UNITED STATES | OMB APPROVAL | |
SECURITIES AND EXCHANGE COMMISSION | OMB Number: 3235-0060 Expires: March 31, 2014 Estimated average burden hours per response. . . 5.0 | |
Washington, D.C. 20549 | ||
FORM 8-K | ||
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 25, 2012
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) | |
Registrant’s telephone number, including area code (248) 631-5400
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
TriMas Corporation (the “Corporation”) issued a press release and held a teleconference on October 25, 2012, reporting its financial results for the third quarter ending September 30, 2012. 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 Corporation's 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 Corporation's visual presentation titled "Third Quarter 2012 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: | October 25, 2012 | By: | /s/ David M. Wathen | |||
Name: | David M. Wathen | |||||
Title: | Chief Executive Officer | |||||
CONTACT: | |||
Sherry Lauderback | |||
VP, Investor Relations & Communications | |||
(248) 631-5506 | |||
sherrylauderback@trimascorp.com | |||
TRIMAS CORPORATION REPORTS RECORD THIRD QUARTER RESULTS
Company Reports Growth in Sales of 21% and Income(1) of 18%
BLOOMFIELD HILLS, Michigan, October 25, 2012 - TriMas Corporation (NASDAQ: TRS) today announced financial results for the quarter ended September 30, 2012. The Company reported record third quarter net sales from continuing operations of $335.9 million, an increase of 21.0% compared to third quarter 2011. Third quarter 2012 diluted earnings per share from continuing operations attributable to TriMas Corporation was $0.47, as compared to $0.49 during third quarter 2011. Excluding Special Items(1), third quarter 2012 diluted earnings per share from continuing operations would have been $0.51, a 4.1% improvement from third quarter 2011.
TriMas Highlights
• | Reported record third quarter net sales of $335.9 million, an increase of 21.0% as compared to third quarter 2011, due to the successful execution of numerous growth initiatives and results from bolt-on acquisitions. |
• | Improved income from continuing operations(1) by 18.3%, excluding the impact of Special Items, compared to third quarter 2011. Improved diluted earnings per share,(1) while absorbing incremental costs related to several acquisitions and approximately 13% higher weighted average shares outstanding for third quarter 2012, as compared to third quarter 2011. |
• | Amended credit facilities to reduce borrowing rates, extend maturities and enhance liquidity and capital structure flexibility to best position the Company for future growth with significantly reduced borrowing costs. |
• | Continued to invest in a flexible manufacturing footprint to optimize manufacturing costs long-term, increase capacity, enhance customer service and drive future growth. |
• | Expanded geographic reach and related sales in faster growing end markets including China, Thailand, Brazil, South Africa, Australia and New Zealand. |
"Our record third quarter sales demonstrates we are successfully executing on our growth strategies," said David Wathen, TriMas President and Chief Executive Officer. "We achieved sales growth of 21.0% during the third quarter, resulting from our bolt-on acquisitions, product innovation, market share gains and geographic expansion. In the midst of an uncertain global economic environment, we identify the bright spots where we believe we can capture growth for our businesses. We are making careful decisions to accelerate growth programs that are working, as we capitalize on opportunities that will drive long-term stakeholder value, while still mitigating and controlling risks."
"Our ongoing productivity and lean programs continue to generate savings that provide a source of funding for our growth initiatives," Wathen stated. "We are investing for the future as we expand our footprint to not only reduce our costs, but also secure additional business and better serve our global customers. While increasing investments in our businesses and absorbing costs related to several acquisitions, we generated $20.1 million in income from continuing operations(1), a 18.3% improvement from third quarter 2011, and $0.51 in diluted earnings per share(1). We believe that the consistent, positive performance we have achieved is the mark of leading businesses, solid plans and a great team."
Wathen continued, "We also significantly improved our capital structure. Following our May equity offering which enabled us to accelerate the pace of our initiatives, we recently refinanced our debt, significantly lowering our annual cash interest costs, extending our credit facility maturities and enhancing our liquidity and capital structure flexibility. We are committed to continuous improvement in all we do, including continued focus on debt and leverage ratio reductions and strong cash flow generation."
"Looking forward, we continue to expect economic uncertainty and choppy end market demand. Based on our results to date and current expectations, we are increasing our 2012 top-line growth estimate to be between 15% to 17%
1
compared to 2011. We reaffirm our full-year 2012 diluted earnings per share outlook range of $1.75 to $1.85 per share, excluding Special Items(1), despite the increase in share count and absorption of acquisition-related costs and decisions to accelerate growth initiatives. We are confident in our ability to grow the top-line faster than the economy, create sustainable operating leverage and generate strong cash flow," Wathen concluded.
