Tredegar Reports First-Quarter Results

Apr 18, 2001, 01:00 ET from Tredegar Corporation

    RICHMOND, Va., April 18 /PRNewswire/ -- Tredegar Corporation (NYSE:   TG)
 reported first-quarter net income of $1.9 million (five cents per share), down
 from $18.5 million (47 cents per share) in 2000.  Excluding nonrecurring
 charges, biotechnology operations and venture capital activities, net income
 from Tredegar's manufacturing operations was $10.8 million (28 cents per
 share), down from $16.1 million (41 cents per share) in 2000.
     First-quarter sales were $191.8 million versus $232.2 million in 2000.
     A summary of first-quarter results is shown below:
 
     (In millions, except per-share data)                    First Quarter
                                                            Ended March 31
                                                         2001           2000
     Net sales                                         $191.8         $232.2
 
     Net income (loss):
       Manufacturing operations                         $10.8          $16.1
       Biotechnology operations                          (2.6)          (1.9)
       Tredegar Investments                              (5.3)           7.8
       Unusual items                                     (1.0)          (3.5)
     Total                                               $1.9          $18.5
 
     Diluted earnings (loss) per share:
       Manufacturing operations                          $.28           $.41
       Biotechnology operations                          (.07)          (.05)
       Tredegar Investments                              (.13)           .20
       Unusual items                                     (.03)          (.09)
     Total                                               $.05           $.47
 
     John D. Gottwald, Tredegar's president and chief executive officer, said:
 "Poor economic and business conditions continue to affect our aluminum
 extrusions business and our venture capital investments.  If the weakness in
 technology markets persists, additional investment-related losses and further
 declines in the value of our investments are likely.  On the other hand, we're
 encouraged by the significant improvement in our plastic films business over
 the fourth quarter of 2000.  If the economy strengthens, we hope to see profit
 growth from our manufacturing operations in the second half of this year."
 
                            MANUFACTURING OPERATIONS
 
                                 Film Products
     First-quarter sales from plastic film operations were $96.8 million, down
 slightly from $99.5 million in 2000.  Excluding unusual items, operating
 profit for the quarter was $15.1 million versus $15.8 million last year.  On a
 similar basis, first-quarter profits were up 38% over fourth-quarter results
 due to higher sales of new products and cost savings from reorganization
 efforts.
     Total volume for the quarter declined to 77 million pounds, down 13% from
 last year, reflecting lower demand for the company's diaper backsheet film.
 The profit impact of the volume decline was partially offset by higher sales
 of new specialty components for diapers and feminine hygiene products.
     Gottwald said:  "We're encouraged by results in our films business, which
 has been struggling for more than two years.  There's growing evidence that
 our efforts to commercialize new products and expand our customer base are
 beginning to take hold.  While it will be difficult to sustain this level of
 profits in the second quarter, we're optimistic about the prospects for profit
 growth in this business later this year."
     First-quarter capital expenditures in Film Products totaled $9.5 million,
 which was primarily used to support a plant expansion in Hungary, a new plant
 in China, and to purchase machinery for new products.  Tredegar expects to
 invest approximately $35 million during 2001 to support continued global
 expansion and product development efforts.
 
                              Aluminum Extrusions
     First-quarter sales in aluminum extrusions were $93.5 million, down 28%
 versus $129.2 million in 2000.  Volume for the quarter declined 29% to 59
 million pounds.  Operating profit was $6.4 million, down 59% from $15.7
 million in last year's first quarter.  Results were affected by a sharp drop
 in demand from transportation and distribution markets, seasonal weakness in
 construction markets, and higher energy costs.
     Gottwald said:  "Our aluminum business continues to struggle with a volume
 decline that began in the third quarter of 2000 and has worsened since then.
 It's clear that general economic weakness is affecting many of our customers.
 In fact, customer orders during the first quarter were 33% below year-ago
 levels.  We've taken action to reduce costs, but orders remain relatively weak
 across most of our end markets.  Hopefully, market conditions will improve
 during the second half of this year."
 
                            BIOTECHNOLOGY OPERATIONS
     The first-quarter operating loss in Tredegar's biotechnology operations
 (Therics and Molecumetics) was $4.1 million versus an operating loss of $3
 million in 2000.  The higher losses reflect increased spending related to the
 company's previously announced strategy to increase research and development
 efforts at these operations.  Tredegar expects the spending rate to continue
 to increase.  Revenues for the quarter were $1.5 million, down from $1.7
 million last year.  Through March 31, Tredegar had total cash invested of
 $70.6 million in its biotechnology operations.
 
