Tredegar — Second Quarter 2026 Earnings Summary

Financial Performance

• Net income from continuing operations was $6.0 million ($0.17 per diluted share) for Q2 2026, compared to $1.8 million ($0.05 per diluted share) in Q2 2025.
• Net income from ongoing operations was $6.4 million ($0.18 per diluted share) for Q2 2026, compared to $1.8 million ($0.05 per diluted share) in Q2 2025.
• Consolidated EBITDA from ongoing operations was $14.2 million for Q2 2026, compared to $10.0 million in Q2 2025.
• Consolidated EBITDA from ongoing operations for the first six months of 2026 was $25.8 million, compared to $21.6 million in the first six months of 2025.
• Total net sales for Q2 2026 were $216.2 million, up from $179.1 million in Q2 2025.
• Total net sales for the first six months of 2026 were $402.7 million, up from $343.9 million in the first six months of 2025.
• Total debt was $46.0 million at June 30, 2026, compared to $35.1 million at December 31, 2025.
• Cash and cash equivalents were $17.2 million at June 30, 2026, compared to $6.7 million at December 31, 2025.
• Net debt was $28.8 million at June 30, 2026, compared to $28.4 million at December 31, 2025.
• Available funds under the ABL Facility were approximately $76 million as of June 30, 2026.
• Effective tax rate from continuing operations was 19.9% for the first six months of 2026, compared to 38.4% in the first six months of 2025.

Guidance and Future Outlook

• Management expects targeted benefits from cost-reduction and operational-improvement initiatives to begin materializing in the next six to nine months.
• Capital expenditures for Bonnell Aluminum are projected to be $20 million in 2026, including $4 million for productivity projects and $16 million for continuity of operations.
• Depreciation expense is projected to be $14 million in 2026, and amortization expense is projected to be $2 million in 2026 for Bonnell Aluminum.
• Capital expenditures for High Performance Films are projected to be $2 million in 2026, including $1 million for productivity projects and $1 million for continuity of operations.
• Depreciation expense is projected to be $4 million in 2026 for High Performance Films, with no amortization expense.
• The Company anticipates capital spending for Bonnell Aluminum to increase from the levels of the past two years and return to a pattern more closely aligned with depreciation and amortization.
• The Company expects the benefit associated with FIFO inventory positions and metal price trends to be substantially neutralized during the third quarter.

Business Segments and Product Lines

• Aluminum Extrusions:
  • EBITDA from ongoing operations was $14.5 million in Q2 2026, up from $9.3 million in Q2 2025 and $11.7 million in Q1 2026.
  • Net sales were $184.1 million in Q2 2026, up 24.1% from Q2 2025.
  • Sales volume decreased 5.8% in Q2 2026 versus Q2 2025 but increased 8.8% versus Q1 2026.
  • TSLOTS™ shipments increased 45% in Q2 2026, supported by demand for data-center infrastructure.
  • Nonresidential building and construction volume declined 16% due to higher costs and economic uncertainty.
  • Automotive and transportation volume declined 16% due to cost pressures and lower sales compared to the prior year's tariff-related pull-forward.
  • Open orders were 23 million pounds at the end of Q2 2026, compared to 25 million pounds in Q2 2025 and 19 million pounds in Q1 2026.
  • Net new orders averaged 3.2 million pounds per week in Q2 2026, up from 3.1 million pounds per week in Q2 2025.
• High Performance Films:
  • EBITDA from ongoing operations was $5.8 million in Q2 2026, down from $6.7 million in Q2 2025.
  • Net sales were $25.6 million in Q2 2026, up 4.2% from Q2 2025.
  • Surface Protection sales volume increased 17.8% in Q2 2026 versus Q2 2025.
  • Advanced packaging films volume decreased 17.8% in Q2 2026 versus Q2 2025.
  • Net sales for the first six months of 2026 were $47.2 million, down 5.9% from the first six months of 2025.
  • EBITDA from ongoing operations for the first six months of 2026 was $10.9 million, down 23.7% from the first six months of 2025.
  • The top four customers comprised 85% of net sales for High Performance Films in the first six months of 2026.

Market and Competitive Landscape

• Market conditions remain impacted by U.S. trade policy, including Section 232 aluminum tariffs increased to 50% in June 2025.
• Bonnell Aluminum experienced a decline in new orders of approximately 20% following the tariff increase.
• Changes to the tariff structure announced in April 2026 appear to be contributing to a more balanced competitive environment.
• Conflict-driven disruptions in the Strait of Hormuz beginning in March 2026 have constrained shipments and raised costs, contributing to historically low U.S. inventory levels.
• The Company has proactively diversified its supply chain portfolio and secured nearly all aluminum supply requirements for the remainder of 2026 to minimize exposure to the Middle East.
• Tariffs and duties continue to be passed through to customers under the Company's metal-cost adjustment mechanism.

Risks and Challenges

• Ongoing economic uncertainty and mixed market conditions.
• Impact of trade policies and prolonged geopolitical conflicts on raw materials and supply chain constraints.
• Risks associated with cost-reduction and operational-improvement initiatives, including the ability to achieve expected benefits within the expected timeframe.
• Disruptions to manufacturing facilities, including those resulting from labor shortages.
• Inability to replace aging equipment and information technology systems with necessary capital expenditures.
• Loss of sales to significant customers on which the Company's business is highly dependent.
• Noncompliance with financial and other restrictive covenants in the ABL Facility.

Management Commentary and Tone

• CEO Dr. Arijit (Bapi) DasGupta stated the company delivered strong second quarter results with higher EBITDA in Aluminum Extrusions driven by metal-related margin tailwinds.
• Management emphasized a focus on strengthening the foundation for long-term value creation through the "One Tredegar" transformation, aligning priorities and building a high-performance culture.
• The High Performance Films plant in Guangzhou, China has surpassed five years without a recordable incident.
• Management is establishing a rigorous capital allocation process to direct resources toward the highest-return opportunities.
• The tone reflects confidence in operational excellence and disciplined execution despite mixed market conditions.

Other Key Points

• The Company implemented additional price increases in the first quarter of 2026 and the third quarter of 2025 to offset tariff-related costs not covered by the metal-cost adjustment mechanism.
• Corporate expenses, net, decreased $2.7 million in the first six months of 2026 compared to the same period in 2025, primarily due to lower professional fees associated with business development activities.
• Interest expense decreased to $0.8 million in the first six months of 2026 from $2.8 million in the first six months of 2025, primarily due to the write-off of deferred financing fees in 2025 and lower weighted average total debt outstanding.
• The Company is optimizing billet casting operations at its Carthage, TN, and Newnan, GA facilities to overcome localized production constraints.
• The ABL Facility matures on May 6, 2030.