Third Quarter Financial Results - From Continuing Operations
• | TriMas reported record third quarter net sales of $335.9 million, an increase of 21.0% as compared to $277.7 million in third quarter 2011. During third quarter, net sales increased in all six reportable segments, primarily as a result of additional sales from bolt-on acquisitions, market share gains, new product introductions and geographic expansion as compared to third quarter 2011. The net sales increase was partially offset by approximately $2.7 million of unfavorable currency exchange, primarily in our Packaging, Energy and Cequent Asia Pacific segments. |
• | The Company reported operating profit of $36.6 million in third quarter 2012. Excluding Special Items(1) related to facility consolidation and relocation projects within the Cequent segments, third quarter 2012 operating profit would have been $38.7 million, as compared to $35.8 million during third quarter 2011, primarily as a result of higher sales levels. Third quarter 2012 operating profit margin was impacted by a less favorable product sales mix, costs related to recent acquisitions including purchase accounting related adjustments, and higher costs associated with our global growth initiatives. The Company continued to generate significant savings from capital investments, productivity projects and Lean initiatives, which funded growth initiatives and offset economic cost increases. |
• | Excluding noncontrolling interests related to Arminak & Associates, third quarter 2012 income from continuing operations was $18.7 million, or $0.47 per diluted share, compared to income from continuing operations of $17.0 million, or $0.49 per diluted share, during third quarter 2011. Excluding Special Items(1), third quarter 2012 income from continuing operations would have been $20.1 million, an improvement of 18.3%, and diluted earnings per share would have been $0.51, a 4.1% improvement from third quarter 2011. |
• | The Company reported Free Cash Flow (defined as Cash Flow from Operating Activities less Capital Expenditures) of $10.5 million for third quarter 2012, compared to $30.7 million in third quarter 2011. The Company expects to generate between $30 million and $40 million in Free Cash Flow for 2012, while increasing its capital expenditures and working capital investments in acquisitions and future growth and productivity programs. |
Financial Position
As of September 30, 2012, TriMas reported total indebtedness of $430.0 million, as compared to $469.9 million as of December 31, 2011. TriMas ended the third quarter with $217.2 million of cash and aggregate availability under its revolving credit and accounts receivable facilities.
On October 11, 2012, the Company announced the closing of its amended and restated credit facilities. The amended and restated credit facilities are comprised of a $250 million Senior Secured Revolving Credit facility, a $200 million Senior Secured Term Loan A facility and a $200 million Senior Secured Term Loan B facility. As a result of the refinance and a reduction in borrowing rates, the Company significantly lowered its future annual cash interest costs, extended credit facility maturities and enhanced liquidity and capital structure flexibility. Proceeds from the borrowings under the amended and restated facilities were used to refinance the Company's existing $125 million Senior Secured Revolving Credit Facility and $225 million Senior Secured Term Loan B and to pay related fees and expenses. In addition, $176.5 million aggregate principal amount of the Company's 9.75% Senior Secured Notes due 2017 have been tendered and retired. TriMas intends to redeem all of the remaining outstanding Notes not tendered in the tender offer. As a result, no Notes will remain outstanding following the redemption.
Business Segment Results - From Continuing Operations(2)
Packaging - (Consists of Rieke Corporation including Arminak & Associates, Innovative Molding and the foreign subsidiaries of Englass, Rieke Germany, Rieke Italia and Rieke China)
Net sales for third quarter increased 67.6% compared to the year ago period primarily as a result of the acquisitions of Arminak in February 2012 and Innovative Molding in August 2011. Specialty systems product sales unrelated to the acquisitions also increased due to additional demand from North American dispensing customers. In addition, sales of industrial closures, rings and levers increased, as an increase in North American sales more than offset a decline in European sales resulting from weak economic conditions. These increases in sales were partially offset by the impact of unfavorable currency exchange. Operating profit and the related margin percentage for the quarter increased primarily due to higher sales levels as a result of the acquisitions, savings from ongoing productivity initiatives and the
2
recognition of a previously deferred gain relating to the segment's post-retirement benefit plan, partially offset by a less favorable product sales mix and higher selling, general and administrative costs. The Company continues to develop specialty dispensing and closure applications for growing end markets, including personal care, cosmetic, pharmaceutical, nutrition and food/beverage, and expand into complementary products.
Energy - (Consists of Lamons including South Texas Bolt & Fitting and CIFAL)
Third quarter net sales increased 6.5% compared to the year ago period due to continued market share gains within the highly-engineered bolt product line, the acquisition of CIFAL in Brazil in July 2012 and additional sales generated by newer branches. Third quarter operating profit and the related margin percentage decreased primarily due to costs related to the acquisition, including purchase accounting adjustments, increased sales at newer branches, which typically have lower margins due to more aggressive market pricing and additional launch costs, and higher selling, general and administrative costs in support of branch expansion. The Company continues to grow its sales and service branch network in support of its global customers.