                              TREDEGAR INVESTMENTS
     Tredegar Investments' first-quarter loss of $5.3 million (13 cents per
 share) includes write-downs related to eight venture capital investments.  The
 write-downs were caused by recent events indicating lower valuations.  During
 the quarter, the depreciation in the net asset value of Tredegar's venture
 portfolio related to investment performance was $36.1 million.  On March 31,
 the total net asset value of venture capital investments was $296.5 million.
 Through March 31, the estimated internal rate of return (IRR) since the
 portfolio's inception in 1992 was 63% (44% after taxes).  Tredegar's Web site,
 http://www.tredegar.com , contains a detailed summary of the company's venture
 capital investments.
     Gottwald said:  "It looks as though 2001 may be shaping up to be the flip
 side of 2000, when our investments generated $84 million in net after-tax
 gains and the portfolio's net asset value appreciation was $173 million.  This
 year, early-stage technology companies are struggling to raise capital in a
 very weak financing environment.  If this continues, further declines in the
 value of our portfolio are likely."
 
                                 UNUSUAL ITEMS
     First-quarter results include a net after-tax charge of $1 million (three
 cents per share) related to the reorganization of the company's films business
 to more closely align its cost structure with revenues.  First-quarter 2000
 results included net after-tax charges totaling $3.5 million (nine cents per
 share) primarily related to the shutdown of a plastic films plant in
 Manchester, Iowa.
 
                   FORWARD-LOOKING AND CAUTIONARY STATEMENTS
     The words "hope," "expect," and similar expressions identify "forward-
 looking" statements within the meaning of the "safe harbor" provisions of the
 Private Securities Litigation Reform Act of 1995.  Such statements involve a
 number of risks and uncertainties that could cause actual results to differ
 materially from those contained in the forward-looking statements, including
 without limitation the following:
     Film Products is highly dependent on sales to Procter & Gamble ("P&G"),
 which comprised 64% of this segment's net sales in 2000.  Film Products'
 success in this regard depends on its ability to develop products that meet
 P&G's requirements as well as market acceptance of related P&G products.  Our
 ability to grow Film Products and attract new customers depends on developing
 and delivering new products, especially in the hygiene market.  While we have
 substantial technical resources, there can be no assurance that our new
 products can be brought to market successfully, or at the same level of
 profitability and market share of replaced films.  A shift in customer
 preferences away from our technologies or our inability to deliver new
 profitable products could have a material adverse effect on our business.
     Aluminum Extrusions is a cyclical, seasonal business that is highly
 dependent on general economic conditions in the U.S. and Canada, particularly
 in the construction and transportation industries.  This business is under
 domestic and foreign competitive pressures and continues to be affected by
 higher energy costs.
     Therics and Molecumetics are biotechnology companies whose ability to
 develop and commercialize products will depend on their preclinical, clinical,
 regulatory and sales and marketing capabilities or, where appropriate, whether
 they can enter into satisfactory arrangements with third parties to provide
 those functions.
     Tredegar Investments holds illiquid investments in early-stage technology
 companies, the value of which depends on the equity markets generally and
 their ability to raise additional capital through subsequent rounds of private
 financing and initial public offerings.  In addition, these companies are
 subject to risk that they will not be able to commercialize their technology,
 product or business concept.
     Tredegar does not undertake to update any forward-looking statement made
 in this press release, to reflect any change in management's expectations or
 any change in conditions, assumptions or circumstances on which such
 statements are based.
     Based in Richmond, Va., Tredegar Corporation is a manufacturer of plastic
 films and aluminum extrusions.  Tredegar also has two operating subsidiaries
 focused on healthcare-related technologies.
 
