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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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 19, 2005
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| TRIMAS
CORPORATION
(Exact name of registrant as specified in its charter) |
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| Delaware | |
333-100351 | |
38-2687639 | ||||||
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other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS
Employer Identification No.) |
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| 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 | |
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| Not Applicable | ||||||||||
| (Former name or former address, if changed since last report.) | ||||||||||
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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):
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| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD.
The Company's only public security holders are holders of its 9 7/8% senior subordinated notes due 2012. The Company held an Investor Communications Meeting at its Tekonsha, Michigan facility on October 19, 2005 to provide a business overview on its Cequent Transportation Accessories Group. A copy of the presentations distributed at the meeting is furnished as exhibits to this Report and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
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| (c) | Exhibits. The following exhibits are filed herewith: |
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| Exhibit No. | |
Description | ||||
| 99.1 | |
TriMas Corporation presentation titled "Tekonsha Investor Presentation." | ||||
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TriMas
Corporation presentation titled "Investor Communications
Meeting." A copy of this presentation is also available at www.trimascorp.com. |
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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.
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TRIMAS CORPORATION |
Date: October 19, 2005 By: /s/ Grant H. Beard
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Name: Grant H.
Beard Title: Chief Executive Officer |
3
The power of great stops.
Electronics & Administrative Offices
Facility
Tekonsha, MI
Facility:
75,000 square feet – 225-250 employees
TS16949:
Certification is in process for 2005 completion
Certified:
QS9000, July 2003
TS16949, Recommended
Benefits:
Refined manufacturing process
Predictable quality
Documented business practices
Cost controls
Commercial Organization
J. Robert Lewis, President
Staff
John Walsh
VP of Sales – Commercial
Mark Gage
VP of Marketing - Commercial
Mark Walkowski
VP of Finance - Commercial
Walt Mills
Director of IT – Commercial
Kreg Kukor
Director of Quality – Commercial
Marcia Albright
VP of Engineering
Jim Shirk
VP of Operations
Curt Somerlott
Director of Purchasing
John Roon
Director of Human Resources
Robb Lewis
Plant Manager
George Cargo
Director Sales – Horse Livestock
TECHNICAL RESOURCES
Internal Technical resources Tekonsha Facility
6 Electrical Engineers: Hardware
4 Electrical Engineers: Software
4 Electrical Engineering Technicians
7 Mechanical Engineers
2 Industrial Design Engineers
5 CAD operators
3 Manufacturing Engineers
2 Quality Engineers
4 Data Document control experts
1 Quality Black Belt
6 Quality Green Belts
Technology Partners
Test Labs:
CSA
Dana TRP
Eaton Corporation
Intertek ETL Entela
UL
Prototype Services:
Fortress Manufacturing, Inc.
Select Manufacturing Services, Inc.
Manufacturing test and support:
Agelent Technologies
Murray A. Percival Group
Consulting Groups
Fredricks Design, Inc.
Calcoast
EST Testing Solutions
Global Testing Service
Link Testing Labs
Product Design Services
Alpha Metals Analytical
VI Engineering
R & S Resources
Technology Partners
Prodigy and Primus are the beginning of a
new
series of intelligent, self leveling, proportional,
consumer based
brake controls.
For the first time in
brake control development,
proportional technology is provided in a format
that
removes the issues associated with leveling and
adjustment
providing the consumer with safety and
ease of operation.
Product
®
NEW! For (August) 2006
P3
An
innovative “step up” from Prodigy®
capable of working
with trailers using
disc brakes.
Product
TM
Tekonsha
Branded
Proportional Controls lead
the industry in consumer recognition and
acceptance … they include:
Sentinel
Voyager
Envoy XP
Product
®
®
®
®
Accupower
Branded “Time
Actuated”
Brake
Controls
DigiTrac II (coming April 2003)
AccuTrac
Pilot
Power on Demand (POD)
Product
®
®
®
®
Tekonsha Full Power ShurSet III Systems
For Trailers with up to 4 braking axles:
5 Amp Sealed Lead
Acid Rechargeable Battery, Heavy
Duty Breakaway Switch (4 axle max.), Latch
able
Mounting System
Tekonsha 4/5th Power ShurSet III Systems
For Trailers with 2 to 3 braking axles:
4 Amp Sealed Lead
Acid Rechargeable Battery,
Breakaway Switch (3 axle max.), Secure Mounting
System
Tekonsha Breakaway System Components
Product
®
®
®
®
®
Brake Control
harnesses … for
most vehicle
applications that include a brake
control harness.