Aerospace & Defense - (Consists of Monogram Aerospace Fasteners and NI Industries)
Net sales for the third quarter increased 2.4% compared to the year ago period primarily due to improved demand for blind bolts and temporary fasteners from aerospace distribution customers resulting from new programs with airplane frame manufacturers, the recent introduction of new products and sales growth in China. This sales increase was partially offset by lower sales in the defense business related to decreased activity associated with managing the relocation to and establishment of the U.S. Army's new defense facility, which is now in the final stages of completion. Third quarter operating profit and the related margin percentage increased primarily due to the fact the aerospace product sales comprised a larger percentage of the total sales for this segment, with aerospace products yielding significantly higher margins than the defense business, as well as lower selling, general and administrative expenses. The Company continues to invest in this segment by developing and marketing highly-engineered products for aerospace applications, as well as bidding on new projects for defense customers.
Engineered Components - (Consists of Arrow Engine and Norris Cylinder)
Third quarter net sales increased 12.8% compared to the year ago period primarily due to improved demand for engines, gas compression products and other well site content related to increased levels of oil drilling activity as compared to 2011, and the successful introduction of additional products for the well-site. Sales of industrial cylinders also increased primarily due to continued market share gains. Third quarter operating profit and the related margin percentage decreased compared to the prior year period primarily due to a less favorable product sales mix and lower fixed cost absorption in the engine business. The Company continues to develop new products and expand its international sales efforts.
Cequent Asia Pacific - (Consists of Cequent operations in Australia, New Zealand, Thailand and South Africa)
Net sales for third quarter increased 44.0% compared to the year ago period, due to new business awards in Thailand, the July 2012 acquisition of New Zealand-based Trail Com and the fourth quarter 2011 acquisition in South Africa, as well as additional demand aided by improved consumer spending and increased vehicle availability, partially offset by the unfavorable impact of currency exchange. Third quarter operating profit and the related margin percentage decreased primarily as the profit earned on the higher sales levels was offset by acquisition-related costs and purchase accounting adjustments, manufacturing inefficiencies associated with the new facility and wind-down of the two former manufacturing facilities, and a recovery of tooling costs in third quarter 2011 that did not recur in third quarter 2012. The Company continues to reduce fixed costs and leverage Cequent's strong brand positions to capitalize on growth opportunities in new markets.
Cequent Americas - (Consists of Cequent Performance Products and Cequent Consumer Products)
The Company renamed the "Cequent North America" segment to "Cequent Americas" effective third quarter 2012 to more appropriately reflect the expanding geography covered by the businesses in this segment.
Net sales for third quarter increased 6.7% compared to the year ago period, resulting primarily from increased sales within the original equipment and retail channels. Sales increases were the result of newer product launches and continued market share gains. Third quarter operating profit increased compared to the prior year period as a result of higher sales levels, excluding the costs incurred related to the relocation of certain production to a lower cost country. Third quarter operating profit margin declined slightly primarily due to an increase in selling, general and administrative expenses in support of an acquisition in Brazil and other growth initiatives, and a less favorable product sales mix. The Company continues to reduce fixed costs and leverage Cequent's strong brand positions and new products for increased market share in the United States and faster growing markets.
3
2012 Outlook
The Company provided updated expectations for full-year 2012 and raised its 2012 sales outlook from an increase of 10% to 14% to a range of 15% to 17% compared to 2011. The Company reaffirmed its 2012 diluted earnings per share (EPS) from continuing operations range to be between $1.75 and $1.85 per share, excluding any events that may be considered Special Items. In addition, the Company expects 2012 Free Cash Flow, defined as Cash Flow from Operating Activities less Capital Expenditures, to be between $30 million and $40 million.
Conference Call Information
TriMas Corporation will host its third quarter 2012 earnings conference call today, Thursday, October 25, 2012, at 10:00 a.m. ET. The call-in number is (888) 430-8705. Participants should request to be connected to the TriMas Corporation third quarter 2012 earnings conference call (Conference ID #4056170). The conference call will also be simultaneously webcast via TriMas' website at www.trimascorp.com, under the "Investors" section, with an accompanying slide presentation. A replay of the conference call will be available on the TriMas website or by dialing (888) 203-1112 (Replay Code #4056170) beginning October 25, 2012 at 3:00 p.m. ET through November 1, 2012 at 3:00 p.m. ET.
Cautionary Notice Regarding Forward-looking Statements
Any "forward-looking" statements contained herein, including those relating to market conditions or the Company's 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 Company's business and industry, the Company's substantial leverage, liabilities imposed by the Company's debt instruments, market demand, competitive factors, supply constraints, material and energy costs, technology factors, litigation, government and regulatory actions, the Company's accounting policies, future trends, and other risks which are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and in the Company's 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.
In this release, certain non-GAAP financial measures are used. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure may be found at the end of this this release. Additional information is available at www.trimascorp.com under the “Investors” section.
About TriMas
Headquartered in Bloomfield Hills, Michigan, TriMas Corporation (NASDAQ: TRS) provides engineered and applied products for growing markets worldwide. TriMas is organized into six reportable segments: Packaging, Energy, Aerospace & Defense, Engineered Components, Cequent Asia Pacific and Cequent Americas. TriMas has approximately 4,500 employees at more than 60 different facilities in 17 countries. For more information, visit www.trimascorp.com.
