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Tredegar Reports Second-Quarter Results

Operating profit from ongoing operations increased in the second quarter and the first six months of 2013, primarily as a result of the addition of AACOA, cost savings associated with the shutdown of the Kentland manufacturing facility and improved pricing, partially offset by production inefficiencies and higher energy costs. The impact on operating profit from ongoing operations directly attributable to the acquisition of AACOA, including synergies, was $1.4 million in the second quarter of 2013 and $2.6 million in the first six months of 2013. Amortization expense associated with AACOA was $0.4 million in the second quarter and $0.9 million in the first six months of 2013. The shutdown of our Kentland manufacturing facility had a net favorable impact on operating profit from ongoing operations of approximately $0.8 million in the second quarter and $2.0 million in the first six months of 2013 in comparison to the same periods in the prior year. Excluding the impact of our acquisition of AACOA and the Kentland shutdown, lower sales volumes had an unfavorable impact on operating profit from ongoing operations of $0.3 million in the second quarter of 2013 compared to the second quarter of 2012. Margins were also negatively impacted by production inefficiencies of approximately $0.5 million and higher energy costs of $0.4 million in the second quarter of 2013 compared to the second quarter of 2012. Additional construction-related expense of $0.3 million was incurred during the second quarter of 2013 for the new automotive press project at our manufacturing facility in Newnan, Georgia.

Capital expenditures for Bonnell Aluminum were $4.6 million in the first six months of 2013 compared to $1.5 million in the first six months of 2012. Capital expenditures are projected to be approximately $16 million in 2013, which includes approximately $12 million for an 18-month project that will expand capacity at our manufacturing facility in Newnan, Georgia. This additional capacity will primarily serve the automotive industry. Depreciation expense was $3.7 million in the first six months of 2013 compared with $5.5 million in the first six months of 2012, and is projected to be approximately $7.5 million in 2013. Higher depreciation expense in 2012 was primarily related to approximately $1.9 million in accelerated depreciation on property, plant and equipment at the Kentland manufacturing facility.

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