UNITED STATES

OMB APPROVAL

 

SECURITIES AND EXCHANGE COMMISSION

OMB Number:     3235-0060

 

Washington, D.C. 20549

Expires:      March 31, 2006

 

 

Estimated average burden

 

FORM 8-K

hours per response ......28.0

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) February 28, 2011

 

TRIMAS CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

001-10716

 

38-2687639

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

39400 Woodward Avenue, Suite 130, Bloomfield Hills, Michigan

 

48304

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code (248) 631-5400

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02  Results of Operations and Financial Condition.

 

TriMas Corporation (the “Corporation”) issued a press release and held a teleconference on February 28, 2011, reporting its financial results for the fourth quarter and fiscal year ending December 31, 2010.  A copy of the press release and teleconference visual presentation are attached hereto as exhibits and are incorporated herein by reference.  The press release and teleconference visual presentation are also available on the Corporation’s website at www.trimascorp.com.

 

The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Corporation under the Securities Act of 1933 or the Exchange Act.

 

Item 9.01  Financial Statements and Exhibits.

 

(d)                                 Exhibits. The following exhibits are furnished herewith:

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release

 

 

 

99.2

 

The Corporation’s visual presentation titled “Fourth Quarter and Full Year 2010 Earnings Presentation”

 

2



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

TRIMAS CORPORATION

 

 

 

 

 

 

Date:

February 28, 2011

 

By:

/s/ Joshua A. Sherbin

 

 

Name:   Joshua A. Sherbin

 

 

Title:     Vice President, General Counsel and Secretary

 

3


 

Exhibit 99.1

 

 

 

CONTACT:

Sherry Lauderback

VP, Investor Relations & Communications

(248) 631-5506

sherrylauderback@trimascorp.com

 

TRIMAS CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 2010 RESULTS

Company Reports $1.21 Diluted EPS on 17% Sales Growth for 2010

Company Provides 2011 Outlook of $1.40 to $1.50 EPS

 

BLOOMFIELD HILLS, Michigan, February 28, 2011 — TriMas Corporation (NASDAQ: TRS) today announced financial results for the quarter and full year ended December 31, 2010. For the quarter, the Company reported net sales from continuing operations of $222.7 million, an increase of 16.5% compared to fourth quarter 2009. Fourth quarter 2010 income from continuing operations was $8.2 million, or $0.23 per diluted share, compared to a loss from continuing operations of $8.9 million, or $0.26 per diluted share, during fourth quarter 2009. Excluding Special Items,(1) fourth quarter 2009 income from continuing operations would have been $3.6 million, or $0.11 per share.

 

For the year ended December 31, 2010, the Company reported net sales from continuing operations of $942.7 million, an increase of 17.3% compared to 2009. The Company reported full year income from continuing operations of $41.9 million, or $1.21 per diluted share, compared to income from continuing operations of $12.7 million, or $0.37 per diluted share, in 2009. Excluding Special Items, 2009 income from continuing operations would have been $14.9 million, or $0.43 per diluted share.

 

TriMas 2010 Highlights

·                 Reported 17.3% net sales growth in 2010, as compared to 2009, due to overall improved economic conditions and the continued execution of several of the Company’s key growth initiatives.

·                 Improved 2010 operating profit margin and Adjusted EBITDA margin by 320 and 250 basis points, respectively, as compared to 2009, excluding the impact of Special Items.

·                 Generated 2010 Free Cash Flow(2) of $83.4 million, or almost $2.50 per diluted share.

·                 Reduced total indebtedness, net of cash, from $505.1 million as of December 31, 2009, to $448.3 million as of December 31, 2010.

·                 Decreased operating working capital as a percentage of sales from 14.5% in 2009 to 12.6% in 2010.

·                 Completed and successfully integrated two bolt-on acquisitions during 2010, enhancing the businesses’ growth opportunities through expansion of the product portfolio and customer base.

 

“We are proud of our many accomplishments in 2010,” said David Wathen, TriMas President and Chief Executive Officer. “Our balanced and structured approach to growth, productivity and cash generation drove positive results across our company. We achieved sales growth of 17%, resulting from improved end markets and successful execution of our strategic growth initiatives including product innovation, geographic expansion and bolt-on acquisitions.”

 

Wathen continued, “In addition to our top-line growth, our lower fixed cost structure and ongoing focus on productivity and lean initiatives drove significant margin expansion. 2010 operating profit margin improved by 320 basis points and 2010 diluted earnings per share improved over 150%, as compared to 2009 and excluding Special Items. We continue to generate strong cash flow, lower operating working capital as a percentage of sales and reduce outstanding debt. We have a solid foundation to build upon going into 2011.”

 

“While the past two years have been focused on structural improvements and turn-around activities, 2011 will be a year in which we intensify our efforts around growth, funded by our continuous productivity improvements and lean initiatives. In 2011, we expect to deliver continued strong results in line with our strategic aspirations. We are estimating 2011 top-line growth of 6% to 9%, compared to 2010, with earnings per share up a multiple of sales growth. We expect full-year 2011 diluted earnings per share from continuing operations to range between $1.40 and $1.50 per share. We continue to be confident in our ability to grow the top-line faster than the economy, create sustainable operating leverage and generate strong cash flow,” Wathen concluded.

 

1



 

Fourth Quarter Financial Results — From Continuing Operations

 

·                  TriMas reported fourth quarter net sales of $222.7 million, an increase of 16.5% in comparison to $191.1 million in fourth quarter 2009, driven by double-digit percentage increases in the Energy, Aerospace & Defense and Engineered Components segments. The effects of currency exchange did not have a material impact during the quarter.

 

·                  The Company reported operating profit of $19.5 million in fourth quarter 2010, as compared to operating profit of $7.1 million during fourth quarter 2009. Excluding the impact of Special Items,(1) operating profit would have improved 14.6%, from $17.0 million in fourth quarter 2009 to $19.5 million in fourth quarter 2010.