                                Tredegar Corporation
                    Condensed Consolidated Statements of Income
                       (In Thousands, Except Per-Share Data)
                                    (Unaudited)
 
                                                        Three Months Ended
                                                             March 31
                                                     2001               2000
 
     Net sales                                      191,802            232,228
     Other income (expense), net                     (5,925)            13,232
                                                    185,877            245,460
 
     Cost of goods sold                             156,855            186,394
     Selling, R&D and general expenses               19,196             18,892
     Amortization of intangibles                      1,214              1,276
     Interest expense                                 4,041              4,295
     Unusual items (a)                                1,600              5,484
                                                    182,906            216,341
 
     Income before income taxes                       2,971             29,119
     Income taxes                                     1,070             10,656
     Net income (a) (b)                              $1,901            $18,463
 
     Earnings per share:
       Basic                                           $.05               $.49
       Diluted                                          .05                .47
 
     Shares used to compute EPS:
       Basic                                         38,069             37,718
       Diluted                                       38,809             38,970
 
 
 
                                  Tredegar Corporation
                       Net Sales and Operating Profit by Segment
                                     (In Thousands)
                                      (Unaudited)
 
                                                       Three Months Ended
                                                            March 31
                                                     2001               2000
     Net Sales
     Film Products                                  $96,830            $99,486
     Fiberlux                                             -              1,782
     Aluminum Extrusions                             93,472            129,240
     Biotechnology operations:
       Molecumetics                                   1,331              1,626
       Therics                                          169                 94
         Total net sales                           $191,802           $232,228
 
     Operating Profit
     Film Products:
       Ongoing operations                           $15,094            $15,750
       Unusual items (a)                             (1,600)            (5,293)
                                                     13,494             10,457
 
     Aluminum Extrusions                              6,381             15,714
 
     Fiberlux                                             -               (209)
 
     Biotechnology operations:
       Molecumetics                                  (1,772)            (1,229)
       Therics                                       (2,349)            (1,799)
                                                     (4,121)            (3,028)
     Tredegar Investments:
       Venture capital activities                    (8,262)            12,143
       Unusual items (a)                                  -               (191)
                                                     (8,262)            11,952
         Total operating profit                       7,492             34,886
     Interest income                                    688                394
     Interest expense                                 4,041              4,295
     Corporate expenses, net (a)                      1,168              1,866
     Income before income taxes                       2,971             29,119
     Income taxes                                     1,070             10,656
     Net income (a) (b)                              $1,901            $18,463
 
 
 
                               Tredegar Corporation
                       Condensed Consolidated Balance Sheets
                                  (In Thousands)
                                    (Unaudited)
 
                                                   March 31,       December 31,
                                                     2001              2000
     Assets
 
     Cash & cash equivalents                        $46,072           $44,530
     Receivable from securities brokers               5,552               292
     Accounts & notes receivable                     99,972            96,652
     Income taxes recoverable                         6,057             3,857
     Inventories                                     45,323            46,825
     Deferred income taxes                           13,800            13,788
     Prepaid expenses & other                         2,852             2,818
     Total current assets                           219,628           208,762
 
     Property, plant & equipment, net               277,131           273,507
     Venture capital investments (c)                199,457           232,259
     Other assets                                    51,910            49,661
     Goodwill & other intangibles                   138,637           139,579
 
     Total assets                                  $886,763          $903,768
 
     Liabilities and Shareholders' Equity
 
     Accounts payable                               $52,933           $51,818
     Accrued expenses                                35,760            36,593
     Total current liabilities                       88,693            88,411
 
     Long-term debt                                 269,513           268,102
     Deferred income taxes                           34,502            40,650
     Other noncurrent liabilities                     9,243             8,877
     Shareholders' equity                           484,812           497,728
 
     Total liabilities and shareholders'
      equity                                       $886,763          $903,768
 
 
 
                                Tredegar Corporation
                           Selected Cash Flow Information
                                   (In Thousands)
                                    (Unaudited)
 
                                                        Three Months Ended
                                                             March 31
                                                     2001               2000
     Net income from operations excluding
      unusual items and venture capital
      investment activities                         $8,213             $14,201
     Depreciation                                    7,849               8,062
     Amortization of intangibles                     1,214               1,276
     Capital expenditures                           13,576              15,843
     Venture capital investments                     4,351              21,603
     Sale of venture capital investments
      (net of transaction costs):
       Value from sale                              10,332              18,323
       (Increase) decrease in receivable
        from securities brokers                     (5,260)            (17,790)
       Proceeds from sale of venture
        capital investments                          5,072                 533
     Increase (decrease) in cash and cash
      equivalents                                    1,542             (12,043)
     Increase (decrease) in long-term debt           1,411                   -
 
 
 
                           Selected Financial Measures
                     (In Millions, Except Per-Share Amounts)
                                   (Unaudited)
 