(1) | Appendix I provides income and diluted earnings per share from continuing operations attributable to TriMas Corporation. The Company presents income from continuing operations and diluted earnings per share from continuing operations attributable to TriMas Corporation and operating profit excluding certain costs, expenses and other charges, collectively described as “Special Items,” that are included in the most directly comparable measures under GAAP, but that management considers important in evaluating the Company's or a segment's operating performance, as applicable, including the quality of operating results. Management also believes the exclusion of these Special Items facilitates the comparison of the Company's core business operations. A reconciliation of these non-GAAP numbers can be found elsewhere in this release, including in Appendix I. |
(2) | Business Segment Results include Operating Profit that 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.” |
4
TriMas Corporation
Condensed Consolidated Balance Sheet
(Unaudited - dollars in thousands)
September 30, 2012 | December 31, 2011 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 26,090 | $ | 88,920 | ||||
Receivables, net | 185,040 | 135,610 | ||||||
Inventories | 220,450 | 178,030 | ||||||
Deferred income taxes | 18,510 | 18,510 | ||||||
Prepaid expenses and other current assets | 10,150 | 10,620 | ||||||
Total current assets | 460,240 | 431,690 | ||||||
Property and equipment, net | 180,100 | 159,210 | ||||||
Goodwill | 269,260 | 215,360 | ||||||
Other intangibles, net | 208,910 | 155,670 | ||||||
Other assets | 26,780 | 24,610 | ||||||
Total assets | $ | 1,145,290 | $ | 986,540 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Current maturities, long-term debt | $ | 17,950 | $ | 7,290 | ||||
Accounts payable | 148,890 | 146,930 | ||||||
Accrued liabilities | 79,480 | 70,140 | ||||||
Total current liabilities | 246,320 | 224,360 | ||||||
Long-term debt | 412,040 | 462,610 | ||||||
Deferred income taxes | 66,340 | 64,780 | ||||||
Other long-term liabilities | 78,780 | 61,000 | ||||||
Total liabilities | 803,480 | 812,750 | ||||||
Redeemable noncontrolling interests | 26,370 | — | ||||||
Total shareholders' equity | 315,440 | 173,790 | ||||||
Total liabilities and shareholders' equity | $ | 1,145,290 | $ | 986,540 | ||||
5
TriMas Corporation
Consolidated Statement of Operations
(Unaudited - dollars in thousands, except per share amounts)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net sales | $ | 335,870 | $ | 277,660 | $ | 971,870 | $ | 824,310 | ||||||||
Cost of sales | (245,730 | ) | (195,720 | ) | (706,930 | ) | (582,260 | ) | ||||||||
Gross profit | 90,140 | 81,940 | 264,940 | 242,050 | ||||||||||||
Selling, general and administrative expenses | (53,550 | ) | (46,170 | ) | (156,730 | ) | (137,180 | ) | ||||||||
Net gain on dispositions of property and equipment | 10 | 20 | 330 | 50 | ||||||||||||
Operating profit | 36,600 | 35,790 | 108,540 | 104,920 | ||||||||||||
Other expense, net: | ||||||||||||||||
Interest expense | (9,450 | ) | (10,730 | ) | (30,420 | ) | (34,370 | ) | ||||||||
Debt extinguishment costs | — | — | (6,560 | ) | (3,970 | ) | ||||||||||
Other income (expense), net | 140 | 540 | (2,410 | ) | (1,170 | ) | ||||||||||
Other expense, net | (9,310 | ) | (10,190 | ) | (39,390 | ) | (39,510 | ) | ||||||||
Income from continuing operations before income tax expense | 27,290 | 25,600 | 69,150 | 65,410 | ||||||||||||
Income tax expense | (7,330 | ) | (8,620 | ) | (19,770 | ) | (21,730 | ) | ||||||||
Income from continuing operations | 19,960 | 16,980 | 49,380 | 43,680 | ||||||||||||
Income from discontinued operations, net of income tax expense | — | 1,290 | — | 3,430 | ||||||||||||
Net income | 19,960 | 18,270 | 49,380 | 47,110 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 1,290 | — | 1,560 | — | ||||||||||||
Net income attributable to TriMas Corporation | $ | 18,670 | $ | 18,270 | $ | 47,820 | $ | 47,110 | ||||||||
Basic earnings per share attributable to TriMas Corporation: | ||||||||||||||||
Continuing operations | $ | 0.48 | $ | 0.49 | $ | 1.29 | $ | 1.28 | ||||||||
Discontinued operations | — | 0.04 | — | 0.10 | ||||||||||||
Net income per share | $ | 0.48 | $ | 0.53 | $ | 1.29 | $ | 1.38 | ||||||||
Weighted average common shares—basic | 39,045,282 | 34,417,879 | 36,994,192 | 34,182,592 | ||||||||||||
Diluted earnings per share attributable to TriMas Corporation: | ||||||||||||||||
Continuing operations | $ | 0.47 | $ | 0.49 | $ | 1.28 | $ | 1.26 | ||||||||
Discontinued operations | — | 0.03 | — | 0.10 | ||||||||||||
Net income per share | $ | 0.47 | $ | 0.52 | $ | 1.28 | $ | 1.36 | ||||||||
Weighted average common shares—diluted | 39,508,503 | 34,901,277 | 37,379,292 | 34,736,307 | ||||||||||||
