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, 1995
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 28, 1995
Common Stock, $.01 Par Value 36,652,152
TRIMAS CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
March 31, 1995 and December 31, 1994 1
Consolidated Condensed Statements of
Income for the Three Months
Ended March 31, 1995 and 1994 2
Consolidated Condensed Statements of
Cash Flows for the Three Months
Ended March 31, 1995 and 1994 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,
1995 1994
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $102,750,000 $107,670,000
Receivables 89,180,000 64,190,000
Inventories 80,670,000 79,560,000
Other current assets 3,300,000 3,590,000
Total current assets 275,900,000 255,010,000
Property and equipment 168,410,000 168,380,000
Excess of cost over net assets
of acquired companies 148,100,000 149,160,000
Notes receivable 9,490,000 9,960,000
Other assets 32,610,000 32,630,000
Total assets $634,510,000 $615,140,000
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable $ 28,970,000 $ 21,590,000
Accrued liabilities 34,480,000 34,370,000
Current portion of
long-term debt 250,000 280,000
Total current
liabilities 63,700,000 56,240,000
Deferred income taxes and other 31,050,000 29,700,000
Long-term debt 238,400,000 238,600,000
Total liabilities 333,150,000 324,540,000
Shareholders' equity:
Common stock, $.01 par value,
authorized 100 million shares,
outstanding 36.6 million shares 370,000 370,000
Paid-in capital 155,120,000 155,210,000
Retained earnings 148,280,000 136,310,000
Cumulative translation adjustments (2,410,000) (1,290,000)
Total shareholders'
equity 301,360,000 290,600,000
Total liabilities and
shareholders' equity $634,510,000 $615,140,000
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,
1995 1994
Net sales $147,600,000 $134,460,000
Cost of sales (100,000,000) (93,200,000)
Selling, general and
administrative expenses (23,130,000) (20,860,000)
Operating profit 24,470,000 20,400,000
Interest expense (3,740,000) (2,840,000)
Other income (expense), net 1,480,000 630,000
(2,260,000) (2,210,000)
Income before income taxes 22,210,000 18,190,000
Income taxes 8,770,000 7,360,000
Net income $ 13,440,000 $ 10,830,000
Earnings per common share:
Primary $.36 $.29
Fully diluted $.34 $.28
Dividends declared per common share $.04 $.03
Weighted average number of common
and common equivalent shares
outstanding:
Primary 36,996,000 37,040,000
Fully diluted 42,090,000 42,123,000
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,
1995 1994
CASH FROM (USED FOR):
OPERATIONS:
Net income $13,440,000 $10,830,000
Adjustments to reconcile net
income to net cash from
operations:
Depreciation and
amortization 5,410,000 5,300,000
Deferred income taxes 700,000 300,000
(Increase) decrease in
receivables (24,520,000) (26,360,000)
(Increase) decrease in
inventories (1,110,000) (3,150,000)
Increase (decrease) in
accounts payable and
accrued liabilities 7,490,000 7,600,000
Other, net 20,000 (10,000)
Net cash from (used for)
operations 1,430,000 (5,490,000)
INVESTMENTS:
Capital expenditures (4,650,000) (6,470,000)
Net cash from (used for)
investments (4,650,000) (6,470,000)
FINANCING:
Retirement of long-term debt (230,000) (230,000)
Common stock dividends paid (1,470,000) (1,100,000)
Net cash from (used for)
financing (1,700,000) (1,330,000)
CASH AND CASH EQUIVALENTS:
Increase (decrease) for the period (4,920,000) (13,290,000)
At beginning of period 107,670,000 69,770,000
At end of period $102,750,000 $56,480,000
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,
1994. Certain amounts in the 1994 financial statements have been
reclassified to conform with the current presentation.
B. Inventories by component are as follows:
March 31, December 31,
1995 1994
Finished goods $43,780,000 $44,860,000
Work in process 11,460,000 10,440,000
Raw material 25,430,000 24,260,000
$80,670,000 $79,560,000
C. Property and equipment reflects accumulated depreciation of $106.4 million
and $103.3 million as of March 31, 1995 and December 31, 1994,
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 1995 equaled $147.6
million, a new first quarter record, and represented a 9.8 percent increase over
the first quarter of 1994. Each of the Company's reporting segments recorded
record first quarter sales during the 1995 quarter.
Net sales of the Towing Systems segment increased 15.5 percent to $48.2
million, compared to $41.7 million in the first quarter of 1994. Demand remains
strong from many of the markets served by this segment including the marine
aftermarket, the automobile and recreational vehicle aftermarket and both the
marine and industrial OEM markets. New product introductions continue to be a
key element of this segment's growth. Sales of this segment, which follow
seasonal patterns reflecting strong market demand in the second quarter, have
also been aided by the trend of new vehicle sales toward light trucks and sport
utility vehicles.