                                                                    At or for
                                             Three Months Ended    the 12 Mos.
                                                   March 31           Ended
                                              2001         2000     03/31/2001
     Net income (d)                            $2.9        $22.0      $107.2
     Diluted earnings per share (d)             .08          .56        2.75
     Manufacturing operations (d):
       Net income                              10.8         16.1        46.0
       Diluted earnings per share               .28          .41        1.19
       EBITDA (e):
         Film Products                         19.6         20.6        66.9
         Aluminum Extrusions                    8.7         15.6        52.3
         Total                                 28.3         36.2       119.1
     Biotechnology operations (d):
       Operating losses (net R&D expenses)      4.1          3.0        14.7
 
     Selected balance sheet data as of
      March 31, 2001:
       Cash invested to date in
        technology operating companies         70.6
       Venture capital net asset value        296.5
       Net debt (f)                           217.9
       Shares outstanding                      38.1
 
 
     Notes to the Financial Tables
 
     (a) Unusual items in the first quarter of 2001 include a pretax charge of
         $1,600 related to further rationalization in the plastic films
         business.  Unusual items in the first quarter of 2000 include a pretax
         charge of $5,293 for the shutdown of a plastic films manufacturing
         facility in Manchester, Iowa and a pretax charge of $191 for costs
         associated with the evaluation of financing and structural options for
         the Technology Group.
 
 
     (b) Comprehensive income (loss), defined as net income and other
         comprehensive income (loss), was a loss of $9.8 million for the first
         quarter of 2001 and income of $61.5 million for the first quarter of
         2000.  Other comprehensive income (loss) includes changes in:
         unrealized gains and losses on available-for-sale securities, foreign
         currency translation adjustments and changes in unrealized gains and
         losses on derivative financial instruments recorded net of deferred
         taxes directly in shareholders' equity.
 
 
     (c) Condensed statements of operations and net assets for Tredegar's
         venture capital investment subsidiary are shown below:
 
 
                        Venture Capital Investment Operations
                          Condensed Statement of Operations
 
                                                          First Quarter
                                                      2001              2000
       (In Millions)
       Net realized gains, losses, write-downs and
         related operating expenses for venture
         capital investments reflected in Tredegar's
         consolidated statements of income
         (net of tax)                                  $(5.3)             $7.8
       Change in unrealized appreciation of venture
         capital investments (net of tax)              (30.8)             79.0
       After-tax appreciation (depreciation) in net
         asset value ("NAV") related to investment
         performance                                  $(36.1)            $86.8
 
 
 
                        Venture Capital Investment Operations
                          Condensed Statement of Net Assets
 
                                                    March 31,      December 31,
                                                      2001             2000
       (In Millions)
       Cost basis of investments                      $214.0            $213.1
       Write-downs taken on securities held
        (charged to earnings)                          (40.2)            (26.6)
       Unrealized appreciation on public securities
        held by Tredegar (reflected directly in
        equity net of deferred taxes)                   25.7              45.8
       Carrying value of investments reflected
        in the balance sheet                           199.5             232.3
       Unrealized appreciation in private securities
        held by Tredegar and in its indirect interest
        in all securities held by venture capital
        funds                                          143.4             171.3
       Estimated fair value of venture
        capital investments                            342.9             403.6
       Estimated taxes on assumed disposal
        at fair value                                  (46.4)            (68.6)
       NAV of venture capital investments             $296.5            $335.0
 
 
 
                        Venture Capital Investment Operations
                        Condensed Statement of Changes in NAV
 
                                                          First Quarter
                                                     2001               2000
       (In Millions)
       NAV at beginning of period                   $335.0             $180.2
       After-tax appreciation (depreciation)
        in NAV related to investment performance
        (net of operating expenses)                  (36.1)              86.8
       After-tax operating expenses
        funded by Tredegar                             1.0                 .6
       New investments                                 4.4               21.6
       Reduction in NAV due to the sale
        of investments                                (7.8)             (12.5)
       Increase (decrease) in NAV                    (38.5)              96.5
       NAV at end of the period                     $296.5             $276.7
 
 
     (d) Excludes unusual items.
 
 
     (e) EBITDA represents earnings before income taxes, unusual items,
         depreciation and amortization and is presented net of allocated
         corporate expenses.
 
     (f) Net debt represents debt less cash and cash equivalents and
         receivables from security brokers.
 