6
TriMas Corporation
Consolidated Statement of Cash Flow
(Unaudited - dollars in thousands)
Nine months ended September 30, | ||||||||
2012 | 2011 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 49,380 | $ | 47,110 | ||||
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: | ||||||||
Gain on dispositions of property and equipment | (330 | ) | (30 | ) | ||||
Depreciation | 18,990 | 19,160 | ||||||
Amortization of intangible assets | 14,460 | 10,780 | ||||||
Amortization of debt issue costs | 2,240 | 2,230 | ||||||
Deferred income taxes | (3,480 | ) | 14,420 | |||||
Debt extinguishment costs | 6,560 | 3,970 | ||||||
Non-cash compensation expense | 6,640 | 2,580 | ||||||
Excess tax benefits from stock based compensation | (2,310 | ) | (3,840 | ) | ||||
Increase in receivables | (38,750 | ) | (39,080 | ) | ||||
Increase in inventories | (31,440 | ) | (13,500 | ) | ||||
Increase in prepaid expenses and other assets | (600 | ) | (2,320 | ) | ||||
Decrease in accounts payable and accrued liabilities | (6,130 | ) | (4,750 | ) | ||||
Other, net | 170 | (1,180 | ) | |||||
Net cash provided by operating activities, net of acquisition impact | 15,400 | 35,550 | ||||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | (36,440 | ) | (23,520 | ) | ||||
Acquisition of businesses, net of cash acquired | (84,600 | ) | (28,620 | ) | ||||
Net proceeds from disposition of assets | 2,950 | 2,240 | ||||||
Net cash used for investing activities | (118,090 | ) | (49,900 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of common stock in connection with the Company's equity offering, net of issuance costs | 79,040 | — | ||||||
Proceeds from borrowings on term loan facilities | 140,370 | 226,520 | ||||||
Repayments of borrowings on term loan facilities | (130,850 | ) | (250,170 | ) | ||||
Proceeds from borrowings on revolving credit facilities and accounts receivable facility | 555,300 | 551,900 | ||||||
Repayments of borrowings on revolving credit facilities and accounts receivable facility | (555,300 | ) | (547,020 | ) | ||||
Repurchase of 9¾% senior secured notes | (50,000 | ) | — | |||||
Senior secured notes redemption premium and debt financing fees | (4,880 | ) | (6,680 | ) | ||||
Distributions to noncontrolling interests | (820 | ) | — | |||||
Shares surrendered upon vesting of options and restricted stock awards to cover tax obligations | (990 | ) | (830 | ) | ||||
Proceeds from exercise of stock options | 5,680 | 960 | ||||||
Excess tax benefits from stock based compensation | 2,310 | 3,840 | ||||||
Net cash provided by (used for) financing activities | 39,860 | (21,480 | ) | |||||
Cash and Cash Equivalents: | ||||||||
Decrease for the period | (62,830 | ) | (35,830 | ) | ||||
At beginning of period | 88,920 | 46,370 | ||||||
At end of period | $ | 26,090 | $ | 10,540 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 20,990 | $ | 25,350 | ||||
Cash paid for taxes | $ | 23,000 | $ | 12,140 | ||||
7
TriMas Corporation
Company and Business Segment Financial Information
Continuing Operations
(Unaudited - dollars in thousands)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Packaging | ||||||||||||||||
Net sales | $ | 77,240 | $ | 46,090 | $ | 202,250 | $ | 137,890 | ||||||||
Operating profit | $ | 18,240 | $ | 10,240 | $ | 44,700 | $ | 37,140 | ||||||||
Energy | ||||||||||||||||
Net sales | $ | 45,460 | $ | 42,690 | $ | 143,220 | $ | 125,810 | ||||||||
Operating profit | $ | 3,780 | $ | 4,560 | $ | 14,520 | $ | 14,920 | ||||||||
Aerospace & Defense | ||||||||||||||||
Net sales | $ | 20,810 | $ | 20,330 | $ | 58,000 | $ | 60,160 | ||||||||
Operating profit | $ | 6,030 | $ | 5,420 | $ | 15,710 | $ | 14,000 | ||||||||
Engineered Components | ||||||||||||||||
Net sales | $ | 51,880 | $ | 46,010 | $ | 154,180 | $ | 126,870 | ||||||||
Operating profit | $ | 6,310 | $ | 7,730 | $ | 22,620 | $ | 19,010 | ||||||||
Cequent Asia Pacific | ||||||||||||||||
Net sales | $ | 37,480 | $ | 26,020 | $ | 94,230 | $ | 67,390 | ||||||||
Operating profit | $ | 3,950 | $ | 5,250 | $ | 9,000 | $ | 9,720 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | 600 | $ | — | $ | 2,880 | $ | — | ||||||||
Excluding Special Items, operating profit would have been | $ | 4,550 | $ | 5,250 | $ | 11,880 | $ | 9,720 | ||||||||
Cequent Americas | ||||||||||||||||
Net sales | $ | 103,000 | $ | 96,520 | $ | 319,990 | $ | 306,190 | ||||||||
Operating profit | $ | 8,430 | $ | 9,580 | $ | 28,090 | $ | 30,630 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | 1,500 | $ | — | $ | 3,840 | $ | — | ||||||||
Excluding Special Items, operating profit would have been | $ | 9,930 | $ | 9,580 | $ | 31,930 | $ | 30,630 | ||||||||
Corporate Expenses | ||||||||||||||||
