UNITED STATES | OMB APPROVAL | |
SECURITIES AND EXCHANGE COMMISSION | OMB Number: 3235-0060 Expires: March 31, 2014 Estimated average burden hours per response. . . 5.0 | |
Washington, D.C. 20549 | ||
FORM 8-K | ||
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 28, 2013
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) 631-5450
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 October 28, 2013, reporting its financial results for the third quarter ending September 30, 2013. 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 "Third Quarter 2013 Earnings Presentation" | |||
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: | October 28, 2013 | By: | /s/ David M. Wathen | |||
Name: | David M. Wathen | |||||
Title: | Chief Executive Officer | |||||
CONTACT: | |||
Sherry Lauderback | |||
VP, Investor Relations & Communications | |||
(248) 631-5506 | |||
sherrylauderback@trimascorp.com | |||
TRIMAS CORPORATION REPORTS RECORD THIRD QUARTER RESULTS
Company Reports Growth in Sales of 6% and Income(1) of 30%
BLOOMFIELD HILLS, Michigan, October 28, 2013 - TriMas Corporation (NASDAQ: TRS) today announced financial results for the quarter ended September 30, 2013. The Company reported record third quarter net sales from continuing operations of $355.6 million, an increase of 5.9% compared to third quarter 2012. Third quarter 2013 diluted earnings per share from continuing operations attributable to TriMas Corporation was $0.70, as compared to $0.47 during third quarter 2012. Excluding Special Items(1), third quarter 2013 diluted earnings per share from continuing operations would have been $0.64, a 25.5% improvement from $0.51 in third quarter 2012.
TriMas Highlights
• | Reported record third quarter net sales of $355.6 million, an increase of 5.9% as compared to third quarter 2012, due to results from bolt-on acquisitions and the successful execution of numerous growth initiatives. |
• | Improved income from continuing operations attributable to TriMas Corporation(1) by 29.5%, excluding the impact of Special Items, compared to third quarter 2012. |
• | Issued 5,175,000 shares of common stock with net proceeds of $174.7 million to be used for general corporate purposes, including future acquisitions, capital expenditures and working capital requirements. |
• | Reduced interest expense by more than 40% as compared to third quarter 2012. In October 2013, the Company entered into new senior secured credit facilities, which will further reduce future interest rates, extend maturities and increase available liquidity. |
• | Continued to invest in a flexible manufacturing footprint to optimize manufacturing costs long-term, add necessary capacity, enhance customer service and support future growth. |
• | Continued to refine the business portfolio to support the Company's strategic initiatives, including completing seven bolt-on acquisitions through third quarter year to date for approximately $56 million, net of cash acquired, and divesting the non-core assets of the European rings and levers business for approximately $10 million. |
• | Today announced the acquisition of Mac Fasteners, Inc., a leader in the manufacture of aerospace fasteners, globally utilized by OEMs, aftermarket repair companies, and commercial and military aircraft producers. Mac Fasteners will become part of the Aerospace and Defense segment. |
"During the quarter, we pursued many key initiatives with actions focused on fine-tuning our business portfolio via acquisition and divestiture, enhancing our capital structure through our September equity offering and recent debt refinancing, moving multiple plants, integrating past acquisitions and evaluating several potential acquisitions," said David Wathen, TriMas President and Chief Executive Officer. "We also continued to focus on our many growth and productivity programs in each of our businesses. While these initiatives contributed positively to our quarter, they will also position TriMas for continued sales and earnings growth and will drive additional shareholder value into the future."
"Our third quarter results once again demonstrate our ability to operate in a slower growth global economic environment, while focusing on continuous improvement on all fronts and making strategic investments to benefit the future," Wathen continued. "In third quarter, we achieved 5.9% sales growth and a 29.5% increase in income from continuing operations attributable to TriMas Corporation(1) compared to third quarter 2012."
"We continue to identify the bright spots and successfully execute on new product introductions, geographic expansion and market share initiatives, as well as leverage our recent bolt-on acquisitions. We also secured new business in Asia for our packaging and aerospace businesses, increased volumes at our international energy branches and continued to leverage Cequent's global platform. We successfully progressed with our footprint consolidation projects within our Cequent segments, moving toward lower cost, more efficient and flexible manufacturing facilities. We remain
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committed to increasing margins across all of our businesses, growing faster in our higher margin businesses and implementing productivity and Lean programs throughout the organization."
Third Quarter Financial Results - From Continuing Operations
• | TriMas reported record third quarter net sales of $355.6 million, an increase of 5.9% as compared to $335.9 million in third quarter 2012. During third quarter, net sales increased in five of the six reportable segments, primarily as a result of additional sales from bolt-on acquisitions, as well as market share gains, new product introductions and geographic expansion as compared to third quarter 2012. These sales increases were partially offset by approximately $3.6 million of unfavorable currency exchange. |
• | The Company reported operating profit of $43.3 million in third quarter 2013, an increase of 18.3% as compared to third quarter 2012. Excluding Special Items(1) related to the facility consolidation and relocation projects within Cequent and the release of a historical translation adjustments resulting from the sale of Rieke Italy, third quarter 2013 operating profit would have been $40.2 million, as compared to $38.7 million during third quarter 2012. Third quarter 2013 operating profit margin percentage, excluding Special Items, was impacted by a less favorable product sales mix related to recent acquisitions and other acquisition-related costs, higher costs associated with global growth initiatives, and new plant and equipment ramp-up costs. The Company continued to generate significant savings from capital investments, productivity projects and Lean initiatives, which contributed to the funding of growth initiatives. |
• | Excluding noncontrolling interests related to Arminak & Associates, third quarter 2013 income from continuing operations attributable to TriMas Corporation was $28.6 million, or $0.70 per diluted share, compared to income from continuing operations attributable to TriMas Corporation of $18.7 million, or $0.47 per diluted share, during third quarter 2012. Excluding Special Items(1), third quarter 2013 income from continuing operations attributable to TriMas Corporation would have been $26.0 million, an improvement of 29.5%, and diluted earnings per share from continuing operations would have been $0.64, a 25.5% improvement from third quarter 2012, primarily due to higher operating profit and lower interest expense, while absorbing approximately 3% higher weighted average shares outstanding. |
• | The Company reported Free Cash Flow (defined as Cash Flow from Operating Activities less Capital Expenditures) of $18.5 million for third quarter 2013, compared to $10.5 million in third quarter 2012. The Company reported year to date Free Cash Flow of $6.1 million for 2013, compared to a use of $21.0 million year to date 2012. The Company expects to generate between $40 million and $50 million in Free Cash Flow for 2013, while continuing to invest in capital expenditures, working capital investments in acquisitions and future growth and productivity programs. |
• | Through September 30, 2013, the Company invested $35.2 million in capital expenditures (included in Free Cash Flow above) primarily in support of future growth and productivity opportunities and $56.0 million in bolt-on acquisitions, net of cash acquired. |
Financial Position
As of September 30, 2013, TriMas reported total indebtedness of $479.7 million, as compared to $422.4 million as of December 31, 2012. After consideration of $209.4 million in cash on the balance sheet as of September 30, 2013, total indebtedness, net of cash, was $270.3 million, as compared to $401.9 million as of December 31, 2012. TriMas ended the third quarter with $416.0 million of cash and aggregate availability under its revolving credit and accounts receivable facilities.
