x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the fiscal year ended December 31, 2020
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¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from to
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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) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Common Stock | TG | New York Stock Exchange |
(Title of class) |
Large accelerated filer | o | Accelerated filer | x | Smaller reporting company | o | ||||||||||||||||||
Non-accelerated filer |
o
|
Emerging growth company | o |
* | In determining this figure, an aggregate of 7,133,634 shares of Common Stock beneficially owned by Floyd D. Gottwald, Jr., John D. Gottwald, William M. Gottwald and the members of their immediate families has been excluded because the shares are deemed to be held by affiliates. The aggregate market value has been computed based on the closing price in the New York Stock Exchange on June 30, 2020. |
Page | |||||||||||
Major Markets | End-Uses | |||||||
Building & construction nonresidential |
Commercial windows and doors, curtain walls, storefronts and entrances, automatic entry doors, walkway covers, ducts, louvers and vents, office wall panels, partitions and interior enclosures, acoustical walls and ceilings, point of purchase displays, pre-engineered structures, and flooring trims (Futura TransitionsTM)
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Building & construction - residential | Residential windows and doors, shower and tub enclosures, railing and support systems, venetian blinds, and swimming pools | |||||||
Automotive and transportation | Automotive and light truck structural components, spare parts, after-market automotive accessories, grills for heavy trucks, travel trailers and recreation vehicles | |||||||
Consumer durables | Furniture, pleasure boats, refrigerators and freezers, appliances and sporting goods | |||||||
Machinery & equipment |
Material handling equipment, conveyors and conveying systems, medical equipment, and aluminum framing systems (TSLOTSTM)
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Distribution (metal service centers specializing in stock and release programs and custom fabrications to small manufacturers) | Various custom profiles including storm shutters, pleasure boat accessories, theater set structures and various standard profiles (including rod, bar, tube and pipe) | |||||||
Electrical and renewable energy | Lighting fixtures, electronic apparatus, solar panel brackets, and rigid and flexible conduits |
Locations in the U.S. | Locations Outside the U.S. | Principal Operations | ||||||||||||
Carthage, Tennessee
Clearfield, Utah (leased) Elkhart, Indiana Newnan, Georgia Niles, Michigan |
None | Production of aluminum extrusions, fabrication and finishing |
Locations in the U.S. | Locations Outside the U.S. | Principal Operations | ||||||||||||
Pottsville, Pennsylvania
Richmond, Virginia (technical center) (leased)
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Guangzhou, China | Production of plastic films |
Locations in the U.S. | Locations Outside the U.S. | Principal Operations | ||||||||||||
Bloomfield, New York (technical center and production facility) |
Cabo de Santo Agostinho, Brazil
|
Production of PET-based films |
*$100 invested on 12/31/15 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Copyright© 2021 Standard & Poor's, a division of S&P Global. All rights reserved.
Copyright© 2021 Russell Investment Group. All rights reserved.
|
Years Ended December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
(In thousands, except per-share data) | ||||||||||||||||||||||||||||||||||||||||||||
Results of Operations: | ||||||||||||||||||||||||||||||||||||||||||||
Sales | $ | 755,290 | $ | 826,324 | $ | 851,834 | $ | 725,867 | $ | 595,665 | ||||||||||||||||||||||||||||||||||
Other income (expense), net (g) | (67,294) | (a) | 28,371 | (a) | 30,455 | (a) | 51,718 | (b) | 2,225 | (b) | ||||||||||||||||||||||||||||||||||
Total | 687,996 | 854,695 | 882,289 | 777,585 | 597,890 | |||||||||||||||||||||||||||||||||||||||
Cost of goods sold (i) | 558,967 | (a) | 641,140 | (a) | 679,665 | (a) | 579,545 | (b) | 472,767 | (b) | ||||||||||||||||||||||||||||||||||
Freight | 25,686 | 28,980 | 27,170 | 22,273 | 17,864 | |||||||||||||||||||||||||||||||||||||||
Selling, general & administrative (i) | 84,246 | (a) | 76,598 | (a) | 67,929 | (a) | 65,189 | (b) | 58,334 | (b) | ||||||||||||||||||||||||||||||||||
Research and development | 8,398 | 7,893 | 6,672 | 6,189 | 6,877 | |||||||||||||||||||||||||||||||||||||||
Amortization of identifiable intangibles | 3,017 | 13,601 | 3,976 | 6,198 | 3,978 | |||||||||||||||||||||||||||||||||||||||
Pension and postretirement benefits (i) | 14,720 | 9,642 | 10,406 | 10,193 | 11,047 | |||||||||||||||||||||||||||||||||||||||
Interest expense | 2,587 | 4,051 | 5,702 | 6,170 | 3,806 | |||||||||||||||||||||||||||||||||||||||
Asset impairments and costs associated with exit and disposal activities, net of adjustments | 1,725 | (a) | 784 | (a) | 398 | (a) | 102,114 | (b) | 302 | (b) | ||||||||||||||||||||||||||||||||||
Goodwill impairment | 13,696 | (c) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Total | 713,042 | 782,689 | 801,918 | 797,871 | 574,975 | |||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (25,046) | 72,006 | 80,371 | (20,286) | 22,915 | |||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (8,213) | 13,545 | 18,807 | (57,753) | 4,786 | |||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | (16,833) | 58,461 | 61,564 | 37,467 | 18,129 | |||||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | (58,611) | (10,202) | (36,722) | 784 | 6,337 | |||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (75,444) | $ | 48,259 | $ | 24,842 | $ | 38,251 | $ | 24,466 | ||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | (0.51) | $ | 1.76 | $ | 1.86 | $ | 1.14 | $ | 0.55 | ||||||||||||||||||||||||||||||||||
Discontinued operations | (1.75) | (0.31) | (1.11) | 0.02 | 0.20 | |||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per share | $ | (2.26) | $ | 1.45 | $ | 0.75 | $ | 1.16 | $ | 0.75 |
Years Ended December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
(In thousands, except per-share data) | |||||||||||||||||||||||||||||
Share Data: | |||||||||||||||||||||||||||||
Equity per share (h) | $ | 3.26 | $ | 11.29 | $ | 10.70 | $ | 10.41 | $ | 9.44 | |||||||||||||||||||
Cash dividends declared per share (n) | $ | 6.45 | $ | 0.46 | $ | 0.44 | $ | 0.44 | $ | 0.44 | |||||||||||||||||||
Weighted average common shares outstanding during the period | 33,402 | 33,236 | 33,068 | 32,946 | 32,762 | ||||||||||||||||||||||||
Shares used to compute diluted earnings (loss) per share during the period | 33,402 | 33,258 | 33,092 | 32,951 | 32,775 | ||||||||||||||||||||||||
Shares outstanding at end of period | 33,457 | 33,365 | 33,176 | 33,017 | 32,934 | ||||||||||||||||||||||||
Closing market price per share: | |||||||||||||||||||||||||||||
High | $ | 22.32 | $ | 23.31 | $ | 26.25 | $ | 25.00 | $ | 25.55 | |||||||||||||||||||
Low | $ | 11.32 | $ | 15.59 | $ | 15.00 | $ | 14.85 | $ | 11.68 | |||||||||||||||||||
End of year | $ | 16.70 | $ | 22.35 | $ | 15.86 | $ | 19.20 | $ | 24.00 | |||||||||||||||||||
Total return to shareholders (d)(n) | 3.6 | % | 43.8 | % | (15.1) | % | (18.2) | % | 79.4 | % | |||||||||||||||||||
Financial Position: | |||||||||||||||||||||||||||||
Total assets | $ | 514,870 | $ | 712,668 | $ | 707,373 | $ | 755,743 | $ | 651,162 | |||||||||||||||||||
Cash and cash equivalents | $ | 11,846 | $ | 31,422 | $ | 34,397 | $ | 36,491 | $ | 29,511 | |||||||||||||||||||
Debt | $ | 134,000 | $ | 42,000 | $ | 101,500 | $ | 152,000 | $ | 95,000 | |||||||||||||||||||
Shareholders’ equity | $ | 109,055 | $ | 376,749 | $ | 354,857 | $ | 343,780 | $ | 310,783 | |||||||||||||||||||
Equity market capitalization (e) | $ | 558,735 | $ | 745,709 | $ | 526,172 | $ | 633,935 | $ | 790,411 |
Net Sales (f) | |||||||||||||||||||||||||||||
Years Ended December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Aluminum Extrusions | $ | 455,711 | $ | 529,602 | $ | 573,126 | $ | 466,833 | $ | 360,098 | |||||||||||||||||||
PE Films | 139,288 | 133,807 | 127,708 | 128,406 | 109,674 | ||||||||||||||||||||||||
Flexible Packaging Films | 134,605 | 133,935 | 123,830 | 108,355 | 108,028 | ||||||||||||||||||||||||
Total net sales | 729,604 | 797,344 | 824,664 | 703,594 | 577,800 | ||||||||||||||||||||||||
Add back freight | 25,686 | 28,980 | 27,170 | 22,273 | 17,864 | ||||||||||||||||||||||||
Sales as shown in Consolidated Statements of Income | $ | 755,290 | $ | 826,324 | $ | 851,834 | $ | 725,867 | $ | 595,664 | |||||||||||||||||||
Identifiable Assets | |||||||||||||||||||||||||||||
As of December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Aluminum Extrusions | $ | 244,560 | $ | 265,027 | $ | 281,372 | $ | 268,127 | $ | 147,639 | |||||||||||||||||||
PE Films | 119,013 | 124,269 | 118,496 | 123,507 | 117,307 | ||||||||||||||||||||||||
Flexible Packaging Films | 66,453 | 74,016 | 58,964 | 49,915 | 156,836 | ||||||||||||||||||||||||
Subtotal | 430,026 | 463,312 | 458,832 | 441,549 | 421,782 | ||||||||||||||||||||||||
General corporate | 71,508 | 109,655 | 99,570 | 109,882 | 37,345 | ||||||||||||||||||||||||
Cash and cash equivalents | 11,846 | 31,422 | 34,397 | 36,491 | 29,511 | ||||||||||||||||||||||||
Discontinued operations | 1,490 | 108,279 | 114,574 | 167,821 | 162,524 | ||||||||||||||||||||||||
Total | $ | 514,870 | $ | 712,668 | $ | 707,373 | $ | 755,743 | $ | 651,162 |
