2 million, primarily due to the timing of payments.

The DPO was approximately 40.6 days in 2025 and 41.3 days in 2024.

Net cash provided by operating activities was $33.0 million in 2025 compared to net cash provided by operating activities of $25.5 million in 2024.

The change in operating activities is primarily due to an increase in EBITDA from ongoing operations of the Company’s continuing business segments of $22.7 million, partially offset by a net increase in accounts and other receivables, inventories, prepaid expenses and other, and accounts payable of $18.9 million.

Net cash provided by investing activities was $40.5 million in 2024 compared to net cash used in investing activities of $26.2 million in 2023.

The change in investing activities is primarily due to net cash proceeds received for the sale of Terphane ($54.6 million) and lower capital expenditure spending ($12.1 million).

The change in operating activities is primarily due to an increase in EBITDA from ongoing operations of the Company’s continuing business segments, partially offset by higher working capital.

Net cash used in investing activities was $5.5 million in 2025 compared to net cash provided by investing activities of $40.5 million in 2024.

The change in investing activities is primarily due to lower net cash proceeds received for the sale of Terphane ($44.8 million) and higher capital expenditures ($2.9 million), partially offset by higher proceeds from the sale of assets ($1.9 million).

Net cash used in financing activities was $28.2 million in 2025 compared to net cash used in financing activities of $65.0 million in 2024.

The change in financing activities is primarily due to higher debt principal payments, net of borrowings ($72.8 million) under the ABL Facility (as defined below), lower dividends paid ($8.9 million) and lower debt financing fees ($3.4 million).

At December 31, 2024, Tredegar had cash, cash equivalents and restricted cash of $7.1 million, including funds held in locations outside the U.S.

The change in financing activities is primarily due to lower debt principal payments, net of borrowings ($37.5 million) under the ABL Facility, partially offset by higher debt financing fees ($0.7 million).

At December 31, 2025, Tredegar had cash and cash equivalents of $6.7 million, including funds held in locations outside the U.S.

of $1.9 million.

Debt and Credit Agreements

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.

In May 2025, the Company entered into Amendment No.

5 (“Amendment No.

5”) to the Second Amended and Restated Credit Agreement (the "ABL Facility"), which provides the Company with a $125 million senior secured asset-based revolving credit facility.

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 will expire on June 30, 2026.

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.

Amendment No.

5 extended the maturity date of the ABL Facility to May 6, 2030.

As of December 31, 2025, funds available to borrow under the ABL Facility was $87.5 million, or 70.0% of the aggregate commitment of $125 million.

The computation of Credit EBITDA, as defined in the ABL Facility, is presented below.

During 2025, the Company's letters of credit have been reduced from approximately $12 million to $3 million, which directly increases the Company's borrowing availability.

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 the greater of (x) 10% of the Line Cap (as defined in the ABL Facility) 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.

The computation of Credit EBITDA and fixed charge coverage ratio, as defined in the ABL Facility, is presented below.

Computations of Credit EBITDA (as defined in the ABL Facility) as of and for the

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Losses related to adjustments in the estimated fair value of assets accounted for under the fair value method of accounting —

Fees, costs and expenses incurred in connection with the amendment process 459

Terphane sale transaction costs in an amount not to exceed $10,000 —

Fees, costs and expenses incurred in connection with the amendment process (Amendment No.

3 “ABL Transition”) 290

Fees, costs and expenses incurred in connection with the amendment process (Amendment No.

After-tax income related to discontinued operations (9,391)

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Income related to adjustments in the estimated fair value of assets accounted for under the fair value method of accounting —

Plus cash dividends declared on investments in an amount not to exceed $10,000 for such period —

Plus or minus, as applicable, pro forma EBITDA adjustments associated with acquisitions and asset dispositions —

Plus or minus, as applicable, pro forma EBITDA adjustments to pension expense associated with the early payment of pension obligations (258)

Credit EBITDA $ 60,146

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** Fixed Charge Coverage Ratio is computed as the ratio of (a) Credit EBITDA minus Unfinanced Capital Expenditures to (b) Fixed Charges.

As of December 31, 2024, the Company was in compliance with all debt covenants.

PE Films Guangzhou Loan

In June 2024, PE Films' business location in Guangzhou, China, Guangzhou Tredegar Film Products Co., Ltd.(“Guangzhou Tredegar”), entered into a 9.5 million Chinese Yuan, which is equivalent to $1.3 million as of December 31, 2024, revolving loan with the Industrial and Commercial Bank of China.

The loan matures on July 3, 2025.

High Performance Films Guangzhou Loan

In October 2025, High Performance Films' business location in Guangzhou, China, Guangzhou Tredegar Film Products Co., Ltd.

(“Guangzhou Tredegar”), entered into a 3.5 million Chinese Yuan, which is equivalent to $0.5 million as of December 31, 2025, unsecured revolving loan with the Industrial and Commercial Bank of China.

The loan matures on October 20, 2026.

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 0.55%.

As of December 31, 2025, the National Interbank Funding Center rate was 3.00%.

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.

This loan was presented as current debt on the consolidated balance sheet for the year ended December 31, 2024.

For more information on the ABL Facility and the PE Films Guangzhou Loan, see Note 7 “Debt and Credit Agreements” to the consolidated Financial Statements in Item 15.

The financial covenants require that the total amount of Guangzhou Tredegar’s current liabilities cannot exceed 50% of the total amount of current assets and the short-term financing amount cannot exceed 50% of Guangzhou Tredegar’s total sales.