"We have continued to enhance our capital structure, starting with the September issuance of additional equity to be used to support our strategic initiatives," said Mark Zeffiro, Executive Vice President and Chief Financial Officer. "Due to the attractive credit markets and the Company’s strong financial performance, we also refinanced our credit facilities with terms better than our existing facilities. We expect TriMas to benefit from the extended credit facility maturities, enhanced liquidity and capital structure flexibility provided to best position the Company for future growth."
Business Segment Results(2) - From Continuing Operations
Packaging - (Consists of Rieke Corporation including Arminak & Associates, Innovative Molding and the foreign subsidiaries of Englass, Rieke Germany and Rieke China)
Net sales for third quarter increased 6.2% compared to the year ago period primarily due to increases in specialty systems product sales resulting from additional demand from North American and European dispensing customers,
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as well as new customer opportunities in Asia. This increase was partially offset by decreases in the industrial closures business, a portion of which is related to the divestiture of the Italian rings and levers business. Operating profit and the related margin percentage for the quarter increased primarily due to higher sales levels, savings from ongoing productivity and automation initiatives both in the legacy and acquired businesses, and a gain recognized on the sale of our business in Italy, partially offset by incremental investments to penetrate the Asian specialty dispensing market. The Company continues to develop specialty dispensing and closure applications for growing end markets, including personal care, pharmaceutical, nutrition and food/beverage, and expand into complementary products.
Energy - (Consists of Lamons including South Texas Bolt & Fitting, CIFAL, Gasket Vedações Técnicas and Wulfrun)
Third quarter net sales increased 4.9% compared to the year ago period primarily due to the results of the recent acquisitions and higher sales levels from the international branches. Third quarter operating profit and the related margin percentage decreased, as manufacturing productivity was more than offset by the impact of weaker refinery shutdown activity, which resulted in a less favorable product mix shift towards standard gaskets and bolts, and higher selling, general and administrative expenses in support of branch expansion and acquisitions during the third quarter of 2013. The Company continues to grow its sales and service branch network in support of its global customers, while focusing on improving margins.
Aerospace & Defense - (Consists of Monogram Aerospace Fasteners, Martinic Engineering and NI Industries)
Net sales for the third quarter increased 27.5% compared to the year ago period primarily due to the acquisition of Martinic Engineering and higher sales levels in the blind bolt fastener product lines, partially offset by a decrease in sales from the defense business. Third quarter operating profit remained flat, while the related margin percentage decreased primarily due to additional selling, general and administrative costs in support of growth initiatives and acquisitions, as well as new equipment and plant ramp-up costs in the legacy aerospace business during the third quarter of 2013. The Company continues to invest in this segment by developing and marketing highly-engineered products for aerospace applications, as well as managing existing defense contracts.
Engineered Components - (Consists of Arrow Engine and Norris Cylinder)
Third quarter net sales decreased 8.4% compared to the year ago period primarily due to lower demand for engines, gas compression products and other well-site content related to decreased levels of drilling activity and well completions as compared to third quarter 2012. However, sales of industrial cylinders increased primarily due to growth in international markets and continued domestic market share gains. Third quarter operating profit and the related margin percentage decreased compared to the prior year period primarily due to the decreased sales and lower fixed cost absorption in the engine business, which was partially offset by improvements in the industrial cylinder business. The Company continues to develop new products and expand its international sales efforts.
Cequent APEA - (Consists of Cequent operations in Australia, Asia, Europe and Africa)
Net sales for third quarter increased 9.3% compared to the year ago period, primarily due to the April 2013 acquisition of C.P. Witter and the July 2013 acquisition of the towing assets of AL-KO, partially offset by the negative impact of currency exchange. Third quarter operating profit and the related margin percentage decreased primarily as the profit earned on the increased sales levels and facility efficiency gains was more than offset by higher selling, general and administrative costs associated with the acquired companies, and less favorable product sales mix. The Company continues to focus on reducing fixed costs and leveraging Cequent's strong brand positions globally.
Cequent Americas - (Consists of Cequent Performance Products and Cequent Consumer Products with operations in North and South America)
Net sales for third quarter increased 7.7% compared to the year ago period, resulting primarily from increased sales within the retail and auto original equipment channels. Third quarter operating profit and the related margin percentage increased compared to the prior year period, as a result of higher sales levels which more than offset a less favorable product sales mix and increase in selling, general and administrative expenses in support of growth initiatives. The Company continues to reduce fixed costs and leverage Cequent's strong brand positions and new products for increased market share in the United States and faster growing markets.
2013 Outlook
The Company provided updated expectations for full-year 2013 and raised its 2013 sales outlook from an increase of 6% to 8% to a range of 8% to 10% compared to 2012. As a result of the Company's September 2013 equity offering and related increased number of shares, as well as the disposition of Rieke Italy, the Company expects full year 2013 diluted earnings per share from continuing operations to now be between $2.10 and $2.15 per share, excluding any current and future events that may be considered Special Items. In addition, the Company expects 2013 Free Cash
3
Flow (defined as Cash Flow from Operating Activities less Capital Expenditures) to be between $40 million and $50 million.
Conference Call Information
TriMas Corporation will host its third quarter 2013 earnings conference call today, Monday, October 28, 2013, at 10:00 a.m. ET. The call-in number is (888) 503-8175. Participants should request to be connected to the TriMas Corporation third quarter 2013 earnings conference call (Conference ID #8271871). 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 (888) 203-1112 (Replay Code #8271871) beginning October 28, 2013 at 3:00 p.m. ET through November 4, 2013 at 3:00 p.m. ET.
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, 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, 2012, 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.
In this release, certain non-GAAP financial measures are used. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure may be found at the end of this release. Additional information is available at www.trimascorp.com under the “Investors” section.
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 APEA and Cequent Americas. TriMas has approximately 6,000 employees at more than 60 different facilities in 17 countries. For more information, visit www.trimascorp.com.
