News Release
First quarter 2020 net loss was
First Quarter Financial Results Highlights
-
Earnings before interest, taxes, depreciation and amortization ("EBITDA") from ongoing operations for Aluminum Extrusions of
$11.7 million was$4.5 million lower than the first quarter of 2019 -
EBITDA from ongoing operations for
PE Films of$14.2 million was$7.6 million higher than the first quarter of 2019 -
EBITDA from ongoing operations for
Flexible Packaging Films of$6.6 million was$3.4 million higher than the first quarter of 2019
THE IMPACT OF COVID-19
Essential Business and Employee Considerations
The Company’s priorities during the COVID-19 pandemic have been to protect the health and safety of employees while keeping its manufacturing sites open due to the essential nature of many of its products. The Company’s businesses have been deemed “essential services,” “critical manufacturers,” and “life sustaining industries” under applicable state or national stay-at-home orders and therefore remain operational as of the date of this communication. Within the limitations imposed by the health and safety procedures described below, the Company has continued to manufacture a broad range of products at its facilities, including components for end-uses that are essential, critical or life sustaining such as: (i) polyester-based materials for flexible food packaging, (ii) polyethylene-based film and laminate materials for personal hygiene and packaging products, (iii) aluminum extrusion parts for hospital beds,
The Company’s efforts to protect the health and well-being of its employees from COVID-19 began at the Company’s
The Company has educated employees about COVID-19 symptoms and hygiene best practices. It has adopted COVID-19-related pay and sick leave policies that incentivize employees to stay home if they feel ill or have been exposed to others with the illness. The Company’s policies include taking employee’s temperature before entering production facilities; mandating handwashing; requiring social distancing and, where social distancing is difficult, requiring face coverings; streamlining onsite personnel to only those required for production and distribution; strongly encouraging and, where mandated, requiring remote work for all those who can work from home; and disinfecting facilities. In the
On
As of
Bonnell Aluminum continuously attempts to match its direct labor with demand, including declining demand associated with the pandemic. Its layoffs of full-time, temporary or contract workers through
Financial Considerations
The 2020 annual plan for Bonnell Aluminum (pre-COVID-19) included sales volume of 201 million pounds and EBITDA from ongoing operations of
To date, Bonnell Aluminum’s
Bonnell Aluminum’s future sales volume, EBITDA from ongoing operations, collections, bad debts, employment level and net cash flow are highly dependent upon the time it takes to safely reopen the
Demand has been strong under COVID-19 conditions for the Company’s flexible food packaging films produced by
Tredegar’s defined benefit pension plan, which was frozen at the end of 2007, was underfunded on a GAAP basis by
Tredegar owns approximately 18.4% of
Tredegar had debt (all under its revolving credit agreement) of
OPERATIONS REVIEW
Aluminum Extrusions
Aluminum Extrusions, which is also referred to as Bonnell Aluminum, produces high-quality, soft-alloy and medium-strength aluminum extrusions primarily for the following markets: building and construction, automotive, and specialty (which consists of consumer durables, machinery and equipment, electrical and distribution end-use products.).
A summary of first quarter results for Aluminum Extrusions is provided below:
|
Three Months Ended |
|
Favorable/
|
|||||||
(In thousands, except percentages) |
|
|
||||||||
2020 |
|
2019 |
|
|||||||
Sales volume (lbs) |
47,317 |
|
|
53,616 |
|
|
(11.7) |
% |
||
Net sales |
$ |
117,887 |
|
|
$ |
139,047 |
|
|
(15.2) |
% |
Ongoing operations: |
|
|
|
|
|
|||||
EBITDA |
$ |
11,677 |
|
|
$ |
16,166 |
|
|
(27.8) |
% |
Depreciation & amortization |
$ |
(4,113) |
|
|
$ |
(4,081) |
|
|
(0.8) |
% |
EBIT* |
$ |
7,564 |
|
|
$ |
12,085 |
|
|
(37.4) |
% |
Capital expenditures |
$ |
1,574 |
|
|
$ |
4,367 |
|
|
|
|
* See the net sales and EBITDA from ongoing operations by segment statements for a reconciliation of this non-GAAP measure to GAAP. |
First Quarter 2020 Results vs. First Quarter 2019 Results
Net sales (sales less freight) in the first quarter of 2020 decreased versus 2019 primarily due to lower sales volume and the passthrough of lower metal costs, partially offset by an increase in average selling prices to cover higher operating costs. Sales volume in the first quarter of 2020 decreased by 11.7% versus 2019.