 

SOURCE Tredegar Corporation
    RICHMOND, Va., April 18 /PRNewswire/ -- Tredegar Corporation (NYSE:   TG)
 reported first-quarter net income of $1.9 million (five cents per share), down
 from $18.5 million (47 cents per share) in 2000.  Excluding nonrecurring
 charges, biotechnology operations and venture capital activities, net income
 from Tredegar's manufacturing operations was $10.8 million (28 cents per
 share), down from $16.1 million (41 cents per share) in 2000.
     First-quarter sales were $191.8 million versus $232.2 million in 2000.
     A summary of first-quarter results is shown below:
 
     (In millions, except per-share data)                    First Quarter
                                                            Ended March 31
                                                         2001           2000
     Net sales                                         $191.8         $232.2
 
     Net income (loss):
       Manufacturing operations                         $10.8          $16.1
       Biotechnology operations                          (2.6)          (1.9)
       Tredegar Investments                              (5.3)           7.8
       Unusual items                                     (1.0)          (3.5)
     Total                                               $1.9          $18.5
 
     Diluted earnings (loss) per share:
       Manufacturing operations                          $.28           $.41
       Biotechnology operations                          (.07)          (.05)
       Tredegar Investments                              (.13)           .20
       Unusual items                                     (.03)          (.09)
     Total                                               $.05           $.47
 
     John D. Gottwald, Tredegar's president and chief executive officer, said:
 "Poor economic and business conditions continue to affect our aluminum
 extrusions business and our venture capital investments.  If the weakness in
 technology markets persists, additional investment-related losses and further
 declines in the value of our investments are likely.  On the other hand, we're
 encouraged by the significant improvement in our plastic films business over
 the fourth quarter of 2000.  If the economy strengthens, we hope to see profit
 growth from our manufacturing operations in the second half of this year."
 
                            MANUFACTURING OPERATIONS
 
                                 Film Products
     First-quarter sales from plastic film operations were $96.8 million, down
 slightly from $99.5 million in 2000.  Excluding unusual items, operating
 profit for the quarter was $15.1 million versus $15.8 million last year.  On a
 similar basis, first-quarter profits were up 38% over fourth-quarter results
 due to higher sales of new products and cost savings from reorganization
 efforts.
     Total volume for the quarter declined to 77 million pounds, down 13% from
 last year, reflecting lower demand for the company's diaper backsheet film.
 The profit impact of the volume decline was partially offset by higher sales
 of new specialty components for diapers and feminine hygiene products.
     Gottwald said:  "We're encouraged by results in our films business, which
 has been struggling for more than two years.  There's growing evidence that
 our efforts to commercialize new products and expand our customer base are
 beginning to take hold.  While it will be difficult to sustain this level of
 profits in the second quarter, we're optimistic about the prospects for profit
 growth in this business later this year."
     First-quarter capital expenditures in Film Products totaled $9.5 million,
 which was primarily used to support a plant expansion in Hungary, a new plant
 in China, and to purchase machinery for new products.  Tredegar expects to
 invest approximately $35 million during 2001 to support continued global
 expansion and product development efforts.
 
                              Aluminum Extrusions
     First-quarter sales in aluminum extrusions were $93.5 million, down 28%
 versus $129.2 million in 2000.  Volume for the quarter declined 29% to 59
 million pounds.  Operating profit was $6.4 million, down 59% from $15.7
 million in last year's first quarter.  Results were affected by a sharp drop
 in demand from transportation and distribution markets, seasonal weakness in
 construction markets, and higher energy costs.
     Gottwald said:  "Our aluminum business continues to struggle with a volume
 decline that began in the third quarter of 2000 and has worsened since then.
 It's clear that general economic weakness is affecting many of our customers.
 In fact, customer orders during the first quarter were 33% below year-ago
 levels.  We've taken action to reduce costs, but orders remain relatively weak
 across most of our end markets.  Hopefully, market conditions will improve
 during the second half of this year."
 
                            BIOTECHNOLOGY OPERATIONS
     The first-quarter operating loss in Tredegar's biotechnology operations
 (Therics and Molecumetics) was $4.1 million versus an operating loss of $3
 million in 2000.  The higher losses reflect increased spending related to the
 company's previously announced strategy to increase research and development
 efforts at these operations.  Tredegar expects the spending rate to continue
 to increase.  Revenues for the quarter were $1.5 million, down from $1.7
 million last year.  Through March 31, Tredegar had total cash invested of
 $70.6 million in its biotechnology operations.
 
