News Release
RICHMOND, Va., Aug. 3 /PRNewswire-FirstCall/ -- Tredegar Corporation (NYSE: TG) reported second-quarter income from continuing operations of $2.1 million (5 cents per share) compared to $5.2 million (14 cents per share) in 2004. Earnings from manufacturing operations were $9.8 million (25 cents per share) versus $10.6 million (27 cents per share) last year. Second-quarter sales were up to $243.7 million from $216.1 million in 2004. A summary of second-quarter results from continuing operations is shown below:
Second Quarter Six Months
(In millions, except per-share data) Ended Ended
June 30 June 30
2005 2004 2005 2004
Sales $243.7 $216.1 $476.5 $412.0
Income from continuing operations as
reported under generally accepted
accounting principles (GAAP) $2.1 $5.2 $7.7 $7.6
After-tax effects of:
Loss associated with plant shutdowns,
asset impairments and restructurings 7.0 4.0 8.3 11.0
Loss from Therics ongoing operations 1.1 1.7 2.3 3.3
Gains from sale of assets and other
items (.4) (.3) (1.8) (4.2)
Income from manufacturing operations* $9.8 $10.6 $16.5 $17.7
Diluted earnings per share from
continuing operations as
reported under GAAP $.05 $.14 $.20 $.20
After-tax effects per diluted share
of:
Loss associated with plant shutdowns,
asset impairments and restructurings .18 .10 .21 .29
Loss from Therics ongoing operations .03 .04 .06 .08
Gains from sale of assets and other
items (.01) (.01) (.05) (.11)
Diluted earnings per share from
manufacturing operations* $.25 $.27 $.42 $.46
* The after-tax effects of unusual items, plant shutdowns, asset impairments and restructurings, Therics' ongoing operations, and gains from sale of assets and other items have been presented separately and removed from income and earnings per share from continuing operations as reported under GAAP to determine Tredegar's presentation of income and earnings per share from manufacturing operations. Income and earnings per share from manufacturing operations are key financial and analytical measures used by Tredegar to gauge the operating performance of its manufacturing businesses. They are not intended to represent the stand-alone results for Tredegar's manufacturing businesses under GAAP and should not be considered as an alternative to net income or earnings per share as defined by GAAP. They exclude items that we believe do not relate to Tredegar's ongoing manufacturing operations. They also exclude Therics, a technology company that cannot be analyzed and valued by historical measures of earnings and cash flow. On June 30, 2005, substantially all of the assets of Therics were sold or assigned to a newly-created limited liability company, Therics, LLC, controlled and managed by an individual not affiliated with Tredegar.
Norman A. Scher, Tredegar's president and chief executive officer, said: "Second-quarter profits in films improved over last year due primarily to growth in new apertured, elastic and surface protection materials. However, despite lower resin costs second-quarter profits declined from the previous quarter due to a recent slowdown in the growth of elastics and lower volume in certain other products. Looking ahead to the second half of 2005, the slowdown in the growth of our elastics business is likely to continue through year-end and resin costs are expected to increase. As a result, 2005 profits in films may not exceed last year's level."
Scher added: "In aluminum, we were encouraged by results in U.S. operations, but overall profits continue to be hurt by appreciation of the Canadian Dollar and higher energy costs. If these conditions persist, it will be difficult to improve upon last year's profits."
MANUFACTURING OPERATIONS
Film Products
Second-quarter net sales in Film Products were $111.2 million, up 10% from $101.5 million in 2004. The sales increase was due primarily to higher selling prices which were driven by the pass-through of higher raw material costs. Growth in higher value new products and foreign exchange rate changes also contributed to the increase in sales. Operating profit from ongoing operations improved to $11.4 million, up 5% from $10.9 million last year. Volume was 64.3 million pounds, down 10% from 71.2 million pounds last year.
Compared to the first-quarter ended March 31, net sales and operating profit from ongoing operations declined 5% and 2%, respectively. Volume was down 5%.