EBITDA from ongoing operations in the first quarter of 2020 decreased by
Lower sales volume and bookings for Bonnell Aluminum coupled with industry data reflecting, among other factors, the impact of COVID-19, appear to indicate a downturn is occurring across all key end-use markets, with double-digit declines in the automotive and specialty markets. See the “The Impact of COVID-19” section for more information on business conditions and projections, including the write-off of goodwill relating to
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for Bonnell Aluminum are projected to be
|
Three Months Ended |
|
Favorable/
|
|||||||
(In thousands, except percentages) |
|
|
||||||||
2020 |
|
2019 |
|
|||||||
Sales volume (lbs) |
27,529 |
|
|
25,846 |
|
|
6.5 |
% |
||
Net sales |
$ |
71,261 |
|
|
$ |
66,779 |
|
|
6.7 |
% |
Ongoing operations: |
|
|
|
|
|
|||||
EBITDA |
$ |
14,189 |
|
|
$ |
6,543 |
|
|
116.9 |
% |
Depreciation & amortization |
$ |
(3,724) |
|
|
$ |
(3,592) |
|
|
(3.7) |
% |
EBIT* |
$ |
10,465 |
|
|
$ |
2,951 |
|
|
254.6 |
% |
Capital expenditures |
$ |
2,416 |
|
|
$ |
6,704 |
|
|
|
|
* See the net sales and EBITDA from ongoing operations by segment statements for a reconciliation of this non-GAAP measure to GAAP. |
First Quarter 2020 Results vs. First Quarter 2019 Results
Net sales in the first quarter of 2020 increased by
Net sales in Surface Protection increased due to higher volume and favorable mix. Financial results in the first quarter of 2019 were unfavorably impacted by weak volume associated with a customer’s inventory correction and a slowdown in the mobile phone market. As discussed further below, a possible customer product transition in Surface Protection continues to be delayed. Net sales decreased by
EBITDA from ongoing operations in the first quarter of 2020 increased by
-
A
$5.4 million increase from Surface Protection, primarily due to higher volume and mix (net favorable impact of$5.6 million ) and lower fixed costs ($0.9 million ), partially offset by higher selling, general and administrative costs ($0.6 million ) and lower productivity ($0.5 million ); and -
A
$2.6 million increase from Personal Care, primarily due to favorable production efficiencies ($1.0 million ), lower fixed and selling, general and administrative costs ($0.8 million ), the favorable impact of the timing of resin cost passthroughs ($0.9 million ) and favorable net foreign exchange impact ($0.6 million ), partially offset by unfavorable pricing ($0.6 million ).
See the “The Impact of COVID-19” section for more information.
Customer Product Transitions in Personal Care and Surface Protection
The Company previously disclosed a significant customer product transition for the Personal Care component of
Personal Care had approximately break-even EBITDA from ongoing operations in 2019 as competitive pressures resulted in missed sales and margin goals. Personal Care continues to focus on new business development and cost reduction initiatives in an effort to improve profitability.
