Shares of Tredegar Corporation TG have gained 8.3% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 1.2% growth over the same time frame. Over the past month, the stock has declined 9.1% compared with the S&P 500’s 8.3% decrease.

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Tredegar incurred a net loss from continuing operations of 21 cents per share in the fourth quarter of 2024, narrower than a loss of $1.00 per share in the same period last year. On an adjusted basis, net income from ongoing operations rose to 6 cents per share from 3 cents per share in the fourth quarter of 2023.

Revenues for the quarter increased 13.1% to $154 million compared to $136.2 million in the prior-year period. The improvement was primarily driven by growth in the company's Aluminum Extrusions and PE Films segments.

The company incurred a net loss from continuing operations of $7.3 million, narrower than the $34.1 million loss in the same period last year. On an adjusted basis, net income from ongoing operations rose to $2 million from $1.1 million in the fourth quarter of 2023.

Segment Highlights

Aluminum Extrusions

Revenues for Tredegar’s Aluminum Extrusions segment grew 11.1% year over year to $122.5 million. Sales volume increased by 8.8% to 35.8 million pounds, supported by a 23% rise in net new orders. However, net new orders remain below pre-pandemic levels. EBITDA from ongoing operations improved 21.5% to $9.7 million, benefiting from higher sales volume, improved labor productivity and lower variable manufacturing costs.

PE Films

The PE Films segment delivered a standout quarter, with revenues jumping 27.3% to $26.4 million. Sales volume increased 6.8% year over year, largely due to a 43% surge in Surface Protection films. The segment’s EBITDA from ongoing operations surged 67.7% to $7.6 million, primarily driven by strong volume growth and operational efficiencies.

Management Commentary

CEO John Steitz emphasized that both business segments performed well in what is typically a seasonally weak quarter. He also noted that net new orders for Bonnell Aluminum continued to grow in early 2025. Additionally, the company significantly strengthened its balance sheet, reducing its net leverage ratio to 1.1X from 3.7X at the end of 2023. This improvement was largely due to a cyclical recovery in the company’s businesses and the completion of the sale of Terphane on Nov. 1, 2024.

Total debt was reduced to $61.9 million as of Dec. 31, 2024, from $126.3 million a year earlier. Net debt declined to $54.8 million from $113.2 million, reflecting disciplined cash management and proceeds from the Terphane divestiture. 

Steitz also expressed support for increased tariffs on aluminum imports under Section 232, arguing that stricter trade measures would help level the playing field for U.S. aluminum producers.

2024 Performance

Total revenues for 2024 increased 4.3% to $598 million, up from $573.3 million in 2023. The Aluminum Extrusions segment reported revenue of $471.8 million for 2024, which dipped 0.6% year over year. The unit’s sales volume inched up 0.5% year over year. The PE Films segment delivered strong results, with revenue surging 37% to $105.2 million, compared to $76.8 million in 2023. Sales volume increased 34% year over year. 

For the full year, Tredegar reported net income from continuing operations of 3 cents per diluted share, a sharp turnaround from a loss of $2.91 per share in 2023.

Outlook

Looking ahead, Tredegar projects capital spending of $17 million for Aluminum Extrusions and $3 million for PE Films in 2025. The company expects continued improvements in demand trends and remains focused on operational efficiency and cost discipline. However, management acknowledges ongoing uncertainties related to raw material costs, trade policy changes and macroeconomic conditions.

Other Developments

Tredegar completed the divestiture of its Terphane flexible packaging business, finalizing the sale to Oben Group in the fourth quarter. The company received an additional $9.8 million in post-closing settlement proceeds in the first quarter of 2025, exceeding initial expectations. The proceeds from this transaction were used to pay down debt, contributing to a $64.4 million reduction in total debt over the past year.

Additionally, the company recognized a $13.3 million goodwill impairment charge related to its Clearfield, UT operation, which was acquired in 2017. The impairment was due to a lower-than-anticipated recovery in sales lost during the pandemic-driven supply chain disruptions.

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