 

·                  Fourth quarter 2010 income from continuing operations was $8.2 million, or $0.23 per diluted share, including approximately $0.10 per share resulting from the benefit of a lower effective tax rate. The lower effective tax rate is related to U.S. tax legislation changes in fourth quarter and additional tax benefits in 2010 that the Company believes will be realized as a result of its improved earnings performance. These results are compared to a loss from continuing operations of $8.9 million, or $0.26 per diluted share, during fourth quarter 2009. Excluding the impact of Special Items, fourth quarter 2009 income from continuing operations would have been $3.6 million, or $0.11 per share.< /p>

 

·                  The Company reported Free Cash Flow(2) for fourth quarter 2010 of $16.7 million, relatively flat in comparison to fourth quarter 2009. Operating working capital as a percentage of last twelve months (LTM) sales continued to improve, declining from 14.5% in fourth quarter 2009 to 12.6% in fourth quarter 2010.

 

Full Year 2010 Financial Results — From Continuing Operations

 

·                  TriMas reported 2010 net sales from continuing operations of $942.7 million, an increase of 17.3% compared to $803.7 million in 2009, due to increased volumes resulting from the economic recovery in 2010, as well as new product introductions, geographic expansion and market share gains. In addition, net sales were favorably impacted by approximately $9.9 million as a result of currency exchange.

 

·                  The Company reported 2010 operating profit of $114.1 million, compared to an operating profit of $49.9 million for 2009. Excluding the impact of Special Items, operating profit would have increased 59.5%, from $71.5 million in 2009 to $114.1 million in 2010. This increase would have represented an improvement in operating profit margin of 320 basis points, resulting from higher sales volumes, reduced cost structure and ongoing productivity initiatives.

 

·                  Adjusted EBITDA(2) for 2010 increased to $150.7 million, as compared to $119.0 million in 2009. Excluding the impact of Special Items, Adjusted EBITDA would have increased 38.8%, from $108.6 million in 2009 to $150.7 million in 2010, representing an improvement in Adjusted EBITDA margin of 250 basis points.

 

·                  2010 income from continuing operations was $41.9 million, or $1.21 per diluted share, compared to income from continuing operations of $12.7 million, or $0.37 per diluted share, during 2009. As noted above, the Company benefited from a lower effective tax rate in 2010 due to additional tax benefits that the Company believes will be realized as a result of its improved earnings performance. Excluding the impact of Special Items, 2009 income from continuing operations would have been $14.9 million, or $0.43 per share.

 

·                  The Company reported Free Cash Flow(2) for 2010 of $83.4 million, or almost $2.50 per diluted share.

 

Financial Position

 

TriMas reported total indebtedness of $494.6 million as of December 31, 2010, as compared to $514.6 million as of December 31, 2009. After consideration of $46.4 million in cash on the balance sheet as of December 31, 2010, total indebtedness, net of cash, was $448.3 million, as compared to $505.1 million as of December 31, 2009. TriMas ended fourth quarter 2010 with $167.1 million of cash and aggregate availability under its revolving credit and accounts receivable facilities.

 

Business Segment Results — From Continuing Operations (Excluding the impact of Special Items(3))

 

The Company realigned its reportable segments to be consistent with the current operating structure and strategic priorities. The Company’s Packaging and Aerospace & Defense segments remain unchanged. The Company’s Arrow Engine business, previously within the Energy segment, is now included in the Engineered Components segment. In addition, the former Cequent segment has been split into two segments, with the Cequent Performance Products and Cequent Consumer Products businesses comprising the new Cequent

 

2



 

North America segment, and the Company’s Cequent Asia Pacific business becoming a separate reportable segment. All prior year information and related comparisons have been adjusted to reflect these changes.

 

Packaging — (Consists of Rieke Corporation including its foreign subsidiaries of Englass, Rieke Germany, Rieke Italia and Rieke China; 2010 Revenue of $171.2 million)

 

Net sales for fourth quarter decreased 3.5% compared to the year ago period, due to sales in fourth quarter 2009 related to H1N1 flu virus products that did not recur, as well as the impact of unfavorable currency exchange. Despite the slight decrease in sales, operating profit for the quarter increased due to lower costs as a result of productivity initiatives, partially offset by an increase in selling, general and administrative costs in support of growth initiatives, as well as unfavorable currency exchange. Full year 2010 sales increased 18.0%, due to improved demand for industrial closure products and sales growth in specialty dispensing and other new products, partially offset by the impact of unfavorable currency exchange. Operating profit for the year increased consistent with the reasons noted above, as well as higher sales volumes. Overall, 2010 operating profit margin improved by approximately 530 b asis points compared to 2009. The Company continues to diversify its product offering by developing specialty dispensing product applications for growing end markets, including pharmaceutical, personal care and food/beverage, and expanding geographically to generate long-term growth.

 

Energy — (Consists of Lamons; 2010 Revenue of  $129.1 million)

 

Fourth quarter and full year 2010 net sales increased 23.4% and 15.8%, respectively, compared to the year ago periods, due to increased sales of specialty gaskets and related fastening hardware resulting from higher levels of turn-around activity at petrochemical refineries and increased demand from the chemical industry. This segment also benefited from incremental sales from newly opened branch facilities, as well as sales resulting from the acquisition of South Texas Bolt & Fitting, completed in the fourth quarter of 2010. Operating profit for the quarter and year increased due to higher sales volumes and lower costs as a result of sourcing and productivity initiatives, partially offset by increased selling, general and administrative costs in support of sales growth initiatives. While operating profit margin decreased during fourth quarter 2010, full- year 2010 operating profit margin increased 100 basis points compared to 2009. The Company continues to grow its sales and service branch network, capitalize on synergies related to the acquisition of South Texas Bolt & Fitting and expand its lines of complementary products.

 

Aerospace & Defense — (Consists of Monogram Aerospace Fasteners and NI Industries; 2010 Revenue of $73.9 million)

 

Net sales for the fourth quarter increased 14.3% compared to the year ago period, due to improved demand from aerospace distribution customers and increased sales in the defense business. 2010 sales were relatively flat, as aerospace distribution customers’ increased purchases during the back half of 2010 were more than offset by lower levels of demand during the first half of 2010. The sales declines in the aerospace business, however, were substantially offset by increased sales in the defense business, although the increased revenue associated with managing the defense facility closure and relocation was at lower margin levels. While operating profit for the year was negatively impacted by this less profitable product sales mix, operating profit increased in fourth quarter compared to the prior year, with improvements in operating profit margin of 580 basis points due to the increase in sales volume and the better absorption of fixed costs in the aerospace business. 2010 full year operating profit and the related margin level declined substantially, primarily due to lower sales levels, an unfavorable product sales mix in our defense business and lower absorption of fixed costs in our aerospace business. Given the long-term prospects for its aerospace business, the Company continues to invest in this high-margin segment by developing and marketing highly-engineered products for aerospace applications, as well as expanding its offerings to military and defense customers.

