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Tredegar Reports Third-Quarter Results

Stocks in this article: TG

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.

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 Tredegar’s financial condition and results of operations. 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 Investor Relations 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 Investor Relations section of our website.

Tredegar Corporation is primarily a manufacturer of plastic films and aluminum extrusions. A global company headquartered in Richmond, Virginia, Tredegar had 2011 sales of $798 million. With approximately 2,000 employees, the company operates manufacturing facilities in North America, South America, Europe, and Asia.

 
Tredegar Corporation
Condensed Consolidated Statements of Income
(In Thousands, Except Per-Share Data)
(Unaudited)
 
  Third Quarter Ended   Nine Months Ended
September 30   September 30
2012   2011 2012   2011
 
Sales $ 218,809 $ 202,590 $ 652,120 $ 595,080
Other income (expense), net (a) (c) (d)   2,939     1,334     8,154     1,957  
  221,748     203,924     660,274     597,037  
 
Cost of goods sold (a) 173,814 164,771 526,471 489,754
Freight 6,130 4,636 17,404 13,377
Selling, R&D and general expenses (a) 19,666 21,224 65,275 59,377
Amortization of intangibles 1,305 130 4,047 388
Interest expense 708 367 2,732 1,083

Asset impairments and costs associated with exit and disposal activities (a)

937 193 3,151 1,277
  202,560     191,321     619,080     565,256  
 

Income from continuing operations before income taxes

19,188 12,603 41,194 31,781
Income taxes from continuing operations (e)   4,661     (133 )   11,516     6,329  
Income from continuing operations 14,527 12,736 29,678 25,452
Loss from discontinued operations (f)   (7,100 )   -     (11,900 )   (345 )
 
Net income (a) (b) $ 7,427   $ 12,736   $ 17,778   $ 25,107  
 
 
 
Earnings (loss) per share:
Basic:
Continuing operations $ .45 $ .40 $ .93 $ .80
Discontinued operations (f)   (.22 )   -     (.37 )   (.01 )
Net income $ .23   $ .40   $ .56   $ .79  
Diluted:
Continuing operations $ .45 $ .40 $ .92 $ .79
Discontinued operations (f)   (.22 )   -   $ (.37 )   (.01 )
Net income $ .23   $ .40   $ .55   $ .78  
 
Shares used to compute earnings (loss) per share:
Basic 32,052 31,952 32,038 31,918
Diluted 32,101 32,060 32,198 32,175
 

 
Tredegar Corporation
Net Sales and Operating Profit by Segment
(In Thousands)
(Unaudited)
 
  Third Quarter Ended   Nine Months Ended
September 30 September 30
2012   2011 2012   2011
Net Sales
Film Products $ 155,296 $ 129,733 $ 459,221 $ 393,289
Aluminum Extrusions 55,222 66,815 172,525 186,712
Other   2,161     1,406     2,970     1,702  
Total net sales 212,679 197,954 634,716 581,703
Add back freight   6,130     4,636     17,404     13,377  

Sales as shown in the Consolidated Statements of Income

$ 218,809 $ 202,590 $ 652,120 $ 595,080
 
Operating Profit
Film Products:
Ongoing operations $ 21,092 $ 15,485 $ 49,999 $ 43,872

Plant shutdowns, asset impairments, restructurings and other (a)

(87 ) (1,435 ) (1,879 ) (2,519 )
 
Aluminum Extrusions:
Ongoing operations 1,846 2,301 7,349 2,539

Plant shutdowns, asset impairments, restructurings and other (a)

(1,067 ) (43 ) (3,214 ) 19
 
Other:
Ongoing operations   503     778     687     610  
Total 22,287 17,086 52,942 44,521
Interest income 84 278 337 778
Interest expense 708 367 2,732 1,083
Gain on investment accounted for under fair value method (c) 2,700 - 9,000 -
Stock option-based compensation costs 386 474 1,147 1,481
Corporate expenses, net (a) (d)   4,789     3,920     17,206     10,954  
Income from continuing operations before income taxes 19,188 12,603 41,194 31,781
Income taxes from continuing operations (e)   4,661     (133 )   11,516     6,329  
Income from continuing operations 14,527 12,736 29,678 25,452
Loss from discontinued operations (f)   (7,100 )   -     (11,900 )   (345 )
Net income (a) (b) $ 7,427   $ 12,736   $ 17,778   $ 25,107  
 

 
Tredegar Corporation
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)
 
  September 30,   December 31,
2012 2011
Assets
 
Cash & cash equivalents $ 44,167 $ 68,939
Accounts & other receivables, net 95,666 98,027
Income taxes recoverable - 2,592
Inventories 66,272 61,290
Deferred income taxes 6,437 7,135
Prepaid expenses & other   7,178   7,880
Total current assets 219,720 245,863
 
Property, plant & equipment, net 236,394 257,274
Goodwill & other intangibles, net 214,477 223,432
Other assets   67,290   54,041
Total assets $ 737,881 $ 780,610
 