Operating loss | $ | (10,140 | ) | $ | (6,990 | ) | $ | (26,100 | ) | $ | (20,500 | ) | ||||
Total Company | ||||||||||||||||
Net sales | $ | 335,870 | $ | 277,660 | $ | 971,870 | $ | 824,310 | ||||||||
Operating profit | $ | 36,600 | $ | 35,790 | $ | 108,540 | $ | 104,920 | ||||||||
Total Special Items to consider in evaluating operating profit: | $ | 2,100 | $ | — | $ | 6,720 | $ | — | ||||||||
Excluding Special Items, operating profit would have been | $ | 38,700 | $ | 35,790 | $ | 115,260 | $ | 104,920 | ||||||||
8
Appendix I
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited - dollars in thousands, except per share amounts)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Income from continuing operations, as reported | $ | 19,960 | $ | 16,980 | $ | 49,380 | $ | 43,680 | ||||||||
Less: Net income attributable to noncontrolling interests | 1,290 | — | 1,560 | — | ||||||||||||
Income from continuing operations attributable to TriMas Corporation | 18,670 | 16,980 | 47,820 | 43,680 | ||||||||||||
After-tax impact of Special Items to consider in evaluating quality of income from continuing operations: | ||||||||||||||||
Severance and business restructuring costs | 1,420 | — | 4,520 | — | ||||||||||||
Debt extinguishment costs | — | — | 4,400 | 2,460 | ||||||||||||
Excluding Special Items, income from continuing operations attributable to TriMas Corporation would have been | $ | 20,090 | $ | 16,980 | $ | 56,740 | $ | 46,140 | ||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Diluted earnings per share from continuing operations attributable to TriMas Corporation, as reported | $ | 0.47 | $ | 0.49 | $ | 1.28 | $ | 1.26 | ||||||||
After-tax impact of Special Items to consider in evaluating quality of EPS from continuing operations: | ||||||||||||||||
Severance and business restructuring costs | 0.04 | — | 0.12 | — | ||||||||||||
Debt extinguishment costs | — | — | 0.12 | 0.07 | ||||||||||||
Excluding Special Items, EPS from continuing operations would have been | $ | 0.51 | $ | 0.49 | $ | 1.52 | $ | 1.33 | ||||||||
Weighted-average shares outstanding for the three and nine months ended September 30, 2012 and 2011 | 39,508,503 | 34,901,277 | 37,379,292 | 34,736,307 | ||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Operating profit from continuing operations, as reported | $ | 36,600 | $ | 35,790 | $ | 108,540 | $ | 104,920 | ||||||||
Special Items to consider in evaluating quality of earnings: | ||||||||||||||||
Severance and business restructuring costs | 2,100 | — | 6,720 | — | ||||||||||||
Excluding Special Items, operating profit from continuing operations would have been | $ | 38,700 | $ | 35,790 | $ | 115,260 | $ | 104,920 | ||||||||
9
Third Quarter 2012 Earnings Presentation October 25, 2012 NASDAQ • TRS
Forward Looking Statements Any “forward-looking” statements contained herein, including those relating to market conditions or the Company’s 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 Company’s business and industry, the Company’s substantial leverage, liabilities imposed by the Company’s debt instruments, market demand, competitive factors, supply constraints, material and energy costs, technology factors, litigation, government and regulatory actions, the Company’s accounting policies, future trends, and other risks which are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2011, and in the Company’s 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. In this presentation, certain non-GAAP financial measures may be used. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure may be found at the end of this this presentation or in the third quarter 2012 earnings release available on the Company’s website. Additional information is available at www.trimascorp.com under the “Investors” section. 2
Agenda • Opening Remarks • Financial Highlights • Segment Highlights • Outlook and Summary • Questions and Answers • Appendix 3
Opening Remarks – Third Quarter Results • Record quarterly sales of $336 million – up 21% compared to Q3 2011 – Continued to gain market share in multiple businesses via rapid responses to short term customer needs – Investments in new products and higher growth markets showing results – Bolt-on acquisitions performed well – achieving revenue and cost synergies • Q3 income(1) increased 18% and Q3 EPS(1) increased 4% on 13% higher shares, compared to Q3 2011 • Accelerating growth programs and investments today to capitalize on opportunities • Achieving 3% total cost productivity; Lean initiatives gaining traction • Additional investments in flexible and productive manufacturing footprint closer to our customers We are making decisions to capture growth and invest for the future. 4 (1) Defined as income and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix.
