News Release
A summary of results for continuing operations for the three and six
months ended
(In Millions, Except Per-Share Data)
Three Months Six Months
Ended Ended
June 30 June 30
------- -------
2009 2008 2009 2008
---- ---- ---- ----
Sales $158.1 $234.0 $311.2 $462.5
Income (loss) from continuing operations
as reported under generally accepted
accounting principles (GAAP) $6.5 $8.9 $(22.3) $12.7
After-tax effects of:
Goodwill impairment relating to
aluminum extrusions business - - 30.6 -
(Gains) losses associated with plant
shutdowns, asset impairments and
restructurings (.2) 1.0 .9 3.7
(Gains) losses from sale of assets
and other items 2.2 (.3) 3.9 (0.8)
--- --- --- ----
Income from continuing manufacturing
operations* $8.5 $9.6 $13.1 $15.6
---- ---- ----- -----
Diluted earnings (loss) per share from
continuing operations as reported
under GAAP $.19 $.26 $(.66) $.37
After-tax effects per diluted share of:
Goodwill impairment relating to
aluminum extrusions business - - .90 -
(Gains) losses associated with plant
shutdowns, asset impairments and
restructurings (.01) .03 .02 .11
(Gains) losses from sale of assets
and other items .07 (.01) .13 (.03)
--- ---- --- ----
Diluted earnings per share from continuing
manufacturing operations* $.25 $.28 $.39 $.45
---- ---- ---- ----
* The after-tax effects of unusual items, plant shutdowns, asset
impairments and restructurings, and gains or losses from sale of assets
and other items have been presented separately and removed from net
income and earnings per share from continuing operations as reported
under GAAP to determine Tredegar's presentation of income and earnings
per share from continuing manufacturing operations. Income and
earnings per share from continuing manufacturing operations are key
financial and analytical measures used by Tredegar to gauge the
operating performance of its continuing manufacturing businesses.
They are not intended to represent the stand-alone results for
Tredegar's continuing 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.
"Our aluminum business experienced a 32% decline in volume in the second quarter of 2009 compared with the second quarter of 2008, with demand down in all markets. Second-quarter volume improved slightly when compared with the first quarter of 2009 due to a seasonal uptick in construction activity. Future performance will be challenging. We do not yet see any sign of a meaningful change in the extrusion market's outlook."
Mr. Gottwald further stated: "We continue to strengthen our financial
condition with cash in excess of debt improving to
MANUFACTURING OPERATIONS
Film Products
Second-quarter net sales (sales less freight) in Film Products were
Net sales in Film Products for the first six months of 2009 were
Net sales in the second quarter and first half of 2009 declined primarily due to lower volumes across all market segments, most notably personal care and surface protection materials, unfavorable changes in the U.S. dollar value of currencies for operations outside of the U.S. and the impact of lower selling prices from the pass-through of lower resin costs. Volume declines in both periods are believed to be primarily driven by the weakened economy and customer inventory adjustments.
Operating profit from ongoing operations increased in the second quarter
and first half of 2009 versus the same periods in 2008 as cost reduction
efforts, productivity gains and the lag in the pass-through of lower resin
costs offset lower volumes and the unfavorable effect of currency changes.
The company estimates that the impact on operating profit of the lag in the
pass-through of changes in average resin costs was not significant in the
second quarter of 2009 and a negative
Capital expenditures in Film Products were
Aluminum Extrusions
Second-quarter net sales from continuing operations in Aluminum Extrusions
were
Net sales in Aluminum Extrusions for the first six months of 2009 declined
50.2% to
The net sales declines in the second quarter and first half of 2009 compared with last year were mainly due to lower sales volume as weak market conditions led to lower shipments in all markets and lower average selling prices driven by lower average aluminum costs. Shipments for non-residential construction, which comprised approximately 72% of total volume in 2008, were down by approximately 32% during the first six months of 2009 compared with the same period of 2008. The decrease in operating profit from ongoing U.S. operations in the second quarter and the reported operating loss from ongoing U.S. operations in the first half of the year were primarily driven by lower sales volumes.
