TG 10-K & 10-Q changes, risk factors and insider trading
Tredegar Corp. · NYSE · Rolling Drawing & Extruding Of Nonferrous Metals · CIK 850429 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “•Unfairly traded imports of aluminum extrusions could injure or threaten with injury America’s domestic aluminum extrusions industry, which could have an adverse effect on the financial condition, results of operations and cash flows of Aluminum Extrusions.”
Largest changes
“•Trade policies and prolonged geopolitical conflicts could cause an increase in the cost of our products or otherwise negatively impact the Company. The primary raw materials used by Aluminum Extrusions consist of aluminum ingot, aluminum scrap and various alloys, which are purchased from domestic and foreign producers in open-market purchases and under short-term contracts. High Performance Film’s Surface Protection business involves imports to and from the U.S. and other countries where the Company produces and sells its products, including China. …”see in full comparison
“•Trade policies could cause an increase in the cost of our products or otherwise negatively impact the Company. The primary raw materials used by Aluminum Extrusions consist of aluminum ingot, aluminum scrap and various alloys, which are purchased from domestic and foreign producers in open-market purchases and under short-term contracts. PE Film’s Surface Protection business involves imports to and from the U.S. and other countries where the Company produces and sells its products, including China. Trade tensions have been rising between the U.S. and other countries. …”see in full comparison
•The Company’s results of operations, financial condition and cash flowssee in full comparisonhave been andcould be impacted by the macroeconomic effects of a pandemic. TheCOVID-19outbreak of a public health emergency, such as a pandemichador epidemic, could have multiple adverse effects on the global economy, including short-term impacts affecting labor supply and causing supply chain disruptions whichledcan lead to inflationary pressures. In addition,thea pandemicresultedmay result in certain after-shocks and structural shifts, whichhavecould adverselyimpactedimpact Tredegar’s markets. Preventive or protective actions taken by governmental authorities could have a material adverse effect on our businesses, our suppliers, contractors and third-party logistic providers, including facility closures, labor constraints, supply chain disruptions and other challenges. These challenges could impact our ability to maintain sufficient inventory and to accurately predict demand or lead times, which could inhibit our ability to service customer demand. Additionally, a future pandemic could heighten other risks described herein.
“In the event of a future pandemic, Tredegar’s businesses, our suppliers, contractors and third-party logistic providers could experience conditions similar to those associated with the COVID-19 pandemic, including facility closures, labor constraints, supply chain disruptions and other challenges. These challenges could impact our ability to maintain sufficient inventory and to accurately predict demand or lead times, which could inhibit our ability to service customer demand. Additionally, a future pandemic could heighten other risks described herein.”see in full comparison
“•Unfairly traded imports of aluminum extrusions could injure or threaten with injury America’s domestic aluminum extrusions industry, which could have an adverse effect on the financial condition, results of operations and cash flows of Aluminum Extrusions.”see in full comparison
“We believe this decline in net new orders after the step-up in the tariff to 50% is due to a combination of lower demand for extrusions in the U.S., tariffs not resulting in the expected favorable shift of market share to domestic producers due to the undervaluation of imported fabricated aluminum products and customers pausing orders to evaluate the permanency of the new higher tariff. Due to the persistent undervaluation problem, the Section 232 framework has created a tariff inversion and price distortions that has created a disadvantage for U.S. …”see in full comparison
Full comparison: every changed paragraph (31)
•Trade policies and prolonged geopolitical conflicts could cause an increase in the cost of our products or otherwise negatively impact the Company. The primary raw materials used by Aluminum Extrusions consist of aluminum ingot, aluminum scrap and various alloys, which are purchased from domestic and foreign producers in open-market purchases and under short-term contracts. High Performance Film’s Surface Protection business involves imports to and from the U.S. and other countries where the Company produces and sells its products, including China. Trade tensions have been rising between the U.S. and other countries. An increase in tariffs and other trade barriers between the U.S. and other countries could cause disruption to supply chains and an increase in the cost of Aluminum Extrusions’ and High Performance Films’ products or otherwise negatively impact the production and sale of the Company’s products in global markets. Furthermore, prolonged geopolitical conflicts, including recent increased tensions in the Middle East, could result in increased pricing of raw materials and supply chain constraints, which could negatively affect our business, financial position, results of operations and cash flows. Refer to Risks Related to Aluminum Extrusions for additional information about unfairly traded imports of aluminum extrusions.
•Tredegar’s performance is influenced by costs incurred by its operating companies, including the cost of raw materials and energy. These costs include the cost of aluminum (the raw material on which Aluminum Extrusions primarily depends), resin (the raw material on which PEHigh Performance Films primarily depends), natural gas (the principal fuel necessary for Aluminum Extrusions’ plants to operate), electricity, diesel fuel, chemicals and paint. Aluminum, resin and natural gas prices are volatile as shown in the charts in Item 7A. The Company attempts to mitigate the effects of increasedhigher costscosts, which includes tariff driven cost increases, through price increases and contractual pass-through provisions, but there are no assurances that higher prices can effectively be passed through to customers or that Tredegar will be able to offset fully or on a timely basis the effects of higher costs. Further, the Company’s cost control efforts may not be sufficient to offset any increases in raw materials, energy or other input costs.
•Noncompliance with any of the covenants in the Company’s $125 million asset-based revolving credit facility (“ABL Facility”), which matures on JuneMay 30,6, 2026,2030, could result in all debt outstanding thereunder becoming due and limiting the Company’s borrowing capacity, which could have a material adverse effect on its consolidated financial condition and liquidity. The credit agreement governing Tredegar’s ABL Facility contains restrictions and financial covenants that, if violated, could restrict the Company’s operational and financial flexibility. Failure to comply with these covenants could result in an event of default, which if not cured or waived, would result in all outstanding debt under the credit facility at such time becoming due, which could have a material adverse effect on the Company’s consolidated financial condition and liquidity.
•Disruptions at one of the Company’s major manufacturing facilities could negatively impact financial results. Tredegar believes it has implemented measures to minimize the risks of disruption at its facilities. However, a disruption could occur as a result of any number of events: an equipment failure with repairs requiring long lead times, labor stoppages or shortages, cybersecurity attacks, utility disruptions, constraints on the supply or delivery of critical raw materials, and severe weather conditions, including potential flooding at the Aluminum Extrusions facility located in Carthage, TN, which is located in a 50-year flood plain. Refer to Risks Related to Aluminum Extrusions for additional information related to aging equipment and systems. A material disruption in one of the Company’s operating locations could negatively impact production and the Company’s consolidated financial condition, results of operations and cash flows.
•Trade policies could cause an increase in the cost of our products or otherwise negatively impact the Company. The primary raw materials used by Aluminum Extrusions consist of aluminum ingot, aluminum scrap and various alloys, which are purchased from domestic and foreign producers in open-market purchases and under short-term contracts. PE Film’s Surface Protection business involves imports to and from the U.S. and other countries where the Company produces and sells its products, including China. Trade tensions have been rising between the U.S. and other countries. An increase in tariffs and other trade barriers between the U.S. and other countries could cause disruption to supply chains and an increase in the cost of Aluminum Extrusions’ and PE Films’ products or otherwise negatively impact the production and sale of the Company’s products in world markets.
•The Company’s results of operations, financial condition and cash flows have been and could be impacted by the macroeconomic effects of a pandemic. The COVID-19outbreak of a public health emergency, such as a pandemic hador epidemic, could have multiple adverse effects on the global economy, including short-term impacts affecting labor supply and causing supply chain disruptions which ledcan lead to inflationary pressures. In addition, thea pandemic resultedmay result in certain after-shocks and structural shifts, which havecould adversely impactedimpact Tredegar’s markets. Preventive or protective actions taken by governmental authorities could have a material adverse effect on our businesses, our suppliers, contractors and third-party logistic providers, including facility closures, labor constraints, supply chain disruptions and other challenges. These challenges could impact our ability to maintain sufficient inventory and to accurately predict demand or lead times, which could inhibit our ability to service customer demand. Additionally, a future pandemic could heighten other risks described herein.
In the event of a future pandemic, Tredegar’s businesses, our suppliers, contractors and third-party logistic providers could experience conditions similar to those associated with the COVID-19 pandemic, including facility closures, labor constraints, supply chain disruptions and other challenges. These challenges could impact our ability to maintain sufficient inventory and to accurately predict demand or lead times, which could inhibit our ability to service customer demand. Additionally, a future pandemic could heighten other risks described herein.
•Tredegar is subject to current and future government regulations, including environmental laws and regulations, and could become exposed to liabilities and costs associated with such regulations. The Company is subject to regulation by local, state, federal and foreign governmental authorities. Additionally, some customers are requesting that the Company demonstrate alignment with the customer’s own sustainability commitments. New laws and regulations, or changes to existing laws, including those relating to environmental matters (including global climate change and plastic products), customer sustainability commitments and privacy matters, could subject Tredegar to significant additional capital expenditures, operating expenses or other compliance costs. Moreover, future developments in federal, state, local and international laws and regulations, including environmental laws, and future customer sustainability initiatives are difficult to predict. Environmental lawslaws, customer sustainability initiatives and privacy restrictions have become and are expected to continue to become increasingly strict. As a result, Tredegar expects to be subject to new environmental and privacy laws and regulations.regulations and new customer sustainability commitments. However, any such changes are uncertain and, therefore, it is not possible for the Company to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes.