The decline in operating profit in the second quarter from the first quarter of 2005 was due to a slowdown in the growth of elastics and lower volume in certain non-elastic diaper-related components and packaging film. The adverse impact of these items was offset by lower resin costs in the second quarter compared with the first quarter of this year.
In the second quarter of this year, lower average resin prices resulted in a positive operating profit impact of approximately $1.5 million compared with the first quarter of 2005. Low-density polyethylene resin in the U.S. declined about 6 cents per pound from first-quarter levels. Resin prices in Europe and Asia also declined. Tredegar expects resin prices to increase during the second half of 2005. The films business has pass-through or cost- sharing agreements for the majority of its sales. However, under certain agreements, changes in resin costs are not passed through for an average period of 90 days.
Growth in new apertured topsheets and surface protection films is expected to continue into 2006. Demand for elastics should improve in 2006 as personal care product suppliers use more elastic materials to improve comfort and fit in diapers and adult incontinence products.
Year-to-date net sales were $228.0 million, up 16%, versus $197.4 million in 2004. Operating profit from ongoing operations was $23.0 million, up 10%, compared to $20.9 million in 2004. Year-to-date volume decreased to 131.7 million pounds from 140.3 million pounds.
Capital spending in Film Products through June 30 totaled $28 million and is expected to be approximately $55 million for the year, and includes capacity expansions for apertured and elastic materials and surface protection films and a new global information system.
Aluminum Extrusions
Second-quarter net sales in Aluminum Extrusions were $126.0 million, up 16% from $109.0 million in 2004 due to higher selling prices, which were driven by higher metal costs. Operating profit from ongoing operations declined 13% to $7.2 million, down from $8.3 million in 2004. The profit decline was due primarily to appreciation of the Canadian Dollar ($1.2 million) and higher energy costs ($900,000). Second-quarter volume was 63.4 million pounds, up slightly from 62.0 million pounds in 2004.
A relatively strong performance in U.S. operations, driven by commercial construction activity and higher sales of hurricane shutters, was offset by softer demand across all Canadian markets.
Year-to-date net sales were $235.9 million, up 16% from $204.2 million in 2004. Operating profit from ongoing operations for the six-month period declined 15% to $10.2 million from $12.0 million in 2004. Year-to-date volume increased slightly to 121.8 million pounds from 120.0 million pounds in 2004.
Through June 30, capital expenditures totaled $8 million and are expected to be approximately $15 million for the year.
THERICS
On July 1, Tredegar announced that it sold or assigned substantially all of the assets of Therics, Inc., a developer and marketer of orthobiologic products, to a new company controlled and managed by Randall R. Theken. The new company, Therics, LLC, is part of a family of orthopedic medical device companies founded by Mr. Theken, including Theken Spine, LLC. In addition to receiving potential future payments on the sale of Therics' products, Tredegar retained a 17.5% equity interest in Therics, LLC and received a 3.5% interest in Theken Spine, LLC.
The second-quarter operating loss from ongoing operations at Therics was $1.6 million compared to a loss of $2.5 million in 2004. Net sales were $115,000 for the quarter versus $120,000 last year. The year-to-date operating loss was $3.5 million compared to $5.0 million in 2004. Year-to- date sales were $252,000, up from $131,000 in 2004.
OTHER ITEMS
Second-quarter results include a net after-tax charge of $7.0 million (18 cents per share) for plant shutdowns, asset impairments and restructurings, primarily associated with charges related to the divestiture of Therics. The charge for plant shutdowns, asset impairments and restructurings for the second quarter of 2004 was $4.0 million (10 cents per share). Results also include gains from the sale of assets and other items of $417,000 (1 cent per share) compared to $268,000 (1 cent per share) in 2004.