 

Engineered Components — (Consists of Arrow Engine, Hi-Vol Products, KEO Cutters, Norris Cylinder and Richards Micro-Tool; 2010 Revenue of $153.2 million)

 

Fourth quarter and full year 2010 net sales increased 94.5% and 53.7%, respectively, compared to the year ago periods, primarily due to improved demand for engines, other well-site content and compression products, increased demand for industrial cylinders and the positive impact of the cylinder asset acquisition completed during second quarter 2010. The specialty fittings and precision cutting tools businesses also experienced improved demand, primarily resulting from the upturn in the domestic economy and new product offerings.

 

3



 

Fourth quarter and full year 2010 operating profit and related margins improved compared to the prior year periods, due to higher sales levels, increased absorption of fixed costs, and productivity and cost reduction efforts, partially offset by higher selling, general and administrative expenses related to the acquisition and increased sales levels. The Company continues to develop new products and expand its international sales efforts.

 

Cequent Asia Pacific — (Consists of Cequent Australia/Asia Pacific; 2010 Revenue of $76.0 million)

 

Net sales for the fourth quarter decreased 13.9% compared to fourth quarter 2009. Despite the favorable effect of currency exchange and expanded sales with some customers, sales were lower overall when compared to fourth quarter 2009 which benefited from an Australian government stimulus program that was not offered in 2010. Operating profit and the related margin level decreased due primarily to the lower sales levels. Full year 2010 sales increased 18.9% compared to 2009, as a result of the favorable effect of currency exchange and additional sales to regional original equipment and aftermarket customers. 2010 operating profit and related margin improved compared to 2009, due to higher sales levels, additional utilization of the lower-cost manufacturing plant in Thailand, productivity initiatives and favorable currency exchange, partially offset by higher sellin g, general and administrative costs in support of the Company’s growth initiatives. The Company continues to reduce fixed costs, minimize its investment in working capital and leverage Cequent’s strong brand positions to capitalize on growth opportunities in expanding markets.

 

Cequent North America — (Consists of Cequent Performance Products and Cequent Consumer Products; 2010 Revenue of $339.3 million)

 

Net sales for fourth quarter and full year 2010 increased 7.8% and 9.8%, respectively, compared to the year ago periods, resulting from increased sales within our original equipment, aftermarket, retail, industrial and agricultural channels, all of which were aided by the economic recovery in 2010. Sales increases were the result of improved customer demand, new product introductions and market share gains. While fourth quarter operating profit declined, full year 2010 operating profit increased substantially with an operating profit margin improvement of 480 basis points compared to 2009, due to improved sales levels, cost reduction actions, improved sourcing and productivity initiatives. The Company continues to reduce fixed costs, minimize its investment in working capital and leverage Cequent’s strong brand positions and new products for increased market share.

 

For a complete schedule of Segment Sales, Adjusted EBITDA and Operating Profit, including Special Items by segment, see page 8 of this release, “Company and Business Segment Financial Information — Continuing Operations.”

 

2011 Outlook

 

The Company is estimating that 2011 sales will increase 6% to 9%, compared to 2010. The Company expects full-year 2011 diluted earnings per share (EPS) from continuing operations to be between $1.40 and $1.50 per share, excluding any future events that may be considered Special Items. In addition, the Company expects 2011 Free Cash Flow, prospectively redefined as Cash Flow from Operating Activities less Capital Expenditures, to be between $50 million and $60 million.

 


(1)

Appendix I details certain costs, expenses and other charges, collectively described as “Special Items,” that are included in the determination of net income (loss) under GAAP and are not added back to net income (loss) in determining Adjusted EBITDA, but that management would consider important in evaluating the quality of the Company’s Adjusted EBITDA and operating results under GAAP.

(2)

See Appendix II for reconciliation of Non-GAAP financial measure Adjusted EBITDA and Free Cash Flow to the Company’s reported results of operations prepared in accordance with GAAP. Additionally, see Appendix I for additional information regarding Special Items impacting reported GAAP financial measures.

(3)

Operating Profit excludes the impact of Special Items. For a complete schedule of Special Items by segment, see Appendix “Company and Business Segment Financial Information — Continuing Operations.”

 

4



 

Conference Call Information

 

TriMas Corporation will host its fourth quarter and full year 2010 earnings conference call today, Monday, February 28, 2011 at 10:00 a.m. EST. The call-in number is (866) 259-7123. Participants should request to be connected to the TriMas Corporation fourth quarter 2010 earnings conference call (Conference ID #1512995). The conference call will also be simultaneously webcast via TriMas’ website at www.trimascorp.com, under the “Investors” section, with an accompanying slide presentation.

 

A replay of the conference call will be available on the TriMas website or by dialing (866) 837-8032 (Access Code #1512995) beginning February 28th at 2:00 p.m. EST through March 7th at 11:59 p.m. EST.

 

Cautionary Notice Regarding Forward-looking Statements

 

Any “forward-looking” statements contained herein, including those relating to market conditions or the Company’s financial condition and results, expense reductions, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including, but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, the Company’s substantial leverage, liabilities imposed by the Company’s debt instruments, market demand, competitive factors, the Company’s ability to maintain compliance with the listing requirements of NASDAQ, supply constraints, material and energy costs, technology factors, litigation, government and regulatory actions, the Company’s accounting policies, future trends, and other risks which are detailed in the Company’s Annual Repor t on Form 10-K for the fiscal year ended December 31, 2010, and in the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.

 

About TriMas

 

Headquartered in Bloomfield Hills, Michigan, TriMas Corporation (NASDAQ: TRS) provides engineered and applied products for growing markets worldwide. TriMas is organized into six reportable segments: Packaging, Energy, Aerospace & Defense, Engineered Components, Cequent Asia Pacific and Cequent North America. TriMas has approximately 3,900 employees at more than 60 different facilities in 11 countries. For more information, visit www.trimascorp.com.

