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UNITED STATES |
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OMB APPROVAL |
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SECURITIES AND EXCHANGE COMMISSION |
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OMB Number: |
3235-0060 |
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Washington, D.C. 20549 |
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Expires: |
March 31, 2006 |
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Estimated average burden |
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FORM 8-K |
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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, 2010
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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001-10716 |
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38-2687639 |
(State or other jurisdiction |
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(Commission |
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(IRS Employer |
of incorporation) |
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File Number) |
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Identification No.) |
39400 Woodward Avenue, Suite 130, Bloomfield Hills, Michigan |
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48304 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code (248) 631-5400
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
TriMas Corporation (the Corporation) issued a press release and held a teleconference on October 28, 2010, reporting its financial results for the third quarter ending September 30, 2010. A copy of the press release and teleconference visual presentation are attached hereto as exhibits and are incorporated herein by reference. The press release and teleconference visual presentation are also available on the Corporations 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. |
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Description |
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99.1 |
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Press Release |
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99.2 |
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The Corporations visual presentation titled Third Quarter 2010 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.
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TRIMAS CORPORATION |
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Date: |
October 28, 2010 |
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By: |
/s/ David M. Wathen |
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Name: |
David M. Wathen |
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Title: |
Chief Executive Officer |
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Exhibit 99.1
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CONTACT: |
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Sherry Lauderback |
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VP, Investor Relations & Communications |
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(248) 631-5506 |
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sherrylauderback@trimascorp.com |
TRIMAS CORPORATION REPORTS THIRD QUARTER 2010 RESULTS
Company Reports $0.37 Diluted EPS on 22% Sales Growth
Company Raises 2010 Outlook to $1.05 to $1.10 EPS
BLOOMFIELD HILLS, Michigan, October 28, 2010 TriMas Corporation (NASDAQ: TRS) today announced financial results for the quarter ended September 30, 2010. The Company reported quarterly net sales from continuing operations of $247.9 million, an increase of 22.1% from third quarter 2009. Third quarter 2010 income from continuing operations was $12.8 million, a 78.5% improvement from $7.2 million in third quarter 2009. The Company reported third quarter 2010 diluted earnings per share from continuing operations of $0.37, as compared to $0.21 during third quarter 2009. Excluding Special Items,(1) third quarter 2009 income from continuing operations would have been $8.2 million, or $0.24 per share.
TriMas Highlights
· Reported 22.1% sales growth in third quarter 2010, as compared to third quarter 2009, due to overall improved economic conditions and the continued successful execution of several of the Companys growth initiatives.
· Improved both income and earnings per share from continuing operations in excess of 50%, as compared to third quarter 2009, excluding the impact of Special Items.
· Generated third quarter 2010 Free Cash Flow(2) of $18.3 million, and $66.7 million for the nine months ended September 30, 2010, or almost $2.00 per diluted share.
· Today announced agreement to acquire South Texas Bolt & Fitting, Inc. (STBF), a diversified manufacturer and distributor of specialized fasteners, serving the oilfield and other industrial markets. Upon deal completion, STBF will become part of Lamons, within the Energy segment.
We experienced sustained momentum across our businesses during the quarter, said David Wathen, TriMas President and Chief Executive Officer. We are pleased that our balanced approach to growth, productivity and cash generation is driving positive results across our company. Our ability to quickly respond to our customers needs by offering new products, unique solutions, superior service and expanded geographic coverage enabled us to secure incremental business during the quarter and for the future.
Wathen continued, Sales improved 22% compared to the third quarter of 2009, with all five segments reporting double-digit sales percentage growth. Third quarter income from continuing operations increased 56% compared to third quarter 2009, excluding the impact of Special Items. We continue to generate cash, lower operating working capital as a percentage of sales and reduce outstanding debt, resulting in cash and available liquidity of approximately $196 million.
Based on the third quarter results and our current outlook, we are raising our 2010 earnings expectations. We now expect 2010 diluted earnings per share (EPS) from continuing operations to range from $1.05 to $1.10 per share, an increase from our previous guidance of $0.90 to $1.00 per share. Although the economic outlook remains uncertain, we are confident in our ability to grow the top-line faster than the economy, create sustainable operating leverage and improve the balance sheet. We remain committed to continuing to improve earnings and margin levels, as we balance growth, productivity and debt reduction, Wathen concluded.
Third Quarter Results From Continuing Operations
· TriMas reported third quarter net sales of $247.9 million, an increase of 22.1% in comparison to $203.0 million in third quarter 2009. Sales in all five business segments increased by a double-digit percentage in comparison to third quarter 2009. The effects of currency exchange did not have a material impact during the quarter.
· The Company reported operating profit of $33.0 million in third quarter 2010, as compared to operating profit of $21.2 million during third quarter 2009. Excluding the impact of Special Items, operating profit would have improved 37.5%, from $24.0 million in third quarter 2009 to $33.0 million in third quarter 2010, and would have represented an increase in operating profit margin of 150 basis points.
· Adjusted EBITDA(2) for third quarter 2010 increased to $42.0 million, as compared to $32.6 million in third quarter 2009. Excluding the impact of Special Items, Adjusted EBITDA would have increased 25.4%, from $33.5 million in third quarter 2009 to $42.0 million in third quarter 2010, and Adjusted EBITDA margin would have improved 50 basis points.
· Income from continuing operations for third quarter 2010 increased 78.5% to $12.8 million, or $0.37 per diluted share, compared to income from continuing operations of $7.2 million, or $0.21 per diluted share, in third quarter 2009. Excluding the impact of Special Items, third quarter 2010 income from continuing operations would have improved 55.6% to $12.8 million, as compared to a third quarter 2009 income of $8.2 million, or $0.24 per share.
· The Company reported Free Cash Flow(2) for third quarter 2010 of $18.3 million, compared to $44.4 million in third quarter 2009. Free Cash Flow for the nine months ended September 30, 2010 was $66.7 million, or almost $2.00 per diluted share. Operating working capital as a percentage of last twelve months (LTM) sales continued to improve, declining from 15.9% in third quarter 2009 to 15.2% in third quarter 2010.
Financial Position
TriMas reported total indebtedness of $499.4 million as of September 30, 2010, as compared to $514.6 million as of December 31, 2009. After consideration of $46.5 million in cash on the balance sheet as of September 30, 2010, total indebtedness, net of cash, was $452.9 million, as compared to $505.1 million as of December 31, 2009. In addition, TriMas ended third quarter 2010 with $149.2 million of aggregate availability under its revolving credit and accounts receivable facilities.
Business Segment Results From Continuing Operations (Excluding the impact of Special Items(3))
Packaging Sales for the third quarter increased 12.0% compared to the year ago period, due to improved demand for industrial closure products, as well as sales growth in specialty dispensing and other new products. Operating profit for the quarter increased due to higher sales volumes and lower costs as a result of productivity initiatives, partially offset by an increase in selling, general and administrative costs in support of sales growth initiatives, as well as unfavorable currency exchange. Overall, third quarter 2010 operating profit margin improved by approximately 520 basis points compared to third quarter 2009. The Company continues to diversify its product offering by developing specialty dispensing product applications for growing end markets, including pharmaceutical, personal care and food/beverage markets, and expanding geographically to generate long-term growth.