                              TREDEGAR INVESTMENTS
     Tredegar Investments' first-quarter loss of $5.3 million (13 cents per
 share) includes write-downs related to eight venture capital investments.  The
 write-downs were caused by recent events indicating lower valuations.  During
 the quarter, the depreciation in the net asset value of Tredegar's venture
 portfolio related to investment performance was $36.1 million.  On March 31,
 the total net asset value of venture capital investments was $296.5 million.
 Through March 31, the estimated internal rate of return (IRR) since the
 portfolio's inception in 1992 was 63% (44% after taxes).  Tredegar's Web site,
 http://www.tredegar.com , contains a detailed summary of the company's venture
 capital investments.
     Gottwald said:  "It looks as though 2001 may be shaping up to be the flip
 side of 2000, when our investments generated $84 million in net after-tax
 gains and the portfolio's net asset value appreciation was $173 million.  This
 year, early-stage technology companies are struggling to raise capital in a
 very weak financing environment.  If this continues, further declines in the
 value of our portfolio are likely."
 
                                 UNUSUAL ITEMS
     First-quarter results include a net after-tax charge of $1 million (three
 cents per share) related to the reorganization of the company's films business
 to more closely align its cost structure with revenues.  First-quarter 2000
 results included net after-tax charges totaling $3.5 million (nine cents per
 share) primarily related to the shutdown of a plastic films plant in
 Manchester, Iowa.
 
                   FORWARD-LOOKING AND CAUTIONARY STATEMENTS
     The words "hope," "expect," and similar expressions identify "forward-
 looking" statements within the meaning of the "safe harbor" provisions of the
 Private Securities Litigation Reform Act of 1995.  Such statements involve a
 number of risks and uncertainties that could cause actual results to differ
 materially from those contained in the forward-looking statements, including
 without limitation the following:
     Film Products is highly dependent on sales to Procter & Gamble ("P&G"),
 which comprised 64% of this segment's net sales in 2000.  Film Products'
 success in this regard depends on its ability to develop products that meet
 P&G's requirements as well as market acceptance of related P&G products.  Our
 ability to grow Film Products and attract new customers depends on developing
 and delivering new products, especially in the hygiene market.  While we have
 substantial technical resources, there can be no assurance that our new
 products can be brought to market successfully, or at the same level of
 profitability and market share of replaced films.  A shift in customer
 preferences away from our technologies or our inability to deliver new
 profitable products could have a material adverse effect on our business.
     Aluminum Extrusions is a cyclical, seasonal business that is highly
 dependent on general economic conditions in the U.S. and Canada, particularly
 in the construction and transportation industries.  This business is under
 domestic and foreign competitive pressures and continues to be affected by
 higher energy costs.
     Therics and Molecumetics are biotechnology companies whose ability to
 develop and commercialize products will depend on their preclinical, clinical,
 regulatory and sales and marketing capabilities or, where appropriate, whether
 they can enter into satisfactory arrangements with third parties to provide
 those functions.
     Tredegar Investments holds illiquid investments in early-stage technology
 companies, the value of which depends on the equity markets generally and
 their ability to raise additional capital through subsequent rounds of private
 financing and initial public offerings.  In addition, these companies are
 subject to risk that they will not be able to commercialize their technology,
 product or business concept.
     Tredegar does not undertake to update any forward-looking statement made
 in this press release, to reflect any change in management's expectations or
 any change in conditions, assumptions or circumstances on which such
 statements are based.
     Based in Richmond, Va., Tredegar Corporation is a manufacturer of plastic
 films and aluminum extrusions.  Tredegar also has two operating subsidiaries
 focused on healthcare-related technologies.
 