Circuit Breakers, Pulse
Preventors, Testing
Equipment and more… Everything you need for
complete and professional
installations.
Brake Hardware… the most complete selection of
electric trailer brake assemblies and
brake
replacement accessories
available.
Product
RV & Trailer Lighting
RV & Trailer Cords &
Connectors
Bargman …
Has been recognized
for more than 50 years as a leading
provider of vehicle / trailer
illumination and electrical
connectivity . Now positioned as a
key brand it is focused
on North American OEM, aftermarket and
International
customers.
Product
NEW! For 2006 - Custom LED’s
Primary markets served by Tekonsha …
Aftermarket
RV Distributors, Trailer Parts
Distributors,
Automotive Distributors, Truck
Accessory
Distributors & Program groups
Original Equipment
Automotive, RV, Trailer, Agricultural & Stock
Special Accounts
Private brand, Trailer hitch
manufacturers,
Raybestos, NAPA & Carquest
Customers
Some of the customers served by Tekonsha include…
Redneck Trailer Supply
Quality Trailer
U-haul
Stag Parkway
Coast Distribution
Lucky B
Northwest Trailer
S & S Tire
TW/UAP
Danzy
Atlas
Vipar Heavy Duty
Customers
Some of our co-brand customers include…
Raybestos (Premimum with Tekonsha label)
NAPA (Premium with Tekonsha label)
Carquest (Premium with Tekonsha label)
Customers
Our Patents and Intangibles include…
Twenty Three design patents
Twenty Six utility patents
Ten patent applications pending
Two disclosures submitted
Patents in Canada
Patents in Germany
Patents in Australia
Patents in Great Britain
Patents in Mexico
Technology
Our technology is focused on…
Factory integrated trailer brake control
Technology
Our technology is focused on…
Output Display
10-segment display
shows
relative output signal
strength sent to trailer
brakes.
Override Slider Switch
Spring loaded switch
provides output signal
proportional to switch position, regardless of
gain setting or
application of base brakes. At-
rest position is far
left. Perimeter is backlit.
Gain Adjust Button (rocker)
Increment gain
setting up or
down in 0.5 steps. Press
buttons to adjust
gain setting.
Symbols are backlit.
Thumb Rest
Protruding wing
provides
anchor point to
rest index
finger while
operating
override with
thumb.
Gain Display
Displays 0-10
gain setting
when trailer
connection to 7-
pin is
established.
When trailer is
disconnected,
display
is blank
& controller
emits a one-time
audible chime.
Technology
Henry Ford Technology Award 2005
Team Leader
Marcia Albright
Program Manager
Jerry Prater
Award Received
September 26, 2005
Technology
Tekonsha Manufacturing Processes
Dual sided, surface mount line with automated inspection
Through-hole axial and radial component insertion
Discrete component placement production lines
In-line, automated wave soldering
2-D, in line, automated visual inspection system
Automated In-Circuit Test station
Automated final test stations
Automated conformal coating equipment
Automated printed circuit board array de-paneling system
Thermal cycling
chamber for sample production stress
testing
Bowl feed, semi-automatic, screw driving
Generic build and pack-to-order processes
In-line quality audit and production reliability processes
Manufacturing
Technology
Strategy
Our Marketing is focused on…
Enhancing our
presence as a category leader with an emphasis on safety in
trailer braking
Initiating the
technological advancement of trailer and automotive
applications
Maintaining price leadership in the market
Our Image will convey…
Our focus on electric trailer braking
A progressive attitude of innovation & safety
Strategy
Our Message is…
We are sensitive to the consumers need
We are dedicated to
our distributors and the satisfaction of their dealers and
installers
Our Sales effort…
Is based on people
selling people. Our sales will continue to be driven by
personnel relationships
We will remain dedicated to two and three step distribution
We will support our
distributors by providing technical training and assistance
at the dealer
level
We will augment our
sales effort on the street through a focused internal
sales group
Thank You, Enjoy the Tour
October 19, 2005
Innovation
A Heartland Industrial Partners’ Company
Investor Communications Meeting
Growth
Industry
This document contains “forward-looking” statements, as that term is defined by the federal securities laws, about our financial condition, results of operations and business. Forward-looking statements include certain anticipated, believed, planned, forecasted, expected, targeted and estimated results along with TriMas’ outlook concerning future results. The words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved. These forward-looking statements are subject to numerous assumptions, risks and uncertainties and accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution readers not to place undue reliance on the statements, which speak only as of the date of this document. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Risks and uncertainties that could cause actual results to vary materially from those anticipated in the forward-looking statements included in this document include general economic conditions in the markets in which we operate and industry-based factors such as: technological developments that could competitively disadvantage us, increases in our raw material, energy, and healthcare costs, our dependence on key individuals and relationships, exposure to product liability, recall and warranty claims, compliance with environmental and other regulations, and competition within our industries. In addition, factors more specific to us could cause actual results to vary materially from those anticipated in the forward-looking statements included in this document such as our substantial leverage, limitations imposed by our debt instruments, our ability to successfully pursue our stated growth strategies and opportunities, including our ability to identify attractive and other strategic acquisition opportunities and to successfully integrate acquired businesses and complete actions we have identified as providing cost-saving opportunities.