EBITDA from Ongoing Operations (l)
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Years Ended December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Aluminum Extrusions: | ||||||||||||||||||||||||||||||||||||||||||||
Ongoing operations: | ||||||||||||||||||||||||||||||||||||||||||||
EBITDA | $ | 55,137 | $ | 65,683 | $ | 65,479 | $ | 58,524 | $ | 46,967 | ||||||||||||||||||||||||||||||||||
Depreciation & amortization (j) | (17,403) | (16,719) | (16,866) | (15,070) | (9,173) | |||||||||||||||||||||||||||||||||||||||
EBIT (m) | 37,734 | 48,964 | 48,613 | 43,454 | 37,794 | |||||||||||||||||||||||||||||||||||||||
Plant shutdowns, asset impairments, restructurings and other | (3,506) | (a) | (561) | (a) | (505) | (a) | 321 | (b) | (741) | (b) | ||||||||||||||||||||||||||||||||||
Goodwill impairment charge | (13,696) | (c) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Trade name accelerated amortization | — | (10,040) | (j) | — | — | — | ||||||||||||||||||||||||||||||||||||||
PE Films: | ||||||||||||||||||||||||||||||||||||||||||||
Ongoing operations: | ||||||||||||||||||||||||||||||||||||||||||||
EBITDA | 45,107 | 41,133 | 32,404 | 37,029 | 21,535 | |||||||||||||||||||||||||||||||||||||||
Depreciation & amortization | (6,762) | (5,860) | (6,201) | (6,117) | (5,718) | |||||||||||||||||||||||||||||||||||||||
EBIT (m) | 38,345 | 35,273 | 26,203 | 30,912 | 15,817 | |||||||||||||||||||||||||||||||||||||||
Plant shutdowns, asset impairments, restructurings and other | (1,974) | (a) | (733) | (a) | (186) | (a) | (157) | (b) | (1) | (b) | ||||||||||||||||||||||||||||||||||
Flexible Packaging Films: | ||||||||||||||||||||||||||||||||||||||||||||
Ongoing operations: | ||||||||||||||||||||||||||||||||||||||||||||
EBITDA | 30,645 | 14,737 | 11,154 | 7,817 | 11,279 | |||||||||||||||||||||||||||||||||||||||
Depreciation & amortization | (1,761) | (1,517) | (1,262) | (10,443) | (9,505) | |||||||||||||||||||||||||||||||||||||||
EBIT (m) | 28,884 | 13,220 | 9,892 | (2,626) | 1,774 | |||||||||||||||||||||||||||||||||||||||
Plant shutdowns, asset impairments, restructurings and other | (18) | — | (a) | (45) | (a) | (89,398) | (b) | (214) | (b) | |||||||||||||||||||||||||||||||||||
Total | 85,769 | 86,123 | 83,972 | (17,494) | 54,429 | |||||||||||||||||||||||||||||||||||||||
Interest income | 44 | 66 | 146 | 54 | 106 | |||||||||||||||||||||||||||||||||||||||
Interest expense | 2,587 | 4,051 | 5,702 | 6,170 | 3,806 | |||||||||||||||||||||||||||||||||||||||
Gain (loss) on investment in kaléo accounted for under the fair value method (g) | (60,900) | 28,482 | 30,600 | 33,800 | 1,600 | |||||||||||||||||||||||||||||||||||||||
Loss on sale of Bright View (o) | (2,299) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Loss on sale of investment property | — | — | (38) | — | — | |||||||||||||||||||||||||||||||||||||||
Unrealized loss on investment property | — | — | (186) | — | (1,032) | |||||||||||||||||||||||||||||||||||||||
Stock option-based compensation expense | 2,161 | 4,132 | 1,156 | 245 | 81 | |||||||||||||||||||||||||||||||||||||||
Corporate expenses, net (k) | 42,912 | (a) | 34,482 | (a) | 27,265 | (a) | 30,231 | (b) | 28,301 | (b) | ||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (25,046) | 72,006 | 80,371 | (20,286) | 22,915 | |||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (8,213) | 13,545 | 18,807 | (57,753) | 4,786 | |||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | (16,833) | 58,461 | 61,564 | 37,467 | 18,129 | |||||||||||||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | (58,611) | (10,202) | (36,722) | 784 | 6,337 | (g) | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (75,444) | $ | 48,259 | $ | 24,842 | $ | 38,251 | $ | 24,466 |
Depreciation and Amortization | |||||||||||||||||||||||||||||
Years Ended December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Aluminum Extrusions | $ | 17,403 | $ | 26,759 | $ | 16,866 | $ | 15,070 | $ | 9,173 | |||||||||||||||||||
PE Films | 6,762 | 5,860 | 6,201 | 6,117 | 5,716 | ||||||||||||||||||||||||
Flexible Packaging Films | 1,761 | 1,517 | 1,262 | 10,443 | 9,505 | ||||||||||||||||||||||||
Subtotal | 25,926 | 34,136 | 24,329 | 31,630 | 24,394 | ||||||||||||||||||||||||
General corporate (k) | 520 | 186 | 163 | 155 | 141 | ||||||||||||||||||||||||
Discontinued operations | 5,511 | 9,962 | 9,312 | 8,492 | 7,937 | ||||||||||||||||||||||||
Total depreciation and amortization expense | $ | 31,957 | $ | 44,284 | $ | 33,804 | $ | 40,277 | $ | 32,472 | |||||||||||||||||||
Capital Expenditures | |||||||||||||||||||||||||||||
Years Ended December 31 | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Aluminum Extrusions | $ | 10,260 | $ | 17,855 | $ | 12,966 | $ | 25,653 | $ | 15,918 | |||||||||||||||||||
PE Films | 6,024 | 8,567 | 2,523 | 4,648 | 9,411 | ||||||||||||||||||||||||
Flexible Packaging Films | 4,959 | 8,866 | 5,423 | 3,619 | 3,391 | ||||||||||||||||||||||||
Subtotal | 21,243 | 35,288 | 20,912 | 33,920 | 28,720 | ||||||||||||||||||||||||
General corporate | 200 | 223 | 427 | 61 | 389 | ||||||||||||||||||||||||
Discontinued operations | 1,912 | 15,353 | 19,475 | 10,381 | 16,348 | ||||||||||||||||||||||||
Total capital expenditures | $ | 23,355 | $ | 50,864 | $ | 40,814 | $ | 44,362 | $ | 45,457 |
Year Ended | Favorable/ | ||||||||||||||||
(In thousands, except percentages) | December 31, | (Unfavorable) | |||||||||||||||
2020 | 2019 | % Change | |||||||||||||||
Sales volume (lbs) | 186,391 | 208,249 | (10.5) | % | |||||||||||||
Net sales | $ | 455,711 | $ | 529,602 | (14.0) | % | |||||||||||
Ongoing operations: | |||||||||||||||||
EBITDA | $ | 55,137 | $ | 65,683 | (16.1) | % | |||||||||||
Depreciation & amortization* | (17,403) | (16,719) | (4.1) | % | |||||||||||||
EBIT** | $ | 37,734 | $ | 48,964 | (22.9) | % | |||||||||||
Capital expenditures | $ | 10,260 | $ | 17,855 | |||||||||||||
* Excludes pre-tax accelerated amortization of trade names of $10.0 million in the year ended December 31, 2019.
** See the table in Item 6. “Selected Financial Data” of this Form 10-K (“Item 6”) for a reconciliation of this non-GAAP measure to GAAP.
|
Year Ended |
Favorable/
(Unfavorable) % Change |
||||||||||||||||
(In thousands, except percentages) | December 31, | ||||||||||||||||
2020 | 2019 | ||||||||||||||||
Sales volume (lbs) | 113,115 | 105,276 | 7.4 | % | |||||||||||||
Net sales | $ | 134,605 | $ | 133,935 | 0.5 | % | |||||||||||
Ongoing operations: | |||||||||||||||||
EBITDA | $ | 30,645 | $ | 14,737 | 107.9 | % | |||||||||||
Depreciation & amortization | (1,761) | (1,517) | (16.1) | % | |||||||||||||
EBIT* | $ | 28,884 | $ | 13,220 | 118.5 | % | |||||||||||
Capital expenditures | $ | 4,959 | $ | 8,866 | |||||||||||||
* See the table in Item 6 for a reconciliation of this non-GAAP measure to GAAP. |
(In millions, except percentages) | 2020 | 2019 | |||||||||
Floating-rate debt with interest charged on a rollover basis at one-month LIBOR plus a credit spread: | |||||||||||
Average outstanding debt balance | $ | 33.5 | $ | 85.0 | |||||||
Average interest rate | 2.3 | % | 4.0 | % |
(In millions, except percentages) | 2019 | 2018 | |||||||||
Floating-rate debt with interest charged on a rollover basis at one-month LIBOR plus a credit spread: | |||||||||||
Average outstanding debt balance | $ | 85.0 | $ | 121.3 | |||||||
Average interest rate | 4.0 | % | 3.8 | % |
Year Ended |
Favorable/
(Unfavorable) % Change |
||||||||||||||||
(In thousands, except percentages) | December 31, | ||||||||||||||||
2019 | 2018 | ||||||||||||||||
Sales volume (lbs) | 105,276 | 98,994 | 6.3 | % | |||||||||||||
Net sales | $ | 133,935 | $ | 123,830 | 8.2 | % | |||||||||||
Ongoing operations: | |||||||||||||||||
EBITDA | $ | 14,737 | $ | 11,154 | 32.1 | % | |||||||||||
Depreciation & amortization | (1,517) | (1,262) | (20.2) | % | |||||||||||||
EBIT* | $ | 13,220 | $ | 9,892 | 33.6 | % | |||||||||||
Capital expenditures | $ | 8,866 | $ | 5,423 | |||||||||||||
* See the table in Item 6 for a reconciliation of this non-GAAP measure to GAAP. |
Computations of Credit EBITDA, Leverage Ratio and Interest Coverage Ratio as Defined in the Credit Agreement Along with Related Most Restrictive Covenants
|
|||||
As of and for the Twelve Months Ended December 31, 2020 (In thousands) | |||||
Computations of Credit EBITDA as defined in Credit Agreement for the twelve months ended December 31, 2020 | |||||
Net income (loss) | $ | (75,444) | |||
Plus: | |||||
After-tax losses related to discontinued operations | 58,611 | ||||
Total income tax expense for continuing operations | — | ||||
Interest expense | 2,587 | ||||
Depreciation and amortization expense for continuing operations | 26,446 | ||||
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 $10,000) | 26,384 | ||||
Charges related to stock option grants and awards accounted for under the fair value-based method | 2,161 | ||||
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 | 60,900 | ||||
Minus: | |||||
After-tax income related to discontinued operations | — | ||||
Total income tax benefits for continuing operations | (8,213) | ||||
Interest income | (44) | ||||
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 | — | ||||
Credit EBITDA as defined in Credit Agreement | $ | 93,388 | |||
Computations of leverage and interest coverage ratios as defined in Credit Agreement at December 31, 2020: | |||||
Leverage ratio (indebtedness-to-Credit EBITDA) | 1.43x | ||||
Interest coverage ratio (Credit EBITDA-to-interest expense) | 36.1x | ||||
Most restrictive covenants as defined in Credit Agreement: | |||||
