0000850429 12/31 2024 Q1 FALSE xbrli:shares iso4217:USD iso4217:USD xbrli:shares tg:lbs iso4217:BRL xbrli:pure 0000850429 2024-01-01 2024-03-31 0000850429 2024-05-03 0000850429 2024-03-31 0000850429 2023-12-31 0000850429 2023-01-01 2023-03-31 0000850429 us-gaap:ProductMember 2024-01-01 2024-03-31 0000850429 us-gaap:ProductMember 2023-01-01 2023-03-31 0000850429 us-gaap:ShippingAndHandlingMember 2024-01-01 2024-03-31 0000850429 us-gaap:ShippingAndHandlingMember 2023-01-01 2023-03-31 0000850429 us-gaap:RetainedEarningsMember 2024-01-01 2024-03-31 0000850429 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0000850429 2022-12-31 0000850429 2023-03-31 0000850429 us-gaap:CommonStockMember 2023-12-31 0000850429 us-gaap:RetainedEarningsMember 2023-12-31 0000850429 tg:TrustForSavingRestorationPlanMember 2023-12-31 0000850429 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-12-31 0000850429 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-01-01 2024-03-31 0000850429 us-gaap:CommonStockMember 2024-01-01 2024-03-31 0000850429 us-gaap:CommonStockMember 2024-03-31 0000850429 us-gaap:RetainedEarningsMember 2024-03-31 0000850429 tg:TrustForSavingRestorationPlanMember 2024-03-31 0000850429 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-03-31 0000850429 us-gaap:CommonStockMember 2022-12-31 0000850429 us-gaap:RetainedEarningsMember 2022-12-31 0000850429 tg:TrustForSavingRestorationPlanMember 2022-12-31 0000850429 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0000850429 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-03-31 0000850429 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0000850429 tg:TrustForSavingRestorationPlanMember 2023-01-01 2023-03-31 0000850429 us-gaap:CommonStockMember 2023-03-31 0000850429 us-gaap:RetainedEarningsMember 2023-03-31 0000850429 tg:TrustForSavingRestorationPlanMember 2023-03-31 0000850429 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0000850429 us-gaap:OtherExpenseMember 2024-01-01 2024-03-31 0000850429 tg:ThirdPartyFinancialInstitutionsMember 2024-03-31 0000850429 tg:ThirdPartyFinancialInstitutionsMember 2023-12-31 0000850429 us-gaap:PensionPlansDefinedBenefitMember 2024-01-01 2024-03-31 0000850429 us-gaap:PensionPlansDefinedBenefitMember 2023-01-01 2023-03-31 0000850429 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2024-01-01 2024-03-31 0000850429 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2023-01-01 2023-03-31 0000850429 tg:AccruedExpensesMember 2024-03-31 0000850429 tg:AccruedExpensesMember 2023-12-31 0000850429 us-gaap:AccumulatedTranslationAdjustmentMember 2023-12-31 0000850429 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2023-12-31 0000850429 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2023-12-31 0000850429 us-gaap:AccumulatedTranslationAdjustmentMember 2024-01-01 2024-03-31 0000850429 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2024-01-01 2024-03-31 0000850429 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2024-01-01 2024-03-31 0000850429 us-gaap:AccumulatedTranslationAdjustmentMember 2024-03-31 0000850429 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2024-03-31 0000850429 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2024-03-31 0000850429 us-gaap:AccumulatedTranslationAdjustmentMember 2022-12-31 0000850429 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2022-12-31 0000850429 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2022-12-31 0000850429 us-gaap:AccumulatedTranslationAdjustmentMember 2023-01-01 2023-03-31 0000850429 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2023-01-01 2023-03-31 0000850429 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2023-01-01 2023-03-31 0000850429 us-gaap:AccumulatedTranslationAdjustmentMember 2023-03-31 0000850429 us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember 2023-03-31 0000850429 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2023-03-31 0000850429 tg:AluminumFuturesContractsMember 2024-03-31 0000850429 tg:AluminumFuturesContractsMember 2023-12-31 0000850429 us-gaap:OtherNoncurrentAssetsMember tg:AluminumFuturesContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2024-03-31 0000850429 us-gaap:OtherNoncurrentAssetsMember tg:AluminumFuturesContractsMember us-gaap:DesignatedAsHedgingInstrumentMember 2023-12-31 0000850429 tg:AluminumFuturesContractsMember tg:AccruedExpensesMember us-gaap:DesignatedAsHedgingInstrumentMember 2024-03-31 0000850429 tg:AluminumFuturesContractsMember tg:AccruedExpensesMember us-gaap:DesignatedAsHedgingInstrumentMember 2023-12-31 0000850429 tg:AluminumFuturesContractsMember us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:DesignatedAsHedgingInstrumentMember 2024-03-31 0000850429 tg:AluminumFuturesContractsMember us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:DesignatedAsHedgingInstrumentMember 2023-12-31 0000850429 tg:TerphaneLtdaMember tg:Oct2018Member 2024-01-01 2024-03-31 0000850429 tg:TerphaneLtdaMember tg:Apr24Member 2024-03-31 0000850429 tg:May24Member tg:TerphaneLtdaMember 2024-03-31 0000850429 tg:Jun24Member tg:TerphaneLtdaMember 2024-03-31 0000850429 tg:TerphaneLtdaMember tg:Jul24Member 2024-03-31 0000850429 tg:TerphaneLtdaMember tg:Aug24Member 2024-03-31 0000850429 tg:TerphaneLtdaMember tg:Sep24Member 2024-03-31 0000850429 tg:TerphaneLtdaMember tg:Oct24Member 2024-03-31 0000850429 tg:TerphaneLtdaMember tg:Nov24Member 2024-03-31 0000850429 tg:TerphaneLtdaMember tg:Dec24Member 2024-03-31 0000850429 tg:TerphaneLtdaMember 2024-03-31 0000850429 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:DesignatedAsHedgingInstrumentMember 2024-03-31 0000850429 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:DesignatedAsHedgingInstrumentMember 2023-12-31 0000850429 us-gaap:OtherNoncurrentAssetsMember us-gaap:DesignatedAsHedgingInstrumentMember 2024-03-31 0000850429 us-gaap:OtherNoncurrentAssetsMember us-gaap:DesignatedAsHedgingInstrumentMember 2023-12-31 0000850429 tg:AccruedExpensesMember us-gaap:DesignatedAsHedgingInstrumentMember 2024-03-31 0000850429 tg:AccruedExpensesMember us-gaap:DesignatedAsHedgingInstrumentMember 2023-12-31 0000850429 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:DesignatedAsHedgingInstrumentMember 2024-03-31 0000850429 us-gaap:OtherNoncurrentLiabilitiesMember us-gaap:DesignatedAsHedgingInstrumentMember 2023-12-31 0000850429 us-gaap:CashFlowHedgingMember us-gaap:CostOfSalesMember tg:AluminumFuturesContractsMember 2024-01-01 2024-03-31 0000850429 us-gaap:CashFlowHedgingMember us-gaap:CostOfSalesMember tg:AluminumFuturesContractsMember 2023-01-01 2023-03-31 0000850429 us-gaap:CashFlowHedgingMember us-gaap:CostOfSalesMember tg:ForeignCurrencyForwardsAndOptionsMember 2024-01-01 2024-03-31 0000850429 us-gaap:CashFlowHedgingMember us-gaap:SellingGeneralAndAdministrativeExpensesMember tg:ForeignCurrencyForwardsAndOptionsMember 2024-01-01 2024-03-31 0000850429 us-gaap:CashFlowHedgingMember us-gaap:CostOfSalesMember tg:ForeignCurrencyForwardsAndOptionsMember 2023-01-01 2023-03-31 0000850429 us-gaap:CashFlowHedgingMember us-gaap:SellingGeneralAndAdministrativeExpensesMember tg:ForeignCurrencyForwardsAndOptionsMember 2023-01-01 2023-03-31 0000850429 tg:BrazilianMember 2024-01-01 2024-03-31 0000850429 tg:TerphaneLtdaMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember 2023-01-01 2023-03-31 0000850429 tg:PEFilmsMember 2024-01-01 2024-03-31 0000850429 tg:PEFilmsMember 2023-01-01 2023-03-31 0000850429 tg:FlexiblePackagingFilmsMemberDomain 2024-01-01 2024-03-31 0000850429 tg:FlexiblePackagingFilmsMemberDomain 2023-01-01 2023-03-31 0000850429 tg:FlexiblePackagingFilmsMember 2024-01-01 2024-03-31 0000850429 tg:FlexiblePackagingFilmsMember 2023-01-01 2023-03-31 0000850429 tg:KaleoMember 2023-01-01 2023-01-31 0000850429 tg:KaleoMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember us-gaap:OperatingSegmentsMember 2024-03-31 0000850429 tg:AluminumExtrusionsMember us-gaap:OperatingSegmentsMember 2023-12-31 0000850429 tg:PEFilmsMember us-gaap:OperatingSegmentsMember 2024-03-31 0000850429 tg:PEFilmsMember us-gaap:OperatingSegmentsMember 2023-12-31 0000850429 tg:FlexiblePackagingFilmsMember us-gaap:OperatingSegmentsMember 2024-03-31 0000850429 tg:FlexiblePackagingFilmsMember us-gaap:OperatingSegmentsMember 2023-12-31 0000850429 tg:SubtotalMember us-gaap:OperatingSegmentsMember 2024-03-31 0000850429 tg:SubtotalMember us-gaap:OperatingSegmentsMember 2023-12-31 0000850429 tg:GeneralCorporateMember us-gaap:OperatingSegmentsMember 2024-03-31 0000850429 tg:GeneralCorporateMember us-gaap:OperatingSegmentsMember 2023-12-31 0000850429 us-gaap:OperatingSegmentsMember 2024-03-31 0000850429 us-gaap:OperatingSegmentsMember 2023-12-31 0000850429 country:US 2024-01-01 2024-03-31 0000850429 country:US 2023-01-01 2023-03-31 0000850429 srt:AsiaMember tg:ExportsFromUnitedStatesMember 2024-01-01 2024-03-31 0000850429 srt:AsiaMember tg:ExportsFromUnitedStatesMember 2023-01-01 2023-03-31 0000850429 srt:LatinAmericaMember tg:ExportsFromUnitedStatesMember 2024-01-01 2024-03-31 0000850429 srt:LatinAmericaMember tg:ExportsFromUnitedStatesMember 2023-01-01 2023-03-31 0000850429 country:CA tg:ExportsFromUnitedStatesMember 2024-01-01 2024-03-31 0000850429 country:CA tg:ExportsFromUnitedStatesMember 2023-01-01 2023-03-31 0000850429 srt:EuropeMember tg:ExportsFromUnitedStatesMember 2024-01-01 2024-03-31 0000850429 srt:EuropeMember tg:ExportsFromUnitedStatesMember 2023-01-01 2023-03-31 0000850429 country:BR tg:OperationsOutsideUnitedStatesMember 2024-01-01 2024-03-31 0000850429 country:BR tg:OperationsOutsideUnitedStatesMember 2023-01-01 2023-03-31 0000850429 srt:AsiaMember tg:OperationsOutsideUnitedStatesMember 2024-01-01 2024-03-31 0000850429 srt:AsiaMember tg:OperationsOutsideUnitedStatesMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:NonresidentialBuildingAndConstructionMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:NonresidentialBuildingAndConstructionMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:ConsumerDurablesMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:ConsumerDurablesMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:AutomotiveMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:AutomotiveMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:ResidentialBuildingAndConstructionMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:ResidentialBuildingAndConstructionMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:ElectricalMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:ElectricalMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:MachineryandEquipmentBNLDomain 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:MachineryandEquipmentBNLDomain 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:DistributionMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:DistributionMember 2023-01-01 2023-03-31 0000850429 tg:AluminumExtrusionsMember tg:AluminumExtrusionsSubtotalMember 2024-01-01 2024-03-31 0000850429 tg:AluminumExtrusionsMember tg:AluminumExtrusionsSubtotalMember 2023-01-01 2023-03-31 0000850429 tg:PEFilmsMember tg:SurfaceProtectionFilmsMember 2024-01-01 2024-03-31 0000850429 tg:PEFilmsMember tg:SurfaceProtectionFilmsMember 2023-01-01 2023-03-31 0000850429 tg:PEFilmsMember tg:OverwrapPackagingMember 2024-01-01 2024-03-31 0000850429 tg:PEFilmsMember tg:OverwrapPackagingMember 2023-01-01 2023-03-31 0000850429 tg:PEFilmsMember tg:FilmProductsSubtotalMember 2024-01-01 2024-03-31 0000850429 tg:PEFilmsMember tg:FilmProductsSubtotalMember 2023-01-01 2023-03-31 0000850429 us-gaap:BaseRateMember 2024-01-01 2024-03-31 0000850429 us-gaap:SecuredOvernightFinancingRateSofrMember 2024-01-01 2024-03-31 0000850429 tg:Over66Of125MillionAggregateCommitmentMember 2024-01-01 2024-03-31 0000850429 tg:Over66Of125MillionAggregateCommitmentMember 2024-03-31 0000850429 tg:LessThan66ButOver33Of125MillionAggregateCommitmentMember 2024-01-01 2024-03-31 0000850429 tg:LessThan66ButOver33Of125MillionAggregateCommitmentMember 2024-03-31 0000850429 tg:LessThan33Of125MillionAggregateCommitmentMember 2024-01-01 2024-03-31 0000850429 tg:LessThan33Of125MillionAggregateCommitmentMember 2024-03-31 0000850429 tg:Mar24Member 2024-03-31 0000850429 tg:Apr24Member 2024-03-31 0000850429 tg:May24Member 2024-03-31 0000850429 tg:Jun24Member 2024-03-31 0000850429 tg:Jul24Member 2024-03-31 0000850429 tg:Aug24Member 2024-03-31 0000850429 tg:Sep24Member 2024-03-31 0000850429 tg:Oct24Member 2024-03-31 0000850429 tg:Nov24Member 2024-03-31 0000850429 tg:Dec24Member 2024-03-31 0000850429 tg:Jan25Member 2024-03-31 0000850429 tg:Feb25Member 2024-03-31 0000850429 tg:Mar25Member 2024-03-31 0000850429 tg:Apr25Member 2024-03-31 0000850429 tg:May25Member 2024-03-31 0000850429 tg:Jun25Member 2024-03-31 0000850429 tg:Jul25Member 2024-03-31 0000850429 tg:Aug25Member 2024-03-31 0000850429 tg:Sep25Member 2024-03-31 0000850429 tg:TerphaneBrazilLoanMember 2024-03-31 0000850429 tg:TredegarIntercompanyMember 2024-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2024
OR