Safe Harbor Statement
2
Manufacturing – Goshen,
IN;
Huntsville, ON; Elkhart, IN
Products – Towing
Products,
Functional Vehicle Accessories
and Cargo Management
Solutions
Distribution –
Installers,
Distributors, Automotive OEM,
and retail segments
Manufacturing – Sheffield, PA
Products – Towing
Products,
Functional Vehicle Accessories
and Cargo Management
Solutions
Distribution
– Mass
Merchants, Auto Specialty,
Program/Buying Groups
Manufacturing –
Wakerley,
Brisbane, Sydney, Australia;
Chonburi Province,
Thailand
Products – Towing,
Trailering,
vehicle accessory, and cargo
management solutions
Distribution
– Automotive OE
and
Aftermarket
Products – Brake
Controls,
Breakaway Systems, Brake
Accessories, Electrical
Converters
Distribution
– Automotive
OEM, Trailer OEM, Marine,
RV, Agricultural/Utility
Manufacturing –
Tekonsha,
MI; Albion,
IN;
Reynosa, MX
Manufacturing – Mosinee,
WI;
Juarez, MX
Products – Trailer
Products
and Accessories
Distribution
– Trailer OEM,
Wholesale-distributor
Six Months Ended June 30
16.4%
11.2%
% margin ……………………
46.0
31.6
Segment Adjusted EBITDA …
$
280.0
$
283.0
Net Sales ….…….…….…..….
2004
2005
Plymouth, Michigan
Plymouth, Michigan
Melbourne, Australia
Solon, Ohio
Tekonsha, Michigan
Mosinee, Wisconsin
Cequent
Australia
Cequent
Consumer Products
Cequent
Electrical Products
Cequent
Trailer Products
Cequent
Towing Products
3
Cequent Transportation Accessories
Cequent Major Facilities
Goshen, IN
South Bend, IN
Mosinee, WI
Juarez, Mexico
Tekonsha, MI
Reynosa, Mexico
4
2005 (June 30, LTM) Total Cequent Net Sales …. $514.3 Million
Cequent Sales by Business Unit
Cequent Sales by Region
Cequent’s Sales Mix
Trailer
20%
Australia
11%
Towing
36%
Consumer
22%
Electrical
11%
Asia-
Pacific
11%
North
America
89%
5
Cequent’s Sales Mix
Cequent Sales by Distribution Channel
Installer 19%
Big Box
Retail
16%
Spec.
Retail
7%
RV
25%
Ag/Utility
15%
Auto
OEM
4%
Marine
4%
Auto
Dealer
10%
6
Market Overview - Recreational Vehicle Segment
U.S. RV Segment by Product Group
SOURCE: RVIA
2004 U.S. RV Market ……. $14.0 billion
(Retail Value)
Total U.S. Towable RV Trailer Market
SOURCE: RVIA
2004 U.S. Towable Trailer Market … $5.8 billion
(Retail Value)
RV Shipment Historical Volume Growth
Total Shipments
(in thousands)
*Pull ahead due to Katrina
0
50
100
150
200
250
300
350
400
450
163
203
228
259
247
248
255
293
321
300
257
307
320
370
370*
340
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005F
2006F
Towables
24%
Motorhomes
76%
Truck
Campers
3%
Folding
Camping
Trailers
4%
Conventional
Travel Trailers
47%
Fifth
Wheel
Trailers
46%
1991-2005 CAGR ……. 5.8%
Total unit
shipments will be down slightly in 2005.
Katrina caused a
significant pull ahead into 2005,
normalized shipments expected to be flat
2005 to
2006. Industry expect volumes to reach 500,000 as
demographics continue to improve.