Maximum permitted aggregate amount of dividends that can be paid by Tredegar subsequent to Amendment No. 1 of the Credit Agreement ($75,000) | 75,000 | ||||
Maximum leverage ratio permitted | 4.00x | ||||
Minimum interest coverage ratio permitted | 3.00x |
Payments Due by Period | |||||||||||||||||||||||||||||||||||||||||
(In millions) | 2021 | 2022 | 2023 | 2024 | 2025 | Remainder | Total | ||||||||||||||||||||||||||||||||||
Debt: | |||||||||||||||||||||||||||||||||||||||||
Principal payments | $ | — | $ | — | $ | — | $ | 134.0 | $ | — | $ | — | $ | 134.0 | |||||||||||||||||||||||||||
Estimated interest expense | 2.3 | 2.3 | 2.3 | 1.1 | — | — | 8.0 | ||||||||||||||||||||||||||||||||||
Estimated contributions required: (1)
|
|||||||||||||||||||||||||||||||||||||||||
Defined benefit plans | 11.7 | 12.0 | 11.9 | 11.3 | 9.7 | 9.5 | 66.1 | ||||||||||||||||||||||||||||||||||
Other postretirement benefits | 0.5 | 0.5 | 0.5 | 0.5 | 0.5 | 2.1 | 4.6 | ||||||||||||||||||||||||||||||||||
Capital expenditure commitments | 1.3 | 3.1 | — | — | — | — | 4.4 | ||||||||||||||||||||||||||||||||||
Leases(2)
|
3.2 | 2.9 | 2.6 | 2.5 | 2.4 | 7.4 | 21.0 | ||||||||||||||||||||||||||||||||||
Estimated obligations relating to uncertain tax positions (3)
|
0.1 | — | — | — | — | 0.6 | 0.7 | ||||||||||||||||||||||||||||||||||
Other (4)
|
4.2 | 0.6 | — | — | — | — | 4.8 | ||||||||||||||||||||||||||||||||||
Total | $ | 23.3 | $ | 21.4 | $ | 17.3 | $ | 149.4 | $ | 12.6 | $ | 19.6 | $ | 243.6 |
Source: Quarterly averages computed by the Company using daily Midwest average prices provided by Platts. |
Source: Quarterly averages computed by Tredegar using monthly NYMEX settlement prices. |
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. |
Source: Quarterly averages computed by Tredegar using monthly data from CMAI Global Index data. |
Source: Quarterly averages computed by Tredegar using monthly data from CMAI Global Index data. |
Tredegar Corporation
Percentage of Net Sales and Total Assets Related to Foreign Markets* |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||
% of Total |
% Total
Assets - Foreign Operations |
% of Total |
% Total
Assets - Foreign Operations |
% of Total |
% Total
Assets -Foreign Operations |
||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | Net Sales | Net Sales | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exports
From U.S. |
Foreign Operations |
Exports
From U.S. |
Foreign Operations |
Exports
From U.S. |
Foreign Operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Canada | 2 | — | — | 2 | — | — | 2 | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Europe | 1 | — | — | 1 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Latin America | — | 13 | 10 | 1 | 12 | 7 | — | 10 | 7 | ||||||||||||||||||||||||||||||||||||||||||||
Asia | 11 | — | 4 | 10 | — | 3 | 9 | 1 | 3 | ||||||||||||||||||||||||||||||||||||||||||||
Total | 14 | 13 | 14 | 14 | 12 | 10 | 11 | 11 | 10 |
* | The percentages for foreign markets are relative to Tredegar’s consolidated net sales and total assets . |
Source: Quarterly averages computed by Tredegar using daily closing data provided by Bloomberg. |
Name | Age | Title | ||||||||||||
John M. Steitz | 62 | President and Chief Executive Officer | ||||||||||||
D. Andrew Edwards | 62 | Executive Vice President and Chief Financial Officer | ||||||||||||
Kevin C. Donnelly | 46 | Vice President, General Counsel and Corporate Secretary |
(a) | List of documents filed as a part of the report: | |||||||
(1) | Financial statements: | |||||||
Tredegar Corporation | ||||||||
Index to Financial Statements and Supplementary Data | ||||||||
Page | ||||||||
Auditors’ Opinions: | ||||||||
Financial Statements: | ||||||||
(2) | Financial statement schedules: | |||||||
None | ||||||||
(3) | ||||||||
December 31 | |||||||||||
2020 | 2019 | ||||||||||
(In thousands, except share data) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 11,846 | $ | 31,422 | |||||||
Accounts and other receivables, net of allowance for doubtful accounts and sales returns of $2,797 in 2020 and $1,904 in 2019
|
86,327 | 89,117 | |||||||||
Income taxes recoverable | 2,807 | 2,661 | |||||||||
Inventories | 66,437 | 64,205 | |||||||||
Prepaid expenses and other | 19,679 | 8,333 | |||||||||
Current assets of discontinued operations | 1,339 | 37,418 | |||||||||
Total current assets | 188,435 | 233,156 | |||||||||
Property, plant and equipment, at cost: | |||||||||||
Land and land improvements | 4,544 | 4,554 | |||||||||
Buildings | 66,406 | 64,311 | |||||||||
Machinery and equipment | 404,669 | 413,856 | |||||||||
Total property, plant and equipment | 475,619 | 482,721 | |||||||||
Less accumulated depreciation | (309,074) | (309,165) | |||||||||
Net property, plant and equipment | 166,545 | 173,556 | |||||||||
Right-of-use leased assets | 16,037 | 18,492 | |||||||||
Investment in kaléo (cost basis of $7,500) | 34,600 | 95,500 | |||||||||
Identifiable intangible assets, net | 18,820 | 22,636 | |||||||||
Goodwill | 67,708 | 81,404 | |||||||||
Deferred income tax assets | 19,068 | 12,435 | |||||||||
Other assets | 3,506 | 4,628 | |||||||||
Non-current assets of discontinued operations | 151 | 70,861 | |||||||||
Total assets | $ | 514,870 | $ | 712,668 | |||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 89,702 | $ | 87,296 | |||||||
Accrued expenses | 40,741 | 39,465 | |||||||||
Lease liability, short-term | 2,082 | 2,427 | |||||||||
Income taxes payable | 706 | — | |||||||||
Current liabilities of discontinued operations | 7,521 | 23,280 | |||||||||
Total current liabilities | 140,752 | 152,468 | |||||||||
Lease liability, long-term | 14,949 | 17,338 | |||||||||
Long-term debt | 134,000 | 42,000 | |||||||||
Pension and other postretirement benefit obligations, net | 110,585 | 107,446 | |||||||||
Deferred income tax liabilities | — | 11,019 | |||||||||
Other non-current liabilities | 5,529 | 5,297 | |||||||||
Non-current liabilities of discontinued operations | — | 351 | |||||||||
Total liabilities | 405,815 | 335,919 | |||||||||
Shareholders’ equity: | |||||||||||
Common stock (no par value): | |||||||||||
Authorized 150,000,000 shares;
|
|||||||||||
Issued and outstanding— 33,457,176 shares in 2020 and 33,365,039 in 2019 (including restricted stock)
|
50,066 | 45,514 | |||||||||
Common stock held in trust for savings restoration plan (105,067 shares in 2020 and 74,798 in 2019)
|
(2,087) | (1,592) | |||||||||
Accumulated other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment | (84,149) | (100,663) | |||||||||
Gain (loss) on derivative financial instruments | 2,264 | (1,307) | |||||||||
Pension and other postretirement benefit adjustments | (96,519) | (95,681) | |||||||||
Retained earnings | 239,480 | 530,478 | |||||||||
Total shareholders’ equity | 109,055 | 376,749 | |||||||||
Total liabilities and shareholders’ equity | $ | 514,870 | $ | 712,668 |
Years Ended December 31 | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands, except per-share data) | |||||||||||||||||
Revenues and other: | |||||||||||||||||
Sales | $ | 755,290 | $ | 826,324 | $ | 851,834 | |||||||||||
Other income (expense), net | (67,294) | 28,371 | 30,455 | ||||||||||||||
687,996 | 854,695 | 882,289 | |||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of goods sold | 558,967 | 641,140 | 679,665 | ||||||||||||||
Freight | 25,686 | 28,980 | 27,170 | ||||||||||||||
Selling, general and administrative | 84,246 | 76,598 | 67,929 | ||||||||||||||
Research and development | 8,398 | 7,893 | 6,672 | ||||||||||||||
Amortization of identifiable intangibles | 3,017 | 13,601 | 3,976 | ||||||||||||||
Pension and postretirement benefits | 14,720 | 9,642 | 10,406 | ||||||||||||||
Interest expense | 2,587 | 4,051 | 5,702 | ||||||||||||||
Asset impairments and costs associated with exit and disposal activities, net of adjustments | 1,725 | 784 | 398 | ||||||||||||||
Goodwill impairment | 13,696 | — | — | ||||||||||||||
Total | 713,042 | 782,689 | 801,918 | ||||||||||||||
Income (loss) from continuing operations before income taxes | (25,046) | 72,006 | 80,371 | ||||||||||||||
Income tax expense (benefit) | (8,213) | 13,545 | 18,807 | ||||||||||||||
Net income (loss) from continuing operations | (16,833) | 58,461 | 61,564 | ||||||||||||||
Income (loss) from discontinued operations, net of tax | (58,611) | (10,202) | (36,722) | ||||||||||||||
Net income (loss) | $ | (75,444) | $ | 48,259 | $ | 24,842 | |||||||||||
Earnings (loss) per share: | |||||||||||||||||
Basic: | |||||||||||||||||
Continuing operations | $ | (0.51) | $ | 1.76 | $ | 1.86 | |||||||||||
Discontinued operations | (1.75) | (0.31) | (1.11) | ||||||||||||||
Basic earnings (loss) per share | $ | (2.26) | $ | 1.45 | $ | 0.75 | |||||||||||
Diluted: | |||||||||||||||||
Continuing operations | $ | (0.51) | $ | 1.76 | $ | 1.86 | |||||||||||
Discontinued operations | (1.75) | (0.31) | (1.11) | ||||||||||||||
Diluted earnings (loss) per share | $ | (2.26) | $ | 1.45 | $ | 0.75 | |||||||||||
Shares used to compute earnings (loss) per share: | |||||||||||||||||
Basic | 33,402 | 33,236 | 33,068 | ||||||||||||||
Diluted | 33,402 | 33,258 | 33,092 |
Years Ended December 31 | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Net income (loss) | $ | (75,444) | $ | 48,259 | $ | 24,842 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||||
Unrealized foreign currency translation adjustment (net of tax benefit of $897 in 2020, net of tax benefit of $623 in 2019 and net of tax of $281 in 2018)
|
(8,781) | (3,723) | (10,762) | ||||||||||||||
Reclassification of foreign currency translation loss realized on the sale of Personal Care Films | 25,295 | — | — | ||||||||||||||