(1) | Appendix I details certain costs, expenses and other charges, collectively described as “Special Items,” that are included in the determination of income from continuing operations attributable to TriMas Corporation under GAAP, but that management would consider important in evaluating the quality of the Company's operating results. |
(2) | Business Segment Results include Operating Profit that excludes the impact of Special Items. For a complete schedule of Special Items by segment, see “Company and Business Segment Financial Information - Continuing Operations.” |
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TriMas Corporation
Condensed Consolidated Balance Sheet
(Unaudited - dollars in thousands)
September 30, 2013 | December 31, 2012 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 209,350 | $ | 20,580 | ||||
Receivables, net | 201,110 | 150,390 | ||||||
Inventories | 249,630 | 238,020 | ||||||
Deferred income taxes | 17,690 | 18,270 | ||||||
Prepaid expenses and other current assets | 17,960 | 10,530 | ||||||
Total current assets | 695,740 | 437,790 | ||||||
Property and equipment, net | 206,730 | 185,030 | ||||||
Goodwill | 290,270 | 270,940 | ||||||
Other intangibles, net | 200,310 | 206,160 | ||||||
Other assets | 39,270 | 31,040 | ||||||
Total assets | $ | 1,432,320 | $ | 1,130,960 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Current maturities, long-term debt | $ | 21,600 | $ | 14,370 | ||||
Accounts payable | 152,460 | 158,410 | ||||||
Accrued liabilities | 83,090 | 74,420 | ||||||
Total current liabilities | 257,150 | 247,200 | ||||||
Long-term debt | 458,140 | 408,070 | ||||||
Deferred income taxes | 63,310 | 60,370 | ||||||
Other long-term liabilities | 80,940 | 84,960 | ||||||
Total liabilities | 859,540 | 800,600 | ||||||
Redeemable noncontrolling interests | 27,960 | 26,780 | ||||||
Total shareholders' equity | 544,820 | 303,580 | ||||||
Total liabilities and shareholders' equity | $ | 1,432,320 | $ | 1,130,960 | ||||
5
TriMas Corporation
Consolidated Statement of Income
(Unaudited - dollars in thousands, except per share amounts)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales | $ | 355,620 | $ | 335,870 | $ | 1,071,430 | $ | 971,870 | ||||||||
Cost of sales | (261,470 | ) | (245,730 | ) | (790,570 | ) | (706,930 | ) | ||||||||
Gross profit | 94,150 | 90,140 | 280,860 | 264,940 | ||||||||||||
Selling, general and administrative expenses | (61,220 | ) | (53,550 | ) | (182,540 | ) | (156,730 | ) | ||||||||
Net gain on dispositions of property and equipment | 10,360 | 10 | 10,350 | 330 | ||||||||||||
Operating profit | 43,290 | 36,600 | 108,670 | 108,540 | ||||||||||||
Other expense, net: | ||||||||||||||||
Interest expense | (5,570 | ) | (9,450 | ) | (16,320 | ) | (30,420 | ) | ||||||||
Debt extinguishment costs | — | — | — | (6,560 | ) | |||||||||||
Other income (expense), net | 2,290 | 140 | 360 | (2,410 | ) | |||||||||||
Other expense, net | (3,280 | ) | (9,310 | ) | (15,960 | ) | (39,390 | ) | ||||||||
Income from continuing operations before income tax expense | 40,010 | 27,290 | 92,710 | 69,150 | ||||||||||||
Income tax expense | (10,060 | ) | (7,330 | ) | (21,620 | ) | (19,770 | ) | ||||||||
Income from continuing operations | 29,950 | 19,960 | 71,090 | 49,380 | ||||||||||||
Income from discontinued operations, net of income tax expense | — | — | 700 | — | ||||||||||||
Net income | 29,950 | 19,960 | 71,790 | 49,380 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 1,320 | 1,290 | 3,090 | 1,560 | ||||||||||||
Net income attributable to TriMas Corporation | $ | 28,630 | $ | 18,670 | $ | 68,700 | $ | 47,820 | ||||||||
Basic earnings per share attributable to TriMas Corporation: | ||||||||||||||||
Continuing operations | $ | 0.71 | $ | 0.48 | $ | 1.71 | $ | 1.29 | ||||||||
Discontinued operations | — | — | 0.02 | — | ||||||||||||
Net income per share | $ | 0.71 | $ | 0.48 | $ | 1.73 | $ | 1.29 | ||||||||
Weighted average common shares—basic | 40,345,828 | 39,045,282 | 39,668,693 | 36,994,192 | ||||||||||||
Diluted earnings per share attributable to TriMas Corporation: | ||||||||||||||||
Continuing operations | $ | 0.70 | $ | 0.47 | $ | 1.70 | $ | 1.28 | ||||||||
Discontinued operations | — | — | 0.02 | — | ||||||||||||
Net income per share | $ | 0.70 | $ | 0.47 | $ | 1.72 | $ | 1.28 | ||||||||
Weighted average common shares—diluted | 40,746,503 | 39,508,503 | 40,029,425 | 37,379,292 | ||||||||||||
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TriMas Corporation
Consolidated Statement of Cash Flow
(Unaudited - dollars in thousands)
Nine months ended September 30, | ||||||||
2013 | 2012 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 71,790 | $ | 49,380 | ||||
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: | ||||||||
Gain on dispositions of property and equipment | (10,350 | ) | (330 | ) | ||||
Bargain purchase gain | (2,880 | ) | — | |||||
Depreciation | 22,190 | 18,990 | ||||||
Amortization of intangible assets | 14,420 | 14,460 | ||||||
Amortization of debt issue costs | 1,310 | 2,240 | ||||||
Deferred income taxes | (3,180 | ) | (3,480 | ) | ||||
Debt extinguishment costs | — | 6,560 | ||||||
Non-cash compensation expense | 7,110 | 6,640 | ||||||
Excess tax benefits from stock based compensation | (1,280 | ) | (2,310 | ) | ||||
Increase in receivables | (48,560 | ) | (38,750 | ) | ||||
(Increase) decrease in inventories | 1,800 | (31,440 | ) | |||||
Increase in prepaid expenses and other assets | (7,100 | ) | (600 | ) | ||||
Decrease in accounts payable and accrued liabilities | (4,280 | ) | (6,130 | ) | ||||
Other, net | 290 | 170 | ||||||
Net cash provided by operating activities, net of acquisition impact | 41,280 | 15,400 | ||||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | (35,150 | ) | (36,440 | ) | ||||
Acquisition of businesses, net of cash acquired | (56,000 | ) | (84,600 | ) | ||||
Net proceeds from disposition of assets | 10,720 | 2,950 | ||||||
Net cash used for investing activities | (80,430 | ) | (118,090 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of common stock in connection with the Company's equity offering, net of issuance costs | 174,720 | 79,040 | ||||||
Proceeds from borrowings on term loan facilities | 150,090 | 140,370 | ||||||
Repayments of borrowings on term loan facilities | (151,710 | ) | (130,850 | ) | ||||
Proceeds from borrowings on revolving credit and accounts receivable facilities | 632,740 | 555,300 | ||||||
Repayments of borrowings on revolving credit and accounts receivable facilities | (575,730 | ) | (555,300 | ) | ||||
Repurchase of 9¾% senior secured notes | — | (50,000 | ) | |||||
Senior secured notes redemption premium and debt financing fees | — | (4,880 | ) | |||||
Distributions to noncontrolling interests | (1,910 | ) | (820 | ) | ||||
Proceeds from contingent consideration related to disposition of businesses | 1,030 | — | ||||||
Shares surrendered upon vesting of options and restricted stock awards to cover tax obligations | (3,930 | ) | (990 | ) | ||||
Proceeds from exercise of stock options | 1,340 | 5,680 | ||||||
Excess tax benefits from stock based compensation | 1,280 | 2,310 | ||||||
Net cash provided by financing activities | 227,920 | 39,860 | ||||||
Cash and Cash Equivalents: | ||||||||
Increase (decrease) for the period | 188,770 | (62,830 | ) | |||||
At beginning of period | 20,580 | 88,920 | ||||||