Year-to-date net after-tax charges for plant shutdowns, asset impairments and restructurings were $8.3 million (21 cents per share). Comparable charges in 2004 totaled $11.0 million (29 cents per share). The year-to-date gains from the sale of assets and other items was $1.8 million (5 cents per share) compared to $4.2 million (11 cents per share) in 2004.
Additional details regarding these items are provided in the financial tables included with this press release.
CAPITAL STRUCTURE
Net debt (debt net of cash) was $92.4 million, or 1.1 times the last twelve months adjusted EBITDA.
See notes to financial tables for reconciliations to comparable GAAP measures.
QUARTERLY CONFERENCE CALL
Tredegar management will host a conference call on August 4 at 11:00 a.m. EDT to discuss its earnings results. Individuals can access the call by dialing 800-772-8997. Individuals calling from outside the United States should dial 416-695-9703. A replay of the call will be available through August 11 by dialing 888-509-0082 (domestic) or 416-695-5275 (international).
Alternatively, individuals may listen to the live audio webcast of the presentation by visiting the Tredegar Web site at http://www.tredegar.com. The webcast of the call may be accessed by selecting the "Webcast of second- quarter results" link on the home page. An archived version of the call will be available for replay on the Web site.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
The words "believe," "hope," "expect," "are likely," and similar expressions may constitute "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on our then current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. Factors that may cause such a difference include, but are not limited to the following:
Film Products is highly dependent on sales to one customer, which comprised approximately 27% of Tredegar's net sales in 2004. The loss or significant reduction of sales associated with this customer would have a material adverse effect on our business, as would delays in this customer rolling out products utilizing new technologies developed by Film Products.
Growth of Film Products depends on its ability to develop and deliver new products at competitive prices, especially in the personal care market. Personal care products are now being made with a variety of new materials, replacing traditional backsheet and other components. While Film Products has substantial technical resources, there can be no assurance that its new products can be brought to market successfully, or if brought to market successfully, at the same level of profitability and market share of replaced films. A shift in customer preferences away from Film Products' technologies, its inability to develop and deliver new profitable products, or delayed acceptance of its new products in domestic or foreign markets, could have a material adverse effect on Tredegar. In the long term, growth will depend on Film Products' ability to provide innovative materials at or below current material costs, including lowering equipment and other capital costs.
Sales volume and profitability of Aluminum Extrusions is cyclical and highly dependent on economic conditions of end-use markets in the U.S. and Canada, particularly in the construction, distribution and transportation industries. Aluminum Extrusions' market segments are also subject to seasonal slowdowns during the winter months. The markets for Aluminum Extrusions' products are marked by differences between the Canadian and U.S. markets. They are also highly competitive with product quality, service, delivery performance and price being the principal competitive factors. Although Aluminum Extrusions targets complex, customized, service-intensive business compared to higher volume, standard extrusion applications, Aluminum Extrusions is under increasing domestic and foreign competitive pressures. Foreign imports, primarily from China, currently represent less than 5% of the North American aluminum extrusion market. Foreign competition to date has been primarily large volume, standard extrusion profiles that impact some of our less strategic end-use markets. Market share erosion in other end-use markets remains possible.
Tredegar's substantial international operations subject us to risks of doing business in foreign countries, which could adversely affect our business, financial condition and results of operations. Risks inherent in international operations include the following, by way of example: changes in general economic conditions, potential difficulty enforcing agreements and intellectual property rights, restrictions on foreign trade or investment, fluctuations in exchange rates, imposition of additional taxes on our foreign income, nationalization of private enterprises and unexpected adverse changes in foreign laws and regulatory requirements.
Tredegar's future performance is also influenced by the costs incurred by Tredegar's operating companies, including, for example, the cost of energy and raw materials. There is no assurance that cost control efforts will be sufficient to offset any additional future declines in revenues or increases in energy, raw materials or other costs.
Tredegar does not undertake to update any forward-looking statement made in this press release to reflect any change in management's expectations or any change in conditions, assumptions or circumstances on which such statements are based.