Derivative financial instruments adjustment (net of tax of $790 in 2020, net of tax of $71 in 2019 and net of tax benefit of $503 in 2018)
|
3,571 | 294 | (2,060) | ||||||||||||||
Pension & other postretirement benefit adjustments: | |||||||||||||||||
Net gains (losses) and prior service costs (net of tax benefit of $4,228 in 2020, net of tax benefit of $6,417 in 2019 and net of tax benefit of $319 in 2018)
|
(12,197) | (22,508) | (1,118) | ||||||||||||||
Amortization of prior service costs and net gains or losses (net of tax of $3,937 in 2020, net of tax of $2,359 in 2019 and net of tax of $3,028 in 2018)
|
11,359 | 8,273 | 10,622 | ||||||||||||||
Other comprehensive income (loss) | 19,247 | (17,664) | (3,318) | ||||||||||||||
Comprehensive income (loss) | $ | (56,197) | $ | 30,595 | $ | 21,524 |
Years Ended December 31 | |||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | |||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income (loss) | $ | (75,444) | $ | 48,259 | $ | 24,842 | |||||||||||
Adjustments for noncash items: | |||||||||||||||||
Depreciation | 28,940 | 30,683 | 29,828 | ||||||||||||||
Amortization of identifiable intangibles | 3,017 | 13,601 | 3,976 | ||||||||||||||
Goodwill impairment | 13,696 | — | 46,792 | ||||||||||||||
Reduction of right-of-use lease asset | 2,753 | 2,588 | — | ||||||||||||||
Deferred income taxes | (16,892) | 5,856 | 8,626 | ||||||||||||||
Accrued pension and postretirement benefits | 14,720 | 9,642 | 10,406 | ||||||||||||||
(Gain) loss on investment in kaléo accounted for under the fair value method | 60,900 | (10,900) | (30,600) | ||||||||||||||
Loss on sale of divested businesses | 52,326 | — | — | ||||||||||||||
Net gain on disposal of assets | — | (6,334) | (46) | ||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||
Accounts and other receivables | (335) | 16,471 | (11,883) | ||||||||||||||
Inventories | (4,366) | 11,315 | (9,577) | ||||||||||||||
Income taxes recoverable/payable | 1,617 | 2,644 | 25,018 | ||||||||||||||
Prepaid expenses and other | (2,203) | 795 | (1,924) | ||||||||||||||
Accounts payable and accrued expenses | 4,045 | (2,937) | 5,571 | ||||||||||||||
Lease liability | (3,049) | (2,723) | — | ||||||||||||||
Pension and postretirement benefit plan contributions | (12,681) | (8,614) | (8,907) | ||||||||||||||
Other, net | 7,329 | 5,517 | 5,672 | ||||||||||||||
Net cash provided by operating activities | 74,373 | 115,863 | 97,794 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Capital expenditures | (23,355) | (50,864) | (40,814) | ||||||||||||||
Return of escrowed funds relating to acquisition earn-out | — | — | 4,250 | ||||||||||||||
Net proceeds on sale of divested businesses | 56,236 | — | — | ||||||||||||||
Net proceeds from the sale of investment property | — | — | 1,384 | ||||||||||||||
Proceeds from the sale of assets and other | — | 10,936 | 1,098 | ||||||||||||||
Net cash provided by (used in) investing activities | 32,881 | (39,928) | (34,082) | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Borrowings | 162,250 | 65,500 | 76,750 | ||||||||||||||
Debt principal payments | (70,250) | (125,000) | (127,250) | ||||||||||||||
Dividends paid | (216,049) | (15,325) | (14,592) | ||||||||||||||
Debt financing costs | (693) | (1,817) | — | ||||||||||||||
Repurchase of employee common stock for tax withholdings | (850) | (854) | (328) | ||||||||||||||
Proceeds from exercise of stock options and other | — | 184 | 1,332 | ||||||||||||||
Net cash provided by (used in) financing activities: | (125,592) | (77,312) | (64,088) | ||||||||||||||
Effect of exchange rate changes on cash | (1,238) | (1,598) | (1,718) | ||||||||||||||
Increase (decrease) in cash and cash equivalents | (19,576) | (2,975) | (2,094) | ||||||||||||||
Cash and cash equivalents at beginning of period | 31,422 | 34,397 | 36,491 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 11,846 | $ | 31,422 | $ | 34,397 | |||||||||||
Supplemental cash flow information: | |||||||||||||||||
Interest payments | $ | 1,679 | $ | 4,358 | $ | 5,421 | |||||||||||
Income tax payments (refunds), net | $ | 1,670 | $ | 2,595 | $ | (24,020) |
Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock |
Retained
Earnings |
Trust for Savings Restoration Plan | Foreign Currency Translation | Gain (Loss) on Derivative Financial Instruments |
Pension & Other
Postretirement Benefit Adjust |
Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
(In thousands, except share and per-share data) | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2018 | 33,017,422 | $ | 34,747 | $ | 487,230 | $ | (1,528) | $ | (86,178) | $ | 459 | $ | (90,950) | $ | 343,780 | ||||||||||||||||||||||||||||||||
Net income | — | — | 24,842 | — | — | — | — | 24,842 | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (10,762) | — | — | (10,762) | |||||||||||||||||||||||||||||||||||||||
Derivative financial instruments adjustment | — | — | — | — | — | (2,060) | — | (2,060) | |||||||||||||||||||||||||||||||||||||||
Net gains or losses and prior service costs | — | — | — | — | — | — | (1,118) | (1,118) | |||||||||||||||||||||||||||||||||||||||
Amortization of prior service costs and net gains or losses | — | — | — | — | — | — | 10,622 | 10,622 | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.44 per share)
|
— | — | (14,592) | — | — | — | — | (14,592) | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 102,762 | 3,141 | — | — | — | — | — | 3,141 | |||||||||||||||||||||||||||||||||||||||
Repurchase of employee common stock for tax withholdings | (17,558) | (328) | — | — | — | — | — | (328) | |||||||||||||||||||||||||||||||||||||||
Issued upon exercise of stock options | 73,398 | 1,332 | — | — | — | — | — | 1,332 | |||||||||||||||||||||||||||||||||||||||
Tredegar common stock purchased by trust for savings restoration plan | — | — | 31 | (31) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | 33,176,024 | 38,892 | 497,511 | (1,559) | (96,940) | (1,601) | (81,446) | 354,857 | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | 48,259 | — | — | — | — | 48,259 | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (3,723) | — | — | (3,723) | |||||||||||||||||||||||||||||||||||||||
Derivative financial instruments adjustment | — | — | — | — | — | 294 | — | 294 | |||||||||||||||||||||||||||||||||||||||
Net gains or losses and prior service costs | — | — | — | — | — | — | (22,508) | (22,508) | |||||||||||||||||||||||||||||||||||||||
Amortization of prior service costs and net gains or losses | — | — | — | — | — | — | 8,273 | 8,273 | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($0.46 per share)
|
— | — | (15,325) | — | — | — | — | (15,325) | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 228,959 | 7,292 | — | — | — | — | — | 7,292 | |||||||||||||||||||||||||||||||||||||||
Repurchase of employee common stock for tax withholdings | (49,444) | (854) | — | — | — | — | — | (854) | |||||||||||||||||||||||||||||||||||||||
Issued upon exercise of stock options | 9,500 | 184 | — | — | — | — | — | 184 | |||||||||||||||||||||||||||||||||||||||
Tredegar common stock purchased by trust for savings restoration plan | — | — | 33 | (33) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | 33,365,039 | 45,514 | 530,478 | (1,592) | (100,663) | (1,307) | (95,681) | 376,749 | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | (75,444) | — | — | — | — | (75,444) | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | (8,781) | — | — | (8,781) | |||||||||||||||||||||||||||||||||||||||
Foreign currency translation loss realized on the sale of Personal Care Films | 25,295 | 25,295 | |||||||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments adjustment | — | — | — | — | — | 3,571 | — | 3,571 | |||||||||||||||||||||||||||||||||||||||
Net gains or losses and prior service costs | — | — | — | — | — | — | (12,197) | (12,197) | |||||||||||||||||||||||||||||||||||||||
Amortization of prior service costs and net gains or losses | — | — | — | — | — | — | 11,359 | 11,359 | |||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($6.45 per share)
|
— | — | (216,049) | — | — | — | — | (216,049) | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 131,354 | 5,402 | — | — | — | — | — | 5,402 | |||||||||||||||||||||||||||||||||||||||
Repurchase of employee common stock for tax withholdings | (39,217) | (850) | — | — | — | — | — | (850) | |||||||||||||||||||||||||||||||||||||||
Tredegar common stock purchased by trust for savings restoration plan | — | — | 495 | (495) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 33,457,176 | $ | 50,066 | $ | 239,480 | $ | (2,087) | $ | (84,149) | $ | 2,264 | $ | (96,519) | $ | 109,055 |
2020 | 2019 | 2018 | |||||||||||||||
Weighted average shares outstanding used to compute basic earnings per share | 33,402,147 | 33,236,115 | 33,067,800 | ||||||||||||||
Incremental shares attributable to stock options and restricted stock | — | 22,022 | 24,674 | ||||||||||||||
Shares used to compute diluted earnings per share | 33,402,147 | 33,258,137 | 33,092,474 |
(In thousands) | Foreign currency translation adjustment | Gain (loss) on derivative financial instruments | Pension and other post-retirement benefit adjustments | Total | |||||||||||||||||||
Beginning balance, January 1, 2020 | $ | (100,663) | $ | (1,307) | $ | (95,681) | $ | (197,651) | |||||||||||||||
Other comprehensive income (loss) before reclassifications | (8,781) | (3,285) | (12,197) | (24,263) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 25,295 | 6,856 | 11,359 | 43,510 | |||||||||||||||||||