Perhaps the
best news of all for the RV industry was
the increase in dollar values of
shipments. Total
retail value of all RV shipments in 2004 rose
an
impressive 15% to set an all time record high of over
$15
billion. The continued strength in RV shipments
as demonstrated
by these growth trends reflects the
strong appeal of the RV lifestyle to a
broadening
consumer base.
7
SOURCE:
Recreation Vehicle Industry Association, Crove Capital Markets Research
NOTE:
Does not include conversion vehicle shipments; dotted line represents a normalized
shipment trend, which was calculated using regression analysis.
Market Overview – RV Segment Demand Drivers
SOURCE: Econstats.com
SOURCE: Energy Information Administration, conventional regular gasoline prices, U.S. Gulf Coast delivered.
(Cents per
Gallon)
(%
rate)
SOURCE: U.S. Census Bureau.
(U.S. population)
($ in
millions)
Jan- 98
Jan- 99
Jan- 00
Jan. 01
Jan. 02
Jan. 03
Jan. 04
Jan. 05
Sep. 05
0
2
4
6
8
10
2000
2004
Under 5
15 to 19
30 to 34
45 to 49
60 to 64
75 to 79
90 to 94
0
5
10
15
20
25
0
20
40
60
80
100
120
140
160
180
Jan-98
Jan-99
Jan-00
Jan. 01
Jan. 02
Jan. 03
Jan. 04
Jan. 05
June. 05
Sep. 05
( Years)
U.S. Population by Age Group
Regular Unleaded Gasoline Prices Have Been on the Rise
Driving Age Population Growth is Driving Fleet Growth and Increased Consumer Spending
U.S. Prime Lending Rate Sept. 2005 – 6.75%
U.S. Prime Lending Rate
U.S. Wholesale Price of Unleaded Regular Gas Sept. -05 ... $2.80
The U.S. prime
lending rate has
been increasing. Industry experts
believe
that increasing lending rates
have more impact on RV demand
than the
price of gasoline. Length of
trip can always be
reduced.
The U.S.
population by age group
statistics indicate that the high
income age
groups from 40 years old
to 60 years olds, baby boomers,
have increased
by over 7.6 million
since 1998. By the end of the
decade,
the number of consumers
aged 50 to 64 will total 57 million,
38% higher
than in 2000.
Growth in the
high income age group
is a positive factor in supporting
recreational
vehicle and aftermarket
accessory product consumer
demand.
Regular
unleaded gasoline prices,
while at all time highs, have less
impact on
RV demand than interest
rates and disposable income which
rose 1.4% in
Q2 of 2005 vs. the
2.9% decline in Q1.
8
Market Overview - Marine Segment
SOURCE: NMMA
SOURCE: NMMA
SOURCE: NMMA
Total
Retail
Sales
(in
thou-
sands)
Total
Retail
Sales
(in mil-
lions)
100
125
150
175
200
225
250
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
133
147
163
176
207
194
181
174
168
136
141
131
134
14
15
16
17
18
16.3
16.3
16.2
16.2
15.4
15.8
16.2
16.6
16.8
17.0
17.2
17.4
17.5
17.6
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Canoes
11%
PWC
9%
Outboards
26%
Sterndrive
8%
Kayaks
41%
Sailboats
2%
Jet Boats
1%
Inboards
2%
Boat trailer
sales peaked in 1995 and have declined
steadily until 2001, growing
slightly in 2002.
2002 showed signs of a cyclical rebound in trailer sales.
The total
estimated number of boats owned has
increased over the past eleven years at
slow rate of 0.6%
annually.
The type of
watercraft owned in the U.S is broad,
including kayaks, outboard power
boats, canoes,
personal watercrafts, stern drive boats, inboard boats,
sailboats and jet boats.
All of the
marine product segments require a towing,
trailer or accessory product to
transport, providing
additional demand for towing and trailer
products.
Boat Trailer Unit Sales
U.S. Marine Segment by Type of Product
Total Recreational Boats Owned in the U.S.
1991-2004 CAGR ……. 0.6%
2004 Total Unit Sales ……. 838,500
1991-2004 CAGR ……. 0.1%
9
Market Overview - Other Market Segments
SOURCE: Census
of Agriculture 1992 and 2002
(1) Horses and
ponies and farms reporting horses and ponies.