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

For the transition period from to
Commission file number 1-10258

Tredegar Corporation
(Exact Name of Registrant as Specified in Its Charter)

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

1100 Boulders Parkway |  |
Richmond, | Virginia |  | 23225
(Address of Principal Executive Offices) |  | (Zip Code)

Registrant’s Telephone Number, Including Area Code: (804) 330-1000
Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer |  | ¨ | Accelerated filer | x | Smaller reporting company |  | ☐
Non-accelerated filer |  | ¨ |  | Emerging growth company |  | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
The number of shares of Common Stock, no par value, outstanding as of May 3, 2024: 34,484,893

Tredegar Corporation
Table of Contents

|  | Page
Part I | Financial Information |  |
Item 1. | Financial Statements |  |
| Condensed Consolidated Balance Sheets (unaudited) |  | 2
| Condensed Consolidated Statements of Income (Loss) (unaudited) |  | 3
| Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) |  | 4
| Condensed Consolidated Statements of Cash Flows (unaudited) |  | 5
| Condensed Consolidated Statements of Shareholders' Equity (unaudited) |  | 6
| Notes to the Condensed Consolidated Financial Statements (unaudited) |  | 7
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 18
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |  | 29
Item 4. | Controls and Procedures |  | 33
Part II | Other Information |  |
Item 1A. | Risk Factors |  | 33
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |  | 34
Item 5. | Other Information |  | 34
Item 6. | Exhibits |  | 34

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Tredegar Corporation
Condensed Consolidated Balance Sheets
(In Thousands, Except Share Data)
(Unaudited)

| March 31, |  | December 31,
| 2024 |  | 2023
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 3,493 |  |  | $ | 9,660 |
Restricted cash | 1,299 |  |  | 3,795 |
Accounts and other receivables, net | 73,032 |  |  | 67,938 |
Income taxes recoverable | 793 |  |  | 1,182 |
Inventories | 86,822 |  |  | 82,037 |
Prepaid expenses and other | 9,438 |  |  | 12,065 |
Total current assets | 174,877 |  |  | 176,677 |
Property, plant and equipment, at cost | 540,856 |  |  | 541,046 |
Less: accumulated depreciation | (362,884) |  |  | (357,591) |
Net property, plant and equipment | 177,972 |  |  | 183,455 |
Right-of-use leased assets | 16,761 |  |  | 11,848 |
Identifiable intangible assets, net | 9,364 |  |  | 9,851 |
Goodwill | 35,717 |  |  | 35,717 |
Deferred income taxes | 24,320 |  |  | 25,034 |
Other assets | 3,520 |  |  | 3,879 |
Total assets | $ | 442,531 |  |  | $ | 446,461 |
Liabilities and Shareholders’ Equity |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 84,925 |  |  | $ | 95,023 |
Accrued expenses | 23,083 |  |  | 24,442 |
Lease liability, short-term | 2,871 |  |  | 2,107 |
ABL revolving facility (matures June 30, 2026) | 128,330 |  |  | 126,322 |
Income taxes payable | 225 |  |  | 1,210 |
Total current liabilities | 239,434 |  |  | 249,104 |
Lease liability, long-term | 15,318 |  |  | 10,942 |
Long-term debt | 20,000 |  |  | 20,000 |
Pension and other postretirement benefit obligations, net | 6,582 |  |  | 6,643 |
Other non-current liabilities | 4,382 |  |  | 4,119 |
Total liabilities | 285,716 |  |  | 290,808 |
Shareholders’ equity: |  |  |
Common stock, no par value (authorized shares 150,000,000, issued and outstanding 34,533,870 shares at March 31, 2024 and 34,408,638 shares at December 31, 2023) | 61,959 |  |  | 61,606 |
Common stock held in trust for savings restoration plan (118,543 shares at March 31, 2024 and 118,543 shares at December 31, 2023) | (2,233) |  |  | (2,233) |
Accumulated other comprehensive income (loss): |  |  |
Foreign currency translation adjustment | (84,985) |  |  | (83,037) |
Gain (loss) on derivative financial instruments | 297 |  |  | 801 |
Pension and other postretirement benefit adjustments | 512 |  |  | 539 |
Retained earnings | 181,265 |  |  | 177,977 |
Total shareholders’ equity | 156,815 |  |  | 155,653 |
Total liabilities and shareholders’ equity | $ | 442,531 |  |  | $ | 446,461 |

See accompanying notes to the condensed consolidated financial statements.
2

Tredegar Corporation
Condensed Consolidated Statements of Income (Loss)
(In Thousands, Except Per Share Data)
(Unaudited)

| Three Months Ended March 31, |  |
| 2024 |  | 2023 |  |  |  |
Revenues and other items: |  |  |  |  |  |  |
Sales | $ | 175,736 |  |  | $ | 191,122 |  |  |  |  |
Other income (expense), net | 8 |  |  | 280 |  |  |  |  |
| 175,744 |  |  | 191,402 |  |  |  |  |
Costs and expenses: |  |  |  |  |  |  |
Cost of goods sold | 142,043 |  |  | 159,525 |  |  |  |  |
Freight | 6,666 |  |  | 6,043 |  |  |  |  |
Selling, general and administrative | 18,258 |  |  | 19,006 |  |  |  |  |
Research and development | 352 |  |  | 1,205 |  |  |  |  |
Amortization of identifiable intangibles | 464 |  |  | 503 |  |  |  |  |
Pension and postretirement benefits | 54 |  |  | 3,418 |  |  |  |  |
Interest expense | 3,455 |  |  | 2,311 |  |  |  |  |
Asset impairments and costs associated with exit and disposal activities, net of adjustments | 507 |  |  | 69 |  |  |  |  |
Total | 171,799 |  |  | 192,080 |  |  |  |  |
Income (loss) before income taxes | 3,945 |  |  | (678) |  |  |  |  |
Income tax expense (benefit) | 657 |  |  | 331 |  |  |  |  |
Net income (loss) | $ | 3,288 |  |  | $ | (1,009) |  |  |  |  |
Earnings (loss) per share: |  |  |  |  |  |  |
Basic | $ | 0.10 |  |  | $ | (0.03) |  |  |  |  |
Diluted | $ | 0.10 |  |  | $ | (0.03) |  |  |  |  |
Shares used to compute earnings (loss) per share: |  |  |  |  |  |  |
Basic | 34,323 |  |  | 33,895 |  |  |  |  |
Diluted | 34,323 |  |  | 33,895 |  |  |  |  |

See accompanying notes to the condensed consolidated financial statements.
3

Tredegar Corporation
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In Thousands)
(Unaudited)

| Three Months Ended March 31,
| 2024 |  | 2023
Net income (loss) | $ | 3,288 |  |  | $ | (1,009) |
Other comprehensive income (loss): |  |  |
Unrealized foreign currency translation adjustment (net of tax expense of $221 in 2024 and net of tax expense of $436 in 2023) | (1,948) |  |  | 1,120 |
Derivative financial instruments adjustment (net of tax benefit of $140 in 2024 and net of tax expense of $836 in 2023) | (504) |  |  | 1,269 |
Amortization of prior service costs and net gains or losses (net of tax benefit of $8 in 2024 and net of tax expense of $637 in 2023) | (27) |  |  | 2,287 |
Other comprehensive income (loss) | (2,479) |  |  | 4,676 |
Comprehensive income (loss) | $ | 809 |  |  | $ | 3,667 |

See accompanying notes to the condensed consolidated financial statements.
4

Tredegar Corporation
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)

| Three Months Ended March 31,
| 2024 |  | 2023
Cash flows from operating activities: |  |  |
Net income (loss) | $ | 3,288 |  |  | $ | (1,009) |
Adjustments for noncash items: |  |  |
Depreciation | 6,252 |  |  | 6,340 |
Amortization of identifiable intangibles | 464 |  |  | 503 |
Reduction of right-of-use lease asset | 610 |  |  | 551 |
Deferred income taxes | 623 |  |  | 411 |
Accrued pension and post-retirement benefits | 54 |  |  | 3,418 |
Stock-based compensation expense | 686 |  |  | 186 |
Gain on investment in kaléo | — |  |  | (262) |
Changes in assets and liabilities: |  |  |
Accounts and other receivables | (5,337) |  |  | (4,320) |
Inventories | (5,481) |  |  | 14,840 |
Income taxes recoverable/payable | (580) |  |  | (1,156) |
Prepaid expenses and other | 1,890 |  |  | 1,816 |
Accounts payable and accrued expenses | (10,306) |  |  | (28,977) |
Lease liability | (689) |  |  | (558) |
Pension and postretirement benefit plan contributions | (158) |  |  | (154) |
Other, net | 965 |  |  | (737) |
Net cash provided by (used in) operating activities | (7,719) |  |  | (9,108) |
Cash flows from investing activities: |  |  |
Capital expenditures | (2,461) |  |  | (9,025) |
Proceeds from the sale of kaléo | — |  |  | 262 |
Proceeds from the sale of assets | 83 |  |  | — |
Net cash provided by (used in) investing activities | (2,378) |  |  | (8,763) |
Cash flows from financing activities: |  |  |
Borrowings | 179,248 |  |  | 37,250 |
Debt principal payments | (177,240) |  |  | (19,250) |
Dividends paid | — |  |  | (4,419) |
Net cash provided by (used in) financing activities | 2,008 |  |  | 13,581 |
Effect of exchange rate changes on cash | (574) |  |  | 83 |
Increase (decrease) in cash, cash equivalents and restricted cash | (8,663) |  |  | (4,207) |
Cash, cash equivalents and restricted cash at beginning of period | 13,455 |  |  | 19,232 |
Cash, cash equivalents and restricted cash at end of period | $ | 4,792 |  |  | $ | 15,025 |

See accompanying notes to the condensed consolidated financial statements.
5

Tredegar Corporation
Condensed Consolidated Statements of Shareholders’ Equity
(In Thousands, Except Share and Per Share Data)
(Unaudited)
The following summarizes the changes in shareholders’ equity for the three month period ended March 31, 2024:

| Common Stock |  | Retained Earnings |  | Trust for Savings Restoration Plan |  | Accumulated Other Comprehensive Income (Loss) |  | Total Shareholders’ Equity
Balance January 1, 2024 | $ | 61,606 |  |  | $ | 177,977 |  |  | $ | (2,233) |  |  | $ | (81,697) |  |  | $ | 155,653 |
Net income (loss) | — |  |  | 3,288 |  |  | — |  |  | — |  |  | 3,288 |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | (1,948) |  |  | (1,948) |
Derivative financial instruments adjustment | — |  |  | — |  |  | — |  |  | (504) |  |  | (504) |
Amortization of prior service costs and net gains or losses | — |  |  | — |  |  | — |  |  | (27) |  |  | (27) |
Stock-based compensation expense | 579 |  |  | — |  |  | — |  |  | — |  |  | 579 |
Repurchase of employee common stock for tax withholdings | (226) |  |  | — |  |  | — |  |  | — |  |  | (226) |
Balance March 31, 2024 | $ | 61,959 |  |  | $ | 181,265 |  |  | $ | (2,233) |  |  | $ | (84,176) |  |  | $ | 156,815 |

The following summarizes the changes in shareholders’ equity for the three month period ended March 31, 2023:

| Common Stock |  | Retained Earnings |  | Trust for Savings Restoration Plan |  | Accumulated Other Comprehensive Income (Loss) |  | Total Shareholders’ Equity
Balance at January 1, 2023 | $ | 58,824 |  |  | $ | 292,721 |  |  | $ | (2,188) |  |  | $ | (147,595) |  |  | $ | 201,762 |
Net income (loss) | — |  |  | (1,009) |  |  | — |  |  | — |  |  | (1,009) |
Foreign currency translation adjustment | — |  |  | — |  |  | — |  |  | 1,120 |  |  | 1,120 |
Derivative financial instruments adjustment | — |  |  | — |  |  | — |  |  | 1,269 |  |  | 1,269 |
Amortization of prior service costs and net gains or losses | — |  |  | — |  |  | — |  |  | 2,287 |  |  | 2,287 |
Cash dividends declared ($0.13 per share) | — |  |  | (4,419) |  |  | — |  |  | — |  |  | (4,419) |
Stock-based compensation expense | 853 |  |  | — |  |  | — |  |  | — |  |  | 853 |
Repurchase of employee common stock for tax withholdings | (254) |  |  |  |  |  |  |  |  | (254) |
Tredegar common stock purchased by trust for savings restoration plan | — |  |  | 15 |  |  | (15) |  |  | — |  |  | — |
Balance at March 31, 2023 | $ | 59,423 |  |  | $ | 287,308 |  |  | $ | (2,203) |  |  | $ | (142,919) |  |  | $ | 201,609 |