The Surface Protection component of
The Company previously reported the risk that a portion of its film products used in surface protection applications will be made obsolete by possible future customer product transitions to less costly alternative processes or materials. These transitions principally relate to one customer. The full transition continues to encounter delays, resulting in higher than expected sales to this customer in the last four quarters. The Company estimates that during the next four quarters the adverse impact on EBITDA from ongoing operations from this customer shift versus the last four quarters ended
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for
|
Three Months Ended |
|
Favorable/
|
|||||||
(In thousands, except percentages) |
|
|
||||||||
2020 |
|
2019 |
|
|||||||
Sales volume (lbs) |
25,779 |
|
|
25,462 |
|
|
1.2 |
% |
||
Net sales |
$ |
30,574 |
|
|
$ |
33,619 |
|
|
(9.1) |
% |
Ongoing operations: |
|
|
|
|
|
|||||
EBITDA |
$ |
6,553 |
|
|
$ |
3,203 |
|
|
104.6 |
% |
Depreciation & amortization |
$ |
(428) |
|
|
$ |
(344) |
|
|
(24.4) |
% |
EBIT* |
$ |
6,125 |
|
|
$ |
2,859 |
|
|
114.2 |
% |
Capital expenditures |
$ |
848 |
|
|
$ |
1,735 |
|
|
|
|
* See the net sales and EBITDA from ongoing operations by segment statements for a reconciliation of this non-GAAP measure to GAAP. |
First Quarter 2020 Results vs. First Quarter 2019 Results
Net sales in the first quarter of 2020 decreased 9.1% versus the first quarter of 2019 primarily due to lower selling prices from the passthrough of lower raw material costs.
Terphane’s EBITDA from ongoing operations in the first quarter of 2020 increased by
-
A benefit from pricing and higher volume (
$0.9 million ), production efficiencies ($0.4 million ) and lower fixed costs ($0.5 million ); -
A benefit of
$1.2 million resulting from the favorable settlement of a dispute related to value-added taxes; -
Net favorable foreign currency translation of Real-denominated operating costs (
$0.2 million ); and -
Foreign currency transaction gains of
$0.1 million in 2020 versus minimal gains in the first quarter of 2019.
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures are projected to be
Corporate Expenses, Interest, Taxes & Other
Pension expense was
Interest expense was
The effective tax rate used to compute income tax expense from continuing operations was 22.7% in the first three months of 2020, compared to 16.9% in the first three months of 2019. The effective tax rate from ongoing operations comparable to the earnings reconciliation table provided in Note (a) of the Notes to Financial Tables in this press release was 25.0% for the first three months of 2020 versus 19.8% in 2019 (see also Note (g) of the Notes to Financial Tables). An explanation of differences between the effective tax rate for income from continuing operations and the
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Some of the information contained in this press release may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. When we use the words “believe,” “estimate,” “anticipate,” “appear to,” “expect,” “project,” “plan,” “likely,” “may” and similar expressions, we do so to identify forward-looking statements. 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. It is possible that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in or implied by these forward-looking statements. In addition, our current projections for Tredegar's businesses could be materially affected by the highly uncertain impact of COVID-19 upon our businesses. As a consequence, our results could differ significantly from our projections, depending on, among other things, the duration of "shelter in place" orders and the ultimate impact of the pandemic on our employees, our supply chains, our customers and the
- loss or gain of sales to significant customers on which our business is highly dependent;
- inability to achieve sales to new customers to replace lost business;
- inability to develop, efficiently manufacture and deliver new products at competitive prices;
- failure of our customers to achieve success or maintain market share;
- failure to protect our intellectual property rights;
-
risks of doing business in countries outside the
U.S. that affect our substantial international operations; - political, economic, and regulatory factors concerning our products;
- uncertain economic conditions in countries in which we do business;
- competition from other manufacturers, including manufacturers in lower-cost countries and manufacturers benefiting from government subsidies;
- impact of fluctuations in foreign exchange rates;
- a change in the amount of our underfunded defined benefit pension plan liability;
- an increase in the operating costs incurred by our operating companies, including, for example, the cost of raw materials and energy;
- inability to successfully identify, complete or integrate strategic acquisitions; failure to realize the expected benefits of such acquisitions and assumption of unanticipated risks in such acquisitions;
- disruption to our manufacturing facilities;
- the impact of public health epidemics on our employees, our production and the global economy, such as the coronavirus (COVID-19) currently impacting the global economy;
- an information technology system failure or breach;
- volatility and uncertainty of the valuation of our investment in kaléo;
- the impact of the imposition of tariffs and sanctions on imported aluminum ingot used in our aluminum extrusions;
-
the impact of new tariffs or duties imposed as a result of rising trade tensions between the
U.S. and other countries; - failure to establish and maintain effective internal control over financial reporting;
-
the termination of anti-dumping duties on products imported to
Brazil that compete with products produced byFlexible Packaging ;
and the other factors discussed in the reports Tredegar files with or furnishes to the
Tredegar does not undertake, and expressly disclaims any duty, 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, except as required by applicable law.
