Tredegar Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

tg-20200630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-10258

Tredegar Corporation

(Exact Name of Registrant as Specified in Its Charter)


Virginia						54-1497771
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

1100 Boulders Parkway

Richmond,

Virginia

23225

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (804) 330-1000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, no par value	TG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Smaller reporting company

Non-accelerated filer

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares of Common Stock, no par value, outstanding as of July 31, 2020: 33,516,949

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Tredegar Corporation

Consolidated Balance Sheets

(In Thousands, Except Share Data)

(Unaudited)


	June 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	39,930	$	31,422

Accounts and other receivables, net of allowance for doubtful accounts and sales returns of $3,383 in 2020 and $3,036 in 2019	100,460		107,558

Income taxes recoverable	852		4,100
Inventories	85,218		81,380

Prepaid expenses and other	10,383		8,696
Total current assets	236,843		233,156
Property, plant and equipment, at cost	806,476		810,801
Less accumulated depreciation	(576,556)		(567,911)
Net property, plant and equipment	229,920		242,890
Right-of-use leased assets	17,879		19,220
Investment in kaléo (cost basis of $7,500)	70,700		95,500
Identifiable intangible assets, net	20,766		22,636
Goodwill	67,708		81,404
Deferred income taxes	10,826		13,129
Other assets	4,165		4,733
Total assets	$	658,807	$	712,668
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	92,882	$	103,657
Accrued expenses	47,054		45,809
Lease liability, short-term	2,949		3,002
Income taxes payable	5,613		—
Total current liabilities	148,498		152,468
Lease liability, long-term	16,305		17,689
Long-term debt	34,000		42,000
Pension and other postretirement benefit obligations, net	104,903		107,446
Deferred income taxes	—		11,019
Other noncurrent liabilities	4,227		5,297
Total liabilities	307,933		335,919

Shareholders’ equity:
Common stock, no par value (issued and outstanding - 33,518,577 shares at June 30, 2020 and 33,365,039 shares at December 31, 2019)	47,448		45,514
Common stock held in trust for savings restoration plan (75,792 shares at June 30, 2020 and 74,798 shares at December 31, 2019)	(1,610)		(1,592)
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment	(112,666)		(100,663)
Gain (loss) on derivative financial instruments	(3,824)		(1,307)
Pension and other post-retirement benefit adjustments	(89,819)		(95,681)
Retained earnings	511,345		530,478
Total shareholders’ equity	350,874		376,749
Total liabilities and shareholders’ equity	$	658,807	$	712,668

See accompanying notes to financial statements.

Tredegar Corporation

Consolidated Statements of Income

(In Thousands, Except Per Share Data)

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Revenues and other items:
Sales	$	218,638	$	248,248	$	446,940	$	496,714
Other income (expense), net	(13)		7,096		(26,225)		24,206
	218,625		255,344		420,715		520,920
Costs and expenses:
Cost of goods sold	161,820		192,581		337,131		393,235
Freight	7,464		8,887		16,044		17,907
Selling, general and administrative	25,212		23,864		48,381		45,875
Research and development	4,865		5,451		9,720		9,936
Amortization of identifiable intangibles	753		890		1,511		1,782
Pension and postretirement benefits	3,567		2,416		7,134		4,831
Interest expense	548		1,263		1,104		2,495
Asset impairments and costs associated with exit and disposal activities, net of adjustments	136		1,075		597		2,131
Goodwill impairment	—		—		13,696		—
Total	204,365		236,427		435,318		478,192
Income (loss) before income taxes	14,260		18,917		(14,603)		42,728
Income tax expense (benefit)	3,064		4,440		(3,477)		8,467


Net income (loss)	$	11,196	$	14,477	$	(11,126)	$	34,261

Earnings (loss) per share:



Basic	$	0.33	$	0.44	$	(0.33)	$	1.03



Diluted	$	0.33	$	0.44	$	(0.33)	$	1.03
Shares used to compute earnings (loss) per share:
Basic	33,435		33,270		33,374		33,197
Diluted	33,436		33,278		33,374		33,203
Dividends per share	$	0.12	$	0.11	$	0.24	$	0.22

See accompanying notes to financial statements.

Tredegar Corporation

Consolidated Statements of Comprehensive Income (Loss)

(In Thousands)

(Unaudited)


	Three Months Ended June 30,
	2020		2019
Net income (loss)	$	11,196	$	14,477
Other comprehensive income (loss):
Unrealized foreign currency translation adjustment (net of tax of $177 in 2020 and tax of $0 in 2019)	(474)		507
Derivative financial instruments adjustment (net of tax of $339 in 2020 and tax benefit of $134 in 2019)	1,258		621
Amortization of prior service costs and net gains or losses (net of tax of $835 in 2020 and tax of $593 in 2019)	2,931		2,079
Other comprehensive income (loss)	3,715		3,207
Comprehensive income (loss)	$	14,911	$	17,684


	Six Months Ended June 30,
	2020		2019
Net income (loss)	$	(11,126)	$	34,261
Other comprehensive income (loss):
Unrealized foreign currency translation adjustment (net of tax benefit of $1,106 in 2020 and tax benefit of $0 in 2019)	(12,003)		(283)
Derivative financial instruments adjustment (net of tax benefit of $887 in 2020 and tax benefit of $51 in 2019)	(2,517)		268
Amortization of prior service costs and net gains or losses (net of tax of $1,671 in 2020 and tax of $1,185 in 2019)	5,862		4,158
Other comprehensive income (loss)	(8,658)		4,143
Comprehensive income (loss)	$	(19,784)	$	38,404

See accompanying notes to financial statements.