See accompanying notes to the condensed consolidated financial statements.
6

TREDEGAR CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying condensed consolidated financial statements of Tredegar Corporation and its subsidiaries (“Tredegar,” “the Company,” “we,” “us” or “our”) contain all adjustments necessary to state fairly, in all material respects, Tredegar’s condensed consolidated financial position as of March 31, 2024, the condensed consolidated results of operations for the three months ended March 31, 2024 and 2023, the condensed consolidated cash flows for the three months ended March 31, 2024 and 2023, and the condensed consolidated changes in shareholders’ equity for the three months ended March 31, 2024 and 2023, in accordance with U.S. generally accepted accounting principles (“GAAP”). All such adjustments, unless otherwise detailed in the notes to the condensed consolidated financial statements, are deemed to be of a normal, recurring nature.
The Company operates on a calendar fiscal year except for the Aluminum Extrusions segment, which operates on a 52/53-week fiscal year basis. As such, the fiscal first quarter for 2024 and 2023 for this segment references 13-week periods ended March 31, 2024 and March 26, 2023, respectively. The Company does not believe the impact of reporting the results of this segment as stated above is material to the consolidated financial results. The Company may fund or receive cash from the Aluminum Extrusions segment based on Aluminum Extrusion’s cash flows from operations during the intervening period from Aluminum Extrusion’s fiscal quarter end and the Company’s fiscal quarter end.
The condensed consolidated financial statements as of December 31, 2023 that is included herein was derived from the audited consolidated financial statements provided in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”) but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the 2023 Form 10-K.
The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year.
Sale of Flexible Packaging Films
On September 1, 2023, the Company announced that it had entered into a definitive agreement to sell its Flexible Packaging Films business (also referred to as "Terphane") to Oben Group (the “Contingent Terphane Sale”). Completion of the sale is contingent upon the satisfaction of customary closing conditions, including the receipt of certain competition filing approvals by authorities in Brazil and Colombia. On October 27, 2023, the Company filed the requisite competition forms with the Administrative Council for Economic Defense (“CADE”) in Brazil. The regulatory review process is ongoing and in line with the Company’s expectations. CADE’s maximum deadline for completing its review is no later than November 18, 2024. The merger review regarding the transaction was cleared by the Colombian authority in early February 2024.
Closure of PE Films Technical Center
In August 2023, the Company adopted a plan to close the PE Films technical center in Richmond, VA and reduce its efforts to develop and sell films supporting the semiconductor market. Future research & development activities for PE Films will be performed at the production facility in Pottsville, PA. PE Films continues to have new business opportunities primarily relating to surface protection films that protect components of flat panel and flexible displays. All activities ceased at the PE Films technical center in Richmond, VA as of the end of the first quarter of 2024. The Company recognized expense incurred through March 31, 2024 associated with the exit activities of $0.2 million for building closure costs. In addition, the Company recognized a non-cash loss on the lease abandonment ($0.3 million).
7

Supply Chain Financing
As of March 31, 2024 and December 31, 2023, $8.8 million and $15.8 million, respectively, of the Company’s accounts payable were financed by participating suppliers through third-party financial institutions.
Accounting standards not yet adopted
In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06 to amend various paragraphs in the Accounting Standards Codification ("ASC") to primarily reflect the issuance of U.S. Securities and Exchange Commission ("SEC") Staff Bulletin No. 33-10532. ASU 2023-06 will impact various disclosure areas, including the statement of cash flows, accounting changes and error corrections, earnings per share, debt, equity, derivatives, and transfers of financial assets. The amendments in this ASU 2023-06 will be effective on the date the related disclosures are removed from Regulation S-X or Regulation S-K by the SEC and will no longer be effective if the SEC has not removed the applicable disclosure requirement by June 30, 2027. Early adoption is not permitted. The Company does not expect a material impact from the adoption of this standard on our consolidated financial statements and related disclosures.
In November 2023, the FASB issued ASU 2023-07 to improve reportable segment disclosure and requirements, primarily through the enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. This ASU is effective for fiscal years beginning after December 15, 2023 and interim period beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU are to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09 to improve the income tax disclosures related to the rate reconciliation and income taxes paid information and to improve the effectiveness of income tax disclosures. The amendments in this ASU will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024; early adoption is permitted. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
2. ACCOUNTS AND OTHER RECEIVABLES
As of March 31, 2024 and December 31, 2023, accounts and other receivables, net include the following:

(In thousands) | March 31, 2024 |  | December 31, 2023
Customer receivables | $ | 73,333 |  |  | $ | 67,183 |
Other receivables | 1,754 |  |  | 3,056 |
Total accounts and other receivables | 75,087 |  |  | 70,239 |
Less: Allowance for bad debts | (2,055) |  |  | (2,301) |
Total accounts and other receivables, net | $ | 73,032 |  |  | $ | 67,938 |

3. INVENTORIES
The components of inventories are as follows:

(In thousands) | March 31, 2024 |  | December 31, 2023
Finished goods | $ | 28,939 |  |  | $ | 29,821 |
Work-in-process | 9,835 |  |  | 7,830 |
Raw materials | 25,182 |  |  | 21,939 |
Stores, supplies and other | 22,866 |  |  | 22,447 |
Total | $ | 86,822 |  |  | $ | 82,037 |

8

4. PENSION AND OTHER POSTRETIREMENT BENEFITS
Tredegar sponsored a noncontributory defined benefit (pension) plan covering certain current and former U.S. employees. As of January 31, 2018, the plan no longer accrued benefits associated with crediting employees for service, thereby freezing all future benefits under the plan. On February 10, 2022, Tredegar announced the initiation of a process to terminate and settle its frozen defined benefit pension plan through lump sum distributions and the purchase of annuity contracts. On November 3, 2023, the pension plan termination and settlement process for the Company was completed, and the remaining pension plan obligation was transferred to Massachusetts Mutual Life Insurance Company. During 2023, the Company recognized a pre-tax pension settlement loss of $92.3 million.
Tredegar also has a non-qualified supplemental pension plan covering certain employees. Effective December 31, 2005, further participation in this plan was terminated and benefit accruals for existing participants were frozen. Pension expense recognized for this plan was immaterial in the three months ended March 31, 2024 and 2023. This information has been included in the pension benefit table below.
The components of net periodic benefit cost for the pension and other postretirement benefit programs reflected in the condensed consolidated statements of income for the three months ended March 31, 2024 and 2023, are shown below:

| Pension Benefits |  | Other Post-Retirement Benefits
| Three Months Ended March 31, |  | Three Months Ended March 31,
(In thousands) | 2024 |  | 2023 |  | 2024 |  | 2023
Service cost | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | 3 |
Interest cost | 19 |  |  | 3,027 |  |  | 67 |  |  | 71 |
Expected return on plan assets | — |  |  | (2,607) |  |  | — |  |  | — |
Amortization of prior service costs, (gains) losses and net transition asset | 5 |  |  | 2,983 |  |  | (40) |  |  | (59) |
Net periodic benefit cost | $ | 24 |  |  | $ | 3,403 |  |  | $ | 30 |  |  | $ | 15 |

Pension and other postretirement liabilities were $7.2 million and $7.3 million at March 31, 2024 and December 31, 2023, respectively ($0.6 million and $0.7 million included in “Accrued expenses” at March 31, 2024 and December 31, 2023, respectively, with the remainder included in “Pension and other postretirement benefit obligations, net” in the condensed consolidated balance sheets).
Tredegar funds its other postretirement benefits on a claims-made basis; for 2024, the Company anticipates the amount will be consistent with amounts paid for the year ended December 31, 2023, or approximately $0.4 million.
5. EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings per share is computed by dividing net income (loss) by the weighted average common and potentially dilutive common equivalent shares outstanding, determined as follows:

| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
Weighted average shares outstanding used to compute basic earnings per share | 34,323 |  |  | 33,895 |  |  |  |  |
Incremental dilutive shares attributable to stock options and restricted stock | — |  |  | — |  |  |  |  |
Shares used to compute diluted earnings per share | 34,323 |  |  | 33,895 |  |  |  |  |

Incremental shares attributable to stock options and restricted stock are computed under the treasury stock method using the average market price during the related period. Average out-of-the-money options to purchase shares that were excluded from the calculation of incremental shares attributable to stock options and restricted stock were 2,870,670 for the three months ended March 31, 2024. If the Company had reported net income for the three months ended March 31, 2023, the average out-of-the-money options to purchase shares that were excluded from the calculation of incremental shares attributable to stock options and restricted stock would have been 2,645,365.
9

6. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2024.

(In thousands) | Foreign Currency Translation |  | Gain (Loss) on Derivative Financial Instruments |  | Pension & Other Postretirement Benefit Adjust |  | Total Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2024 | $ | (83,037) |  |  | $ | 801 |  |  | $ | 539 |  |  | $ | (81,697) |
Other comprehensive income (loss) | (1,727) |  |  | 282 |  |  | — |  |  | (1,445) |
Income tax (expense) benefit | (221) |  |  | (112) |  |  | — |  |  | (333) |
Other comprehensive income (loss), net of tax | (1,948) |  |  | 170 |  |  | — |  |  | (1,778) |
Reclassification adjustment to net income (loss) | — |  |  | (927) |  |  | (35) |  |  | (962) |
Income tax (expense) benefit | — |  |  | 253 |  |  | 8 |  |  | 261 |
Reclassification adjustment to net income (loss), net of tax | — |  |  | (674) |  |  | (27) |  |  | (701) |
Other comprehensive income (loss), net of tax | (1,948) |  |  | (504) |  |  | (27) |  |  | (2,479) |
Balance at March 31, 2024 | $ | (84,985) |  |  | $ | 297 |  |  | $ | 512 |  |  | $ | (84,176) |

The changes in accumulated other comprehensive income (loss) by component for the three months ended March 31, 2023.

(In thousands) | Foreign Currency Translation |  | Gain (Loss) on Derivative Financial Instruments |  | Pension & Other Postretirement Benefit Adjust |  | Total Accumulated Other Comprehensive Income (Loss)
Balance at January 1, 2023 | $ | (86,079) |  |  | $ | (2,480) |  |  | $ | (59,036) |  |  | $ | (147,595) |
Other comprehensive income (loss) | 1,557 |  |  | 3,078 |  |  | — |  |  | 4,635 |
Income tax (expense) benefit | (437) |  |  | (1,087) |  |  | — |  |  | (1,524) |
Other comprehensive income (loss), net of tax | 1,120 |  |  | 1,991 |  |  | — |  |  | 3,111 |
Reclassification adjustment to net income (loss) | — |  |  | (973) |  |  | 2,924 |  |  | 1,951 |
Income tax (expense) benefit | — |  |  | 251 |  |  | (637) |  |  | (386) |
Reclassification adjustment to net income (loss), net of tax | — |  |  | (722) |  |  | 2,287 |  |  | 1,565 |
Other comprehensive income (loss), net of tax | 1,120 |  |  | 1,269 |  |  | 2,287 |  |  | 4,676 |
Balance at March 31, 2023 | $ | (84,959) |  |  | $ | (1,211) |  |  | $ | (56,749) |  |  | $ | (142,919) |

The amounts reclassified out of accumulated other comprehensive income (loss) related to pension and other postretirement benefits is included in the computation of net periodic pension costs. See Note 4 for additional details.
7. DERIVATIVES
Tredegar uses derivative financial instruments for the purpose of hedging margin exposure from fixed-price forward sales contracts in Aluminum Extrusions and exposure from currency volatility that exists as part of ongoing business operations in Flexible Packaging Films. These derivative financial instruments are designated as and qualify as cash flow hedges and are recognized in the condensed consolidated balance sheet at fair value. If individual derivative instruments with the same counterparty can be settled on a net basis, the Company records the corresponding derivative fair values as a net asset or net liability.
In the normal course of business, Aluminum Extrusions enters into fixed-price forward sales contracts with a small subset of its customers for the future sale of fixed quantities of aluminum extrusions at scheduled intervals. In order to hedge margin exposure created from the fixing of future sales prices relative to volatile raw material (aluminum) costs, Aluminum Extrusions enters into a combination of forward purchase commitments and futures contracts to acquire or hedge aluminum, based on the
10

scheduled purchases for the firm sales commitments. The fixed-price firm sales commitments and related hedging instruments have durations generally no longer than 12 months. The notional amount of aluminum futures contracts that hedged future purchases of aluminum to meet fixed-price forward sales contract obligations was $6.8 million (5.1 million pounds of aluminum) at March 31, 2024 and $7.7 million (5.6 million pounds of aluminum) at December 31, 2023.
The table below summarizes the location and gross amounts of aluminum futures contract fair values (Level 2) in the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023:

| March 31, 2024 |  | December 31, 2023
(In thousands) | Balance Sheet Account |  | Fair Value |  | Balance Sheet Account |  | Fair Value
Derivatives Designated as Hedging Instruments |  |  |  |  |  |  |
Asset derivatives: Aluminum futures contracts | Other assets |  | 28 |  |  | Other assets |  | — |
Liability derivatives: Aluminum futures contracts | Accrued expenses |  | (318) |  |  | Accrued expenses |  | (483) |
Aluminum futures contracts | Other non-current liabilities |  | — |  |  | Other non-current liabilities |  | (9) |
Net asset (liability) |  |  | $ | (290) |  |  |  |  | $ | (492) |