To the extent that the financial information portion of this press 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. Reconciliations of non-GAAP financial measures are provided in the Notes to the Financial Tables included with this press release and can also be found within “Presentations” in the “Investors” section of our website, www.tredegar.com.
Tredegar uses its website as a channel of distribution of material Company information. Financial information and other material information regarding Tredegar is posted on and assembled in the “Investors” section of its website.
|
||||||||
Condensed Consolidated Statements of Income |
||||||||
(In Thousands, Except Per-Share Data) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
2020 |
|
2019 |
||||
Sales |
|
$ |
228,302 |
|
|
$ |
248,466 |
|
Other income (expense), net (c)(d) |
|
(26,211) |
|
|
17,110 |
|
||
|
|
202,091 |
|
|
265,576 |
|
||
|
|
|
|
|
||||
Cost of goods sold (c) |
|
175,311 |
|
|
200,653 |
|
||
Freight |
|
8,580 |
|
|
9,021 |
|
||
Selling, R&D and general expenses (c) |
|
28,024 |
|
|
26,497 |
|
||
Amortization of intangibles |
|
758 |
|
|
891 |
|
||
Pension and postretirement benefits |
|
3,567 |
|
|
2,415 |
|
||
Interest expense |
|
555 |
|
|
1,232 |
|
||
Asset impairments and costs associated with exit and
|
|
461 |
|
|
1,056 |
|
||
|
|
13,696 |
|
|
— |
|
||
|
|
230,952 |
|
|
241,765 |
|
||
Income (loss) before income taxes |
|
(28,861) |
|
|
23,811 |
|
||
Income tax expense (benefit) |
|
(6,540) |
|
|
4,026 |
|
||
Net income (loss) |
|
$ |
(22,321) |
|
|
$ |
19,785 |
|
|
|
|
|
|
||||
Earnings (loss) per share: |
|
|
|
|
||||
Basic |
|
$ |
(0.67) |
|
|
$ |
0.60 |
|
Diluted |
|
$ |
(0.67) |
|
|
$ |
0.60 |
|
|
|
|
|
|
||||
Shares used to compute earnings (loss) per share: |
|
|
|
|
||||
Basic |
|
33,313 |
|
|
33,123 |
|
||
Diluted |
|
33,313 |
|
|
33,127 |
|
|
|||||||
|
|||||||
(In Thousands) |
|||||||
(Unaudited) |
|||||||
|
|
||||||
|
Three Months Ended |
||||||
|
|
||||||
|
2020 |
|
2019 |
||||
|
|
|
|
||||
Aluminum Extrusions |
$ |
117,887 |
|
|
$ |
139,047 |
|
|
71,261 |
|
|
66,779 |
|
||
|
30,574 |
|
|
33,619 |
|
||
Total net sales |
219,722 |
|
|
239,445 |
|
||
Add back freight |
8,580 |
|
|
9,021 |
|
||
Sales as shown in the Condensed Consolidated
|
$ |
228,302 |
|
|
$ |
248,466 |
|
EBITDA from Ongoing Operations |
|
|
|
||||
Aluminum Extrusions: |
|
|
|
||||
Ongoing operations: |
|
|
|
||||
EBITDA (b) |
11,677 |
|
|
16,166 |
|
||
Depreciation & amortization |
(4,113) |
|
|
(4,081) |
|
||
EBIT (b) |
7,564 |
|
|
12,085 |
|
||
Plant shutdowns, asset impairments, restructurings and other (c) |
(688) |
|
|
(40) |
|
||
|
(13,696) |
|
|
— |
|
||
|
|
|
|
||||
Ongoing operations: |
|
|
|
||||
EBITDA (b) |
14,189 |
|
|
6,543 |
|
||
Depreciation & amortization |
(3,724) |
|
|
(3,592) |
|
||
EBIT (b) |
10,465 |
|
|
2,951 |
|
||
Plant shutdowns, asset impairments, restructurings and other (c) |
(906) |
|
|
(1,378) |
|
||
|
|
|
|
||||
Ongoing operations: |
|
|
|
||||
EBITDA (b) |
6,553 |
|
|
3,203 |
|
||
Depreciation & amortization |
(428) |
|
|
(344) |
|
||
EBIT (b) |
6,125 |
|
|
2,859 |
|
||
Total |
8,864 |
|
|
16,477 |
|
||
Interest income |
52 |
|
|
59 |
|
||
Interest expense |
555 |
|
|
1,232 |
|
||
Gain (loss) on investment in kaléo accounted for under fair
|
(26,100) |
|
|
17,082 |
|
||
Stock option-based compensation costs |
584 |
|