At end of period | $ | 209,350 | $ | 26,090 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 12,610 | $ | 20,990 | ||||
Cash paid for taxes | $ | 29,880 | $ | 23,000 | ||||
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TriMas Corporation
Company and Business Segment Financial Information
Continuing Operations
(Unaudited - dollars in thousands)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Packaging | ||||||||||||||||
Net sales | $ | 82,010 | $ | 77,240 | $ | 235,000 | $ | 202,250 | ||||||||
Operating profit | $ | 31,320 | $ | 18,240 | $ | 65,550 | $ | 44,700 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Release of historical translation adjustments related to the sale of Italian business | $ | (7,910 | ) | $ | — | $ | (7,910 | ) | $ | — | ||||||
Excluding Special Items, operating profit would have been | $ | 23,410 | $ | 18,240 | $ | 57,640 | $ | 44,700 | ||||||||
Energy | ||||||||||||||||
Net sales | $ | 47,680 | $ | 45,460 | $ | 161,420 | $ | 143,220 | ||||||||
Operating profit | $ | 1,450 | $ | 3,780 | $ | 12,530 | $ | 14,520 | ||||||||
Aerospace & Defense | ||||||||||||||||
Net sales | $ | 26,540 | $ | 20,810 | $ | 71,250 | $ | 58,000 | ||||||||
Operating profit | $ | 6,060 | $ | 6,030 | $ | 15,330 | $ | 15,710 | ||||||||
Engineered Components | ||||||||||||||||
Net sales | $ | 47,540 | $ | 51,880 | $ | 143,830 | $ | 154,180 | ||||||||
Operating profit | $ | 2,860 | $ | 6,310 | $ | 14,450 | $ | 22,620 | ||||||||
Cequent APEA | ||||||||||||||||
Net sales | $ | 40,950 | $ | 37,480 | $ | 111,330 | $ | 94,230 | ||||||||
Operating profit | $ | 3,570 | $ | 3,950 | $ | 9,300 | $ | 9,000 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | — | $ | 600 | $ | — | $ | 2,880 | ||||||||
Excluding Special Items, operating profit would have been | $ | 3,570 | $ | 4,550 | $ | 9,300 | $ | 11,880 | ||||||||
Cequent Americas | ||||||||||||||||
Net sales | $ | 110,900 | $ | 103,000 | $ | 348,600 | $ | 319,990 | ||||||||
Operating profit | $ | 7,440 | $ | 8,430 | $ | 21,030 | $ | 28,090 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | 4,780 | $ | 1,500 | $ | 12,570 | $ | 3,840 | ||||||||
Excluding Special Items, operating profit would have been | $ | 12,220 | $ | 9,930 | $ | 33,600 | $ | 31,930 | ||||||||
Corporate Expenses | ||||||||||||||||
Operating loss | $ | (9,410 | ) | $ | (10,140 | ) | $ | (29,520 | ) | $ | (26,100 | ) | ||||
Total Company | ||||||||||||||||
Net sales | $ | 355,620 | $ | 335,870 | $ | 1,071,430 | $ | 971,870 | ||||||||
Operating profit | $ | 43,290 | $ | 36,600 | $ | 108,670 | $ | 108,540 | ||||||||
Total Special Items to consider in evaluating operating profit: | $ | (3,130 | ) | $ | 2,100 | $ | 4,660 | $ | 6,720 | |||||||
Excluding Special Items, operating profit would have been | $ | 40,160 | $ | 38,700 | $ | 113,330 | $ | 115,260 | ||||||||
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Appendix I
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited - dollars in thousands, except per share amounts)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Income from continuing operations, as reported | $ | 29,950 | $ | 19,960 | $ | 71,090 | $ | 49,380 | ||||||||
Less: Net income attributable to noncontrolling interests | 1,320 | 1,290 | 3,090 | 1,560 | ||||||||||||
Income from continuing operations attributable to TriMas Corporation | 28,630 | 18,670 | 68,000 | 47,820 | ||||||||||||
After-tax impact of Special Items to consider in evaluating quality of income from continuing operations: | ||||||||||||||||
Release of historical translation adjustments related to the sale of Italian business | (7,910 | ) | — | (7,910 | ) | — | ||||||||||
Severance and business restructuring costs | 3,100 | 1,420 | 8,690 | 4,520 | ||||||||||||
Tax restructuring | 2,200 | — | 2,200 | — | ||||||||||||
Debt extinguishment costs | — | — | — | 4,400 | ||||||||||||
Excluding Special Items, income from continuing operations attributable to TriMas Corporation would have been | $ | 26,020 | $ | 20,090 | $ | 70,980 | $ | 56,740 | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Diluted earnings per share from continuing operations attributable to TriMas Corporation, as reported | $ | 0.70 | $ | 0.47 | $ | 1.70 | $ | 1.28 | ||||||||
After-tax impact of Special Items to consider in evaluating quality of EPS from continuing operations: | ||||||||||||||||
Release of historical translation adjustments related to the sale of Italian business | (0.19 | ) | — | (0.20 | ) | — | ||||||||||
Severance and business restructuring costs | 0.08 | 0.04 | 0.22 | 0.12 | ||||||||||||
Tax restructuring | 0.05 | — | 0.05 | — | ||||||||||||
Debt extinguishment costs | — | — | — | 0.12 | ||||||||||||
Excluding Special Items, EPS from continuing operations would have been | $ | 0.64 | $ | 0.51 | $ | 1.77 | $ | 1.52 | ||||||||
Weighted-average shares outstanding for the three and nine months ended September 30, 2013 and 2012 | 40,746,503 | 39,508,503 | 40,029,425 | 37,379,292 | ||||||||||||
9
Third Quarter 2013 Earnings Presentation October 28, 2013 NASDAQ • TRS
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 leverage, liabilities imposed by the Company’s debt instruments, market demand, competitive factors, 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 ending December 31, 2012, 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. In this presentation, certain non-GAAP financial measures may be used. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure may be found at the end of this presentation or in the third quarter 2013 earnings release available on the Company’s website. Additional information is available at www.trimascorp.com under the “Investors” section. 2
Agenda • Opening Remarks • Financial Highlights • Segment Highlights • Outlook and Summary • Questions and Answers • Appendix 3
Opening Remarks – Third Quarter Results • Record Q3 sales of approximately $356 million – up 6% compared to Q3 2012 – Results from bolt-on acquisitions adding to top-line – Investments in new products and higher growth markets generating results • Q3 2013 income(1) increased 30% and EPS(1) increased 25% • Capital structure enhanced – September equity offering and October refinance provide additional flexibility and cost reduction • Continued investments in short and long-term growth and productivity programs • Track record of successful acquisitions and synergy attainment; robust pipeline of acquisitions • Continued focus on cash flow, working capital and leverage Investing in growth balanced with margin expansion activities. 4 (1) Defined as income from continuing operations and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix.
Opening Remarks • Current environment • Industrial – Norris cylinders, Rieke steel products • Energy – drilling still down, refinery turnarounds • Middle class – growing in emerging markets • Aircraft – build rates remain strong • Growth highlights • Product enhancements and rollouts • Geographic expansion and bolt-on acquisitions • Productivity initiatives • Capital and people driven • Capital structure enhancements • Equity offering raises $175 million • New debt structure expanded with lower cost • People • Second Green Belt class • TriMas intranet launched for communication 5 No significant changes in macro environment – we continuously fine-tune strategies to mitigate risks and capture opportunities.
