UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the quarterly period ended June 30, 2003 |
OR
|_| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from ____________ to ____________ |
Commission file number 1-10258
Tredegar Corporation
(Exact Name of Registrant as Specified in Its Charter)
| Virginia (State or Other Jurisdiction of Incorporation or Organization) |
54-1497771 (I.R.S. Employer Identification No.) |
| 1100 Boulders Parkway Richmond, Virginia (Address of Principal Executive Offices) |
23225 (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (804) 330-1000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
The number of shares of Common Stock, no par value, outstanding as of July 31, 2003: 38,081,140.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Tredegar Corporation
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
|
|
|
June 30, |
|
Dec. 31, |
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
113,074 |
|
$ |
109,928 |
|
| Accounts and notes receivable |
|
|
90,365 |
|
|
92,892 |
|
| Income taxes recoverable |
|
|
60,179 |
|
|
12,863 |
|
| Inventories |
|
|
46,260 |
|
|
43,969 |
|
| Deferred income taxes |
|
|
9,294 |
|
|
20,976 |
|
| Prepaid expenses and other |
|
|
4,174 |
|
|
3,962 |
|
|
|
|
|
|
|
|
|
|
| Total current assets |
|
|
323,346 |
|
|
284,590 |
|
|
|
|
|
|
|
|
|
|
| Property, plant and equipment, at cost |
|
|
546,122 |
|
|
505,093 |
|
| Less accumulated depreciation |
|
|
274,190 |
|
|
254,490 |
|
|
|
|
|
|
|
|
|
|
| Net property, plant and equipment |
|
|
271,932 |
|
|
250,603 |
|
|
|
|
|
|
|
|
|
|
| Net non-current assets of Therics held for sale |
|
|
— |
|
|
10,406 |
|
| Venture capital investments |
|
|
— |
|
|
93,765 |
|
| Other assets and deferred charges |
|
|
74,529 |
|
|
66,316 |
|
| Goodwill and other intangibles |
|
|
139,845 |
|
|
132,282 |
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
809,652 |
|
$ |
837,962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
43,848 |
|
$ |
35,861 |
|
| Accrued expenses |
|
|
46,307 |
|
|
42,409 |
|
| Current portion of long-term debt |
|
|
62,500 |
|
|
55,000 |
|
|
|
|
|
|
|
|
|
|
| Total current liabilities |
|
|
152,655 |
|
|
133,270 |
|
| Long-term debt |
|
|
167,592 |
|
|
204,280 |
|
| Deferred income taxes |
|
|
54,856 |
|
|
27,443 |
|
| Other noncurrent liabilities |
|
|
10,368 |
|
|
10,037 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
385,471 |
|
|
375,030 |
|
|
|
|
|
|
|
|
|
|
| Shareholders’ equity: |
|
|
|
|
|
|
|
| Common stock, no par value |
|
|
104,153 |
|
|
108,389 |
|
| Common stock held in trust for savings restoration plan |
|
|
(1,212 |
) |
|
(1,212 |
) |
| Unrealized gain on available-for-sale securities |
|
|
1,069 |
|
|
586 |
|
| Foreign currency translation adjustment |
|
|
4,731 |
|
|
(4,422 |
) |
| Loss on derivative financial instruments |
|
|
142 |
|
|
(842 |
) |
| Minimum pension liability |
|
|
(3,310 |
) |
|
(3,310 |
) |
| Retained earnings |
|
|
318,608 |
|
|
363,743 |
|
|
|
|
|
|
|
|
|
|
| Total shareholders’ equity |
|
|
424,181 |
|
|
462,932 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities and shareholders’ equity |
|
$ |
809,652 |
|
$ |
837,962 |
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
2
Tredegar Corporation
Consolidated Statements of Income
(In Thousands, except per share amounts)
(Unaudited)
|
|
|
Second Quarter Ended |
|
Six Months Ended |
| ||||||||
|
|
|
|
|
|
| ||||||||
|
|
|
2003 |
|
2002 |
|
2003 |
|
2002 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales |
|
$ |
181,574 |
|
$ |
200,554 |
|
$ |
363,619 |
|
$ |
378,006 |
|
| Other income (expense), net |
|
|
428 |
|
|
366 |
|
|
1,151 |
|
|
416 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
182,002 |
|
|
200,920 |
|
|
364,770 |
|
|
378,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of goods sold |
|
|
149,836 |
|
|
153,968 |
|
|
299,337 |
|
|
291,368 |
|
| Freight |
|
|
4,532 |
|
|
4,051 |
|
|
8,720 |
|
|
7,794 |
|
| Selling, general and administrative |
|
|
12,313 |
|
|
13,104 |
|
|
25,201 |
|
|
24,981 |
|
| Research and development |
|
|
5,076 |
|
|
5,058 |
|
|
10,379 |
|
|
10,674 |
|
| Amortization of intangibles |
|
|
67 |
|
|
11 |
|
|
134 |
|
|
78 |
|
| Interest expense |
|
|
1,683 |
|
|
2,310 |
|
|
3,786 |
|
|
4,498 |
|
| Plant shutdowns, asset impairments and restructurings |
|
|
5,882 |
|
|
268 |
|
|
5,967 |
|
|
1,264 |
|
| Unusual items |
|
|
— |
|
|
— |
|
|
1,067 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
179,389 |
|
|
178,770 |
|
|
354,591 |
|
|
340,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income before income taxes |
|
|
2,613 |
|
|
22,150 |
|
|
10,179 |
|
|
37,765 |
|
| Income taxes |
|
|
932 |
|
|
7,879 |
|
|
3,639 |
|
|
13,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations |
|
|
1,681 |
|
|
14,271 |
|
|
6,540 |
|
|
24,330 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from venture capital investment activities (including an after-tax loss on the sale of the venture capital investment portfolio of $49,216 in 2003) |
|
|
— |
|
|
(12,160 |
) |
|
(49,516 |
) |
|
(19,329 |
) |
| Income (loss) from operations of Molecumetics (including an after-tax gain on the sale of intellectual property of $891 in 2003 and an expected loss on disposal of $3,900 in 2002) |
|
|
891 |
|
|
(5,446 |
) |
|
891 |
|
|
(7,753 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from discontinued operations |
|
|
891 |
|
|
(17,606 |
) |
|
(48,625 |
) |
|
(27,082 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
2,572 |
|
$ |
(3,335 |
) |
$ |
(42,085 |
) |
$ |
(2,752 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
$ |
.04 |
|
$ |
.37 |
|
$ |
.17 |
|
$ |
.64 |
|
| Discontinued operations |
|
|
.02 |
|
|
(.46 |
) |
|
(1.28 |
) |
|
(.71 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
.06 |
|
$ |
(.09 |
) |
$ |
(1.11 |
) |
$ |
(.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
$ |
.04 |
|
$ |
.36 |
|
$ |
.17 |
|
$ |
.63 |
|
| Discontinued operations |
|
|
.02 |
|
|
(.45 |
) |
|
(1.26 |
) |
|
(.70 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
.06 |
|
$ |
(.09 |
) |
$ |
(1.09 |
) |
$ |
(.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used to compute earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
38,047 |
|
|
38,270 |
|
|
38,113 |
|
|
38,219 |
|
| Diluted |
|
|
38,418 |
|
|
39,111 |
|
||||||