Current Environment Headwinds • European downturn continues • New geographies take time to penetrate (eg. Brazil) • Overall industrial production – “holding pattern until election” • Currency translation • Costs related to capacity adds at Monogram and Rieke • Customers and growth strategy create upward pressure on capex and working capital 5 Uncertain economy and some tough markets – increased focus on “bright spots.” Positives • New product sales in majority of businesses • Aircraft build rates driving record production and backlogs at Monogram • Additional sales in Asia in multiple businesses • Oil drilling up ~7% • Customers require speed – opportunities to increase market share • Global customers want global suppliers with local plants • Solid pipeline of bolt-on acquisitions • Emerging markets still attractive
Financial Highlights
Third Quarter Summary • Sales increased 21.0% compared to Q3 2011 – sales increased in all six segments • Investments in bolt-on acquisitions, new products and geographic expansion driving positive results • Productivity efforts continued to fund growth initiatives – productivity savings in line with target of 3% • Operating profit margin negatively impacted by acquisition-related costs and less favorable product sales mix • Q3 income(1) and EPS(1) increased 18% and 4%, respectively, while absorbing costs related to acquisitions and taking into account incremental shares compared to Q3 2011 • Continued focus on cash flow and working capital management 7 (1) Defined as income and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix. (2) Free Cash Flow is defined as Cash Flows from Operating Activities less Capital Expenditures. (unaudited, $ in millions, except per share amounts) (from continuing operations) Q3 2012 Q3 2011 % Chg Revenue 335.9$ 277.7$ 21.0% Operating Profit 36.6$ 35.8$ 2.3% Excl. Special Items (1), Operating Profit would have been: 38.7$ 35.8$ 8.1% Excl. Special Items (1), Operating Profit margin would have been: 11.5% 12.9% -140 bps Inco e 20.0$ 17.0$ 17.6% Income attributable to TriMas Corporation (1) 18.7$ 17.0$ 10.0% Excl. Special Items (1), Income attributable to TriMas Corporation would have been: 20.1$ 17.0$ 18.3% Diluted earnings per share, attributable to TriMas Corporation 0.47$ 0.49$ -4.1% Excl. Special Items (1), diluted earnings per share attributable to TriMas Corporation would have been: 0.51$ 0.49$ 4.1% Free Cash Flow (2) 10.5$ 30.7$ -65.9% Total Debt 430.0$ 476.0$ -9.7%
8 ($ in millions) Capitalization Total Debt and Leverage Ratio (including A/R Facility) Comments: • Reduced interest expense by $1.3M in Q3 2012 as compared to Q3 2011 • Q3 2012 leverage ratio of 2.29x • Continued focus on deleveraging • Refinance largely complete As of September 30, 2012, TriMas had $217.2 million of cash and available liquidity under its revolving credit and accounts receivable facilities. $754 $657 $630 $515 $495 $470 $430 1x 2x 3x 4x 5x 6x $200 $300 $400 $500 $600 $700 $800 YE 06 YE 07 YE 08 YE 09 YE 10 YE 11 9/30/2012 Leve ra ge R ati o To tal D e b t Total Indebtedness Leverage
Refinance Summary 9 As of 9/30/2012(1) Amount Rate Maturity Revolving Credit Facility $125M(2) LIBOR plus 3.25% June 2016 Term Loan B $217M LIBOR plus 3.00% (LIBOR floor of 1.25%) June 2017 Senior Secured Notes $197M 9.75% December 2017 Post Refinance(1) Amount Rate Maturity Revolving Credit Facility $250M LIBOR plus 2.00% (3) October 2017 Term Loan A $200M LIBOR plus 2.00% (3) October 2017 Term Loan B $200M LIBOR plus 2.75% (LIBOR floor of 1.00%) October 2019 On a pro forma basis, we estimate annual cash interest savings of $14 million. (1) The Company did not refinance Non-U.S. Bank Debt or the A/R Facility during the recent transaction. (2) No amount outstanding as of 9/30/12. (3) Subject to a step-up to LIBOR plus 2.5% or step-down to LIBOR plus 1.5% based on leverage ratio. • Substantial support from both existing and new lenders • Reduced rates, extended maturities and increased financial flexibility • Moody’s upgraded TriMas with a positive outlook • Possible efforts to fix variable interest rates
Segment Highlights
Packaging Q3 2012 Results: • Sales increased primarily as a result of acquisitions and specialty systems product sales gains — Increase in North America industrial product sales offset declines in Europe — Impact of unfavorable currency exchange • Operating profit and margin increased primarily due to higher sales, the recognition of a benefit plan deferred gain and ongoing productivity initiatives • Margins impacted by less favorable product sales mix — Innovative Molding and Arminak businesses have lower margins than the rest of business – margins improving — Decrease in European industrial closure sales ($ in millions) Key Initiatives: • Target specialty dispensing and closure products in higher growth end markets — Food, beverage, nutrition, cosmetic, personal care and pharmaceutical • Increase focus on Asian market and cultivate other geographic opportunities • Integrate bolt-on acquisitions into global sales network, while growing margins • Provide customized solutions focused on customer needs, differentiation and delivery speed • Increase low-cost country sourcing and expand flexible manufacturing footprint • Ensure new products continue to have barriers to entry 11 Net Sales $46.1 $77.2 Q3 2011 Q3 2012 67.6% Operating Profit $10.2 $18.2 Q3 2011 Q3 2012 78.1%