•Unfairly traded imports of aluminum extrusions could injure or threaten with injury America’s domestic aluminum extrusions industry, which could have an adverse effect on the financial condition, results of operations and cash flows of Aluminum Extrusions.
Chinese and other foreign manufacturers continue to attempt to evade the antidumping and countervailing orders to avoid duties. In October 2022, the U.S. International Trade Commission extended the antidumping and countervailing duty orders against aluminum extrusions from China for a period of five years.
In March 2018, the U.S. imposed tariffs of 10% on aluminum ingot and semi-finished aluminum imported into the U.S. from certain countries (“Section 232 tariffs”). In December 2020, the Department of Commerce introduced general approved exclusions, allowing importers to bypass individual exclusion requests and import items without Section 232 tariffs. All general approved exclusions were terminated effective March 12, 2025.
Unfairly traded imports of aluminum extrusions continue to pose a significant threat to the U.S. aluminum extrusion industry and to our Aluminum Extrusions segment. Effective June 4, 2025, the Section 232 tariffs were increased to 50%, except for the United Kingdom, after previously being increased from 10% to 25%, effective March 12, 2025. These measures are in addition to existing antidumping and countervailing duties. There are no country-specific or product-specific exclusions occurring to date, except for an alternative arrangement with the United Kingdom.
Despite these actions, weekly net new orders declined approximately 23.6% after the tariff increase to 50%, from an average of 3.4 million pounds per week in the first half of 2025 to 2.6 million pounds per week in the period from June 2025 through early March 2026.
We believe this decline in net new orders after the step-up in the tariff to 50% is due to a combination of lower demand for extrusions in the U.S., tariffs not resulting in the expected favorable shift of market share to domestic producers due to the undervaluation of imported fabricated aluminum products and customers pausing orders to evaluate the permanency of the new higher tariff. Due to the persistent undervaluation problem, the Section 232 framework has created a tariff inversion and price distortions that has created a disadvantage for U.S. extruders and fabricators, allowing foreign finished goods to enter the market at prices domestic manufacturers cannot match. These domestic industry structural issues have reduced the effectiveness of recent tariff increases and have contributed to renewed import surges, despite the intended Section 232 measures.
Although the initial strengthening of the Section 232 program resulted in market share gains for U.S. producers, those gains have diminished, and imports from certain countries have again begun to increase share at the expense of the domestic industry. If these conditions persist, particularly the tariff inversion and continued undervaluation of imported fabricated aluminum productions, they could have a material adverse effect on the financial condition, results of operations, and cash flows of our Aluminum Extrusions segment.
•Our business is capital intensive, and the inability to replace aging equipment could have an adverse effect on our growth and profitability. Our operations rely heavily on manufacturing equipment and information technology (“IT”) systems that, in certain cases, are aging or approaching obsolescence. Many of our production assets have been in service for decades and, while maintained, are more susceptible to mechanical failure, inefficiency, or downtime compared to modern equipment. Unexpected breakdowns or extended outages could disrupt production schedules, increase maintenance costs, and impair our ability to meet customer demand.
Similarly, portions of our IT infrastructure, including enterprise resource planning and manufacturing execution systems (ERP/MES), are based on legacy platforms that may lack the flexibility and scalability features of newer technologies. These limitations increase the risk of system failures, security and operational inefficiencies. In addition, reliance on outdated systems hinders our ability to integrate emerging technologies, automate processes, or respond quickly to evolving regulatory and market requirements. A new ERP/MES project for all locations of the Aluminum Extrusions business commenced in 2022, with capitalized spending to-date of approximately $21 million related to assets not yet placed in service. As the project progressed, certain implementation phases proved more complex and time‑consuming than originally anticipated, requiring a redesign of key elements of the system. During the second quarter of 2023, this project was reorganized to increase the utilization of existing dedicated internal resources for system design in lieu of more costly external consultants. The Company expects that in late 2026 the Board will evaluate the new project design and capital needed for implementation based on the Company’s earnings, financial position, expected cash needs, and other relevant considerations.
Furthermore, significant capital expenditures are required to modernize our infrastructure, and delays or difficulties in implementing such upgrades could exacerbate these risks. Although we currently finance most of our capital expenditures through cash provided by operations, we also may depend on increased borrowing or other financing arrangements to fund future capital expenditures. If we are unable to obtain suitable financing on favorable terms or at all, we may not be able to complete future capital projects and our ability to maintain or expand our operations may be limited. If we are unable to timely upgrade or replace aging equipment and obsolete IT systems, our business could face higher operating costs, reduced competitiveness, or experience non-cash asset impairments.
•Unfairly traded imports of aluminum extrusions could injure or threaten with injury America’s domestic aluminum extrusions industry, which could have an adverse effect on the financial condition, results of operations and cash flows of Aluminum Extrusions. Chinese and other foreign manufacturers continue to try to evade the antidumping and countervailing orders to avoid duties. In October, 2022, the U.S. International Trade Commission (“ITC”) extended the antidumping and countervailing duty orders against aluminum extrusions from China for a period of five years.
In March 2018, the U.S. imposed tariffs of 10% on aluminum ingot and semi-finished aluminum imported into the U.S. from certain countries (“Section 232 tariffs”). In December 2020, the Department of Commerce (“USDOC”) introduced a tariff exclusion process, allowing importers to bypass individual exclusion requests and import items without Section 232 tariffs.
The Company participated as a member of the U.S. Aluminum Extruders Coalition which filed a trade case with the USDOC and the U.S. International Trade Commission (“USITC”) against 15 countries in response to alleged large and increasing volumes of unfairly priced imports of aluminum extrusions since 2019. In November 2023, the USITC found that there is a reasonable indication that the American aluminum extrusions industry is materially injured or threatened with injury due to imports from 14 countries, including China. In September 2024, the USDOC announced its final determinations that aluminum extrusion producers and exporters in 14 countries, including China, sold aluminum extrusions at less-than-fair value in the U.S. In October 2024, the USITC found that U.S. producers had not been materially injured by reason of the subject imports, despite the USDOC findings of less-than-fair value pricing by those imports. The coalition has appealed the decision.
The USITC negative determination in October did not impact the existing duties on aluminum extrusions from China.
On February 10, 2025, the Section 232 tariffs on all aluminum imports were increased from 10% to 25%, effective March 12, 2025, and certain country-specific and product-specific exclusions from the tariffs were revoked. This action also expands the scope of the tariffs to include downstream products, including certain finished aluminum goods. These measures, which apply in addition to existing antidumping and countervailing duties, are intended to prevent the circumvention of duties through the importation of downstream products. The actual level and timing of the tariffs remains a fluid situation. A failure by, or the inability of, U.S. trade officials to restore the import tariff in its full format could have an adverse effect on the businesses, financial condition, results of operations and cash flows of Aluminum Extrusions.
•The failure to successfully implement the new enterprise resource planning and manufacturing execution systems could adversely impact the Aluminum Extrusions business and results of operations. In January 2022, Aluminum Extrusions commenced the implementation of new enterprise resource planning and manufacturing execution systems (“ERP/MES”) across all locations of the Aluminum Extrusions business. The implementation of these systems is a major undertaking from a financial, management, and personnel perspective. The implementations have been more difficult, time-consuming and costly (approximately $21 million of spending to date) than expected. This project has been reorganized with the timing for the go-live date being uncertain. There can be no assurance that these systems will be beneficial to the extent anticipated. Conversely, our existing systems could become obsolete, fail to function properly or otherwise fail to address our needs. Any additional disruptions, delays or deficiencies in the design and implementation of the new systems could adversely affect our financial position, results of operations and cash flows.
Risks Related to PEHigh Performance Films
•PEHigh Performance Films is highly dependent on sales associated with relatively few large customers. PEHigh Performance Films’ top four customers comprised in total approximately 16%,13%, 12%16% and 12% of Tredegar’s consolidated net sales in 2024,2025, 20232024 and 2022,2023, respectively. The loss or significant reduction of sales associated with one or more of these customers without replacement by new business could have an adverse effect on the Company.
While PEHigh Performance Films is undertaking efforts to expand its customer base, there can be no assurance that such efforts will be successful, or that they will offset any loss of sales and profits associated with large customer declines.
•The failure of our customers to achieve success or maintain market share, shifts in customer strategies, and changes in consumer preferences could adversely impact High Performance Films’ sale and operating margins. Our specialized protection and thin-gauge advanced packaging films are used in the production of various consumer products sold worldwide. Our business relies heavily on a few large customers and the markets they operate in. Failure by a key customer to maintain market share or changes in customer strategies or preferences could reduce orders and significantly affect our operating results. Cyclical downturns, disruptive technologies, shifting consumer preferences, and operational decisions by a key customer that result in component substitution all pose risks to our business.