(horses in
thousands)
SOURCE: Trailer Body Builders
(Industrial
trailers in units)
SOURCE: U.S. Census Bureau
1997
1998
1999
2000
2001
2002
2003
2004
50,000
100,000
150,000
200,000
250,000
300,000
350,000
1,500
2,000
2,500
3,000
3,500
4,000
1992
1997
2002
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
0
1
2
3
4
5
The U.S.
trailer production cycle typically follows GDP
growth. Current
estimates of GDP growth in 2005 and
2006 are 3.6% and 3.2%, respectively.
The light
industrial and utility trailer segments generally
follow the same trends as
light vehicle aftermarket macro
demand as most of these consumers are using
these
trailers for personal use hobbies.
Equestrian
trailer industry has very few published
statistics to track demand,
however, the U.S. farm
population of horses has increased at an annual rate
of
1.7% over the past ten years providing an indicator of
corresponding
growth in the equestrian trailer market.
CAGR
1997-2002… - 1.7%
CAGR
1992-2002 … 12.2%
U.S. Equestrian(1) Population
U.S. Gross Domestic Product YOY % Change
U.S. Industrial Trailer Production
10
Market Overview - Agricultural Equipment
North American Agricultural Equipment Demand
SOURCE: Freedonia
SOURCE: U.S. Census Bureau
U.S. Farm Machinery and Equipment Shipments
($ millions)
CAGR
1989-2004 … 1.9%
2004-2009 … 3.3%
Forecast
($ millions)
Jan-98
Jul-98
Jan-99
Jul-99
Jan-00
Jul-00
Jan-01
Jul-01
Jan-02
Jul-02
Jan-03
Jul-03
Jan-04
Jul-04
Jan-05
$20,000
$22,000
$24,000
$26,000
$28,000
$5,000
$10,000
$15,000
$20,000
1989
1994
1999
2000
2001
2002
2003
2004
2009
The three
largest agricultural equipment buying regions of the World are Western Europe,
Asia-Pacific and North America
accounting for 88% of total World demand.
Fredonia
predicts demand in North America for agricultural equipment will grow at an
average annual rate of 3.5% over the
next five years.
Historically,
agricultural equipment demand in North America has grown more slowly at 1.0%,
however, this measurement
in growth does not account for peak demand in the
mid-1990’s.
A recent
positive indicator, U.S. farm machinery and equipment shipments are on the
rise, 10% higher in January over a
seasonally adjusted low in April 2003.
11
Cequent Road to Recovery (Profit Improvement)
Removed a layer of management
Elimination of 99 salaried positions
Initiated closure of four plants
Simplifying towing distribution systems
30% Towing SKU reduction project
Transfer Trailer products to Mexico
On Target to Exceed $15 Million Cost Structure Reduction
Aggressive
stance with
retail/consumer customers
Offset
operational cost (due to freight,
etc.) when possible
Reduce Cost Structure
Aggressive off-shore sourcing plan
Maximize
leverage with steel supply
options
Raise Prices
Reduce Material Spending
12
Tom Benson, President
Industry
A Heartland Industrial Partners’ Company
Cequent Towing Products
Innovation
Growth
Cequent Towing Products – Market Share
Towing Products Market Share
Source: Internal company estimates
Cequent
Towing,
50%
Other, 2%
Curt, 9%
Putnam,
5%
EZ-Lift, 8%
Valley, 26%
14
Cequent Towing: Extensive Product Portfolio
Standard Hitch
Storage Box
Roof Racks
Auxiliary
Lighting
Electric Lift Platform
(Shown with DPS Hitch)
Cargo Trays
Compact
Carriers
Folding Carrier
5TH WHEEL
HITCHES
15,000 - 30,000 lbs
Rail Kits
Gooseneck
Systems
Custom Tube Steps
Side Window Air Deflector
Side Window Louvers
Tonneau Covers
Taillight
Covers
Hitch
Receivers
Cargo Table
Swing
Away
Carrier
Bumper Pack
(Shown with DPS Hitch)
5th Wheel Hitches
Custombuilt Hitches
Ball
Mounts
Hitch Balls
Dual Port
System
(DPSTM
)
Hitches
or
Standard Hitches
Connectors
Convertors
Adapters
Harnesses
Electrical
Hood Protection
Light Duty
Medium Duty
Heavy Duty
Front Mounted
Receivers
& Accessories
15
Cequent Towing Trade Sales Breakdown
Source: Internal company estimates
Installer/WD,
88%
OE, 12%
Balls &
Mounts,
5.0%
Fifth Wheel,
20.3%
WDH, 10.7%
Sway
Controls,
2.3%
Brake
Controls,
9.7%
Other
(wiring, pins,
racks),
12.5%
Hitches,
39.5%
Installer Sales by Product Line
Sales by Channel
16
Cequent Towing Top Customers
Stag Parkway
– Largest RV WD in
North America