Net other comprehensive income (loss) - current period | 16,514 | 3,571 | (838) | 19,247 | |||||||||||||||||||
Ending balance, December 31, 2020 | $ | (84,149) | $ | 2,264 | $ | (96,519) | $ | (178,404) |
(In thousands) | Foreign currency translation adjustment | Gain (loss) on derivative financial instruments | Pension and other post-retirement benefit adjustments | Total | |||||||||||||||||||
Beginning balance, January 1, 2019 | $ | (96,940) | $ | (1,601) | $ | (81,446) | $ | (179,987) | |||||||||||||||
Other comprehensive income (loss) before reclassifications | (3,723) | (2,686) | (22,508) | (28,917) | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 2,980 | 8,273 | 11,253 | |||||||||||||||||||
Net other comprehensive income (loss) - current period | (3,723) | 294 | (14,235) | (17,664) | |||||||||||||||||||
Ending balance, December 31, 2019 | $ | (100,663) | $ | (1,307) | $ | (95,681) | $ | (197,651) |
Years Ended December 31 | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Revenues and other items: | |||||||||||||||||
Sales | $ | 110,246 | $ | 146,034 | $ | 213,637 | |||||||||||
Other income (expense), net | (333) | 6,424 | 4 | ||||||||||||||
109,913 | 152,458 | 213,641 | |||||||||||||||
Costs and expenses: | |||||||||||||||||
Cost of goods sold | 92,079 | 126,371 | 170,091 | ||||||||||||||
Freight | 5,229 | 7,083 | 8,857 | ||||||||||||||
Selling, general and administrative | 16,824 | 17,754 | 17,354 | ||||||||||||||
Research and development | 8,863 | 11,743 | 12,035 | ||||||||||||||
Asset impairments and costs associated with exit and disposal activities, net of adjustments | 1,529 | 3,341 | 2,515 | ||||||||||||||
Goodwill impairment | — | — | 46,792 | ||||||||||||||
Loss on sale of business | 50,027 | — | — | ||||||||||||||
Total | 174,551 | 166,292 | 257,644 | ||||||||||||||
Income (loss) from discontinued operations before income taxes | (64,638) | (13,834) | (44,003) | ||||||||||||||
Income tax expense (benefit) | (6,027) | (3,632) | (7,281) | ||||||||||||||
Income (loss) from discontinued operations, net of tax | $ | (58,611) | $ | (10,202) | $ | (36,722) |
Year Ended December 31, | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Operating activities: | |||||||||||||||||
Depreciation and amortization | $ | 5,511 | $ | 9,962 | $ | 9,312 | |||||||||||
Gain from the sale of the Shanghai manufacturing facility assets
|
— | (6,316) | — | ||||||||||||||
Loss on sale of Personal Care Films | 50,027 | — | — | ||||||||||||||
Total | 55,538 | 3,646 | 9,312 | ||||||||||||||
Investing activities: | |||||||||||||||||
Net proceeds on sale of Personal Care Films | $ | 55,115 | $ | — | $ | — | |||||||||||
Proceeds from the sale of the Shanghai manufacturing facility assets
|
— | 10,936 | — | ||||||||||||||
Capital expenditures | (1,912) | (15,353) | (19,475) | ||||||||||||||
Total | $ | 53,203 | $ | (4,417) | $ | (19,475) |
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
(Loss) gain on investment in kaléo accounted for under fair value method | $ | (60,900) | $ | 28,482 | $ | 30,600 | |||||||||||
Loss on sale of Bright View Technologies | (2,299) | — | — | ||||||||||||||
Corporate costs associated with the divestiture of Personal Care Films | (851) | — | — | ||||||||||||||
COVID-19-related expenses (a) | (2,231) | — | — | ||||||||||||||
Other | (1,013) | (111) | (145) | ||||||||||||||
Total | $ | (67,294) | $ | 28,371 | $ | 30,455 | |||||||||||
(a) Costs associated with operating under COVID-19 conditions include employee overtime expenses associated with absenteeism, personal protective equipment supplies and facility maintenance. |
Net Sales | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Aluminum Extrusions | $ | 455,711 | $ | 529,602 | $ | 573,126 | |||||||||||
PE Films | 139,288 | 133,807 | 127,708 | ||||||||||||||
Flexible Packaging Films | 134,605 | 133,935 | 123,830 | ||||||||||||||
Total net sales | 729,604 | 797,344 | 824,664 | ||||||||||||||
Add back freight | 25,686 | 28,980 | 27,170 | ||||||||||||||
Sales as shown in consolidated statements of income | $ | 755,290 | $ | 826,324 | $ | 851,834 |
EBITDA from Ongoing Operations | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Aluminum Extrusions: | |||||||||||||||||
Ongoing operations: | |||||||||||||||||
EBITDA | $ | 55,137 | $ | 65,683 | $ | 65,479 | |||||||||||
Depreciation & amortization (d) | (17,403) | (16,719) | (16,866) | ||||||||||||||
EBIT | 37,734 | 48,964 | 48,613 | ||||||||||||||
Plant shutdowns, asset impairments, restructurings and other (a) | (3,506) | (561) | (505) | ||||||||||||||
Goodwill impairment charge | (13,696) | — | — | ||||||||||||||
Trade name accelerated amortization (d) | — | (10,040) | — | ||||||||||||||
PE Films: | |||||||||||||||||
Ongoing operations: | |||||||||||||||||
EBITDA | 45,107 | 41,133 | 32,404 | ||||||||||||||
Depreciation & amortization | (6,762) | (5,860) | (6,201) | ||||||||||||||
EBIT | 38,345 | 35,273 | 26,203 | ||||||||||||||
Plant shutdowns, asset impairments, restructurings and other (a) | (1,974) | (733) | (186) | ||||||||||||||
Flexible Packaging Films: | |||||||||||||||||
Ongoing operations: | |||||||||||||||||
EBITDA | 30,645 | 14,737 | 11,154 | ||||||||||||||
Depreciation & amortization | (1,761) | (1,517) | (1,262) | ||||||||||||||
EBIT | 28,884 | 13,220 | 9,892 | ||||||||||||||
Plant shutdowns, asset impairments, restructurings and other (a) | (18) | — | (45) | ||||||||||||||
Total | 85,769 | 86,123 | 83,972 | ||||||||||||||
Interest income | 44 | 66 | 146 | ||||||||||||||
Interest expense | 2,587 | 4,051 | 5,702 | ||||||||||||||
Gain (loss) on investment in kaléo accounted for under the fair value method (a) | (60,900) | 28,482 | 30,600 | ||||||||||||||
Loss on sale of Bright View (f) | (2,299) | — | — | ||||||||||||||
Loss on sale of investment property (a) | — | — | (38) | ||||||||||||||
Unrealized loss on investment property (a) | — | — | (186) | ||||||||||||||
Stock option-based compensation expense | 2,161 | 4,132 | 1,156 | ||||||||||||||
Corporate expenses, net (a) | 42,912 | 34,482 | 27,265 | ||||||||||||||
Income (loss) from continuing operations before income taxes | (25,046) | 72,006 | 80,371 | ||||||||||||||
Income tax expense (benefit) (a) | (8,213) | 13,545 | 18,807 | ||||||||||||||
Income (loss) from continuing operations | (16,833) | 58,461 | 61,564 | ||||||||||||||
Income (loss) from discontinued operations, net of tax (a) | (58,611) | (10,202) | (36,722) | ||||||||||||||
Net income (loss) | $ | (75,444) | $ | 48,259 | $ | 24,842 |
Identifiable Assets | |||||||||||
(In thousands) | 2020 | 2019 | |||||||||
Aluminum Extrusions | $ | 244,560 | $ | 265,027 | |||||||
PE Films | 119,013 | 124,269 | |||||||||
Flexible Packaging Films | 66,453 | 74,016 | |||||||||
Subtotal | 430,026 | 463,312 | |||||||||
General corporate | 71,508 | 109,655 | |||||||||
Cash and cash equivalents (b) | 11,846 | 31,422 | |||||||||
Discontinued operations | 1,490 | 108,279 | |||||||||
Total | $ | 514,870 | $ | 712,668 |
Depreciation and Amortization | Capital Expenditures | ||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||
Aluminum Extrusions | $ | 17,403 | $ | 26,759 | $ | 16,866 | $ | 10,260 | $ | 17,855 | $ | 12,966 | |||||||||||||||||||||||
PE Films | 6,762 | 5,860 | 6,201 | 6,024 | 8,567 | 2,523 | |||||||||||||||||||||||||||||
Flexible Packaging Films | 1,761 | 1,517 | 1,262 | 4,959 | 8,866 | 5,423 | |||||||||||||||||||||||||||||
Subtotal | 25,926 | 34,136 | 24,329 | 21,243 | 35,288 | 20,912 | |||||||||||||||||||||||||||||
General corporate (e) | 520 | 186 | 163 | 200 | 223 | 427 | |||||||||||||||||||||||||||||
Discontinued operations | 5,511 | 9,962 | 9,312 | 1,912 | 15,353 | 19,475 | |||||||||||||||||||||||||||||
Total | $ | 31,957 | $ | 44,284 | $ | 33,804 | $ | 23,355 | $ | 50,864 | $ | 40,814 |
Net Sales by Geographic Area (c) | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
United States | $ | 530,243 | $ | 593,599 | $ | 636,968 | |||||||||||
Exports from the United States to: | |||||||||||||||||
Asia | 80,217 | 82,342 | 74,499 | ||||||||||||||
Canada | 18,024 | 15,022 | 16,467 | ||||||||||||||
Europe | 5,440 | 5,752 | 3,909 | ||||||||||||||
Latin America | 2,169 | 4,135 | 991 | ||||||||||||||
Operations outside the United States: | |||||||||||||||||
Brazil | 93,511 | 96,274 | 85,868 | ||||||||||||||
China | — | 220 | 5,962 | ||||||||||||||
Total | $ | 729,604 | $ | 797,344 | $ | 824,664 |
Identifiable Assets
by Geographic Area (c) |
Property, Plant & Equipment,
Net by Geographic Area (c) |
||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
United States | $ | 363,106 | $ | 403,366 | $ | 132,268 | $ | 140,609 | |||||||||||||||
Operations outside the United States: | |||||||||||||||||||||||
Brazil | 49,157 | 41,890 | 15,588 | 15,348 | |||||||||||||||||||
China | 17,763 | 18,056 | 16,245 | 16,210 | |||||||||||||||||||
General corporate | 71,508 | 109,655 | 2,444 | 1,389 | |||||||||||||||||||
Cash and cash equivalents (b) | 11,846 | 31,422 | n/a | n/a | |||||||||||||||||||
Discontinued operations | 1,490 | 108,279 | — | 69,334 | |||||||||||||||||||
Total | $ | 514,870 | $ | 712,668 | $ | 166,545 | $ | 242,890 |
Net Sales by Product Group | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Aluminum Extrusions: | |||||||||||||||||
Nonresidential building & construction | $ | 253,126 | $ | 272,729 | $ | 289,572 | |||||||||||
Consumer durables | 44,167 | 57,607 | 66,416 | ||||||||||||||
Automotive | 35,895 | 46,461 | 48,037 | ||||||||||||||
Machinery & equipment | 30,649 | 38,657 | 41,899 | ||||||||||||||
Distribution | 28,339 | 34,753 | 40,924 | ||||||||||||||
