TREDEGAR CORP (TG)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered sequential improvement: consolidated EBITDA from ongoing operations rose to $11.1M vs. $10.1M in Q3, driven by stronger Bonnell Aluminum (Aluminum Extrusions) and PE Films; GAAP EPS was a loss of $(0.21) while ongoing EPS was $0.06, reflecting non-GAAP normalization of special items .
• Segment performance: Aluminum Extrusions EBITDA $9.7M (+56% q/q; +21% y/y) on higher volumes and contribution margin; PE Films EBITDA $7.6M (+29% q/q; +68% y/y) as surface protection continued to recover .
• Balance sheet and leverage improved materially post-Terphane sale, with net debt down to $54.8M and net leverage ratio at 1.1x vs. 3.7x in 2023; availability under the ABL was ~$44M at year-end .
• Policy tailwind: Section 232 aluminum tariffs increased to 25% effective March 12, 2025 and broadened to downstream products; management expects this to support domestic extruders, a potential stock reaction catalyst as macro policy shifts aid pricing power and share recapture .
• No explicit revenue/EPS guidance provided; 2025 segment capex and D&A plans outlined (Bonnell: $17M capex; PE Films: $3M), indicating operational investment focus over near-term top-line targets .

What Went Well and What Went Wrong

What Went Well

• Aluminum Extrusions volume and orders strengthened: sales volume up 8.8% y/y to 35.8M lbs; net new orders +23% y/y; open orders rose to ~17M lbs (vs. 14M y/y), supporting a recovery narrative .
• PE Films recovery continued: EBITDA from ongoing operations $7.6M in Q4 (+$3.1M y/y) on stronger surface protection volumes and mix, plus cost improvements .
• Leverage reset: net leverage ratio improved to 1.1x (from 3.7x), aided by Terphane divestiture proceeds and operating cash flow; availability under ABL ~$44M at YE, bolstering liquidity .

Management quotes:

• “Both businesses finished 2024 with solid performances in the typically seasonally low fourth quarter.” – CEO John Steitz .
• “Net new orders have continued to grow at Bonnell Aluminum so far in 2025. PE Films results are encouraging as well.” – CEO John Steitz .
• “We support actions to increase the Section 232 tariffs... and to apply the tariffs to downstream products like the extrusions that we produce.” – CEO John Steitz .

What Went Wrong

• GAAP hit from goodwill impairment: $13.3M pretax write-off at Bonnell’s Clearfield unit pressured Q4 GAAP results (after-tax $10.4M) despite positive ongoing earnings; highlights slower-than-expected full recovery of customer volumes post-pandemic disruptions .
• LIFO/SG&A pressures: LIFO charge of $1.2M (vs. $0.9M benefit y/y) and higher SG&A (+$1.3M, chiefly incentives) diluted Aluminum Extrusions EBITDA flow-through .
• Mixed end-market signals: Automotive volumes fell 21% y/y in Q4, and non-residential B&C volume slightly declined y/y, underscoring uneven demand across sub-markets .

Financial Results

Consolidated Quarterly Snapshot

Notes: “Ongoing” excludes special items per company reconciliation.

Segment Breakdown

Operating KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic posture: “Our balance sheet was strong at the end of 2024 with a net leverage ratio of 1.1x… due to the cyclical recovery… and the completion of the sale of Terphane” – CEO John Steitz .
• Policy advocacy: “We support actions to increase the Section 232 tariffs… [and] apply the tariffs to downstream products like the extrusions that we produce” – CEO John Steitz .
• Segment tone: “Net new orders have continued to grow at Bonnell Aluminum… PE Films results are encouraging as well” – CEO John Steitz .
• Asset impairment context: Clearfield goodwill write-off reflects slower-than-anticipated profit recovery to pre-pandemic levels due to customer sourcing shifts and import competition .

Q&A Highlights

• No Q4 earnings call transcript available in the document catalog; management commentary is from the earnings press release and 8-K materials .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 EPS/Revenue/EBITDA was unavailable due to SPGI access limitations (Daily Request Limit exceeded). As a result, comparisons to consensus cannot be provided at this time.
• Implication: With stronger-than-expected segment EBITDA momentum and tariff policy tailwinds, sell-side models may need to revisit Aluminum Extrusions volume/mix assumptions and PE Films margin durability; however, we cannot quantify revisions without S&P Global data.

Key Takeaways for Investors

• Recovery intact: Sequential EBITDA from ongoing operations improved, with Aluminum Extrusions volumes and orders trending up; watch specialty products demand and B&C pipeline to sustain momentum .
• PE Films resilience: Post-restock moderation still yields robust y/y growth; efficiencies and mix support margins—monitor display end-market cycles for sustainability .
• Leverage reset is a catalyst: Net leverage at 1.1x and ~$44M ABL availability expands strategic flexibility; additional $9.8M settlement proceeds received Q1’25 bolster liquidity .
• Policy tailwinds: Section 232 tariff increase and scope expansion could improve domestic pricing power and deter circumvention via downstream imports; a potential medium-term margin uplift for Bonnell .
• Non-GAAP vs GAAP: Goodwill impairment drove GAAP loss in Q4, but ongoing operations remain profitable; focus on cash-generation metrics and ongoing EBITDA to gauge core performance .
• Capex targeted to continuity/productivity: Elevated 2025 capex at Bonnell and modest increase at PE Films indicate investment in reliability and efficiency; watch returns on these deployments .
• Risk checks: Automotive demand softness and LIFO charges remain watch items; ERP/MES timing still extended—execution matters for operational improvement .

Sources: Tredegar Q4 2024 8-K and press release, Q3 and Q2 8-Ks and press releases, and company news on Terphane sale .