|
415 |
|
||
Corporate expenses, net (c) |
10,538 |
|
|
8,160 |
|
||
Income (loss) before income taxes |
(28,861) |
|
|
23,811 |
|
||
Income tax expense (benefit) |
(6,540) |
|
|
4,026 |
|
||
Net income (loss) |
$ |
(22,321) |
|
|
$ |
19,785 |
|
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(In Thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Cash & cash equivalents |
|
$ |
35,059 |
|
|
$ |
31,422 |
|
Accounts & other receivables, net |
|
106,211 |
|
|
107,558 |
|
||
Income taxes recoverable |
|
565 |
|
|
4,100 |
|
||
Inventories |
|
84,215 |
|
|
81,380 |
|
||
Prepaid expenses & other |
|
8,772 |
|
|
8,696 |
|
||
Total current assets |
|
234,822 |
|
|
233,156 |
|
||
Property, plant & equipment, net |
|
233,631 |
|
|
242,890 |
|
||
Right-of-use leased assets |
|
18,559 |
|
|
19,220 |
|
||
Investment in kaléo (cost basis of |
|
69,400 |
|
|
95,500 |
|
||
Identifiable intangible assets, net |
|
21,571 |
|
|
22,636 |
|
||
|
|
67,708 |
|
|
81,404 |
|
||
Deferred income taxes |
|
13,218 |
|
|
13,129 |
|
||
Other assets |
|
4,277 |
|
|
4,733 |
|
||
Total assets |
|
$ |
663,186 |
|
|
$ |
712,668 |
|
Liabilities and Shareholders’ Equity |
|
|
|
|
||||
Accounts payable |
|
$ |
105,066 |
|
|
$ |
103,657 |
|
Accrued expenses |
|
46,862 |
|
|
45,809 |
|
||
Lease liability, short-term |
|
2,973 |
|
|
3,002 |
|
||
Total current liabilities |
|
154,901 |
|
|
152,468 |
|
||
Lease liability, long-term |
|
17,010 |
|
|
17,689 |
|
||
Long-term debt |
|
43,000 |
|
|
42,000 |
|
||
Pension and other postretirement benefit obligations, net |
|
105,265 |
|
|
107,446 |
|
||
Deferred income taxes |
|
— |
|
|
11,019 |
|
||
Other noncurrent liabilities |
|
4,420 |
|
|
5,297 |
|
||
Shareholders’ equity |
|
338,590 |
|
|
376,749 |
|
||
Total liabilities and shareholders’ equity |
|
$ |
663,186 |
|
|
$ |
712,668 |
|
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(In Thousands) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
|
Three Months Ended |
||||||
|
|
2020 |
|
2019 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net income (loss) |
|
$ |
(22,321) |
|
|
$ |
19,785 |
|
Adjustments for noncash items: |
|
|
|
|
||||
Depreciation |
|
7,557 |
|
|
7,168 |
|
||
Amortization of intangibles |
|
758 |
|
|
891 |
|
||
Reduction of right-of-use lease asset |
|
696 |
|
|
632 |
|
||
|
|
13,696 |
|
|
— |
|
||
Deferred income taxes |
|
(9,804) |
|
|
2,410 |
|
||
Accrued pension income and post-retirement benefits |
|
3,567 |
|
|
2,415 |
|
||
(Gain) loss on investment accounted for under the fair value method |
|
26,100 |
|
|
(17,082) |
|
||
(Gain) loss on asset impairments and divestitures |
|
— |
|
|
421 |
|
||
Net (gain) loss on sale of assets |
|
— |
|
|
(385) |
|
||
Changes in assets and liabilities: |
|
|
|
|
||||
Accounts and other receivables |
|
(2,849) |
|
|
1,595 |
|
||
Inventories |
|
(6,982) |
|
|
(6,794) |
|
||
Income taxes recoverable/payable |
|
3,478 |
|
|
1,664 |
|
||
Prepaid expenses and other |
|
(294) |
|
|
1,078 |
|
||
Accounts payable and accrued expenses |
|
3,588 |
|
|
(2,033) |
|
||
Lease liability |
|
(741) |
|
|
(640) |
|
||
Pension and postretirement benefit plan contributions |
|
(1,967) |
|
|
(1,724) |
|
||
Other, net |
|
595 |
|
|
1,727 |
|
||
Net cash provided by operating activities |
|
15,077 |
|
|
11,128 |
|
||
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
(4,854) |
|
|
(12,879) |