Residential building & construction | 40,049 | 43,554 | 43,943 | ||||||||||||||
Electrical | 23,486 | 35,841 | 42,335 | ||||||||||||||
Subtotal | 455,711 | 529,602 | 573,126 | ||||||||||||||
PE Films: | |||||||||||||||||
Surface protection films | 109,097 | 103,893 | 98,126 | ||||||||||||||
Packaging | 22,700 | 22,542 | 22,310 | ||||||||||||||
LED-based products | 7,491 | 7,372 | 7,272 | ||||||||||||||
Subtotal | 139,288 | 133,807 | 127,708 | ||||||||||||||
Flexible Packaging Films | 134,605 | 133,935 | 123,830 | ||||||||||||||
Total | $ | 729,604 | $ | 797,344 | $ | 824,664 |
(In thousands) | 2020 | 2019 | |||||||||
Customer receivables | $ | 85,274 | $ | 88,822 | |||||||
Other accounts and notes receivable | 3,850 | 2,199 | |||||||||
Total accounts and other receivables | 89,124 | 91,021 | |||||||||
Less: Allowance for bad debts and sales returns | (2,797) | (1,904) | |||||||||
Total accounts and other receivables, net | $ | 86,327 | $ | 89,117 |
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Balance, beginning of year | $ | 1,904 | $ | 2,054 | $ | 2,227 | |||||||||||
Charges to expense | 1,901 | 715 | 450 | ||||||||||||||
Recoveries | (90) | (38) | (85) | ||||||||||||||
Write-offs and settlements | (709) | (756) | (414) | ||||||||||||||
Foreign exchange and other | (209) | (71) | (124) | ||||||||||||||
Balance, end of year | $ | 2,797 | $ | 1,904 | $ | 2,054 |
(In thousands) | 2020 | 2019 | |||||||||
Finished goods | $ | 15,251 | $ | 18,217 | |||||||
Work-in-process | 9,098 | 12,123 | |||||||||
Raw materials | 25,913 | 20,121 | |||||||||
Stores, supplies and other | 16,175 | 13,744 | |||||||||
Total | $ | 66,437 | $ | 64,205 |
(In thousands) | 2020 | 2019 | Amortization Periods | ||||||||||||||
Goodwill | $ | 67,708 | $ | 81,404 | Not amortized | ||||||||||||
Identifiable intangible assets, net: | |||||||||||||||||
Customer relationships (cost basis of $29,450 in 2020 and $29,550 in 2019)
|
17,551 | 20,198 | 10-12 years | ||||||||||||||
Proprietary technology (cost basis of $3,726 in 2020 and $6,181 in 2019)
|
194 | 895 | Not more than 15 years | ||||||||||||||
Trade names (cost basis of $13,397 in 2020 and $13,645 in 2019)
|
1,075 | 1,543 | 5 - 13 years | ||||||||||||||
Total carrying value of identifiable intangibles | 18,820 | 22,636 | |||||||||||||||
Total carrying value of goodwill and identifiable intangible assets | $ | 86,528 | $ | 104,040 |
(In thousands) | Customer Relationships | Proprietary Technology | Trade Names | Total | ||||||||||||||||||||||||||||
Aluminum Extrusions: | ||||||||||||||||||||||||||||||||
Net carrying value at December 31, 2018 | $ | 22,124 | $ | 75 | $ | 10,555 | $ | 32,754 | ||||||||||||||||||||||||
Amortization expense | (2,480) | (20) | (10,555) | (13,055) | ||||||||||||||||||||||||||||
Net carrying value at December 31, 2019 | 19,644 | 55 | — | 19,699 | ||||||||||||||||||||||||||||
Amortization expense | (2,480) | (20) | — | (2,500) | ||||||||||||||||||||||||||||
Net carrying value at December 31, 2020 | $ | 17,164 | $ | 35 | $ | — | $ | 17,199 | ||||||||||||||||||||||||
PE Films: | ||||||||||||||||||||||||||||||||
Net carrying value at December 31, 2018 | $ | — | $ | 730 | $ | — | $ | 730 | ||||||||||||||||||||||||
Amortization expense | — | (120) | — | (120) | ||||||||||||||||||||||||||||
Net carrying value at December 31, 2019 | — | 610 | — | 610 | ||||||||||||||||||||||||||||
Amortization expense | — | (120) | — | (120) | ||||||||||||||||||||||||||||
Bright View disposal | — | (490) | — | (490) | ||||||||||||||||||||||||||||
Net carrying value at December 31, 2020 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
Flexible Packaging Films: | ||||||||||||||||||||||||||||||||
Net carrying value at December 31, 2018 | $ | 661 | $ | 288 | $ | 1,862 | $ | 2,811 | ||||||||||||||||||||||||
Amortization expense | (91) | (55) | (280) | (426) | ||||||||||||||||||||||||||||
Increase (decrease) due to foreign currency translation | (16) | (3) | (39) | (58) | ||||||||||||||||||||||||||||
Impairment loss | — | — | — | — | ||||||||||||||||||||||||||||
Net carrying value at December 31, 2019 | 554 | 230 | 1,543 | 2,327 | ||||||||||||||||||||||||||||
Amortization expense | (84) | (53) | (260) | (397) | ||||||||||||||||||||||||||||
Increase (decrease) due to foreign currency translation | (83) | (18) | (208) | (309) | ||||||||||||||||||||||||||||
Net carrying value at December 31, 2020 | $ | 387 | $ | 159 | $ | 1,075 | $ | 1,621 | ||||||||||||||||||||||||
Total net carrying value of identifiable intangibles at December 31, 2020 | $ | 17,551 | $ | 194 | $ | 1,075 | $ | 18,820 |
Year |
Amount
(In thousands) |
||||
2021 | $ | 2,955 | |||
2022 | 2,820 | ||||
2023 | 2,195 | ||||
2024 | 2,154 | ||||
2025 | 2,154 |
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
(In thousands) |
Balance Sheet
Account |
Fair
Value |
Balance Sheet
Account |
Fair
Value |
|||||||||||||||||||
Derivatives Designated as Hedging Instruments | |||||||||||||||||||||||
Asset derivatives:
Aluminum futures contracts |
Prepaid expenses & other | $ | 1,560 | Accrued expenses | $ | 6 | |||||||||||||||||
Liability derivatives: | |||||||||||||||||||||||
Liability derivatives:
Aluminum futures contracts |
Accrued expenses | (22) | Accrued expenses | (1,259) | |||||||||||||||||||
Net asset (liability) | $ | 1,538 | $ | (1,253) |
December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
(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 | $ | 853 | Prepaid expenses and other | $ | 83 | |||||||||||||||||
Liability derivatives:
Foreign currency forward contracts |
Accrued expenses | (466) | Accrued expenses | (935) | |||||||||||||||||||
Net asset (liability) | $ | 387 | $ | (852) |
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 | ||||||||||
$1,270 | 5.4638 | R$6,939 | Jan-21 | 70% | ||||||||||
$1,290 | 5.4674 | R$7,053 | Feb-21 | 71% | ||||||||||
$1,270 | 5.4693 | R$6,946 | Mar-21 | 70% | ||||||||||
$1,320 | 5.4765 | R$7,229 | Apr-21 | 73% | ||||||||||
$1,285 | 5.4778 | R$7,039 | May-21 | 71% | ||||||||||
$1,395 | 5.4882 | R$7,656 | Jun-21 | 77% | ||||||||||
$1,450 | 5.4945 | R$7,967 | Jul-21 | 80% | ||||||||||
$1,430 | 5.4993 | R$7,864 | Aug-21 | 79% | ||||||||||
$1,520 | 5.5105 | R$8,376 | Sep-21 | 84% | ||||||||||
$1,400 | 5.5100 | R$7,714 | Oct-21 | 78% | ||||||||||
$1,495 | 5.5224 | R$8,256 | Nov-21 | 83% | ||||||||||
$1,170 | 5.5060 | R$6,442 | Dec-21 | 65% | ||||||||||
$16,295 | 5.4913 | R$89,481 | 75% |
(In thousands) | Cash Flow Derivative Hedges | ||||||||||||||||
Aluminum Futures Contracts | |||||||||||||||||
Years Ended December 31, | 2020 | 2019 | 2018 | ||||||||||||||
Amount of pre-tax gain (loss) recognized in other comprehensive income | $ | 74 | $ | (2,359) | $ | (1,123) | |||||||||||
Location of gain (loss) reclassified from accumulated other comprehensive income into net income (effective portion) |
Cost of
goods sold |
Cost of
goods sold |
Cost of
goods sold |
||||||||||||||
Amount of pre-tax gain (loss) reclassified from accumulated other comprehensive income to net income (effective portion) | $ | (2,717) | $ | (2,736) | $ | 1,069 |
(In thousands) | Cash Flow Derivative Hedges | |||||||||||||||||||||||||
Foreign Currency Forward Contracts | ||||||||||||||||||||||||||
Years Ended December 31, | 2020 | 2019 | 2018 | |||||||||||||||||||||||
Amount of pre-tax gain (loss) recognized in other comprehensive income | $ | — | $ | (4,437) | $ | — | $ | (856) | $ | — | $ | (2,105) | ||||||||||||||
Location of gain (loss) reclassified from accumulated other comprehensive income into net income (effective portion) |
Cost of
goods sold |
Selling, general & admin |
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 to net income (effective portion) | $ | 62 | $ | (6,069) | $ | 62 | $ | (904) | $ | 62 | $ | (1,796) |
(In thousands) | 2020 | 2019 | |||||||||
Payrolls, related taxes and medical and other benefits | $ | 9,571 | $ | 6,227 | |||||||
Incentive compensation | 8,138 | 9,603 | |||||||||
Vacation | 7,283 | 6,975 | |||||||||
Workers’ compensation and disabilities | 2,986 | 3,546 | |||||||||
Environmental liabilities (current) | 2,066 | 2,122 | |||||||||
Accrued severance | 1,894 | 1,180 | |||||||||
Accrued utilities | 1,460 | 1,711 | |||||||||
Customer rebates | 1,398 | 1,504 | |||||||||
Accrued freight | 1,397 | 1,389 | |||||||||
Derivative contract liability | 487 | 2,188 | |||||||||
Other | 4,061 | 3,020 | |||||||||
Total | $ | 40,741 | $ | 39,465 |
Options Outstanding at December 31, 2020 | Options Exercisable at December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average | Aggregate Intrinsic Value | Aggregate Intrinsic Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Range of
Exercise Prices |
Shares | Remaining Contractual Life |
Exercise
Price |
Shares | Weighted Average Exercise Price | |||||||||||||||||||||||||||||||||||||||||||||||||||
$ | — | to | $ | 13.99 | 1,598,700 | 5.4 years | $ | 12.11 | $ | 7,338,799 | 425,219 | $ | 12.50 | $ | 1,785,553 | |||||||||||||||||||||||||||||||||||||||||
13.99 | to | 18.65 | 1,059,138 | 4.4 years | 14.64 | 2,209,408 | 692,973 | 14.66 | 1,447,785 | |||||||||||||||||||||||||||||||||||||||||||||||
18.65 | to | 23.32 | 169,600 | 2.1 years | 20.27 | — | 169,600 | 20.27 | — | |||||||||||||||||||||||||||||||||||||||||||||||
Total | 2,827,438 | 4.9 years | $ | 13.55 | $ | 9,548,207 | 1,287,792 | $ | 14.68 | $ | 3,233,338 |
Unvested Restricted Stock | Maximum Unvested Restricted Stock Units Issuable Upon Satisfaction of Certain Performance Criteria | ||||||||||||||||||||||||||||||||||
Number
of Shares |
Weighted Avg. Grant Date Fair Value/Share |
Grant Date
