Tredegar Corporation (TG) delivered a mixed QQ1 2025 performance characterized by a material year-over-year revenue decline alongside a modestly positive bottom line. Revenue for the quarter totaled $164.7 million, down 9.5% YoY, while gross profit reached $29.1 million, driving a gross margin of approximately 17.7%. Despite a thin operating margin, the company reported a net income of $10.1 million and earnings per share of $0.29 for the quarter, implying a net income margin near 6.1% and an annualized cadence that supports cash-generation optionality at low levels. QoQ performance shows pronounced top-line momentum with a 235.9% sequential revenue increase and a marked improvement in profitability metrics, aided by favorable product mix and cost control; however, operating cash flow remained negative for QQ1 2025, underscoring ongoing working capital and capital expenditure dynamics.
From a balance sheet perspective, Tredegar maintains a conservative financial posture with total assets of $374.2 million and stockholders’ equity of $191.4 million. Liquidity remains constrained (current ratio 1.56; quick ratio 0.89; cash ratio 0.036) and net debt stands at $11.96 million on total debt of $15.62 million. Free cash flow was negative by approximately $7.96 million, with operating cash flow of about $-5.01 million and capital expenditures of $2.96 million in QQ1 2025, indicating working capital intensity and a need for cash-flow normalization to support dividends and potential buybacks.
Overall, the QQ1 2025 print signals that Tredegar retains a diversified and resilient product portfolio across Aluminum Extrusions, PE Films, and Flexible Packaging Films, but the near-term cash conversion challenges and modest profitability underscore a higher beta to industrial cycle dynamics. The stock’s inexpensive-looking valuation on traditional multiples contrasts with structurally slower cash generation, suggesting an upside if management executes on working capital efficiency and cost discipline while cyclicality in end-markets abates.
Margins and profitability metrics show an extremely lean operating base (operating margin 0.76%), with net income benefiting from favorable tax and non-operating items vs. the operating income line. Cash flow remains a weakness: Net cash from operating activities is $(5.01) million; free cash flow is $(7.96) million; capital expenditures were $(2.96) million. Liquidity is modest (cash $3.66m; current assets $161.73m; total current liabilities $103.80m; current ratio 1.56). Leverage is contained (total debt $15.62m; net debt $11.96m; debt-to-capitalization 27.2%), but interest coverage is only ~1.24x, signaling sensitivity to rising rates or weaker earnings.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
164.74M
-9.50%
235.85%
Gross Profit
29.10M
25.04%
182.50%
Operating Income
1.26M
N/A
115.99%
Net Income
10.10M
355.98%
113.89%
EPS
0.29
363.64%
113.68%
Key Financial Ratios
Gross Profit Margin
Weak
17.70%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Weak
0.76%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Fair
6.13%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
2.70%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
5.28%
Return on equity is acceptable but below top-tier companies
Current Ratio
Healthy
1.56
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Moderate
0.37
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
Value
6.60x
P/E ratio suggests potential undervaluation or stable earnings
Price to Book
Fair Value
1.39x
Price-to-book ratio reasonable for profitable companies
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Tredegar Corporation (TG) QQ1 2024 Earnings Review: Revenue Slump and Eroding Profitability Across Aluminum Extrusions, PE Films and Flexible Packagin...