 

5



 

TriMas Corporation

Condensed Consolidated Balance Sheet

(Dollars in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2010

 

2009

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

46,370

 

$

9,480

 

Receivables, net of reserves

 

117,050

 

93,380

 

Inventories

 

161,300

 

141,840

 

Deferred income taxes

 

34,500

 

24,320

 

Prepaid expenses and other current assets

 

7,550

 

6,500

 

Assets of discontinued operations held for sale

 

 

4,250

 

Total current assets

 

366,770

 

279,770

 

Property and equipment, net

 

167,510

 

162,220

 

Goodwill

 

205,890

 

196,330

 

Other intangibles, net

 

159,930

 

164,080

 

Other assets

 

24,060

 

23,380

 

Total assets

 

$

924,160

 

$

825,780

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities, long-term debt

 

$

17,730

 

$

16,190

 

Accounts payable

 

128,300

 

92,840

 

Accrued liabilities

 

68,400

 

65,750

 

Liabilities of discontinued operations

 

 

1,070

 

Total current liabilities

 

214,430

 

175,850

 

Long-term debt

 

476,920

 

498,360

 

Deferred income taxes

 

63,880

 

42,590

 

Other long-term liabilities

 

56,610

 

47,000

 

Total liabilities

 

811,840

 

763,800

 

Total shareholders’ equity

 

112,320

 

61,980

 

Total liabilities and shareholders’ equity

 

$

924,160

 

$

825,780

 

 

6


 


 

TriMas Corporation

Consolidated Statement of Operations

(Dollars in thousands, except for share amounts)

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

(unaudited)

 

 

 

 

 

Net sales

 

$

222,650

 

$

191,090

 

$

942,650

 

$

803,650

 

Cost of sales

 

(158,160

)

(137,110

)

(662,300

)

(594,830

)

Gross profit

 

64,490

 

53,980

 

280,350

 

208,820

 

Selling, general and administrative expenses

 

(44,400

)

(37,960

)

(164,730

)

(150,200

)

Estimated future unrecoverable lease obligations

 

 

(5,250

)

 

(5,250

)

Fees incurred under advisory services agreement

 

 

(2,890

)

 

(2,890

)

Loss on dispositions of property and equipment

 

(590

)

(750

)

(1,540

)

(570

)

Operating profit

 

19,500

 

7,130

 

114,080

 

49,910

 

Other income (expense), net:

 

 

 

 

 

 

 

 

 

Interest expense

 

(12,050

)

(10,540

)

(51,830

)

(45,070

)

Gain (loss) on extinguishment of debt

 

 

(10,260

)

 

17,990

 

Gain on bargain purchase

 

 

 

410

 

 

Other, net

 

(260

)

(40

)

(1,510

)

(1,750

)

Other expense, net

 

(12,310

)

(20,840

)

(52,930

)

(28,830

)

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

7,190

 

(13,710

)

61,150

 

21,080

 

Income tax (expense) benefit

 

980

 

4,840

 

(19,250

)

(8,350

)

Income (loss) from continuing operations

 

8,170

 

(8,870

)

41,900

 

12,730

 

Income (loss) from discontinued operations, net of income taxes

 

(2,480

)

(2,490

)

3,370

 

(12,950

)

Net income (loss)

 

$

5,690

 

$

(11,360

)

$

45,270

 

$

(220

)

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - basic:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.24

 

$

(0.26

)

$

1.24

 

$

0.38

 

Discontinued operations, net of income taxes

 

(0.07

)

(0.08

)

0.10

 

(0.39

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share

 

$

0.17

 

$

(0.34

)

$

1.34

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - basic

 

33,852,165

 

33,516,104

 

33,761,430

 

33,489,659

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - diluted:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.23

 

$

(0.26

)

$

1.21

 

$

0.37

 

Discontinued operations, net of income taxes

 

(0.07

)

(0.08

)

0.10

 

(0.38

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share

 

$

0.16

 

$

(0.34

)

$

1.31

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - diluted

 

34,561,391

 

33,516,104

 

34,435,245

 

33,892,170

 

 

7



 

TriMas Corporation

Company and Business Segment Financial Information

Continuing Operations

(Unaudited — dollars in thousands)

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

 

 

2010

 

2009

 

2010

 

2009

 

Packaging

 

 

 

 

 

 

 

 

 

Net sales

 

$

37,560

 

$

38,930

 

$

171,170

 

$

145,060

 

Operating profit

 

$

10,230

 

$

9,660

 

$

48,710

 

$

33,050

 

Adjusted EBITDA

 

$

13,180

 

$

12,970

 

$

60,530

 

$

45,730

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating operating profit and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

(110

)

$

 

$

(590

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit would have been:

 

$

10,230

 

$

9,770

 

$

48,710

 

$

33,640

 

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

13,180

 

$

13,080

 

$

60,530

 

$

46,320

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

Net sales

 

$

34,700

 

$

28,110

 

$

129,100

 

$

111,520

 

Operating profit

 

$

3,340

 

$

2,790

 

$

14,700

 

$

11,140

 

Adjusted EBITDA

 

$

4,000

 

$

3,250

 

$

16,640

 

$

13,120

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating operating profit and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

(340

)

$

 

$

(470

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit would have been:

 

$

3,340

 

$

3,130

 

$

14,700

 

$

11,610

 

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

4,000

 

$

3,590

 

$

16,640

 

$

13,590

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Defense

 

 

 

 

 

 

 

 

 

Net sales

 

$

20,460

 

$

17,900

 

$

73,930

 

$

74,420

 

Operating profit

 

$

5,070

 

$

3,360

 

$

18,090

 

$

21,770

 

Adjusted EBITDA

 

$

5,640

 

$

3,850

 

$

20,420

 

$

24,030

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating operating profit and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

(40

)

$

 

$

(180

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit would have been:

 

$

5,070

 

$

3,400

 

$

18,090

 

$

21,950

 

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

5,640

 

$

3,890

 

$

20,420

 

$

24,210

 

 

 

 

 

 

 

 

 

 

 

Engineered Components

 

 

 

 

 

 

 

 

 

Net sales

 

$

45,330

 

$

23,300

 

$

153,190

 

$

99,700

 

Operating profit

 

$

4,890

 

$

1,930

 

$

17,400

 

$

4,600

 

Adjusted EBITDA

 

$

6,230

 

$

2,980

 

$

22,540

 

$

8,740

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating operating profit and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

 

$

 

$

(470

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit would have been:

 

$

4,890

 