Fair Value (In thousands) |
Number
of Shares |
Weighted Avg. Grant Date Fair Value/Share |
Grant Date
Fair Value (In thousands) |
||||||||||||||||||||||||||||||
Outstanding at January 1, 2018 | 206,676 | $ | 16.15 | $ | 3,337 | 172,133 | $ | 15.78 | $ | 2,716 | |||||||||||||||||||||||||
Granted | 119,915 | 17.39 | 2,085 | 61,227 | 17.35 | 1,062 | |||||||||||||||||||||||||||||
Vested | (64,702) | 18.31 | (1,185) | — | — | — | |||||||||||||||||||||||||||||
Forfeited | (17,153) | 15.84 | (272) | (48,651) | 13.23 | (644) | |||||||||||||||||||||||||||||
Outstanding at December 31, 2018 | 244,736 | 16.20 | 3,965 | 184,709 | 16.97 | 3,134 | |||||||||||||||||||||||||||||
Granted | 185,422 | 18.46 | 3,423 | 57,442 | 18.34 | 1,053 | |||||||||||||||||||||||||||||
Vested | (117,834) | 14.76 | (1,739) | (69,926) | 10.96 | (766) | |||||||||||||||||||||||||||||
Forfeited | (26,389) | 16.11 | (425) | (24,562) | 11.51 | (283) | |||||||||||||||||||||||||||||
Outstanding at December 31, 2019 | 285,935 | 18.27 | 5,224 | 147,663 | 21.25 | 3,138 | |||||||||||||||||||||||||||||
Granted | 155,138 | 14.55 | 2,257 | 34,275 | 15.25 | 523 | |||||||||||||||||||||||||||||
Vested | (148,709) | 17.39 | (2,586) | (37,370) | 17.38 | (649) | |||||||||||||||||||||||||||||
Forfeited | (57,385) | 17.00 | (976) | (32,066) | 17.36 | (557) | |||||||||||||||||||||||||||||
Outstanding at December 31, 2020 | 234,979 | $ | 16.68 | $ | 3,919 | 112,502 | $ | 21.82 | $ | 2,455 |
Pension Benefits |
Other Post-
Retirement Benefits |
|||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Change in benefit obligation: | ||||||||||||||||||||||||||
Benefit obligation, beginning of year | $ | 318,763 | $ | 287,240 | $ | 7,650 | $ | 6,889 | ||||||||||||||||||
Service cost | — | — | 29 | 26 | ||||||||||||||||||||||
Interest cost | 10,156 | 12,222 | 243 | 290 | ||||||||||||||||||||||
Effect of actuarial (gains) losses related to the following: | ||||||||||||||||||||||||||
Discount rate change | 26,887 | 38,919 | 644 | 894 | ||||||||||||||||||||||
Retirement rate assumptions and mortality table adjustments | (3,446) | (2,589) | 13 | 21 | ||||||||||||||||||||||
Other | 69 | (1,047) | 55 | (176) | ||||||||||||||||||||||
Plan participant contributions | — | — | 606 | 649 | ||||||||||||||||||||||
Benefits paid | (16,270) | (15,982) | (1,076) | (943) | ||||||||||||||||||||||
Benefit obligation, end of year | $ | 336,159 | $ | 318,763 | $ | 8,164 | $ | 7,650 | ||||||||||||||||||
Change in plan assets: | ||||||||||||||||||||||||||
Plan assets at fair value, beginning of year | $ | 218,329 | $ | 205,367 | $ | — | $ | — | ||||||||||||||||||
Actual return on plan assets | 18,800 | 20,624 | — | — | ||||||||||||||||||||||
Employer contributions | 12,216 | 8,320 | 470 | 294 | ||||||||||||||||||||||
Plan participant contributions | — | — | 606 | 649 | ||||||||||||||||||||||
Benefits paid | (16,270) | (15,982) | (1,076) | (943) | ||||||||||||||||||||||
Plan assets at fair value, end of year | $ | 233,075 | $ | 218,329 | $ | — | $ | — | ||||||||||||||||||
Funded status of the plans | $ | (103,084) | $ | (100,434) | $ | (8,164) | $ | (7,650) | ||||||||||||||||||
Amounts recognized in the consolidated balance sheets: | ||||||||||||||||||||||||||
Accrued expenses (current) | $ | 181 | $ | 168 | $ | 481 | $ | 470 | ||||||||||||||||||
Pension and other postretirement benefit obligations, net | 102,903 | 100,266 | 7,683 | 7,180 | ||||||||||||||||||||||
Net amount recognized | $ | 103,084 | $ | 100,434 | $ | 8,164 | $ | 7,650 |
Pension Benefits |
Other Post-
Retirement Benefits |
|||||||||||||||||||||||||||||||||||||
(In thousands, except percentages) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligations: | ||||||||||||||||||||||||||||||||||||||
Discount rate | 2.57 | % | 3.27 | % | 4.40 | % | 2.54 | % | 3.25 | % | 4.37 | % | ||||||||||||||||||||||||||
Expected long-term return on plan assets | 5.00 | % | 5.00 | % | 6.00 | % | n/a | n/a | n/a | |||||||||||||||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost: | ||||||||||||||||||||||||||||||||||||||
Discount rate | 3.27 | % | 4.40 | % | 3.72 | % | 3.25 | % | 4.37 | % | 3.69 | % | ||||||||||||||||||||||||||
Expected long-term return on plan assets | 5.00 | % | 6.00 | % | 6.50 | % | n/a | n/a | n/a | |||||||||||||||||||||||||||||
Components of net periodic benefit cost: | ||||||||||||||||||||||||||||||||||||||
Service cost | $ | — | $ | — | $ | 17 | $ | 29 | $ | 26 | $ | 36 | ||||||||||||||||||||||||||
Interest cost | 10,156 | 12,222 | 11,442 | 243 | 290 | 271 | ||||||||||||||||||||||||||||||||
Expected return on plan assets | (11,004) | (13,528) | (15,011) | — | — | — | ||||||||||||||||||||||||||||||||
Amortization of prior service costs and gains or losses | 15,494 | 10,891 | 13,894 | (198) | (258) | (243) | ||||||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 14,646 | $ | 9,585 | $ | 10,342 | $ | 74 | $ | 58 | $ | 64 |
(In thousands) |
Pension
Benefits |
Other Post-
Retirement Benefits |
|||||||||
2021 | $ | 17,593 | $ | 481 | |||||||
2022 | 18,001 | 482 | |||||||||
2023 | 18,205 | 478 | |||||||||
2024 | 18,445 | 473 | |||||||||
2025 | 18,511 | 468 | |||||||||
2026—2030 | 90,778 | 2,196 |
Pension | Other Post-Retirement | ||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||
Net actuarial (gain) loss | $ | 150,267 | $ | 150,047 | $ | 132,751 | $ | 86 | $ | (824) | $ | (1,821) |
Target % Composition of Plan Assets1
|
Expected Long-term Return % | ||||||||||
Pension plans: | |||||||||||
Fixed income securities | 12.0 | % | 1.3 | % | |||||||
Large/mid-capitalization equity securities | 27.0 | 6.3 | |||||||||
Small-capitalization equity securities | 8.0 | 6.8 | |||||||||
International and emerging market equity securities | 20.0 | 5.6 | |||||||||
Total equity securities | 55.0 | 6.1 | |||||||||
Private equity and hedge funds | 33.0 | 4.4 | |||||||||
Total | 100.0 | % | 5.0 | % | |||||||
1.Target percentages for the composition of plan assets represents a neutral position within the approved range of allocations for such assets.
|
(In thousands) | |||||||||||
Future Lease Payments | |||||||||||
2021 | $ | 2,749 | |||||||||
2022 | 2,653 | ||||||||||
2023 | 2,525 | ||||||||||
2024 | 2,417 | ||||||||||
2025 | 2,417 | ||||||||||
Thereafter | 7,404 | ||||||||||
Total undiscounted operating lease payments | 20,165 | ||||||||||
Less: Imputed interest | 3,134 | ||||||||||
Present value of operating lease liabilities | $ | 17,031 |
(In thousands) | 2020 | 2019 | |||||||||
Operating lease expense | $ | 3,260 | $ | 3,087 | |||||||
Right-of-use assets recognized as non-cash additions from the execution of new operating leases
|
$ | 529 | $ | 20,709 | |||||||
Other Information: | |||||||||||
Weighted-average remaining lease term for operating leases | 8 years | 9 years | |||||||||
Weighted-average discount rate for operating leases | 4.21 | % | 4.24 | % |
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Income (loss) from continuing operations before income taxes: | |||||||||||||||||
Domestic | $ | (58,033) | $ | 52,536 | $ | 67,806 | |||||||||||
Foreign | 32,987 | 19,470 | 12,565 | ||||||||||||||
Total | $ | (25,046) | $ | 72,006 | $ | 80,371 | |||||||||||
Current income tax expense (benefit):
|
|||||||||||||||||
Federal | $ | 4,777 | $ | 7,551 | $ | 30 | |||||||||||
State | 136 | 1,558 | 766 | ||||||||||||||
Foreign | 2,374 | 579 | 771 | ||||||||||||||
Total | 7,287 | 9,688 | 1,567 | ||||||||||||||
Deferred income tax expense (benefit):
|
|||||||||||||||||
Federal | (18,191) | 15,298 | 16,264 | ||||||||||||||
State | (640) | 187 | 948 | ||||||||||||||
Foreign | 3,331 | (11,628) | 28 | ||||||||||||||
Total | (15,500) | 3,857 | 17,240 | ||||||||||||||
Total income tax expense (benefit) | $ | (8,213) | $ | 13,545 | $ | 18,807 |
2020 | 2019 | 2018 | ||||||||||||||||||||||||
(In thousands, except percentages) | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||
Foreign rate differences | $ | 3,753 | (14.9) | $ | 1,533 | 1.9 | $ | 1,576 | 2.1 | |||||||||||||||||
U.S. tax on foreign branch income | 1,409 | (5.6) | 16,029 | 22.3 | 2,229 | 2.8 | ||||||||||||||||||||
Non-deductible expenses | 219 | (0.9) | 285 | 0.4 | 99 | 0.1 | ||||||||||||||||||||
Valuation allowance for capital loss carryforwards | 52 | (0.2) | 60 | 0.1 | 553 | 0.7 | ||||||||||||||||||||
Unremitted earnings from foreign operations | 13 | (0.1) | 60 | 0.1 | 126 | 0.2 | ||||||||||||||||||||
Foreign derived intangible income deduction | — | — | (319) | (0.4) | (695) | (0.9) | ||||||||||||||||||||
Valuation allowance due to foreign losses and impairments | — | — | (14,350) | (19.9) | (2,162) | (2.7) | ||||||||||||||||||||
Stock-based compensation | (24) | 0.1 | 292 | 0.4 | 177 | 0.2 | ||||||||||||||||||||
Dividend received deduction net of foreign withholding tax | (52) | 0.2 | (1,016) | (1.4) | — | — | ||||||||||||||||||||
Tax contingency accruals and tax settlements | (58) | 0.2 | (2,543) | (3.5) | 673 | 0.8 | ||||||||||||||||||||
State taxes, net of federal income tax benefit | (373) | 1.5 | 1,050 | 1.5 | 1,203 | 1.5 | ||||||||||||||||||||
Research and development tax credit | (633) | 2.5 | (523) | (0.7) | (130) | (0.2) | ||||||||||||||||||||
Changes in estimates related to prior year tax provision | (2,472) | 9.9 | (135) | (0.2) | (380) | (0.5) | ||||||||||||||||||||
Brazilian tax incentive | (4,787) | 19.1 | (1,999) | (2.8) | (1,340) | (1.7) | ||||||||||||||||||||
Income tax expense (benefit) at federal statutory rate | (5,260) | 21.0 | 15,121 | 21.0 | 16,878 | 21.0 | ||||||||||||||||||||
Income tax expense (benefit) at effective income tax rate | $ | (8,213) | 32.8 | $ | 13,545 | 18.8 | $ | 18,807 | 23.4 |
