FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
Commission file number 1-10716
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-2687639
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
315 East Eisenhower Parkway, Ann Arbor, Michigan 48108
(Address of principal executive offices) (Zip Code)
(313) 747-7025
(Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding at
Class April 30, 1996
Common Stock, $.01 Par Value 36,662,980
TRIMAS CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
March 31, 1996 and December 31, 1995 1
Consolidated Condensed Statements of
Income for the Three Months
Ended March 31, 1996 and 1995 2
Consolidated Condensed Statements of
Cash Flows for the Three Months
Ended March 31, 1996 and 1995 3
Notes to Consolidated Condensed
Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 5
Part II. Other Information and Signature 8
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
March 31, December 31,
1996 1995
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 79,160,000 $ 92,390,000
Receivables 96,050,000 71,200,000
Inventories 91,990,000 85,490,000
Other current assets 2,690,000 2,510,000
Total current assets 269,890,000 251,590,000
Property and equipment 175,320,000 173,700,000
Excess of cost over net assets
of acquired companies 143,800,000 144,860,000
Other assets 44,810,000 46,210,000
Total assets $633,820,000 $616,360,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 26,840,000 $ 24,390,000
Other current liabilities 32,260,000 29,740,000
Total current liabilities 59,100,000 54,130,000
Deferred income taxes and other 36,790,000 36,360,000
Long-term debt 187,040,000 187,200,000
Total liabilities 282,930,000 277,690,000
Shareholders' equity:
Common stock, $.01 par value, authorized
100 million shares, outstanding 36.6
million shares 370,000 370,000
Paid-in capital 155,220,000 155,430,000
Retained earnings 197,670,000 185,370,000
Cumulative translation adjustments (2,370,000) (2,500,000)
Total shareholders' equity 350,890,000 338,670,000
Total liabilities and
shareholders' equity $633,820,000 $616,360,000
The accompanying notes are an integral part of the
consolidated financial statements.
1
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
1996 1995
Net sales $147,700,000 $147,600,000
Cost of sales (100,240,000) (100,000,000)
Selling, general and administrative expenses (22,990,000) (23,130,000)
Operating profit 24,470,000 24,470,000
Interest expense (2,690,000) (3,740,000)
Other, net (principally interest income) 1,390,000 1,480,000
(1,300,000) (2,260,000)
Income before income taxes 23,170,000 22,210,000
Income taxes 9,040,000 8,770,000
Net income $ 14,130,000 $ 13,440,000
Earnings per common share:
Primary $.38 $.36
Fully diluted $.36 $.34
Dividends declared per common share $.05 $.04
Weighted average number of common
and common equivalent shares
outstanding:
Primary 36,966,000 36,996,000
Fully diluted 42,067,000 42,090,000
The accompanying notes are an integral part of the
consolidated condensed financial statements.
2
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
1996 1995
CASH FROM (USED FOR):
OPERATIONS:
Net income $14,130,000 $13,440,000
Adjustments to reconcile net income
to net cash from operations:
Depreciation and amortization 5,740,000 5,410,000
Deferred income taxes 1,100,000 700,000
(Increase) decrease in receivables (24,300,000) (24,520,000)
(Increase) decrease in inventories (6,500,000) (1,110,000)
Increase (decrease) in accounts
payable and other current
liabilities 5,060,000 7,490,000
Other, net (360,000) 20,000
Net cash from (used for)
operations (5,130,000) 1,430,000
INVESTMENTS:
Capital expenditures (6,070,000) (4,650,000)
Net cash from (used for)
investments (6,070,000) (4,650,000)
FINANCING:
Retirement of long-term debt (200,000) (230,000)
Common stock dividends paid (1,830,000) (1,470,000)
Net cash from (used for)
financing (2,030,000) (1,700,000)
CASH AND CASH EQUIVALENTS:
Increase (decrease) for the period (13,230,000) (4,920,000)
At beginning of period 92,390,000 107,670,000
At end of period $79,160,000 $102,750,000
The accompanying notes are an integral part of the
consolidated condensed financial statements.