In the event that a counterparty to an aluminum fixed-price forward sales contract chooses not to take delivery of its aluminum extrusions, the customer is contractually obligated to compensate Aluminum Extrusions for any losses on the related aluminum futures and/or forward contracts through the date of cancellation.
The Company's earnings are exposed to foreign currency exchange risk primarily through the translation of the financial statements of subsidiaries that have a functional currency other than the U.S. Dollar. The Company estimates that the net mismatch translation exposure for the Flexible Packaging Film's business unit in Brazil (“Terphane Ltda.”) of its sales and raw materials quoted or priced in U.S. Dollars and its variable conversion, fixed conversion and sales, general and administrative costs (before depreciation and amortization) quoted or priced in Brazilian Real ("R$") will result in an annual net cost of R$139 million for the full year of 2024.
Terphane Ltda. had the following outstanding foreign exchange average forward rate contracts to purchase Brazilian Real and sell U.S. Dollars as of March 31, 2024:

USD Notional Amount (000s) | Average Forward Rate Contracted on USD/BRL | R$ Equivalent Amount (000s) | Applicable Month | Estimated % of Terphane Ltda. R$ Operating Cost Exposure Hedged
$1,827 | 5.3373 | R$9,751 | Apr-24 | 84%
$1,798 | 5.3588 | R$9,635 | May-24 | 83%
$1,812 | 5.3708 | R$9,732 | Jun-24 | 84%
$1,804 | 5.3848 | R$9,714 | Jul-24 | 84%
$1,806 | 5.4014 | R$9,755 | Aug-24 | 84%
$1,857 | 5.4107 | R$10,048 | Sep-24 | 87%
$1,851 | 5.4225 | R$10,037 | Oct-24 | 87%
$1,837 | 5.4403 | R$9,994 | Nov-24 | 86%
$1,801 | 5.4580 | R$9,830 | Dec-24 | 85%
$16,393 | 5.3984 | R$88,496 |  | 84%

These foreign currency exchange contracts have been designated and qualify as cash flow hedges of Terphane Ltda.’s forecasted sales to customers quoted or priced in U.S. Dollars over that period. By changing the currency risk associated with these U.S. Dollar sales, the derivatives have the effect of offsetting operating costs quoted or priced in Brazilian Real and decreasing the net exposure to Brazilian Real in the condensed consolidated statements of income.
11

The table below summarizes the location and gross amounts of foreign currency forward contract fair values (Level 2) in the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023:

| March 31, 2024 |  | December 31, 2023
(In thousands) | Balance Sheet Account |  | Fair Value |  | Balance Sheet Account |  |  | Fair Value
Derivatives Designated as Hedging Instruments |  |  |  |  |  |  |  |
Asset derivatives: Foreign currency forward contracts | Prepaid expenses and other |  | $ | 1,154 |  |  | Prepaid expenses and other |  |  | $ | 2,050 |
Foreign currency forward contracts | Other assets |  | — |  |  | Other assets |  |  | 146 |
Liability derivatives: Foreign currency forward contracts | Accrued expenses |  | (6) |  |  | Other non-current liabilities |  |  | — |
Foreign currency forward contracts | Other non-current liabilities |  | (2) |  |  | Other non-current liabilities |  |  | — |
Net asset (liability) |  |  | $ | 1,146 |  |  |  |  |  | $ | 2,196 |

These derivative contracts involve elements of market risk that are not reflected on the condensed consolidated balance sheet, including the risk of dealing with counterparties and their ability to meet the terms of the contracts. The counterparties to any forward purchase commitments are major aluminum brokers and suppliers, and the counterparties to any aluminum futures contracts are major financial institutions. Fixed-price forward sales contracts are only made available to the most credit-worthy customers. The counterparties to the Company’s foreign currency cash flow hedge contracts are major financial institutions.
The pre-tax effect on net income (loss) and other comprehensive income (loss) of derivative instruments classified as cash flow hedges and described in the previous paragraphs for the three month periods ended March 31, 2024 and 2023 is summarized in the table below:

| Cash Flow Derivative Hedges
| Three Months Ended March 31,
| Aluminum Futures Contracts |  | Foreign Currency Forwards
(In thousands) | 2024 |  | 2023 |  | 2024 |  | 2023
Amount of pre-tax gain (loss) recognized in other comprehensive income (loss) | $ | 721 |  |  | $ | 1,402 |  |  | $ | — |  | $ | (439) |  |  | $ | — |  |  | $ | 1,676 |
Location of gain (loss) reclassified from accumulated other comprehensive income (loss) into net income (effective portion) | Cost of goods sold |  | Cost of goods sold |  | Cost of goods sold | Selling, general & admin |  | Cost of goods sold |  | Selling, general & admin
Amount of pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) to net income (effective portion) | $ | 519 |  |  | $ | 672 |  |  | $ | 15 |  | $ | 393 |  |  | $ | 15 |  |  | $ | 286 |

As of March 31, 2024, the Company expects $0.4 million of unrealized after-tax gains on aluminum and foreign currency derivative instruments reported in accumulated other comprehensive income (loss) to be reclassified to earnings within the next 12 months. For the three month periods ended March 31, 2024 and 2023, net gains or losses realized, from previously unrealized net gains or losses on hedges that had been discontinued, were not material.
8. INCOME TAXES
Tredegar recorded tax expense (benefit) of $0.7 million on pre-tax income (loss) of $3.9 million in the first three months of 2024. The effective tax rate in the first three months of 2024 was 16.7% and (48.8)% in the first three months of 2023. The change in effective tax rate was primarily due to pre-tax income in the first quarter of 2024 versus a pre-tax loss in the first three months of 2023.
The effective tax rate for the first three months of 2024 varies from the 21% statutory rate primarily due to foreign rate differences and non-deductible expenses offset by Brazilian tax incentives and federal tax credits. Brazil income tax was deemed deductible but not creditable in the U.S. in the first three months of 2023. As a result of guidance released by the U.S. Treasury and Internal Revenue Service ("IRS") in the fourth quarter of 2023, and new Brazil tax legislation effective January 1, 2024, Brazil income tax is deemed creditable in the U.S. for 2024.
12

The Brazilian federal statutory income tax rate is a composite of 34.0% (25.0% of income tax and 9.0% of social contribution on income). Terphane Ltda.’s manufacturing facility in Brazil is the beneficiary of certain income tax incentives that allow for a reduction in the statutory Brazilian federal income tax rate to 15.25% levied on the operating profit on certain of its products. The incentives have been granted for a 10-year period, from the commencement date of January 1, 2015 and expiring at the end of 2024.
9. BUSINESS SEGMENTS
The Company’s business segments are Aluminum Extrusions, PE Films, and Flexible Packaging Films. Information by business segment is reported below. There are no accounting transactions between segments and no allocations to segments.
The Company’s reportable segments are based on its method of internal reporting, which is generally segregated by differences in products. Accounting standards for presentation of segments require an approach based on the way the Company organizes the segments for making operating decisions and how the CODM assesses performance. Earnings before interest, taxes, depreciation and amortization ("EBITDA") from ongoing operations is the key profitability measure used by the CODM (Tredegar’s President and Chief Executive Officer) for purposes of assessing financial performance. The Company uses sales less freight (“net sales”) as its measure of revenues from external customers at the segment level. This measure is separately included in the financial information regularly provided to the CODM.
The following table presents net sales and EBITDA from ongoing operations by segment for the three months ended March 31, 2024 and 2023:
13

| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
Net Sales |  |  |  |  |  |  |
Aluminum Extrusions | $ | 114,222 |  |  | $ | 133,370 |  |  |  |  |
PE Films | 24,735 |  |  | 20,182 |  |  |  |  |
Flexible Packaging Films | 30,113 |  |  | 31,527 |  |  |  |  |
Total net sales | 169,070 |  |  | 185,079 |  |  |  |  |
Add back freight | 6,666 |  |  | 6,043 |  |  |  |  |
Sales as shown in the condensed consolidated statements of income (loss) | $ | 175,736 |  |  | $ | 191,122 |  |  |  |  |
EBITDA from Ongoing Operations |  |  |  |  |  |  |
Aluminum Extrusions: |  |  |  |  |  |  |
Ongoing operations: |  |  |  |  |  |  |
EBITDA | $ | 12,540 |  |  | $ | 14,638 |  |  |  |  |
Depreciation & amortization | (4,542) |  |  | (4,411) |  |  |  |  |
EBIT | 7,998 |  |  | 10,227 |  |  |  |  |
Plant shutdowns, asset impairments, restructurings and other | (1,167) |  |  | (493) |  |  |  |  |
PE Films: |  |  |  |  |  |  |
Ongoing operations: |  |  |  |  |  |  |
EBITDA | 6,904 |  |  | 1,849 |  |  |  |  |
Depreciation & amortization | (1,329) |  |  | (1,643) |  |  |  |  |
EBIT | 5,575 |  |  | 206 |  |  |  |  |
Plant shutdowns, asset impairments, restructurings and other | (504) |  |  | 2 |  |  |  |  |
Flexible Packaging Films: |  |  |  |  |  |  |
Ongoing operations: |  |  |  |  |  |  |
EBITDA | 1,963 |  |  | 1,350 |  |  |  |  |
Depreciation & amortization | (751) |  |  | (700) |  |  |  |  |
EBIT | 1,212 |  |  | 650 |  |  |  |  |
Plant shutdowns, asset impairments, restructurings and other | — |  |  | (78) |  |  |  |  |
Total | 13,114 |  |  | 10,514 |  |  |  |  |
Interest income | 22 |  |  | 44 |  |  |  |  |
Interest expense | 3,455 |  |  | 2,311 |  |  |  |  |
Gain on investment in kaleo, Inc. | — |  |  | 262 |  |  |  |  |
Stock option-based compensation costs | — |  |  | 231 |  |  |  |  |
Corporate expenses, net | 5,736 |  |  | 8,956 |  |  |  |  |
Income (loss) before income taxes | 3,945 |  |  | (678) |  |  |  |  |
Income tax expense (benefit) | 657 |  |  | 331 |  |  |  |  |
Net income (loss) | $ | 3,288 |  |  | $ | (1,009) |  |  |  |  |

The following table presents identifiable assets by segment at March 31, 2024 and December 31, 2023:

(In thousands) | March 31, 2024 |  | December 31, 2023
Aluminum Extrusions | $ | 264,300 |  |  | $ | 255,756 |
PE Films | 57,925 |  |  | 56,536 |
Flexible Packaging Films | 81,290 |  |  | 84,062 |
Subtotal | 403,515 |  |  | 396,354 |
General corporate | 34,224 |  |  | 36,652 |
Cash, cash equivalents and restricted cash | 4,792 |  |  | 13,455 |
Total | $ | 442,531 |  |  | $ | 446,461 |

14

The following tables disaggregate the Company’s revenue by geographic area and product group for the three months ended March 31, 2024 and 2023:

Net Sales by Geographic Area (a)
| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
United States | $ | 132,627 |  |  | $ | 150,611 |  |  |  |  |
Exports from the United States to: |  |  |  |  |  |  |
Asia | 8,825 |  |  | 5,732 |  |  |  |  |
Latin America | 1,331 |  |  | 1,859 |  |  |  |  |
Canada | 4,539 |  |  | 4,284 |  |  |  |  |
Europe | 255 |  |  | 860 |  |  |  |  |
Operations outside the United States: |  |  |  |  |  |  |
Brazil | 21,331 |  |  | 21,628 |  |  |  |  |
Asia | 162 |  |  | 105 |  |  |  |  |
Total | $ | 169,070 |  |  | $ | 185,079 |  |  |  |  |
(a) Export sales relate mostly to PE Films. Operations in Brazil relate to Flexible Packaging Films.

The Company’s facilities in Pottsville, PA (“PV”) and Guangzhou, China (“GZ”) have a tolling arrangement whereby certain surface protection films are manufactured in GZ for a fee with raw materials supplied from PV that are then shipped by GZ directly to customers principally in the Asian market, but paid by customers directly to PV. Amounts associated with this intercompany tolling arrangement are reported in the table above as export sales from the U.S. to Asia, and include net sales of $6.1 million and $3.4 million in the first quarter of 2024 and 2023, respectively.