First quarter 1995 sales for the Specialty Fasteners segment were $39.0
million, a 10.5 percent increase over the same quarter in 1994. Volume with
heavy-duty truck-related and other OEM and distribution markets continues to
grow as those customers continue to experience strong domestic and international
demand for their products. Sales of aerospace fasteners and related products
increased primarily as a result of new product development and market share
gains.
First quarter 1995 sales by the Specialty Container Products segment grew
to $42.7 million compared to the prior year's first quarter results of $41.2
million. Sales of specialty container closures and compressed gas cylinders
improved as the industrial markets requiring these products
5
continued to strengthen. The Corporate Companies segment first quarter sales of
$17.7 million increased 8.8 percent over last year's first quarter sales of
$16.3 million.
The Company's consolidated gross margin percentage for the first quarter
1995 was 32.2 percent compared to 30.7 percent during last year's first quarter,
reflecting the volume sensitive nature of the Company's operations. Maintaining
high gross margins is an important operating strategy of the Company as it helps
maximize earnings growth as a result of sales increases.
The Company's consolidated operating profit for the first quarter 1995 of
$24.5 million represented a 20.0 percent increase over operating profit for the
first quarter of 1994. Each of the Company's reporting segments experienced an
increase in operating profit over the first quarter of last year. Consolidated
operating profit for the first quarter 1995 equaled 16.6 percent of net sales
compared to 15.2 percent of net sales for the comparable period in 1994. The
improvement in profit was primarily the result of the previously mentioned
increased sales volumes, as well as successful cost reduction programs.
Interest expense increased in the 1995 first quarter because of higher
prevailing interest rates. Higher interest rates and increased average cash
balances resulted in more interest income, the major component of other income,
in the 1995 period.
Net income of $13.4 million resulted in primary earnings per common share
of $.36, compared to first quarter 1994 primary earnings per common share of
$.29, both based on 37.0 million shares outstanding. Fully diluted earnings per
common share were $.34 compared to $.28 in the first quarter of 1994, both based
on 42.1 million shares outstanding.
6
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
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, 1995 the current ratio was 4.3 to 1 and working
capital equaled $212.2 million, including $102.8 million of cash and cash
equivalents. The Company had available credit of $228.0 million under its
revolving credit facility at March 31, 1995.
Cash and cash equivalents decreased $4.9 million and $13.3 million during
the first quarters of 1995 and 1994, respectively. The Company's operating
activities provided $1.4 million during the first quarter 1995 and used $5.5
million during the same quarter of 1994. 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 $24.5 million in the
first quarter 1995 and $26.4 million in the first quarter of 1994. The cash
flow resulting from these increased receivables is historically realized later
in the year. A corresponding increase in accounts payable and accrued
liabilities provided $7.5 million and $7.6 million, respectively, in the 1995
and 1994 first quarters. Capital expenditures equaled $4.7 million in the first
quarter of 1995 and $6.5 million in the first quarter of 1994. Common stock
dividends paid totaled $1.5 million for the first quarter of 1995 compared to
$1.1 million for the first quarter of 1994.
The Company believes its cash flows from operations, along with its
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, 1995.
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 5, 1995 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,
1995 1994
Primary:
Net income $13,440 $10,830
Weighted average common shares
outstanding 36,644 36,644
Dilution of stock options 352 396
Weighted average common and common
equivalent shares outstanding after
assumed exercise of options 36,996 37,040
Primary earnings per common share $.36 $.29
Fully diluted:
Net income $13,440 $10,830
Add after tax convertible debenture
related expenses 920 920
Net income as adjusted $14,360 $11,750
Weighted average common shares
outstanding 36,644 36,644
Dilution of stock options 363 396
Addition from assumed conversion of
convertible debentures 5,083 5,083
Weighted average common and common
equivalent shares outstanding on a
fully diluted basis 42,090 42,123
Fully diluted earnings per common share $.34 $.28
Exhibit 12
TRIMAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
Three Months Ended
March 31,
1995 1994
Earnings:
Income before income taxes $22,210 $18,190
Fixed charges 3,990 3,090
Earnings before fixed charges $26,200 $21,280
Fixed Charges:
Interest $3,790 $2,900
Portion of rental expense 220 220
Fixed charges $4,010 $3,120
Ratios of earnings to fixed charges 6.5 6.8
5
3-MOS
DEC-31-1995
MAR-31-1995
102,750,000
0
91,040,000
1,860,000
80,670,000
275,900,000
274,840,000
106,430,000
634,510,000
63,700,000
238,400,000
370,000
0
0
300,990,000
634,510,000
147,600,000
147,600,000
100,000,000
100,000,000
0
0
3,740,000
22,210,000
8,770,000
13,440,000
0
0
0
13,440,000
.36
.34
