TREDEGAR REPORTS FIRST-QUARTER RESULTS

RICHMOND, Va., May 3, 2006–Tredegar Corporation (NYSE:TG) reported first-quarter income from continuing operations of $8.2 million (21 cents per share) compared to $5.6 million (14 cents per share) in 2005. Earnings from manufacturing operations were $9.5 million (24 cents per share) versus $6.7 million (17 cents per share) last year. First-quarter sales were up to $268.0 million from $232.8 million in 2005. A summary of first-quarter results from continuing operations is shown below:

John D. Gottwald, Tredegar’s president and chief executive officer, said: “We’re pleased with the improved operating results for the first quarter versus 2005. In films, growth in sales of higher value-added materials had a favorable impact on profits as did the resin price pass-through. However, second-quarter profits are likely to drop due primarily to customer inventory adjustments. In aluminum, volumes were reasonably strong, especially considering that the first quarter is seasonally sluggish. Bookings remain solid.”

MANUFACTURING OPERATIONS

Film Products

First-quarter net sales in Film Products were $126.3 million, up 8% from $116.7 million in the first quarter of 2005 while operating profit from ongoing operations rose 34% to $15.6 million from $11.6 million. The increase in operating profit over last year’s first quarter was primarily due to continued growth in surface protection films, elastic materials and new apertured topsheets. Profits also benefited from an increase in selling prices to cover higher resin costs incurred during the fourth quarter of 2005. Volume was 64.5 million pounds compared with 67.4 million pounds in the first quarter of 2005. Volume declines were mainly due to competitive pressures on certain mature products used in baby diapers and adult incontinence products.

Net sales, operating profit from ongoing operations and volume in the fourth quarter of 2005 were $116.0 million, $8.2 million and 63.3 million pounds, respectively. Fourth-quarter 2005 results were adversely affected by record-level, hurricane-related increases in resin prices.

Film Products has index-based pass-through raw material agreements for the majority of its business. However, under certain agreements, changes in resin prices are not passed through for an average period of 90 days. Average quarterly prices of low-density polyethylene resin in the U.S. decreased 8 cents per pound in the first quarter of 2006 after increasing 21 cents per pound or 32% in the fourth quarter of 2005. Since 2002, U.S. low-density polyethylene resin prices have more than doubled. Resin prices in Europe, Asia and South America have also increased significantly during this time.

Tredegar estimates that the lag in the pass-through to customers of changes in resin prices had a positive impact on first-quarter 2006 results of $2 million compared with a negative impact on fourth-quarter 2005 results of $5.5 million (net of the favorable effect of a decline in inventories accounted for under the last-in first-out method). There was no significant resin pass-through lag in the first quarter of 2005.

The company expects customer inventory adjustments to adversely affect sales and profits in the second quarter of 2006.

Film Products continues to expand capacity to support growth in new products. Capital expenditures were $11.4 million in the first quarter and are expected to be $45 million for the year. Approximately half of the forecasted capital expenditures relates to expanding the production capacity for surface protection films. Other planned capital expenditures include capacity additions for elastic materials and a new information system, which is currently being rolled out in U.S. locations. Depreciation expense was $7.7 million in the first quarter of 2006 compared with $6.1 million in the first quarter of last year, and is projected to increase by $5 million to $31 million for the year.

Aluminum Extrusions

First-quarter net sales in Aluminum Extrusions were $135.2 million, up 23% from $110.0 million in the first quarter of 2005 primarily due to improved volume and higher selling prices. Operating profit from ongoing operations increased to $4.9 million, up 63% from $3.0 million in the first quarter of 2005. The increase in operating profit was mainly due to higher volume, which was up 9% to 63.7 million pounds versus 58.4 million pounds in the first quarter of 2005. Growth in shipments continued to be driven by demand for extrusions used in commercial construction and hurricane protection products. Higher selling prices helped to offset the negative impact of higher energy costs ($1.7 million) and appreciation of the Canadian Dollar ($300,000).

First-quarter capital expenditures were $1.7 million and are expected to be approximately $10 million for the year.

OTHER ITEMS

Net pension expense was $675,000 in the first quarter of 2006, an increase of $1.5 million (2 cents per share after taxes) from the net pension income of $793,000 recognized in the first quarter of 2005. Tredegar expects net pension expense of $2.8 million in 2006, an unfavorable change of $5.4 million (9 cents per share after taxes) versus 2005. Most of this change relates to a pension plan that is reflected in “Corporate expenses, net” in the operating profit by segment table. The company expects required contributions to its pension plans to be about $800,000 in 2006.

During the first quarter, the company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123(R), "Share-Based Payment," which requires all stock-based compensation to be expensed and accounted for using a fair value-based method. The adoption of SFAS No. 123(R) and the granting of stock options on March 7, 2006 resulted in a first-quarter pretax charge for stock option-based compensation of $211,000. The company expects to recognize stock option-based compensation costs under the new standard of approximately $1.1 million in 2006 (2 cents per share after taxes).

First-quarter results also include a net after-tax charge of $1.3 million (3 cents per share) for plant shutdowns, asset impairments and restructurings, the same level as last year. First-quarter results in 2005 also included gains from the sale of assets and other items of $1.4 million (3 cents per share). Details regarding these items are provided in the financial tables included with this press release.

CAPITAL STRUCTURE

Net debt (debt net of cash) was $86.3 million or less than one times the last twelve months adjusted EBITDA from manufacturing operations.

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

Some of the information contained in this press release may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. When we use the words “believe,” “hope,” “expect,” “are likely,” “project” and similar expressions, we do so to identify forward-looking statements. 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. It is possible that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause actual results to differ from expectations include, without limitation: Film Products is highly dependent on sales to one customer — The Procter & Gamble Company; growth of Film Products depends on its ability to develop and deliver new products at competitive prices, especially in the personal care market; sales volume and profitability of Aluminum Extrusions is cyclical and highly dependent on economic conditions of end-use markets in the United States and Canada, particularly in the construction, distribution and transportation industries and are also subject to seasonal slowdowns during the winter months; our 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; and our future performance is influenced by costs incurred by our operating companies including, for example, the cost of energy and raw materials. For a more complete discussion of some of the other risks and important factors that could affect our future results and financial condition, see “Risk Factors” in Part I, Item 1A of our most recent Annual Report on Form 10-K and “Risk Factors” in Part II, Item 1A of our Quarterly Report on Form 10-Q for this period that will be filed with the Securities and Exchange Commission.

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 the financial information portion of 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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