•The failure of PE Films’ customers to achieve success or maintain market share could adversely impact PE Films’ sales and operating margins. PE Films’ specialized protection and polyethylene overwrap films are used in the production of various consumer products sold worldwide. Our customers’ ability to successfully develop, manufacture and market those products is integral to PE Films’ success. Cyclical downturns and changing consumer preferences, particularly those driven by changes in technology, may negatively affect businesses that use PE Films’ film products, which could adversely affect sales and operating margins. Other factors that could adversely affect the business include (i) failure by a key customer to achieve success or maintain share in markets in which they sell products containing PE Films’ materials, including as a result of customer preferences for products other than films, (ii) key customers using products developed by others that replace PE Films’ business with such customers, (iii) delays in a key customer rolling out products utilizing new technologies developed by PE Films, and (iv) operational decisions by a key customer that result in component substitution, inventory reductions and similar changes.
•The Company’s inability to protect its intellectual property rights or its infringement of the intellectual property rights of others could have an adverse impact on PEHigh Performance Films. The continued success of PEHigh Performance Films’ business depends on its ability not only to protect its own technologies and trade secrets, but also to develop and sell new products that do not infringe upon existing patents. Intellectual property litigation is very costly and could result in substantial expense and diversions of Company resources, both of which could adversely affect its consolidated financial condition, results of operations and cash flows. In addition, there may be no effective legal recourse against infringement of the Company’s intellectual property by third parties, whether due to limitations on enforcement of rights in foreign jurisdictions or as a result of other factors.
•Our international operations expose us to risks associated with fluctuations in foreign currency exchange rates. Because we compete against protective films companies who produce and supply films within Japan and price their products in yen, changes in exchange rates, which result in a strong U.S. dollar versus the Japanese yen, can adversely affect the competitiveness of our products in foreign markets and our reported results of operations.
Management's Discussion & Analysis (MD&A)
New heading “Aluminum Extrusions”
New heading “High Performance Films”
Removed heading “2023 versus 2022”
Removed heading “Goodwill Impairment at Bonnell”
Removed heading “2023 versus 2022”
Removed heading “Corporate Expenses and Interest”
Largest changes
The financial covenant is a minimum fixed charge coverage ratio (as defined in the ABL Facility) of 1.00:1.00 that will be triggered in the event that availability is less than the greater of (x) 10% of thesee in full comparison$125Line Cap (as defined in the ABL Facility) and (y) $10 millioncommitment amountandcontinuingwillthereaftercontinue until availability is equal to or greater than the greater of (x) 10% of the$125Line Cap and (y) $10 millioncommitment amountfor 30 consecutivedays.days,Asas long as no events ofDecemberdefault31,are2024, funds available to borrow under the ABL Facility was $43.8 million, or 35.0% of the aggregate commitment of $125 million.continuing.
Insee in full comparisonDecemberMay2023,2025, the Company entered into Amendment No.35 (“Amendment No. 5”) to the Second Amended and Restated Credit Agreement (“theCredit"ABLAgreement”Facility"),which,whichprior to the ABL Adjustment Date (as defined below), providedprovides the Company with a$180$125 million senior secured asset-based revolving credit facility.In April 2024, the Company entered into Amendment No. 4 to the Credit Agreement (as amended by Amendment No. 3 and Amendment No. 4, the “ABL Facility”) that, among other items: (i) moved the ABL Adjustment Date (defined below) from March 31, 2025 to September 30, 2025 and (ii) required weekly reporting of the borrowing base financial covenant until the ABL Adjustment Date.The ABL Facility is secured by substantially all assets of the Company and its domestic subsidiaries, including equity in certain material first-tier foreign subsidiaries. Availability for borrowings under the ABL Facility is governed by a borrowing base, determined by the application of specified advance rates against eligible assets, including a portion of trade accounts receivable, inventory, cash and cash equivalents,owned real properties,and owned machinery and equipment.UponAmendment No. 5 extended theearliermaturity date ofSeptember 30, 2025 orthedateABLtheFacilityCompanytoreceivedMaythe6,proceeds2030.from the saleAs ofTerphaneDecember(the31,“ABL2025,AdjustmentfundsDate”),available to borrow under the$180 millionABL Facility wasto$87.5bemillion,reducedorto70.0% of the aggregate commitment of $125 million.OnDuringNovember 1, 2024, with2025, theclosingCompany's letters ofthecreditsalehaveofbeenTerphane,reduced from approximately $12 million to $3 million, which directly increases theABLCompany'sAdjustmentborrowingDate occurred. The ABL Facility will expire on June 30, 2026.availability.
“Domestic producers of aluminum extrusions in the U.S. continue to experience adverse conditions associated with economic uncertainty, including persistently high interest rates, tight lending standards and inflationary pressures, which negatively impact the non-residential B&C end-use market. These pandemic-related disruptions, which resulted in long lead times and a decline in industry capacity utilization, caused pricing pressure in the aluminum extrusions end-use markets. An influx of foreign imports at less-than-fair value pricing has also adversely impacted domestic producers.”see in full comparison
“During 2024, a non-cash goodwill impairment of $13.3 million was recognized associated with the Clearfield, Utah operation reporting unit in Aluminum Extrusions. During 2023, a non-cash partial goodwill impairment of $34.9 million was recognized associated with the Surface Protection reporting unit in PE Films. See Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for more information.”see in full comparison
“As of December 31, 2025, the Company’s reporting unit with goodwill was Surface Protection in High Performance Films. The Company’s Step 0 analysis as of December 1, 2025 of this reporting unit concluded that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount. Therefore, the Step 1 quantitative goodwill impairment test for this reporting unit was not necessary as of December 1, 2025.”see in full comparison
Full comparison: every changed paragraph (114)
This section provides discussion and a year-to-year comparison for the years ended December 31, 20242025 and 2023 and for the years ended December 31, 2023 and 2022.2024.
Tredegar Corporation is an industrial manufacturer with two primary businesses: custom aluminum extrusions for the B&C, automotive and specialty end-use markets in the United States through its Aluminum Extrusions segment (with exports comprising less than 5% of total sales volume) and surface protection films for high-technologyhigh-end technology applications in the global electronics industry and packaging films for consumer and industrial products through its PEHigh Performance Films segment. With approximately 1,5001,700 employees, the Company operates manufacturing facilities in the U.S. and China.
Sales were $722.9 million in 2025 compared to $598.0 million in 2024 compared to $573.3 million in 2023.2024. Net income (loss) from continuing operations was $1.0$24.1 million ($0.03$0.69 per diluted share) in 2024,2025, compared with net income (loss) from continuing operations of $(99.2)$1.0 million ($(2.91)$0.03 per diluted share) in 2023.2024.
•EBITDA from ongoing operations for PEHigh Performance Films of $30.5$27.1 million was $19.3$3.3 million higherlower than the year of 2023.2024.
Sales in 20242025 increased by 4.3%20.9% compared with 2023.2024. Net sales wereincreased relatively flat27.0% in Aluminum Extrusions primarily due to flathigher sales volume and the pass-through of higher metal costs, partially offset by a lower average conversion price add-on to metal costs associated with a shift in sales mix.costs. Net sales increaseddecreased 37.0%5.2% in PEHigh Performance Films primarily due to higherlower net sales and volume in Surface Protection, with extremely high sales in the first half of 2024 associated with the restocking of Surface Protection customers’and inventories.advanced Overwrappackaging films volume increased 14% versus 2023, primarily due to volume increases associated with lower margin business.films. For more information on changes in net sales and volume, see the Segment Operations Review section below.
Other income (expense), net was $1.4 million in 2025 compared to $(1.0) million in 20242024. comparedThe amount in other income (expense), net for 2025 was primarily related to $(2.1)a milliongain inon 2023.the sale of corporate-owned land of $1.5 million. The amount in other income (expense), net for 2024 was primarily related to $1.3 million of deferred and discretionary incentive payments made in 2024 subsequent to the sale of Terphane. The amount in other income (expense), net for 2023 was primarily related to a $2.0 million charge to adjust the initial purchase price of the nonparticipating single premium group annuity contract as a result of the routine administrative process to transition the pension plan.
•The gross profit margin in Aluminum Extrusions increasedremained flat primarily due to favorable variable manufacturing costs, higher labor productivity and higher volume, partiallyfavorable pricing and lower manufacturing costs associated with material yield, offset by higher labor andrates, employee-relatedunfavorable costsproductivity, higher maintenance and lowersupply spreadexpense, (partially due to the differenceimpact betweenof selling pricestariffs and metalsevere costs)weather and downed equipment in the first half of 2025, higher expense for externally produced billet associated with athe shiftincrease in salesvolume mix.and higher die expense associated with timing of purchases and increasing volume. Additionally, inventories accounted for under the last-in first-out (“LIFO”) inventory method resulted in a net benefit of $2.6 million in 2025 compared to a net benefit of $0.1 million in 2024 due to a favorable current cost adjustment associated with higher metal prices ($9.3 million benefit in 2025 and $1.3 million benefit 2024), partially offset by a corresponding increase in the LIFO reserve, which resulted in a charge of $6.7 million in the fourth quarter 2025 versus a charge of $1.2 million in 2024the versusfourth aquarter benefit of $0.9 million in 2023.2024. The timing of the flow-through under the first-in first-out (“FIFO”) method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $1.4$8.7 million in 20242025 versus a chargebenefit of $1.0$0.1 million in 2023.2024.