3
TRIMAS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
A. Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation
have been included, and such adjustments are of a normal recurring nature.
The year-end condensed balance sheet data was derived from audited
financial statements, but does not include all disclosures required by
generally accepted accounting principles. For further information, refer
to the consolidated financial statements and footnotes thereto included in
the Company's annual report on Form 10-K for the year ended December 31,
1995. Certain amounts in the 1995 financial statements have been
reclassified to conform with the current presentation.
B. Inventories by component are as follows:
March 31, December 31,
1996 1995
Finished goods $49,040,000 $47,490,000
Work in process 14,580,000 14,200,000
Raw material 28,370,000 23,800,000
$91,990,000 $85,490,000
C. Property and equipment reflects accumulated depreciation of $120.8 million
and $116.8 million as of March 31, 1996 and December 31, 1995,
respectively.
4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Consolidated net sales during the first quarter of 1996 were a record
$147.7 million. The Company's Towing Systems, Specialty Container Products and
Corporate Companies segments all recorded increased sales compared to the prior
year's first quarter, while sales by the Specialty Fasteners segment declined.
Consolidated net sales equaled $147.6 million in the first quarter of 1995.
First quarter sales by the Towing Systems segment increased to $49.2
million, compared to $48.2 million in the first quarter of 1995. Increased
sales to both domestic independent hitch installers and towing products
customers in Australia were partially offset by lower sales to the domestic
marine aftermarket. Continuing penetration of the specialty automotive retail
market and ongoing new product introductions also aided first quarter sales
performance. Abnormally severe weather conditions during the quarter,
especially in the mid-Atlantic and northeastern United States, as well as
unseasonably cold temperatures in other parts of the country, negatively
affected segment sales performance.
First quarter 1996 sales for the Specialty Fasteners segment were $36.0
million, compared to $39.0 million during the same quarter in 1995. Segment
sales were negatively impacted by lower sales to heavy-duty truck markets,
decreased demand for specialized metallurgical services from automotive
component customers and continued but moderating inventory readjustments in
distribution markets. During the quarter sales of specialty aerospace fasteners
increased as a result of improving conditions in aerospace markets.
First quarter 1996 sales by the Specialty Container Products segment
increased modestly to $42.8 million compared to the prior year's first quarter
results of $42.7 million. Moderately increased sales of gasket products to
5
industrial processing industries were offset by reduced sales to the industrial
container closure and compressed gas distributor markets. The Corporate
Companies segment first quarter sales of $19.7 million increased 10.9 percent
over last year's first quarter sales of $17.7 million, primarily reflecting
increased sales of insulation related products used in commercial and industrial
construction and maintenance markets, and continued strength in markets for
precision tools.
The Company's consolidated gross margin percentage for the first quarter
1996 was 32.1 percent compared to 32.2 percent during last year's first
quarter. The Company's consolidated operating profit for the first quarter
1996 was $24.5 million and equaled the operating profit for the first quarter
of 1995. Consolidated operating profit margin equaled 16.6 percent in both the
current quarter and the comparable period in 1995.
Interest expense decreased in the 1996 first quarter primarily because of
the $51.5 million reduction of long-term debt in 1995, and because of lower
prevailing interest rates. Lower interest rates and lower average cash and cash
equivalent balances resulted in less interest income, the major component of
other income, in the 1996 period.
Net income of $14.1 million resulted in primary earnings per common share
of $.38, compared to first quarter 1995 primary earnings per common share of
$.36, both based on 37.0 million shares outstanding. Fully diluted earnings per
common share were $.36 compared to $.34 in the first quarter of 1995, both based
on 42.1 million shares outstanding.
