Discontinued Operations

12 Months Ended

Dec. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

16. DIVESTITURES

Flexible Packaging Films

On September 1, 2023, the Company entered into an agreement to sell Terphane, headquartered in Brazil, to Oben for net cash-free and debt-free base consideration of $116 million.

On November 1, 2024, Tredegar completed the sale of Terphane to Oben. At closing, Tredegar received $60 million in cash, which is net of Terphane debt assumed by Oben of $20 million and estimated Terphane cash retained by Oben of $2 million. The cash proceeds received by Tredegar at closing are after deducting net working capital adjustments and closing indebtedness ($20.5 million), escrow funds ($19.8 million), projected Brazil withholding taxes ($10.8 million), and transaction expenses ($4.4 million). On February 28, 2025, the Company received $9.8 million from post-closing settlement of the transaction, which was $2.8 million higher than expected mainly due to higher cash held at Terphane in Brazil than estimated at closing. The proceeds from the sale of Terphane were required to be used to pay down debt outstanding under the ABL Facility.

Upon completion of the sale, the Company recognized a pre-tax loss of $74.9 million for the year ended December 31, 2024, which includes the realization of other comprehensive losses on foreign currency translation adjustments, net of gains on derivative financial instruments of $102.3 million previously reflected in accumulated other comprehensive income (loss).

The following table summarizes the financial results of discontinued operations reflected in the Consolidated Statements of Income (Loss) for the years ended December 31, 2024, 2023 and 2022:


	Years Ended December 31,
(In thousands)	2024		2023		2022
Revenue and other items
Sales	$	118,382	$	131,502	$	176,579
Other income (expense), net	8		2		(51)
	118,390		131,504		176,528
Costs and expenses
Cost of goods sold	97,919		118,669		133,493
Freight	5,598		5,177		8,440
Selling, general and administrative	7,608		10,819		9,179
Research and development	655		867		891
Amortization of intangibles	78		139		396
Interest expense (a)	7,532		5,291		849
Asset impairments and costs associated with exit and disposal activities, net of adjustments	—		107		—
Loss on sale of business	74,877		—		—
Total	194,267		141,069		153,248
Income (loss) from discontinued operations before income tax	(75,877)		(9,565)		23,280
Income tax expense (benefit)	(10,267)		(2,825)		7,410
Income (loss) from discontinued operations, net of tax	$	(65,610)	$	(6,740)	$	15,870
(a) For the years ended December 31, 2024 and 2023, interest expense includes $1.9 million and $0.4 million, respectively, directly related to the $20 million of outstanding Terphane debt assumed by Oben.

Interest expense allocated to discontinued operations was determined by applying the ABL Facility weighted-average interest rate to the Terphane sale proceeds, as the sale proceeds were required to be used to pay down debt outstanding under the ABL Facility.

The assets and liabilities of the discontinued operations reflected in the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively were as follows:


	December 31,
(In thousands)	2024		2023
Assets
Restricted cash	$	—	$	404
Accounts and other receivables, net	—		12,323

Inventories	—		32,382
Prepaid expenses and other	—		3,249
Total current assets	—		48,358
Property, plant and equipment, net	—		32,298
Right-of-use leased assets	—		748
Identifiable intangible assets, net	—		746
Deferred income taxes (a)	126		1,880
Other assets	—		436
Total non-current assets	126		36,108
Total assets of discontinued operations	$	126	$	84,466

Liabilities
Accounts payable (a)	$	161	$	25,695
Accrued expenses (a)	580		5,836
Lease liability, short-term	—		204
Income taxes payable	—		1,027
Total current liabilities	741		32,762
Lease liability long-term	—		546
Long term debt	—		20,000
Other non-current liabilities	—		257
Total non-current liabilities	—		20,803
Total liabilities of discontinued operations	$	741	$	53,565
(a) The consolidated balance sheet of discontinued operations as of December 31, 2024 includes $0.1 million of deferred tax assets, $0.6 million of severance and $0.2 million of miscellaneous accrued expenses.

The following table provides significant operating, investing and financing cash flow information for discontinued operations:


	Year Ended December 31,
(In thousands)	2024		2023		2022
Operating activities:
Depreciation and amortization	$	2,313	$	2,865	$	2,444
Loss on the sale of divested business	74,877		—		—
Total	$	77,190	$	2,865	$	2,444
Investing activities:
Net proceeds on sale of divested business	$	54,631	$	—	$	—
Capital expenditures	(2,489)		(4,323)		(8,151)
Total	$	52,142	$	(4,323)	$	(8,151)
Financing activities
Borrowings	$	—	$	20,000	$	—
Debt principal payments	—		—		—
Total	$	—	$	20,000	$	—