On August 7, 2024, Tredegar Corp (TG, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Tredegar Corp, through its subsidiaries, is engaged in the manufacture of Polyethylene Plastic films, Polyester Films, and Aluminum Extrusions. The company operates through three segments: PE Films, Flexible Packaging Films, and Aluminum Extrusions, with the latter generating the majority of its revenue.
Performance Overview
Tredegar Corp reported a net income of $8.8 million ($0.26 per diluted share) for the second quarter of 2024, a significant improvement from a net loss of $18.9 million ($0.56 per diluted share) in the same period last year. Net income from ongoing operations, excluding special items, was $10.3 million ($0.30 per diluted share) compared to a loss of $2.0 million ($0.06 per diluted share) in the second quarter of 2023.
Segment Performance
Aluminum Extrusions: The Aluminum Extrusions segment, also known as Bonnell Aluminum, saw its EBITDA from ongoing operations increase to $12.9 million from $10.2 million in the second quarter of 2023. Sales volume slightly decreased to 34.9 million pounds from 35.5 million pounds in the same period last year. Despite the lower volume, the segment benefited from higher net pricing and manufacturing cost improvements.
PE Films: The PE Films segment experienced a remarkable turnaround with EBITDA from ongoing operations rising to $10.1 million from $0.8 million in the second quarter of 2023. This was primarily driven by a 68.9% increase in sales volume to 10.5 million pounds, reflecting a restocking of Surface Protection customer inventories.
Flexible Packaging Films: The Flexible Packaging Films segment, also known as Terphane, reported an EBITDA from ongoing operations of $3.2 million, up from $0.2 million in the second quarter of 2023. Sales volume increased to 25.1 million pounds from 23.7 million pounds in the same period last year.
Financial Achievements and Challenges
Tredegar Corp's financial achievements in the second quarter of 2024 are noteworthy, especially given the challenges faced in the previous year. The company's ability to turn around its net income and improve EBITDA across all segments is a positive indicator for value investors. However, the company continues to face challenges such as lower sales volumes in some segments and competitive pressures in the global market.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $190.2 million | $178.2 million |
| Cost of Goods Sold | $148.7 million | $153.3 million |
| Net Income | $8.8 million | $(18.9) million |
| Earnings per Share (Diluted) | $0.26 | $(0.56) |
Commentary from Management
"For the second quarter in a row we recognized a meaningful profit from ongoing operations after suffering a period of losses that began with the second quarter of last year. In addition, results in the most recent quarter improved sequentially." - John Steitz, President and CEO of Tredegar Corp.
Analysis
The second quarter results indicate a strong recovery for Tredegar Corp, driven by improved operational efficiencies and strategic cost management. The significant increase in EBITDA across all segments, particularly in PE Films, highlights the company's ability to adapt to market conditions and optimize its operations. However, the company must continue to navigate challenges such as competitive pressures and fluctuating raw material costs to sustain its growth trajectory.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Tredegar Corp for further details.