•The gross profit margin in PEHigh Performance Films increasedslightly decreased primarily due to higherlower contribution margin (net sales less variable costs) from Surface Protection associated with substantially higherlower volume, unfavorable mix, partially offset by favorable pricing, operating efficiencies and variable cost savings inand 2024operating versus 2023.efficiencies. Inventories accounted for under the LIFO method resulted in a charge of $0.2 million in 2025 versus a benefit of $0.2 million in 2024 versus a benefit of $1.3 million in 2023,2024, and the pass-through lag associated with resin costs resulted in a charge of $1.0$0.3 million in 20242025 versus a charge of $0.5$1.0 million in 2023.2024.
As a percentage of sales, selling, general and administrative (“SG&A”) and research and development (“R&D”) expenses were 12.3%11.0% in 20242025 compared with 11.9%12.3% in 2023.2024. While SG&A expense increased 11.6%8.3% and R&D decreasedremained 75.4%flat year-over-year, sales increased $24.7$124.8 million or 4.3%20.9% compared with the prior year period. Higher SG&A spending was primarily due to higher employee-related compensation and higher professional fees associated with business development activities. Lower R&D spending was primarily due to lower costs associated with the closure of the PE Films technical center in Richmond, VA in 2023.
Pension and postretirement benefits was $0.2 million in 2024 compared to $10.8 million in 2023. The change in pension and postretirement benefits was primarily due to lower pension expense as a result of the pension plan termination completed in 2023. During 2023, the Company settled the pension plan, which resulted in a pre-tax pension settlement loss in the consolidated results of operation of $92.3 million. On November 3, 2023, the pension plan termination and settlement process was completed, and the Company’s relevant pension plan obligation was transferred to Massachusetts Mutual Life Insurance Company. See Note 8 “Retirement Plans and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15 for more information.
During 2024, a non-cash goodwill impairment of $13.3 million was recognized associated with the Clearfield, Utah operation reporting unit in Aluminum Extrusions. During 2023, a non-cash partial goodwill impairment of $34.9 million was recognized associated with the Surface Protection reporting unit in PE Films. See Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for more information.
The effective tax rate used to compute income taxes from continuing operations for the year of 2024 was (18.8)%, compared to 34.1% in 2023. The decrease in the effective tax rate is primarily due to pre-tax income from continuing operations in 2024 versus a pre-tax loss from continuing operations in 2023. The tax rate in 2023 was significantly impacted by tax benefits previously recorded in other comprehensive income (loss) that were released in 2023 as a result of the pension plan termination. The stranded taxes released with the termination of the pension plan represent the effect of the change in federal and state tax rates on pension-related deferred tax items initially recorded in other comprehensive income. The related stranded taxes were released in full in 2023. See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.
Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items in 2024 detailed below are shown in the reconciliation of net sales and EBITDA from ongoing operations by segment in the Segment Operations Review below and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the consolidated statements of income, unless otherwise noted.
Average total debt outstanding and interest rates were as follows:
2023 versus 2022
The following table presents a bridge of consolidated net income (loss) from the year of 2022 to the year of 2023 with related management’s discussion and analysis below the table.
Sales in 2023 decreased by 24.8% compared with 2022. Net sales decreased 25.6% in Aluminum Extrusions primarily due to lower sales volume and the pass-through of lower metal costs. Net sales decreased 21.3% in PE Films primarily due to lower volume in Surface Protection, resulting from weak demand in the consumer electronics market and customer inventory corrections during 2023. For more information on changes in net sales and volume, see the Segment Operations Review section below.
Other income (expense), net was $(2.1) million in 2023 compared to $1.1 million in 2022. The change in other income (expense), net was primarily due to a $2.0 million charge to adjust the initial purchase price of the nonparticipating single premium group annuity contract as a result of the routine administrative process to transition the pension plan. Also, there was cash consideration of $0.3 million received in January 2023 compared to $1.4 million received in May 2022 related to customary post-closing adjustments on the sale of the investment in kaleo, Inc., which was sold in December 2021.
Consolidated gross profit (sales minus cost of goods sold and freight) as a percentage of sales (gross profit margin) was 12.4% in 2023 versus 13.8% in 2022.
•The gross profit margin in Aluminum Extrusions decreased primarily due to lower volume, lower labor productivity in the first half of 2023, higher supply expense, including higher paint expense associated with a shift to more painted product throughout 2023 and inflationary costs for other supplies, partially offset by lower utility costs and unfavorable LIFO inventory adjustments. The timing of the flow through under the FIFO method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a charge of $1.0 million in 2023 versus a benefit of $0.1 million in 2022. There were lower fixed manufacturing costs primarily due to lower non-production utility costs, and lower employee compensation. In addition, the Company recorded an unfavorable out-of-period adjustment of $0.4 million related to inventory and accrued labor costs in 2022.
•The gross profit margin in PE Films increased primarily due to higher overwrap films contribution margin associated with higher volume, favorable mix and favorable pricing, operating efficiencies and cost improvements and favorable LIFO inventory adjustments for both Surface Protection and overwrap films in 2023 versus 2022, partially offset by lower contribution margin for Surface Protection associated with a market slowdown, customer inventory corrections and for previously disclosed customer product transitions. In addition, fixed manufacturing costs were lower primarily due to employee compensation and fixed cost savings.
For more information on changes in operating costs and expenses, see the Segment Operations Review section below.
As a percentage of sales, SG&A and R&D expenses were 11.9% in 2023 compared with 9.8% in 2022. While SG&A and R&D expenses decreased 6.1% and 45.6% year-over-year, sales decreased $188.7 million or 24.8% compared with the prior year period. Lower SG&A spending was primarily due to lower employee-related compensation and lower stock-based compensation. Lower R&D spending was primarily due to the closure of the technical center in Richmond, VA.
For more information on changes in interest expense, see the “Corporate Expenses, Interest and Other” section of the Segment Operations Review section below.
During 2023,2025, the Company settledterminated the pensionOther plan,Post-Retirement whichBenefits resulted(“OPEB”) inprogram. aThe OPEB total obligation and unrecognized pre-tax pensionactuarial settlementgain lossreported in the consolidated resultsbalance sheets was $5.0 million and $1.3 million, respectively, which was realized in the income statement during the fourth quarter of operation of $92.3 million. On November 3, 2023, the pension plan termination and settlement process was completed, and the Company’s relevant pension plan obligation was transferred to Massachusetts Mutual Life Insurance Company.2025. See Note 8 “Retirement PlansBenefits and Other Postretirement Benefits” to the Consolidated Financial Statements in Item 15 for more information.
During 2023,2024, a non-cash partial goodwill impairment of $34.9$13.3 million was recognized associated with the SurfaceClearfield, ProtectionUtah operation reporting unit in PEAluminum Films,Extrusions. seeSee Note 1 “Nature of Operations and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 15 for more information.
The effective tax rate used to compute income taxes from continuing operations for the year of 20232025 was 34.1%,21.5%, compared to (31.618.8)% in 2022.2024. The increase in the effective tax rate iswas primarily due to taxhigher benefitspre-tax previouslyincome recordedfrom continuing operations in other2025 comprehensivethan incomein (loss)2024. thatThe weretax releasedrate asin a2024 resultwas impacted by the release of thevaluation pension plan termination, partially offset by a reduction in Brazilian tax incentives as a percentage of income. The stranded taxes released with the termination of the pension plan represent the effect of the change in federal and state tax ratesallowance on pension-related deferred tax items initially recorded in other comprehensive income. The related stranded taxes were released in full in 2023.taxes. See Note 11 “Income Taxes” to the Consolidated Financial Statements in Item 15 for additional information.
Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items in 20232025 detailed below are shown in the reconciliation of net sales and EBITDA from ongoing operations by segment table in the Segment Operations Review below and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the consolidated statements of income, unless otherwise noted.
Aluminum Extrusions
Net sales in 20242025 wereincreased relatively flat27.0% versus 20232024 primarily due to flathigher sales volume and the pass-through of higher metal costs,costs. partiallySales offsetvolume byincreased a12.9% lowerversus average conversion price add-on to metal costs associated with a shift in sales mix.2024.
◦FavorableHigher variable manufacturing costsvolume ($4.8$14.6 million), higherfavorable labor productivitypricing ($2.5$5.6 million) and higherlower volumemanufacturing costs associated with material yield ($0.8 million favorable in 2025 versus $0.5 million favorable in 2024), partially offset by: higher labor rates ($3.1 million); unfavorable productivity ($1.2 million); higher maintenance and employee-relatedsupply costsexpense, partially due to the impact of tariffs and severe weather and downed equipment in the first half of 2025 ($2.2 million); andhigher lowerexpense spreadfor externally produced billet associated with athe shiftincrease in sales mixvolume ($1.4$0.9 million); higher die expense associated with timing of purchases and increasing volumes ($1.0 million), and higher utilities ($0.9 million); and ◦The timing of the flow-through under the FIFO method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $1.4$8.7 million in 20242025 versus a chargebenefit of $1.0$0.1 million in 2023.2024.
