Tredegar Corporation · NYSE:TG
Tredegar — Q4 2023 Earnings Presentation
37 slides from Tredegar's earnings presentation, Mar 20, 2024
Slide 1: 2023 Fourth Quarter Financial Results
2023 Fourth Quarter Financial Results March 20, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this presentation are forward-looking statements. Pursuant to federal securities regulations, we have set forth cautionary statements relating to those forward-looking statements in our Annual Report on Form 10-K for the year ended December
Slide 3: 2023 Fourth Quarter and Full Year Results
Tredegar Corporation 2023 Fourth Quarter and Full Year Results (in millions, except per share data) 4Q 2023 4Q 2022 2023 2022 Net Sales1 $162.4 $182.8 $677.9 $903.6 Net Income (Loss) from Ongoing Operations2 $(0.1) $0.5 $(4.7) $39.5 Diluted Earnings (Loss) per share from Ongoing Operations2 $(0.01)
Slide 4: Aluminum Extrusions (Bonnell Aluminum)
Aluminum Extrusions (Bonnell Aluminum) 2023 Fourth Quarter and Full Year Results Fourth Quarter Performance Full Year Performance (in millions) 4Q 23 4Q 22 (in millions) 2023 2022 Volume (lbs.) 32.9 37.2 (12)% Volume (lbs.) 138.5 174.7 (21)% Net Sales1 $110.2 $127.8 (14)% Net Sales1 $474.8 $637.9 (2
Slide 5: Aluminum Extrusions: Sales Volume by End-Use Market and Open Orders
Aluminum Extrusions (Bonnell Aluminum) Sales Volume by End-Use Market and Open Orders Three Months Three Months Ended Favorable/ Ended Favorable/ Year Ended Favorable/ December 31, (Unfavorable) September 30, (Unfavorable) December 31, (Unfavorable) (In millions of lbs) 2023 2022 % Change 2023 % Cha
Slide 6: Aluminum Extrusions: ABI Index
Aluminum Extrusions (Bonnell Aluminum) ABI Index • One of the key indicators for non-residential building & construction (B&C) is the Architecture Billings Index (ABI), which leads non-residential B&C activity by 9 to 12 months. Published monthly by the American Institute of Architects, the ABI is a
Slide 7: PE Films
PE Films (Surface Protection, Polyethylene Overwrap Films & Films for Other Markets) 2023 Fourth Quarter and Full Year Results Fourth Quarter Performance Full Year Performance (in millions) 4Q 23 4Q 22 (in millions) 2023 2022 Volume (lbs.) 8.5 5.6 52% Volume (lbs.) 29.4 32.9 (11)% Net Sales1 $20.7 $
Slide 8: Flexible Packaging Films (Terphane)
Flexible Packaging Films (Terphane) 2023 Fourth Quarter and Full Year Results Fourth Quarter Performance Full Year Performance (in millions) 4Q 23 4Q 22 (in millions) 2023 2022 Volume (lbs.) 22.8 24.5 (7)% Volume (lbs.) 88.5 106.7 (17)% Net Sales1 $31.5 $40.0 (21)% Net Sales1 $126.3 $168.1 (25)% Ong
Slide 9: Status of Current Corporate Strategic Initiatives: Agreement to Sell Terphane
Status of Current Corporate Strategic Initiatives Agreement to Sell Terphane On September 1, 2023, the Company announced that it had entered into a definitive agreement to sell Terphane to Oben Group (the “Contingent Terphane Sale”). Completion of the sale is contingent upon the satisfaction of cust
Slide 10: Status of Current Corporate Strategic Initiatives: ABL Facility
Status of Current Corporate Strategic Initiatives ABL Facility On December 27, 2023, the Company entered into Amendment No. 3 (the “ABL Facility”) to the Second Amended and Restated Credit Agreement dated June 29, 2022, which provides the Company with a $180 million senior secured asset-based revolv
Slide 11: Status of Current Corporate Strategic Initiatives: Pension Plan Termination
Status of Current Corporate Strategic Initiatives Pension Plan Termination On September 27, 2023, the Company borrowed $30 million under the Prior Credit Agreement in anticipation of the final funding expected for terminating its defined benefit pension plan obligation. On October 31, 2023, the Comp
Slide 12: 2023 Financial Highlights
Tredegar Corporation 2023 Financial Highlights ($ in millions) Cash Flows provided by Operations $24.0 $26.4 Capital Expenditures Dividends Paid1 $8.9 Net Debt (Cash)2 $132.8 ABL Facility availability in excess of Minimum Liquidity covenant $22.9 1. The Company suspended its quarterly dividend (whic
Slide 13: Appendix
‘Tredegar an < ) Appendix
Slide 14: Major Product Groups, Primary End Markets, Customers, Competitors
Major Product Groups Primary End Markets Customers Competitors Aluminum Extrusions Custom designed, fabricated and Building and Construction: commercial windows & Glazing contractors and Hydro Extrusions North finished aluminum extrusions; value- doors, curtain walls, storefronts & entrances, automa
Slide 15: Tredegar's Global Presence
Tredegar’s Global Presence 14
Slide 16: Tredegar at a Glance
Tredegar at a Glance Business Strengths Aluminum Extrusions ➢ Industry-leading position in non-residential building and construction and value-added OEM components in North American extrusions market ➢ Market-focused manufacturing operations (including aluminum log casting capabilities) and world-cl
Slide 17: Aluminum Extrusions: Business Profile
Aluminum Extrusions Business Profile Key Market Drivers $475 million 2023 Net Sales1 • Strong demand for finished products, including anodized, painted products and fabricated components 9% Electrical & • Growing aluminum content in vehicles, driven by CAFE Other (corporate average fuel economy) sta
Slide 18: Index of North American Industry Volume for Bonnell's Key Markets
