TriMas Announces Plan for Tax-Free Spin-off of Cequent Businesses
Resulting in Two Independent Publicly Traded Companies
- Plan to create two separate, stand-alone companies via a tax-free spin-off of Cequent businesses; expected completion during mid-2015.
-
Mark Zeffiro to serve as President and CEO of the new stand-alone Cequent company;Dave Wathen will remain President and CEO ofTriMas . -
Conference call for investors to be held today,
December 8 , at10 a.m. ET .
Under this plan, the new, stand-alone Cequent company will operate as an
independent, publicly held company. The Cequent businesses generated
revenue of approximately
"Our announcement today reflects our continued commitment to enhance
shareholder value through the active management of our business
portfolio and organizational focus," said
"We believe the spin-off will provide both companies greater flexibility to focus on their distinct growth and margin improvement strategies within their respective core markets, enabling them to further improve competitiveness and create significant value for shareholders, customers and employees," Wathen continued. "Following the separation, each company will be able to better allocate resources to meet the needs of their respective businesses, pursue distinct capital allocation strategies, intensify focus on growth and margin improvement priorities, and provide a clearer investment thesis to attract a long-term investor base best-suited to each company."
The New Stand-Alone Cequent
Upon completion of the transaction, the new stand-alone Cequent company
will consist of TriMas' current Cequent Americas and Cequent APEA
segments, with a combined annual revenue of
Over the past several years, the Cequent businesses have implemented changes that are driving increased margins. At the same time, Cequent has expanded its global presence through both organic initiatives and bolt-on acquisitions, creating significant opportunities for future global growth. The new stand-alone Cequent company will focus on leveraging its broad product offering through innovation and global penetration, while remaining committed to improved operational performance, margin expansion, and enhanced cash flow and returns.
Post separation,
Planned Capital Structures
Although the capital structures are not finalized and specific terms remain to be determined, following the spin-off transaction, both companies are expected to be well capitalized with sufficient liquidity and flexibility to pursue future growth opportunities. Additionally, the capital allocation policy at both companies is expected to remain disciplined with a focus on the highest return opportunities.
Transaction Details
The completion of the spin-off is subject to customary conditions,
including effectiveness of appropriate filings with the
Conference Call and Webcast
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 the Company's plans
for successfully executing the spin-off within the expected timeframe or
at all, the taxable nature of the spin-off, future prospects of the
companies as independent companies, general economic and currency
conditions, various conditions specific to the Company's business and
industry, the Company's ability to integrate Allfast and attain the
expected synergies, and the acquisition being accretive, 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 ended
About
Headquartered in
(1) Operating profit margin excludes "Special Items." Special Items for each period are provided in the Appendix.
| Appendix | ||||||||||||||||||||
| Company and Business Segment TTM Financial Information | ||||||||||||||||||||
| Continuing Operations | ||||||||||||||||||||
| (Unaudited - dollars in thousands) | ||||||||||||||||||||
| Quarter To Date |
Trailing |
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| Packaging | ||||||||||||||||||||
| Net sales | $ | 78,220 | $ | 81,430 | $ | 86,250 | $ | 89,320 | $ | 335,220 | ||||||||||
| Operating profit | $ | 18,220 | $ | 18,360 | $ | 20,540 | $ | 20,770 | $ | 77,890 | ||||||||||
| Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
| Severance and business restructuring costs | $ | - | $ | - | $ | - | $ | 620 | $ | 620 | ||||||||||
| Excluding Special Items, operating profit would have been | $ | 18,220 | $ | 18,360 | $ | 20,540 | $ | 21,390 | $ | 78,510 | ||||||||||
| Energy | ||||||||||||||||||||
| Net sales | $ | 44,160 | $ | 52,780 | $ | 52,320 | $ | 50,290 | $ | 199,550 | ||||||||||
| Operating profit (loss) | $ | (3,910 | ) | $ | 2,600 | $ | (630 | ) | $ | (1,100 | ) | $ | (3,040 | ) | ||||||
| Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
| Severance and business restructuring costs | $ | - | $ | - | $ | 2,350 | $ | 2,080 | $ | 4,430 | ||||||||||
| Excluding Special Items, operating profit would have been | $ | (3,910 | ) | $ | 2,600 | $ | 1,720 | $ | 980 | $ | 1,390 | |||||||||
| Aerospace (1) | ||||||||||||||||||||
| Net sales | $ | 27,300 | $ | 27,180 | $ | 31,820 | $ | 27,410 | $ | 113,710 | ||||||||||
| Operating profit | $ | 7,010 | $ | 4,850 | $ | 5,690 | $ | 3,870 | $ | 21,420 | ||||||||||
| Engineered Components | ||||||||||||||||||||
| Net sales | $ | 41,540 | $ | 55,430 | $ | 54,320 | $ | 55,310 | $ | 206,600 | ||||||||||
| Operating profit | $ | 5,000 | $ | 7,880 | $ | 8,950 | $ | 8,090 | $ | 29,920 | ||||||||||
| "New TriMas" (2) | ||||||||||||||||||||
| Net sales | $ | 191,220 | $ | 216,820 | $ | 224,710 | $ | 222,330 | $ | 855,080 | ||||||||||
| Operating profit | $ | 26,320 | $ | 33,690 | $ | 34,550 | $ | 31,630 | $ | 126,190 | ||||||||||
| Total Special Items to consider in evaluating operating profit | $ | - | $ | - | $ | 2,350 | $ | 2,700 | $ | 5,050 | ||||||||||
| Excluding Special Items, operating profit would have been | $ | 26,320 | $ | 33,690 | $ | 36,900 | $ | 34,330 | $ | 131,240 | ||||||||||
| Operating profit margin excluding special items | 13.8 | % | 15.5 | % | 16.4 | % | 15.4 | % | 15.3 | % | ||||||||||
| Cequent APEA | ||||||||||||||||||||
| Net sales | $ | 40,290 | $ | 39,470 | $ | 43,800 | $ | 44,290 | $ | 167,850 | ||||||||||
| Operating profit | $ | 4,620 | $ | 2,500 | $ | 2,220 | $ | 3,210 | $ | 12,550 | ||||||||||
| Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
| Severance and business restructuring costs | $ | - | $ | - | $ | - | $ | 380 | $ | 380 | ||||||||||
| Excluding Special Items, operating profit would have been | $ | 4,620 | $ | 2,500 | $ | 2,220 | $ | 3,590 | $ | 12,930 | ||||||||||
| Cequent Americas | ||||||||||||||||||||
| Net sales | $ | 88,680 | $ | 109,090 | $ | 134,490 | $ | 113,500 | $ | 445,760 | ||||||||||
| Operating profit (loss) | $ | (12,180 | ) | $ | 5,710 | $ | 16,940 | $ | 8,660 | $ | 19,130 | |||||||||
| Special Items to consider in evaluating operating profit (loss): | ||||||||||||||||||||
| Severance and business restructuring costs | $ | 13,000 | $ | 980 | $ | 1,460 | $ | 360 | $ | 15,800 | ||||||||||
| Excluding Special Items, operating profit would have been | $ | 820 | $ | 6,690 | $ | 18,400 | $ | 9,020 | $ | 34,930 | ||||||||||
| "New Cequent" (2) | ||||||||||||||||||||
| Net sales | $ | 128,970 | $ | 148,560 | $ | 178,290 | $ | 157,790 | $ | 613,610 | ||||||||||
| Operating profit | $ | (7,560 | ) | $ | 8,210 | $ | 19,160 | $ | 11,870 | $ | 31,680 | |||||||||
| Total Special Items to consider in evaluating operating profit | $ | 13,000 | $ | 980 | $ | 1,460 | $ | 740 | $ | 16,180 | ||||||||||
| Excluding Special Items, operating profit would have been | $ | 5,440 | $ | 9,190 | $ | 20,620 | $ | 12,610 | $ | 47,860 | ||||||||||
| Operating profit margin excluding special items | 4.2 | % | 6.2 | % | 11.6 | % | 8.0 | % | 7.8 | % | ||||||||||
| Corporate Expenses | ||||||||||||||||||||
| Operating loss | $ | (8,320 | ) | $ | (9,640 | ) | $ | (9,270 | ) | $ | (11,230 | ) | $ | (38,460 | ) | |||||
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| Net sales | $ | 320,190 | $ | 365,380 | $ | 403,000 | $ | 380,120 | $ | 1,468,690 | ||||||||||
| Operating profit | $ | 10,440 | $ | 32,260 | $ | 44,440 | $ | 32,270 | $ | 119,410 | ||||||||||
| Total Special Items to consider in evaluating operating profit | $ | 13,000 | $ | 980 | $ | 3,810 | $ | 3,440 | $ | 21,230 | ||||||||||
| Excluding Special Items, operating profit would have been | $ | 23,440 | $ | 33,240 | $ | 48,250 | $ | 35,710 | $ | 140,640 | ||||||||||
| Operating profit margin excluding special items | 7.3 | % | 9.1 | % | 12.0 | % | 9.4 | % | 9.6 | % | ||||||||||
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(1) Results have been adjusted for the discontinued operations of NI in the third quarter 2014 |
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(2) Represents operating results before corporate expense allocations |
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| Discontinued Operations (1) | ||||||||||||||||||||
| Net sales | $ | 3,240 | $ | 2,360 | $ | 980 | $ | - | $ | 6,580 | ||||||||||
| Operating profit | $ | 1,420 | $ | 330 | $ | (400 | ) | $ | - | $ | 1,350 | |||||||||
VP,
Investor Relations
sherrylauderback@trimascorp.com
Source:
News Provided by Acquire Media