To the extent that this release contains non-GAAP financial measures, it also presents both the most directly comparable financial measures calculated and presented in accordance with GAAP and a quantitative reconciliation of the difference between any such non-GAAP measures and such comparable GAAP financial measures. Accompanying the reconciliation is management's statement concerning the reasons why management believes that presentation of non-GAAP measures provides useful information to investors concerning Tredegar's financial condition and results of operations.
Based in Richmond, Va., Tredegar Corporation is a global manufacturer of plastic films and aluminum extrusions.
Tredegar Corporation
Condensed Consolidated Statements of Income
(In Thousands, Except Per-Share Data)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
Sales $ 243,724 $ 216,053 $ 476,481 $ 411,972
Other income (expense),
net(a)(c) 938 352 3,498 6,458
244,662 216,405 479,979 418,430
Cost of goods sold(a) 204,077 177,483 402,429 341,227
Freight 6,402 5,468 12,345 10,295
Selling, R&D and general
expenses(a) 18,956 18,623 38,820 36,567
Amortization of intangibles 106 67 212 134
Interest expense 1,093 598 2,056 1,521
Asset impairments and costs
associated with exit and
disposal activities(a)(b) 10,491 6,004 11,358 16,787
241,125 208,243 467,220 406,531
Income before income taxes 3,537 8,162 12,759 11,899
Income taxes 1,405 2,983 5,077 4,291
Net income (a)(b)(c)(d) $ 2,132 $ 5,179 $ 7,682 $ 7,608
Earnings per share:
Basic $ .05 $ .14 $ .20 $ .20
Diluted .05 .14 .20 .20
Shares used to compute earnings
per share:
Basic 38,453 38,235 38,446 38,232
Diluted 38,592 38,427 38,614 38,431
Tredegar Corporation
Net Sales and Operating Profit by Segment
(In Thousands)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
Net Sales
Film Products $ 111,244 $ 101,484 $ 227,955 $ 197,370
Aluminum Extrusions 125,963 108,981 235,929 204,176
Therics 115 120 252 131
Total net sales 237,322 210,585 464,136 401,677
Add back freight 6,402 5,468 12,345 10,295
Sales as shown in the
Consolidated
Statements of Income $ 243,724 $ 216,053 $ 476,481 $ 411,972
Operating Profit
Film Products:
Ongoing operations $ 11,396 $ 10,863 $ 22,974 $ 20,887
Plant shutdowns, asset
impairments and
restructurings, net of
gain on sale of asset(a) 44 (4,834) 413 (6,037)
Aluminum Extrusions:
Ongoing operations 7,221 8,281 10,218 11,964
Plant shutdowns, asset
impairments and
restructurings(a) (202) (146) (840) (9,726)
Therics(b):
Ongoing operations (1,644) (2,543) (3,467) (5,034)
Plant shutdowns, asset
impairments and
restructurings(a) (10,049) (1,024) (10,049) (1,024)
Total 6,766 10,597 19,249 11,030
Interest income 142 72 240 146
Interest expense 1,093 598 2,056 1,521
Gain on the sale of corporate
assets(c) 61 413 61 6,547
Corporate expenses, net(a) 2,339 2,322 4,735 4,303
Income before income taxes 3,537 8,162 12,759 11,899
Income taxes 1,405 2,983 5,077 4,291
Net income(a)(b)(c)(d) $ 2,132 $ 5,179 $ 7,682 $ 7,608
Tredegar Corporation
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
June 30, December 31,
2005 2004
Assets
Cash & cash equivalents $26,950 $22,994
Accounts & notes receivable, net 123,813 117,314
Inventories 60,870 65,360
Deferred income taxes 8,176 10,181
Prepaid expenses & other 2,958 4,689
Total current assets 222,767 220,538
Property, plant & equipment, net 320,422 316,692
Other assets 95,867 89,261
Goodwill & other intangibles 137,483 142,983
Total assets $776,539 $769,474
Liabilities and Shareholders' Equity
Accounts payable $66,776 $63,852
Accrued expenses 38,397 38,141
Income taxes payable 3,944 1,446
Current portion of long-term debt 14,375 13,125
Total current liabilities 123,492 116,564
Long-term debt 99,241 90,327
Deferred income taxes 65,646 71,141
Other noncurrent liabilities 10,982 11,000
Shareholders' equity 477,178 480,442
Total liabilities and shareholders'
equity $776,539 $769,474
Tredegar Corporation