Channel: RVWD
Toyota/Flex-N-Gate
– TMMNA
635 Tacoma Project
Channel: Auto OE
U-Haul –
Largest Purchaser of
Trailer Hitches of any Installer in
the US
Channel: Installer
17
Cequent Towing Top Customers
Rigid Hitch
– Telemarketing-based
Business with no Field Sales
Force
Channel: Installer
E-Trailer
– Leader in E-Commerce
Business in Towing Category
Channel: E-Commerce
Meyer
Distribution – Third Largest
Truck Accessory Distributor in the
US
Channel: Truck Accessories
18
Cequent Towing - Market Update
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Current Market Conditions
$3.00 gas has
slowed the RV market and reduced disposable income (RV towables are down 7.9%
YTD)
Boat sales are off 1.8% YTD
End of automotive incentives have slowed vehicle sales
This is the slow time of the year
Opportunities
Expect a
pick-up in Class I and II sales as more passenger cars are sold versus
“already hitched”
SUV’s
Improved sales due to increased FTM (first to market) activity
Expect a slight increase in WDH (weight distributing hitch) sales as FEMA trailers hit the Gulf Coast
Threats
Concerns about interest rates and inflation have caused the RV trade to expect lower sales
Considerable talk in the marketplace about large distributors going offshore on a direct basis
Bob Lewis, President
Innovation
A Heartland Industrial Partners’ Company
Cequent Trailer & Electrical Products
Industry
Growth
Cequent Trailer & Electrical Products
Trailer Products
Electrical Products
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Cequent Trailer & Electrical – Market Share
Trailer - Jacks
Trailer - Couplers
Source: Internal company estimates
Electrical Products
Atwood, 21%
Shelby, 5%
Dutton
Lainson, 3%
Stallion, 1%
Binkley, 1%
Other, 8%
Cequent, 80%
Other
(Jordan,
Hopkins), 8%
Kelsey-Hayes,
12%
Cequent, 49%
Other, 4%
Lainson, 8%
Shelby, 9%
Atwood, 30%
Cequent, 61%
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Cequent Trailer & Electrical Products
Trailer/Electrical Trade Sales by Channel
Electrical – Sales by Product Line
Source: Internal company estimates
Trailer – Sales by Product Line
Jacks, 46%
Lights, Kits
&
Wiring, 6%
Locks, 3%
Accessories, 4%
Brakes, 2%
Fenders, 1%
Mounts, 1%
Service Kits, 1%
Winches, 8%
ATV Acc., 7%
Other, 6%
Couplers, 16%
Lighting
Products, 9.4%
Breakaway
Systems, 5.5%
Electrical
&
Wiring, 5.8%
Other, 4.0%
Brake
Controls,
72.6%
Brake
Hardware, 2.7%
Marine, 12%
OE Auto, 7%
OE RV, 2%
Retail, 16%
WD RV, 13%
Export/Misc.,
2%
AG &
Indust.,
18%
Horse/Utility,
30%
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Cequent Trailer & Electrical – Top Customers
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Trailer/Electrical 2005 Initiatives – Revenue Growth
Trailer & Electrical 2005 Initiatives
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Target
opportunities include additional trailer
brake control options,
manufactured electrical
control modules and integrated connectivity
within automotive OEM
Target
opportunities for expansion in RV and
Specialty OEM include LED taillights
and
couplers and jacks where Cequent has not
pursued business in the
past
Target
opportunities for expansion in RV
distribution include an LED
taillights
replacement program, enhanced lighting line,
new
trailer brake control technology and
couplers/ jacks where Cequent is not a
market share leader
Target
opportunities in Horse, Livestock &
Utility include the introduction of
new
electric jack, the introduction of new
gooseneck
couplers in a HD capacity, the
enhanced lighting program
and an enhanced
line of connectivity
Target
opportunities in Marine Trailer
Manufacturers, Marine Distribution &
Marine
Retail include
LED based illumination, our
import jack expansion and the introduction of
our pivot coupler and actuator
The launch of a
Bargman branded electrical t-
connect line in Q4
Electrical
harness opportunities within the
Agricultural and Industrial channel
New category
growth of couplers and jacks
within the RV OEM channel
Cequent Trailer Products – Market Update
26
Current Market Conditions
Trailer OEM
Feeders currently busy with FEMA orders (dump and construction