                                Tredegar Corporation
                    Condensed Consolidated Statements of Income
                       (In Thousands, Except Per-Share Data)
                                    (Unaudited)
 
                                                        Three Months Ended
                                                             March 31
                                                     2001               2000
 
     Net sales                                      191,802            232,228
     Other income (expense), net                     (5,925)            13,232
                                                    185,877            245,460
 
     Cost of goods sold                             156,855            186,394
     Selling, R&D and general expenses               19,196             18,892
     Amortization of intangibles                      1,214              1,276
     Interest expense                                 4,041              4,295
     Unusual items (a)                                1,600              5,484
                                                    182,906            216,341
 
     Income before income taxes                       2,971             29,119
     Income taxes                                     1,070             10,656
     Net income (a) (b)                              $1,901            $18,463
 
     Earnings per share:
       Basic                                           $.05               $.49
       Diluted                                          .05                .47
 
     Shares used to compute EPS:
       Basic                                         38,069             37,718
       Diluted                                       38,809             38,970
 
 
 
                                  Tredegar Corporation
                       Net Sales and Operating Profit by Segment
                                     (In Thousands)
                                      (Unaudited)
 
                                                       Three Months Ended
                                                            March 31
                                                     2001               2000
     Net Sales
     Film Products                                  $96,830            $99,486
     Fiberlux                                             -              1,782
     Aluminum Extrusions                             93,472            129,240
     Biotechnology operations:
       Molecumetics                                   1,331              1,626
       Therics                                          169                 94
         Total net sales                           $191,802           $232,228
 
     Operating Profit
     Film Products:
       Ongoing operations                           $15,094            $15,750
       Unusual items (a)                             (1,600)            (5,293)
                                                     13,494             10,457
 
     Aluminum Extrusions                              6,381             15,714
 
     Fiberlux                                             -               (209)
 
     Biotechnology operations:
       Molecumetics                                  (1,772)            (1,229)
       Therics                                       (2,349)            (1,799)
                                                     (4,121)            (3,028)
     Tredegar Investments:
       Venture capital activities                    (8,262)            12,143
       Unusual items (a)                                  -               (191)
                                                     (8,262)            11,952
         Total operating profit                       7,492             34,886
     Interest income                                    688                394
     Interest expense                                 4,041              4,295
     Corporate expenses, net (a)                      1,168              1,866
     Income before income taxes                       2,971             29,119
     Income taxes                                     1,070             10,656
     Net income (a) (b)                              $1,901            $18,463
 
 
 
                               Tredegar Corporation
                       Condensed Consolidated Balance Sheets
                                  (In Thousands)
                                    (Unaudited)
 
                                                   March 31,       December 31,
                                                     2001              2000
     Assets
 
     Cash & cash equivalents                        $46,072           $44,530
     Receivable from securities brokers               5,552               292
     Accounts & notes receivable                     99,972            96,652
     Income taxes recoverable                         6,057             3,857
     Inventories                                     45,323            46,825
     Deferred income taxes                           13,800            13,788
     Prepaid expenses & other                         2,852             2,818
     Total current assets                           219,628           208,762
 
     Property, plant & equipment, net               277,131           273,507
     Venture capital investments (c)                199,457           232,259
     Other assets                                    51,910            49,661
     Goodwill & other intangibles                   138,637           139,579
 
     Total assets                                  $886,763          $903,768
 
     Liabilities and Shareholders' Equity
 
     Accounts payable                               $52,933           $51,818
     Accrued expenses                                35,760            36,593
     Total current liabilities                       88,693            88,411
 
     Long-term debt                                 269,513           268,102
     Deferred income taxes                           34,502            40,650
     Other noncurrent liabilities                     9,243             8,877
     Shareholders' equity                           484,812           497,728
 
     Total liabilities and shareholders'
      equity                                       $886,763          $903,768
 
 
 
                                Tredegar Corporation
                           Selected Cash Flow Information
                                   (In Thousands)
                                    (Unaudited)
 
                                                        Three Months Ended
                                                             March 31
                                                     2001               2000
     Net income from operations excluding
      unusual items and venture capital
      investment activities                         $8,213             $14,201
     Depreciation                                    7,849               8,062
     Amortization of intangibles                     1,214               1,276
     Capital expenditures                           13,576              15,843
     Venture capital investments                     4,351              21,603
     Sale of venture capital investments
      (net of transaction costs):
       Value from sale                              10,332              18,323
       (Increase) decrease in receivable
        from securities brokers                     (5,260)            (17,790)
       Proceeds from sale of venture
        capital investments                          5,072                 533
     Increase (decrease) in cash and cash
      equivalents                                    1,542             (12,043)
     Increase (decrease) in long-term debt           1,411                   -
 
 
 
                           Selected Financial Measures
                     (In Millions, Except Per-Share Amounts)
                                   (Unaudited)
 