Condensed Consolidated Statement of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended
June 30
2005 2004
Cash flows from operating activities:
Net income $ 7,682 $ 7,608
Adjustments for noncash items:
Depreciation 18,453 16,162
Amortization of intangibles 212 134
Deferred income taxes 952 (2,365)
Accrued pension income and
postretirement benefits (1,111) (2,042)
Gain on sale of assets (2,507) (6,547)
Loss on asset impairments and
divestitures 6,439 12,476
Changes in assets and liabilities,
net of effects of acquisitions
and divestitures:
Accounts and notes receivables (8,441) (29,774)
Inventories 3,459 72
Income taxes recoverable - 58,633
Prepaid expenses and other 1,747 (622)
Accounts payable (1,033) 13,824
Accrued expenses and income taxes
payable 268 3,018
Other, net (2,116) (1,506)
Net cash provided by operating
activities 24,004 69,071
Cash flows from investing activities:
Capital expenditures (35,483) (24,737)
Proceeds from the sale of assets
and property disposals 3,368 7,829
Other, net 875 1,051
Net cash used in investing
activities (31,240) (15,857)
Cash flows from financing activities:
Dividends paid (3,095) (3,068)
Debt principal payments (29,336) (60,849)
Borrowings 39,500 10,000
Book overdrafts 5,785 -
Proceeds from exercise of stock
options 195 458
Net cash provided by (used in)
financing activities 13,049 (53,459)
Effect of exchange rate changes on
cash (1,857) (530)
Increase in cash and cash equivalents 3,956 (775)
Cash and cash equivalents at
beginning of period 22,994 19,943
Cash and cash equivalents at end of
period $ 26,950 $ 19,168
Selected Financial Measures
(In Millions)
(Unaudited)
For the Twelve Months Ended
June 30, 2005
Film Aluminum Therics
Products Extrusions (b) Total
Operating profit (loss) from ongoing
operations $ 45.3 $ 20.9 $ (8.2) $ 58.0
Allocation of corporate overhead (7.1) (3.3) - (10.4)
Add back depreciation and amortization 24.5 11.1 1.0 36.6
Adjusted EBITDA (e) $ 62.7 $ 28.7 $ (7.2) $ 84.2
Selected balance sheet and other data
as of June 30, 2005:
Cash invested to date in Therics $ 76.8
Net debt (f) $ 92.4
Shares outstanding 38.6
Notes to the Financial Tables
(a) Plant shutdowns, asset impairments and restructurings in the second
quarter of 2005 include:
* A pretax charge of $10 million related to the sale or assignment of
substantially all of Therics' assets, including asset impairment
charges of $5.6 million, lease-related losses of $3 million and
severance and other transaction-related costs of $1.4 million (see
Note (b) for additional information);
* A pretax gain of $653,000 related to the shutdown of the films
manufacturing facility in Carbondale, Pennsylvania, including a
$630,000 gain on the sale of the facility (included in "Other
income (expense), net" in the condensed consolidated statements of
income), and the reversal to income of certain shutdown-related
accruals of $23,000;
* Pretax charges of $500,000 related to severance and other employee-
related costs associated with restructurings in Film Products
($227,000) and Aluminum Extrusions ($273,000);
* A pretax gain of $71,000 related to the shutdown of the aluminum
extrusions facility in Aurora, Ontario, including the reversal to
income of certain severance and employee-related accruals of
$474,000, partially offset by other shutdown-related costs of
$403,000;
* A net pretax charge of $250,000 related to severance and other
employee-related costs associated with the restructuring of the
research and development operations in Film Products (of this
amount, $346,000 in pretax charges for employee relocation
and recruitment is included in "Selling, R&D and general
expenses" in the condensed consolidated statements of income);
* Pretax charges of $105,000 for accelerated depreciation related to
restructurings in Film Products; and
* A pretax charge of $27,000 related to severance and other employee-
related costs associated with the shutdown of the films
manufacturing facility in New Bern, North Carolina.