Tredegar Corporation

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)


	Six Months Ended June 30,
	2020		2019
Cash flows from operating activities:
Net income (loss)	$	(11,126)	$	34,261
Adjustments for noncash items:
Depreciation	15,357		14,465
Amortization of identifiable intangibles	1,511		1,782
Reduction of right-of-use lease asset	1,402		1,270
Goodwill impairment	13,696		—
Deferred income taxes	(8,461)		5,339
Accrued pension and post-retirement benefits	7,134		4,831
(Gain) loss on investment in kaléo accounted for under the fair value method	24,800		(6,600)
Loss on asset impairments and divestitures	—		522
Net gain on disposal of assets	—		(11)

Changes in assets and liabilities:
Accounts and other receivables	2,303		8,471
Inventories	(8,515)		702
Income taxes recoverable/payable	8,799		3,860
Prepaid expenses and other	(1,912)		1,081
Accounts payable and accrued expenses	(6,936)		(566)
Lease liability	(1,496)		(1,306)
Pension and postretirement benefit plan contributions	(2,130)		(3,648)
Other, net	1,636		4,043
Net cash provided by operating activities	36,062		68,496
Cash flows from investing activities:
Capital expenditures	(8,806)		(24,251)




Proceeds from the sale of assets and other	—		22
Net cash used in investing activities	(8,806)		(24,229)
Cash flows from financing activities:
Borrowings	25,000		30,000
Debt principal payments	(33,000)		(58,500)
Dividends paid	(8,025)		(7,320)
Debt financing costs	—		(1,757)
Repurchase of employee common stock for tax withholdings	(586)		(854)

Net cash used in financing activities	(16,611)		(38,431)
Effect of exchange rate changes on cash	(2,137)		(464)
Increase in cash & cash equivalents	8,508		5,372
Cash and cash equivalents at beginning of period	31,422		34,397
Cash and cash equivalents at end of period	$	39,930	$	39,769

See accompanying notes to financial statements.

Tredegar Corporation

Consolidated Statement of Shareholders’ Equity

(In Thousands, Except Share and Per Share Data)

(Unaudited)

The following summarizes the changes in shareholders’ equity for the three month period ended June 30, 2020:


											Accumulated Other Comprehensive Income (Loss)
	Common Stock		Retained Earnings		Trust for Savings Restoration Plan		Foreign Currency Translation		Gain (Loss) on Derivative Financial Instruments		Pension & Other Post-retirement Benefit Adjustment		Total Shareholders’ Equity
Balance April 1, 2020	$	46,054	$	504,161	$	(1,601)	$	(112,192)	$	(5,082)	$	(92,750)	$	338,590
Net income	—		11,196		—		—		—		—		11,196
Other comprehensive income (loss):
Foreign currency translation adjustment (net of tax benefit of $177)	—		—		—		(474)		—		—		(474)
Derivative financial instruments adjustment (net of tax of $339)	—		—		—		—		1,258		—		1,258
Amortization of prior service costs and net gains or losses (net of tax of $835)	—		—		—		—		—		2,931		2,931
Cash dividends declared ($0.12 per share)	—		(4,021)		—		—		—		—		(4,021)
Stock-based compensation expense	1,394		—		—		—		—		—		1,394


Tredegar common stock purchased by trust for savings restoration plan	—		9		(9)		—		—		—		—
Balance at June 30, 2020	$	47,448	$	511,345	$	(1,610)	$	(112,666)	$	(3,824)	$	(89,819)	$	350,874

The following summarizes the changes in shareholders’ equity for the six month period ended June 30, 2020:


											Accumulated Other Comprehensive Income (Loss)
	Common Stock		Retained Earnings		Trust for Savings Restoration Plan		Foreign Currency Translation		Gain (Loss) on Derivative Financial Instruments		Pension & Other Post-retirement Benefit Adjustment		Total Shareholders’ Equity
Balance at January 1, 2020	$	45,514	$	530,478	$	(1,592)	$	(100,663)	$	(1,307)	$	(95,681)	$	376,749
Net income (loss)	—		(11,126)		—		—		—		—		(11,126)
Other comprehensive income (loss):
Foreign currency translation adjustment (net of tax benefit of $1,106)	—		—		—		(12,003)		—		—		(12,003)
Derivative financial instruments adjustment (net of tax benefit of $887)	—		—		—		—		(2,517)		—		(2,517)
Amortization of prior service costs and net gains or losses (net of tax of $1,671)	—		—		—		—		—		5,862		5,862
Cash dividends declared ($0.24 per share)	—		(8,025)		—		—		—		—		(8,025)
Stock-based compensation expense	2,520		—		—		—		—		—		2,520
Repurchase of employee common stock for tax withholdings	(586)		—		—		—		—		—		(586)