(In thousands) | 2020 | 2019 | |||||||||
Deferred income tax liabilities: | |||||||||||
Amortization of goodwill and identifiable intangibles | $ | 9,520 | $ | 12,080 | |||||||
Depreciation | 10,844 | 7,395 | |||||||||
Foregone tax credits on foreign branch income | 5,714 | 12,361 | |||||||||
Excess of carrying value over tax basis of investment in kaléo | 4,905 | 17,504 | |||||||||
Derivative financial instruments | 659 | — | |||||||||
Right-of-use leased assets | 2,979 | 751 | |||||||||
Other | 285 | 488 | |||||||||
Total deferred income tax liabilities | 34,906 | 50,579 | |||||||||
Deferred income tax assets: | |||||||||||
Pensions | 25,576 | 21,025 | |||||||||
Employee benefits | 9,757 | 7,963 | |||||||||
Excess capital losses | 7,462 | 1,551 | |||||||||
Inventory | 2,613 | 3,759 | |||||||||
Asset write-offs, divestitures and environmental accruals | 2,904 | 1,355 | |||||||||
Tax benefit on U.S. federal, state and foreign NOL and credit carryforwards | 18,305 | 17,992 | |||||||||
Timing adjustment for unrecognized tax benefits on uncertain tax positions, including portion relating to interest and penalties | 134 | 187 | |||||||||
Allowance for doubtful accounts | 141 | 383 | |||||||||
Lease liabilities | 3,144 | 967 | |||||||||
Derivative financial instruments | — | 345 | |||||||||
Foreign currency translation gain adjustment | 1,423 | 255 | |||||||||
Deferred income tax assets before valuation allowance | 71,459 | 55,782 | |||||||||
Less: Valuation allowance | 17,485 | 3,787 | |||||||||
Total deferred income tax assets | 53,974 | 51,995 | |||||||||
Net deferred income tax (assets) liabilities | $ | (19,068) | $ | (1,416) | |||||||
Amounts recognized in the consolidated balance sheets: | |||||||||||
Deferred income tax assets (noncurrent) | $ | 19,068 | $ | 12,435 | |||||||
Deferred income tax liabilities (noncurrent) | — | 11,019 | |||||||||
Net deferred income tax assets (liabilities) | $ | 19,068 | $ | 1,416 |
Years Ended December 31, | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Balance at beginning of period | $ | 881 | $ | 3,361 | $ | 1,962 | |||||||||||
Increase (decrease) due to tax positions taken in: | |||||||||||||||||
Current period | 12 | 12 | 13 | ||||||||||||||
Prior period | — | 49 | 1,430 | ||||||||||||||
Increase (decrease) due to settlements with taxing authorities | (265) | (151) | — | ||||||||||||||
Reductions due to lapse of statute of limitations | — | (2,390) | (44) | ||||||||||||||
Balance at end of period | $ | 628 | $ | 881 | $ | 3,361 |
Years Ended December 31, | |||||||||||||||||
(In thousands) | 2020 | 2019 | 2018 | ||||||||||||||
Gross unrecognized tax benefits on uncertain tax positions (reflected in
current income tax, other noncurrent liability accounts, or deferred tax assets in the balance sheet)
|
$ | 628 | $ | 881 | $ | 3,361 | |||||||||||
Deferred income tax assets related to unrecognized tax benefits on uncertain tax positions (reflected in deferred income tax accounts in the balance sheet) | (110) | (163) | (211) | ||||||||||||||
Net unrecognized tax benefits on uncertain tax positions, which would impact the effective tax rate if recognized | 518 | 718 | 3,150 | ||||||||||||||
Interest and penalties accrued on deductions taken relating to uncertain tax positions (approximately $2, $(144) and $107 reflected in income tax expense in the income statement in 2020, 2019 and 2018, respectively, with the balance shown in current income tax and other noncurrent liability accounts in the balance sheet) | 102 | 100 | 243 | ||||||||||||||
Related deferred income tax assets recognized on interest and penalties | (24) | (23) | (56) | ||||||||||||||
Interest and penalties accrued on uncertain tax positions net of related deferred income tax benefits, which would impact the effective tax rate if recognized | 78 | 77 | 187 | ||||||||||||||
Total net unrecognized tax benefits on uncertain tax positions reflected in the balance sheet, which would impact the effective tax rate if recognized | $ | 596 | $ | 795 | $ | 3,337 |
First
Quarter |
Second
Quarter |
Third
Quarter |
Fourth
Quarter |
||||||||||||||||||||
For the year ended December 31, 2020 | |||||||||||||||||||||||
Sales | $ | 192,136 | $ | 186,260 | $ | 184,370 | $ | 192,524 | |||||||||||||||
Gross profit | 40,092 | 46,331 | 41,909 | 42,305 | |||||||||||||||||||
Income (loss) from continuing operations, net of tax | (20,663) | 14,332 | (16,976) | 6,475 | |||||||||||||||||||
Income (loss) from discontinued operations, net of tax | (1,658) | (3,136) | (48,237) | (5,580) | |||||||||||||||||||
Net income (loss) | $ | (22,321) | $ | 11,196 | $ | (65,213) | $ | 895 | |||||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||
Basic: | |||||||||||||||||||||||
Continuing operations | $ | (0.62) | $ | 0.43 | $ | (0.51) | $ | 0.19 | |||||||||||||||
Discontinued operations | (0.05) | (0.10) | (1.44) | (0.17) | |||||||||||||||||||
Basic | $ | (0.67) | $ | 0.33 | $ | (1.95) | $ | 0.02 | |||||||||||||||
Diluted: | |||||||||||||||||||||||
Continuing operations | $ | (0.62) | $ | 0.43 | $ | (0.51) | $ | 0.19 | |||||||||||||||
Discontinued operations | (0.05) | (0.10) | (1.44) | (0.17) | |||||||||||||||||||
Diluted | $ | (0.67) | $ | 0.33 | $ | (1.95) | $ | 0.02 | |||||||||||||||
For the year ended December 31, 2019 | |||||||||||||||||||||||
Sales | $ | 207,948 | $ | 214,095 | $ | 205,968 | $ | 198,313 | |||||||||||||||
Gross profit | 34,986 | 44,375 | 38,892 | 37,951 | |||||||||||||||||||
Income (loss) from continuing operations, net of tax | 22,548 | 19,871 | 15,052 | 990 | |||||||||||||||||||
Income (loss) from discontinued operations, net of tax | (2,763) | (5,394) | 2,081 | (4,126) | |||||||||||||||||||
Net income | $ | 19,785 | $ | 14,477 | $ | 17,133 | $ | (3,136) | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic: | |||||||||||||||||||||||
Continuing operations | $ | 0.68 | $ | 0.60 | $ | 0.45 | $ | 0.03 | |||||||||||||||
Discontinued operations | (0.08) | (0.16) | 0.06 | (0.12) | |||||||||||||||||||
Basic | $ | 0.60 | $ | 0.44 | $ | 0.51 | $ | (0.09) | |||||||||||||||
Diluted: | |||||||||||||||||||||||
Continuing operations | $ | 0.68 | $ | 0.60 | $ | 0.45 | $ | 0.03 | |||||||||||||||
Discontinued operations | (0.08) | (0.16) | 0.06 | (0.12) | |||||||||||||||||||
Diluted | $ | 0.60 | $ | 0.44 | $ | 0.51 | $ | (0.09) |
* | Denotes compensatory plans or arrangements or management contracts. |
+ | Filed herewith |
TREDEGAR CORPORATION
(Registrant) |
||||||||||||||
Dated: | March 16, 2021 | By | /s/ John M. Steitz | |||||||||||
John M. Steitz | ||||||||||||||
President and Chief Executive Officer |
Signature | Title | ||||||||||
/s/ | John M. Steitz | President, Chief Executive Officer and Director | |||||||||
(John M. Steitz) | (Principal Executive Officer) | ||||||||||
/s/ | D. Andrew Edwards | Executive Vice President and Chief Financial Officer | |||||||||
(D. Andrew Edwards) | (Principal Financial Officer) | ||||||||||
/s/ | Frasier W. Brickhouse, II | Corporate Treasurer and Controller | |||||||||
(Frasier W. Brickhouse, II) | (Principal Accounting Officer) | ||||||||||
/s/ | John D. Gottwald | Chairman of the Board of Directors | |||||||||
(John D. Gottwald) | |||||||||||
/s/ | Gregory A. Pratt | Lead Director | |||||||||
(Gregory A. Pratt) | |||||||||||
/s/ | George C. Freeman, III | Director | |||||||||
(George C. Freeman, III) | |||||||||||
/s/ | William M. Gottwald | Director | |||||||||
(William M. Gottwald) | |||||||||||
/s/ | Kenneth R. Newsome | Director | |||||||||
(Kenneth R. Newsome) | |||||||||||
/s/ | Thomas G. Snead, Jr. | Director | |||||||||
(Thomas G. Snead, Jr.) | |||||||||||
/s/ | Carl E. Tack, III | Director | |||||||||
(Carl E. Tack, III) | |||||||||||
/s/ | Anne G. Waleski | Director | |||||||||
(Anne G. Waleski) |
Tredegar Corporation | |||||
Entity | State of Incorporation | ||||
Tredegar Corporation | Virginia | ||||
Bon L Aluminum LLC | Virginia | ||||
Bon L Campo Limited Partnership | Texas | ||||
Bon L Holdings LLC | Virginia | ||||
Bonnell Aluminum (Clearfield), Inc. | Delaware | ||||
Bonnell Aluminum (Corporate), Inc. | Virginia | ||||
Bonnell Aluminum (Elkhart), Inc. | Virginia | ||||
Bonnell Aluminum, Inc. | Virginia | ||||
Bonnell Aluminum (Niles), LLC |
Virginia
|
||||
El Campo GP, LLC | Virginia | ||||
Guangzhou Tredegar Film Products Company Limited | China | ||||
Idlewood Properties, Inc. | Virginia | ||||
TAC Holdings LLC | Virginia | ||||
Terphane Acquisition Corp. II | Cayman Islands | ||||
Terphane Holdings LLC | Delaware | ||||
Terphane LLC | Delaware | ||||
Terphane Limitada | Brazil | ||||
Tredegar Capital Holdings LLC | Virginia | ||||
Tredegar Far East Corporation | Virginia | ||||
Tredegar Film Products (Europe), Inc. | Virginia | ||||
Tredegar Film Products (Korea), Inc. | Korea | ||||
Tredegar Film Products - Lake Zurich, LLC | Virginia | ||||
Tredegar Film Products (Latin America), Inc. | Virginia | ||||
Tredegar Films Development, Inc. | Virginia | ||||
Tredegar Investments, LLC | Virginia | ||||
Tredegar Investments II, LLC | Virginia | ||||
Tredegar Performance Films Inc. | Virginia | ||||
Tredegar Surface Protection, LLC | Virginia |
/s/ John M. Steitz | |||||
John M. Steitz | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) |
/s/ D. Andrew Edwards | |||||
D. Andrew Edwards | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) |
/s/ John M. Steitz | |||||
John M. Steitz | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
March 16, 2021 |
/s/ D. Andrew Edwards | |||||
D. Andrew Edwards | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
March 16, 2021 |