Plant shutdowns, asset impairments and restructurings in the first
six months of 2005 include:
* A pretax charge of $10 million related to the sale or assignment
of substantially all of Therics' assets, including asset impairment
charges of $5.6 million, lease-related losses of $3 million and
severance and other transaction-related costs of $1.4 million (see
Note (b) for additional information);
* A pretax gain of $1.6 million related to the shutdown of the films
manufacturing facility in New Bern, North Carolina, including a
$1.8 million gain on the sale of the facility (included in "Other
income (expense), net" in the condensed consolidated statements of
income), partially offset by shutdown-related expenses of $225,000;
* A pretax charge of $1 million for process reengineering costs
associated with the implementation of a global information system
in Film Products (included in "Costs of goods sold" in the
condensed consolidated statements of income);
* Pretax charges of $918,000 related to severance and other employee-
related costs associated with restructurings in Film Products
($477,000) and Aluminum Extrusions ($441,000);
* A pretax charge of $399,000 related to the shutdown of the aluminum
extrusions facility in Aurora, Ontario, including $873,000 of
shutdown-related costs, partially offset by the reversal to income
of certain severance and employee-related accruals of $474,000;
* A pretax gain of $653,000 related to the shutdown of the films
manufacturing facility in Carbondale, Pennsylvania, including a
$630,000 gain on the sale of the facility (included in "Other
income (expense), net" in the condensed consolidated statements of
income), and the reversal to income of certain shutdown-related
accruals of $23,000;
* A pretax gain of $508,000 for interest receivable on tax refund
claims (included in "Corporate expenses, net" in the net sales and
operating profit by segment table and "Other income (expense), net"
in the condensed consolidated statements of income);
* A net pretax charge of $130,000 related to severance and other
employee-related costs associated with the restructuring of the
research and development operations in Film Products (of this
amount, $545,000 in pretax charges for employee relocation and
recruitment is included in "Selling, R&D and general expenses" in
the condensed consolidated statements of income); and
* Pretax charges of $205,000 for accelerated depreciation related to
restructurings in Film Products.
Plant shutdowns, asset impairments and restructurings in the second
quarter of 2004 include:
* A pretax charge of $2.7 million for impairment of the films
business in Argentina;
* Pretax charges of $994,000 related to accelerated depreciation from
plant shutdowns and restructurings in Film Products;
* A pretax charge of $879,000 related to the estimated loss on the
sub-lease of a portion of the Therics facility in Princeton, New
Jersey;
* Pretax charges of $575,000 in Film Products and $146,000 in
Aluminum Extrusions related to asset impairments;
* A pretax charge of $300,000 related to severance and other
employee-related costs associated with the planned shutdown of the
films manufacturing facility in New Bern, North Carolina;
* A pretax charge of $300,000 related to the estimated loss on the
sale of the previously shutdown films manufacturing facility in
Manchester, Iowa; and
* A pretax charge of $145,000 related to severance costs in Therics.