                                                                    At or for
                                             Three Months Ended    the 12 Mos.
                                                   March 31           Ended
                                              2001         2000     03/31/2001
     Net income (d)                            $2.9        $22.0      $107.2
     Diluted earnings per share (d)             .08          .56        2.75
     Manufacturing operations (d):
       Net income                              10.8         16.1        46.0
       Diluted earnings per share               .28          .41        1.19
       EBITDA (e):
         Film Products                         19.6         20.6        66.9
         Aluminum Extrusions                    8.7         15.6        52.3
         Total                                 28.3         36.2       119.1
     Biotechnology operations (d):
       Operating losses (net R&D expenses)      4.1          3.0        14.7
 
     Selected balance sheet data as of
      March 31, 2001:
       Cash invested to date in
        technology operating companies         70.6
       Venture capital net asset value        296.5
       Net debt (f)                           217.9
       Shares outstanding                      38.1
 
 
     Notes to the Financial Tables
 
     (a) Unusual items in the first quarter of 2001 include a pretax charge of
         $1,600 related to further rationalization in the plastic films
         business.  Unusual items in the first quarter of 2000 include a pretax
         charge of $5,293 for the shutdown of a plastic films manufacturing
         facility in Manchester, Iowa and a pretax charge of $191 for costs
         associated with the evaluation of financing and structural options for
         the Technology Group.
 
 
     (b) Comprehensive income (loss), defined as net income and other
         comprehensive income (loss), was a loss of $9.8 million for the first
         quarter of 2001 and income of $61.5 million for the first quarter of
         2000.  Other comprehensive income (loss) includes changes in:
         unrealized gains and losses on available-for-sale securities, foreign
         currency translation adjustments and changes in unrealized gains and
         losses on derivative financial instruments recorded net of deferred
         taxes directly in shareholders' equity.
 
 
     (c) Condensed statements of operations and net assets for Tredegar's
         venture capital investment subsidiary are shown below:
 
 
                        Venture Capital Investment Operations
                          Condensed Statement of Operations
 
                                                          First Quarter
                                                      2001              2000
       (In Millions)
       Net realized gains, losses, write-downs and
         related operating expenses for venture
         capital investments reflected in Tredegar's
         consolidated statements of income
         (net of tax)                                  $(5.3)             $7.8
       Change in unrealized appreciation of venture
         capital investments (net of tax)              (30.8)             79.0
       After-tax appreciation (depreciation) in net
         asset value ("NAV") related to investment
         performance                                  $(36.1)            $86.8
 
 
 
                        Venture Capital Investment Operations
                          Condensed Statement of Net Assets
 
                                                    March 31,      December 31,
                                                      2001             2000
       (In Millions)
       Cost basis of investments                      $214.0            $213.1
       Write-downs taken on securities held
        (charged to earnings)                          (40.2)            (26.6)
       Unrealized appreciation on public securities
        held by Tredegar (reflected directly in
        equity net of deferred taxes)                   25.7              45.8
       Carrying value of investments reflected
        in the balance sheet                           199.5             232.3
       Unrealized appreciation in private securities
        held by Tredegar and in its indirect interest
        in all securities held by venture capital
        funds                                          143.4             171.3
       Estimated fair value of venture
        capital investments                            342.9             403.6
       Estimated taxes on assumed disposal
        at fair value                                  (46.4)            (68.6)
       NAV of venture capital investments             $296.5            $335.0
 
 
 
                        Venture Capital Investment Operations
                        Condensed Statement of Changes in NAV
 
                                                          First Quarter
                                                     2001               2000
       (In Millions)
       NAV at beginning of period                   $335.0             $180.2
       After-tax appreciation (depreciation)
        in NAV related to investment performance
        (net of operating expenses)                  (36.1)              86.8
       After-tax operating expenses
        funded by Tredegar                             1.0                 .6
       New investments                                 4.4               21.6
       Reduction in NAV due to the sale
        of investments                                (7.8)             (12.5)
       Increase (decrease) in NAV                    (38.5)              96.5
       NAV at end of the period                     $296.5             $276.7
 
 
     (d) Excludes unusual items.
 
 
     (e) EBITDA represents earnings before income taxes, unusual items,
         depreciation and amortization and is presented net of allocated
         corporate expenses.
 
     (f) Net debt represents debt less cash and cash equivalents and
         receivables from security brokers.
 
 SOURCE  Tredegar Corporation