trailers in
high demand)
Marine
suffering from years of decreased demand, will be impacted by fuel costs
even more
Ag and
Industrial has been steady, impacted by fuel prices that consume budgets in
lieu of capital purchases
Q4 will be
stronger than previous estimates, could see some FEMA trailer build
impact,
some peripheral RV support
Opportunities
RV manufacturer penetration with steel parts and electrical
Off-shore sourcing
More Mexico production
Threats
Fuel prices
impact travel, capital budgets for equipment, the “blue collar”
marine
purchases
Chinese imports and infringement of our patents, below market pricing
Cequent Electrical Products – Market Update
27
Trailer OEM
Feeders currently busy with FEMA orders (dump and construction
trailers in
high demand)
RV distributors
working off inventories this year, should buy into the Q4 dating for
upcoming Q1 ’06 shows
RV OEM will add one month of sales of lighting products for FEMA in Q4
Auto OEM will remain constant in Q4
RV manufacturer
penetration with steel parts and electrical with our consolidated
sales
channel approach
Lighting line expansion, new catalog, new products (i.e. LED)
Q1 ’06 rebuild of RV inventories on dealer lots
Chinese imports, below market pricing
Fuel prices on RV buyers
Cequent Electrical Products – Market Update
Cequent Electrical Products – Market Update
Current Market Conditions
Opportunities
Threats
Craig Manchen, President
Innovation
A Heartland Industrial Partners’ Company
Cequent Consumer Products
Industry
Growth
Cequent Consumer – Market Share
Loading Ramps
Tie Downs & Stretch Cords
Source: Internal company estimates
Towing Accessories
Valley, 19%
MasterLock,
18%
Bully, 8%
Other, 8%
Cequent, 47%
Daws/Better
Built, 13%
Ohio Steel, 15%
Oxlite, 10%
Universal
Industrial, 7%
5-Star, 11%
Other , 7%
Cequent, 37%
Keeper, 20%
Allied, 14%
USA
Products,
3%
Erickson, 2%
Joubert, 8%
Other, 4%
Home Depot
(PL), 7%
Lowes (PL),
10%
Cequent, 32%
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Cequent Consumer Products
Load:
Anchor:
Secure:
Carry:
Organize:
Protect:
Cargo Management Products
LOAD
ANCHOR
SECURE
CARRY
ORGANIZE
PROTECT
A full line of
aluminum, steel and plastic loading
ramps and ramp kits provide sturdy,
safe loading of
motorcycles, ATVs, lawn tractors and other
equipment.
Anchor systems
and hardware to anchor heavy
loads, attach tie downs, truck caps,
toolboxes,
camper shells, over-the-rail bedliners, tonneau
covers,
antenna mounts, cab extenders and more.
A complete line
of tie downs, tarp straps, stretch
cords and bungee cords to meet all
securing needs.
Products are available in a wide number of styles to
match specific use.
Products which
expand vehicle carrying capacity,
which include roof top, rear and hitch
mount carriers
for luggage, bikes and construction.
A wide range of
products to organize vehicle and
garage, including the new award winning
Space
Master cargo organizer, truck and storage nets,
cargo bars, and a
complete line of garage
organization products.
Keeps vehicles
looking SHOWROOM NEW with
Cargo Liners, Floor Guards, All Weather Floor
Mats,
Hump Liners, and Splash Guards. Custom fit vehicle
protection for
trucks, cars, vans, and SUVs.
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Cequent Consumer Products
HITCHES
TOWING ACCESSORIES
TRAILER ACCESSORIES
ELECTRICAL & LIGHTING
Towing, Trailering and Electrical Products
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Hitches:
Multi-fit and customer fit hitches for a wide range of
vehicles, from light duty to heavy duty applications.
Towing:
Complete range of towing accessories for any usage
application, including ball mounts, hitch balls, locking
accessories, heavy duty towing products, and safety
chains. Hitch Balls and ball mounts feature our
exclusive InterLock™ design.
Trailer:
Full line of trailer accessories to fit marine, utility and
agricultural trailers. Products include couplers, jacks,
winches, and wheel bearing kits.
Electrical:
Products that connect the towing vehicle to the
trailer, including, brake controls, adapters, universal
and custom electrical connectors, and wiring kits.