•Inventories accounted for under the LIFO method resulted in a net benefit of $2.6 million in 2025 compared to a net benefit of $0.1 million in 2024 due to a favorable current cost adjustment associated with higher metal prices ($9.3 million benefit in 2025 and $1.3 million benefit in 2024), partially offset by a corresponding increase in the LIFO reserve, which resulted in a charge of $6.7 million in 2025 versus a charge of $1.2 million in 2024.
•Higher fixed costs primarily associated with wage increases and compensation-related costs ($2.9 million), higher maintenance and utilities expenses ($1.5 million) and added resources to support increasing volume ($1.2 million).
•Inventories accounted for under the LIFO method resulted in a charge of $1.2 million in 2024 versus a benefit of $0.9 million in 2023;
•Lower manufacturing fixed costs of $0.9 million primarily due to lower employee-related compensation and reduced outside services ($1.2 million); and
•Higher SG&A expenses of $3.9 million primarily due to employee-related incentive compensation ($2.7$3.2 million), employee training and onboarding expense ($0.5 million) and headquartersroutine rentenvironmental expensescompliance expense ($0.6$0.3 million).
•Higher other expense for employee-related medical costs caused by an increase in the number of high-cost medical claims versus favorable experience in recent years ($1.1 million). The Company is self-insured for medical claims with stop loss coverage for claims of over $0.3 million.
Given recent increased geopolitical tensions in the Middle East, Aluminum Extrusions believesis thatmonitoring itpotential hasimplications adequatefor the availability of certain aluminum‑related raw materials in 2026 and evaluating whether diversifying its sourcing may be warranted. Aluminum Extrusions maintains robust supply agreements forthat support the continuity of aluminum and other productkey cost components in 2025.components. See discussion of quantitative and qualitative disclosures about market risk in Item 7A in this Form 10-K for additional information on aluminum price trends.
Goodwill Impairment at Bonnell
During the fourth quarter of 2024, the Company recognized a non-cash write-off of goodwill of $13.3 million ($10.4 million after deferred income tax benefits) associated with the Clearfield, Utah operation ("Clearfield") acquired in February 2017 (formerly Futura). Clearfield exceeded expectations in performance, including exceptional customer service, from the date of acquisition until before pandemic-related disruptions that resulted in long lead times during periods of 2021 and 2022. Long lead times resulted in customers seeking supply from other sources to meet their demand, including imports. Some business lost at Clearfield during this time has been regained during the recovery underway, but not at the level that the Company previously anticipated would eventually replicate the EBITDA and net cash flow generation that existed prior to the pandemic-related disruptions. As a consequence, using projections that assume the continuation of lower sales and profitability, the estimated fair value of Clearfield during the fourth quarter of 2024 fell below its carrying value by more than the amount of goodwill causing the write-off.
Capital expenditures for Bonnell Aluminum are projected to be $17$20 million in 2025,2026, including $5$7 million for productivity projects and $12$13 million for capital expenditures required to support continuity of operations. Depreciation expense is projected to be $16$14 million in 2025.2026. Amortization expense is projected to be $2 million in 2025.2026. The Company anticipates capital spending to increase from the levels of the past two years and return to a pattern more closely aligned with depreciation and amortization, consistent with long-term historical patterns. This approach supports ongoing maintenance and efficiency initiatives while maintaining disciplined capital allocation.
High Performance Films
A summary of results for PEHigh Performance Films is provided below:
Net sales in 2025 decreased 5.2% versus 2024 due to a decrease of 4% in sales volume in 2025 for surface protection films versus 2024. Advanced packaging films volume decreased 1%.
Net sales in 2024 increased 37.0% versus 2023 due to higher net sales in Surface Protection. Sales volume in 2024 for surface protection films increased 57% versus 2023, with extremely high sales volumes in the first half of 2024 associated with the restocking of Surface Protection customers’ inventories. Overwrap films volume increased 14% versus 2023, primarily due to volume increases associated with lower margin business.
EBITDA from ongoing operations in 20242025 increaseddecreased $19.3$3.3 million versus 20232024 primarily due to:
•HigherLower contribution margin of $19.0$1.8 million resulting from:
◦A $19.4 million increase from Surface Protection associated with substantially higher volume and favorable pricing ($13.4 million), and operating efficiencies and variable cost savings ($6.0 million);
◦RelativelyA flat$1.0 contributionmillion margindecrease from overwrapSurface films,Protection associated with lower volume, unfavorable mix and favorable pricing ($4.5 million), partially offset by variable cost savings and operating efficiencies ($3.1 million) and the pass-through lag associated with resin costs (a charge of $0.2 million in 2025 versus a charge of $0.7 in 2024); and ◦A $0.8 million decrease from advanced packaging films associated with lower volume, unfavorable shift in sales mix and unfavorable pricing ($1.0 million), offsetand byunfavorable operating efficiencies and($0.5 million), partially offset by variable cost savings ($1.0$0.5 million); and ◦Thethe pass-through lag associated with resin costs ($1.0a charge of $0.1 million charge in 20242025 versus a charge of $0.5$0.3 million in 20232024).
•Inventories accounted for under the LIFO method that resulted in a charge of $0.2 million in 2025 versus a benefit of $0.2 million in 2024 versus a benefit of $1.3 million in 2023.2024.
•Higher fixed costs primarily associated with wage increases and compensation-related costs ($0.9 million).
•Lower SG&A of $0.2 million primarily due to lower administrative costs.
•A foreign currency transaction loss of $0.3 million in 2025 versus a gain of $0.3 million in 2024.
•Lower SG&A of $0.9 million primarily due to decreased research and development costs ($1.6 million), partially offset by increased employee-related incentive compensation ($1.2 million).
Capital expenditures for PEHigh Performance Films are projected to be $3 million in 2025,2026, including $2$1 million for productivity projects and $1$2 million for capital expenditures required to support continuity of current operations. Depreciation expense is projected to be $5$4 million in 2025.2026. There is no amortization expense for PEHigh Performance Films.
Corporate expenses, net in 2025 increased by $0.9 million compared to 2024, primarily due to higher professional fees associated with business development activities ($5.9 million) and higher stock based compensation ($0.5 million), partially offset by lower employee-related incentive compensation ($2.1 million), a gain on the sale of corporate owned land ($1.5 million), lower internal and external audit fees ($0.9 million), lower professional fees associated with remediation activities related to internal control over financial reporting ($0.3 million) and lower professional fees associated with the transition to the ABL Facility (as defined below) ($0.2 million). The Company does not expect significant expenses from business development activities in 2026.
Corporate expenses, net in 2024 decreased by $9.2 million compared to 2023, primarily due to lower pension expense as a result of the pension plan termination completed in 2023 ($10.7 million), a non-recurring charge in 2023 associated with the pension plan transition ($2.3 million) and lower software maintenance fees ($0.6 million), partially offset by higher employee-related incentive compensation ($4.7 million).
Interest expense was $4.0 million in 2025 in comparison to $4.7 million in 2024 in comparison to $6.3 million in 2023,2024, primarily due to lower weighted average total debt outstanding,outstanding and lower interest rates, partially offset by higherthe interestwrite-off rates.of deferred financing fees related to the May 2025 amendment to the ABL Facility of $0.8 million.
2023 versus 2022
A summary of operating results for 2023 versus 2022 for each of the Company’s reporting segments is shown below.