$

1,930

 

$

17,400

 

$

5,070

 

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

6,230

 

$

2,980

 

$

22,540

 

$

9,210

 

 

 

 

 

 

 

 

 

 

 

Cequent Asia Pacific

 

 

 

 

 

 

 

 

 

Net sales

 

$

18,950

 

$

22,000

 

$

75,990

 

$

63,930

 

Operating profit (loss)

 

$

2,630

 

$

4,130

 

$

12,050

 

$

7,990

 

Adjusted EBITDA

 

$

3,320

 

$

5,810

 

$

14,800

 

$

12,170

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating operating profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

 

$

 

$

(270

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit (loss) would have been:

 

$

2,630

 

$

4,130

 

$

12,050

 

$

8,260

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

 

$

 

$

(270

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

3,320

 

$

5,810

 

$

14,800

 

$

12,440

 

 

 

 

 

 

 

 

 

 

 

Cequent North America

 

 

 

 

 

 

 

 

 

Net sales

 

$

65,650

 

$

60,880

 

$

339,270

 

$

309,020

 

Operating profit (loss)

 

$

(340

)

$

(6,060

)

$

27,840

 

$

(3,160

)

Adjusted EBITDA

 

$

2,770

 

$

(2,230

)

$

40,580

 

$

13,110

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating operating profit (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

(6,500

)

$

 

$

(13,820

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit (loss) would have been:

 

$

(340

)

$

440

 

$

27,840

 

$

10,660

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

(6,120

)

$

 

$

(11,200

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

2,770

 

$

3,890

 

$

40,580

 

$

24,310

 

 

 

 

 

 

 

 

 

 

 

Corporate Expenses

 

 

 

 

 

 

 

 

 

Operating loss

 

$

(6,320

)

$

(8,680

)

$

(24,710

)

$

(25,480

)

Adjusted EBITDA

 

$

(6,430

)

$

(9,310

)

$

(24,820

)

$

2,050

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating operating loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

(2,890

)

$

 

$

(5,830

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating loss would have been:

 

$

(6,320

)

$

(5,790

)

$

(24,710

)

$

(19,650

)

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

- Severance and business restructuring costs

 

$

 

$

(2,890

)

$

 

$

(5,830

)

- Gain on extinguishment of debt

 

$

 

$

 

$

 

$

29,390

 

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

(6,430

)

$

(6,420

)

$

(24,820

)

$

(21,510

)

 

 

 

 

 

 

 

 

 

 

Total Company

 

 

 

 

 

 

 

 

 

Net sales

 

$

222,650

 

$

191,120

 

$

942,650

 

$

803,650

 

Operating profit

 

$

19,500

 

$

7,130

 

$

114,080

 

$

49,910

 

Adjusted EBITDA

 

$

28,710

 

$

17,320

 

$

150,690

 

$

118,950

 

 

 

 

 

 

 

 

 

 

 

Total Special Items to consider in evaluating operating profit:

 

$

 

$

(9,880

)

$

 

$

(21,630

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit would have been:

 

$

19,500

 

$

17,010

 

$

114,080

 

$

71,540

 

 

 

 

 

 

 

 

 

 

 

Total Special Items to consider in evaluating Adjusted EBITDA:

 

$

 

$

(9,500

)

$

 

$

10,380

 

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, Adjusted EBITDA would have been:

 

$

28,710

 

$

26,820

 

$

150,690

 

$

108,570

 

 

8



 

Appendix I

 

TriMas Corporation

 

Additional Information Regarding Special Items Impacting

Reported GAAP Financial Measures

(Unaudited)

 

 

 

Three months ended

 

Three months ended

 

 

 

December 31, 2010

 

December 31, 2009

 

(dollars in thousands, except per share amounts)

 

Income

 

EPS

 

Income

 

EPS

 

 

 

 

 

 

 

 

 

 

 

Income and EPS from continuing operations, as reported

 

$

8,170

 

$

0.23

 

$

(8,870

)

$

(0.26

)

 

 

 

 

 

 

 

 

 

 

After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations:

 

 

 

 

 

 

 

 

 

Severance and business restructuring costs and other

 

 

 

(6,110

)

(0.18

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items except gain on extinguishment of debt, income and EPS from continuing operations would have been

 

$

8,170

 

$

0.23

 

$

(2,760

)

$

(0.08

)

 

 

 

 

 

 

 

 

 

 

After-tax impact of loss on extinguishment of debt

 

 

 

(6,380

)

(0.19

)

 

 

 

 

 

 

 

 

 

 

Excluding Total Special Items, income and EPS from continuing operations would have been

 

$

8,170

 

$

0.23

 

$

3,620

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding at December 31, 2010 and 2009

 

 

 

34,561,391

 

 

 

33,516,104

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended

 

Twelve months ended

 

 

 

December 31, 2010

 

December 31, 2009

 

(dollars in thousands, except per share amounts)

 

Income

 

EPS

 

Income

 

EPS

 

 

 

 

 

 

 

 

 

 

 

Income and EPS from continuing operations, as reported

 

$

41,900

 

$

1.21

 

$

12,730

 

$

0.37

 

 

 

 

 

 

 

 

 

 

 

After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations:

 

 

 

 

 

 

 

 

 

Severance and business restructuring costs and other

 

 

 

(13,360

)

(0.39

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items except gain on extinguishment of debt, income and EPS from continuing operations would have been

 

$

41,900

 

$

1.21

 

$

26,090

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

After-tax impact of gain on extinguishment of debt

 

 

 

11,190

 

0.33

 

 

 

 

 

 

 

 

 

 

 

Excluding Total Special Items, income and EPS from continuing operations would have been

 

$

41,900

 

$

1.21

 

$

14,900

 

$

0.43

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding at December 31, 2010 and 2009

 

 

 

34,435,245

 

 

 

33,892,170

 

 

9



 

Appendix I (cont.)