|
||
Proceeds from the sale of assets and other |
|
— |
|
|
22 |
|
||
Net cash used in investing activities |
|
(4,854) |
|
|
(12,857) |
|
||
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings |
|
16,500 |
|
|
23,750 |
|
||
Debt principal payments |
|
(15,500) |
|
|
(15,250) |
|
||
Dividends paid |
|
(4,005) |
|
|
(3,652) |
|
||
Repurchase of employee common stock for tax withholdings |
|
(586) |
|
|
(815) |
|
||
Net cash (used in) provided by financing activities |
|
(3,591) |
|
|
4,033 |
|
||
Effect of exchange rate changes on cash |
|
(2,995) |
|
|
(399) |
|
||
Increase in cash and cash equivalents |
|
3,637 |
|
|
1,905 |
|
||
Cash and cash equivalents at beginning of period |
|
31,422 |
|
|
34,397 |
|
||
Cash and cash equivalents at end of period |
|
$ |
35,059 |
|
|
$ |
36,302 |
|
Notes to the Financial Tables
(Unaudited)
(a) |
Tredegar’s presentation of net income and earnings per share from ongoing operations are non-GAAP financial measures that exclude the effects of gains or losses associated with plant shutdowns, asset impairments and restructurings, gains or losses from the sale of assets, goodwill impairment charges and other items (which includes unrealized gains and losses for an investment accounted for under the fair value method), which have been presented separately and removed from net income and diluted earnings per share as reported under GAAP. Net income and earnings per share from ongoing operations are key financial and analytical measures used by management to gauge the operating performance of Tredegar’s ongoing operations. They are not intended to represent the stand-alone results for Tredegar’s ongoing operations 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 management believes do not relate to Tredegar’s ongoing operations. A reconciliation to net income and earnings per share from ongoing operations for the three months ended |
(in millions, except per share data) |
|
Three Months Ended |
||||||
|
|
2020 |
|
2019 |
||||
Net income (loss) as reported under GAAP |
|
$ |
(22.3) |
|
|
$ |
19.8 |
|
After-tax effects of: |
|
|
|
|
||||
(Gains) losses associated with plant shutdowns, asset impairments
|
|
0.4 |
|
|
0.8 |
|
||
(Gains) losses from sale of assets and other: |
|
|
|
|
||||
(Gain) loss associated with the investment in kaléo |
|
20.4 |
|
|
(14.3) |
|
||
Other |
|
2.3 |
|
|
1.0 |
|
||
|
|
10.5 |
|
|
— |
|
||
Net income from ongoing operations |
|
$ |
11.3 |
|
|
$ |
7.3 |
|
|
|
|
|
|
||||
Earnings (loss) per share as reported under GAAP (diluted) |
|
$ |
(0.67) |
|
|
$ |
0.60 |
|
After-tax effects per diluted share of: |
|
|
|
|
||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings |
|
0.01 |
|
|
0.02 |
|
||
(Gains) losses from sale of assets and other: |
|
|
|
|
||||
(Gain) loss associated with the investment in kaléo |
|
0.61 |
|
|
(0.43) |
|
||
Other |
|
0.07 |
|
|
0.03 |
|
||
|
|
0.32 |
|
|
— |
|
||
Earnings per share from ongoing operations (diluted) |
|
$ |
0.34 |
|
|
$ |
0.22 |
|
Reconciliations of the pre-tax and post-tax balances attributed to net income are shown in Note (g). |
(b) |
EBITDA (earnings before interest, taxes, depreciation and amortization) from ongoing operations is the key profitability metric used by the Company’s chief operating decision maker to assess segment financial performance. For more business segment information, see Note 11 in the Notes to Financial Statements in the Form 10-Q. | |