Recent Acquisitions • Located in Ottawa, Kansas • Manufacturer of aerospace fasteners, globally utilized by OEMs, aftermarket repair companies, and commercial and military aircraft producers • Broadens product offering on aircraft • Diversifies distribution channels • Provides flexible manufacturing footprint • Approximate annual revenue of $18 million • Part of the Aerospace and Defense segment • Located in Bangalore, India • Manufacturer of high quality, low cost non-asbestos sheet jointing • Further expands low cost manufacturing for Lamons • Part of the Energy segment Good pipeline of potential acquisitions; approach remains consistent with bolt-ons, clear synergies and fast integration. 6
Financial Highlights
Third Quarter Summary • Sales increased 5.9% as compared to Q3 2012 – sales increased in five of six segments • Operating profit was impacted in the short term positively by the sale of Rieke Italy, and offset by a less favorable product sales mix, growth initiatives, and facility consolidation and relocation projects • Q3 income(1) and EPS(1) increased 29.5% and 25.5%, respectively, primarily due to higher operating profit and lower interest expense • Free Cash Flow(2) as expected and well ahead of 2012 • Total Debt, net of cash, was $270.4 million as of September 30, 2013 8 (1) Defined as operating profit, excluding “Special Items,” and income from continuing operations and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix. (2) Free Cash Flow is defined as Cash Flows from Operating Activities less Capital Expenditures. (Unaudited, dollars in millions, except per share amounts) (from continuing operations) Q3 2013 Q3 2012 % Chg Revenue 355.6$ 335.9$ 5.9% Operating Profit 43.3$ 36.6$ 18.3% Excl. Special Items (1), Operating Profit would have been: 40.2$ 38.7$ 3.8% Excl. Special Items (1), Operating Profit Margin would have been: 11.3% 11.5% -20 bps Inco e 30.0$ 20.0$ 50.1% Income attributable to TriMas Corporation (1) 28.6$ 18.7$ 53.3% Excl. Special Items (1), Income attributable to TriMas Corporation would have been: 26.0$ 20.1$ 29.5% Diluted Earnings Per Share attributable to TriMas Corporation 0.70$ 0.47$ 48.9% Excl. Special Items (1), Diluted Earnings Per Share attributable to TriMas Corporation would have been: 0.64$ 0.51$ 25.5% Free Cash Flow (2) 18.5$ 10.5$ 76.6% Total Debt 479.7$ 430.0$ 11.6%
• Productivity gains offset economics, investments in growth and short-term manufacturing inefficiencies resulting from rapid growth • Price increases essentially offset commodity inflation • Manufacturing inefficiencies from smaller lot sizes and short-cycle changes • Margin decline at Arrow Engine due to lower fixed cost absorption and less favorable product sales mix • Mix will be addressed through synergies identified and Lean implementation • Plan to increase the margins of acquisitions over time ~ -60 Basis Points Operating Profit Margin Bridge: Q3 2012 to Q3 2013 14.5% 13.9% Q3 2012 Q3 2013 Productivity Italy Sale Gain Economics Mix Manufacturing Inefficiencies Engine Business Acquisitions 9 Note: Above reflects operating profit margin excluding Special Items and corporate expenses. “Special Items” and corporate expense for the period are provided in the Appendix.
Enhanced Capital Structure 10 As of 10/16/2013(1) Amount Rate Maturity Revolving Credit Facility $250M LIBOR plus 2.00% (2) October 2017 Term Loan A $200M LIBOR plus 2.00% (2) October 2017 Term Loan B $200M LIBOR plus 2.75% (LIBOR floor of 1.00%) October 2019 Post Refinance(1) Amount Rate Maturity Revolving Credit Facility $575M LIBOR plus 1.625% (3) October 2018 Term Loan A $175M L IBOR plus 1.625% (3) October 2018 (1) The Company did not refinance Non-U.S. Bank Debt or the A/R Facility during the recent transaction. (2) Subject to a step-up to LIBOR plus 2.5% or step-down to LIBOR plus 1.5% based on leverage ratio. (3) Subject to a step-up to LIBOR plus 2.125% of step-down to LIBOR plus 1.375% based on leverage ratio. • September equity offering of 5,175,000 shares of common stock with net proceeds of approximately $175 million (approximately 13% more outstanding shares) • October refinance further reduces rates, extends maturities and increases financial flexibility – approximately $4 million annual cash interest savings on a pro forma basis • Moody’s upgraded TriMas’ credit facility rating • Substantial support from both existing and new stakeholders As of September 30, 2013, TriMas had $416.0 million of cash and available liquidity under its revolving credit and accounts receivable facilities.
Segment Highlights
Packaging Q3 2013 Results: • Sales increased primarily as a result of specialty systems product sales gains — Increased demand from North American and European dispensing customers, as well as additional business wins in Asia • European market appears stable, but no signs of improvement • Operating profit(1) and margin increased primarily due to higher sales, ongoing productivity and automation initiatives and gain on sale of business • Sold non-core Italian ring and levers business (dollars in millions) Key Initiatives: • Target specialty dispensing and closure products in higher growth end markets — Beverage, food, nutrition, personal care and pharmaceutical • Increase focus on Asian market and cultivate other geographic opportunities • Further integrate acquisitions into global sales network, while growing margins • Provide solutions focused on customer needs, differentiation and delivery speed • Increase low cost sourcing and leverage flexible manufacturing footprint • Ensure new products continue to have barriers to entry 12 Net Sales $77.2 $82.0 Q3 2012 Q3 2013 6.2% Operating Profit (1) $18.2 $23.4 Q3 2012 Q3 2013 28.3% (1) Excluding “Special Items” for each period which are provided in the Appendix.