 

TriMas Corporation

 

Additional Information Regarding Special Items Impacting

Reported GAAP Financial Measures

(Unaudited)

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

(dollars in thousands)

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Operating profit from continuing operations, as reported

 

$

19,500

 

$

7,130

 

$

114,080

 

$

49,910

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating quality of earnings:

 

 

 

 

 

 

 

 

 

Severance and business restructuring costs and other

 

$

 

$

(9,880

)

$

 

$

(21,630

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items, operating profit from continuing operations would have been

 

$

19,500

 

$

17,010

 

$

114,080

 

$

71,540

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

(dollars in thousands)

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA from continuing operations, as reported

 

$

28,710

 

$

17,320

 

$

150,690

 

$

118,950

 

 

 

 

 

 

 

 

 

 

 

Special Items to consider in evaluating quality of earnings:

 

 

 

 

 

 

 

 

 

Severance and business restructuring costs and other

 

$

 

$

(9,500

)

$

 

$

(19,010

)

 

 

 

 

 

 

 

 

 

 

Excluding Special Items except gain on extinguishment of debt, Adjusted EBITDA from continuing operations would have been

 

$

28,710

 

$

26,820

 

$

150,690

 

$

137,960

 

 

 

 

 

 

 

 

 

 

 

Gross gain on extinguishment of debt

 

$

 

$

 

$

 

$

29,390

 

 

 

 

 

 

 

 

 

 

 

Excluding Total Special Items, Adjusted EBITDA from continuing operations would have been

 

$

28,710

 

$

26,820

 

$

150,690

 

$

108,570

 

 

10



 

Appendix II

 

TriMas Corporation

Reconciliation of Non-GAAP Measure Adjusted EBITDA(1) and Free Cash Flow(2)

(Unaudited)

 

 

 

Three months ended

 

Twelve months ended

 

 

 

December 31,

 

December 31,

 

(dollars in thousands)

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

5,690

 

$

(11,360

)

$

45,270

 

$

(220

)

Income tax expense (benefit)

 

(2,130

)

(7,170

)

21,450

 

(520

)

Interest expense

 

12,180

 

10,670

 

52,380

 

45,720

 

Debt extinguishment costs

 

 

10,260

 

 

11,400

 

Impairment of property and equipment

 

 

2,340

 

 

 

2,340

 

Impairment of goodwill and indefinite-lived intangible assets

 

 

930

 

 

 

930

 

Depreciation and amortization

 

9,470

 

10,530

 

37,740

 

43,940

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA, total company

 

25,210

 

16,200

 

156,840

 

103,590

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA, discontinued operations

 

(3,500

)

(1,120

)

6,150

 

(15,360

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA, continuing operations

 

$

28,710

 

$

17,320

 

$

150,690

 

$

118,950

 

Special Items, excluding gain on extinguishment of debt

 

 

9,500

 

 

(10,380

)

Cash interest

 

(17,380

)

(18,140

)

(45,090

)

(43,600

)

Cash taxes

 

(2,660

)

(1,470

)

(8,920

)

(8,200

)

Non-cash gain on bargain purchase

 

 

 

(410

)

 

Capital expenditures

 

(10,810

)

(3,210

)

(21,900

)

(14,030

)

Changes in operating working capital

 

19,190

 

14,790

 

(2,950

)

58,710

 

Free Cash Flow from operations before Special Items

 

17,050

 

18,790

 

71,420

 

101,450

 

Cash paid for Special Items

 

(420

)

(2,220

)

(2,870

)

(9,130

)

Net proceeds from sale of business and other assets

 

90

 

90

 

14,810

 

23,190

 

Free Cash Flow

 

$

16,720

 

$

16,660

 

$

83,360

 

$

115,510

 

 


(1)

The Company defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change, interest, taxes, depreciation, amortization, debt extinguishment costs, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. Lease expense and non-recurring charges are included in Adjusted EBITDA and include both cash and non-cash charges related to restructuring and integration expenses. In evaluating our business, management considers and uses Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability. Management believes this measure is useful as an analytical indicator of leverage capacity and debt servicing ability, and uses it to measure financial performance as well as for planning purposes. However, Adjusted EBITDA should not be considered as an alternative to net income, cash flow from operating activities or any other measures calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definition of Adjusted EBITDA used here may differ from that used by other companies.

 

 

(2)

The Company defines Free Cash Flow as Adjusted EBITDA from continuing operations, plus Special Items and net proceeds from sale of businesses, less cash paid for interest, taxes and Special Items, capital expenditures and changes in operating working capital. As detailed in Appendix I, for purposes of determining Free Cash Flow, Special Items, net, include those costs, expenses and other charges incurred on a cash basis that are included in the determination of net income (loss) under GAAP and are not added back to net income (loss) in determining Adjusted EBITDA, but that management would consider important in evaluating the quality of the Company’s Free Cash Flow, as defined.

 

11


 

Exhibit 99.2

 

GRAPHIC

Fourth Quarter and Full Year 2010 Earnings Presentation February 28, 2011

 


GRAPHIC

Safe Harbor Statement Any “forward-looking” statements contained herein, including those relating to market conditions or the Company’s financial condition and results, expense reductions, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including, but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, the Company’s substantial leverage, liabilities imposed by the Company’s debt instruments, market demand, competitive factors, the Company’s ability to maintain compliance with the listing requirements of NASDAQ, supply constraints, material and energy costs, technology factors, litigation, government and regulatory actions, the Company’s accounting policies, future trends, and other risks which are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and in the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.

 


GRAPHIC

Agenda Overview Financial Highlights Segment Highlights Outlook and Summary Questions and Answers Appendix

 


GRAPHIC

Opening Remarks – 2010 Results Stronger top-line performance – Sales up 17% vs. 2009 Improvements in end market demand; leading indicators better Continued to gain market share in several businesses Investments in new products and markets showing results Improved earnings driven by better operating performance and lower fixed cost structure Continued margin expansion supported by productivity initiatives Improvement in working capital levels as a percentage of sales Continued focus on free cash flow and debt reduction Delivering on our commitments, while investing in future growth.

 


GRAPHIC

Opening Remarks – Going Forward New product and share gain projects are yielding growth 2 successful bolt-on acquisitions in 2010 Increased focus on business development in faster growing geographies Global Sourcing Organization gaining traction and driving results Intensified focus on productivity and lean initiatives Executing on strategic aspirations and positioning TriMas for future success.