Net Sales by Product Group
| Three Months Ended March 31, |  |
(In thousands) | 2024 |  | 2023 |  |  |  |
Aluminum Extrusions: |  |  |  |  |  |  |
Nonresidential building & construction | $ | 66,347 |  |  | $ | 78,629 |  |  |  |  |
Consumer durables | 7,984 |  |  | 10,347 |  |  |  |  |
Automotive | 10,606 |  |  | 12,122 |  |  |  |  |
Residential building & construction | 7,902 |  |  | 11,603 |  |  |  |  |
Electrical | 5,836 |  |  | 8,129 |  |  |  |  |
Machinery & equipment | 12,195 |  |  | 10,724 |  |  |  |  |
Distribution | 3,352 |  |  | 1,816 |  |  |  |  |
Subtotal | 114,222 |  |  | 133,370 |  |  |  |  |
PE Films: |  |  |  |  |  |  |
Surface protection films | 17,011 |  |  | 12,855 |  |  |  |  |
Overwrap packaging | 7,724 |  |  | 7,327 |  |  |  |  |
Subtotal | 24,735 |  |  | 20,182 |  |  |  |  |
Flexible Packaging Films | 30,113 |  |  | 31,527 |  |  |  |  |
Total | $ | 169,070 |  |  | $ | 185,079 |  |  |  |  |

10. DEBT
ABL Facility
On December 27, 2023, the Company entered into Amendment No. 3 (the “ABL Facility”) to the Second Amended and Restated Credit Agreement, which provides the Company with a $180 million senior secured asset-based revolving credit facility that will expire on June 30, 2026. On April 16, 2024, the Company entered into Amendment No. 4 (the "Amendment") that, among other items: (i) moves the ABL Adjustment Date (defined below) from March 31, 2025 to September 30, 2025 and (ii) requires weekly reporting of the borrowing base financial covenant. 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
15

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. Upon the earlier of September 30, 2025 or the date the Company receives the proceeds from the sale of Terphane (the “ABL Adjustment Date”), the $180 million ABL Facility will be reduced to $125 million. As of March 31, 2024, availability under the ABL Facility was $22.2 million, after reducing the borrowing base by the aggregate outstanding borrowings of $128.3 million, standby letters of credit of $13.1 million, and the Minimum Liquidity (as defined in the ABL Facility) financial covenant.
Outstanding borrowings accrue interest at the rates elected by the Company depending on the type of loan and denomination of such borrowing. With respect to revolving loans denominated in U.S. Dollars, the Company may elect interest rates at:
•Alternate Base Rate (“ABR”) plus 2.50% before the ABL Adjustment Date and the applicable ABR Spread (as defined in the ABL Facility) after the ABL Adjustment Date are determined in accordance with an excess availability-based pricing grid. ABR is defined, in part, as the greater of (a) the Prime Rate in effect on such day, (b) the Federal Reserve Bank of New York Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR Rate (defined below) for a one-month period plus 1%; or
•The Adjusted Term Secured Overnight Financing Rate ("SOFR") Rate plus 3.50% before the ABL Adjustment Date and the applicable Term Benchmark Spread (as defined in the ABL Facility) are determined in accordance with an excess availability-based pricing grid after the ABL Adjustment Date. Adjusted Term SOFR Rate is defined as the Term SOFR Rate plus 0.10%, subject to an initial Floor (as defined in the ABL Facility) of 0%.
Interest rate indices for select non-U.S. dollar borrowings, including borrowings denominated in Euro, Pounds Sterling, Swiss Francs and Japanese Yen, remain consistent with the Second Amended and Restated Credit Agreement.
Based upon the quarterly average of daily availability under the ABL Facility, the interest rate pricing grid applicable after the ABL Adjustment Date will be as follows:

Pricing under the ABL Facility (Basis Points)
Quarter Average of Daily Availability | Term Benchmark Spread | ABR Spread | Commitment Fee*
> 66% of $125 million aggregate commitment | 225.0 | 125.0 | 40.0
≤ 66% but > 33% of $125 million aggregate commitment | 250.0 | 150.0 | 40.0
≤ 33% of $125 million aggregate commitment | 275.0 | 175.0 | 40.0
*The Commitment Fee before the ABL Adjustment Date and after the ABL Adjustment Date remain the same as reflected in this table.

Under the terms of the ABL Facility, certain domestic bank accounts are subject to blocked account agreements, each of which contains a springing feature whereby the lenders may exercise control over those accounts during a cash dominion period (any such period, a “Cash Dominion Period”). A Cash Dominion Period was implemented on the date of the closing of the ABL Facility and will remain in effect at all times prior to the ABL Adjustment Date. After the ABL Adjustment Date, a Cash Dominion Period goes into effect if availability under the ABL Facility falls below 12.5% or an Event of Default (as defined in the ABL Facility) occurs. The Company would then be subject to the Cash Dominion Period until the Event of Default is waived or ABL Facility availability is above 12.5% of the $125 million aggregate commitment for 30 consecutive days. Receipts that have not yet been applied to the ABL Facility are classified as restricted cash in the Company’s consolidated balance sheets.
The financial covenants in the ABL Facility are as follows:
•Until the ABL Adjustment Date, the Company is required to maintain (i) a minimum Credit EBITDA (as defined in the ABL Facility), as of the end of each fiscal month for the 12-month period then ended (presented below) and (ii) a Minimum Liquidity (as defined in the ABL Facility) of $10.0 million.
16

Minimum Credit EBITDA (In thousands)
March 2024 | $ | 16,640 |
April 2024 | 19,780 |
May 2024 | 19,660 |
June 2024 | 19,450 |
July 2024 | 21,860 |
August 2024 | 22,830 |
September 2024 | 25,370 |
October 2024 | 26,070 |
November 2024 | 27,640 |
December 2024 | 29,640 |
January 2025 | 29,740 |
February 2025 | 29,850 |
March 2025 | 29,980 |
April 2025 | 30,340 |
May 2025 | 30,700 |
June 2025 | 31,030 |
July 2025 | 31,370 |
August 2025 | 31,710 |
September 2025 | $ | 32,080 |

•Following the ABL Adjustment Date, the foregoing financial covenants will cease to exist and will be replaced with a minimum fixed charge coverage ratio of 1.00:1.00 that will be triggered in the event that availability is less than 10% of $125 million commitment amount and continuing thereafter until availability is greater than 10% of the $125 million commitment amount for 30 consecutive days.
In addition to the financial covenants, the ABL Facility contains restrictive covenants, including covenants that restrict the Company’s ability to pay dividends and repurchase shares of its common stock.
If at any time the availability under the ABL facility after the ABL Adjustment Date is less than 20% of the maximum aggregate principal amount in effect at such time or an Event of Default occurs, the Company’s current weekly reporting requirements to lenders will continue until the Event of Default is waived, cured or the availability under the ABL facility is above 20% of the maximum aggregate principal amount for 30 consecutive days.
The ABL Facility has customary representations and warranties including, as a condition to each borrowing, that all such representations and warranties are true and correct in all material respects (including a representation that no Material Adverse Effect (as defined in the ABL Facility) has occurred since December 31, 2022). In the event that the Company cannot certify that all conditions to the borrowing have been met, the lenders can restrict the Company’s future borrowings under the ABL Facility. Because a Cash Dominion Period is currently in effect and the Company is required to represent that no Material Adverse Effect has occurred as a condition to borrowing, the outstanding debt under the ABL Facility (all contractual payments due on June 30, 2026) is classified as a current liability in the condensed consolidated balance sheets.
In accordance with the ABL Facility, the lenders have been provided with the Company’s financial statements, covenant compliance certificates and projections to facilitate their ongoing assessment of the Company. Accordingly, the Company believes the likelihood that lenders would exercise the subjective acceleration clause whereby prohibiting future borrowings is remote. As of March 31, 2024, the Company was in compliance with all debt covenants.
Terphane Brazil Loan
On October 26, 2023, Flexible Packaging Film's business unit in Brazil (“Terphane Ltda.”), the Company’s wholly owned subsidiary in Brazil, borrowed $20 million secured by certain of its assets (“Terphane Brazil Loan”). This U.S. Dollar borrowing matures on October 30, 2028, with interest payable quarterly at an annual floating interest rate of the SOFR plus 5.99%. The SOFR rate was 5.31% as of March 31, 2024. Quarterly principal payments of $1.7 million begin starting in year 3 of the loan. There are no prepayment penalties. The Company expects that the Terphane Brazil Loan will be repaid (and collateral released) upon the closing of the Contingent Terphane Sale. On October 26, 2023, the Company borrowed $20 million from Terphane Ltda. (the “Intercompany Loan”) at the same interest rate as the Terphane Brazil Loan, thereby transferring the funds to the U.S. The Company will repay the Intercompany Loan in conjunction with the closing of the Contingent Terphane Sale.
17

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking and Cautionary Statements
Some of the information contained in this Quarterly Report on Form 10-Q ("Form 10-Q") may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. When the Company uses the words “believe,” “estimate,” “anticipate,” “appear to,” “expect,” “project,” “plan,” “likely,” “may” and similar expressions, it does so to identify forward-looking statements. Such statements are based on the Company's then current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. It is possible that the Company's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. Factors that could cause actual results to differ materially from expectations include, without limitation, the following:
•inability to successfully complete strategic dispositions, including the Contingent Terphane Sale, failure to realize the expected benefits of such dispositions and assumption of unanticipated risks in such dispositions;
•inability to successfully transition into an asset-based revolving lending facility;
•noncompliance with any of the financial and other restrictive covenants in the Company's asset-based credit facility;
•the impact of macroeconomic factors, such as inflation, interest rates, recession risks and other lagging effects of the COVID-19 pandemic
•an increase in the operating costs incurred by the Company’s business units, including, for example, the cost of raw materials and energy;
•failure to continue to attract, develop and retain certain key officers or employees;
•disruptions to the Company’s manufacturing facilities, including those resulting from labor shortages;
•inability to develop, efficiently manufacture and deliver new products at competitive prices;
•the impact of the imposition of tariffs and sanctions on imported aluminum ingot used by Bonnell Aluminum;
•failure to prevent foreign companies from evading anti-dumping and countervailing duties;
•unanticipated problems or delays with the implementation of the enterprise resource planning and manufacturing executions systems, or security breaches and other disruptions to the Company's information technology infrastructure;
•loss or gain of sales to significant customers on which the Company’s business is highly dependent;
•inability to achieve sales to new customers to replace lost business;
•failure of the Company’s customers to achieve success or maintain market share;
•failure to protect our intellectual property rights;
•risks of doing business in countries outside the U.S. that affect our international operations;
•political, economic and regulatory factors concerning the Company’s products;
•competition from other manufacturers, including manufacturers in lower-cost countries and manufacturers benefiting from government subsidies;
•impact of fluctuations in foreign exchange rates;
•the termination of anti-dumping duties on products imported to Brazil that compete with products produced by Flexible Packaging;
•an information technology system failure or breach;
•the impact of public health epidemics on employees, production and the global economy, such as the COVID-19 pandemic;
•inability to successfully identify, complete or integrate strategic acquisitions; failure to realize the expected benefits of such acquisitions and assumption of unanticipated risks in such acquisitions;
•impairment of the Surface Protection reporting unit's goodwill;
and the other factors discussed in the reports Tredegar files with or furnishes to the Securities and Exchange Commission (the “SEC”) from time to time, including the risks and important factors set forth in additional detail in Part I, Item 1A of Tredegar’s
18

Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Readers are urged to review and consider carefully the disclosures Tredegar makes in its filings with the SEC.
Tredegar does not undertake, and expressly disclaims any duty, to update any forward-looking statement to reflect any change in management’s expectations or any change in conditions, assumptions or circumstances on which such statements are based, except as required by applicable law.
References herein to “Tredegar,” “the Company,” “we,” “us” and “our” are to Tredegar Corporation and its subsidiaries, collectively, unless the context otherwise indicates or requires.
Unless otherwise stated or indicated, all comparisons are to the prior year period. References to "Notes" are to notes to our condensed consolidated financial statements found in Part I, Item 1 of this Form 10-Q.
Critical Accounting Policies and Estimates
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 2023 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, 2023, there have been no changes in these policies or estimates that have had a material impact on our results of operations or financial position.
Business Overview
Tredegar Corporation is an industrial manufacturer with three primary businesses: custom aluminum extrusions for the North American building and construction ("B&C"), automotive and specialty end-use markets through its Aluminum Extrusions segment; surface protection films for high-technology applications in the global electronics industry through its PE Films segment; and specialized polyester films primarily for the Latin American flexible packaging market through its Flexible Packaging Films segment. With approximately 1,900 employees, the Company operates manufacturing facilities in North America, South America, and Asia.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") from ongoing operations is the measure of segment profit and loss used by Tredegar’s chief operating decision maker ("CODM") for purposes of assessing financial performance. The Company uses sales less freight (“net sales”) as its measure of revenues from external customers at the segment level. This measure is separately included in the financial information regularly provided to the CODM.
Earnings before interest and taxes ("EBIT") from ongoing operations is a non-GAAP financial measure included in the reconciliation of segment financial information to consolidated results for the Company in Note 9. It is not intended to represent the stand-alone results for Tredegar's ongoing operations under GAAP and should not be considered as an alternative to net income as defined by GAAP. We believe that EBIT is a widely understood and utilized metric that is meaningful to certain investors and that including this financial metric in the reconciliation of management’s performance metric, EBITDA from ongoing operations, provides useful information to those investors that primarily utilize EBIT to analyze the Company’s core operations.
First quarter 2024 net income (loss) was $3.3 million ($0.10 per diluted share) compared with net income (loss) of $(1.0) million ($(0.03) per diluted share) in the first quarter of 2023.
First Quarter Financial Results Highlights
•EBITDA from ongoing operations for Aluminum Extrusions was $12.5 million in the first quarter of 2024 versus $14.6 million in the first quarter of last year and $8.0 million in the fourth quarter of 2023.
◦Sales volume was 33.8 million pounds in the first quarter of 2024 versus 37.6 million pounds in the first quarter of last year and 32.9 million pounds in the fourth quarter of 2023.
◦Open orders at the end of the first quarter of 2024 were approximately 15 million pounds (versus 27 million pounds in the first quarter of 2023 and 14 million pounds at the end of the fourth quarter of 2023). Net new orders increased 61% and 12% in the first quarter of 2024 versus the first quarter of 2023 and fourth quarter of 2023, respectively.
•EBITDA from ongoing operations for PE Films was $6.9 million in the first quarter of 2024 versus $1.8 million in the first quarter of 2023 and $4.5 million in the fourth quarter of 2023. Sales volume was 10.0 million pounds in the first quarter of 2024 versus 7.4 million pounds in the first quarter of 2023 and 8.5 million pounds in the fourth quarter of 2023.
•EBITDA from ongoing operations for Flexible Packaging Films (also referred to as "Terphane") was $2.0 million during the first quarter of 2024 versus $1.4 million in the first quarter of 2023 and $2.3 million during the fourth quarter of 2023. Sales volume was 22.0 million pounds in the first quarter of 2024 versus 19.8 million pounds in the first quarter 2023 and
19

22.8 million pounds in the fourth quarter of 2023. See the Status of Agreement to Sell Terphane in Results of Operations below for information on the planned sale of Terphane.
The bottom of the recent severe down cycle in Aluminum Extrusions, which the Company believes was a residual impact of the pandemic and started in the second half of 2022, appears to have occurred in the third quarter of 2023. Net new orders and sales volume have increased sequentially in each quarter since that time. At PE Films, EBITDA from ongoing operations during the first quarter of 2024 was exceptional at $6.9 million. The process to complete the closing of the Company’s agreement to sell Terphane continues to advance as planned, including the review required by competition authorities in Brazil. The Company continues to focus on prudently managing costs, working capital and capital spending.
Results of Operations
First Quarter of 2024 Compared with the First Quarter of 2023
The following table presents a bridge of consolidated net income (loss) from the first quarter of 2023 to the first quarter of 2024 with management's related discussion and analysis below the table.

