TREDEGAR REPORTS FOURTH-QUARTER, YEAR-END RESULTS

RICHMOND, Va., February 8, 2006 – Tredegar Corporation (NYSE:TG) reported fourth-quarter income from continuing operations of $890,000 (2 cents per share) compared to $3.4 million (9 cents per share) in 2004. Earnings from manufacturing operations were $6.1 million (15 cents per share) versus $6.5 million (17 cents per share) last year. Fourth-quarter sales were up to $239.8 million from $226.7 million in 2004. A summary of fourth-quarter and year-end results from continuing operations is shown below:

Norman A. Scher, Tredegar’s president and chief executive officer, said: “In films, results were down significantly from third-quarter and year-ago levels due to substantially higher resin costs and the timing lag between these rising costs and corresponding price increases. Profits in aluminum improved over the fourth quarter of 2004 as price increases and higher shipments helped to offset rising energy costs.”

In January, Tredegar announced Scher’s retirement as president and chief executive officer and the appointment of John D. Gottwald, Tredegar’s board chairman, as his successor effective March 1, 2006.

Gottwald said: “Cost reductions and strategic focus will be priorities in 2006.”

MANUFACTURING OPERATIONS

Film Products

Fourth-quarter net sales in Film Products were $116.0 million, about the same as the third quarter of 2005 and up 4% from $111.3 million in the fourth quarter of 2004. The increase in sales over last year was due primarily to the pass-through of higher raw material costs and growth in higher value-added products. Volume was 63.3 million pounds, down from 66.1 million pounds in the third quarter of 2005 and 68.3 million pounds in the fourth quarter of 2004. Volume declines were mainly due to competitive pressures on certain lower margin materials used in baby diapers and adult incontinence products. Packaging film volumes were also hurt by competitive pressures.

Operating profit from ongoing operations in the fourth quarter of 2005 was $8.2 million, down from $13.8 million in the third quarter of 2005 and $11.4 million in the fourth quarter of 2004. The profit decline was driven by the lag in passing through higher resin costs. The company estimates that the adverse impact on operating profit of this lag (net of the favorable effect of a decline in inventories accounted for under the last-in first-out method) in the fourth quarter compared with the third quarter of 2005 was approximately $5.5 million. Fourth quarter 2004 operating profit was also adversely affected by the lag of passing through higher resin prices of around $2 million compared with the third quarter of 2004, but was helped by a $1 million customer reimbursement for prior period start-up costs.

Resin prices continued to escalate to record high levels in the fourth quarter due to supply shortages related to the gulf coast hurricanes. Average quarterly prices of low-density polyethylene resin in the U.S. increased 21 cents per pound or 32% in the quarter. Resin prices in Europe and South America exhibited similar trends. To mitigate the impact of resin price fluctuations, Film Products has index-based pass-through agreements for the majority of its business. However, under certain agreements, changes in resin costs are not passed through for an average period of 90 days. For non-indexed customers, Film Products has implemented price increases to mitigate the negative impact of higher resin costs.

Full year net sales were $460.3 million, up 11%, versus $413.3 million in 2004. Operating profit from ongoing operations was up 4% to $44.9 million from $43.3 million in 2004 despite significantly higher resin costs. Volume for the year decreased to 261.1 million pounds from 278.7 million pounds. Last year’s volume included 9.4 million pounds associated with the divested films business in Argentina.

Capital expenditures in 2005 were $50 million and primarily supported capacity expansions for higher value-added materials and a new global information system. Aggregate capital spending for the last three years totaled approximately $150 million. About one-third of this capital spending relates to customer-specific opportunities that are covered by capital indemnification, contractual volume commitments or similar arrangements. Capital expenditures are expected to be about $50 million in 2006, about half of which is for additional capacity to meet expected demand for surface protection films. These films are primarily used to protect flat panel display components during fabrication, shipping and handling. Sales of surface protection films totaled approximately $30 million in 2005, up from $16 million in 2004. Planned capital expenditures also include expansion of capacity to support elastic material growth opportunities. Sales of elastic materials are expected to continue growing as manufacturers of diapers and adult incontinence products add more stretch to their products to improve comfort and fit.

Aluminum Extrusions

Fourth-quarter net sales in Aluminum Extrusions were $117.7 million, up 8% from $108.9 million in 2004 primarily due to higher selling prices driven by higher raw material and energy costs. Fourth-quarter volume was up 2% to 60.7 million pounds versus 59.6 million pounds in 2004, as stronger shipments in commercial construction and hurricane protection products were offset by lower shipments in other end markets. Operating profit from ongoing operations increased to $4.7 million, up 42% from $3.3 million in 2004. This increase was mainly due to higher selling prices and volume, and the favorable impact of $700,000 from the reversal of a capital tax accrual. Profits continue to be suppressed by higher energy costs, which were up $3.4 million in the fourth quarter of 2005 over 2004, and appreciation of the Canadian Dollar (adverse impact of $700,000 in the fourth quarter of 2005 compared with 2004).

The average costs for natural gas, electricity and diesel fuel were significantly higher in 2005 compared with 2004. Natural gas prices were up more than 80% in the fourth quarter over last year’s fourth-quarter levels. For every $1 mmBtu change in the price of natural gas, the company expects a corresponding operating profit impact of approximately $150,000 per month. Aluminum Extrusions has implemented an energy surcharge to lessen the negative impact of rising energy costs.

Full-year net sales were $471.7 million, up 11% from $425.1 million in 2004. Operating profit from ongoing operations declined 15% to $19.3 million from $22.6 million in 2004 due mainly to higher energy costs (approximately $7 million) and strength of the Canadian Dollar (about $3.5 million). Annual volume increased to 246.4 million pounds from 243.4 million pounds in 2004.