 


GRAPHIC

Financial Highlights

 


GRAPHIC

Fourth Quarter Summary Sales increased 16.5% vs. Q4 2009 Double-digit percentage sales increases in Energy, Aerospace & Defense and Engineered Components Continued to gain additional market share in several businesses, while investments in new products and markets showing results Productivity efforts continue to drive enhanced profitability and fund growth Income and EPS increased compared to Q4 2009 (excl. Special Items) Benefit of a lower effective tax rate in Q4 2010 of approximately $0.10 EPS Q4 2010 Free Cash Flow of $16.7 million – same level as Q4 2009; Continued improvement in working capital as a percentage of sales Realigned reportable segments (1) “Special Items” for each period, as well as the Reconciliation of Non-GAAP Measures Adjusted EBITDA and Free Cash Flow, are provided in the Appendix.

 


GRAPHIC

2010 Full Year Summary Sales improved 17.3% as a result of improving end market demand and execution of the Company’s growth initiatives Earnings and margin levels improved at higher rate than sales Productivity efforts and lower fixed cost structure continue to drive enhanced profitability and margins Adjusted EBITDA margins improved 250 bps compared to 2009 Diluted EPS, excluding Special Items, more than doubled compared to 2009 Free Cash Flow of almost $2.50 per diluted share Debt levels down approximately $20 million with an additional $37 million in cash compared to year end 2009 (1) “Special Items” for each period, as well as the Reconciliation of Non-GAAP Measures Adjusted EBITDA and Free Cash Flow, are provided in the Appendix.

 


GRAPHIC

Margin Improvements Comments: Operating profit and Adjusted EBITDA margins improved 320 and 250 bps, respectively, compared to 2009 2010 margin levels are higher than 2008 levels, despite approximately $71M higher sales in 2008 Each business has plans in place to achieve material, labor and overhead productivity (1) Adjusted EBITDA and Operating Profit exclude “Special Items” for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. (1) Productivity initiatives improve margins over time.

 


GRAPHIC

Working Capital Comments: 2010 operating working capital at 12.6% of sales vs. 14.5% in 2009 Reduction due to lower inventory levels relative to sales, about ½ turn improvement Long-term target of approximately 13% of sales 12.6% of Sales 14.5% of Sales Continued lean initiatives will drive permanent process change and working capital reductions.

 


GRAPHIC

Capitalization (Dollars in thousands) As of December 31, 2010, TriMas had $167.1 million of cash and available liquidity under its revolving credit and receivables facilities. Comments: Increased cash by $37 million Reduced debt by $20 million Funded $31 million in acquisitions

 


GRAPHIC

Segment Highlights

 


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Packaging Results: FY 2010 sales increased due to improved demand for industrial closures and increased specialty dispensing sales Q4 2010 sales decreased due to H1N1-related sales in Q4 2009 that did not recur in Q4 2010, as well as impact of unfavorable currency exchange Increased sales volumes and productivity actions improved Adjusted EBITDA and operating profit FY 2010 operating profit margin improved approximately 530 basis points compared to FY 2009 ($ in millions) (1) Adjusted EBITDA and Operating Profit exclude “Special Items” for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Key Initiatives: Target specialty dispensing products in higher growth end markets Pharmaceutical and medical Food and beverage Personal care Increase geographic coverage efforts in Europe & Asia Increase low-cost country sourcing and manufacturing Consider complementary bolt-on acquisitions Ensure new products continue to have barriers to entry

 


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 Energy ($ in millions) (1) Adjusted EBITDA and Operating Profit exclude “Special Items” for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Results: Sales increased due to improved demand for specialty gaskets and fastening hardware, incremental sales from newer branch facilities and the acquisition of STB&F Operating profit increased due to higher sales volumes, and lower costs resulting from sourcing and productivity initiatives, partially offset by higher SG&A in support of growth FY 2010 operating profit margin improved approximately 100 basis points compared to FY 2009 Key Initiatives: Faster expansion of business with major customers globally Capitalize on synergies related to acquisition of South Texas Bolt & Fitting Increase sales of specialty gaskets and bolts Capture larger share of new markets such as OEM, Engineered & Construction, Power Gen and Pulp/Paper Continue to reduce costs and improve working capital turnover

 


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Aerospace & Defense Key Initiatives: Expand aerospace fastener product lines to increase content and applications per aircraft Drive on-going Lean initiatives to lower working capital and reduce costs Leverage and develop existing defense customer relationships Consider complementary bolt-on acquisitions ($ in millions) Results: Q4 2010 sales increased due to improved demand from aerospace distribution customers and increased sales in the defense business FY 2010 sales were relatively flat compared to FY 2009 as sales declines in the aerospace business were offset by increased revenue associated with managing defense facility closure/ relocation (at significantly lower margin levels) While operating profit for FY 2010 was negatively impacted by less profitable sales mix, operating profit in Q4 2010 improved due to sales increase and better absorption of fixed costs in the aerospace business Expectations of ramp-up from large frame, composite aircraft (1) Adjusted EBITDA and Operating Profit exclude “Special Items” for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix.

 


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Engineered Components ($ in millions) Key Initiatives: Expand complementary product lines at well-site and grow natural gas compression products Capitalize on shale and natural gas opportunities Develop additional capabilities of cylinder business to capture new markets Continue to reduce costs and improve working capital turnover Continue to expand product offering and geographies Expand specialty products for existing components and tooling markets (1) Adjusted EBITDA and Operating Profit exclude “Special Items” for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Results: Sales increased in both periods due to improved demand for engines and other well-site content, industrial cylinders, specialty fittings and precision cutting tools Positive impact of Q2 bolt-on acquisition in the cylinder business Operating profit increased in Q4 and FY 2010 due to higher sales volumes, increased absorption of fixed costs and productivity efforts, partially offset by higher SG&A related to the acquisition FY 2010 operating profit margin improved approximately 630 basis points compared to FY 2009

 


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Cequent (Asia Pacific & North America) ($ in millions) $46.4 (1) Adjusted EBITDA and Operating Profit exclude “Special Items” for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Results: FY 2010 sales increased resulting from improvements in the North American towing, trailer and electrical products and retail businesses, as well as growth in Asia Pacific business and the favorable impact of currency exchange Q4 2010 Asia Pacific sales declined when compared to Q4 2009 which benefited from Australian government stimulus FY 2010 Adjusted EBITDA and operating profit increased due to improved sales levels and significant cost reductions and productivity initiatives Key Initiatives: Continue reduce fixed costs and simplify the business Improve processes for better customer service and support Leverage strong brands for additional market share and cross-selling Expand sales to newer geographies Continue to reduce working capital requirements Legend Asia Pacific North America

 


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Outlook and Summary

 


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Strategic Aspirations High single-digit top-line growth Earnings growth faster than revenue growth 3% to 5% of total gross cost productivity gains annually – utilize savings to fund growth Invest in growth programs that deliver new products, new markets and expanded geographies Increase revenues in fastest growing markets Ongoing improvement in capital turns and all cycle times Continued decrease in leverage ratio Winning businesses grow revenue and earnings in all market conditions. Foundation for 2011 Playbook:

 


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2011 Outlook 2011 Outlook Sales growth 6% - 9% Earnings Per Share, diluted $1.40 to $1.50 Free Cash Flow(1) $50 to $60 million (1) 2011 Free Cash Flow is defined as Cash Flow from Operating Activities less Capital Expenditures. 2011 Outlook in line with our Strategic Aspirations.