Lighting:
A broad line of trailer and towing lights for marine,
utility and agricultural trailers. Products provide
added safety and visibility, and include clearance
markers, reflectors, stop/turn/tail lights and
submersible light kits.
Cequent Consumer – Market Update
Retail sales of
Towing/Tie Down/Trailer Products has been growing at a rate
of 3-5% over
the last four years
Retail sales in 2005 started very strong earlier in the year: 10% sales growth
Now
experiencing softness in sales due to high gas prices (less disposable
income and lower store traffic) – flat with last year
Retail market
share growing on DIY (Do It Yourself) Towing Accessories
(e.g.,
non-application-specific hitches, balls, ball mounts, locks, etc.)
Retail market
share also growing on DIY Tie Downs and Trailer Products
(easy to use
products priced at a value)
Application-specific
hitches buying through OE or Installer (hard to install,
substantial
retailer inventory commitment)
Consumers are looking for value (quality, name brand products, at fair prices)
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Cequent Consumer – Opportunities & Threats
Competition is
more experienced in off-
shore sourcing – CCP now has major
initiatives underway
Competition has
focused on innovation to
penetrate our shelves – increasing our focus
on innovation
Consolidation
of retail customers has
created extremely large customers with high
leverage
Some of these
customers are looking to
source our products directly from Asian
sources
Reese brand
name stand for quality to both
the consumer and retailer
Retailers
understand the importance of the
Reese brand – worked with us during
our
integration hardships in 2004
Currently
raising pricing/profits on towing
items as customer service improves
Extending the
Reese brand into other
product categories (Tie Downs, Electrical,
Lighting, Marine)
Switching
production to lower cost Asian
sources, while maintaining strict quality
specifications
Consolidating
warehousing/shipping of all
retail products for cost savings and ease of
servicing customers
Expect
profitability and sales to grow
substantially in 2006 and
beyond
Threats
Opportunities
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Cequent Consumer - Opportunities (cont’d)
Top accounts offer significant growth potential
Major retailers are committed to double-digit growth
Combined, these retailers open hundreds of new stores each year
Acquisitions by major retailers are common, e.g.,
Advance Auto
recently acquired American International (65 stores)
and Lappens Auto Parts
(18 stores)
O’Reilly recently purchased Midwest Auto (65 stores)
Wal-Mart expanding globally
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Ed Schwartz, Group President
Cequent Transportation Accessories
A Heartland Industrial Partners’ Company
Cequent Australia
Industry
Innovation
Growth
Cequent Australia
Australia Sales by Channel
Other, 7%
Towing
Aftermarket,
33%
Roof
Racks
OE, 12%
Roof
Racks
Aftermarket,
8%
Towing
OE,
40%
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Cequent Australia
Estimated Sales by Product
Top Customers
Toyota
Ford
Nissan
GM Holden
Subaru
Towing OE,
30%
Side Steps,
2%
Caravan &
Camping,
8%
Protection
Bars, 2%
Cargo
Barriers, 3%
Roof Rack
Accessories,
19%
Towing
Aftermarket,
36%
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2006 Imperatives - Business Partners
TriMotive enjoys tremendous relationships with OE vehicle manufacturers
Represented with every marquee in Australia
Relationships with parent overseas (Japan, Thailand, Korea)
Awarded supplier
Q1
Toyota President Award
Nomination yearly since 2000
Established Corporate Organizations
Trust
IP
Stringent standards
Long term relationship building
Recognize value add
Expect continued investment
Innovation
Japan
FHI -
Subaru
Brisbane OLD
Planned
Current
Ford
Mitsubishi
Nissan
Toyota
Subaru
Audi
Daewoo
SsangYong
Hidden
BMW
Daimler Chrysler
Porsche
Honda
Adelaide SA
Sydney NSW
Melbourne Victoria
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Mitsubishi
Suzuki - Mayfair
Hyundai / Mobis
GM Daewoo
Toyota
Ford
Nissan
Renault
Mazda
Suzuki
Toyota Engineering
Alfa
Citroen
Mobis / Hyundai
Cequent Wrap-Up
Events beyond our control are impacting the Cequent group of companies
Gas prices
Weather (Katrina/Rita)
Economy
We are dealing with these events on a number of fronts
Sales initiatives
Cost reductions – Road to Recovery
Price increases – Road to Recovery
Customer/market tough decisions
We appreciate your support and thank you for attending
Q&A?
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Thank You!
Innovation
A Heartland Industrial Partners’ Company
Industry
Growth