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Mar 31, 2024
Tredegar Q1 2024 Earnings Report
Reported a profit from ongoing operations and advanced in the sale of Terphane.
Key Takeaways
Tredegar Corporation reported a net income of $3.3 million for Q1 2024, a significant improvement compared to the net loss of $1.0 million in Q1 2023. The company saw increased earnings in PE Films and Flexible Packaging Films, while Aluminum Extrusions experienced a decrease in EBITDA. Tredegar is progressing with the sale of Terphane and focuses on managing costs and working capital.
Net income was $3.3 million ($0.10 per diluted share) in Q1 2024, compared to a net loss of $(1.0) million ($(0.03) per diluted share) in Q1 2023.
Net income from ongoing operations was $5.6 million ($0.16 per diluted share) in Q1 2024, compared to $2.5 million ($0.07 per diluted share) in Q1 2023.
Aluminum Extrusions EBITDA from ongoing operations decreased to $12.5 million from $14.6 million in Q1 2023.
PE Films EBITDA from ongoing operations significantly increased to $6.9 million from $1.8 million in Q1 2023, driven by higher volumes and cost improvements.
Tredegar
Tredegar
Tredegar Revenue by Segment
Tredegar Revenue by Geographic Location
Revenue by Segment
Aluminum Extrusions Revenue
CapyFin.comPE Films Revenue
CapyFin.comRevenue by Geographic Location
United States Revenue
CapyFin.comAsia Revenue
CapyFin.com Forward Guidance
The process to complete the closing of our agreement to sell Terphane continues to advance as planned, including the review required by competition authorities in Brazil. Meanwhile, the recovery that we believe is underway in our business units is having a favorable impact on overall operating results and improving our outlook of net financial leverage.
Positive Outlook
- The company is progressing with selling of Terphane.
- The regulatory review process is ongoing and in line with the Company’s expectations.
- The merger review regarding the transaction was cleared by the Colombian authority in early February 2024.
- The company expects to realize after-tax net debt-free cash proceeds of $85 million after deducting projected Brazil withholding taxes, escrow funds, U.S. capital gains taxes and transaction costs.
- Daily liquidity under the ABL Facility from January 1, 2024 to March 31, 2024, was $10 million to $27 million.
Challenges Ahead
- Completion of the sale is contingent upon the satisfaction of customary closing conditions, including the receipt of certain competition filing approvals by authorities in Brazil and Colombia.
- CADE’s maximum deadline for completing its review is no later than November 18, 2024.
- Actual after-tax proceeds may differ from estimates due to possible changes in deductions and the Company's tax situation during the potentially lengthy interim period to the closing date.
- Total debt increased $2.0 million and net debt increased $10.7 million in the first quarter of 2024 versus the end of 2023 due primarily to higher net working capital to support the recovery the Company believes is underway in its businesses.
- As of March 31, 2024, excess available borrowings under the ABL Facility were approximately $22.2 million, based upon the outstanding borrowing base availability net of the financial covenant for Minimum Liquidity (as defined in the ABL Facility).
Revenue & Expenses
Visualization of income flow from segment revenue to net income