Energy (dollars in millions) Q3 2013 Results: • Sales increased as a result of recent bolt-on acquisitions and increased sales generated by international locations • Operating profit and the related margin percentage decreased as the margin impact of higher sales and manufacturing productivity was more than offset by the impact of weaker refinery shutdown activity, which resulted in a less favorable product sales mix shift toward standard gaskets and bolts • Continued investments in branch expansion and bolt-on acquisitions • Acquired Basrur, a manufacturer and distributor of sheet jointing in India during September 2013 Key Initiatives: • Replicate U.S. branch strategy – expand business capabilities with major customers globally • Execute on growth and profitability initiatives in Brazil and other emerging markets • Increase sales of highly-engineered specialty products • Maximize supply chain and drive Lean initiatives to improve margins 13 Net Sales $45.5 $47.7 Q3 2012 Q3 2013 4.9% Operating Profit $3.8 $1.5 Q3 2012 Q3 2013 -61.6%
Aerospace & Defense Key Initiatives: • Expand aerospace fastener product lines to increase content and applications • Leverage positive end market trends of composite aircraft and robotic assembly • Capture incremental opportunities in emerging markets • Drive ongoing Lean initiatives to lower working capital and reduce costs • Continue to integrate Martinic Engineering and Mac Fasteners; consider other complementary bolt-on acquisitions • Manage existing defense contracts (dollars in millions) Q3 2013 Results: • Sales increased in the aerospace business primarily as a result of the acquisition of Martinic Engineering during Q1, which expands our content on aircraft, and higher blind bolt sales • Operating profit was flat, while the related margin percentage decreased, due to higher SG&A in support of growth initiatives, as well as new equipment and plant ramp-up costs in the aerospace business • Aircraft frame manufacturers continue to ramp-up build rates with growth in backlog and reductions in past due orders • Acquired Mac Fasteners, a leading manufacturer of aerospace fasteners, in October 2013 14 Net Sales $20.8 $26.5 Q3 2012 Q3 2013 27.5% Operating Profit $6.0 $6.1 Q3 2012 Q3 2013 0.5%
Engineered Components (dollars in millions) Key Initiatives: • Expand complementary product lines at well-sites and grow compression products – product diversification decreases cyclicality • Grow products to support the shift toward increased use of natural gas and production in shale formations • Expand cylinder business into new markets and applications • Continue to expand product offering and geographies • Continue to improve working capital turnover Q3 2013 Results: • Sales of engines, compressors and other well-site content decreased due to reduced levels of drilling and well completions • Sales of industrial cylinders increased primarily due to market share gains, both domestically and internationally, as well as new products • Operating profit and related margin declined due to decreased sales levels and lower fixed cost absorption in the engine business, partially offset by improvements in the industrial cylinder business 15 Net Sales $51.9 $47.5 Q3 2012 Q3 2013 -8.4% Operating Profit $6.3 $2.9 Q3 2012 Q3 2013 -54.7%
Cequent (APEA & Americas) (dollars in millions) $46.4 Q3 2013 Results: • Sales in Americas increased primarily due to higher sales within the automotive OE and retail channels • Americas operating profit and margin(1) increased as a result of the higher sales • APEA sales increased due to the acquisitions of C.P. Witter and the towing assets of AL-KO • APEA operating profit and margin(1) decreased as profit from higher sales volumes was offset by additional costs related to the acquisitions and less favorable product sales mix Key Initiatives: • Globalize full product line and strong brands for market share and cross-selling • Expand sales in new growing geographies and support global customer needs • Manage utilization of flexible manufacturing footprint in Thailand and Mexico • Integrate opportunistic, bolt-on acquisitions to capture synergies and support global customers • Utilize Lean to continue to reduce fixed costs and simplify the businesses for better customer service and operating effectiveness • Continue to reduce working capital requirements APEA Americas 16 APEA Americas (1) Excluding “Special Items” for each period which are provided in the Appendix. $41.0 $110.9 Net Sales $37.5 $103.0 Q3 2012 Q3 2013 $140.5 $151.9 8.1% $3.6 $12.2 Operating Profit (1) $4.6 $9.9 Q3 2012 Q3 2013 $15.8 9.0% $14.5
YTD 2013 Summary • Continuous improvement on all fronts • Further enhancement of capital structure positions TriMas for future sales and earnings growth • Seven bolt-on acquisitions through September YTD – future synergies will deliver improved profitability and growth • Generated record EPS • Continuous productivity initiatives fund investments for long-term growth • Continued focus on margins, cash flow, working capital and leverage Continue momentum to drive positive results. 17
Outlook and Summary
2013 Outlook Outlook as of 2/26/13, 4/25/13 and 7/25/13 Outlook as of 10/28/13 Comments Sales Growth 6% to 8% 8% to 10% Packaging, Aerospace and Cequent volumes increased partially offset by Rieke Italy sale Earnings Per Share, diluted(1) $2.15 to $2.25 $2.15 to $2.25 $2.05 to $2.15 $2.10 to $2.15 Midpoint represents a more than 19% increase as compared to 2012 2013 impact of increased share count and Rieke Italy sale (approximately $0.10) Current EPS Outlook Free Cash Flow(2) $40 to $50 million $40 to $50 million YTD ahead of 2012; seasonal FCF generation (1) Defined as diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” (2) Defined as Cash Flow from Operating Activities less Capital Expenditures. 2013 outlook in line with our strategic aspirations, while effectively investing in future growth and productivity. 19
2014 Drivers Consistent focus – On track to meet/exceed Strategic Aspirations. Strategic Aspirations •Generate high single-digit top- line growth • Invest in growing end markets through new products, global expansion and acquisitions • Drive 3% to 5% total gross cost productivity gains annually - utilize savings to fund growth •Grow earnings faster than revenue growth •Optimize capital structure • Strive to be a great place to work Tailwinds •Most global economies improving • Aircraft build rates, U.S. energy production, middle class consumer demand and emerging markets improving •New product pipeline •Robust strategic/opportunistic acquisition pipeline • Several new, lower cost plants on-line and ramping up • Strong balance sheet •Acquisition integrations yielding margin improvement •Productivity projects for margin improvement • Investment in SIOP, systems and Green Belts Headwinds •1-2% economic growth causes short-term changes •U.S. government uncertainty •U.S. oil/gas drilling levels uncertain •Currency and wage inflation in China, Thailand and Mexico 20
Questions & Answers
Appendix
YTD 2013 Summary • Sales increased 10.2% as compared to YTD 2013 – sales increased in five of six segments • Investments in bolt-on acquisitions, new products and geographic expansion driving positive results • Productivity efforts contributed to funding growth initiatives • Operating profit was negatively impacted by acquisition-related costs, and costs related to facility consolidation and relocation projects • Income(1) and EPS(1) increased 25.1% and 16.4%, respectively, while absorbing costs related to acquisitions and taking into account higher weighted average shares compared to YTD 2012 • Lower interest expense and a reduced tax rate had a positive effect • Free Cash Flow(2) and debt levels as expected 23 (Unaudited, dollars in millions, except per share amounts) (from continuing operations) Q3 YTD 2013 Q3 YTD 2012 % Chg Revenue 1,071.4$ 971.9$ 10.2% Operating Profit 108.7$ 108.5$ 0.1% Excl. Special Items (1), Operating Profit would have been: 113.3$ 115.3$ -1.7% Excl. Special Items (1), Operating Profit margin would have been: 10.6% 11.9% -130 bps Inco e 71.1$ 49.4$ 44.0% I c me attributable to TriMas Corporation (1) 68.0$ 47.8$ 42.2% Excl. Special Items (1), Income attributable to TriMas Corporation would have been: 71.0$ 56.7$ 25.1% Diluted earnings per share, attributable to TriMas Corporation 1.70$ 1.28$ 32.8% Excl. Special Items (1), diluted earnings per share attributable to TriMas Corporation would have been: 1.77$ 1.52$ 16.4% Free Cash Flow (2) 6.1$ (21.0)$ fav Debt 479.7$ 430.0$ 11.6% (1) Defined as operating profit, excluding “Special Items,” and income from continuing operations and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix. (2) Free Cash Flow is defined as Cash Flows from Operating Activities less Capital Expenditures.