Liquidity, Working Capital and Cash Flows
The Company's financial strategies include maintaining a relatively high
level of liquidity. Historically, TriMas Corporation on an annual basis has
6
generated sufficient cash flows from operating activities to fund capital
expenditures, debt service and dividends while maintaining its strategic level
of liquidity. At March 31, 1996 the current ratio was 4.6 to 1 and working
capital equaled $210.8 million, including $79.2 million of cash and cash
equivalents. The Company had available credit of $278.0 million under its
revolving credit facility at March 31, 1996.
Cash and cash equivalents decreased $13.2 million and $4.9 million during
the first quarters of 1996 and 1995, respectively. The Company's operating
activities used $5.1 million during the first quarter 1996, compared to
providing $1.4 million during the same quarter of 1995, due in part to increased
inventory levels at certain operating units. Higher inventory levels resulted
from competitive buying opportunities and, in one situation, a planned build in
raw material safety stock related to supplier changes. Increases in first
quarter sales compared to the preceding year's fourth quarter contributed to
increases in receivables, primarily in the Towing Systems segment, of $24.3
million in the first quarter 1996 and $24.5 million in the first quarter of
1995. Cash flow resulting from these increased receivables is historically
realized later in the year. A corresponding increase in accounts payable and
other current liabilities provided $5.1 million and $7.5 million, respectively,
in the 1996 and 1995 first quarters. Capital expenditures equaled $6.1 million
in the first quarter of 1996 and $4.7 million in the first quarter of 1995. The
majority of the 1996 expenditures, $3.9 million, were in the Specialty Fasteners
and Towing Systems segments. Common stock dividends paid totaled $1.8 million
for the first quarter of 1996 compared to $1.5 million for the first quarter of
1995.
The Company believes its cash flows from operations, along with its unused
borrowing capacity and access to financial markets, are adequate to fund its
strategies for future growth, including working capital, expenditures for
manufacturing expansion and efficiencies, market share initiatives, and
corporate development activities.
7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K:
None were filed during the quarter ended March 31, 1996.
SIGNATURE
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 thereunto duly authorized.
TRIMAS CORPORATION
Date: May 10, 1996 By: /s/William E. Meyers
William E. Meyers
Vice President - Controller
(Chief accounting officer
and authorized signatory)
8
Exhibit Index
Exhibit
Number Description of Document
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
Exhibit 11
TRIMAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(In Thousands, Except Per Share Amounts)
Three Months Ended
March 31,
1996 1995
Primary:
Net income $14,130 $13,440
Weighted average common shares outstanding 36,644 36,644
Dilution of stock options 322 352
Weighted average common and common
equivalent shares outstanding after
assumed exercise of options 36,966 36,996
Primary earnings per common share $.38 $.36
Fully diluted:
Net income $14,130 $13,440
Add after tax convertible debenture
related expenses 920 920
Net income as adjusted $15,050 $14,360
Weighted average common shares outstanding 36,644 36,644
Dilution of stock options 340 363
Addition from assumed conversion of
convertible debentures 5,083 5,083
Weighted average common and common
equivalent shares outstanding on a fully
diluted basis 42,067 42,090
Fully diluted earnings per common share $.36 $.34
Exhibit 12
TRIMAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
Three Months Ended
March 31,
1996 1995
Earnings:
Income before income taxes $23,170 $22,210
Fixed charges 2,980 3,990
Earnings before fixed charges $26,150 $26,200
Fixed Charges:
Interest $2,780 $ 3,790
Portion of rental expense 250 220
Fixed charges $3,030 $ 4,010
Ratios of earnings to fixed charges 8.6 6.5
5
3-MOS
DEC-31-1996
MAR-31-1996
79,160,000
0
97,580,000
1,530,000
91,990,000
269,890,000
296,120,000
120,800,000
633,820,000
59,100,000
187,040,000
370,000
0
0
350,520,000
633,820,000
147,700,000
147,700,000
100,240,000
100,240,000
0
0
2,690,000
23,170,000
9,040,000
14,130,000
0
0
0
14,130,000
.38
.36