Liabilities and Shareholders' Equity
 
Accounts payable $ 68,379 $ 73,742
Accrued expenses 43,531 41,997
Income taxes payable   1,852   -
Total current liabilities 113,762 115,739
 
Long-term debt 80,000 125,000
Deferred income taxes 68,989 70,754
Other noncurrent liabilities 68,232 72,210
Shareholders' equity   406,898   396,907
Total liabilities and shareholders' equity $ 737,881 $ 780,610
 

 
Tredegar Corporation
Condensed Consolidated Statement of Cash Flows
(In Thousands)
(Unaudited)
 
  Nine Months Ended
September 30
2012   2011
Cash flows from operating activities:
Net income $ 17,778 $ 25,107
Adjustments for noncash items:
Depreciation 34,470 32,139
Amortization of intangibles 4,047 388
Deferred income taxes (2,828 ) 448
Accrued pension income and postretirement benefits 6,258 1,861
Gain on investment accounted for under the fair value method (c) (9,000 ) -
Loss on asset impairments and divestitures (a) (d) 1,942 798
Gain on sale of assets (303 ) (1,205 )

Changes in assets and liabilities, net of effects of acquisitions and divestitures:

Accounts and other receivables 1,652 (14,186 )
Inventories (6,319 ) 7,419
Income taxes recoverable/payable 4,122 (3,255 )
Prepaid expenses and other 1,783 715
Accounts payable and accrued expenses 565 675
Other, net   (4,606 )   (2,170 )
Net cash provided by operating activities   49,561     48,734  
Cash flows from investing activities:
Capital expenditures (20,638 ) (11,235 )
Acquisition (3,311 ) -
Proceeds from the sale of assets and property disposals   1,141     1,622  
Net cash used in investing activities   (22,808 )   (9,613 )
Cash flows from financing activities:
Debt principal payments and financing costs (46,354 ) (89 )
Dividends paid (4,817 ) (4,319 )
Proceeds from exercise of stock options and other   125     709  
Net cash used in financing activities   (51,046 )   (3,699 )
Effect of exchange rate changes on cash   (479 )   790  
Increase (decrease) in cash and cash equivalents (24,772 ) 36,212
Cash and cash equivalents at beginning of period   68,939     73,191  
Cash and cash equivalents at end of period $ 44,167   $ 109,403  
 

Selected Financial Measures
(In Millions)
(Unaudited)
 
Selected balance sheet and other data as of September 30, 2012:
Net debt (g) $ 35.8
Shares outstanding 32.1

Notes to the Financial Tables

(a) Plant shutdowns, asset impairments, restructurings and other in the third quarter of 2012 include:

  • Net pretax charge of $0.7 million associated with the shutdown of the aluminum extrusions manufacturing facility in Kentland, Indiana, which includes accelerated depreciation for property and equipment of $0.6 million (included in "Cost of goods sold" in the condensed consolidated statements of income), severance and other employee-related costs of $0.2 million and other shutdown-related charges of $0.7 million, partially offset by adjustments to inventories accounted for under the last-in, first-out method of $0.5 million (included in "Cost of goods sold" in the condensed consolidated statements of income) and gains on the sale of equipment of $0.3 million (included in "Other income (expense), net" in the condensed consolidated statement of income);
  • Pretax charges of $0.3 million for acquisition-related expenses (included in "Selling, R&D and general expenses" in the condensed consolidated statements of income) associated with the acquisition of AACOA by Aluminum extrusions; and
  • Pretax charges of $0.1 million for integration-related expenses and other non-recurring transactions (included in "Selling, R&D and general expenses" in the condensed consolidated statements of income) associated with the acquisition of Terphane by Film Products.

Plant shutdowns, asset impairments, restructurings and other in the first nine months of 2012 include:

  • Net pretax charge of $2.7 million associated with the shutdown of the aluminum extrusions manufacturing facility in Kentland, Indiana, which includes accelerated depreciation for property and equipment of $2.4 million (included in "Cost of goods sold" in the condensed consolidated statements of income), severance and other employee-related costs of $1.2 million and other shutdown-related charges of $0.9 million, partially offset by adjustments to inventories accounted for under the last-in, first-out method of $1.5 million (included in "Cost of goods sold" in the condensed consolidated statements of income) and gains on the sale of equipment of $0.3 million (included in "Other income (expense), net" in the condensed consolidated statement of income);
  • Pretax charges of $1.0 million for integration-related expenses and other non-recurring transactions (included in "Selling, R&D and general expenses" in the condensed consolidated statements of income) associated with the acquisition of Terphane by Film Products;
  • Pretax loss of $0.8 million for asset impairments associated with a previously shutdown film products manufacturing facility in LaGrange, Georgia;
  • Pretax charges of $0.3 million for acquisition-related expenses (included in "Selling, R&D and general expenses" in the condensed consolidated statements of income) associated with the acquisition of AACOA by Aluminum Extrusions; and
  • Pretax charges of $0.3 million for severance and other employee-related costs in connection with restructurings in Film Products ($71,000) and Aluminum Extrusions ($0.2 million).




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