FOR IMMEDIATE RELEASE
TREDEGAR RELEASES ANNUAL MEETING HIGHLIGHTS
RICHMOND, Va., May 20, 1999 -- At its annual meeting of shareholders,
held today in Richmond, Va., Tredegar Corporation (NYSE:TG) expressed optimism
about recent acquisitions and its prospects for growth in 2000, but said 1999
performance may be disappointing due to losses in its newly acquired Therics
subsidiary and lower than expected profits in its plastic films business.
EXXON FILMS ACQUISITION A MAJOR OPPORTUNITY
Earlier this week, Tredegar announced its acquisition of Exxon's
plastic films business for $200 million. Douglas R. Monk, Tredegar's chief
operating officer, said: "We think it's a great strategic fit. Exxon was an
excellent competitor that we're thrilled to have on our side. They have
exceptional technical strengths and a broad product line that's spread across a
variety of similar and new markets for Tredegar."
Regarding the near-term profit impact of the Exxon acquisition, Monk
added: "We don't expect it to have much of an impact on earnings this year.
Hopefully, we'll begin to see the results in the form of earnings growth next
year, and momentum should build after that."
THERICS TO GENERATE INITIAL LOSSES, LONG-TERM POTENTIAL IS SUBSTANTIAL
Therics, the company's recently acquired drug delivery subsidiary, is
expected to generate pretax losses of approximately $7 million (including
goodwill amortization) over the next 12 months as it seeks revenue-based
development partnerships. Tredegar said successful commercialization of Therics'
technology could lead to substantial revenue and earnings growth. John D.
Gottwald, Tredegar's president and chief executive officer, said: "On a
risk-reward basis, I think Therics is a good bet, and we should know which way
it's headed within a couple of years."
-- more --
TREDEGAR ANNUAL MEETING, page 2
ALUMINUM BUSINESS STRONG, SEEKING ACQUISITIONS
The company said profits in aluminum extrusions, which have doubled
since 1996, continue to be strong. Tredegar has doubled its production capacity
in this business by adding five plants, one in mid-1997 and four more during
1998. Monk said: "The truly exciting thing is that most of our profit growth has
been driven by our original three plants. If we make similar improvements in the
acquired plants, we should be able to sustain the momentum we've achieved." He
added that Tredegar is considering additional acquisitions in this business.
FILMS PROFITS LOWER THAN EXPECTED IN 1999, OUTLOOK FOR 2000 IS POSITIVE
The company said that 1999 profits in its films business continue to be
affected by a variety of factors including higher product development costs,
delays in new product introductions, start-up expenses at a new plant in
Hungary, and weakness in Far East and Latin American markets. Gottwald said:
"Due to the sluggishness we're experiencing in films, which I suspect will
continue to disappoint all of us for a while, and the newly added expenses
associated with Therics, I expect 1999 results to be less than exciting and
clearly lower than I had hoped."
Gottwald added: "I'm optimistic that results in 2000 will improve as
new products ramp up in films, the aluminum business continues to grow, and
acquisition synergies kick in. Looking further down the road, if you factor in
the potential of our technology businesses, the prospect of Tredegar achieving
high growth rates becomes very intriguing. We've certainly planted the seeds for
growth in future years."
Based in Richmond, Va., Tredegar Corporation is a manufacturer of
plastics and aluminum extrusions. Tredegar also has interests in drug discovery,
drug delivery and a variety of other emerging technologies.
###
This press release contains forward-looking statements based on
management's beliefs, assumptions and currently available information. Due to
potential changes in a variety of business and economic conditions, actual
results may differ materially from those anticipated in forward-looking
statements.