What changed in the latest 10-Q
Risk Factors
As disclosed in “Item 1A. Risk Factors” in the 2025 Form 10-K, there are a number of risks and uncertainties that can have a material effect on the operating results of our businesses and our financial condition. There are no material updates or changes to our risk factors previously disclosed in the 2025 Form 10-K.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “First Six Months of 2026 Compared with the First Six Months of 2025 Results”
New heading “First Six Months of 2026 Results vs. First Six Months of 2025 Results”
New heading “First Six Months of 2026 Results vs. First Six Months of 2025 Results”
Largest changes
“Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items for the first six months of 2026 and 2025 detailed below are shown in the reconciliation of net sales and EBITDA from ongoing operations by segment in the table in the Segment Operations Review section below and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the condensed consolidated statements of income, unless otherwise noted.”see in full comparison
“◦Favorable mix ($5.5 million) and favorable manufacturing costs primarily associated with casting capabilities due to scrap spreads, reflecting a wider cost differential between primary aluminum and recycled scrap input, and higher scrap utilization ($7.0 million favorable in the first six months of 2026 versus $0.9 million unfavorable in the first six months of 2025), partially offset by lower volume ($4.1 million), higher labor rates ($3.7 million), decreased labor productivity primarily due to more labor intensive requirements for higher-value products ($0.7 million), higher maintenance …”see in full comparison
“Effective June 4, 2025, Section 232 tariffs on aluminum products increased to 50%, following a prior increase from 10% to 25% in March 2025, with the United Kingdom as the only exception. In April 2026, federal policymakers updated several elements of Section 232, including measures intended to close the loophole that allowed undervalued aluminum extrusions to enter the U.S. market. While these changes are expected to help restore fair competition for domestic producers, U.S. …”see in full comparison
“◦Lower volume ($1.9 million), higher labor rates ($2.0 million), unfavorable labor productivity primarily due to more labor intensive requirements for higher-value products ($1.0 million), higher maintenance, supply and die expense, partially associated with tariff impact ($0.8 million), and higher freight expense ($0.8 million), partially offset by pricing increases ($0.6 million) and favorable manufacturing costs primarily associated with casting capabilities due to scrap spreads, reflecting a wider cost differential between primary aluminum and recycled scrap input, and higher scrap …”see in full comparison
“First Six Months of 2026 Compared with the First Six Months of 2025 Results”see in full comparison
“First Six Months of 2026 Results vs. First Six Months of 2025 Results”see in full comparison
Full comparison: every changed paragraph (94)
•the risks associated with our cost-reduction and operational-improvement initiatives, including our ability to achieve the expected benefits within the expected timeframe or at all;
In the ordinary course of business, the Company makes a number of estimates and assumptions relating to the reporting of results of operations and financial position in the preparation of financial statements in conformity with generally accepted accounting standards in the United States ("GAAP"). The Company believes the estimates, assumptions and judgments described in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates”in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the " 2025 Form 10-K") have the greatest potential impact on our financial statements, so Tredegar considers these to be its critical accounting policies. Since December 31, 2025, there have been no changes in these policies or estimates that have had a material impact on our results of operations or financial position.
FirstSecond quarter 2026 net income (loss) from continuing operations was $5.1$6.0 million ($0.15$0.17 per diluted share) compared to $0.7$1.8 million ($0.02$0.05 per diluted share) in the firstsecond quarter of 2025.
FirstSecond Quarter Financial Results Highlights
•EBITDA from ongoing operations for Aluminum Extrusions was $14.5 million in the second quarter of 2026 versus $9.3 million in the second quarter of 2025 and versus $11.7 million in the first quarter of 2026.
•EBITDA from ongoing operations for Aluminum Extrusions was $11.7 million in the first quarter of 2026 versus $9.2 million in the first quarter of 2025 and versus $15.7 million in the fourth quarter of 2025.
•EBITDA from ongoing operations for High Performance Films was $5.8 million in the second quarter of 2026 versus $6.7 million in the second quarter of 2025 and versus $5.1 million in the first quarter of 2026 versus $7.5 million in the first quarter of 2025 and versus $5.7 million in the fourth quarter of 2025.2026.
FirstSecond Quarter of 2026 Compared with the FirstSecond Quarter of 2025 Results
The following table presents a bridge of consolidated net income (loss) from continuing operations from the firstsecond quarter of 2025 to the firstsecond quarter of 2026 with management's related discussion and analysis below the table.
Sales in the firstsecond quarter of 2026 increased by $21.8$37.1 million compared with the firstsecond quarter of 2025. Net sales (sales less freight) in Aluminum Extrusions increased $25.8$35.8 million, primarily due to the pass-through of higher metal costs, partially offset by lower volume. Net sales in High Performance Films decreasedincreased $4.0$1.0 million, primarily due to aan decreaseincrease in sales volume andin surface protection films, partially offset by unfavorable mix in surface protection films. For more information on net sales and volume, see the Segment Operations Review below.
Consolidated gross profit (sales minus cost of goods sold and freight) as a percentage of sales (gross profit margin) was 12.6%13.4% in the firstsecond quarter of 2026 compared to 14.3%13.6% in the firstsecond quarter of 2025. The gross profit margin in Aluminum Extrusions remainsremained consistent with the prior period. The gross profit margin in High Performance Films decreased primarily due to a lower Surfaceadvanced Protectionpackaging contribution margin associated with lowerthe volumepass-through andlag unfavorableassociated mix, partially offset bywith higher advancedresin packaging volume and favorable mix.costs.
As a percentage of sales, selling, general and administrative (“SG&A”) and research and development ("R&D") expenses were 8.9%9.4% in the firstsecond quarter of 2026 compared with 12.6%11.6% in the firstsecond quarter of 2025. FirstSecond quarter sales increased 13.2%20.7% while SG&A decreased 20.5%2.1% compared to the prior period. Lower SG&A spending was primarily due to lower professional fees associated with business development activities ($2.9$1.1 million), lower employee compensation ($0.7 million), and lower stock-based compensation ($0.4 million), partially offset by higher employee compensation ($0.8 million).
Interest expense was $0.4$0.5 million in the firstsecond quarter of 2026 in comparison to $1.0$1.8 million in the firstsecond quarter of 2025. The decrease in interest expense was primarily due to the write-off of deferred financing fees related to Amendment No. 5 to the Company's Second Amended and Restated Credit Agreement of $0.8 million during the second quarter of 2025, lower weighted average total debt outstanding and lower interest rates.
The effective tax rate used to compute income taxes (benefit) from continuing operations in the firstsecond quarter of 2026 was 16.9%22.3% compared to 46.2%35.0% in the firstsecond quarter of 2025. The effective tax rate for the firstsecond three monthsquarter of 2026 varieswas fromconsistent with the U.S. statutory rate of 21% due to research and development tax credits while the effective tax rate for the firstsecond three monthsquarter of 2025 variesvaried from the statutory rate due to a mix of lower pre-tax income and higher nondeductible discrete items as a percentage of pre-tax income.
Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items for the firstsecond quarters of 2026 and 2025 detailed below are shown in the reconciliation of net sales and EBITDA from ongoing operations by segment in the table in the Segment Operations Review section below and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the condensed consolidated statements of income, unless otherwise noted.
Average total debt outstanding and interest rates were as follows:
First Six Months of 2026 Compared with the First Six Months of 2025 Results
The following table presents a bridge of consolidated net income (loss) from continuing operations from the first six months of 2025 to the first six months of 2026 with management's related discussion and analysis below the table.
Sales in the first six months of 2026 increased by $58.9 million compared with the first six months of 2025. Net sales (sales less freight) in Aluminum Extrusions increased $61.6 million, primarily due to the pass-through of higher metal costs, partially offset by lower volume. Net sales in High Performance Films decreased $3.0 million, primarily due to unfavorable mix in surface protection films. For more information on net sales and volume, see the Segment Operations Review below.
Consolidated gross profit (sales minus cost of goods sold and freight) as a percentage of sales (gross profit margin) was 13.0% in the first six months of 2026 compared to 13.9% in the first six months of 2025. The gross profit margin in Aluminum Extrusions remained consistent with the prior period. The gross profit margin in High Performance Films decreased due to a lower Surface Protection contribution margin associated with lower volume, unfavorable mix, and the pass-through lag associated with higher resin costs, partially offset by favorable productivity and cost improvements.
As a percentage of sales, SG&A and R&D expenses were 9.2% in the first six months of 2026 compared with 12.1% in the first six months of 2025. Sales increased 17.1% while SG&A decreased 11.3% compared to the prior period. Lower SG&A spending was primarily due to lower professional fees associated with business development activities ($4.1 million) and lower stock-based compensation ($0.7 million).
Interest expense was $0.8 million in the first six months of 2026 in comparison to $2.8 million in the first six months of 2025. The decrease was primarily due to the write-off of deferred financing fees related to Amendment No. 5 to the Second Amended and Restated Credit Agreement of $0.8 million during the first six months of 2025, lower weighted average total debt outstanding and lower interest rates.
The effective tax rate from continuing operations in the first six months of 2026 was 19.9% compared to 38.4% in the first six months of 2025. The effective tax rate for the first six months of 2026 varied from the statutory rate of 21% due to research and development tax credits while the effective tax rate for the first six months of 2025 varied from the statutory rate due to a mix of lower pre-tax income and higher nondeductible discrete items as a percentage of pre-tax income.
Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items for the first six months of 2026 and 2025 detailed below are shown in the reconciliation of net sales and EBITDA from ongoing operations by segment in the table in the Segment Operations Review section below and are included in “Asset impairments and costs associated with exit and disposal activities, net of adjustments” in the condensed consolidated statements of income, unless otherwise noted.
A summary of results for Aluminum Extrusions (also "Bonnell Aluminum") is provided below:
The following table presents the sales volume by end use market for the three and six months ended MarchJune 31,30, 2026 and 2025, and the three months ended DecemberMarch 31, 2025.2026.