Capital expenditures for continuing operations in Aluminum Extrusions were
OTHER ITEMS
Net pension income from continuing operations was
Interest expense was
The effective tax rate used to compute income taxes from continuing
manufacturing operations was 29.4% in the second quarter of 2009 compared with
36.6% in the second quarter of 2008, and 33.4% in the first six months of 2009
compared with 37.5% in the first six months of 2008. The decrease in the
effective tax rate for continuing manufacturing operations during the second
quarter of 2009 versus last year, which had a favorable impact of
approximately
Overall results for continuing operations for the quarter and year-to-date
periods include special items. After-tax charges for continuing operations
for plant shutdowns, asset impairments and restructurings and gains and losses
from the sale of assets and other items were
CAPITAL STRUCTURE AND ADJUSTED EBITDA
Net cash (cash and cash equivalents in excess of debt) was
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," "expect," "project,"
"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 these forward-looking statements. Factors that could
cause actual results to differ from expectations include, without limitation:
Film Products is highly dependent on sales to one customer -- The
To the extent that the financial information portion of 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
Based in
Tredegar Corporation
Condensed Consolidated Statements of Income
(In Thousands, Except Per-Share Data)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30 June 30
---- ---- ---- ----
2009 2008 2009 2008
---- ---- ---- ----
Sales $158,115 $234,008 $311,181 $462,488
Other income (expense),
net (a) (d) (e) 488 663 1,357 1,220
--- --- ----- -----
158,603 234,671 312,538 463,708
------- ------- ------- -------
Cost of goods sold (a) 125,615 196,249 250,873 390,488
Freight 3,870 5,797 7,099 10,898
Selling, R&D and general
expenses 17,266 17,139 34,550 36,108
Amortization of
intangibles 30 31 60 63
Interest expense 184 557 388 1,438
Asset impairments and costs
associated with exit and
disposal activities (a) (149) 1,219 1,482 5,159
Goodwill impairment
charge (b) - - 30,559 -
--- --- ------ ---
146,816 220,992 325,011 444,154
------- ------- ------- -------
Income (loss) from
continuing operations
before income taxes 11,787 13,679 (12,473) 19,554
Income taxes (e) 5,300 4,814 9,857 6,904
----- ----- ----- -----
Income (loss) from
continuing operations 6,487 8,865 (22,330) 12,650
Loss from discontinued
operations (f) - (207) - (930)
--- ---- --- ----
Net income (loss) (c) $6,487 $8,658 $(22,330) $11,720
------ ------ -------- -------
Earnings (loss) per share:
Basic:
Continuing operations $.19 $.26 $(.66) $.37
Discontinued operations - (.01) - (.03)
--- ---- --- ----
Net income (loss) $.19 $.25 $(.66) $.34
---- ---- ----- ----
Diluted:
Continuing operations $.19 $.26 $(.66) $.37
Discontinued operations - (.01) - (.03)
--- ---- --- ----
Net income (loss) $.19 $.25 $(.66) $.34
---- ---- ----- ----
Shares used to compute
earnings (loss) per share:
Basic 33,876 33,997 33,871 34,231
Diluted 33,971 34,211 33,871 34,445
Tredegar Corporation
Net Sales and Operating Profit by Segment
(In Thousands)
(Unaudited)
Second Quarter Ended Six Months Ended
June 30 June 30
---- ---- ---- ----
2009 2008 2009 2008
---- ---- ---- ----
Net Sales
Film Products $107,804 $135,529 $212,587 $267,843
Aluminum Extrusions 46,441 92,682 91,495 183,747
------ ------ ------ -------
Total net sales 154,245 228,211 304,082 451,590
Add back freight 3,870 5,797 7,099 10,898
----- ----- ----- ------
Sales as shown in the
Consolidated
Statements of Income $158,115 $234,008 $311,181 $462,488
-------- -------- -------- --------
Operating Profit
Film Products:
Ongoing operations $14,214 $13,479 $27,228 $24,265
Plant shutdowns, asset
impairments,
restructurings and
other (a) 149 (944) (660) (4,649)
Aluminum Extrusions (f):
Ongoing operations 634 2,406 (1,163) 3,948
Goodwill impairment
charge (b) - - (30,559) -
Plant shutdowns, asset
impairments,
restructurings and
other (a) (328) (380) (1,306) (615)
AFBS:
Plant shutdowns, asset
impairments and
restructurings (d) - - 150 -
--- --- --- ---
Total 14,669 14,561 (6,310) 22,949
Interest income 175 188 434 446
Interest expense 184 557 388 1,438
Gain on the sale of
corporate assets (e) - - 404 -
Stock option-based
compensation costs 541 278 803 338
Corporate expenses, net (a) 2,332 235 5,810 2,065
----- --- ----- -----
Income (loss) before
income taxes 11,787 13,679 (12,473) 19,554
Income taxes (e) 5,300 4,814 9,857 6,904
----- ----- ----- -----
Income (loss) from
continuing operations 6,487 8,865 (22,330) 12,650
Loss from discontinued
operations (f) - (207) - (930)