Condensed Consolidated Balance Sheet (Unaudited, dollars in thousands) 24 September 30, December 31, 2013 2012 Assets Current assets: Cash and cash equivalents …………………………………………...……………………………………….209,350$ 20,580$ Receivables, net………………………………………………….………………………….. 201,110 150,390 Inventories .……………………………………………...……………………………………………………...249,630 238,020 Deferred income taxes …………………………………….……………………………………………………………………17,690 18,270 Prepaid expenses and other current assets ..……….………………….……………………………………………………17,960 10,530 Total current assets ………………………………...……….……………………………………………….. 695,740 437,790 Property and equipment, net ..……………………..…………………………………………206,730 185,030 Goodwill …………………………………………………………………………………………………290,270 270,940 Other intangibles, net ……………………………………………………………………….200,310 206,160 Other assets ...………………………………………………………………………………..39,270 31,040 Total assets …………………………………………………………………………………..1,432,320$ 1,130,960$ Liabilities and Shareholders' Equity Current liabilities: Current maturities, long-term debt ……………………...………………………………………………..21,600$ 14,370$ Accounts payable….…………………………………………….……………………………..152,460 158,410 Accrued liabilities ..………………………………………………….……………………………….83,090 74,420 Total current liabilities ……………………………………...………………………………..257,150 247,200 Long-term debt ………………………………………………..……………………………………458,140 408,070 Deferred income taxes ……………………………………………..…………………………….63,310 60,370 Other long-term liabilities ……………………………………….………………………………………80,940 84,960 Total liabilities …………………………………………………..…………………………………….859,540 800,600 Redeemable noncontrolling interests…………………………………………………..…………………………………….27,960 26,780 Total shareholders' equity …………………………………………..………………….544,820 303,580 Total liabilities and shareholders' equity …………………………….……………………1,432,320$ 1,130,960$
Capitalization 25 (Unaudited, dollars in thousands) As of September 30, 2013, TriMas had $416.0 million of cash and available liquidity under its revolving credit and accounts receivable facilities. September 30, December 31, 2013 2012 Cash and Cash Equivalents……………………………..………………… 209,350$ 20,580$ Credit Agreement……….……………………………….. 413,720 399,500 Receivables facility and other………………………..….. 66,020 22,940 479,740 422,440 Total Debt………………………...………………………...………………………… 479,740$ 422,440$ Key Ratios: Bank LTM EBITDA……………………………………………………………………………….……………………………………… 199,670$ 191,710$ Interest Coverage Ratio………………………………………………………………… 9.82 x 5.68 x Leverage Ratio…………………………………………………………………... 2.47 x 2.30 x Bank Covenants: Minimum Interest Coverage Ratio………………………………………………………………… 3.00 x 3.00 x Maximum Leverage Ratio………………………………………………………………………………… 3.50 x 3.50 x
Consolidated Statement of Income (Unaudited, dollars in thousands, except for per share amounts) 26 Nine months ended 2013 2012 2013 2012 Net sales.................................................................................... 355,620$ 335,870$ 1,071,430$ 971,870$ Cost of sales............................................................................... (261,470) (245,730) (790,570) (706,930) Gross profit.............................................................................. 94,150 90,140 280,860 264,940 Selling, general and administrative expenses.................................. (61,220) (53,550) (182,540) (156,730) Net gain on dispositions of property and equipment......................... 10,360 10 10,350 330 Operating profit......................................................................... 43,290 36,600 108,670 108,540 Other expense, net:..................................................................... Interest expense....................................................................... (5,570) (9,450) (16,320) (30,420) Debt extinguishment costs........................................................ - - - (6,560) Other income (expense), net...................................................... 2,290 140 360 (2,410) Other expense, net................................................................ (3,280) (9,310) (15,960) (39,390) Income from continuing operations before income tax expense......... 40,010 27,290 92,710 69,150 Income tax expense..................................................................... (10,060) (7,330) (21,620) (19,770) Income from continuing operations................................................. 29,950 19,960 71,090 49,380 Income from discontinued operations, net of income tax expense..... - - 700 - Net income.................................................................................. 29,950 19,960 71,790 49,380 Less: Net income attributable to noncontrolling interests................. 1,320 1,290 3,090 1,560 Net income attributable to TriMas Corporation................................. 28,630$ 18,670$ 68,700$ 47,820$ Earnings per share attributable to TriMas Corporation - basic: Continuing operations …………………………...….…………………………………………………………………………….…………………….. 0.71$ 0.48$ 1.71$ 1.29$ Discontinued operations…………………….……………………..……. - - 0.02 - Net income per share…………………………………...……………… 0.71$ 0.48$ 1.73$ 1.29$ Weighted average common shares - basic …………………………...………………….….. 40,345,828 39,045,282 39,668,693 36,994,192 Earnings per share attributable to TriMas Corporation - diluted: Continuing operations …………………………...….……………………………… 0.70$ 0.47$ 1.70$ 1.28$ Discontinued operations……………………..…………………………… - - 0.02 - Net income per share…………………………………...………………… 0.70$ 0.47$ 1.72$ 1.28$ Weighted average common shares - diluted …………………………...………………….….. 40,746,503 39,508,503 40,029,425 37,379,292 September 30, September 30, Three months ended
Consolidated Statement of Cash Flow (Unaudited, dollars in thousands) 27 2013 2012 Cash Flows from Operating Activities: Net income..................................................................................................................... 71,790$ 49,380$ Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: Gain on dispositions of property and equipment............................................................... (10,350) (330) Bargain purchase gain.................................................................................................. (2,880) - Depreciation................................................................................................................. 22,190 18,990 Amortization of intangible assets................................................................................... 14,420 14,460 Amortization of debt issue costs.................................................................................... 1,310 2,240 Deferred income taxes.................................................................................................. (3,180) (3,480) Debt extinguishment costs............................................................................................ - 6,560 Non-cash compensation expense.................................................................................. 7,110 6,640 Excess tax benefits from stock based compensation....................................................... (1,280) (2,310) Increase in receivables.................................................................................................. (48,560) (38,750) (Increase) decrease in inventories.................................................................................. 1,800 (31,440) Increase in prepaid expenses and other assets............................................................... (7,100) (600) Decrease in accounts payable and accrued liabilities....................................................... (4,280) (6,130) Other, net.................................................................................................................... 290 170 Net cash provided by operating activities, net of acquisition impact................................ 41,280 15,400 Cash Flows from Investing Activities: Capital expenditures..................................................................................................... (35,150) (36,440) Acquisition of businesses, net of cash acquired.............................................................. (56,000) (84,600) Net proceeds from disposition of assets......................................................................... 10,720 2,950 Net cash used for investing activities........................................................................... (80,430) (118,090) Cash Flows from Financing Activities: Proceeds from sale of common stock in connection with the Company's equity offering, net of issuance costs …....