EBIT (earnings before interest and taxes) from ongoing operations is a non-GAAP financial measure included in the accompanying tables and the reconciliation of segment financial information to consolidated results for the Company in the net sales and EBITDA from ongoing operations by segment statements. It is not intended to represent the stand-alone results for Tredegar’s ongoing operations under GAAP and should not be considered as an alternative to net income as defined by GAAP. EBIT is a widely understood and utilized metric that is meaningful to certain investors. The Company believes that including this financial metric in the reconciliation of management’s performance metric, EBITDA from ongoing operations, provides useful information to those investors that primarily utilize EBIT to analyze the Company’s core operations. | ||
(c) |
Losses associated with plant shutdowns, asset impairments, restructurings and other items in the first three months of 2020 and 2019 detailed below are shown in the statements of net sales and EBITDA from ongoing operations by segment and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the condensed consolidated statements of income, unless otherwise noted. |
($ in millions) |
Three Months Ended
|
|||||||
|
Pre-Tax |
Net of Tax |
||||||
Aluminum Extrusions: |
|
|
||||||
Losses from sale of assets, investment writedowns and other items: |
|
|
||||||
|
Consulting expenses for ERP feasibility study3 |
$ |
0.7 |
|
$ |
0.5 |
|
|
|
|
|
|
|
||||
|
|
|
||||||
(Gains) losses associated with plant shutdowns, asset impairments and restructurings: |
|
|
||||||
|
Consolidation of Personal Care manufacturing facilities - |
|
|
|||||
|
|
Product qualifications1 |
$ |
0.1 |
|
$ |
0.1 |
|
|
|
|
||||||
|
|
Severance |
0.1 |
|
0.1 |
|
||
|
|
Asset impairment |
0.3 |
|
0.2 |
|
||
Subtotal for |
0.5 |
|
0.4 |
|
||||
|
|
|
||||||
Losses from sale of assets, investment writedowns and other items: |
|
|
||||||
|
Estimated excess costs associated with ramp-up of new product offerings
|
0.4 |
|
0.3 |
|
|||
|
|
|
|
|
||||
|
|
Total for |
$ |
0.9 |
|
$ |
0.7 |
|
|
|
|
|
|
||||
Corporate: |
|
|
||||||
|
|
Professional fees associated with: remediation activities and other costs
|
$ |
2.3 |
|
$ |
1.8 |
|
|
|
Write-down of investment in |
0.2 |
|
0.1 |
|
||
|
|
Total for Corporate |
$ |
2.5 |
|
$ |
1.9 |
|
1. Included in “Cost of goods sold” in the condensed consolidated statements of income. 2. Included in “Selling, R&D and general expenses” in the condensed consolidated statements of income. 3. Included in “Other income (expense), net” in the condensed consolidated statements of income. |
|
Three months ended
|
|||||||
($ in millions) |
Pre-Tax |
Net of Tax |
||||||
|
|
|
||||||
Losses associated with plant shutdowns, asset impairments and restructurings: |
|
|
||||||
|
|
|
|
|||||
|
|
Asset-related expenses |
$ |
0.2 |
|
$ |
0.2 |
|
|
Other restructuring costs - severance |
0.4 |
|
0.3 |
|
|||
|
Write-off of Personal Care production line - |
0.4 |
|
0.3 |
|
|||
Subtotal for |
1.0 |
|
0.8 |
|
||||
|
|
|
||||||
Losses from sale of assets, investment writedowns and other items: |
|
|
||||||
|
Estimated excess costs associated with ramp-up of new product offerings and additional expenses related to strategic capacity expansion projects1 |
