Tredegar — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net loss from continuing operations was $(2.8) million, or $(0.08) per diluted share, for the third quarter of 2026, compared to net income of $7.1 million, or $0.20 per diluted share, in the third quarter of 2025.
• Net income from continuing operations was $8.3 million, or $0.24 per diluted share, for the nine months ended September 30, 2026, compared to $9.6 million, or $0.28 per diluted share, for the same period in 2025.
• Net loss from ongoing operations (non-GAAP) was $(1.4) million, or $(0.04) per diluted share, for the third quarter of 2026, compared to net income of $9.2 million, or $0.26 per diluted share, in the third quarter of 2025.
• Net income from ongoing operations (non-GAAP) was $10.0 million, or $0.29 per diluted share, for the nine months ended September 30, 2026, compared to $14.6 million, or $0.41 per diluted share, in the first nine months of 2025.
• Consolidated EBITDA from ongoing operations was $4.1 million for the third quarter of 2026, down from $18.1 million in the third quarter of 2025.
• Consolidated EBITDA from ongoing operations was $30.0 million for the nine months ended September 30, 2026, down from $39.7 million in the first nine months of 2025.
• Total debt increased to $49.0 million at September 30, 2026, from $35.1 million at December 31, 2025.
• Cash and cash equivalents were $16.3 million at September 30, 2026, compared to $6.7 million at December 31, 2025.
• Net debt was $32.7 million at September 30, 2026, compared to $28.4 million at December 31, 2025.
• Interest expense for the first nine months of 2026 was $1.4 million, compared to $3.6 million in the same period of 2025.
• The effective tax rate from continuing operations for the first nine months of 2026 was 20.2%, compared to 27.1% in the first nine months of 2025.

Guidance and Future Outlook:

• Management expects to begin realizing benefits from the "One Tredegar" initiative in the first quarter of 2027.
• Capital expenditures for Bonnell Aluminum are projected to be $17 million in 2026 ($4 million for productivity projects and $13 million for continuity).
• Depreciation expense for Bonnell Aluminum is projected to be $15 million in 2026, with amortization of $2 million.
• Capital expenditures for High Performance Films are projected to be $2 million in 2026.
• Depreciation expense for High Performance Films is projected to be $4 million in 2026, with no amortization expense.
• Management is positioning both businesses to capitalize on strategic applications and larger customer opportunities, focusing capital on areas with attractive returns.

Business Segments and Product Lines:

• Aluminum Extrusions (Bonnell Aluminum):
  • Net sales increased 9.1% to $177.3 million in the third quarter of 2026 versus $162.5 million in the third quarter of 2025, primarily due to the pass-through of higher metal costs, partially offset by lower volume.
  • Sales volume decreased 11.6% to 36.5 million pounds in the third quarter of 2026 versus 41.3 million pounds in the third quarter of 2025.
  • EBITDA from ongoing operations was $2.5 million in the third quarter of 2026, down from $16.8 million in the third quarter of 2025.
  • TSLOTS™ shipments increased 48% in the third quarter of 2026.
  • Open orders were 24 million pounds at the end of the third quarter of 2026, compared to 19 million pounds at the end of the third quarter of 2025.
  • Nonresidential building and construction volume decreased 14%, while consumer durables volume decreased 22% and automotive/transportation volume decreased 17%.
• High Performance Films:
  • Net sales decreased 8.1% to $23.8 million in the third quarter of 2026 versus $25.9 million in the third quarter of 2025, due to decreased sales volume and unfavorable mix.
  • Sales volume decreased 13.4% to 8.4 million pounds in the third quarter of 2026 versus 9.7 million pounds in the third quarter of 2025.
  • Surface Protection sales volume decreased 18.6% in the third quarter of 2026 versus the third quarter of 2025.
  • Advanced packaging films volume decreased 6.8% in the third quarter of 2026 versus the third quarter of 2025.
  • EBITDA from ongoing operations was $4.6 million in the third quarter of 2026, down from $7.2 million in the third quarter of 2025.
  • The top four customers comprised 85% of net sales for High Performance Films for the first nine months of 2026 and 2025.

Market and Competitive Landscape:

• The Architecture Billings Index (ABI) has demonstrated a decline in billings during 2026, including a sharp decrease in September 2026.
• U.S. trade policy changes announced in April 2026, intended to close loopholes for undervalued aluminum extrusions, 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 of aluminum.
• The memory chip market pressures may continue to affect customer production levels and High Performance Films' product mix through the remainder of 2026.
• Tariffs and duties continue to be passed through to customers under the Company's metal-cost adjustment mechanism.

Risks and Challenges:

• Bonnell Aluminum profitability was significantly affected by lower shipments amid continued pressure on building and construction demand and the timing lag of the pass-through of metal costs.
• High Performance Films experienced lower Surface Protection demand, unfavorable customer and product mix, and resin-cost pressures.
• Higher labor rates, unfavorable labor productivity due to a more labor-intensive production mix, higher maintenance associated with down equipment, and higher freight expense contributed to decreased contribution margins in Aluminum Extrusions.
• The timing of the flow-through under the FIFO method of aluminum raw materials costs resulted in a $2.8 million charge in the third quarter of 2026 versus a $4.3 million benefit in the third quarter of 2025.
• Higher fixed costs associated with wage and benefits increases impacted both segments.
• A foreign currency transaction loss of $0.1 million occurred in the third quarter of 2026 for High Performance Films.
• The Company faces risks related to trade policies, geopolitical conflicts, inflation, interest rates, raw material cost increases, and operational execution of cost-reduction initiatives.

Management Commentary and Tone:

• CEO Dr. Arijit (Bapi) DasGupta stated the company is "well on the way" to re-engineering Tredegar into a stronger operating company and creating sustainable shareholder value through the "One Tredegar" initiative.
• Management acknowledged third-quarter results were "not where we want them to be," citing broader market pressures and execution areas needing improvement.
• The company has added experienced leaders to critical roles to build a more capable, accountable, and execution-focused organization.
• Management is responding with urgency to factors within their control, focusing on operating reliability, productivity, cost discipline, supply-chain resilience, and cash generation.
• The next phase of "One Tredegar" aims to turn organizational change into measurable results by improving profitability, generating cash, and investing in opportunities that create long-term shareholder value.

Other Key Points:

• Corporate expenses, net, decreased $6.8 million in the first nine months of 2026 compared to the same period in 2025, driven by lower professional fees associated with business development activities, lower stock-based compensation, and lower employee-related incentive compensation.
• The Company does not expect significant expenses from business development activities in 2026.
• Bonnell Aluminum has proactively diversified its supply chain portfolio to support long-term stability, securing nearly all anticipated aluminum supply requirements for the remainder of 2026 and minimizing exposure to the Middle East.
• Bonnell Aluminum is optimizing billet casting operations at its Carthage, TN and Newnan, GA facilities to overcome localized production constraints.
• High Performance Films maintains pass-through mechanisms with customers for resin costs and has not experienced supply issues despite resin cost increases.
• The Company reported a gain of $0.6 million from the sale of the Terphane business in the first nine months of 2025, which is excluded from ongoing operations.
• The Company operates manufacturing facilities in North America and Asia with approximately 1,700 employees.