Tredegar Adopted Plan On August 3, 2023, To Close PE Films Technical Center In Richmond And Reduce Its Efforts To Develop And Sell Films Supporting Semiconductor Market
Portfolio Pulse from Benzinga Newsdesk
Tredegar Corporation (TG) has announced plans to close its PE Films Technical Center in Richmond and reduce its efforts to develop and sell films supporting the semiconductor market. Future R&D activities will be conducted at the Pottsville, PA facility. The company expects to incur $1.8 million in cash costs related to exit activities, non-cash asset write-offs, and accelerated depreciation of up to $4.5 million. However, it anticipates net annual cash savings of $3.4 million starting from Q4 2023.
August 09, 2023 | 12:20 pm
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Tredegar's decision to close its PE Films Technical Center and reduce its efforts in the semiconductor market could lead to short-term costs but long-term savings. The company expects to incur $1.8 million in cash costs and up to $4.5 million in non-cash asset write-offs and accelerated depreciation. However, it anticipates net annual cash savings of $3.4 million starting from Q4 2023.
The closure of the PE Films Technical Center and the reduction in efforts to develop and sell films for the semiconductor market could initially impact Tredegar's financials negatively due to the associated exit costs and asset write-offs. However, the company's anticipation of net annual cash savings of $3.4 million starting from Q4 2023 suggests a positive long-term impact. This could potentially offset the short-term costs, leading to a neutral short-term price direction.
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