FirstSecond Quarter 2026 Results vs. FirstSecond Quarter 2025 Results
Net sales in the firstsecond quarter of 2026 increased 19.3%24.1% versus the firstsecond quarter of 2025 primarily due to the pass-through of higher metal costs, partially offset by lower volume. Sales volume in the firstsecond quarter of 2026 decreased 7.3%5.8% versus the second quarter of 2025 and increased 8.8% versus the first quarter of 20252026. andBonnell 5.4%Aluminum versus the fourth quarter of 2025. The Company reportedexperienced a 6%16% decline in nonresidential building and construction volume, driven by higher costscosts, including significantly higher metal costs, and ongoing economic uncertainty. Nonresidential building and construction volume represented approximately 48% of total volume and remains Bonnell Aluminum’s most significant end-use market. Within the specialty market, electricalconsumer shipmentsdurables volume, representing 8% of total volume, decreased 45%18% followingdue theto expirationconsumer ofcautionary federalspending taxon creditsdiscretionary for solar panels.purchases. Also inwithin the specialty market, TSLOTSTM shipments, representing approximately 13%11% of total volume, increased 70%,45%, supported by increased demand for data‑containment and data‑center infrastructure. Automotive and transportation volume declined 19%16%, asreflecting continued cost pressures on manufacturers continuedand tolower facesales risingcompared costwith pressures.the prior year period, which benefited from tariff-related pull-forward demand in the second quarter of 2025. Automotive and transportation represents approximately 7% of total volume.
Net new orders in the firstsecond quarter of 2026 decreasedincreased 20%slightly versus the first quarter of 2025 fromto an average of 3.43.2 million pounds per week versus an average of 3.1 million pounds per week in the firstsecond quarter of 20252025, tosupported 2.8by millionincreased pounds per weekactivity in theTSLOTSTM firstfor quartermodular ofaluminum 2026.framing The Company believes this year-over-year decline reflects both softer U.S. demandsystems and therenewable continuedenergy undervaluation of imported extrusions, attributed to the tariff structure associated with the increase of Section 232 tariffs on aluminum products to 50%, discussed below.applications. Open orders at the end of the firstsecond quarter of 2026 were 1923 million pounds versus 25 million pounds at the end of the firstsecond quarter of 2025 and 1719 million pounds at the end of the fourthfirst quarter of 2025.2026. This level of open orders falls belowwithin the normalized level that is typically associated with stable demand patterns and healthy market dynamics.
Market conditions remain impacted by U.S. trade policy. Following the increase in Section 232 aluminum tariffs to 50% in June 2025, Bonnell Aluminum experienced a decline in new orders of approximately 20%. Changes to the tariff structure announced in April 2026, which include measures intended to close the loophole that allowed undervalued aluminum extrusions to enter the U.S., appear to be contributing to a more balanced competitive environment.
Effective June 4, 2025, Section 232 tariffs on aluminum products increased to 50%, following a prior increase from 10% to 25% in March 2025, with the United Kingdom as the only exception. In April 2026, federal policymakers updated several elements of Section 232, including measures intended to close the loophole that allowed undervalued aluminum extrusions to enter the U.S. market. While these changes are expected to help restore fair competition for domestic producers, U.S. extruders have emphasized the need for clear, uniform, and predictable enforcement to avoid near‑term market disruption. The Company continues to participate in a coalition of downstream aluminum manufacturers that engages with policymakers on issues affecting the competitiveness of the U.S. aluminum extrusion industry.
EBITDA from ongoing operations in the firstsecond quarter of 2026 increased $2.5$5.2 million versus the firstsecond quarter of 2025, primarily due to:
◦Lower volume ($1.9 million), higher labor rates ($2.0 million), unfavorable labor productivity primarily due to more labor intensive requirements for higher-value products ($1.0 million), higher maintenance, supply and die expense, partially associated with tariff impact ($0.8 million), and higher freight expense ($0.8 million), partially offset by pricing increases ($0.6 million) and favorable manufacturing costs primarily associated with casting capabilities due to scrap spreads, reflecting a wider cost differential between primary aluminum and recycled scrap input, and higher scrap utilization ($5.1 million favorable in the second quarter of 2026 versus $0.7 million unfavorable in the second quarter of 2025).
◦Pricing increases ($4.6 million) and lower manufacturing costs associated with material yield ($2.0 million favorable in the first quarter of 2026 versus $0.1 million unfavorable in the first quarter of 2025), partially offset by lower volume ($2.1 million), higher labor rates ($0.7 million), unfavorable labor productivity ($0.6 million), higher maintenance and supply expense ($0.8 million), higher freight expense ($0.4 million), higher utilities ($0.5 million), and higher die expense ($0.8 million).
◦The timing of the flow-through under the first-in, first-out ("FIFO") method of aluminum raw materials costs, which were previously acquired in a quickly changing commodity pricing environment, causing a temporary mismatch in the change in the cost of raw materials included in variable costs and the pass through to customers included in sales, resulted in a benefit of $2.9$4.9 million in the firstsecond quarter of 2026 versus a benefitcharge of $1.7$0.7 million in the firstsecond quarter of 2025.
•Higher fixed costs primarily associated with wage and benefits increases ($0.5 million).
•LowerHigher SG&A expenses primarily associated with lower employee-relatedincentive compensation and lower routine environmental compliance expense ($0.5$0.9 million).
•Lower other expense for lower employee-related medical costs associated with medical claims ($0.6$1.5 million).
The Company expects the benefit associated with FIFO inventory positions and metal price trends to be substantially neutralized during the third quarter.
First Six Months of 2026 Results vs. First Six Months of 2025 Results
Net sales in the first six months of 2026 increased 21.8% versus the first six months of 2025 primarily due to the pass-through of higher metal costs, partially offset by lower sales volume. Sales volume in the first six months of 2026 decreased 6.5% versus the first six months of 2025.
EBITDA from ongoing operations in the first six months of 2026 increased $7.8 million in comparison to the first six months of 2025 primarily due to:
•A $7.2 million increase in contribution margin associated with:
◦Favorable mix ($5.5 million) and favorable manufacturing costs primarily associated with casting capabilities due to scrap spreads, reflecting a wider cost differential between primary aluminum and recycled scrap input, and higher scrap utilization ($7.0 million favorable in the first six months of 2026 versus $0.9 million unfavorable in the first six months of 2025), partially offset by lower volume ($4.1 million), higher labor rates ($3.7 million), decreased labor productivity primarily due to more labor intensive requirements for higher-value products ($0.7 million), higher maintenance expense, primarily associated with downed equipment in the first quarter of 2026 and tariff impacts ($1.1 million), higher die expense, including tariff impact ($1.3 million), higher freight ($1.2 million), and higher utilities ($0.5 million).
◦The timing of the flow-through under the FIFO method of aluminum raw material costs, which were previously acquired in a quickly changing commodity pricing environment and passed through to customers, resulted in a benefit of $7.8 million in the first six months of 2026 versus a benefit of $1.0 million in the first six months of 2025.
•Higher fixed costs primarily associated with wage and benefits-related expense increases ($1.1 million).
•Higher SG&A expenses primarily associated with higher incentive compensation, partially offset by lower routine environmental compliance expense ($0.4 million).
•Lower other expense for lower employee-related medical costs associated with medical claims ($2.1 million).
Conflict-driven disruptions in the Strait of Hormuz beginning in March 2026 have constrained shipments and raised costs, contributing to historically low U.S. inventory levels. In response to recentongoing geopolitical tensions in the Middle East and resulting contraction of the global aluminum market, we have proactively diversified ourBonnell Aluminum’s supply chain portfolio to support long-term stability. Through the third quarterremainder of 2026, we have successfully transitionedsecured nearly all of ourBonnell Aluminum’s aluminum supply previouslyrequirements sourcedand fromare proactively reviewing Bonnell Aluminum’s 2027 supply needs and sources to minimize exposure to the Middle East to North American partners.East. Simultaneously, we are optimizing billet casting operations at our Carthage, TN, and Newnan, GA facilities to overcome localized production constraints. These strategic shifts in our supply chain and internal capabilities continue to strengthen our operational resilience, positioning theBonnell CompanyAluminum to meet customer demand through 2026.demand.
Capital expenditures for Bonnell Aluminum are projected to be $20 million in 2026, including $4 million for productivity projects and $16 million for capital expenditures required to support continuity of operations. Depreciation expense is projected to be $14 million in 2026. Amortization expense is projected to be $2 million in 2026. The Company anticipates capital spending for Bonnell Aluminum to increase from the levels of the past two years and return to a pattern more closely aligned with depreciation and amortization, consistent with long-term historical patterns. This approach supports ongoing maintenance and efficiency initiatives while maintaining disciplined capital allocation.
FirstSecond Quarter 2026 Results vs. FirstSecond Quarter 2025 Results
Net sales in the firstsecond quarter of 2026 decreasedincreased 15.7%4.2% versus the firstsecond quarter of 2025 due to aan decreaseincrease in sales volume andfor surface protection films, partially offset by unfavorable mix in surface protection films. Surface Protection sales volume decreasedincreased 17.5%17.8% in the firstsecond quarter of 2026 versus the firstsecond quarter of 2025. Sales volume for surface protection films declined in the first quarter of 2026 as expected due to a significant customer’s inventory correction and scheduled maintenance activity for another customer. Volume for advanced packaging films, which are predominantly manufactured and sold in the U.S. and used in consumer staple items, increaseddecreased 5.6%17.8% in the firstsecond quarter of 2026 versus the firstsecond quarter of 2025. The top four customers comprised 87% and 91% of the net sales for High Performance Films for the first three months of 2026 and first three months of 2025, respectively.