Plant shutdowns, asset impairments and restructurings in the first six
months of 2004 include:
* A pretax charge of $9.6 million related to the planned shutdown
of an aluminum extrusions facility in Aurora, Ontario, including
asset impairment charges of $7.1 million and severance and other
employee-related costs of $2.5 million;
* A pretax charge of $2.7 million for impairment of the films
business in Argentina;
* Pretax charges of $1.7 million related to accelerated depreciation
from plant shutdowns and restructurings in Film Products;
* A pretax charge of $879,000 related to the estimated loss on the
sub-lease of a portion of the Therics facility in Princeton, New
Jersey;
* Pretax charges of $575,000 in Film Products and $146,000 in
Aluminum Extrusions related to asset impairments;
* Pretax charges of $837,000 related to severance and other employee-
related costs associated with the planned shutdown of the film
manufacturing facility in New Bern, North Carolina;
* A pretax charge of $300,000 related to the estimated loss on the
sale of the previously shutdown films manufacturing facility in
Manchester, Iowa; and
* A pretax charge of $145,000 related to severance costs in Therics.
(b) On June 30, 2005, substantially all of the assets of Therics, Inc., a
wholly-owned subsidiary of Tredegar, were sold or assigned to a newly-
created limited liability company, Therics, LLC, controlled and
managed by an individual not affiliated with Tredegar. Therics
retained substantially all of its liabilities in the transaction,
which included customary indemnification provisions for pre-
transaction liabilities. Therics received a 17.5% equity interest in
the new company valued at $170,000 and a 3.5% interest in Theken
Spine, LLC valued at $800,000, along with potential future payments on
the sale of certain products by Therics, LLC.
(c) Gain on the sale of corporate assets for the first six months of 2005
include a gain of $61,000 related to the sale of corporate real
estate. Gain on the sale of corporate assets for the first six months
of 2004 include gains of $6.1 million related to the sale of public
equity securities and $413,000 on the sale of corporate real estate.
(d) Comprehensive income (loss), defined as net income and other
comprehensive income (loss), was a loss of $3.2 million for the second
quarter of 2005 and income of $4 million for the second quarter of
2004. Comprehensive income (loss) was a loss of $568,000 for the first
six months of 2005 and income of $3 million for the first six months
of 2004. Other comprehensive income (loss) includes changes in
unrealized gains and losses on available-for-sale securities, foreign
currency translation adjustments, unrealized gains and losses on
derivative financial instruments and minimum pension liability
recorded net of deferred taxes directly in shareholders' equity.
(e) Adjusted EBITDA represents income from operations before interest,
taxes, depreciation, amortization, unusual items and losses associated
with plant shutdowns, asset impairments and restructurings, gains from
the sale of assets and other items. Adjusted EBITDA is not intended
to represent cash flow from operations as defined by GAAP and should
not be considered as either an alternative to net income (as an
indicator of operating performance) or to cash flow (as a measure of
liquidity). Tredegar uses Adjusted EBITDA as a measure of unlevered
(debt-free) operating cash flow. We also use it when comparing
relative enterprise values of manufacturing companies and when
measuring debt capacity. When comparing the valuations of a peer
group of manufacturing companies, we express enterprise value as a
multiple of Adjusted EBITDA. We believe Adjusted EBITDA is preferable
to operating profit and other GAAP measures when applying a comparable
multiple approach to enterprise valuation because it excludes
depreciation and amortization, unusual items and losses associated
with plant shutdowns, asset impairments and restructurings, measures
of which may vary among peer companies.
(f) Net debt is calculated as follows (in millions):
Debt $ 113.6
Less: Cash and cash equivalents, net of overdrafts (21.2)
Net debt $ 92.4
SOURCE Tredegar Corporation
-0- 08/03/2005
/CONTACT: Mitzi S. Reynolds of Tredegar Corporation, +1-804-330-1134,
fax: +1-804-330-1177, or mitzireynolds@tredegar.com/
/Web site: http://www.tredegar.com /
(TG)
CO: Tredegar Corporation
ST: Virginia
IN: CHM TEX MNG
SU: ERN ERP CCA
RC-MV
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