--- ---- --- ----
Net income (loss) (c) $6,487 $8,658 $(22,330) $11,720
------ ------ -------- -------
Tredegar Corporation
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
June 30, December 31,
2009 2008
---- ----
Assets
Cash & cash equivalents $58,658 $45,975
Accounts & notes receivable, net 81,933 91,400
Income taxes recoverable 6,554 12,549
Inventories 29,159 36,809
Deferred income taxes 5,198 7,654
Prepaid expenses & other 3,114 5,374
--- ---
Total current assets 184,616 199,761
Property, plant & equipment, net 232,723 236,870
Other assets 40,723 38,926
Goodwill & other intangibles (b) 104,428 135,075
-------- --------
Total assets $562,490 $610,632
-------- --------
Liabilities and Shareholders' Equity
Accounts payable $48,061 $54,990
Accrued expenses 35,427 38,349
Current portion of long-term debt 644 529
------ ---
Total current liabilities 84,132 93,868
Long-term debt 960 22,173
Deferred income taxes 48,520 45,152
Other noncurrent liabilities 26,530 29,023
Shareholders' equity 402,348 420,416
-------- --------
Total liabilities and shareholders' equity $562,490 $610,632
-------- --------
Tredegar Corporation
Condensed Consolidated Statement of Cash Flows
(In Thousands)
(Unaudited)
Six Months Ended
June 30
---- ----
2009 2008
---- ----
Cash flows from operating activities:
Net income (loss) $(22,330) $11,720
Adjustments for noncash items:
Depreciation 19,663 22,379
Amortization of intangibles 60 63
Goodwill impairment charge 30,559 -
Deferred income taxes 2,160 7,123
Accrued pension income and postretirement
benefits (1,267) (2,825)
Loss on asset impairments and divestitures - 3,337
Gain on sale of assets (1,004) -
Changes in assets and liabilities, net of
effects of acquisitions and divestitures:
Accounts and notes receivables 9,732 (25,162)
Inventories 8,055 15,913
Income taxes recoverable 5,995 (9,803)
Prepaid expenses and other 2,221 828
Accounts payable and accrued expenses (522) 2,086
Other, net (1,333) 2,180
------ -----
Net cash provided by operating activities 51,989 27,839
------ ------
Cash flows from investing activities:
Capital expenditures (including settlement
of related accounts payable of $1,709
in 2009) (17,348) (10,461)
Proceeds from the sale of the aluminum
extrusions business in Canada (net of
cash included in sale and transaction
costs) - 23,616
Proceeds from the sale of assets and
property disposals 1,118 248
Investments - (1,722)
--- ------
Net cash provided by (used in) investing
activities (16,230) 11,681
------- ------
Cash flows from financing activities:
Dividends paid (2,717) (2,736)
Debt principal payments (21,098) (47,209)
Borrowings - 22,000
Repurchases of Tredegar common stock --- (12,904)
Proceeds from exercise of stock options and
other 187 -
--- ---
Net cash used in financing activities (23,628) (40,849)
------- -------
Effect of exchange rate changes on cash 552 1,621
--- -----
Increase in cash and cash equivalents 12,683 292
Cash and cash equivalents at beginning of
period 45,975 48,217
------ ------
Cash and cash equivalents at end of period $58,658 $48,509
------- -------
Selected Financial Measures
(In Millions)
(Unaudited)
For the Twelve Months
Ended June 30, 2009
---------------------
Film Aluminum
Products Extrusions Total
---------- ------------ -------
Operating profit from continuing
ongoing operations $56.9 $5.0 $61.9
Allocation of corporate overhead (11.0) (2.7) (13.7)
Add back depreciation and
amortization from continuing operations 32.6 7.8 40.4
---- --- ----
Adjusted EBITDA from continuing
operations (g) $78.5 $10.1 $88.6
----- ----- -----
Selected balance sheet and other data
as of June 30, 2009 :
Net debt (cash) (h) $(57.1)
Shares outstanding 34.0
Notes to the Financial Tables
(a) Plant shutdowns, asset impairments, restructurings and other in the second quarter of 2009 include:
-- Pretax losses of$779,000 associated with Aluminum Extrusions for timing differences between the recognition of realized losses on aluminum futures contracts and related revenues from the delayed fulfillment by customers of fixed-price forward purchase commitments (included in "Cost of goods sold" in the condensed consolidated statements of income); -- Pretax gain of$276,000 (included in "Cost of goods sold" in the condensed consolidated statements of income) related to the reduction of future environmental costs expected to be incurred by Aluminum Extrusions; -- Pretax gain of$175,000 on the sale of a previously shutdown aluminum extrusions manufacturing facility in El Campo,Texas (included in "Other income (expense), net" in the condensed consolidated statements of income); and -- Pretax gain of$149,000 related to the reversal to income of certain inventory impairment accruals in Film Products.
