Tredegar — Third Quarter 2026 Earnings Summary

Financial Performance

• Reported a net loss from continuing operations of $(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 for the nine months ended September 30, 2026, was $8.3 million, or $0.24 per diluted share, compared to $9.6 million, or $0.28 per diluted share, in the same period of 2025.
• Net loss from ongoing operations (non-GAAP) was $(1.4) million, or $(0.04) per diluted share, for the third quarter of 2026, versus 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) for the nine months ended September 30, 2026, was $10.0 million, or $0.29 per diluted share, compared to $14.6 million, or $0.41 per diluted share, in the prior year period.
• Consolidated EBITDA from ongoing operations (non-GAAP) was $4.1 million for the third quarter of 2026, a decrease from $18.1 million in the third quarter of 2025.
• Consolidated EBITDA from ongoing operations for the nine months ended September 30, 2026, was $30.0 million, down from $39.7 million in the same period 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 (total debt less cash) was $32.7 million at September 30, 2026, compared to $28.4 million at December 31, 2025.
• Interest expense for the nine months ended September 30, 2026, was $1.4 million, down from $3.6 million in the same period of 2025.
• The effective tax rate from continuing operations for the nine months ended September 30, 2026, was 20.2%, compared to 27.1% in the prior year period.

Guidance and Future Outlook

• Management expects to begin realizing benefits from the "One Tredegar" initiative in the first quarter of 2027.
• The company is positioning both business segments to capitalize on strategic applications and larger customer opportunities in 2027.
• Capital expenditures for Bonnell Aluminum are projected to be $17 million for the full year 2026, including $4 million for productivity projects and $13 million for continuity of operations.
• Capital expenditures for High Performance Films are projected to be $2 million for the full year 2026.
• Depreciation expense is projected to be $15 million for Bonnell Aluminum and $4 million for High Performance Films in 2026.
• Amortization expense is projected to be $2 million for Bonnell Aluminum in 2026; there is no amortization expense projected for High Performance Films.
• Management anticipates that memory chip market pressures may continue to affect customer production levels and product mix for High Performance Films through the remainder of 2026.

Business Segments and Product Lines

• Aluminum Extrusions (Bonnell):
  • Net sales for the third quarter of 2026 were $177.3 million, up 9.1% from $162.5 million in the third quarter of 2025.
  • Sales volume decreased 11.6% to 36.5 million pounds in the third quarter of 2026 compared to 41.3 million pounds in the prior year period.
  • EBITDA from ongoing operations for the segment 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, supported by demand for modular aluminum framing systems.
  • Nonresidential building and construction volume decreased 14%, driven by higher pricing and economic uncertainty.
  • Consumer durables volume decreased 22%, and automotive/transportation volume declined 17%.
  • Net new orders averaged 2.8 million pounds per week in the third quarter of 2026, up from 2.6 million pounds per week in the prior year period.
  • Open orders at the end of the third quarter were 24 million pounds, compared to 19 million pounds in the prior year period.
  • The segment faced a $2.8 million charge related to the timing of aluminum raw material cost flow-through under the FIFO method.
• High Performance Films:
  • Net sales for the third quarter of 2026 were $23.8 million, down 8.1% from $25.9 million in the third quarter of 2025.
  • Sales volume decreased 13.4% to 8.4 million pounds in the third quarter of 2026 compared to 9.7 million pounds in the prior year period.
  • EBITDA from ongoing operations for the segment was $4.6 million in the third quarter of 2026, down from $7.2 million in the third quarter of 2025.
  • Surface Protection sales volume decreased 18.6% in the third quarter of 2026 due to weakened consumer electronics display market demand and inventory corrections.
  • Advanced packaging films volume decreased 6.8% in the third quarter of 2026.
  • The top four customers comprised 85% of net sales for the first nine months of 2026 and 2025.
  • The segment experienced a $0.5 million charge in the third quarter of 2026 related to the pass-through lag of higher resin costs.

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.
• Tariffs and duties continue to be passed through to customers via the metal-cost adjustment mechanism.
• Conflict-driven disruptions in the Strait of Hormuz beginning in March 2026 have constrained shipments and raised costs, contributing to historically low U.S. aluminum inventory levels.
• High Performance Films maintains pass-through mechanisms for resin costs and has not experienced supply issues despite resin cost increases driven by geopolitical tensions.

Risks and Challenges

• Bonnell Aluminum profitability was significantly affected by lower shipments amid continued pressure on building and construction demand.
• High Performance Films faced lower Surface Protection demand, unfavorable customer and product mix, and resin-cost pressures.
• The Aluminum Extrusions segment faced higher labor rates, unfavorable labor productivity due to a more labor-intensive production mix, higher maintenance costs, and higher freight expenses.
• The High Performance Films segment faced unfavorable pricing and mix in Surface Protection and unfavorable productivity in advanced packaging films.
• Forward-looking statements note risks including trade policies, geopolitical conflicts, macroeconomic factors (inflation, interest rates, recession), raw material cost increases, and potential disruptions to manufacturing facilities.

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 through the "One Tredegar" initiative.
• Management acknowledged third-quarter results were "not where we want them to be" and cited broader market pressures and execution areas needing improvement.
• The company is focusing on operating reliability, productivity, cost discipline, supply-chain resilience, and cash generation.
• Management highlighted the addition of experienced leaders to critical roles to build a more capable, accountable, and execution-focused organization.
• The next phase of "One Tredegar" aims to turn organizational change into measurable results by improving profitability, generating cash, and investing in opportunities with attractive returns.

Other Key Points

• The company proactively diversified Bonnell Aluminum's supply chain portfolio to minimize exposure to the Middle East and optimize billet casting operations at Carthage, TN, and Newnan, GA facilities.
• Corporate expenses, net, decreased $6.8 million in the first nine months of 2026 compared to 2025, driven by lower professional fees, stock-based compensation, and incentive compensation.
• The effective tax rate variance in 2025 was due to higher nondeductible discrete items, while the 2026 variance was due to research and development tax credits.
• The Company operates manufacturing facilities in North America and Asia with approximately 1,700 employees.
• The ABL revolving facility balance increased to $49.0 million at September 30, 2026, from $34.6 million at December 31, 2025.