In June 2024, Guangzhou Tredegar entered into a 9.5 million Chinese Yuan revolving loan with the Industrial and Commercial Bank of China.

This loan matured on July 3, 2025.

The interest rate was 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 December 31, 2025, there was no outstanding loan balance.

The revolving loan was secured by a mortgage contract listing the Guangzhou Tredegar factory building as collateral.

The mortgage was cancelled during the fourth quarter of 2025.

Each Guangzhou Tredegar loan, as applicable, was presented as current debt on the consolidated balance sheet for the years ended December 31, 2025 and 2024.

For more information on the ABL Facility and the High Performance Films Guangzhou Loan, see Note 7 “Debt and Credit Agreements” to the consolidated Financial Statements in Item 15.

As of December 31, 2025, the Company was in compliance with all debt covenants.

The Company believes that existing borrowing availability, current cash balances and cash flow from operations will be sufficient to satisfy short term material cash requirements related to working capital, capital expenditure, and debt repayments for at least the next 12 months.

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Debt and interest payments

As of December 31, 2024, the Company had outstanding debt under the ABL Facility of $60.6 million with contractual payments due in June 2026.

As of December 31, 2025, the Company had outstanding debt under the ABL Facility of $34.6 million with contractual payments due in May 2030.

Estimated future interest payments associated with the ABL Facility total $8.4 million, with $1.9 million payable within the next 12 months.

As of December 31, 2024, PE Films had outstanding debt of $1.3 million under the PE Films Guangzhou Loan.

Estimated future interest payments associated with the PE Films Guangzhou Loan payable within the next 12 months were immaterial.

As of December 31, 2025, High Performance Films had outstanding debt of $0.5 million under the High Performance Films Guangzhou Loan.

Estimated future interest payments associated with the High Performance Films Guangzhou Loan payable within the next 12 months are immaterial.

Capital expenditure commitments

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Uncertain Tax Positions

As of December 31, 2024, unrecognized tax benefits on uncertain tax positions were $0.8 million.

Tax payments resulting from the successful challenge by the taxing authority on uncertain tax positions taken by Tredegar would possibly result in the payment of interest and penalties of $0.2 million, which were accrued at December 31, 2024, if tax payments were made as a result of a successful challenge by the taxing authority on uncertain tax positions.

Due to uncertainties in the timing of potential tax audits, the timing of the resolution of these positions is uncertain.

Therefore, the Company is unable to make a reasonably reliable estimate of the timing of payments beyond 12 months.

As of December 31, 2025, there were no unrecognized tax benefits on uncertain tax positions.

See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.

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The Company has no material off-balance sheet arrangements that have had or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

From time to time, the Company enters into transactions with third parties in connection with the sale of assets or businesses in which it agrees to indemnify the buyers or third parties involved in the transaction, or the sellers or third parties involved in the transaction agree to indemnify Tredegar, for certain liabilities or risks related to the assets or business.

involved in the transaction agree to indemnify Tredegar, for certain liabilities or risks related to the assets or business.

Also, in the ordinary course of business, the Company may enter into agreements with third parties for the sale of goods or services that may contain indemnification provisions.

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If the Company's Step 0 analysis indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company would perform a quantitative impairment test (“Step 1 analysis”).

Domestic producers of aluminum extrusions in the U.S.

continue to experience adverse conditions associated with economic uncertainty, including persistently high interest rates, tight lending standards and inflationary pressures, which negatively impact the non-residential B&C end-use market.

These pandemic-related disruptions, which resulted in long lead times and a decline in industry capacity utilization, caused pricing pressure in the aluminum extrusions end-use markets.

An influx of foreign imports at less-than-fair value pricing has also adversely impacted domestic producers.

As of December 31, 2025, the Company’s reporting unit with goodwill was Surface Protection in High Performance Films.

The Company’s Step 0 analysis as of December 1, 2025 of this reporting unit concluded that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount.

Therefore, the Step 1 quantitative goodwill impairment test for this reporting unit was not necessary as of December 1, 2025.

As of December 31, 2025 and 2024, Surface Protection had goodwill of $22.4 million.

During 2024, customers of the Aluminum Extrusions’ Clearfield, Utah operation ("Clearfield") acquired as “Futura” in February 2017 continued to seek supply from other sources to meet their demand, including imports.

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Key financial assumptions utilized to determine the fair value of the reporting unit include sales volume and sales price growth projections.

At December 31, 2024, the effect of a two percent increase per year in these growth projections would increase the reporting unit’s fair value, however such sensitized fair value is still below Clearfield’s carrying value by more than the amount of goodwill.

As of December 31, 2024, the Company’s remaining goodwill of $22.4 million was included in the Surface Protection reporting unit.

See Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for additional information on the analysis of goodwill impairment.

Current tax liabilities and assets are recognized for the estimated taxes payable or refundable, respectively, on the tax returns for the current year.

Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Accordingly, accounting for income taxes represents the Company’s best estimate of various events and transactions.

Tax laws are often complex and may be subject to differing interpretations by the taxpayer and the relevant governmental taxing authorities.

In establishing a provision for income tax expense, Tredegar must make judgments and interpretations about the application of tax laws.

The Company must also make estimates about when in the future certain items will affect taxable income in the various taxing jurisdictions.

A valuation allowance is recorded in the period when the Company determines that it is more likely than not that all or a portion of deferred income tax assets may not be realized.

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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 7. Management’s Discussion and Analysis