Energy Third quarter sales increased 31.8% compared to the year ago period, due to improved demand for engines, other well-site content and new compression products. Sales in the Energy segment were also positively impacted by higher sales of specialty gaskets and related fastening hardware due to higher levels of turn-around activity at petrochemical refineries, increased demand from the chemical industry and incremental sales from newly opened branch facilities. Operating profit for the quarter increased due to higher sales volumes and lower costs as a result of productivity initiatives, partially offset by increased selling, general and administrative costs in support of sales growth initiatives. The Company continues to launch new well-site and compression products to complement its engine business. In the specialty gasket and fastener business, the Company continues to grow its sales and service branch network, as well as expand its lines of complementary products as demonstrated by the bolt-on acquisition announced today.
Aerospace & Defense Sales for the third quarter increased 19.4% compared to the year ago period, due to increased sales in the defense business and improved demand from aerospace distribution customers. While sales in the defense business increased compared to the year ago period, the increased revenue associated with managing the facility closure and relocation was at lower margin levels. Overall, operating profit for the quarter increased slightly as a result of the increased sales volumes and lower selling, general and administrative costs in the defense business, largely offset by an unfavorable product mix in both businesses
and unfavorable absorption of fixed costs in the aerospace business. Given the long-term prospects for its aerospace business, the Company continues to invest in this high-margin segment by developing and marketing highly-engineered products for the aerospace market, as well as expanding its offerings to military and defense customers.
Engineered Components Third quarter sales increased 65.2% compared to the year ago period, primarily due to improved demand in the industrial cylinder business, as well as the acquisition of a cylinder business during the second quarter of 2010. The specialty fittings and precision cutting tools businesses also experienced improved demand, primarily resulting from the upturn in the domestic economy and new product offerings. Operating profit and related margins improved compared to third quarter 2009 due to the Companys productivity initiatives and higher sales levels. The Company continues to develop new products and expand its international sales efforts.
Cequent Sales for the third quarter increased 16.4% compared to the year ago period, resulting from increased sales in the North American towing, trailer and electrical products, retail and Australia/Asia Pacific businesses. Sales increases during the quarter were the result of improved customer demand, new product introductions and market share gains, as well as the favorable impact of currency exchange. Due to cost reduction actions, alternative sourcing arrangements, productivity initiatives and improved sales levels, operating profit and related margins improved as compared to third quarter 2009. The Company continues to aggressively reduce fixed costs, minimize its investment in working capital and leverage Cequents strong brand positions and new products for increased market share.
Outlook
Based on the Companys third quarter results and current outlook for the remainder of 2010, management raised its outlook for full-year 2010 diluted earnings per share (EPS) from continuing operations to $1.05 to $1.10 per share, as compared to $0.43 per share in 2009, excluding Special Items in both periods. The Company previously provided an outlook for 2010 EPS of $0.90 to $1.00 per share. The Company also raised its 2010 sales outlook from an increase of 10% to 14% to a range of 15% to 17% as compared to 2009. In addition, the Company expects its full-year 2010 operating profit margin to improve by approximately 250 to 300 basis points as compared to 2009, excluding Special Items. The Company also raised its Free Cash Flow outlook from a range of $65 to $70 million to a range of $75 to $80 million.
(1) Appendix I details certain costs, expenses and other charges, collectively described as Special Items, that are included in the determination of net income (loss) under GAAP and are not added back to net income (loss) in determining Adjusted EBITDA, but that management would consider important in evaluating the quality of the Companys Adjusted EBITDA and operating results under GAAP.
(2) See Appendix II for reconciliation of Non-GAAP financial measure Adjusted EBITDA and Free Cash Flow to the Companys reported results of operations prepared in accordance with GAAP. Additionally, see Appendix I for additional information regarding Special Items impacting reported GAAP financial measures.
(3) Operating Profit excludes the impact of Special Items. For a complete schedule of Special Items by segment, see Appendix Company and Business Segment Financial Information Continuing Operations.
Conference Call Information
TriMas Corporation will host its third quarter 2010 earnings conference call today, Thursday, October 28, 2010 at 10:00 a.m. EDT. The call-in number is (866) 281-6628. Participants should request to be connected to the TriMas Corporation third quarter 2010 earnings conference call (Conference ID # 1489834). The conference call will also be simultaneously webcast via TriMas website at www.trimascorp.com with an accompanying slide presentation, under the Investors section.
A replay of the conference call will be available on the TriMas website or by dialing (866) 837-8032 (Access Code # 1489834) beginning October 28th at 2:00 p.m. EDT through November 4th at 11:59 p.m. EDT.
Cautionary Notice Regarding Forward-looking Statements
Any forward-looking statements contained herein, including those relating to market conditions or the Companys 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 Companys business and industry, the Companys substantial leverage, liabilities imposed by the Companys debt instruments, market demand,
competitive factors, the Companys ability to maintain compliance with the listing requirements of NASDAQ, supply constraints, material and energy costs, technology factors, litigation, government and regulatory actions, the Companys accounting policies, future trends, and other risks which are detailed in the Companys Annual Report on Form 10-K for the fiscal year ending December 31, 2009, and in the Companys Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.
About TriMas
Headquartered in Bloomfield Hills, Michigan, TriMas Corporation (NASDAQ: TRS) provides engineered and applied products for growing markets worldwide. TriMas is organized into five strategic business segments: Packaging, Energy, Aerospace & Defense, Engineered Components and Cequent. TriMas has approximately 3,900 employees at more than 60 different facilities in 11 countries. For more information, visit www.trimascorp.com.