Tredegar common stock purchased by trust for savings restoration plan	—		18		(18)		—		—		—		—
Balance at June 30, 2020	$	47,448	$	511,345	$	(1,610)	$	(112,666)	$	(3,824)	$	(89,819)	$	350,874

The following summarizes the changes in shareholders’ equity for the three month period ended June 30, 2019:


											Accumulated Other Comprehensive Income (Loss)
	Common Stock		Retained Earnings		Trust for Savings Restoration Plan		Foreign Currency Translation		Gain (Loss) on Derivative Financial Instruments		Pension & Other Post-retirement Benefit Adjustment		Total Shareholders’ Equity
Balance at April 1, 2019	$	39,587	$	513,653	$	(1,568)	$	(97,730)	$	(1,954)	$	(79,367)	$	372,621
Net income (loss)	—		14,477		—		—		—		—		14,477
Other comprehensive income (loss):
Foreign currency translation adjustment (net of tax of $0)	—		—		—		507		—		—		507
Derivative financial instruments adjustment (net of tax benefit of $134)	—		—		—		—		621		—		621
Amortization of prior service costs and net gains or losses (net of tax of $593)	—		—		—		—		—		2,079		2,079
Cash dividends declared ($0.11 per share)	—		(3,669)		—		—		—		—		(

Price	19.40	EPS	2
Shares	33	P/E	8
MCap	647	P/FCF	7
Net Debt	23	EBIT	86
TEV	670	TEV/EBIT	8
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-06
10-Q	2020-03-31	Filed 2020-05-11
10-K	2019-12-31	Filed 2020-03-16
10-Q	2019-09-30	Filed 2019-11-06
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-09
10-K	2018-12-31	Filed 2019-03-18
10-Q	2018-09-30	Filed 2018-11-09
10-Q	2018-06-30	Filed 2018-08-01
10-Q	2018-03-31	Filed 2018-05-01
10-K	2017-12-31	Filed 2018-02-22
10-Q	2017-09-30	Filed 2017-11-01
10-Q	2017-06-30	Filed 2017-08-02
10-Q	2017-03-31	Filed 2017-05-02
10-K	2016-12-31	Filed 2017-02-22
10-Q	2016-09-30	Filed 2016-11-02
10-Q	2016-06-30	Filed 2016-08-02
10-Q	2016-03-31	Filed 2016-05-03
10-K	2015-12-31	Filed 2016-02-29
10-Q	2015-09-30	Filed 2015-11-09
10-Q	2015-06-30	Filed 2015-07-30
10-Q	2015-03-31	Filed 2015-05-05
10-K	2014-12-31	Filed 2015-03-02
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-08
10-Q	2014-03-31	Filed 2014-05-01
10-K	2013-12-31	Filed 2014-02-28
10-Q	2013-09-30	Filed 2013-11-04
10-Q	2013-06-30	Filed 2013-08-02
10-Q	2013-03-31	Filed 2013-05-03
10-K	2012-12-31	Filed 2013-03-01
10-Q	2012-09-30	Filed 2012-11-02
10-Q	2012-06-30	Filed 2012-08-02
10-Q	2012-03-31	Filed 2012-05-04
10-K	2011-12-31	Filed 2012-03-02
10-Q	2011-09-30	Filed 2011-11-03
10-Q	2011-06-30	Filed 2011-08-04
10-Q	2011-03-31	Filed 2011-05-05
10-K	2010-12-31	Filed 2011-03-04
10-Q	2010-09-30	Filed 2010-11-03
10-Q	2010-06-30	Filed 2010-08-04
10-Q	2010-03-31	Filed 2010-05-05
10-K	2009-12-31	Filed 2010-03-04

8-K	2020-08-24	Enter Agreement, Regulation FD, Exhibits
8-K	2020-08-05	Earnings, Exhibits
8-K	2020-05-21
8-K	2020-05-11
8-K	2020-03-26
8-K	2020-03-16
8-K	2020-01-28
8-K	2019-11-06
8-K	2019-10-08
8-K	2019-08-08
8-K	2019-06-28
8-K	2019-05-10
8-K	2019-05-02
8-K	2019-03-19
8-K	2019-02-22
8-K	2018-11-09
8-K	2018-11-01
8-K	2018-08-16
8-K	2018-08-02
8-K	2018-06-04
8-K	2018-05-10
8-K	2018-05-02
8-K	2018-05-01
8-K	2018-02-22
8-K	2018-02-19

EX-31.1	tg-ex31120200630x10q.htm
EX-31.2	tg-ex31220200630x10q.htm
EX-32.1	tg-ex32120200630x10q.htm
EX-32.2	tg-ex32220200630x10q.htm

TG 10Q Quarterly Report

Tredegar Earnings 2020-06-30