Aluminum Extrusions Index of North American Industry Volume for Bonnell’s Key Markets Note: Index computations based on Aluminum Association data (1982=1.0) through 2022. Specialty includes aluminum extrusions sold to consumer durables, electrical and machinery markets. Data for 2023 not yet release
Slide 19: Aluminum Extrusions: Key Markets
Aluminum Extrusions Key Markets - B&C/Automotive/Specialty 18
Slide 20: Automotive Aluminum Extrusion Applications
Aluminum Extrusions Automotive Aluminum Extrusion Applications ➢ Crash management systems – beams and mounting plates, crush cans ➢ Roof rails ➢ Electrical battery trays ➢ Air conditioner tube connectors Aluminum Overview Film Products Financials 19 Extrusions
Slide 21: Aluminum Extrusions: Annual Historical Financials
Aluminum Extrusions Annual Historical Financials 2 Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) 638 $80 66 67 $600 530 539 55 56 456 475 38 $40 $300 $0 $0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Volume (lbs. in millions) Capital Expenditures ($ in millions) 300 $30 20
Slide 22: PE Films: Business Profile
PE Films Business Profile Key Growth Drivers $77 million 2023 Net Sales1 • “Internet of Things” leading to greater connectivity and more displays and semiconductors 38% • Thinner devices with increasing resolution and larger Overwrap screen size Packaging • Demographic and workplace trends shifting
Slide 23: End-Use Markets for Surface Protection Products
PE Films End-Use Markets for Surface Protection Products 22
Slide 24: Surface Protection Overview
PE Films Surface Protection Overview Typical LCD Optical Stack (examples: TVs, Smartphones) 23
Slide 25: PE Films: Annual Historical Financials
PE Films Annual Historical Financials Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) $200 45 41 139 $40 $150 134 119 28 98 $100 77 $20 12 11 $50 $0 $0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Volume (lbs. in millions) Capital Expenditures ($ in millions) 44 45 $10 9 39 4
Slide 26: Flexible Packaging Films: Business Profile
Flexible Packaging Films Business Profile $126 million 2023 Net Sales1 Key Growth Drivers • Growing end-user demand for convenience foods, lighter packaging and branded consumer 29% North products America & Other • Packaging innovation driving demand for flexible packaging Customers • Global and reg
Slide 27: End-Use and Value-Add Products
Flexible Packaging Films End-Use and Value-Add Products 26
Slide 28: Flexible Packaging Films: Annual Historical Financials
Flexible Packaging Films Annual Historical Financials Net Sales1 ($ in millions) EBITDA from Ongoing Ops ($ in millions) $200 $40 168 32 31 134 135 140 $30 27 126 $100 $20 15 $10 4 $0 $0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Volume (lbs. in millions) Capital Expenditures ($ in millions)
Slide 29: Tredegar Corporation: Annual Historical Financials
Tredegar Corporation Annual Historical Financials 1 2 Net Sales ($ in millions) Consolidated EBITDA from Ongoing Ops ($ in millions) 904 $150 $900 797 798 730 678 96 $100 92 85 $600 81 $300 $50 34 $0 $0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Earnings (Loss) Per Share from Ongoing Ops3 Cap
Slide 30: Capital Expenditures – History & Projections
Tredegar Corporation Capital Expenditures – History & Projections ($ in millions) 2024 2019 2020 2021 2022 2023 Projection2 Aluminum Extrusions $17.9 $10.3 $18.9 $23.7 $20.3 $9 PE Films1 8.6 6.0 3.0 3.3 1.8 2 Flexible Packaging 8.9 5.0 5.6 8.2 4.3 4 Corporate 0.2 0.2 (0.1) 1.7 0.0 0 Total $35.6 $21.
Slide 31: Quarterly Cash Dividend
Tredegar Corporation Quarterly Cash Dividend ($) .13 .12 .11 .09 .07 .06 .045 .04 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Tredegar suspended its quarterly dividend on 8/3/2023. A special dividend of $5.97 per share was paid in 2020 and $0.75 per share was paid in 2012 3
Slide 32: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations
Slide 33: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations On October 30, 2020, the Company completed the sale of its personal care films business ("Personal Care Films"), w hich w as part of its PE Films segment. The transaction excluded the packaging film lines and related operations located at the Pottsville, Pennsylvania
Slide 34: Summary Financial Information
GAAP to Non-GAAP Reconciliations 2. Summary Financial Information Year Ended Decem ber 31, (in millio ns) 2019 2020 2021 2022 2023 Income and expense relating to ongoing operations: Total EBITDA for segments (a) $ 121.5 $ 130.8 $ 115.3 $ 106.2 $ 53.6 Pension expense (c) (9.6) (14.6) (14.1) - - Corpo
Slide 35: Summary Financial Information (continued)
GAAP to Non-GAAP Reconciliations 2. Summary Financial Information (continued) Notes: (a) Tredegar’s presentation of segment earnings before interest, taxes, depreciation and amortization from ongoing operations (“EBITDA") from ongoing operations aligns w ith key metrics used by the Chief Operating D
Slide 36: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 4. The after-tax effects of losses associated w ith plant shutdow ns, asset impairments and restructurings, gains or losses from the sale of assets, goodw ill impairment charges, net periodic benefit cost for the frozen defined benefit pension plan and other items (w
Slide 37: Net Debt
GAAP to Non-GAAP Reconciliations 5. Net debt is a non-GAAP financial measure that is not intended to represent debt as defined by GAAP, but is utilized by management in evaluating financial leverage and equity valuation. A calculation of net debt is show n below : (In millions) December 31, December