TriMas Corporation
Condensed Consolidated Balance Sheet
(Unaudited dollars in thousands)
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September 30, |
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December 31, |
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2010 |
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2009 |
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Assets |
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Current assets: |
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|
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|
|
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Cash and cash equivalents |
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$ |
46,510 |
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$ |
9,480 |
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Receivables, net of reserves |
|
128,480 |
|
93,380 |
|
||
Inventories |
|
149,130 |
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141,840 |
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||
Deferred income taxes |
|
32,920 |
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24,320 |
|
||
Prepaid expenses and other current assets |
|
7,610 |
|
6,500 |
|
||
Assets of discontinued operations held for sale |
|
|
|
4,250 |
|
||
Total current assets |
|
364,650 |
|
279,770 |
|
||
Property and equipment, net |
|
161,620 |
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162,220 |
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||
Goodwill |
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194,850 |
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196,330 |
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||
Other intangibles, net |
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155,640 |
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164,080 |
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Other assets |
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22,740 |
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23,380 |
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Total assets |
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$ |
899,500 |
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$ |
825,780 |
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|
|
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Liabilities and Shareholders Equity |
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Current liabilities: |
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|
|
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Current maturities, long-term debt |
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$ |
6,940 |
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$ |
16,190 |
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Accounts payable |
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108,370 |
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92,840 |
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||
Accrued liabilities |
|
74,570 |
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65,750 |
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||
Liabilities of discontinued operations |
|
|
|
1,070 |
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||
Total current liabilities |
|
189,880 |
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175,850 |
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||
Long-term debt |
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492,480 |
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498,360 |
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||
Deferred income taxes |
|
67,180 |
|
42,590 |
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||
Other long-term liabilities |
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45,120 |
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47,000 |
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||
Total liabilities |
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794,660 |
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763,800 |
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||
Total shareholders equity |
|
104,840 |
|
61,980 |
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Total liabilities and shareholders equity |
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$ |
899,500 |
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$ |
825,780 |
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TriMas Corporation
Consolidated Statement of Operations
(Unaudited dollars in thousands,
except for share amounts)
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2010 |
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2009 |
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2010 |
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2009 |
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Net sales |
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$ |
247,880 |
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$ |
202,970 |
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$ |
720,000 |
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$ |
612,560 |
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Cost of sales |
|
(173,390 |
) |
(144,770 |
) |
(504,140 |
) |
(457,720 |
) |
||||
Gross profit |
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74,490 |
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58,200 |
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215,860 |
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154,840 |
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Selling, general and administrative expenses |
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(41,260 |
) |
(37,070 |
) |
(120,330 |
) |
(112,240 |
) |
||||
Gain (loss) on dispositions of property and equipment |
|
(220 |
) |
20 |
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(950 |
) |
180 |
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Operating profit |
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33,010 |
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21,150 |
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94,580 |
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42,780 |
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||||
Other income (expense), net: |
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|
|
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|
|
|
|
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||||
Interest expense |
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(12,550 |
) |
(10,750 |
) |
(39,780 |
) |
(34,530 |
) |
||||
Gain on extinguishment of debt |
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|
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1,180 |
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|
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28,250 |
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Gain on bargain purchase |
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|
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410 |
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Other, net |
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(200 |
) |
(190 |
) |
(1,250 |
) |
(1,710 |
) |
||||
Other income (expense), net |
|
(12,750 |
) |
(9,760 |
) |
(40,620 |
) |
(7,990 |
) |
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|
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|
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Income from continuing operations before income tax expense |
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20,260 |
|
11,390 |
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53,960 |
|
34,790 |
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||||
Income tax expense |
|
(7,500 |
) |
(4,240 |
) |
(20,230 |
) |
(13,190 |
) |
||||
Income from continuing operations |
|
12,760 |
|
7,150 |
|
33,730 |
|
21,600 |
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||||
Income (loss) from discontinued operations, net of income tax benefit (expense) |
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(40 |
) |
(1,320 |
) |
5,850 |
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(10,460 |
) |
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Net income |
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$ |
12,720 |
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$ |
5,830 |
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$ |
39,580 |
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$ |
11,140 |
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Earnings per share - basic: |
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Continuing operations |
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$ |
0.38 |
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$ |
0.21 |
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$ |
1.00 |
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$ |
0.64 |
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Discontinued operations, net of income tax benefit (expense) |
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(0.00 |
) |
(0.04 |
) |
0.17 |
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(0.31 |
) |
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Net income per share |
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$ |
0.38 |
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$ |
0.17 |
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$ |
1.17 |
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$ |
0.33 |
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Weighted average common shares - basic |
|
33,827,939 |
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33,496,634 |
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33,730,852 |
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33,480,747 |
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Earnings per share - diluted: |
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|
|
|
|
|
|
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||||
Continuing operations |
|
$ |
0.37 |
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$ |
0.21 |
|
$ |
0.98 |
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$ |
0.64 |
|
Discontinued operations, net of income tax benefit (expense) |
|
(0.00 |
) |
(0.04 |
) |
0.17 |
|
(0.31 |
) |
||||
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|
|
|
|
|
|
|
|
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||||
Net income per share |
|
$ |
0.37 |
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$ |
0.17 |
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$ |
1.15 |
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$ |
0.33 |
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|
|
|
|
|
|
|
|
|
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Weighted average common shares - diluted |
|
34,512,820 |
|
34,007,846 |
|
34,380,188 |
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33,752,210 |
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TriMas Corporation
Company and Business Segment Financial Information
Continuing Operations
(Unaudited dollars in thousands)
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2010 |
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2009 |
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2010 |
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2009 |
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Packaging |
|
|
|
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|
|
|
|
|
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Net sales |
|
$ |
44,490 |
|
$ |
39,730 |
|
$ |
133,610 |
|
$ |
106,130 |
|
Operating profit |
|
$ |
13,140 |
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$ |
9,160 |
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$ |
38,480 |
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$ |
23,390 |
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Adjusted EBITDA |
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$ |
16,010 |
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$ |
12,540 |
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$ |
47,350 |
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$ |
32,760 |
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Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
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|
|
|
|
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|
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- Severance and business restructuring costs |
|
$ |
|
|
$ |
(480 |
) |
$ |
|
|
$ |
(480 |
) |
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|
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|
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Excluding Special Items, operating profit would have been: |
|
$ |
13,140 |
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$ |
9,640 |
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$ |
38,480 |
|
$ |
23,870 |
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|
|
|
|
|
|
|
|
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|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
16,010 |
|
$ |
13,020 |
|
$ |
47,350 |
|
$ |
33,240 |
|
|
|
|
|
|
|
|
|
|
|
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Energy |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
47,440 |
|
$ |
36,000 |
|
$ |
135,080 |
|
$ |
111,260 |
|
Operating profit |
|
$ |
4,910 |
|
$ |
3,200 |
|
$ |
15,440 |
|
$ |
9,380 |
|
Adjusted EBITDA |
|
$ |
5,620 |
|
$ |
3,950 |
|
$ |
17,540 |
|
$ |
11,730 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(30 |
) |
$ |
|
|
$ |
(240 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
4,910 |
|
$ |
3,230 |
|
$ |
15,440 |
|
$ |
9,620 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
5,620 |
|
$ |
3,980 |
|
$ |
17,540 |
|
$ |
11,970 |
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
19,170 |
|
$ |
16,060 |
|
$ |
53,470 |
|
$ |
56,530 |
|
Operating profit |
|
$ |
5,350 |
|
$ |
5,190 |
|
$ |
13,020 |
|
$ |
18,410 |
|
Adjusted EBITDA |
|
$ |
5,770 |
|
$ |
5,760 |
|
$ |
14,780 |
|
$ |
20,180 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(10 |
) |
$ |
|
|
$ |
(140 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
5,350 |
|
$ |
5,200 |
|
$ |
13,020 |
|
$ |
18,550 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
5,770 |
|
$ |
5,770 |
|
$ |
14,780 |
|
$ |
20,320 |
|
|
|
|
|
|
|
|
|
|
|
||||
Engineered Components |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
24,950 |
|
$ |
15,100 |
|
$ |
67,180 |
|
$ |
48,570 |
|
Operating profit |
|
$ |
2,690 |
|
$ |
920 |
|
$ |
8,430 |
|
$ |
1,640 |
|
Adjusted EBITDA |
|
$ |
3,760 |
|
$ |
1,640 |
|
$ |
11,410 |
|
$ |
3,900 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(210 |
) |
$ |
|
|
$ |
(370 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
2,690 |
|
$ |
1,130 |
|
$ |
8,430 |
|
$ |
2,010 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
3,760 |
|
$ |
1,850 |
|
$ |
11,410 |
|
$ |
4,270 |
|
|
|
|
|
|
|
|
|
|
|
||||
Cequent |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
111,830 |
|
$ |
96,080 |
|
$ |
330,660 |
|
$ |
290,070 |
|
Operating profit (loss) |
|
$ |
13,430 |
|
$ |
7,220 |
|
$ |
37,600 |
|
$ |
6,760 |
|
Adjusted EBITDA |
|
$ |
17,320 |
|
$ |
12,200 |
|
$ |
49,290 |
|
$ |
21,700 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit (loss): |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(2,130 |
) |
$ |
|
|
$ |
(7,580 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit (loss) would have been: |
|
$ |
13,430 |
|
$ |
9,350 |
|
$ |
37,600 |
|
$ |
14,340 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(1,560 |
) |
$ |
|
|
$ |
(5,340 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
17,320 |
|
$ |
13,760 |
|
$ |
49,290 |
|
$ |
27,040 |
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate Expenses |
|
|
|
|
|
|
|
|
|
||||
Operating loss |
|
$ |
(6,510 |
) |
$ |
(4,540 |
) |
$ |
(18,390 |
) |
$ |
(16,800 |
) |
Adjusted EBITDA |
|
$ |
(6,450 |
) |
$ |
(3,520 |
) |
$ |
(18,390 |
) |
$ |
11,360 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating loss: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(2,940 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating loss would have been: |
|
$ |
(6,510 |
) |
$ |
(4,540 |
) |
$ |
(18,390 |
) |
$ |
(13,860 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(2,940 |
) |
- Gain on extinguishment of debt |
|
$ |
|
|
$ |
1,330 |
|
$ |
|
|
$ |
29,390 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
(6,450 |
) |
$ |
(4,850 |
) |
$ |
(18,390 |
) |
$ |
(15,090 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Total Company |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
247,880 |
|
$ |
202,970 |
|
$ |
720,000 |
|
$ |
612,560 |
|
Operating profit |
|
$ |
33,010 |
|
$ |
21,150 |
|
$ |
94,580 |
|
$ |
42,780 |
|
Adjusted EBITDA |
|
$ |
42,030 |
|
$ |
32,570 |
|
$ |
121,980 |
|
$ |
101,630 |
|
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items to consider in evaluating operating profit: |
|
$ |
|
|
$ |
(2,860 |
) |
$ |
|
|
$ |
(11,750 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
33,010 |
|
$ |
24,010 |
|
$ |
94,580 |
|
$ |
54,530 |
|
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items to consider in evaluating Adjusted EBITDA: |
|
$ |
|
|
$ |
(960 |
) |
$ |
|
|
$ |
19,880 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
42,030 |
|
$ |
33,530 |
|
$ |
121,980 |
|
$ |
81,750 |
|
Appendix I
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited)
|
|
Three months ended |
|
Three months ended |
|
||||||||
|
|
September 30, 2010 |
|
September 30, 2009 |
|
||||||||
(dollars in thousands, except per share amounts) |
|
Income |
|
EPS |
|
Income |
|
EPS |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Income and EPS from continuing operations, as reported |
|
$ |
12,760 |
|
$ |
0.37 |
|
$ |
7,150 |
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
|
|
|
|
(1,780 |
) |
(0.05 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items except gain on extinguishment of debt, income and EPS from continuing operations would have been |
|
$ |
12,760 |
|
$ |
0.37 |
|
$ |
8,930 |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of gain on extinguishment of debt |
|
|
|
|
|
730 |
|
0.02 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Total Special Items, income and EPS from continuing operations would have been |
|
$ |
12,760 |
|
$ |
0.37 |
|
$ |
8,200 |
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding at September 30, 2010 and 2009 |
|
|
|
34,512,820 |
|
|
|
34,007,846 |
|
|
|
Nine months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, 2010 |
|
September 30, 2009 |
|
||||||||
(dollars in thousands, except per share amounts) |
|
Income |
|
EPS |
|
Income |
|
EPS |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Income and EPS from continuing operations, as reported |
|
$ |
33,730 |
|
$ |
0.98 |
|
$ |
21,600 |
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
|
|
|
|
(7,310 |
) |
(0.22 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items except gain on extinguishment of debt, income and EPS from continuing operations would have been |
|
$ |
33,730 |
|
$ |
0.98 |
|
$ |
28,910 |
|
$ |
0.86 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of gain on extinguishment of debt |
|
|
|
|
|
17,570 |
|
0.52 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Total Special Items, income and EPS from continuing operations would have been |
|
$ |
33,730 |
|
$ |
0.98 |
|
$ |
11,340 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding at September 30, 2010 and 2009 |
|
|
|
34,380,188 |
|
|
|
33,752,210 |
|
Appendix I (cont.)
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited)
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
(dollars in thousands) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Operating profit from continuing operations, as reported |
|
$ |
33,010 |
|
$ |
21,150 |
|
$ |
94,580 |
|
$ |
42,780 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating quality of earnings: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
$ |
|
|
$ |
(2,860 |
) |
$ |
|
|
$ |
(11,750 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit from continuing operations would have been |
|
$ |
33,010 |
|
$ |
24,010 |
|
$ |
94,580 |
|
$ |
54,530 |
|
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
(dollars in thousands) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA from continuing operations, as reported |
|
$ |
42,030 |
|
$ |
32,570 |
|
$ |
121,980 |
|
$ |
101,630 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating quality of earnings: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
$ |
|
|
$ |
(2,290 |
) |
$ |
|
|
$ |
(9,510 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items except gain on extinguishment of debt, Adjusted EBITDA from continuing operations would have been |
|
$ |
42,030 |
|
$ |
34,860 |
|
$ |
121,980 |
|
$ |
111,140 |
|
|
|
|
|
|
|
|
|
|
|
||||
Gross gain on extinguishment of debt |
|
$ |
|
|
$ |
1,330 |
|
$ |
|
|
$ |
29,390 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Total Special Items, Adjusted EBITDA from continuing operations would have been |
|
$ |
42,030 |
|
$ |
33,530 |
|
$ |
121,980 |
|
$ |
81,750 |
|
Appendix II
TriMas Corporation
Reconciliation of Non-GAAP Measure Adjusted EBITDA(1) and Free Cash Flow(2)
(Unaudited)
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
(dollars in thousands) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
Net income (loss) |
|
$ |
12,720 |
|
$ |
5,830 |
|
$ |
39,580 |
|
$ |
11,140 |
|
Income tax expense |
|
7,450 |
|
3,420 |
|
23,580 |
|
6,650 |
|
||||
Interest expense |
|
12,680 |
|
10,930 |
|
40,200 |
|
35,050 |
|
||||
Debt extinguishment costs |
|
|
|
150 |
|
|
|
1,140 |
|
||||
Depreciation and amortization |
|
9,220 |
|
10,580 |
|
28,270 |
|
33,410 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA, total company |
|
42,070 |
|
30,910 |
|
131,630 |
|
87,390 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA, discontinued operations |
|
40 |
|
(1,660 |
) |
9,650 |
|
(14,240 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA, continuing operations |
|
$ |
42,030 |
|
$ |
32,570 |
|
$ |
121,980 |
|
$ |
101,630 |
|
Special Items |
|
|
|
2,290 |
|
|
|
9,510 |
|
||||
Non-cash gross gain on extinguishment of debt |
|
|
|
(1,330 |
) |
|
|
(29,390 |
) |
||||
Cash interest |
|
(5,710 |
) |
(3,630 |
) |
(27,710 |
) |
(25,460 |
) |
||||
Cash taxes |
|
(2,990 |
) |
(2,420 |
) |
(6,260 |
) |
(6,730 |
) |
||||
Non-cash gain on bargain purchase |
|
|
|
|
|
(410 |
) |
|
|
||||
Capital expenditures |
|
(5,840 |
) |
(4,430 |
) |
(11,090 |
) |
(10,820 |
) |
||||
Changes in operating working capital |
|
(8,760 |
) |
23,170 |
|
(22,140 |
) |
43,920 |
|
||||
Free Cash Flow from operations before Special Items |
|
18,730 |
|
46,220 |
|
54,370 |
|
82,660 |
|
||||
Cash paid for Special Items |
|
(460 |
) |
(2,470 |
) |
(2,450 |
) |
(6,900 |
) |
||||
Net proceeds from sale of business and other assets |
|
50 |
|
680 |
|
14,790 |
|
23,100 |
|
||||
Free Cash Flow |
|
$ |
18,320 |
|
$ |
44,430 |
|
$ |
66,710 |
|
$ |
98,860 |
|
(1) The Company defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change, interest, taxes, depreciation, amortization, debt extinguishment costs, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. Lease expense and non-recurring charges are included in Adjusted EBITDA and include both cash and non-cash charges related to restructuring and integration expenses. In evaluating our business, management considers and uses Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability. Management believes this measure is useful as an analytical indicator of leverage capacity and debt servicing ability, and uses it to measure financial performance as well as for planning purposes. However, Adjusted EBITDA should not be considered as an alternative to net income, cash flow from operating activities or any other measures calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definition of Adjusted EBITDA used here may differ from that used by other companies.
(2) The Company defines Free Cash Flow as Adjusted EBITDA from continuing operations, plus Special Items and net proceeds from sale of businesses, less cash paid for interest, taxes and Special Items, capital expenditures and changes in operating working capital. As detailed in Appendix I, for purposes of determining Free Cash Flow, Special Items, net, include those costs, expenses and other charges incurred on a cash basis that are included in the determination of net income (loss) under GAAP and are not added back to net income (loss) in determining Adjusted EBITDA, but that management would consider important in evaluating the quality of the Companys Free Cash Flow, as defined.
Exhibit 99.2
Third Quarter 2010 Earnings Presentation October 28, 2010 |
Safe Harbor Statement Any forward-looking statements contained herein, including those relating to market conditions or the Companys 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 Companys business and industry, the Companys substantial leverage, liabilities imposed by the Companys debt instruments, market demand, competitive factors, the Companys ability to maintain compliance with the listing requirements of NASDAQ, supply constraints, material and energy costs, technology factors, litigation, government and regulatory actions, the Companys accounting policies, future trends, and other risks which are detailed in the Companys Annual Report on Form 10-K for the fiscal year ending December 31, 2009, and in the Companys 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. |
Agenda Overview Financial Highlights Segment Highlights Outlook and Summary Questions and Answers Appendix |
Third Quarter Results Summary Sales up 22% vs. Q3 2009 Double-digit percentage sales increases in all segments Continued to gain market share in several businesses Investments in new products and markets showing results Improved earnings driven by better operating performance and permanently lowered fixed cost structure Continued margin expansion supported by productivity initiatives Improvement in working capital levels as a percentage of sales Continued focus on free cash flow and debt reduction Demonstrating sustainable momentum across our businesses. |
Third Quarter Highlights Several commercial successes will yield future growth Increased focus on business development in non-U.S. markets Global Sourcing Organization gaining traction and driving results Signed agreement to acquire South Texas Bolt & Fitting Executing strategic imperatives and positioning TriMas for future success. |
Third Quarter Financial Highlights |
Third Quarter Summary Sales improved 22% as a result of improving end market demand and execution of growth initiatives All segments reported double-digit percentage sales increase compared to Q3 2009 Productivity efforts continue to drive enhanced profitability and margins Gross profit and Adjusted EBITDA margins improved 140 and 50 bps, respectively, compared to Q3 2009 Income and EPS increased over 50%, compared to Q3 2009 Q3 2010 Free Cash Flow of $18.3 million Continued debt reduction and increased liquidity Ended Q3 with $46.5 million of cash (1) Special Items for each period, as well as the Reconciliation of Non-GAAP Measures Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. (from continuing operations) Q3 2010 Q3 2009 %Chg Revenue $ 247.9 $ 203.0 22.1% Gross Profit $ 74.5 $ 58.2 28.0% Gross Profit Margin 30.1% 28.7% 140 bps Adjusted EBITDA(1) $ 42.0 $ 32.6 29.0% Excl. Total Special Items, Adjusted EBITDA would have been: $ 42.0 $ 33.5 25.4% Excl. Total Special Items, Adjusted EBITDA margin would have been: 17.0% 16.5% 50 bps Income $ 12.8 $ 7.2 78.5% Excl. Total Special Items, Income would have been: $ 12.8 $ 8.2 55.6% Diluted earnings per share $ 0.37 $ 0.21 76.2% Excl. Total Special Items, diluted EPS would have been: $ 0.37 $ 0.24 54.2% Free Cash Flow(1) $ 18.3 $ 44.4 -58.8% Debt and A/R Securitization $ 499.4 $ 526.0 -5.1%
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Third Quarter Summary Sales improved 22% as a result of improving end market demand and execution of growth initiatives All segments reported double-digit percentage sales increase compared to Q3 2009 Productivity efforts continue to drive enhanced profitability and margins Gross profit and Adjusted EBITDA margins improved 140 and 50 bps, respectively, compared to Q3 2009 Income and EPS increased over 50%, compared to Q3 2009 Q3 2010 Free Cash Flow of $18.3 million Continued debt reduction and increased liquidity Ended Q3 with $46.5 million of cash (1) Special Items for each period, as well as the Reconciliation of Non-GAAP Measures Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Revenue $ 247.9 $ 203.0 22.1% Gross Profit $ 74.5 $ 58.2 28.0% Gro ss P ro fit Margin 30.1% 28.7% 140 bps Adjusted EBITDA(1) $ 42.0 $ 32.6 29.0% Excl. Total Special Items, Adjusted EBITDA would have been: $ 42.0 $ 33.5 25.4% Excl. Total Special Items, Adjusted EB ITDA margin would have been: 17.0% 16.5% 50 bps Income $ 12.8 $ 7.2 78.5% Excl. Total Special Items, Income would have been: $ 12.8 $ 8.2 55.6% Diluted earnings per share $ 0.37 $ 0.21 76.2% Excl. Total Special Items, diluted EPS would have been: $ 0.37 $ 0.24 54.2% Free Cash Flow (1) $ 18.3 $ 44.4 -58.8% Debt and A/R Securitization $ 499.4 $ 526.0 -5.1% (from continuing operations) Q3 2010 Q3 2009 %Chg |
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Margin Improvements Comments: Productivity initiatives improve margins over time Operating profit and Adjusted EBITDA margins improved 150 and 50 bps, respectively, compared to Q3 2009 Q3 2010 margin levels are higher than Q3 2008 levels, despite approximately $11M higher sales in Q3 2008 Each business has plans in place to achieve material, labor and overhead productivity (1) Adjusted EBITDA and Operating Profit exclude Special Items for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. (1) Continued expansion of margins, despite tougher comparables. Margins (excl. Special Items)(1) Q3 2008 Q3 2009 Q3 2010 Op Income Margin Adj EBITDA Margin 14.5% 16.5% 17.0% 11.1% 11.89% 13.3% |
Global Sourcing Organization Initiatives Implemented cross-SBU teams led by GSO. Sourcing 100+ on-going projects totaling more than $30 million in annual spend Implementation of continuous improvement at suppliers Diversify supplier base across multiple low-cost countries Best practice sharing National Contracts / Aggregation All-TriMas functional teams to focus on ideas Focus areas include: Freight and Logistics Corrugated Packaging Raw Materials Energy Travel & Office Supplies Compliance Costs Office Supplies Forklifts and other equipment Temporary Labor Emerging Market Development Provide organizational support with resources in new geographies Develop market research Include top-line ideas, as well as import and export strategies Bridge cultural differences and build global relationships |
Working Capital Comments: Operating working capital at 15.2% of LTM sales vs. 15.9% at Q3 2009, due to lower inventory levels relative to sales Continued improvement expected due to enhanced focus on asset efficiencies 15.2% of Sales 15.9% of Sales Continued lean initiatives will drive permanent process change and working capital reductions. $200 $175 $150 $125 $100 $75 2008 2009 2010 Q1 Q2 Q3 Q4 |
Capitalization (Dollars in thousands) As of September 30, 2010, TriMas had $195.7 million of cash and available liquidity under its revolving credit and receivables facilities. September 30, December 31, 2010 2009 Cash and Cash Equivalents 46,510 $ 9,480 $ Term loan 249,600 251,580 Revolving credit facilities - 5,100 Non-U.S. bank debt and other 4,520 12,890 254,120 269,570 9 3/4% senior secured notes, due December 2017 245,300 244,980 A/R Facility Borrowings -$ -$ Total Debt 499,420 $ 514,550 $ Key Ratios: Bank LTM EBITDA 155,460 $ 138,450 $ Interest Coverage Ratio 3.25 x 3.13 x Leverage Ratio 3.21 x 3.68 x Bank Covenants: Minimum Interest Coverage Ratio 2.00 x 2.20 x Maximum Leverage Ratio 5.00 x 4.50 x |
Segment Highlights |
Packaging Results: Sales growth in industrial closure and specialty dispensing products Increased sales volumes and productivity actions improved Adjusted EBITDA and operating profit Q3 2010 operating profit margin improved approximately 520 basis points compared to Q3 2009 ($ in millions) (1) Adjusted EBITDA and Operating Profit exclude Special Items for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Key Initiatives: Target specialty dispensing products in higher growth end markets Pharmaceutical and medical Food and beverage Personal care Increase geographic coverage efforts in Europe & Asia Increase low-cost country sourcing and manufacturing Consider complementary bolt-on acquisitions Ensure new products continue to have barriers to entry |
Energy ($ in millions) (1) Adjusted EBITDA and Operating Profit exclude Special Items for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Results: Sales increased due to improved demand for engines, other well-site content and compression products, as well as specialty gaskets and related fastening hardware Positive conversion resulted due to higher sales volumes and cost reductions Q3 2010 operating profit margin improved approximately 130 basis points compared to Q3 2009 Key Initiatives: Faster expansion of business with major customers globally Agreement to acquire South Texas Bolt & Fitting by Lamons Expand complementary product lines at well-site and grow natural gas compression products Capitalize on shale and natural gas opportunities Better leverage installed manufacturing footprint in Asia Increase low-cost country sourcing |
Aerospace & Defense Key Initiatives: Expand aerospace fastener product lines to increase content and applications per aircraft Drive ongoing Lean initiatives to lower working capital and reduce costs Leverage and develop existing defense customer relationships Consider complementary bolt-on acquisitions ($ in millions) Results: Increased sales in defense business and improved demand from aerospace distribution customers Operating profit increased slightly as a result of increased sales and lower SG&A, largely offset by unfavorable product mix and unfavorable absorption of fixed costs in the aerospace business Expectations of ramp-up from large frame, composite aircraft (1) Adjusted EBITDA and Operating Profit exclude Special Items for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. |
Engineered Components ($ in millions) Key Initiatives: Develop additional capabilities of cylinder business to capture new markets Integration of cylinder business acquisition Continue to reduce costs and improve working capital turnover Continue to expand product offering and geographies Expand specialty products for existing components and tooling markets (1) Adjusted EBITDA and Operating Profit exclude Special Items for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Results: Sales increased due to improved demand in industrial cylinder, specialty fittings and precision cutting tool businesses Positive impact of Q2 bolt-on acquisition in the cylinder business Adjusted EBITDA and operating profit increased in Q3 due to higher sales volumes and lower costs Operating profit margin improved approximately 330 basis points compared to Q3 2009 |
Cequent ($ in millions) (1) Adjusted EBITDA and Operating Profit exclude Special Items for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Results: Sales increased resulting from improvements in the North American towing, trailer and electrical products and retail businesses, as well as the favorable impact of currency exchange Adjusted EBITDA and operating profit increased due to significant cost reductions and productivity initiatives Q3 2010 operating profit margin increased 230 basis points compared to Q3 2009 Key Initiatives: Continue to aggressively reduce fixed costs and simplify the business Improve processes for better customer service and support Leverage strong brands for additional market share and cross-selling Continue to reduce working capital requirements |
Outlook and Summary |
TriMas 2010 Outlook As of 3/2/10 As of 4/29/10 As of 8/3/10 As of 10/28/10 Sales Growth 4% - 7% 5% - 9% 10% - 14% 15% - 17% Core growth 3% - 4% 3% - 4% 5% - 7% 7% - 8% New program/market share growth 1% - 3% 2% - 5% 5% - 6% 7% - 8% Bolt-on acquisitions 0% - 2% 0% - 2% 0.5% - 1% 1% - 1.5% Recurring Operating Profit Up 60 to 100 bps Up 80 to 120 bps Up 200 to 250 bps Up 250 to 300 bps Free Cash Flow(1) > $30 million $40 to $45 million $65 to $70 million $75 to $80 million Diluted EPS (excl. Special Items) > $0.60 $0.65 to $0.75 $0.90 to $1.00 $1.05 to $1.10 (1) Special Items for each period, as well as the Reconciliation of Non-GAAP Measures Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Full Year 2010 Outlook provided: Excluding Special Items, Company raises 2010 EPS outlook to a range of $1.05 to $1.10, an increase of at least 144% vs. 2009 EPS. |
Strategic Aspirations High single-digit top-line growth Earnings growth faster than revenue growth 3% to 5% of total gross cost productivity gains annually utilize savings to fund growth Invest in growth programs that deliver new products, new markets and expanded geographies Increase revenues in fastest growing markets Ongoing improvement in capital turns and all cycle times Continued decrease in leverage ratio Winning businesses grow revenue and earnings, despite slow markets. Strategic Aspirations and Plan are the foundation for 2011 Playbook |
Questions & Answers |
Appendix |
Statement of Operations (Unaudited, dollars in thousands) Three months ended September 30, Nine months ended September 30, 2010 2009 2010 2009 Net sales $ 247,880 $ 202,970 $ 720,000 $ 612,560 Cost of sales (173,390) (144,770) (504,140) (457,720) Gross profit 74,490 58,200 215,860 154,840 Selling, general and administrative expenses (41,260) (37,070) (120,330) (112,240) Gain (loss) on dispositions of property and equipment (220) 20 (950) 180 Operating profit 33,010 21,150 94,580 42,780 Other income (expense), net: Interest expense (12,550) (10,750) (39,780) (34,530) Gain on extinguishment of debt 1,180 28,250 Gain on bargain purchase - 410 Other, net (200) (190) (1,250) (1,710) Other income (expense), net (12,750) (9,760) (40,620) (7,990) Income from continuing operations before income tax expense 20,260 11,390 53,960 34,790 Income tax expense (7,500) (4,240) (20,230) (13,190) Income from continuing operations 12,760 7,150 33,730 21,600 Income (loss) from discontinued operations, net of income tax benefit (expense) (40) (1,320) 5,850 (10,460) Net income $ 12,720 $ 5,830 $ 39,580 $ 11,140 Earnings per share - basic: Continuing operations $ 0.38 $ 0.21 $ 1.00 $ 0.64 Discontinued operations, net of income tax benefit (expense) (0.00) (0.04) 0.17 (0.31) Net income per share $ 0.38 $ 0.17 $ 1.17 $ 0.33 Weighted average common shares - basic 33,827,939 33,496,634 33,730,852 33,480,747 Earnings per share - diluted: Continuing operations $ 0.37 $ 0.21 $ 0.98 $ 0.64 Discontinued operations, net of income tax benefit (expense) (0.00) (0.04) 0.17 (0.31) Net income per share $ 0.37 $ 0.17 $ 1.15 $ 0.33 TRIMAS Weighted average common shares - diluted 34,512,820 34,007,846 34,380,188 33,752,210 |
Condensed Balance Sheet (Unaudited, dollars in thousands) Assets September 30, 2010 December 31, 2009 Current assets: Cash and cash equivalents $ 46,510 $ 9,480 Receivables, net of reserves 128,480 93,380 Inventories 149,130 141,840 Deferred income taxes 32,920 24,320 Prepaid expenses and other current assets 7,610 6,500 Assets of discontinued operations held for sale 4,250 - Total current assets 364,650 279,770 Property and equipment, net 161,620 162,220 Goodwill 194,850 196,330 Other intangibles, net 155,640 164,080 Other assets 22,740 23,380 Total assets $ 899,500 $ 825,780 Liabilities and Shareholders' Equity Current liabilities: Current maturities, long-term debt $ 6,940 $ 16,190 Accounts payable 108,370 92,840 Accrued liabilities 74,570 65,750 Liabilities of discontinued operations 1,070 Total current liabilities 189,880 175,850 Long-term debt 492,480 498,360 Deferred income taxes 67,180 42,590 Other long-term liabilities 45,120 47,000 Total liabilities 794,660 763,800 Total shareholders' equity 104,840 61,980 Total liabilities and shareholders' equity $ 899,500 $ 825,780 |
Reconciliation of Non-GAAP Measures Adjusted EBITDA(1) and Free Cash Flow(2) (Unaudited) (1) The Company defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change, interest, taxes, depreciation, amortization, debt extinguishment costs, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. Lease expense and non-recurring charges are included in Adjusted EBITDA and include both cash and non-cash charges related to restructuring and integration expenses. In evaluating our business, management considers and uses Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability. Management believes this measure is useful as an analytical indicator of leverage capacity and debt servicing ability, and uses it to measure financial performance as well as for planning purposes. However, Adjusted EBITDA should not be considered as an alternative to net income, cash flow from operating activities or any other measures calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definition of Adjusted EBITDA used here may differ from that used by other companies. (2) The Company defines Free Cash Flow as Adjusted EBITDA from continuing operations, plus Special Items and net proceeds from sale of businesses, less cash paid for interest, taxes and Special Items, capital expenditures and changes in operating working capital. As detailed in Appendix I, for purposes of determining Free Cash Flow, Special Items, net, include those costs, expenses and other charges incurred on a cash basis that are included in the determination of net income (loss) under GAAP and are not added back to net income (loss) in determining Adjusted EBITDA, but that management would consider important in evaluating the quality of the Companys Free Cash Flow, as defined. (Unaudited) Three months ended September 30, Nine months ended September 30, (dollars in thousands) 2010 2009 2010 2009 Net income (loss) $ 12,720 $ 5,830 $ 39,580 $ 11,140 Income tax expense 7,450 3,420 23,580 6,650 Interest expense 12,680 10,930 40,200 35,050 Debt extinguishment costs - 150 1,140 Depreciation and amortization 9,220 10,580 28,270 33,410 Adjusted EBITDA, total company 42,070 30,910 131,630 87,390 Adjusted EBITDA, discontinued operations 40 (1,660) 9,650 (14,240) Adjusted EBITDA, continuing operations $ 42,030 $ 32,570 $ 121,980 $ 101,630 Special Items 2,290 9,510 Non-cash gross gain on extinguishment of debt (1,330) (29,390) Cash interest (5,710) (3,630) (27,710) (25,460) Cash taxes (2,990) (2,420) (6,260) (6,730) Non-cash gain on bargain purchase (410) Capital expenditures (5,840) (4,430) (11,090) (10,820) Changes in operating working capital (8,760) 23,170 (22,140) 43,920 Free Cash Flow from operations before Special Items 18,730 46,220 54,370 82,660 Cash paid for Special Items (460) (2,470) (2,450) (6,900) Net proceeds from sale of business and other assets 50 680 14,790 23,100 Free Cash Flow $ 18,320 $ 44,430 $ 66,710 $ 98,860 |
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited) (dollars in thousands, except per share amounts) Three months ended September 30, 2010 Income EPS Three months ended September 30, 2009 Income EPS Income and EPS from continuing operations, as reported $ 12,760 $ 0.37 $ 7,150 $ 0.21 After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: Severance and business restructuring costs (1,780) (0.05) Excluding Special Items except gain on extinguishment of debt, income and EPS from continuing operations would have been $ 12, 760 $ 0.37 $ 8,930 $ 0.26 After-tax impact of gain on extinguishment of debt 730 0.02 Excluding Total Special Items, income and EPS from continuing operations would have been $ 12, 760 $ 0.37 $ 8,200 $ 0.24 Weighted-average shares outstanding at September 30, 2010 and 2009 34,512,820 34,007,846 (dollars in thousands, except per share amounts) Nine months ended Nine months ended September 30, 2010 September 30, 2009 Income EPS Income EPS Income and EPS from continuing operations, as reported $ 33,730 $ 0.98 $ 21,600 $ 0.64 After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: Severance and business restructuring costs (7,310) (0.22) Excluding Special Items except gain on extinguishment of debt, income and EPS from continuing operations would have been $ 33,730 $ 0.98 $ 28,910 $ 0.86 After-tax impact of gain on extinguishment of debt 17,570 0.52 Excluding Total Special Items, income and EPS from continuing operations would have been $ 33,730 $ 0.98 $ 11,340 $ 0.34 Weighted-average shares outstanding at September 30, 2010 and 2009 34,380,188 33,752,210 |
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited) Three months ended September 30, Nine months ended September 30, (dollars in thousands) 2010 2009 2010 2009 Operating profit from continuing operations, as reported $ 33,010 $ 21,150 $ 94,580 $ 42,780 Special Items to consider in evaluating quality of earnings: Severance and business restructuring costs $- (2,860) $ - $ (11,750) Excluding Special Items, operating profit from continuing operations would have been $ 33,010 $ 24,010 $ 94,580 $ 54,530 Three months ended September 30, Nine months ended September 30, (dollars in thousands) 2010 2009 2010 2009 Adjusted EBITDA from continuing operations, as reported $ 42,030 $ 32,570 $ 121,980 $ 101,630 Special Items to consider in evaluating quality of earnings: Severance and business restructuring costs $ - $ (2,290) $ - $ (9,510) Excluding Special Items except gain on extinguishment of debt, Adjusted EBITDA from continuing operations would have been $ 42,030 $ 34,860 $ 121,980 $ 111,140 Gross gain on extinguishment of debt $ 1,330 $ - $ 29,390 $ - Excluding Total Special Items, Adjusted EBITDA from continuing operations would have been $ 42,030 $ 33,530 $ 121,980 $ 81,750 |
Company and Business Segment Financial Information Cont. Ops (Unaudited, dollars in thousands) Three months ended September 30, Nine months ended September 30, 2010 2009 2010 2009 Packaging Net sales $ 44,490 $ 39,730 $ 133, 610 $ 106,130 Operating profit $ 13,140 $ 9,160 $ 38,480 $ 23,390 Adjusted EBITDA $ 16,010 $ 12,540 $ 47,350 $ 32760 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ (480) $ - $ (480) Excluding Special Items , operating profit would have been: $ 13,140 $ 9,640 $ 38,480 $ 23,870 Excluding Special Items , Adjusted EBITDA would have been: $ 16,010 $ 13,020 $ 47,350 $ 33,240 Energy Net sales $ 47,440 $ 36,000 $ 135,080 $ 111,260 Operating profit $ 4,910 $ 3,200 $ 15,440 $ 9,380 Adjusted EBITDA $ 5,620 $ 3,950 $ 17,540 $ 11,730 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ (30) $ - $ (240) Excluding Special Items , operating profit would have been: $ 4,910 $ 3,230 $ 15,440 $ 9,620 Excluding Special Items , Adjusted EBITDA would have been: $ 5,620 $ 3,980 $ 17,540 $ 11,970 Aerospace & Defense Net sales $ 19,170 $ 16,060 $ 53,470 $ 56,530 Operating profit $ 5,350 $ 5,190 $ 13,020 $ 18,410 Adjusted EBITDA $ 5,770 $ 5,760 $ 14,780 $ 20,180 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ (10) $ - $ (140) Excluding Special Items , operating profit would have been: $ 5,350 $ 5,200 $ 13,020 $ 18,550 Excluding Special Items , Adjusted EBITDA would have been: $ 5,770 $ 5,770 $ 14,780 $ 20,320 Engineered Components Net sales $ 24,950 $ 15,100 $ 67,180 $ 48,570 Operating profit $ 2,690 $ 920 $ 8,430 $ 1,640 Adjusted EBITDA $ 3,760 $ 1,640 $ 11,410 $ 3,900 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ (210) $ - $ (370) Excluding Special Items , operating profit would have been: $ 2690 $ 1,130 $ 8,430 $ 2010 Excluding Special Items , Adjusted EBITDA would have been: $ 3,760 $ 1,850 $ 11,410 $ 4,270 |
Company and Business Segment Financial Information Cont. Ops (cont.) (Unaudited, dollars in thousands) Cequent Three months ended September 30, Nine months ended September 30, 2010 2009 2010 2009 $ 111,830 $ 96,080 $ 330,660 $ 290,070 Net sales Operating profit (loss) $ 13,430 $ 7,220 $ 37,600 $ 6,760 Adjusted EBITDA $ 17,320 $ 12, 200 $ 49,290 $ 21,700 Special Items to consider in evaluating operating profit (loss): - Severance and business restructuring costs $ - $ (2,130) $ - $ (7,580) Excluding Special Items, operating profit (loss) would hale been: $ 13,430 $ 9,350 $ 37,600 $ 14,340 Special Items to consider in evaluating Adjusted EBITDA: - Severance and business restructuring costs $ - $ (1,560) $ - $ (5,340) Excluding Special Items, Adjusted EBITDA would have been: $ 17,320 $ 13,760 $ 49,290 $ 27,040 Corporate Expenses Operating loss $ (6,510) $ (4,540) $ (18,390) $ (16,800) Adjusted EBITDA $ (6,450) $ (3,520) $ (18,390) $ 11,360 Special Items to consider in evaluating operating loss: - Severance and business restructuring costs $ - $ - $ - $ (2,940) Excluding Special Items, operating loss would have been: $ (6,510) $ (4,540) $ (18,390) $ (13,860) Special Items to consider in evaluating Adjusted EBITDA: - Severance and business restructuring costs $ - $ - $ - $ (2,940) - Gain on extinguishment of debt $ - $ 1,330 $ - $ 29,390 Excluding Special Items, Adjusted EBITDA would have been: $ (6,450) $ (4,850) $ (18,390) $ (15,090) Total Company Net sales $ 247,880 $ 202,970 $ 720,000 $ 612,560 Operating profit $ 33,010 $ 21,150 $ 94,580 $ 42,780 Adjusted EBITDA $ 42,030 $ 32, 570 $ 121,980 $ 101,630 Total Special Items to consider in evaluating operating profit: $ (Z 860) $ $ (11,750) Excluding Special Items, operating profit would have been: $ 33,010 $ 24,010 $ 94,580 $ 54,530 Total Special Items to consider in evaluating Adjusted EBITDA: $ $ (960) $ $ 19,880 Excluding Special Items, Adjusted EBITDA would have been: $ 42,030 $ 33,530 $ 121,980 $ 81,750 |
LTM EBITDA as Defined in Credit Agreement (Unaudited, dollars in thousands) Reported net income for the twelve months ended September 30, 2010 $28,220 Interest expense, net (as defined) 50,880 Income tax expense 16,410 Depreciation and amortization 38,800 Extraordinary non-cash charges 3,270 Monitoring fees 2,890 Interest equivalent costs 310 Non-cash compensation expense 2,080 Other non-cash expenses or losses 4,420 Non-recurring expenses or costs for acquisition integration 70 Non-recurring expenses or costs for cost savings projects 5,520 Debt extinguishment costs 10,260 Negative EBITDA from discontinued operations 320 Permitted dispositions (8,830) Permitted acquisitions 840 Bank EBITDA - LTM Ended September 30, 2010 (1) $ 155,460 I (1) As defined in the Amended and Restated Credit Agreement dated December 16, 2009. |