Surface Protection has not experienced an adverse impact on customer demand related to tariff actions; however, the situation remains fluid and the impact on consumer electronics is uncertain.
EBITDA from ongoing operations in the firstsecond quarter of 2026 decreased $2.4$0.9 million versus the firstsecond quarter of 2025, primarily due to:
◦A $0.1 million increase from Surface Protection primarily due to favorable productivity and cost improvements ($0.8 million), partially offset by unfavorable mix ($0.2 million) and the pass-through lag associated with higher resin costs (a charge of $0.5 million in the second quarter of 2026 versus no charge or benefit in the second quarter of 2025).
◦A $0.8 million decrease from advanced packaging films primarily due to the pass-through lag associated with higher resin costs (a charge of $0.7 million in the second quarter of 2026 versus no charge or benefit in the second quarter of 2025).
•Higher fixed costs associated with employee-related compensation ($0.4 million).
◦A $2.8 million decrease from Surface Protection associated with lower volume and unfavorable mix ($3.4 million), partially offset by cost improvements and favorable productivity ($0.6 million).
◦A $0.4 million increase from advanced packaging films primarily due to higher volume, favorable mix and unfavorable pricing ($0.5 million), partially offset by unfavorable productivity ($0.1 million).
•A foreign currency transaction loss of $0.3 million in the firstsecond quarter of 2026 versus no gain or loss in the firstsecond quarter of 2025.
TG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 3 Form 4 filings (1 insider, 3 trade dates, 4,000 shares, about $31.2K) and open-market sales in 46 filings (4 insiders, 28 trade dates, 495,926 shares, about $4.0M). Net open-market shares: -491,926 (purchases minus sales); net value about -$4.0M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-01 | Dutra Ana |
Grant/award | 1,583 | — | — |
| 2026-10-01 | Haniford Joseph E |
Grant/award | 3,237 | — | — |
| 2026-10-01 | Boiter Cynthia |
Grant/award | 3,237 | — | — |
| 2026-10-01 | Parks David |
Grant/award | 3,237 | — | — |
| 2026-10-01 | Vlahcevic Christine R |
Grant/award | 3,237 | — | — |
| 2026-10-01 | Pratt Gregory A |
Grant/award | 4,406 | — | — |
| 2026-09-25 | Sweeney Susan E |
Grant/award | 8,343 | — | — |
| 2026-09-21 | Yao Cindy |
Grant/award | 19,510 | $7.01 | $136.8K |
| 2026-08-25 | Gottwald John D |
Open-market sale | 13 | $8.00 | $104 |
| 2026-08-25 | Gottwald William M |
Open-market sale | 14 | $8.00 | $112 |
| 2026-08-25 | Gottwald James T. |
Open-market sale | 14 | $8.00 | $112 |
| 2026-08-21 | Gottwald James T. |
Open-market sale | 780 | $8.00 | $6.2K |
| 2026-08-21 | Gottwald John D |
Open-market sale | 781 | $8.00 | $6.2K |
| 2026-08-19 | Gottwald William M |
Open-market sale | 4,318 | $8.12 | $35.1K |
| 2026-08-19 | Gottwald John D |
Open-market sale | 4,318 | $8.12 | $35.1K |
| 2026-08-19 | Gottwald James T. |
Open-market sale | 4,318 | $8.12 | $35.1K |
| 2026-08-18 | Gottwald John D |
Open-market sale | 3,472 | $8.01 | $27.8K |
| 2026-08-18 | Gottwald William M |
Open-market sale | 3,472 | $8.01 | $27.8K |
| 2026-08-18 | Gottwald James T. |
Open-market sale | 3,472 | $8.01 | $27.8K |
| 2026-08-18 | Dasgupta Arijit |
Open-market purchase | 2,093 | $7.87 | $16.5K |
| 2026-08-17 | Gottwald John D |
Open-market sale | 7,718 | $8.02 | $61.9K |
| 2026-08-17 | Gottwald William M |
Open-market sale | 7,718 | $8.02 | $61.9K |
| 2026-08-17 | Gottwald James T. |
Open-market sale | 7,719 | $8.02 | $61.9K |
| 2026-08-14 | Dasgupta Arijit |
Open-market purchase | 907 | $7.87 | $7.1K |
| 2026-08-13 | Gottwald John D |
Open-market sale | 1,020 | $8.00 | $8.2K |
| 2026-08-13 | Gottwald James T. |
Open-market sale | 1,020 | $8.00 | $8.2K |
| 2026-08-13 | Gottwald William M |
Open-market sale | 1,021 | $8.00 | $8.2K |
| 2026-08-12 | Gottwald John D |
Open-market sale | 13,170 | $8.07 | $106.3K |
| 2026-08-12 | Gottwald William M |
Open-market sale | 13,170 | $8.07 | $106.3K |
| 2026-08-12 | Gottwald James T. |
Open-market sale | 13,170 | $8.07 | $106.3K |
| 2026-08-11 | Gottwald John D |
Open-market sale | 17,148 | $8.19 | $140.4K |
| 2026-08-11 | Gottwald William M |
Open-market sale | 17,148 | $8.19 | $140.4K |
| 2026-08-11 | Gottwald James T. |
Open-market sale | 17,148 | $8.19 | $140.4K |
| 2026-07-01 | Haniford Joseph E |
Grant/award | 1,272 | $7.77 | $9.9K |
| 2026-07-01 | Boiter Cynthia |
Grant/award | 1,718 | $7.77 | $13.3K |
| 2026-07-01 | Parks David |
Grant/award | 2,895 | $7.77 | $22.5K |
| 2026-07-01 | Vlahcevic Christine R |
Grant/award | 2,895 | $7.77 | $22.5K |
| 2026-07-01 | Pratt Gregory A |
Grant/award | 3,941 | $7.77 | $30.6K |
| 2026-06-12 | Gottwald William M |
Open-market sale | 20,145 | $8.16 | $164.4K |
| 2026-06-12 | Gottwald John D |
Open-market sale | 20,146 | $8.16 | $164.4K |
| 2026-06-12 | Gottwald James T. |
Open-market sale | 20,146 | $8.16 | $164.4K |
| 2026-06-11 | Gottwald William M |
Open-market sale | 6,152 | $8.00 | $49.2K |
| 2026-06-11 | Gottwald John D |
Open-market sale | 6,152 | $8.00 | $49.2K |
| 2026-06-11 | Gottwald James T. |
Open-market sale | 6,152 | $8.00 | $49.2K |
| 2026-06-10 | Gottwald William M |
Open-market sale | 15,809 | $8.04 | $127.1K |
| 2026-06-10 | Gottwald James T. |
Open-market sale | 15,808 | $8.04 | $127.1K |
| 2026-06-10 | Gottwald John D |
Open-market sale | 15,808 | $8.04 | $127.1K |
| 2026-06-09 | Gottwald William M |
Open-market sale | 2,350 | $8.00 | $18.8K |
| 2026-06-09 | Gottwald James T. |
Open-market sale | 2,351 | $8.00 | $18.8K |
| 2026-06-09 | Gottwald John D |
Open-market sale | 2,351 | $8.00 | $18.8K |
| 2026-06-05 | Gottwald John D |
Open-market sale | 3,333 | $7.76 | $25.9K |
| 2026-06-05 | Gottwald William M |
Open-market sale | 3,334 | $7.76 | $25.9K |
| 2026-06-05 | Gottwald James T. |
Open-market sale | 3,333 | $7.76 | $25.9K |
| 2026-06-04 | Gottwald John D |
Open-market sale | 33 | $8.00 | $264 |
| 2026-06-04 | Gottwald William M |
Open-market sale | 33 | $8.00 | $264 |
| 2026-06-04 | Gottwald James T. |
Open-market sale | 34 | $8.00 | $272 |
| 2026-06-03 | Gottwald William M |
Open-market sale | 848 | $7.77 | $6.6K |
| 2026-06-03 | Gottwald John D |
Open-market sale | 847 | $7.77 | $6.6K |
| 2026-06-03 | Gottwald James T. |
Open-market sale | 847 | $7.77 | $6.6K |
| 2026-06-02 | Gottwald William M |
Open-market sale | 197 | $8.00 | $1.6K |
Well-known investors holding TG (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 451,880 | $3.6M | 0.0% | Added 426% |
| Millennium Management (Israel Englander) | 2026-06-30 | 194,328 | $1.5M | 0.0% | Reduced 16% |
| D. E. Shaw & Co. | 2026-06-30 | 140,164 | $1.1M | 0.0% | Reduced 15% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 134,311 | $1.1M | 0.0% | Added 71% |
| Renaissance Technologies | 2026-06-30 | 112,300 | $893.9K | 0.0% | Reduced 43% |
| Two Sigma Investments | 2026-06-30 | 73,491 | $585.0K | 0.0% | Added 5% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 33,070 | $263.2K | 0.0% | Added 14% |