0.3 |
|
0.2 |
|
|||
|
|
|
|
|
||||
|
|
Total for |
$ |
1.3 |
|
$ |
1.0 |
|
|
|
|
|
|
||||
Corporate: |
|
|
||||||
|
Professional fees associated with: remediation activities and other costs
|
$ |
0.9 |
|
$ |
0.7 |
|
|
1. Included in “Cost of goods sold” in the condensed consolidated statements of income.
|
(d) |
A pre-tax loss on the Company’s investment in kaléo of |
|
(e) |
The operations of Aluminum Extrusions’s |
|
(f) |
Net debt is calculated as follows: |
(in millions) |
|
|
|
|
|
Increase/ |
||||||
|
|
2020 |
|
2019 |
|
(Decrease) |
||||||
Debt |
|
$ |
43.0 |
|
|
$ |
42.0 |
|
|
$ |
1.0 |
|
Less: Cash and cash equivalents |
|
35.1 |
|
|
31.4 |
|
|
3.7 |
|
|||
Net debt |
|
$ |
7.9 |
|
|
$ |
10.6 |
|
|
$ |
(2.7) |
|
Net debt is not intended to represent total debt as defined by GAAP. Net debt is utilized by management in evaluating the Company’s financial leverage and equity valuation, and management believes that investors also may find net debt to be helpful for the same purposes. |
||
(g) |
Tredegar’s presentation of net income from ongoing operations is non-GAAP financial measure that excludes the effects of gains or losses associated with plant shutdowns, asset impairments and restructurings, gains or losses from the sale of assets, goodwill impairment charges and other items (which includes unrealized gains and losses for an investment accounted for under the fair value method), which has been presented separately and removed from net income as reported under GAAP. Net income from ongoing operations is a key financial and analytical measures used by management to gauge the operating performance of Tredegar’s ongoing operations. It is not intended to represent the stand-alone results for Tredegar’s ongoing operations under GAAP and should not be considered as an alternative to net income as defined by GAAP. It excludes items that we believe do not relate to Tredegar’s ongoing operations. Reconciliations of the pre-tax and post-tax balances attributed to net income from ongoing operations for the three months ended |
(In Millions) |
Pre-tax |
|
Taxes Expense
|
|
After-Tax |
|
Effective
|
|||||||
Three Months Ended |
(a) |
|
(b) |
|
|
|
(b)/(a) |
|||||||
Net loss reported under GAAP |
$ |
(28.9) |
|
|
$ |
(6.6) |
|
|
$ |
(22.3) |
|
|
22.7 |
% |
(Gains) losses associated with plant shutdowns,
|
0.5 |
|
|
0.1 |
|
|
0.4 |
|
|
|
||||
(Gains) losses from sale of assets and other |
29.7 |
|
|
7.0 |
|
|
22.7 |
|
|
|
||||
|
13.7 |
|
|
3.2 |
|
|
10.5 |
|
|
|
||||
Net income from ongoing operations |
$ |
15.0 |
|
|
$ |
3.7 |
|
|
$ |
11.3 |
|
|
25.0 |
% |
Three Months Ended |
|
|
|
|
|
|
|
|||||||
Net income reported under GAAP |
$ |
23.8 |
|
|
$ |
4.0 |
|
|
$ |
19.8 |
|
|
16.9 |
% |
(Gains) losses associated with plant shutdowns,
|
1.0 |
|
|
0.2 |
|
|
0.8 |
|
|
|
||||
(Gains) losses from sale of assets and other |
(15.8) |
|
|
(2.5) |
|
|
(13.3) |
|
|
|
||||
|
— |
|
|
— |
|
|
— |
|
|
|
||||
Net income from ongoing operations |
$ |
9.0 |
|
|
$ |
1.7 |
|
|
$ |
7.3 |
|
|
19.8 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200511005521/en/
neill.bellamy@tredegar.com
Source: