|
UNITED STATES |
OMB APPROVAL |
|
SECURITIES AND EXCHANGE COMMISSION |
OMB Number: 3235-0060 |
|
Washington, D.C. 20549 |
Expires: March 31, 2006 |
|
|
Estimated average burden |
|
FORM 8-K |
hours per response ......28.0 |
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 3, 2010
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
|
001-10716 |
|
38-2687639 |
(State or other jurisdiction |
|
(Commission |
|
(IRS Employer |
of incorporation) |
|
File Number) |
|
Identification No.) |
39400 Woodward Avenue, Suite 130, Bloomfield Hills, Michigan |
|
48304 |
(Address of principal executive offices) |
|
(Zip Code) |
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 August 3, 2010, reporting its financial results for the second quarter ending June 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. |
|
Description |
|
|
|
99.1 |
|
Press Release |
|
|
|
99.2 |
|
The Corporations visual presentation titled Second 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.
|
|
|
TRIMAS CORPORATION |
|
|
|
|
|
|
|
|
|
|
|
Date: |
August 3, 2010 |
|
By: |
/s/ David M. Wathen |
|
|
|
Name: |
David M. Wathen |
|
|
|
Title: |
Chief Executive Officer |
Exhibit 99.1
CONTACT: Sherry Lauderback VP, Investor Relations & Communications (248) 631-5506 sherrylauderback@trimascorp.com |
TRIMAS CORPORATION REPORTS SECOND QUARTER 2010 RESULTS
Company Reports $0.44 Diluted EPS on 21% Sales Growth
Company Raises 2010 Outlook to $0.90 to $1.00 EPS
BLOOMFIELD HILLS, Michigan, August 3, 2010 TriMas Corporation (NASDAQ: TRS) today announced financial results for the quarter ended June 30, 2010. The Company reported quarterly net sales from continuing operations of $252.1 million, an increase of 21.3% from second quarter 2009. Second quarter 2010 income from continuing operations was $15.2 million, a 54.8% improvement from $9.8 million in second quarter 2009. The Company reported second quarter 2010 diluted earnings per share from continuing operations of $0.44, as compared to $0.29 during second quarter 2009. Excluding Special Items,(1) second quarter 2009 income from continuing operations would have been $3.9 million, or $0.11 per share.
TriMas Highlights
· Reported 21.3% sales growth in second quarter 2010, as compared to second quarter 2009, due to overall improved economic conditions and the successful execution of several of the Companys growth initiatives.
· Improved income and earnings per share from continuing operations to $15.2 million, or $0.44 per share, in second quarter 2010, as compared to $3.9 million, or $0.11 per share, in second quarter 2009, excluding the impact of Special Items.
· Improved second quarter operating profit margin (excluding the impact of Special Items) by 560 basis points to 14.5%, as compared to 8.9% in second quarter 2009.
· Generated second quarter 2010 Free Cash Flow(2) of $51.9 million, or approximately $1.50 per diluted share.
· Reduced operating working capital by 15.9%, from $154.2 in second quarter 2009 to $129.6 million in second quarter 2010, notwithstanding the increase in sales.
· Expanded Norris Cylinders product portfolio by acquiring certain assets related to Taylor-Wharton Internationals high and low-pressure cylinder business.
We are very pleased with our performance during the second quarter, said David Wathen, TriMas President and Chief Executive Officer. Successful execution of our productivity and growth initiatives, as well as an improving economic environment, resulted in encouraging increases in sales and profitability during the second quarter. As a leaner, faster organization, we were able to quickly respond and take advantage of rising customer demand, as well as to successfully leverage our lower cost position.
Wathen continued, Sales improved 21% compared to the second quarter of 2009, with four out of five segments reporting double-digit sales percentage growth. Second quarter operating profit improved 97%, excluding Special Items, which represents an operating profit margin increase of 560 basis points as compared to second quarter 2009. In fact, we were able to replace more than $27 million of gains from the purchase of our bonds in the first half of 2009 with operational earnings generated as a result of the increased sales levels and our leaner cost structure, which has allowed for significant margin expansion.
Based on these 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 $0.90 to $1.00 per share, an increase from our previous guidance of $0.65 to $0.75 per share. We remain cautious about the economic outlook, yet remain confident in our ability to navigate the economic uncertainty as demonstrated by our performance in the front half of 2010. We will maintain our balanced approach to productivity, growth and debt reduction, Wathen concluded.
Second Quarter Results From Continuing Operations
· TriMas reported second quarter net sales of $252.1 million, an increase of 21.3% in comparison to $207.9 million in second quarter 2009. Sales increased in the Packaging, Energy, Engineered Components and Cequent segments. Second quarter 2010 net sales were favorably impacted by approximately $2.4 million as a result of currency exchange effects.
· The Company reported operating profit of $36.5 million in second quarter 2010, as compared to operating profit of $16.4 million during second quarter 2009. Excluding the impact of Special Items, operating profit would have improved 97%, from $18.6 million in second quarter 2009 to $36.5 million in second quarter 2010, which would represent an increase in operating profit margin of 560 basis points.
· Adjusted EBITDA(2) for second quarter 2010 increased to $45.8 million, as compared to $38.6 million in second quarter 2009. Excluding the impact of Special Items, Adjusted EBITDA would have increased 67.5%, from $27.4 million in second quarter 2009 to $45.8 million in second quarter 2010, with Adjusted EBITDA margin improving 500 basis points.
· Income from continuing operations for second quarter 2010 increased 54.8% to $15.2 million, or $0.44 per diluted share, compared to income from continuing operations of $9.8 million, or $0.29 per diluted share, in second quarter 2009. Excluding the impact of Special Items, second quarter 2010 income from continuing operations would have improved 295.3% to $15.2 million, as compared to a second quarter 2009 income of $3.9 million, or $0.11 per share.
· The Company reported Free Cash Flow(2) for second quarter 2010 of $51.9 million, compared to $23.5 million in second quarter 2009. Operating working capital declined by 15.9%, from $154.2 in second quarter 2009 to $129.6 million in second quarter 2010, notwithstanding the sales growth.
Financial Position
TriMas ended second quarter 2010 with cash of $24.6 million and $165.9 million of aggregate availability under its revolving credit and accounts receivable facilities. TriMas reported total indebtedness of $500.2 million as of June 30, 2010, as compared to $547.4 million as of June 30, 2009 and $514.6 million as of December 31, 2009.
Business Segment Results From Continuing Operations (Excluding the impact of Special Items(3))
Packaging Sales for the second quarter increased 25.9% compared to the year ago period, due to growth in specialty dispensing and other new products, as well as an increase in the sales of industrial closure products. Operating profit for the quarter increased 52.7% due to the 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, second quarter 2010 operating profit margin improved by approximately 520 basis points compared to second 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 Second quarter sales increased 25.0% 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 newer 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. Overall, second quarter 2010 operating profit margin improved by approximately 460 basis points compared to second quarter 2009. The Company continues to launch new well-site and compression products to complement its engine business, while continuing to expand its sales and service branch network for the specialty gasket business.
Aerospace & Defense Sales for the second quarter decreased 5.7% compared to the year ago period, primarily due to lower sales of new aerospace products as a result of a significant launch order in second
quarter of 2009 that did not recur in 2010, and lower demand from distribution customers. Management noted that the aerospace business has experienced some stabilization of sales volumes and order backlog during the quarter. Sales in the defense business increased compared to the year ago period, but the increased revenue associated with managing the facility closure and relocation was at lower margin levels. Overall, operating profit for the quarter decreased primarily due to lower sales volumes, less absorption of fixed costs and lower margin level associated with the facility contract. 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 Second quarter sales increased 56.3% compared to the year ago period, due to improved demand in the industrial cylinder, specialty fittings and precision cutting tools businesses, primarily resulting from the upturn in the domestic economy and new product offerings. Operating profit and related margins improved substantially compared to second quarter 2009 due to the Companys productivity initiatives and improved sales levels. As a result, second quarter 2010 operating profit margin improved by approximately 1460 basis points compared to second quarter 2009. The Company continues to develop new products and expand its international sales efforts.
Cequent Sales for the second quarter increased 18.1% compared to the year ago period, resulting from increased sales in the North American towing, trailer and electrical products, Australia/Asia Pacific and retail businesses, as well as the favorable impact of currency exchange. Sales increases during the quarter were the result of improved customer demand, new product introductions and market share gains. Due to cost reduction actions, alternate sourcing arrangements, productivity initiatives and improved sales levels, operating profit margin improved over 830 basis points to 13.1% as compared to 4.8% in second 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.
Results of Discontinued Operations
In April 2010, the Company sold its non-core real estate property management business in California for $13 million cash proceeds, resulting in a pre-tax gain on sale of approximately $10.1 million during the second quarter of 2010. In addition, the Company sold its medical device line of business in May 2010 for cash proceeds of $2.0 million, which approximated the net book value of the assets and liabilities sold.
Outlook
Based on the Companys second quarter results, management raised its outlook for full-year 2010 diluted earnings per share (EPS) from continuing operations to $0.90 to $1.00 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 $0.65 to $0.75 per share. The Company also raised its 2010 sales outlook from an increase of 5% to 9% to a range of 10% to 14% as compared to 2009. In addition, the Company expects its full-year 2010 operating profit margin to improve by 200 to 250 basis points as compared to 2009, excluding Special Items. The Company increased its Free Cash Flow outlook from a range of $40 to $45 million to a range of $65 to $70 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.
Form S-3 Shelf Registration
The Company filed a Form S-3 shelf registration statement today with the Securities and Exchange Commission (SEC). The shelf registration, when declared effective, will permit the Company to issue up to an aggregate of 5 million shares of common stock as described in the registration statement. The shelf registration provides the Company with flexibility to publicly offer and sell common stock from time to time, in one or more separate offerings, with terms to be determined at the time of an offering. The Company does not have any current intention to issue equity under the registration statement. Filing the shelf registration is intended to give the Company greater flexibility to respond to capital market and strategic opportunities as they may arise, and is another component of managements efforts to enhance corporate preparedness and response times.
A registration statement relating to these securities has been filed with the SEC, but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The terms of any offering under the registration statement would be established at the time of the offering and as required would be described in a prospectus supplement filed with the SEC prior to the completion of the offering. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities, in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of any such state. Any offering of the securities covered under the shelf registration statement will be made solely by means of a prospectus and an accompanying prospectus supplement relating to that offering.
Conference Call Information
TriMas Corporation will host its second quarter 2010 earnings conference call today, Tuesday, August 3, 2010 at 10:00 a.m. EDT. The call-in number is (866) 835-8825. Participants should request to be connected to the TriMas Corporation second quarter 2010 earnings conference call (Conference ID # 1461148). 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 # 1461148) beginning August 3rd at 2:00 p.m. EDT through August 10th 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)
|
|
June 30, |
|
December 31, |
|
||
|
|
2010 |
|
2009 |
|
||
Assets |
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
24,590 |
|
$ |
9,480 |
|
Receivables, net of reserves |
|
137,820 |
|
93,380 |
|
||
Inventories |
|
138,440 |
|
141,840 |
|
||
Deferred income taxes |
|
28,120 |
|
24,320 |
|
||
Prepaid expenses and other current assets |
|
5,930 |
|
6,500 |
|
||
Assets of discontinued operations held for sale |
|
|
|
4,250 |
|
||
Total current assets |
|
334,900 |
|
279,770 |
|
||
Property and equipment, net |
|
158,660 |
|
162,220 |
|
||
Goodwill |
|
191,460 |
|
196,330 |
|
||
Other intangibles, net |
|
157,920 |
|
164,080 |
|
||
Other assets |
|
22,360 |
|
23,380 |
|
||
Total assets |
|
$ |
865,300 |
|
$ |
825,780 |
|
|
|
|
|
|
|
||
Liabilities and Shareholders Equity |
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Current maturities, long-term debt |
|
$ |
7,180 |
|
$ |
16,190 |
|
Accounts payable |
|
115,870 |
|
92,840 |
|
||
Accrued liabilities |
|
65,630 |
|
65,750 |
|
||
Liabilities of discontinued operations |
|
|
|
1,070 |
|
||
Total current liabilities |
|
188,680 |
|
175,850 |
|
||
Long-term debt |
|
493,020 |
|
498,360 |
|
||
Deferred income taxes |
|
57,490 |
|
42,590 |
|
||
Other long-term liabilities |
|
44,960 |
|
47,000 |
|
||
Total liabilities |
|
784,150 |
|
763,800 |
|
||
Total shareholders equity |
|
81,150 |
|
61,980 |
|
||
Total liabilities and shareholders equity |
|
$ |
865,300 |
|
$ |
825,780 |
|
TriMas Corporation
Consolidated Statement of Operations
(Unaudited dollars in thousands, except for share amounts)
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
|
June 30, |
|
June 30, |
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
Net sales |
|
$ |
252,060 |
|
$ |
207,870 |
|
$ |
472,120 |
|
$ |
409,590 |
|
Cost of sales |
|
(173,750 |
) |
(157,690 |
) |
(330,750 |
) |
(312,950 |
) |
||||
Gross profit |
|
78,310 |
|
50,180 |
|
141,370 |
|
96,640 |
|
||||
Selling, general and administrative expenses |
|
(41,370 |
) |
(33,870 |
) |
(79,070 |
) |
(75,170 |
) |
||||
Gain (loss) on dispositions of property and equipment |
|
(420 |
) |
120 |
|
(730 |
) |
160 |
|
||||
Operating profit |
|
36,520 |
|
16,430 |
|
61,570 |
|
21,630 |
|
||||
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
(13,090 |
) |
(11,300 |
) |
(27,230 |
) |
(23,780 |
) |
||||
Gain on extinguishment of debt |
|
|
|
11,760 |
|
|
|
27,070 |
|
||||
Gain on bargain purchase |
|
410 |
|
|
|
410 |
|
|
|
||||
Other, net |
|
(540 |
) |
(820 |
) |
(1,050 |
) |
(1,520 |
) |
||||
Other income (expense), net |
|
(13,220 |
) |
(360 |
) |
(27,870 |
) |
1,770 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Income from continuing operations before income tax expense |
|
23,300 |
|
16,070 |
|
33,700 |
|
23,400 |
|
||||
Income tax expense |
|
(8,080 |
) |
(6,240 |
) |
(12,730 |
) |
(8,950 |
) |
||||
Income from continuing operations |
|
15,220 |
|
9,830 |
|
20,970 |
|
14,450 |
|
||||
Income (loss) from discontinued operations, net of income tax benefit (expense) |
|
6,210 |
|
(840 |
) |
5,890 |
|
(9,140 |
) |
||||
Net income |
|
$ |
21,430 |
|
$ |
8,990 |
|
$ |
26,860 |
|
$ |
5,310 |
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share - basic: |
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
0.45 |
|
$ |
0.29 |
|
$ |
0.62 |
|
$ |
0.43 |
|
Discontinued operations, net of income tax benefit (expense) |
|
0.18 |
|
(0.02 |
) |
0.17 |
|
(0.27 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Net income per share |
|
$ |
0.63 |
|
$ |
0.27 |
|
$ |
0.79 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares - basic |
|
33,794,647 |
|
33,485,317 |
|
33,681,516 |
|
33,472,481 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share - diluted: |
|
|
|
|
|
|
|
|
|
||||
Continuing operations |
|
$ |
0.44 |
|
$ |
0.29 |
|
$ |
0.61 |
|
$ |
0.43 |
|
Discontinued operations, net of income tax benefit (expense) |
|
0.18 |
|
(0.02 |
) |
0.17 |
|
(0.27 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Net income per share |
|
$ |
0.62 |
|
$ |
0.27 |
|
$ |
0.78 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares - diluted |
|
34,437,418 |
|
33,656,242 |
|
34,318,002 |
|
33,532,477 |
|
TriMas Corporation
Company and Business Segment Financial Information
Continuing Operations
(Unaudited dollars in thousands)
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
|
June 30, |
|
June 30, |
|
||||||||
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
Packaging |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
45,520 |
|
$ |
36,150 |
|
$ |
89,120 |
|
$ |
66,400 |
|
Operating profit |
|
$ |
13,480 |
|
$ |
8,830 |
|
$ |
25,340 |
|
$ |
14,230 |
|
Adjusted EBITDA |
|
$ |
16,420 |
|
$ |
11,580 |
|
$ |
31,340 |
|
$ |
20,220 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
13,480 |
|
$ |
8,830 |
|
$ |
25,340 |
|
$ |
14,230 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
16,420 |
|
$ |
11,580 |
|
$ |
31,340 |
|
$ |
20,220 |
|
|
|
|
|
|
|
|
|
|
|
||||
Energy |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
43,750 |
|
$ |
34,990 |
|
$ |
87,640 |
|
$ |
75,260 |
|
Operating profit |
|
$ |
5,350 |
|
$ |
2,660 |
|
$ |
10,530 |
|
$ |
6,180 |
|
Adjusted EBITDA |
|
$ |
6,020 |
|
$ |
3,500 |
|
$ |
11,920 |
|
$ |
7,780 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(200 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
5,350 |
|
$ |
2,660 |
|
$ |
10,530 |
|
$ |
6,380 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
6,020 |
|
$ |
3,500 |
|
$ |
11,920 |
|
$ |
7,980 |
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace & Defense |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
17,220 |
|
$ |
18,270 |
|
$ |
34,300 |
|
$ |
40,470 |
|
Operating profit |
|
$ |
3,810 |
|
$ |
6,410 |
|
$ |
7,670 |
|
$ |
13,220 |
|
Adjusted EBITDA |
|
$ |
4,490 |
|
$ |
7,010 |
|
$ |
9,010 |
|
$ |
14,420 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(20 |
) |
$ |
|
|
$ |
(130 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
3,810 |
|
$ |
6,430 |
|
$ |
7,670 |
|
$ |
13,350 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
4,490 |
|
$ |
7,030 |
|
$ |
9,010 |
|
$ |
14,550 |
|
|
|
|
|
|
|
|
|
|
|
||||
Engineered Components |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
23,320 |
|
$ |
14,920 |
|
$ |
42,230 |
|
$ |
33,470 |
|
Operating profit |
|
$ |
3,930 |
|
$ |
340 |
|
$ |
5,740 |
|
$ |
720 |
|
Adjusted EBITDA |
|
$ |
5,080 |
|
$ |
1,140 |
|
$ |
7,650 |
|
$ |
2,260 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(160 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
3,930 |
|
$ |
340 |
|
$ |
5,740 |
|
$ |
880 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
5,080 |
|
$ |
1,140 |
|
$ |
7,650 |
|
$ |
2,420 |
|
|
|
|
|
|
|
|
|
|
|
||||
Cequent |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
122,250 |
|
$ |
103,540 |
|
$ |
218,830 |
|
$ |
193,990 |
|
Operating profit (loss) |
|
$ |
16,050 |
|
$ |
2,890 |
|
$ |
24,170 |
|
$ |
(460 |
) |
Adjusted EBITDA |
|
$ |
19,850 |
|
$ |
8,160 |
|
$ |
31,970 |
|
$ |
9,500 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating profit (loss): |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(2,120 |
) |
$ |
|
|
$ |
(5,460 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit (loss) would have been: |
|
$ |
16,050 |
|
$ |
5,010 |
|
$ |
24,170 |
|
$ |
5,000 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
(940 |
) |
$ |
|
|
$ |
(3,790 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
19,850 |
|
$ |
9,100 |
|
$ |
31,970 |
|
$ |
13,290 |
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate Expenses |
|
|
|
|
|
|
|
|
|
||||
Operating loss |
|
$ |
(6,100 |
) |
$ |
(4,700 |
) |
$ |
(11,880 |
) |
$ |
(12,260 |
) |
Adjusted EBITDA |
|
$ |
(6,040 |
) |
$ |
7,250 |
|
$ |
(11,940 |
) |
$ |
14,880 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating operating loss: |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(2,940 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating loss would have been: |
|
$ |
(6,100 |
) |
$ |
(4,700 |
) |
$ |
(11,880 |
) |
$ |
(9,320 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
||||
- Severance and business restructuring costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(2,940 |
) |
|
|
|
|
|
|
|
|
|
|
||||
- Gain on extinguishment of debt |
|
$ |
|
|
$ |
12,240 |
|
$ |
|
|
$ |
28,060 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
(6,040 |
) |
$ |
(4,990 |
) |
$ |
(11,940 |
) |
$ |
(10,240 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Total Company |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
252,060 |
|
$ |
207,870 |
|
$ |
472,120 |
|
$ |
409,590 |
|
Operating profit |
|
$ |
36,520 |
|
$ |
16,430 |
|
$ |
61,570 |
|
$ |
21,630 |
|
Adjusted EBITDA |
|
$ |
45,820 |
|
$ |
38,640 |
|
$ |
79,950 |
|
$ |
69,060 |
|
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items to consider in evaluating operating profit: |
|
$ |
|
|
$ |
(2,140 |
) |
$ |
|
|
$ |
(8,890 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit would have been: |
|
$ |
36,520 |
|
$ |
18,570 |
|
$ |
61,570 |
|
$ |
30,520 |
|
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items to consider in evaluating Adjusted EBITDA: |
|
$ |
|
|
$ |
11,280 |
|
$ |
|
|
$ |
20,840 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, Adjusted EBITDA would have been: |
|
$ |
45,820 |
|
$ |
27,360 |
|
$ |
79,950 |
|
$ |
48,220 |
|
Appendix I
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited)
|
|
Three months ended |
|
Three months ended |
|
||||||||
|
|
June 30, 2010 |
|
June 30, 2009 |
|
||||||||
(dollars in thousands, except per share amounts) |
|
Income |
|
EPS |
|
Income |
|
EPS |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Income and EPS from continuing operations, as reported |
|
$ |
15,220 |
|
$ |
0.44 |
|
$ |
9,830 |
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
|
|
|
|
(1,330 |
) |
(0.04 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items except gain (loss) on extinguishment of debt, income and EPS from continuing operations would have been |
|
$ |
15,220 |
|
$ |
0.44 |
|
$ |
11,160 |
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of gain on extinguishment of debt |
|
|
|
|
|
7,310 |
|
0.22 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Total Special Items, income and EPS from continuing operations would have been |
|
$ |
15,220 |
|
$ |
0.44 |
|
$ |
3,850 |
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding at June 30, 2010 and 2009 |
|
|
|
34,437,418 |
|
|
|
33,656,242 |
|
|
|
Six months ended |
|
Six months ended |
|
||||||||
|
|
June 30, 2010 |
|
June 30, 2009 |
|
||||||||
(dollars in thousands, except per share amounts) |
|
Income |
|
EPS |
|
Income |
|
EPS |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Income and EPS from continuing operations, as reported |
|
$ |
20,970 |
|
$ |
0.61 |
|
$ |
14,450 |
|
$ |
0.43 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
|
|
|
|
(5,530 |
) |
(0.16 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items except gain (loss) on extinguishment of debt, income and EPS from continuing operations would have been |
|
$ |
20,970 |
|
$ |
0.61 |
|
$ |
19,980 |
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of gain on extinguishment of debt |
|
|
|
|
|
16,840 |
|
0.50 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Excluding Total Special Items, income and EPS from continuing operations would have been |
|
$ |
20,970 |
|
$ |
0.61 |
|
$ |
3,140 |
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding at June 30, 2010 and 2009 |
|
|
|
34,318,002 |
|
|
|
33,532,477 |
|
Appendix I (cont.)
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited)
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
|
June 30, |
|
June 30, |
|
||||||||
(dollars in thousands) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Operating profit from continuing operations, as reported |
|
$ |
36,520 |
|
$ |
16,430 |
|
$ |
61,570 |
|
$ |
21,630 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating quality of earnings: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
$ |
|
|
$ |
(2,140 |
) |
$ |
|
|
$ |
(8,890 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items, operating profit from continuing operations would have been |
|
$ |
36,520 |
|
$ |
18,570 |
|
$ |
61,570 |
|
$ |
30,520 |
|
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
|
June 30, |
|
June 30, |
|
||||||||
(dollars in thousands) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA from continuing operations, as reported |
|
$ |
45,820 |
|
$ |
38,640 |
|
$ |
79,950 |
|
$ |
69,060 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating quality of earnings: |
|
|
|
|
|
|
|
|
|
||||
Severance and business restructuring costs |
|
$ |
|
|
$ |
(960 |
) |
$ |
|
|
$ |
(7,220 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Excluding Special Items except gain (loss) on extinguishment of debt, Adjusted EBITDA from continuing operations would have been |
|
$ |
45,820 |
|
$ |
39,600 |
|
$ |
79,950 |
|
$ |
76,280 |
|
|
|
|
|
|
|
|
|
|
|
||||
Gross gain on extinguishment of debt |
|
$ |
|
|
$ |
12,240 |
|
$ |
|
|
$ |
28,060 |
|
|
|
|
|
|
|
|
|
|
|
||||
Excluding Total Special Items, Adjusted EBITDA from continuing operations would have been |
|
$ |
45,820 |
|
$ |
27,360 |
|
$ |
79,950 |
|
$ |
48,220 |
|
Appendix II
TriMas Corporation
Reconciliation of Non-GAAP Measure Adjusted EBITDA(1) and Free Cash Flow(2)
(Unaudited)
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
|
June 30, |
|
June 30, |
|
||||||||
(dollars in thousands) |
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
||||
Net income (loss) |
|
$ |
21,430 |
|
$ |
8,990 |
|
$ |
26,860 |
|
$ |
5,310 |
|
Income tax expense |
|
11,660 |
|
5,720 |
|
16,130 |
|
3,230 |
|
||||
Interest expense |
|
13,230 |
|
11,590 |
|
27,520 |
|
24,120 |
|
||||
Debt extinguishment costs |
|
|
|
480 |
|
|
|
990 |
|
||||
Depreciation and amortization |
|
9,440 |
|
11,070 |
|
19,050 |
|
22,830 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA, total company |
|
55,760 |
|
37,850 |
|
89,560 |
|
56,480 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA, discontinued operations |
|
9,940 |
|
(790 |
) |
9,610 |
|
(12,580 |
) |
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA, continuing operations |
|
$ |
45,820 |
|
$ |
38,640 |
|
$ |
79,950 |
|
$ |
69,060 |
|
Special Items |
|
|
|
960 |
|
|
|
7,220 |
|
||||
Non-cash gross gain on extinguishment of debt |
|
|
|
(12,240 |
) |
|
|
(28,060 |
) |
||||
Cash interest |
|
(16,750 |
) |
(17,060 |
) |
(22,000 |
) |
(21,830 |
) |
||||
Cash taxes |
|
(2,020 |
) |
(1,870 |
) |
(3,270 |
) |
(4,310 |
) |
||||
Non-cash gain on bargain purchase |
|
(410 |
) |
|
|
(410 |
) |
|
|
||||
Capital expenditures |
|
(2,660 |
) |
(3,110 |
) |
(5,250 |
) |
(6,390 |
) |
||||
Changes in operating working capital |
|
13,970 |
|
18,470 |
|
(13,380 |
) |
20,750 |
|
||||
Free Cash Flow from operations before Special Items |
|
37,950 |
|
23,790 |
|
35,640 |
|
36,440 |
|
||||
Cash paid for Special Items |
|
(810 |
) |
(2,020 |
) |
(1,990 |
) |
(4,440 |
) |
||||
Net proceeds from sale of business and other assets |
|
14,710 |
|
1,740 |
|
14,740 |
|
22,420 |
|
||||
Free Cash Flow |
|
$ |
51,850 |
|
$ |
23,510 |
|
$ |
48,390 |
|
$ |
54,420 |
|
(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
Second Quarter 2010 Earnings Presentation August 3, 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 |
Second Quarter Results Summary Sales up 21% vs. Q2 2009 Double-digit percentage sales increases in 4 out of 5 segments Fast responses to short-term demands and supply chain disruptions garner sales as end markets stabilize Investments in new products and markets showing results Improved quality of earnings driven by operating performance of the businesses and lower cost structure Significant margin expansion supported by productivity initiatives Improvement in working capital levels Continued focus on free cash flow and debt reduction The TriMas Operating Model is working. |
Second Quarter Overview External Factors Less commodity inflation than expected Less impact from currency exchange Stronger than expected demand levels Faster inventory rebuild in some channels Internal Factors Fast responses to short-term demand New product programs (with strong margins) going well and share gains captured Productivity programs yielded results earlier than projected New Global Sourcing Organization achieved fast ramp-up and impact Successful execution and stronger than expected demand enhanced second quarter results. |
Second Quarter Financial Highlights |
Second Quarter Summary Sales improved 21.3% as a result of improving end market demand and execution of growth initiatives Increased sales in Packaging, Energy, Engineered Components and Cequent segments Earnings and margin levels improved at higher rate than sales Cost reduction and productivity efforts continue to drive enhanced profitability Gross profit and Adjusted EBITDA margins improved 700 and 500 bps, respectively, compared to Q2 2009 Q2 2010 Free Cash Flow of $51.9 million, or approximately $1.50 per share Continued debt reduction and increased liquidity Completed sale of non-core assets in discontinued operations (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) Q2 2010 Q2 2009 % Chg Revenue $252.1 $207.9 21.3% Gross Profit $78.3 $50.2 56.1% Gross Profit Margin 31.1% 24.1% 700 bps Adjusted EBITDA (1) $45.8 $38.6 18.6% Excl. Total Special Items, Adjusted EBITDA would have been: $45.8 $27.4 67.5% Excl. Total Special Items, Adjusted EBITDA margin would have been: 18.2% 13.2% 500 bps Income $15.2 $9.8 54.8% Excl. Total Special Items, Income would have been: $15.2 $3.9 295.3% Diluted earnings per share $0.44 $0.29 51.7% Excl. Total Special Items, diluted EPS would have been: $0.44 $0.11 300.0% Free Cash Flow (1) $51.9 $23.5 120.5% Debt and A/R Securitization $500.2 $547.4 -8.6% |
Margin Improvements Comments: Cost reduction and productivity initiatives improve margins over time Operating profit and Adjusted EBITDA margins improved 560 and 500 bps, respectively, compared to Q2 2009 Q2 2010 margin levels are higher than Q2 2008 levels, despite approximately $30M higher sales in Q2 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. |
Working Capital Comments: Working capital decreased 15.9% from $154.2 million in Q2 2009 to $129.6 million in Q2 2010, despite sales increase of 21% Held inventory relatively flat with Q1 2010 levels, despite 14.5% sales increase Operating working capital at 15.0% of LTM sales vs. 17.5% at Q2 2009 Continued improvement expected due to enhanced focus on asset efficiencies 15.0% of Sales 17.5% of Sales Continued lean initiatives will drive permanent process change and working capital reductions. |
Capitalization (Dollars in thousands) As of June 30, 2010, TriMas had $190.5 million of cash and available liquidity under its revolving credit and receivables securitization facilities. June 30, 2010 December 31, 2009 Cash and Cash Equivalents 24,590 9,480 Term loan 250,250 251,580 Revolving credit facilities - 5,100 Non-U.S. bank debt and other 4,760 12,890 255,010 269,570 9 3/4 % senior secured notes, due December 2017 245,190 244,980 A/R Facility Borrowings - - Total Debt 500,200 514,550 Key Ratios: Bank LTM EBITDA 146,490 138,300 Interest Coverage Ratio 3.15 x 3.13x Leverage Ratio 3.41x 3.68x Bank Covenants: Minimum Interest Coverage Ratio 2.15x 2.20x Maximum Leverage Ratio 5.25x 4.50x |
Segment Highlights |
Packaging Results: Sales growth in specialty dispensing and industrial closure products Increased sales volumes and productivity actions improved Adjusted EBITDA and operating profit Q2 2010 operating profit margin improved approximately 520 basis points compared to Q2 2009 ($ 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 Q2 2010 operating profit margin improved approximately 460 basis points compared to Q2 2009 Continued to decrease working capital levels Key Initiatives: Faster expansion of gasket business with major customers globally Expand complementary product lines at well-site Grow natural gas compression products Better leverage installed manufacturing footprint in Asia Increase low-cost country sourcing Improve inventory turns by implementing Lean initiatives Capitalize on shale and natural gas opportunities |
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: Operating profit margin decreased due to lower sales volumes and lower absorption of fixed costs Profitability affected by mix of defense facility contract Aerospace business experienced some stabilization of demand and backlog levels in Q2 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 management and facilities 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 Adjusted EBITDA and operating profit increased in Q2 due to higher sales volumes and lower costs Operating profit margin improved approximately 1460 basis points compared to Q2 2009 |
Cequent ($ in millions) $46.4 (1) Adjusted EBITDA and Operating Profit exclude Special Items for each period. A detailed schedule of Special Items, as well as the Reconciliation of Non-GAAP Measure Adjusted EBITDA and Free Cash Flow, are provided in the Appendix. Results: Sales increased resulting from improvements in the North American towing, trailer and electrical products, Australia/Asia Pacific and retail businesses, as well as the favorable impact of currency exchange Adjusted EBITDA and operating profit increased due to significant cost reductions Q2 2010 operating profit margin increased 830 basis points compared to Q2 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 Reduce capital requirements |
2010 Playbook TriMas Operating Model is producing results Continue to drive productivity initiatives Faster than expected Continue to improve working capital metrics Faster than expected Optimize growth programs Mixed Grow revenue Bumpy economic recovery requires fast responses to win Winning 10 20 new product programs in each segment Mixed Footprint expansion focused on faster growth non-U.S. markets 2nd Half Recruiting key technical and sales people Started Keep improving capital structure On track Continue to execute plan... Focus remains consistent. Mid-Year Report Card |
Outlook and Summary |
TriMas 2010 Outlook As of 3/2/10 As of 4/29/10 As of 8/3/10 Sales Growth 4% - 7% 5% - 9% 10% - 14% Core growth 3% - 4% 3% - 4% 5% - 7% New program/market share growth 1% - 3% 2% - 5% 5% - 6% Bolt-on acquisitions 0% - 2% 0% - 2% 0.5% - 1% Recurring Operating Profit Up 60 to 100 bps Up 80 to 120 bps Up 200 to 250 bps Free Cash Flow(1) > $30 million $40 to $45 million $65 to $70 million Diluted EPS (excl. Special Items) > $0.60 $0.65 to $0.75 $0.90 to $1.00 (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 $0.90 to $1.00, an increase of at least 109% vs. 2009 EPS. Target double-digit EPS growth long-term. |
Second Half 2010 Considerations (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. Traditional TriMas seasonality 2009 back half performance recovery High levels of cost restructuring and productivity achieved in Q3 and Q4 2009 Early cycle business sales up in Q4 2009 (Packaging & Cequent) Increased focus on growth projects Productivity achieved earlier than planned External risks still present (U.S. and European economies, commodities, China supply) Additional considerations for outlook. |
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 |
Questions & Answers |
Appendix |
YTD Summary Sales improved 15.3% as a result of improving end market demand and execution of the Companys growth initiatives Increased sales in Packaging, Energy, Engineered Components and Cequent segments Aerospace & Defense sales declined primarily due to reductions in distributor inventory levels Earnings and margin levels improved at higher rate than sales Cost reduction and productivity efforts continue to drive enhanced profitability Gross profit and Adjusted EBITDA margins improved 630 and 510 bps, respectively, compared to Q2 2009 Diluted EPS increased from $0.09 in first half 2009 to $0.61 in first half 2010, excluding Special Items (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) Q2 YTD 2010 Q2 YTD 2009 %Chg Revenue $ 472.1 $ 409.6 15.3% Gross Profit $ 141.4 $ 96.6 46.3% Gross Profit Margin 29.9% 23.6% 630 bps Adjusted EBITDA(1) $ 80.0 $ 69.1 15.8% Excl. Total Special Items, Adjusted EBITDA would have been: $ 80.0 $ 48.2 65.8% Excl. Total Special Items, Adjusted EBITDA margin would have been: 16.9% 11.8% 510 bps Income (loss) $ 21.0 $ 14.5 45.1% Excl. Total Special Items, Income would have been: $ 21.0 $ 3.1 fav Diluted earnings (loss) per share $ 0.61 $ 0.43 41.9% Excl. Total Special Items, diluted EPS would have been: $ 0.61 $ 0.09 fav Free Cash Flow(1) $ 48.4 $ 54.4 -11.1% Debt and A/R Securitization $ 500.2 $ 547.4 -8.6% |
Statement of Operations (Unaudited, dollars in thousands) Three months ended Six months ended June 30, June 30, 2010 2009 2010 2009 Net sales $ 252,060 $ 207,870 $ 472,120 $ 409,590 Cost of sales (173,750) (157,690) (330,750) (312,950) Gross profit 78,310 50,180 141,370 96,640 Selling, general and administrative expenses (41,370) (33,870) (79,070) (75,170) Gain (loss) on dispositions of property and equipment (420) 120 (730) 160 Operating profit 36,520 16,430 61,570 21,630 Other income (expense), net: Interest expense (13,090) (11,300) (27,230) (23,780) Gain on extinguishment of debt - 11,760 - 27,070 Gain on bargain purchase 410 - 410 - Other, net (540) (820) (1,050) (1,520) Other income (expense), net (13,220) (360) (27,870) 1,770 Income from continuing operations before income tax expense 23,300 16,070 33,700 23,400 Income tax expense (8,080) (6,240) (12,730) (8,950) Income from continuing operations 15,220 9,830 20,970 14,450 Income (loss) from discontinued operations, net of income tax benefit (expense) 6,210 (840) 5,890 (9,140) Net income $ 21,430 $ 8,990 $ 26,860 $ 5,310 Earnings per share - basic: Continuing operations $ 0.45 $ 0.29 $ 0.62 $ 0.43 Discontinued operations, net of income tax benefit (expense) 0.18 (0.02) 0.17 (0.27) Net income per share $ 0.63 $ 0.27 $ 0.79 $ 0.16 Weighted average common shares - basic 33,794,647 33,485,317 33,681,516 33,472,481 Earnings per share - diluted: Continuing operations $ 0.44 $ 0.29 $ 0.61 $ 0.43 Discontinued operations, net of income tax benefit (expense) 0.18 (0.02) 0.17 (0.27) Net income per share $ 0.62 $ 0.27 $ 0.78 $ 0.16 Weighted average common shares - diluted 34,437,418 33,656,242 34,318,002 33,532,477 |
Condensed Balance Sheet (Unaudited, dollars in thousands) June 30, December 31, 2010 2009 Assets Current assets: Cash and cash equivalents $ 24,590 $ 9,480 Receivables, net of reserves 137,820 93,380 Inventories 138,440 141,840 Deferred income taxes 28,120 24,320 Prepaid expenses and other current assets 5,930 6,500 Assets of discontinued operations held for sale - 4,250 Total current assets 334,900 279,770 Property and equipment, net 158,660 162,220 Goodwill 191,460 196,330 Other intangibles, net 157,920 164,080 Other assets 22,360 23,380 Total assets $ 865,300 $ 825,780 Liabilities and Shareholders' Equity Current liabilities: Current maturities, long-term debt $ 7,180 $ 16,190 Accounts payable 115,870 92,840 Accrued liabilities 65,630 65,750 Liabilities of discontinued operations - 1,070 Total current liabilities 188,680 175,850 Long-term debt 493,020 498,360 Deferred income taxes 57,490 42,590 Other long-term liabilities 44,960 47,000 Total liabilities 784,150 763,800 Total shareholders' equity 81,150 61,980 Total liabilities and shareholders' equity $ 865,300 $ 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, 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, changes in operating working capital and non-cash (gains) losses on debt extinguishment. As detailed in Appendix I, for purposes of determining Free Cash Flow, Special Items, net, include those one-time 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. Three months ended Six months ended June 30, June 30, (dollars in thousands) 2010 2009 2010 2009 Net income (loss) $ 21,430 $ 8,990 $ 26,860 $ 5,310 Income tax expense 11,660 5,720 16,130 3,230 Interest expense 13,230 11,590 27,520 24,120 Debt extinguishment costs - 480 - 990 Depreciation and amortization 9,440 11,070 19,050 22,830 Adjusted EBITDA, total company 55,760 37,850 89,560 56,480 Adjusted EBITDA, discontinued operations 9,940 (790) 9,610 (12,580) Adjusted EBITDA, continuing operations $ 45,820 $ 38,640 $ 79,950 $ 69,060 Special Items - 960 - 7,220 Non-cash gross gain on extinguishment of debt - (12,240) - (28,060) Cash interest (16,750) (17,060) (22,000) (21,830) Cash taxes (2,020) (1,870) (3,270) (4,310) Non-cash gain on bargain purchase (410) - (410) - Capital expenditures (2,660) (3,110) (5,250) (6,390) Changes in operating working capital 13,970 18,470 (13,380) 20,750 Free Cash Flow from operations before Special Items 37,950 23,790 35,640 36,440 Cash paid for Special Items (810) (2,020) (1,990) (4,440) Net proceeds from sale of business and other assets 14,710 1,740 14,740 22,420 Free Cash Flow $ 51,850 $ 23,510 $ 48,390 $ 54,420 |
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited) Three months ended Three months ended June 30, 2010 June 30, 2009 (dollars in thousands, except per share amounts) Income EPS Income EPS Income and EPS from continuing operations, as reported $ 15,220 $ 0.44 $ 9,830 $ 0.29 After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: Severance and business restructuring costs - - (1,330) (0.04) Excluding Special Items except gain (loss) on extinguishment of debt, income and EPS from continuing operations would have been $ 15,220 $ 0.44 $ 11,160 $ 0.33 After-tax impact of gain on extinguishment of debt - - 7,310 0.22 Excluding Total Special Items, income and EPS from continuing operations would have been $ 15,220 $ 0.44 $ 3,850 $ 0.11 Weighted-average shares outstanding at June 30, 2010 and 2009 34,437,418 33,656,242 Six months ended Six months ended June 30, 2010 June 30, 2009 (dollars in thousands, except per share amounts) Income EPS Income EPS Income and EPS from continuing operations, as reported $ 20,970 $ 0.61 $ 14,450 $ 0.43 After-tax impact of Special Items to consider in evaluating quality of income and EPS from continuing operations: Severance and business restructuring costs - - (5,530) (0.16) Excluding Special Items except gain (loss) on extinguishment of debt, income and EPS from continuing operations would have been $ 20,970 $ 0.61 $ 19,980 $ 0.59 After-tax impact of gain on extinguishment of debt - - 16,840 0.50 Excluding Total Special Items, income and EPS from continuing operations would have been $ 20,970 $ 0.61 $ 3,140 $ 0.09 Weighted-average shares outstanding at June 30, 2010 and 2009 34,318,002 33,532,477 |
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited) Three months ended Six months ended June 30, June 30, (dollars in thousands) 2010 2009 2010 2009 Operating profit from continuing operations, as reported $ 36,520 $ 16,430 $ 61,570 $ 21,630 Special Items to consider in evaluating quality of earnings: Severance and business restructuring costs $ - $ (2,140) $ - $ (8,890) Excluding Special Items, operating profit from continuing operations would have been $ 36,520 $ 18,570 $ 61,570 $ 30,520 Three months ended Six months ended June 30, June 30, (dollars in thousands) 2010 2009 2010 2009 Adjusted EBITDA from continuing operations, as reported $ 45,820 $ 38,640 $ 79,950 $ 69,060 Special Items to consider in evaluating quality of earnings: Severance and business restructuring costs $ - $ (960) $ - $ (7,220) Excluding Special Items except gain (loss) on extinguishment of debt, Adjusted EBITDA from continuing operations would have been $ 45,820 $ 39,600 $ 79,950 $ 76,280 Gross gain on extinguishment of debt $ - $ 12,240 $ - $ 28,060 Excluding Total Special Items, Adjusted EBITDA from continuing operations would have been $ 45,820 $ 27,360 $ 79,950 $ 48,220 |
Company and Business Segment Financial Information Cont. Ops (Unaudited, dollars in thousands) Three months ended Six months ended June 30, June 30, 2010 2009 2010 2009 Packaging Net sales $ 45,520 $ 36,150 $ 89,120 $ 66,400 Operating profit $ 13,480 $ 8,830 $ 25,340 $ 14,230 Adjusted EBITDA $ 16,420 $ 11,580 $ 31,340 $ 20,220 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ - $ - $ - Excluding Special Items, operating profit would have been: $ 13,480 $ 8,830 $ 25,340 $ 14,230 Excluding Special Items, Adjusted EBITDA would have been: $ 16,420 $ 11,580 $ 31,340 $ 20,220 Energy Net sales $ 43,750 $ 34,990 $ 87,640 $ 75,260 Operating profit $ 5,350 $ 2,660 $ 10,530 $ 6,180 Adjusted EBITDA $ 6,020 $ 3,500 $ 11,920 $ 7,780 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ - $ - $ (200) Excluding Special Items, operating profit would have been: $ 5,350 $ 2,660 $ 10,530 $ 6,380 Excluding Special Items, Adjusted EBITDA would have been: $ 6,020 $ 3,500 $ 11,920 $ 7,980 Aerospace & Defense Net sales $ 17,220 $ 18,270 $ 34,300 $ 40,470 Operating profit $ 3,810 $ 6,410 $ 7,670 $ 13,220 Adjusted EBITDA $ 4,490 $ 7,010 $ 9,010 $ 14,420 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ (20) $ - $ (130) Excluding Special Items, operating profit would have been: $ 3,810 $ 6,430 $ 7,670 $ 13,350 Excluding Special Items, Adjusted EBITDA would have been: $ 4,490 $ 7,030 $ 9,010 $ 14,550 Engineered Components Net sales $ 23,320 $ 14,920 $ 42,230 $ 33,470 Operating profit $ 3,930 $ 340 $ 5,740 $ 720 Adjusted EBITDA $ 5,080 $ 1,140 $ 7,650 $ 2,260 Special Items to consider in evaluating operating profit and Adjusted EBITDA: - Severance and business restructuring costs $ - $ - $ - $ (160) Excluding Special Items, operating profit would have been: $ 3,930 $ 340 $ 5,740 $ 880 Excluding Special Items, Adjusted EBITDA would have been: $ 5,080 $ 1,140 $ 7,650 $ 2,420 |
Company and Business Segment Financial Information Cont. Ops (cont.) (Unaudited, dollars in thousands) Three months ended Six months ended June 30, June 30, 2010 2009 2010 2009 Cequent Net sales $ 122,250 $ 103,540 $ 218,830 $ 193,990 Operating profit (loss) $ 16,050 $ 2,890 $ 24,170 $ (460) Adjusted EBITDA $ 19,850 $ 8,160 $ 31,970 $ 9,500 Special Items to consider in evaluating operating profit (loss): - Severance and business restructuring costs $ - $ (2,120) $ - $ (5,460) Excluding Special Items, operating profit (loss) would have been: $ 16,050 $ 5,010 $ 24,170 $ 5,000 Special Items to consider in evaluating Adjusted EBITDA: - Severance and business restructuring costs $ - $ (940) $ - $ (3,790) Excluding Special Items, Adjusted EBITDA would have been: $ 19,850 $ 9,100 $ 31,970 $ 13,290 Corporate Expenses Operating loss $ (6,100) $ (4,700) $ (11,880) $ (12,260) Adjusted EBITDA $ (6,040) $ 7,250 $ (11,940) $ 14,880 Special Items to consider in evaluating operating loss: - Severance and business restructuring costs $ - $ - $ - $ (2,940) Excluding Special Items, operating loss would have been: $ (6,100) $ (4,700) $ (11,880) $ (9,320) Special Items to consider in evaluating Adjusted EBITDA: - Severance and business restructuring costs $ - $ - $ - $ (2,940) - Gain on extinguishment of debt $ - $ 12,240 $ - $ 28,060 Excluding Special Items, Adjusted EBITDA would have been: $ (6,040) $ (4,990) $ (11,940) $ (10,240) Total Company Net sales $ 252,060 $ 207,870 $ 472,120 $ 409,590 Operating profit $ 36,520 $ 16,430 $ 61,570 $ 21,630 Adjusted EBITDA $ 45,820 $ 38,640 $ 79,950 $ 69,060 Total Special Items to consider in evaluating operating profit: $ - $ (2,140) $ - $ (8,890) Excluding Special Items, operating profit would have been: $ 36,520 $ 18,570 $ 61,570 $ 30,520 Total Special Items to consider in evaluating Adjusted EBITDA: $ - $ 11,280 $ - $ 20,840 Excluding Special Items, Adjusted EBITDA would have been: $ 45,820 $ 27,360 $ 79,950 $ 48,220 |
LTM EBITDA as Defined in Credit Agreement (Unaudited, dollars in thousands) Reported net income for the twelve months ended June 30, 2010 $21,330 Interest expense, net (as defined) 49,110 Income tax expense 12,380 Depreciation and amortization 40,160 Extraordinary non-cash charges 3,270 Monitoring fees 2,890 Interest equivalent costs 630 Non-cash compensation expense 1,930 Other non-cash expenses or losses 4,240 Non-recurring expenses or costs for acquisition integration 70 Non-recurring expenses or costs for cost savings projects 6,640 Debt extinguishment costs 10,410 Negative EBITDA from discontinued operations 340 Permitted dispositions (7,170) Permitted acquisitions 260 Bank EBITDA - LTM Ended June 30, 2010 (1) $ 146,490 (1) As defined in the Amended and Restated Credit Agreement dated December 16, 2009. |