(In thousands) |  |
Net income (loss) for the three months ended March 31, 2023 |  | $ | (1,009) |
Income tax expense (benefit) |  | 331 |
Income (loss) before income taxes for the three months ended March 31, 2023 |  | (678) |
Change in income (loss) from increases (decreases) in the following items: |  |
Sales |  | (15,386) |
Other income (expense), net |  | (272) |
Total |  | (15,658) |
Change in income (loss) from (increases) decreases in the following items: |  |
Cost of goods sold |  | 17,482 |
Freight |  | (623) |
Selling, general and administrative |  | 748 |
Research and development |  | 853 |
Pension and postretirement benefits |  | 3,364 |
Interest expense |  | (1,144) |
Other |  | (399) |
Total |  | 20,281 |
Income (loss) before income taxes for the three months ended March 31, 2024 |  | 3,945 |
Income tax expense (benefit) |  | 657 |
Net income (loss) for the three months ended March 31, 2024 |  | $ | 3,288 |

Sales in the first quarter of 2024 decreased by $15.4 million compared with the first quarter of 2023. Net sales (sales less freight) in Aluminum Extrusions decreased $19.1 million, primarily due to lower sales volume and the pass-through of lower metal costs. Net sales in PE Films increased $4.6 million, primarily due to volume increases in both Surface Protection and overwrap films. Net sales in Flexible Packaging Films decreased $1.4 million, primarily due to lower selling prices that the Company believes are driven by excess global capacity and stronger competition in Brazil, Latin America and the U.S., and unfavorable product mix, partially offset by higher sales volume. For more information on net sales and volume, see the Segment Operations Review below.
Other income (expense), net in the first quarter of 2024 decreased by $0.3 million compared with the first quarter of 2023. The change in other income (expense), net was primarily due to cash consideration of $0.3 million received in January 2023 related to the 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 15.4% in the first quarter of 2024 compared to 13.4% in the first quarter of 2023. The gross profit margin in Aluminum Extrusions remained consistent with the prior year period primarily due to lower sales volume, offset by higher net pricing after the pass-through of metal costs changes, lower labor and employee-related costs, lower supply expense, lower utility expense and lower freight expense. Additionally, the timing of the flow through under the first-in first-out method of aluminum raw material costs passed through to customers, previously acquired at higher prices in a quickly changing commodity pricing environment, resulted in a charge of $1.2 million in the first quarter of 2024 versus a benefit of $1.7 million in the first quarter
20

of 2023. The gross profit margin in PE Films increased due to a higher Surface Protection contribution margin associated with higher volume, favorable pricing, operating efficiencies and manufacturing costs savings, lower fixed costs and cost improvements from overwrap films. The gross profit margin in Flexible Packaging Films slightly increased primarily due to lower raw material costs, lower fixed costs and higher sales volume, partially offset by lower selling prices from global excess capacity and margin pressures and higher variable costs.
The percentage of sales, selling, general and administrative (“SG&A”) and research and development ("R&D") expenses of 10.6% in the first quarter of 2024 remained consistent with the first quarter of 2023.
During 2023, the Company settled the pension plan, which decreased the pension and other postretirement expenses for the first quarter of 2024 compared to the first quarter of 2023. See Note 4 for additional information.
Interest expense of $3.5 million in the first three months of 2024 increased $1.1 million compared to the first three months of 2023 due to higher average debt levels and interest rates. See Note 10 for additional information.
The effective tax rate used to compute income taxes was 16.7% in the first quarter of 2024 compared to (48.8)% in the first quarter of 2023. See Note 8 for additional information.
Pre-tax gains and losses associated with plant shutdowns, asset impairments, restructurings and other items for the first quarters of 2024 and 2023 detailed below are shown in the statements of net sales and EBITDA from ongoing operations by segment table in Note 9 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.

| Three Months Ended March 31,
(In millions) | 2024 | 2023
Aluminum Extrusions: |  |
(Gains) losses from sale of assets, investment writedowns and other items: |  |
Consulting expenses for ERP/MES project 1 | $ | 0.6 |  | $ | — |
Storm damage to the Newnan, Georgia plant 1 | 0.1 |  | 0.6 |
Legal fees associated with the Aluminum Extruders Trade Case 1 | 0.2 |  | — |
Total for Aluminum Extrusions | $ | 0.9 |  | $ | 0.6 |
PE Films: |  |
(Gains) losses associated with plant shutdowns, asset impairments and restructurings: |  |
Richmond, Virginia Technical Center closure expenses, including severance 3 | $ | 0.2 |  | $ | — |
Richmond, Virginia Technical Center lease abandonment 3 | 0.3 |  | — |
Total for PE Films | $ | 0.5 |  | $ | — |
Flexible Packaging Films: |  |
(Gains) losses associated with plant shutdowns, asset impairments and restructurings: |  |
Other restructuring costs - severance | $ | — |  | $ | 0.1 |
Total for Flexible Packaging Films | $ | — |  | $ | 0.1 |
Corporate: |  |
(Gains) losses from sale of assets, investment writedowns and other items: |  |
Professional fees associated with business development activities 1 | $ | 0.5 |  | $ | 0.3 |
Professional fees associated with remediation activities related to internal control over financial reporting 1 | 0.9 |  | 0.5 |
Professional fees associated with the transition to the ABL Facility 1 | 0.2 |  | — |
Stock-based compensation expense associated with the fair value remeasurement of awards granted at the time of the 2020 special dividend 1 | — |  | (0.1) |
Net periodic benefit cost for the frozen defined benefit pension plan in process of termination 2 | — |  | 3.4 |
Total for Corporate | $ | 1.6 |  | $ | 4.1 |
1. Included in “Selling, general and administrative expenses” in the condensed consolidated statements of income. 2. See Note 4 for additional information. 3. See Note 1 for additional information.

21

Average total debt outstanding and interest rates were as follows:

| Three Months Ended March 31,
(In millions, except percentages) | 2024 |  | 2023
Floating-rate debt with interest charged on a rollover basis plus a credit spread: |  |  |
Average total outstanding debt balance | $ | 153.1 |  |  | $ | 147.0 |
Average interest rate | 9.4 | % |  | 6.3 | %

Segment Operations Review
Aluminum Extrusions
A summary of results for Aluminum Extrusions is provided below:

| Three Months Ended |  | Favorable/ (Unfavorable) % Change |  |  |  |
(In thousands, except percentages) | March 31, |  |  |
2024 |  | 2023 |  |  |  |  |
Sales volume (lbs) | 33,841 |  |  | 37,562 |  |  | (9.9)% |  |  |  |  |  |
Net sales | $ | 114,222 |  |  | $ | 133,370 |  |  | (14.4)% |  |  |  |  |  |
Ongoing operations: |  |  |  |  |  |  |  |  |  |  |
EBITDA | $ | 12,540 |  |  | $ | 14,638 |  |  | (14.3)% |  |  |  |  |  |
Depreciation & amortization | (4,542) |  |  | (4,411) |  |  | (3.0)% |  |  |  |  |  |
EBIT* | $ | 7,998 |  |  | $ | 10,227 |  |  | (21.8)% |  |  |  |  |  |
Capital expenditures | $ | 1,550 |  |  | $ | 7,742 |  |  |  |  |  |  |  |  |
*See the table in Note 9 for a reconciliation of this non-GAAP measure to the most comparable measure calculated in accordance with GAAP.

First Quarter 2024 Results vs. First Quarter 2023 Results
Net sales (sales less freight) in the first quarter of 2024 decreased 14.4% versus the first quarter of 2023 primarily due to lower sales volume and the pass-through of lower metal costs. Sales volume in the first quarter of 2024 decreased 9.9% versus the first quarter of 2023 but increased 2.7% versus the fourth quarter 2023.
Net new orders, which remain low compared to pre-pandemic levels but are growing, increased 61% in the first quarter of 2024 versus the first quarter of 2023, marking the sixth consecutive quarterly increase in incoming orders. Since January 2021, net new orders for the Company's aluminum extruded products have generally tracked the ISM® Manufacturing PMI®. The Company believes that net new orders continue to be below pre-pandemic levels due to higher interest rates, tighter lender requirements and the increase in remote working, which particularly impacts the non-residential B&C end-use market. In addition, data indicates that aluminum extrusion imports increased significantly in recent years, especially during the pandemic, and some of Bonnell Aluminum’s customers may have sourced, and continue to source, aluminum extrusions from producers outside the United States.
Open orders at the end of the first quarter of 2024 were 15 million pounds (versus 14 million pounds at the end of the fourth quarter of 2023 and 27 million pounds at the end of the first quarter of 2023). This level is below the quarterly range of 21 to 27 million pounds in 2019 before pandemic-related disruptions (particularly starting in early 2021 with the re-opening of markets following the rollout of vaccines) that resulted in long lead times, driving a peak in open orders of approximately 100 million pounds during the first quarter of 2022.
The Company is participating as part of a coalition of members of the Aluminum Extruders Council who have filed a trade case with the Department of Commerce (“DOC”) and the U.S. International Trade Commission (“ITC”) against 15 countries in response to alleged large and increasing volumes of unfairly priced imports of aluminum extrusions since 2019. In November 2023, the ITC 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. The ITC’s preliminary determination found that subject import volumes were significant and increasing, and that with regard to pricing, subject imports predominantly undersold the domestic product by volume in each year of the period of investigation. On May 2, 2024, the DOC announced its preliminarily determination that aluminum extrusion producers and exporters in 14 countries, including China, sold aluminum extrusions at less-than-fair value in the United States. Final determinations, which are expected by the end of the third quarter of 2024, should provide an additional opportunity for Bonnell to regain market share.
22

EBITDA from ongoing operations in the first quarter of 2024 decreased $2.1 million v ersus the first quarter of 2023 primarily due to:
•Lower volume ($3.3 million) offset by higher net pricing after the pass-through of metal cost changes ($2.0 million), lower labor and employee-related costs ($0.6 million), lower supply expense ($0.6 million), lower utility expense ($0.4 million), lower SG&A expenses ($0.3 million) and lower freight rates ($0.2 million); and
•The timing of the flow-through under the first-in first-out method of aluminum raw material costs passed through to customers, previously acquired at higher prices in a quickly changing commodity pricing environment, resulted in a charge of $1.2 million in the first quarter of 2024 versus a benefit of $1.7 million in the first quarter of 2023.
R efer to Item 3. Q uantitative and Qualitative Disclosures About Market Risk in this Form 10-Q f or additional information on aluminum prices.
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for Bonnell Aluminum are projected to be $9 million in 2024, including $4 million for productivity projects and $5 million for capital expenditures required to support continuity of operations. The projected spending reflects stringent spending measures that the Company has implemented to control its financial leverage. The multi-year implementation for new enterprise resource planning and manufacturing execution systems ("ERP/MES") has been reorganized with an extended implementation period. As a result, the earliest "go-live" date for the net ERP/MES is 2025. The ERP/MES project commenced in 2022, with spending to-date of approximately $21 million. Depreciation expense is projected to be $16 million in 2024. Amortization expense is projected to be $2 million in 2024.
PE Films
A summary of results for PE Films is provided below:

| Three Months Ended |  | Favorable/ (Unfavorable) % Change |  |  |  |
(In thousands, except percentages) | March 31, |  |  |
2024 |  | 2023 |  |  |  |  |
Sales volume (lbs) | 10,036 |  |  | 7,368 |  |  | 36.2% |  |  |  |  |  |
Net sales | $ | 24,735 |  |  | $ | 20,182 |  |  | 22.6% |  |  |  |  |  |
Ongoing operations: |  |  |  |  |  |  |  |  |  |  |
EBITDA | $ | 6,904 |  |  | $ | 1,849 |  |  | 273.4% |  |  |  |  |  |
Depreciation & amortization | (1,329) |  |  | (1,643) |  |  | 19.1% |  |  |  |  |  |
EBIT* | $ | 5,575 |  |  | $ | 206 |  |  | NM** |  |  |  |  |  |
Capital expenditures | $ | 394 |  |  | $ | 716 |  |  |  |  |  |  |  |  |
* See the table in Note 9 for a reconciliation of this non-GAAP measure to the most comparable measure calculated in accordance with GAAP. ** Not meaningful ("NM")