Capital expenditures were $12 million in 2005 and are expected to be approximately $10 million in 2006.

Profit growth in 2006 is expected to be driven by focusing on improving volume for the company’s operations in Canada, higher volume anticipated from hurricane-related rebuilding, recent price increases, the energy surcharge and cost reductions from productivity enhancements.

OTHER ITEMS

During the fourth quarter of 2005, the company recognized a pretax loss of $5 million ($3.8 million after taxes or 10 cents per share) from the write-down of its investment in Novalux, Inc., a developer of laser technology. The remaining carrying value of this investment at December 31, 2005 was $1.1 million.

Fourth-quarter results include a net after-tax charge of $2.4 million (6 cents per share) for plant shutdowns, asset impairments and restructurings associated primarily with the planned shutdown of the plastic films plant in LaGrange, Ga., announced earlier this month. The plant is scheduled to close by May 1, 2006, and the company expects to incur additional charges of approximately $1.7 million ($1.0 million after taxes or 3 cents per share).

The effective tax rate for manufacturing operations was 30.1% in the fourth quarter of 2005 compared with an expected rate of 36%. The lower rate was primarily due to an adjustment of deferred provincial tax rates related to the company's aluminum operations in Canada (favorable impact of 1 cent per share). The company’s estimate of the effective tax rate for manufacturing operations in 2006 is 36%.

Tredegar expects net pension income in 2006 to decline by approximately $5 million (8 cents per share after taxes). Most of this decline in pension income relates to a pension plan that is reflected in “Corporate expenses, net” in the operating profit by segment table.

Details and the financial impact of losses associated with plant shutdowns, asset impairments and restructurings, gains from the sale of assets and discontinued operations are provided in the financial tables included with this press release.

CAPITAL STRUCTURE

Net debt (debt net of cash) was $89.6 million or about one times the last twelve months adjusted EBITDA from manufacturing operations. The company refinanced its debt in December with a $300 million five-year unsecured revolving credit facility.

See notes to financial tables for reconciliations to comparable GAAP measures.

QUARTERLY CONFERENCE CALL

Tredegar management has discontinued conference calls.

The words “believe,” “hope,” “expect,” “are likely,” and similar expressions may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on our then current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements. Factors that may cause such a difference include, but are not limited to the following:

Film Products is highly dependent on sales to one customer, which comprised approximately 25% of Tredegar’s net sales in 2005. The loss or significant reduction of sales associated with this customer would have a material adverse effect on our business, as would delays in this customer rolling out products utilizing new technologies developed by Film Products.

Growth of Film Products depends on its ability to develop and deliver new products at competitive prices, especially in the personal care market. Personal care products are now being made with a variety of new materials, replacing traditional backsheet and other components. While Film Products has substantial technical resources, there can be no assurance that its new products can be brought to market successfully, or if brought to market successfully, at the same level of profitability and market share of replaced films. A shift in customer preferences away from Film Products’ technologies, its inability to develop and deliver new profitable products, or delayed acceptance of its new products in domestic or foreign markets, could have a material adverse effect on Tredegar. In the long term, growth will depend on Film Products’ ability to provide innovative materials at or below current material costs, including lowering equipment and other capital costs.

Sales volume and profitability of Aluminum Extrusions is cyclical and highly dependent on economic conditions of end-use markets in the U.S. and Canada, particularly in the construction, distribution and transportation industries. Aluminum Extrusions’ market segments are also subject to seasonal slowdowns during the winter months. The markets for Aluminum Extrusions’ products are marked by differences between the Canadian and U.S. markets. They are also highly competitive with product quality, service, delivery performance and price being the principal competitive factors. Although Aluminum Extrusions targets complex, customized, service-intensive business compared to higher volume, standard extrusion applications, Aluminum Extrusions is under increasing domestic and foreign competitive pressures. Foreign imports, primarily from China, represent a growing portion of the North American aluminum extrusion market. Foreign competition to date has been primarily large volume, standard extrusion profiles that impact some of our less strategic end-use markets. Market share erosion in other end-use markets remains possible.

Tredegar’s substantial international operations subject us to risks of doing business in foreign countries, which could adversely affect our business, financial condition and results of operations. Risks inherent in international operations include the following, by way of example: changes in general economic conditions, potential difficulty enforcing agreements and intellectual property rights, restrictions on foreign trade or investment, fluctuations in exchange rates, imposition of additional taxes on our foreign income, nationalization of private enterprises and unexpected adverse changes in foreign laws and regulatory requirements.

Tredegar’s future performance will also be influenced by the costs incurred by Tredegar’s operating companies, including the cost of energy and raw materials. These costs include, without limitation, the cost of resin (the raw material on which Film Products primarily depends), natural gas (the principal fuel necessary for Aluminum Extrusions’ plants to operate), electricity and diesel fuel. Resin and natural gas prices have risen significantly and may continue to do so in the future. There is no assurance that cost control efforts will be sufficient to offset any additional future declines in revenues or increases in energy, raw materials or other costs. Tredegar attempts to mitigate the effects of increased costs through price increases, but there are no assurances that higher selling prices can be effectively passed through to Tredegar’s customers.

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.

To the extent that this release contains non-GAAP financial measures, it also presents both the most directly comparable financial measures calculated and presented in accordance with GAAP and a quantitative reconciliation of the difference between any such non-GAAP measures and such comparable GAAP financial measures. Accompanying the reconciliation is management’s statement concerning the reasons why management believes that presentation of non-GAAP measures provides useful information to investors concerning Tredegar’s financial condition and results of operations.

Based in Richmond, Va., Tredegar Corporation is a global manufacturer of plastic films and aluminum extrusions.

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