 


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End Markets Packaging: Specialty dispensing, consumer-based packaging products: ~40% Industrial closures: ~60% 30%+ is non-North American Consumer-based markets: Up mid single-digit % Medical/Pharma Food/Beverage Personal Care Industrial GDP: Up low single-digit % New markets and customers New applied technologies and applications Upside in Asia and South America Energy: Oil & Gas/Refining/ Petrochemical MRO business: ~75% New markets such as OEM, Engineered & Construction, Power Gen and Pulp/Paper: ~25% MRO: More stable – replace / fix – tends to move with Industrial GDP (Up low single-digit %) Continued geographic expansion New product offering / expansion New awards with existing customers Ability to leverage specialty gasket and bolt product portfolio Aerospace & Defense: Aerospace: ~80% Defense: ~20% Aerospace commercial build rates: Recovering – up mid single-digit % Defense: Management of base relocation (no production through 2011); cost-plus contract High content on new composite aircraft New products and applications Pursuit of new geographies Engineered Components: Oil and gas commodity-driven: ~40% Industrial: ~40% Automotive: ~15% Medical: ~5% Commodity dynamics: Natural gas and oil prices affect demand Industrial GDP: Up low single-digit % Automotive: Up high single digit % Medical tooling: Up high single digit % Oil & gas: Product expansion at well-site Industrial: Continued geographic expansion; Medical: Apply core competencies to other markets and customers Cequent Asia Pacific and North America: Work-related end markets (agriculture, construction, etc): ~50% Recreational end markets: ~50% Trailer registrations expected to increase Light pick-up truck sales expected to increase Overall market: Up low to mid single digit % Strong construction and mining sectors in Australia Flooding in Australia will shift (not eliminate) some revenue to Q2 Gain share due to broad product portfolio and strong brands Protect existing patents New awards domestic and international Segment Description End Market Dynamics TriMas Advantage Overall sales estimate for 2011 expected to be up 6% to 9% versus 2010.

 


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2011 Key Growth Initiatives New specialty dispensing systems for consumer applications Growth in Asian markets New branch ramp-up (U.S. and non-U.S. based) Growth in specialty gaskets and bolts New aircraft development and production ramp-up Global sales expansion Additional products for composite aircraft applications New cylinder applications (cell phone towers, mining, ISO small high pressure) Additional well-site content (electronics, gas compression products, compressors) Natural gas compressor packaging North American automotive OEM wins for engineered, heavy duty trailer products Thailand-based automotive OEM wins Cargo management and towing products share gains at large retailers 2010 commercial successes and investments position us for growth in 2011.

 


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2010 to 2011 EPS Bridge *Defined as EPS growth not attributable to other identified factors 2010 EPS Higher estimated tax rate (2010 effect) Interest Reduction 2011 EPS $1.21 $0.08 ($0.10) $0.20- $0.30 Core Growth & Productivity* Prior Year Acquisitions $0.05 $1.40 - $1.50 Expect to achieve 16% - 24% EPS growth YOY (26% - 35% growth, excluding 2010 tax benefit). Commodity Inflation Investments in Growth & Future Productivity Productivity ($0.04) Other non-operational items Price Faster Program Implementation Industrial Growth

 


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Summary Executing in faster growing end markets with successful start to emerging market initiatives Continued leverage of new cost structure will drive earnings growth2-3x sales growth Stay ahead of potential commodity inflation Robust cash generation even with investments in growth Continued focus on productivity (3 - 5% gross) funds growth investments and margin expansion Committed to capital allocation that will create value On track for continuous improvement and strong results

 


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Questions & Answers

 


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Appendix

 


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2011 Additional Assumptions 2011 Estimates Interest expense $47 million Capital expenditures ~ 3.5% of sales Tax rate 37.5%

 


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Condensed Balance Sheet (Dollars in thousands)

 


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Statement of Operations (Dollars in thousands)

 


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Reconciliation of Non-GAAP Measures Adjusted EBITDA(1) and Free Cash Flow(2) (Unaudited) (1) The Company defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change, interest, taxes, depreciation, amortization, debt extinguishment costs, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. Lease expense and non-recurring charges are included in Adjusted EBITDA and include both cash and non-cash charges related to restructuring and integration expenses. In evaluating our business, management considers and uses Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability. Management believes this measure is useful as an analytical indicator of leverage capacity and debt servicing ability, and uses it to measure financial performance as well as for planning purposes. However, Adjusted EBITDA should not be considered as an alternative to net income, cash flow from operating activities or any other measures calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definition of Adjusted EBITDA used here may differ from that used by other companies. (2) The Company defines Free Cash Flow as Adjusted EBITDA from continuing operations, plus Special Items and net proceeds from sale of businesses, less cash paid for interest, taxes and Special Items, capital expenditures and changes in operating working capital. As detailed in Appendix I, for purposes of determining Free Cash Flow, Special Items, net, include those costs, expenses and other charges incurred on a cash basis that are included in the determination of net income (loss) under GAAP and are not added back to net income (loss) in determining Adjusted EBITDA, but that management would consider important in evaluating the quality of the Company’s Free Cash Flow, as defined.

 


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Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited)

 


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Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited)

 


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Company and Business Segment Financial Information – Cont. Ops (Unaudited, dollars in thousands)

 


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Company and Business Segment Financial Information – Cont. Ops (cont.) (Unaudited, dollars in thousands)

 


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LTM EBITDA as Defined in Credit Agreement (Unaudited, dollars in thousands)