TREDEGAR REPORTS THIRD QUARTER 2020 RESULTS
RICHMOND, VA--(BUSINESS WIRE)--11/9/2020--Tredegar Corporation (NYSE:TG, also the “Company” or “Tredegar”) today reported third quarter financial results for the period ended September 30, 2020.
Third quarter 2020 net loss from continuing operations was $17.0 million ($0.51 per diluted share) compared to net income from continuing operations of $15.1 million ($0.45 per diluted share) in the third quarter of 2019. Net income from ongoing operations, which excludes special items and discontinued operations, was $13.2 million ($0.39 per diluted share) in the third quarter of 2020 compared with $13.3 million ($0.40 per diluted share) in the third quarter of 2019. A reconciliation of net income (loss) from continuing operations, a financial measure calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), to net income from ongoing operations, a non-GAAP financial measure, for the three and nine months ended September 30, 2020 and 2019, is provided in Note (a) of the Notes to the Financial Tables in this press release.
On August 24, 2020, the Company entered into a definitive agreement to sell its Personal Care Films business ("Personal Care business"), which excludes the packaging film lines and related operations located at the Pottsville, Pennsylvania manufacturing site ("Pottsville Packaging"). The Company completed this divestiture at the end of October and received gross proceeds of $60.5 million. Net cash proceeds from the sale, after future deductions for transaction costs, purchase price adjustments and transition services after September 30, 2020, are estimated at $45 to $50 million. Net cash income tax costs or benefits relating to the transaction are expected to be negligible. All historical results for the Personal Care business have been presented as discontinued operations. The surface protection component of the PE Films segment now includes Pottsville Packaging.
Third Quarter Financial Results Highlights
•Earnings before interest, taxes, depreciation and amortization ("EBITDA") from ongoing operations for Aluminum Extrusions of $16.5 million was $0.1 million higher than the third quarter of 2019
•EBITDA from ongoing operations for PE Films of $6.0 million was $4.2 million lower than the third quarter of 2019
•EBITDA from ongoing operations for Flexible Packaging Films of $9.5 million was $5.2 million higher than the third quarter of 2019
John Steitz, Tredegar’s president and chief executive officer said, “Despite COVID-19-related lower volume, Bonnell Aluminum's EBITDA from ongoing operations during the third quarter was essentially flat with last year. It continues to outperform our expectations. The PE Films segment experienced a decline in profitability during the third quarter versus last year due to previously disclosed customer product transitions in the Surface Protection component that had been delayed. Our Surface Protection team has been making progress in generating sales from new products, applications and customers to help offset the expected future adverse impact of the transitions. Regarding Terphane, our flexible packaging films business, its performance has been a great story since 2017, but especially in 2020 with EBITDA from ongoing operations doubling in 2020 versus 2019."
Mr. Steitz continued, "We had strong cash flow during the third quarter with net cash in excess of debt as of September 30, 2020 of $28.0 million, up from $5.9 million as of June 30, 2020, which excludes the net cash proceeds expected from the sale of the Personal Care business of $45 to $50 million."
On a final note, Mr. Steitz commented, "I'd like to thank again all of our employees for their hard work and dedication during these unprecedented times."
THE IMPACT OF COVID-19
Essential Business and Employee Considerations
The Company’s priorities during the COVID-19 pandemic continue to be to protect the health and safety of employees while keeping its manufacturing sites open due to the essential nature of many of its products. The Company’s businesses have been deemed “essential services,” “critical manufacturers,” and “life sustaining industries” under applicable state or national stay-at-home orders and, therefore, remain operational. Within the limitations imposed by the health and safety procedures described below, the Company has continued to manufacture the full range of products at its facilities, including certain products that are components for end-uses that are essential, critical or life sustaining such as: (i) polyester-based materials for flexible food packaging, (ii) polyethylene-based film for packaging products, (iii) aluminum extrusion parts for hospital beds, FEMA tents, temporary hospital structures and medical equipment, (iv) materials for face shields, and (v) polyethylene-based films used to protect components of flat panel displays during manufacturing and transportation processes, which are instrumental to allowing employees to work from home.
The following information was filed by Tredegar Corp (TG) on Monday, November 9, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.