First Quarter 2024 Results vs. First Quarter 2023 Results
Net sales in the first quarter of 2024 were 22.6% higher compared to the first quarter of 2023, with volume increases in both Surface Protection and overwrap films. Surface Protection sales volume in the first quarter of 2024 increased 43% versus the first quarter of 2023 and 30% versus the fourth quarter of 2023. Given recent volume improvements for Surface Protection and other market indicators, the Company believes that the consumer electronics market is now in recovery mode.
EBITDA from ongoing operations during the first quarter of 2024 was $6.9 million, which was exceptional and well above comparable amounts realized during the second and first halves of 2023 of $8.6 million and $2.7 million, respectively.
EBITDA from ongoing operations in the first quarter of 2024 increased $5.1 million v ersus the first quarter of 2023, primarily due to:
•A $4.4 million inc rease from Surface Protection primarily due to h igher contribution margin associated with higher volume ($1.0 million), favorable pricing ($0.3 million), operating efficiencies and manufacturing costs savings ($1.9 million), lower fixed costs ($0.4 million), and lower SG&A ($0.7 million, including $0.6 million associated with the closure of the Richmond Technical Center in 2023).
•A $0.7 million increase from overwrap films primarily due to cost improvements.
23

R efer to Item 3. Q uantitative and Qualitative Disclosures About Market Risk in this Form 10-Q f or additional information on resin prices. Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for PE Films are projected to be $2 million in 2024, including $1 million for productivity projects and $1 million for capital expenditures required to support continuity of current operations. Depreciation expense is projected to be $5 million in 2024. There is no amortization expense for PE Films.
Flexible Packaging Films
A summary of results for Flexible Packaging Films is provided below:

| Three Months Ended |  | Favorable/ (Unfavorable) % Change |  |  |  |
(In thousands, except percentages) | March 31, |  |  |
2024 |  | 2023 |  |  |  |  |
Sales volume (lbs) | 21,973 |  |  | 19,845 |  |  | 10.7% |  |  |  |  |  |
Net sales | $ | 30,113 |  |  | $ | 31,527 |  |  | (4.5)% |  |  |  |  |  |
Ongoing operations: |  |  |  |  |  |  |  |  |  |  |
EBITDA | $ | 1,963 |  |  | $ | 1,350 |  |  | 45.4% |  |  |  |  |  |
Depreciation & amortization | (751) |  |  | (700) |  |  | (7.3)% |  |  |  |  |  |
EBIT* | $ | 1,212 |  |  | $ | 650 |  |  | 86.5% |  |  |  |  |  |
Capital expenditures | $ | 518 |  |  | $ | 605 |  |  |  |  |  |  |  |  |
* See the table in Note 9 for a reconciliation of this non-GAAP measure to the most comparable measure calculated in accordance with GAAP.

First Quarter 2024 Results vs. First Quarter 2023 Results
Net sales in the first quarter of 2024 decreased 4.5% compared to the first quarter of 2023 primarily due to lower selling prices that the Company believes are driven by excess global capacity and strong competition in Brazil, Latin America and the U.S., and unfavorable product mix, partially offset by higher sales volume.
EBITDA from ongoing operations in the first quarter of 2024 increased $0.6 million versus the first quarter of 2023, primarily due to:
•Lower raw material costs ($1.9 million), lower fixed costs ($1.7 million), higher sales volume ($ 1.0 million) and lower SG&A ($0.2 million), partially offset by lower selling prices from global excess capacity and margin pressures ($2.1 million) and higher variable costs ($1.3 million);
•Foreign currency transaction gains ($0.1 million) in the first quarter of 2024 compared to foreign currency transaction losses ($0.1 million) in the first quarter of 2023; and
•Net unfavorable foreign currency translation of Real-denominated operating costs ($0.9 million).
Refer to Item 3. Quantitative and Qualitative Disclosures About Market Risk in this Form 10-Q f or additional information on polyester fiber and component price trends.
Projected Capital Expenditures and Depreciation & Amortization
Capital expenditures for Flexible Packaging Films are projected to be $4 million in 2024 for capital expenditures required to support continuity of current operations. Depreciation expense is projected to be $3 million in 2024. Amortization expense is projected to be $0.1 million in 2024.
Corporate Expenses, Interest & Other
Corporate expenses, net in the first three months of 2024 decreased $3.2 million compared to the first three months of 2023 primarily due to lower pension expense as a result of the pension plan termination completed in 2023 ($3.4 million) and lower internal audit fees ($0.3 million), partially offset by higher stock-based compensation ($0.6 million).
Interest expense of $3.5 million in the first three months of 2024 increased $1.1 million compared to the first three months of 2023 due to higher average debt levels and interest rates.
Status of Agreement to Sell Terphane
On September 1, 2023, the Company announced that it had entered into a definitive agreement to sell Terphane to Oben Group (the “Contingent Terphane Sale”). Completion of the sale is contingent upon the satisfaction of customary closing conditions, including the receipt of certain competition filing approvals by authorities in Brazil and Colombia. On October 27, 2023, the Company filed the requisite competition forms with the Administrative Council for Economic Defense (“CADE”) in
24

Brazil. The regulatory review process is ongoing and in line with the Company’s expectations. CADE’s maximum deadline for completing its review is no later than November 18, 2024. The merger review regarding the transaction was cleared by the Colombian authority in early February 2024.
As of March 31, 2024, the Company has reported results for Terphane as a continuing operation, given the status of the approval process by authorities. If the sale transaction is completed, the Company expects to realize after-tax net debt-free cash proceeds of $85 million after deducting projected Brazil withholding taxes, escrow funds, U.S. capital gains taxes and transaction costs. Actual after-tax proceeds may differ from estimates due to possible changes in deductions and the Company's tax situation during the potentially lengthy interim period to the closing date.
Net capitalization and other credit measures are provided in Liquidity and Capital Resources below.
Liquidity and Capital Resources
The Company continues to focus on improving working capital management. Measures such as days sales outstanding (“DSO”), days inventory outstanding (“DIO”) and days payables outstanding (“DPO”) are used to evaluate changes in working capital. Changes in operating assets and liabilities from December 31, 2023 to March 31, 2024 are summarized below.
•Accounts and other receivables increased $5.1 million (7.5%).
◦Accounts and other receivables in Aluminum Extrusions increased $7.3 million primarily due to increased sales volume during the first three months of 2024. DSO (represents trailing 12 months net sales divided by a rolling 12-month average of accounts and other receivables balances) was approximately 43.9 days for the 12 months ended March 31, 2024 and 45.1 days for the 12 months ended December 31, 2023.
◦Accounts and other receivables in PE Films remained relatively flat. DSO was approximately 26.3 days for the 12 months ended March 31, 2024, which was the same for the 12 months ended December 31, 2023.
◦Accounts and other receivables in Flexible Packaging Films decreased $2.3 million primarily due to improved collection efforts during the three months ended 2024. DSO was approximately 37.1 days for the 12 months ended March 31, 2024 and 38.1 days for the 12 months ended December 31, 2023.
•Inventories increased $4.8 million (5.8%).
◦Inventories in Aluminum Extrusions remained relatively flat. DIO (represents trailing 12 months costs of goods sold calculated on a first-in first-out basis divided by a rolling 12-month average of inventory balances calculated on the first-in first-out basis) was approximately 48.3 days for the 12 months ended March 31, 2024 and 51.6 days for the 12 months ended December 31, 2023.
◦Inventories in PE Films increased $2.9 million due to higher raw materials to support increased sales volume during the first three months of 2024. DIO was approximately 53.6 days for the 12 months ended March 31, 2024 and 57.2 days for the 12 months ended December 31, 2023.
◦Inventories in Flexible Packaging Films increased $1.9 million primarily due to higher raw material purchases. DIO was approximately 107.8 days for the 12 months ended March 31, 2024 and 117.7 days for the 12 months ended December 31, 2023.
•Net property, plant and equipment decreased $5.5 million primarily due to depreciation expense of $6.3 million and a $0.9 million unfavorable change in the value of the U.S. dollar relative to foreign currencies, partially offset by capital expenditures of $1.8 million.
•Identifiable intangible assets, net decreased $0.5 million (4.9%) due to amortization expense.
•Deferred income tax assets decreased $0.7 million (2.9%). See Note 8 for more information.
•Accounts payable decreased $10.1 million (10.6%).
◦Accounts payable in Aluminum Extrusions decreased $9.0 million primarily due to the timing of payments. DPO (represents trailing 12 months costs of goods sold calculated on a first-in first-out basis divided by a rolling 12-month average of accounts payable balances) was approximately 47.7 days for the 12 months ended March 31, 2024 and 49.8 days for the 12 months ended December 31, 2023.
◦Accounts payable in PE Films increased $2.7 million primarily due to higher raw material purchases. DPO was approximately 43.9 days for the 12 months ended March 31, 2024 and 43.4 days for the 12 months ended December 31, 2023.
◦Accounts payable in Flexible Packaging Films decreased $3.8 million primarily due to lower raw material costs. DPO was approximately 65.3 days for the 12 months ended March 31, 2024 and 61.7 days for the 12 months ended December 31, 2023.
25

Net cash used in operating activities was $7.7 million in the first three months of 2024 compared to $9.1 million in the first three months of 2023. The decrease was primarily due to improved working capital due to factors discussed earlier in this section relating to accounts and other receivables, inventories and accounts payable.
Net cash used in investing activities was $2.4 million in the first three months of 2024 compared to $8.8 million the first three months of 2023. The decrease was primarily due to lower capital expenditures ($6.6 million).
Net cash provided by financing activities was $2.0 million in the first three months of 2024, compared to $13.6 million in the first three months of 2023. The decrease was primarily due to lower net borrowings ($16.0 million) under the ABL Facility (as defined below) during the first three months of 2024 as compared to the first three months of 2023 and dividends paid ($4.4 million) during the first three months of 2023.
At March 31, 2024, the Company had cash, cash equivalents and restricted cash of $4.8 million, including cash and cash equivalents held in locations outside the U.S. of $3.8 million.
Debt and Credit Agreements
ABL Facility
On December 27, 2023, the Company entered into Amendment No. 3 (the “ABL Facility”) to the Second Amended and Restated Credit Agreement, which provides the Company with a $180 million senior secured asset-based revolving credit facility that will expire on June 30, 2026. On April 16, 2024, the Company entered into Amendment No. 4 (the "Amendment") that, among other items: (i) moves the ABL Adjustment Date (defined below) from March 31, 2025 to September 30, 2025 and (ii) requires weekly reporting of the borrowing base financial covenant. 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. Upon the earlier of September 30, 2025 or the date the Company receives the proceeds from the sale of Terphane (the “ABL Adjustment Date”), the $180 million ABL Facility will be reduced to $125 million. As of March 31, 2024, availability under the ABL Facility was $22.2 million, after reducing the borrowing base by the aggregate outstanding borrowings of $128.3 million, standby letters of credit of $13.1 million, and the Minimum Liquidity (as defined in the ABL Facility) financial covenant.
Under the terms of the ABL Facility, certain domestic bank accounts are subject to blocked account agreements, each of which contains a springing feature whereby the lenders may exercise control over those accounts during a cash dominion period (any such period, a “Cash Dominion Period”). A Cash Dominion Period was implemented on the date of the closing of the ABL Facility and will remain in effect at all times prior to the ABL Adjustment Date. After the ABL Adjustment Date, a Cash Dominion Period goes into effect if availability under the ABL Facility falls below 12.5% or an Event of Default (as defined in the ABL Facility) occurs. The Company would then be subject to the Cash Dominion Period until the Event of Default is waived or ABL Facility availability is above 12.5% of the $125 million aggregate commitment for 30 consecutive days. Receipts that have not yet been applied to the ABL Facility are classified as restricted cash in the Company’s consolidated balance sheets.
The financial covenants in the ABL Facility are as follows:
•Until the ABL Adjustment Date, the Company is required to maintain (i) a minimum Credit EBITDA (as defined in the ABL Facility), as of the end of each fiscal month for the 12-month period then ended (presented below) and (ii) a Minimum Liquidity (as defined in the ABL Facility) of $10.0 million.
26

Minimum Credit EBITDA (In thousands)
March 2024 | $ | 16,640 |
April 2024 | 19,780 |
May 2024 | 19,660 |
June 2024 | 19,450 |
July 2024 | 21,860 |
August 2024 | 22,830 |
September 2024 | 25,370 |
October 2024 | 26,070 |
November 2024 | 27,640 |
December 2024 | 29,640 |
January 2025 | 29,740 |
February 2025 | 29,850 |
March 2025 | 29,980 |
April 2025 | 30,340 |
May 2025 | 30,700 |
June 2025 | 31,030 |
July 2025 | 31,370 |
August 2025 | 31,710 |
September 2025 | $ | 32,080 |

•Following the ABL Adjustment Date, the foregoing financial covenants will cease to exist and will be replaced with a minimum fixed charge coverage ratio of 1.00:1.00 that will be triggered in the event that availability is less than 10% of $125 million commitment amount and continuing thereafter until availability is greater than 10% of the $125 million commitment amount for 30 consecutive days.
27

The computation of Credit EBITDA, as defined in the ABL Facility, is presented below.