…....…….………..…...……………………………….……………….… 174,720 79,040 Proceeds from borrowings on term loan facilities............................................................. 150,090 140,370 Repayments of borrowings on term loan facilities............................................................. (151,710) (130,850) Proceeds from borrowings on revolving credit and accounts receivable facilities.................. 632,740 555,300 Repayments of borrowings on revolving credit and accounts receivable facilities................. (575,730) (555,300) Repurchase of 9¾% senior secured notes...................................................................... - (50,000) Senior secured notes redemption premium and debt financing fees................................... - (4,880) Distributions to noncontrolling interests.......................................................................... (1,910) (820) Proceeds from contingent consideration related to disposition of businesses..................... 1,030 - Shares surrendered upon vesting of options and restricted stock awards to cover tax obligations………..…………...….…..………………….....………………………………………. (3,930) (990) Proceeds from exercise of stock options........................................................................ 1,340 5,680 Excess tax benefits from stock based compensation....................................................... 1,280 2,310 Net cash provided by financing activities...................................................................... 227,920 39,860 Cash and Cash Equivalents: Increase (decrease) for the period.................................................................................. 188,770 (62,830) At beginning of period................................................................................................... 20,580 88,920 At end of period......................................................................................................... 209,350$ 26,090$ Supplemental disclosure of cash flow information: Cash paid for interest................................................................................................. 12,610$ 20,990$ Cash paid for taxes.................................................................................................... 29,880$ 23,000$ Nine months ended September 30,
Company and Business Segment Financial Information 28 Three months ended 2013 2012 2013 2012 Packaging Net sales………………………...………………………………………… 82,010$ 77,240$ 235,000$ 202,250$ Operating profit…………………………………………………………… 31,320$ 18,240$ 65,550$ 44,700$ Special Items to consider in evaluating operating profit: - Release of historical translation adjustment related to the sale of Italian business……….………………………………………… (7,910)$ -$ (7,910)$ -$ Excluding Special Items, operating profit would have been…….. 23,410$ 18,240$ 57,640$ 44,700$ Energy Net sales………………………………………………………………….. 47,680$ 45,460$ 161,420$ 143,220$ Operating profit…………………………………………………………… 1,450$ 3,780$ 12,530$ 14,520$ Aerospace & Defense Net sales………………………………………………………………….. 26,540$ 20,810$ 71,250$ 58,000$ Operating profit…………………………………………………………… 6,060$ 6,030$ 15,330$ 15,710$ Engineered Components Net sales………………………………………………………………….. 47,540$ 51,880$ 143,830$ 154,180$ Operating profit…………………………………………………………… 2,860$ 6,310$ 14,450$ 22,620$ Cequent APEA Net sales………………………………………………………………….. 40,950$ 37,480$ 111,330$ 94,230$ Operating profit…………………………………………………………… 3,570$ 3,950$ 9,300$ 9,000$ Special Items to consider in evaluating operating profit: - Severance and business restructuring costs…..………….………. -$ 600$ -$ 2,880$ Excluding Special Items, operating profit would have been…….. 3,570$ 4,550$ 9,300$ 11,880$ Cequent Americas Net sales………………………………………………………………….. 110,900$ 103,000$ 348,600$ 319,990$ Operating profit…………………………………………………………… 7,440$ 8,430$ 21,030$ 28,090$ Special Items to consider in evaluating operating profit: - Severance and business restructuring costs……………………. 4,780$ 1,500$ 12,570$ 3,840$ Excluding Special Items, operating profit would have been…….. 12,220$ 9,930$ 33,600$ 31,930$ Corporate Expenses Operati g loss……………………………………………………………. (9,410)$ (10,140)$ (29,520)$ (26,100)$ Total Company Net sales………………………………………………………………….. 355,620$ 335,870$ 1,071,430$ 971,870$ Operating profit…………………………………………………………… 43,290$ 36,600$ 108,670$ 108,540$ Total Special Items to consider in evaluating operating profit………. (3,130)$ 2,100$ 4,660$ 6,720$ Excluding Special Items, operating profit would have been…….. 40,160$ 38,700$ 113,330$ 115,260$ Nine months ended September 30, September 30, (Unaudited, dollars in thousands)
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 29 (Unaudited, dollars in thousands, except for per share amounts) 2013 2012 2013 2012 Income from continuing operations, as reported………………………………………………..…………………. 29,950$ 19,960$ 71,090$ 49,380$ Less: Net income attributable to noncontrolling interests…………………………………. 1,320 1,290 3,090 1,560 Income from continuing operations attributable to TriMas Corporation……………………………………………………………….. 28,630 18,670 68,000 47,820 After-tax impact of Special Items to consider in evaluating quality of income from continuing operations: Release of historical translation adjustment related to the sale of Italian business…………………...…….………….………………………………… (7,910) - (7,910) - Severance and business restructuring costs………………………………………………………………3,100 1,420 8,690 4,520 Tax restructuring…………………….………………………………………….. 2,200 - 2,200 - Debt extinguishment costs………………………………………………………. - - - 4,400 Excluding Special Items, income from continuing operations attributable to TriMas Corporation would have been……………………………………………………………………….. 26,020$ 20,090$ 70,980$ 56,740$ 2013 2012 2013 2012 Diluted earnings per share from continuing operations attributable to TriMas Corporation, as reported………………………………………………………………………..……………………………………………. 0.70$ 0.47$ 1.70$ 1.28$ After-tax impact of Special Items to consider in evaluating quality of EPS from continuing operations: Release of historical translation adjustment related to the sale of Italian business………………………………………...……………………… (0.19) - (0.20) - Severance and business restructuring costs………………………………………………………………0.08 0.04 0.22 0.12 Tax restructuring…………………….………………………………………….. 0.05 - 0.05 - Debt extinguishment costs - - - 0.12 Excluding Special Items, EPS from continuing operations would have been……………..………………..……………………………………..…. $ 0.64 $ 0.51 $ 1.77 $ 1.52 Weighted-average shares outstanding for the three and six months ended June 30, 2013 and 2012 40,746,503 39,508,503 40,029,425 37,379,292 2013 2012 2013 2012 Operating profit (excluding Special Items)……………………….………. 40,160$ 38,700$ 113,330$ 115,260$ Corporate expenses……………………………………………………………. 9,410 10,140 29,520 26,100 Segment operating profit (excluding Special Items)………………….. 49,570$ 48,840$ 142,850$ 141,360$ Segment operating profit margin (excluding Special Items)…...…… 13.9% 14.5% 13.3% 14.5% Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
LTM Bank EBITDA as Defined in Credit Agreement 30 (Unaudited, dollars in thousands) Net income attributable to TriMas Corporation for the twelve months ended September 30, 2013 ………………………………………………………...……………………….. 54,760$ Net income attributable to partially-owned subsidiaries…….………………………………………………………………………. 3,940 Interest expense, net (as defined)…………………….…………………………………………………………………………….. 21,700 Income tax expense.……………………………….……………………………………………………………………………………… 7,820 Depreciation and amortization……………………………...………………………………………………………………………. 48,040 Non-cash compensation expense………………….…………………..…………………………………………………………. 9,750 Other non-cash expenses or losses………………………………………………………………………………….. 3,020 Non-recurring expenses or costs in connection with acquisition integration………………...…………………………………………………………… 450 Debt extinguishment costs……………………...………………………………………………………………… 40,250 Non-recurring expenses or costs for cost saving projects…………………………………………………………………. 15,280 Permitted dispositions……………………………………………………………………………………………………………. (1,940) Permitted acquisitions……………………………………………………………………………………………………………. 2,180 EBITDA of partially-owned subsidiaries attributable to noncontrolling interest……………………………………….. (5,580) Bank EBITDA - LTM Ended September 30, 2013 (1)…………………………………………………………………………………………… 199,670$ (1) As defined in the Credit Agreement dated October 11, 2012.