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Tredegar Reports Third-Quarter Results

Stocks in this article: TG

Nancy M. Taylor, Tredegar’s president and chief executive officer, said: “Film Products’ performance for the quarter was positively impacted by the higher quarter-over-quarter profitability of our recently acquired flexible packaging business, Terphane. While Terphane’s third-quarter performance reflects improved market conditions, we are also pleased with its trends in operational performance. On the down side for Films, the market dynamics affecting the market for our personal care materials continue to exert pressure on our margins and volumes, as we experience softness in demand and increased pricing pressure for several of our personal care products. We continue to focus on cost reductions in light of challenging market conditions.”

Ms. Taylor continued, “While Bonnell’s profitability for the quarter was dampened by lower volumes, primarily due to the closing of its Kentland, Indiana facility, its year-to-date performance has been quite positive. Bonnell’s keen focus on cost control and margin improvement has been a key contributor to its demonstrated trend of strengthening performance. Consistent with our goal to grow in markets outside of building and construction, we recently announced the acquisition of AACOA, a Midwestern manufacturer of aluminum extrusions with industry-leading capabilities in anodizing and fabrication. We believe that this combination will prove to be a strong strategic fit and provides an exciting platform for growing the business.”

OPERATIONS REVIEW

Film Products

A summary of third quarter and year-to-date operating results for Film Products is provided below:

 
Films
 
  Quarter Ended

 

Favorable/

  Nine Months Ended

 

Favorable/

(In Thousands, September 30

 

(Unfavorable)

September 30

 

(Unfavorable)

Except Percentages)   2012   2011

 

% Change

  2012   2011

 

% Change

   
Sales volume (pounds) 68,157 51,396 32.6 % 203,078 157,852 28.7 %
 
Net sales $ 155,296 $ 129,733 19.7 % $ 459,221 $ 393,289 16.8 %
 

Operating profit from ongoing operations

  $ 21,092   $ 15,485   36.2 %   $ 49,999   $ 43,872   14.0 %
 

Net sales (sales less freight) in the third quarter and first nine months of 2012 increased in comparison to the same periods in the prior year primarily due to the addition of Terphane. Terphane, which was acquired in the fourth quarter of 2011, generated net sales of $34.8 million in the third quarter of 2012 and $101.6 million in the first nine months of 2012. The increase in net sales for the third quarter of 2012 compared to the third quarter of 2011 from the addition of Terphane was partially offset by lower volumes in personal care materials. For the year-to-date period, the addition of net sales from the acquisition of Terphane was partially offset by lower volumes in all of the other product lines of Film Products.

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