Computations of Credit EBITDA (as defined in the ABL Facility) as of and for the Twelve Months Ended March 31, 2024 *
Computations of Credit EBITDA for the twelve months ended March 31, 2024 (in thousands):
Net income (loss) | $ | (101,608) |
Plus: |
After-tax losses related to discontinued operations | — |
Total income tax expense for continuing operations | — |
Interest expense | 12,751 |
Depreciation and amortization expense for continuing operations | 27,554 |
All non-cash losses and expenses, plus cash losses and expenses not to exceed $10,000, for continuing operations that are classified as unusual, extraordinary or which are related to plant shutdowns, asset impairments and/or restructurings (cash-related of $9,899) | 141,252 |
Charges related to stock option grants and awards accounted for under the fair value-based method | — |
Losses related to the application of the equity method of accounting | — |
Losses related to adjustments in the estimated fair value of assets accounted for under the fair value method of accounting | — |
Fees, costs and expenses incurred in connection with the amendment process | 184 |
Terphane sale transaction costs in an amount not to exceed $10,000 | 4,949 |
Minus: |
After-tax income related to discontinued operations | — |
Total income tax benefits for continuing operations | (53,799) |
Interest income | (500) |
All non-cash gains and income, plus cash gains and income in excess of $10,000, for continuing operations that are classified as unusual, extraordinary or which are related to plant shutdowns, asset impairments and/or restructurings | — |
Income related to changes in estimates for stock option grants and awards accounted for under the fair value-based method | — |
Income related to the application of the equity method of accounting | — |
Income related to adjustments in the estimated fair value of assets accounted for under the fair value method of accounting | — |
Plus cash dividends declared on investments in an amount not to exceed $10,000 for such period | — |
Plus or minus, as applicable, pro forma EBITDA adjustments associated with acquisitions and asset dispositions | — |
Plus or minus, as applicable, pro forma EBITDA adjustments to pension expense associated with the early payment of pension obligations | 7,284 |
Credit EBITDA | 38,067 |
*Credit EBITDA is not intended to represent net income (loss) or cash flow from operations as defined by GAAP and should not be considered as an alternative to either net income (loss) or to cash flow.

28

The computation of the ABL Facility availability and Minimum Liquidity covenant, as defined in the ABL Facility, is presented below.

(In thousands, except percentages) | March 31, 2024 |  | December 31, 2023
Maximum aggregate principal | $ | 180,000 |  |  | $ | 180,000 |
Maximum borrowing limit per the Borrowing base as defined in the ABL Facility (includes eligible domestic cash and cash equivalents of $851 as of March 31, 2024 and $3,846 as of December 31, 2023) | $ | 173,601 |  |  | $ | 172,286 |
ABL Facility outstanding debt (matures on June 30, 2026) | 128,330 |  |  | 126,322 |
Outstanding standby letters of credit | 13,080 |  |  | 13,080 |
ABL Facility availability | $ | 32,191 |  |  | $ | 32,884 |
Minimum Liquidity covenant | 10,000 |  |  | 10,000 |
ABL Facility availability in excess of Minimum Liquidity covenant | $ | 22,191 |  |  | $ | 22,884 |

In addition to the financial covenants, the ABL Facility contains restrictive covenants, including covenants that restrict the Company’s ability to pay dividends and repurchase shares of its common stock.
As of March 31, 2024, the Company was in compliance with all debt covenants.
Terphane Brazil Loan
On October 26, 2023, Terphane Ltda., the Company’s wholly owned subsidiary in Brazil, borrowed $20 million secured by certain of its assets (“Terphane Brazil Loan”). This U.S. Dollar borrowing matures on October 30, 2028. The Company expects that the Terphane Brazil Loan will be repaid (and collateral released) upon the closing of the Contingent Terphane Sale. On October 26, 2023, the Company borrowed $20 million from Terphane Ltda. (the “Intercompany Loan”) at the same interest rate as the Terphane Brazil Loan, thereby transferring the funds to the U.S. The Company will repay the Intercompany Loan in conjunction with the closing of the Contingent Terphane Sale.
For more information on the ABL Facility and the Terphane Brazil Loan, see Note 10 for additional information.
The Company believes that existing borrowing availability, current cash balances and cash flow from operations will be sufficient to satisfy short term material cash requirements related to working capital, capital expenditure, and debt repayments for at least the next 12 months. In the longer term, liquidity will depend on many factors, including the results of operations, the timing and extent of capital expenditures, changes in operating plans, or other events that would cause the Company to seek additional financing in future periods. In addition, the completion of the Contingent Terphane Sale would provide additional liquidity.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Tredegar has exposure to the volatility of interest rates, polyethylene and polypropylene resin prices, Terephthalic Acid (“PTA”) and Monoethylene Glycol (“MEG”) prices, aluminum ingot and scrap prices, energy prices, foreign currencies and emerging markets. See Liquidity and Capital Resources above regarding interest rate exposures related to borrowings under the Credit Agreement.
Profit margins in Aluminum Extrusions are sensitive to fluctuations in aluminum ingot and scrap prices as well as natural gas prices (natural gas is the principal energy source used to operate its casting furnaces). Changes in polyethylene resin prices and the timing of those changes could have a significant impact on profit margins in PE Films. Changes in polyester resin, PTA and MEG prices, and the timing of those changes, could have a significant impact on profit margins in Flexible Packaging Films. There is no assurance of the Company’s ability to pass through higher raw material and energy costs to its customers.
The purchase price of raw materials fluctuates on a monthly basis; therefore, Aluminum Extrusions pricing policies generally allow the Company to pass the underlying index cost of aluminum and certain alloys through to the vast majority of our customers so that we remain substantially neutral to metal pricing. In the normal course of business, Aluminum Extrusions enters into fixed-price forward sales contracts with certain customers for the sale of fixed quantities of aluminum extrusions at scheduled intervals. In order to hedge its exposure to aluminum price volatility (see the chart below) under these fixed-price arrangements, which generally have a duration of not more than 12 months, the Company enters into a combination of forward purchase commitments and futures contracts to acquire or hedge aluminum, based on the scheduled deliveries. See Note 7 for additional information.
29

The volatility of quarterly average aluminum prices is shown in the chart below.

Source: Quarterly averages computed by the Company using daily Midwest average prices provided by Platts.

The volatility of quarterly average natural gas prices is shown in the chart below.

Source: Quarterly averages computed by Tredegar using monthly NYMEX settlement prices.

30

The volatility of average quarterly prices of polyethylene resin in the U.S. (a primary raw material for PE Films) is shown in the chart below.

Source: Quarterly averages computed by Tredegar using monthly data provided by IHS, Inc. In February 2020, IHS reflected a 32 cents per pound non-market adjustment based on their estimate of the growth of discounts in prior periods. The 4th quarter 2019 average rate of $0.51 per pound is shown on a pro forma basis as if the non-market adjustment was made in the fourth quarter of 2019. In January 2023, IHS reflected a 41 cents per pound non-market adjustment based on their estimate of the growth of discounts in the prior periods. The 4th quarter 2022 average rate of $0.60 per pound is shown on a pro forma basis as if the non-market adjustment was made in the fourth quarter of 2022.

The price of resin is driven by several factors, including supply and demand and the price of oil, ethylene and natural gas. Selling prices to customers are set considering numerous factors, including the expected volatility of resin prices. PE Films has index-based pass-through raw material cost arrangements with customers. However, under certain agreements, changes in resin prices are not passed through for a period of 90 days. In response to unprecedented cost increases and supply issues for polyethylene and polypropylene resin, Tredegar Surface Protection implemented a quarterly resin cost pass-through mechanism, effective July 1, 2021, for all products and customers not previously covered by such arrangements. Pricing on the remainder of the business is based upon raw material costs and supply/demand dynamics within the markets that the Company competes.
31

Polyester resins, MEG and PTA used in flexible packaging films produced in Brazil are primarily purchased domestically, with other sources available mostly from Asia and the U.S. Given the nature of these products as commodities, pricing is derived from Asian pricing indexes. The volatility of the average quarterly prices for polyester fibers in Asia, which is representative of polyester resin (a primary raw material for Flexible Packaging Films) pricing trends, is shown in the chart below:

Source: Quarterly averages computed by Tredegar using monthly data from CMAI Global Index data.

The volatility of average quarterly prices of PTA and MEG in Asia (raw materials used in the production of polyester resins produced by Flexible Packaging Films) is shown in the chart below:

Source: Quarterly averages computed by Tredegar using monthly data from CMAI Global Index data.

Tredegar attempts to match the pricing and cost of its products in the same currency and generally views the volatility of foreign currencies and the corresponding impact on earnings and cash flow as part of the overall risk of operating in a global environment (for additional information, see trends for the Brazilian Real and Chinese Yuan in the charts on the following page). Exports from the U.S. are generally denominated in U.S. Dollars. The Company’s foreign currency exposure on income from foreign operations relates to the Chinese Yuan and the Brazilian Real.
PE Films is generally able to match the currency of its sales and costs for its product lines. For flexible packaging films produced in Brazil, selling prices and key raw material costs are principally determined in U.S. Dollars and are impacted by local economic conditions and local and global competitive dynamics. Flexible Packaging Films is exposed to foreign
32

exchange translation risk (its functional currency is the Brazilian Real) because almost 90% of the sales of Flexible Packaging Films business unit in Brazil (“Terphane Ltda.”) and substantially all of its related raw material costs are quoted or priced in U.S. Dollars while its variable conversion, fixed conversion and sales, general and administrative costs before depreciation & amortization (collectively “Terphane Ltda. Operating Costs”) are quoted or priced in Brazilian Real. This mismatch, together with a variety of economic variables impacting currency exchange rates, causes volatility that could negatively or positively impact EBITDA from ongoing operations for Flexible Packaging Films.
The Company estimates annual net costs of R$139.0 million for the net mismatch translation exposure between Terphane Ltda.’s U.S. Dollar quoted or priced sales and raw material costs and underlying Brazilian Real quoted or priced Terphane Ltda. Operating Costs. Terphane Ltda. has outstanding foreign exchange average forward rate contracts to purchase Brazilian Real and sell U.S. Dollars to hedge its exposure. See Note 7 for more information on outstanding hedging contracts and this hedging program.
Tredegar estimates that the change in the value of foreign currencies relative to the U.S. Dollar for PE Films had no impact on EBITDA from ongoing operations for the first quarter of 2024 compared with the same period of 2023.
Trends for the Brazilian Real and Chinese Yuan exchange rates relative to the U.S. Dollar are shown in the chart below.

Source: Quarterly averages computed by Tredegar using daily closing data provided by Bloomberg.

Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this Form 10-Q, pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company carried out an evaluation with the participation of its management, including its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2024.
Based on this evaluation of our disclosure controls and procedures as of March 31, 2024, the Company's Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the quarter ended March 31, 2024, that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).
PART II - OTHER INFORMATION
Item 1A. Risk Factors.
As disclosed in “Item 1A. Risk Factors” in the 2023 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 2023 Form 10-K.
33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The Company’s Credit Agreement contains financial and other restrictive covenants, including a restriction on the Company’s ability to pay dividends to shareholders. For more information on the Credit Agreement, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.”
Item 5. Other Information.
Director and Officer Trading Arrangements
During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits.

10.1 |  | Amendment No. 4, dated April 16, 2024, to the Second Amended and Restated Credit Agreement, dated June 29, 2022, by and among Tredegar Corporation, as borrower, certain of Tredegar Corporation’s material domestic subsidiaries, as guarantors, the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, Citizens Bank, N.A. and PNC Bank, National Association, as co-syndication agents, and Bank of America, N.A., U.S. Bank National Association and Wells Fargo Bank, National Association, as co-documentation agents (filed as Exhibit 10.1 of Tredegar's Current Report on Form 8-K (File No. 1-10258), filed on April 22, 2024, and incorporated herein by reference).
*10.2 |  | Form of Notice of Phantom Stock Unit Award and Phantom Stock Unit Award Terms and Conditions.
31.1 |  | Certification of President and Chief Executive Officer of Tredegar Corporation, pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 |  | Certification of Executive Vice President and Chief Financial Officer of Tredegar Corporation, pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 |  | Certification of President and Chief Executive Officer of Tredegar Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 |  | Certification of Executive Vice President and Chief Financial Officer of Tredegar Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 |  | XBRL Instance Document and Related Items.
104 |  | Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101).
* |  | Denotes compensatory plans or arrangements or management contracts.

34

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  |  |  | Tredegar Corporation
|  |  |  | (Registrant)
Date: |  | May 9, 2024 |  | /s/ John M. Steitz
|  |  |  | John M. Steitz
|  |  |  | President and Chief Executive Officer
|  |  |  | (Principal Executive Officer)
Date: |  | May 9, 2024 |  | /s/ D. Andrew Edwards
|  |  |  | D. Andrew Edwards
|  |  |  | Executive Vice President and Chief Financial Officer
|  |  |  | (Principal Financial Officer)
Date: |  | May 9, 2024 |  | /s/ Frasier W. Brickhouse, II
|  |  |  | Frasier W. Brickhouse, II
|  |  |  | Corporate Treasurer and Controller
|  |  |  | (Principal Accounting Officer)