Plant shutdowns, asset impairments, restructurings and other in the first six months of 2009 include:
-- Pretax charges of$1.6 million for severance and other employee-related costs in connection with restructurings in Film Products ($1.1 million ), Aluminum Extrusions ($369,000 ) and corporate headquarters ($178,000 , included in "Corporate expenses, net" in the net sales and operating profit by segment table); -- Pretax losses of$1.4 million associated with Aluminum Extrusions for timing differences between the recognition of realized losses on aluminum futures contracts and related revenues from the delayed fulfillment by customers of fixed-price forward purchase commitments (included in "Cost of goods sold" in the condensed consolidated statements of income); -- Pretax gain of$276,000 (included in "Cost of goods sold" in the condensed consolidated statements of income) related to the reduction of future environmental costs expected to be incurred by Aluminum Extrusions; -- Pretax gain of$275,000 on the sale of equipment (included in "Other income (expense), net" in the condensed consolidated statements of income) from a previously shutdown films manufacturing facility in LaGrange,Georgia ; -- Pretax gain of$175,000 on the sale of a previously shutdown aluminum extrusions manufacturing facility in El Campo,Texas (included in "Other income (expense), net" in the condensed consolidated statements of income); and -- Pretax gain of$149,000 related to the reversal to income of certain inventory impairment accruals in Film Products.
Plant shutdowns, asset impairments, restructurings and other in the second quarter of 2008 include:
-- Pretax charge of$854,000 for asset impairments in Film Products; -- Pretax charges of$365,000 for severance and other employee-related costs in connection with restructurings in Film Products ($90,000 ) and Aluminum Extrusions ($275,000 ); and -- A pretax charge of$105,000 related to expected future environmental costs at the aluminum extrusions facility in Newnan,Georgia (included in "Cost of goods sold" in the condensed consolidated statements of income).
Plant shutdowns, asset impairments, restructurings and other in the first six months of 2008 include:
-- Pretax charges of$2.7 million for severance and other employee-related costs in connection with restructurings in Film Products ($2.2 million ) and Aluminum Extrusions ($510,000 ); -- Pretax charges of$2.5 million for asset impairments in Film Products; and -- A pretax charge of$105,000 related to expected future environmental costs at the aluminum extrusions facility in Newnan,Georgia (included in "Cost of goods sold" in the condensed consolidated statements of income).
(b) Goodwill impairment charge of
(c) Comprehensive income (loss), defined as net income and other
comprehensive income (loss), was income of
(d) Gain on the sale of investments in
(e) Gain on sale of corporate assets in the first six months of 2009
includes a realized gain on the sale of corporate real estate (
Income taxes for 2009 include the recognition of valuation allowances of
(f) On
Second Quarter Six Months
Ended Ended
June 30 June 30
(In thousands) 2009 2008 2009 2008
---- ---- ---- ----
Income (loss) from operations before
income taxes $- $- $- $(391)
Income tax cost (benefit) on operations - - - (98)
--- --- --- ---
- - - (293)
--- --- --- ----
Loss associated with asset impairments
and disposal activities - (207) - (1,337)
Income tax cost (benefit) on asset
impairments and costs associated with
disposal activities - - - (700)
--- --- --- ----
- (207) - (637)
--- ---- --- ----
Income (loss) from discontinued
operations $- $(207) $- $(930)
--- ----- --- -----
(g) Adjusted EBITDA for the twelve months ended
(h) Net debt (cash) is calculated as follows (in millions):
Debt $1.6
Less: Cash and cash equivalents (58.7)
-----
Net debt (cash) $(57.1)
------
Net debt or cash is not intended to represent debt or cash as defined by GAAP. Net debt or cash is utilized by management in evaluating the company's financial leverage and equity valuation and the company believes that investors also may find net debt or cash to be helpful for the same purposes.
SOURCE
Fax: +1-804-330-1777,
daedward@tredegar.com/