Energy ($ in millions) Q3 2012 Results: • Sales increased as a result of continued market share gains of highly- engineered bolts, the July acquisition in Brazil and additional sales generated by newer branches • Operating profit decreased due to costs related to the acquisition, increased sales at new branches which typically have lower margins and higher SG&A in support of branch expansion Key Initiatives: • Replicate U.S. branch strategy – expand business capabilities with major customers globally • Execute on growth initiatives in Brazil • Increase sales of specialty products • Maximize supply chain for cost and delivery • Improve margins through successful ramp-up of new branches 12 Net Sales $42.7 $45.5 Q3 2011 Q3 2012 6.5% Operating Profit $4.6 $3.8 Q3 2011 Q3 2012 -17.1%
Aerospace & Defense Key Initiatives: • Expand aerospace fastener product lines to increase content and applications per aircraft • Leverage positive end market trends including composite aircraft and robotic assembly • Capture incremental opportunities in emerging markets • Drive ongoing Lean initiatives to lower working capital and reduce costs • Consider complementary bolt-on acquisitions • Transition defense business from base relocation management to bidding on new projects ($ in millions) Q3 2012 Results: • Double-digit sales increase in the aerospace business more than offset lower sales in the defense business • Increased order activity and backlogs as airplane frame manufacturers ramp-up build rates • Operating profit and margin increased compared to Q3 2011 as aerospace product sales comprised a larger percentage of total sales and have significantly higher margins • Margins also benefited from productivity gains, as well as lower SG&A expenses 13 Net Sales $20.3 $20.8 Q3 2011 Q3 2012 2.4% Operating Profit $5.4 $6.0 Q3 2011 Q3 2012 11.3%
Engineered Components ($ in millions) Key Initiatives: • Expand complementary product lines at well site and grow compression products – product diversification decreases cyclicality • Grow products to support the shift toward increased use of natural gas and production in shale formations • Expand into new markets for cylinder business • Continue to expand product offering and geographies • Continue to reduce costs and improve working capital turnover Q3 2012 Results: • Engines, compressors and other well site content sales increased due to increased levels of oil drilling and new products • Industrial cylinder sales increased primarily due to market share gains • Operating profit and related margin decreased due to a less favorable product sales mix in the engine business 14 Net Sales $46.0 $51.9 Q3 2011 Q3 2012 12.8% Operating Profit $7.7 $6.3 Q3 2011 Q3 2012 -18.4%
Cequent (Americas & Asia Pacific) ($ in millions) $46.4 Q3 2012 Results: • Sales in Americas increased in the original equipment and retail channels as a result of new products and increased market share • Americas operating profit(1) increased due to higher sales levels, while operating profit margin(1) declined slightly due to higher SG&A in support of the acquisition in Brazil and other growth initiatives • Asia Pacific sales increased due to new business awards in Thailand, the acquisitions in New Zealand and South Africa, and an improved economy • Asia Pacific operating profit(1) decreased as a result of acquisition costs and additional costs related to the manufacturing plant consolidation • Productivity projects continued in Q3 to improve the manufacturing footprint in Americas and Asia Pacific Key Initiatives: • Leverage full product line and strong brands for additional market share and cross-selling • Expand sales in new growing geographies • Continue to improve utilization of low cost country manufacturing footprint in Thailand and Mexico • Integrate opportunistic, bolt-on acquisition to capture synergies • Continue to reduce fixed costs and simplify the businesses • Improve processes for better customer service and support • Continue to reduce working capital requirements Asia Pacific Americas 15 Asia Pacific Americas (1) Excluding “Special Items” for each period which are provided in the Appendix. $37.5 $103.0 Net Sales $26.0 $96.5 Q3 2011 Q3 2012 $122.5 $140.5 14.6% $4.6 $9.9 Operating Profit (1) $5.2 $9.6 Q3 2011 Q3 2012 $14.5 -2.3% $14.8
Outlook and Summary
YTD 2012 Summary • Tenth consecutive quarter over quarter of double-digit sales and income growth(1) • Strong organic growth through product innovation, geographic expansion, market share gains and increased end market demand • Acquisitions on schedule with revenue and cost synergies • Follow our customers in growing, global markets; Brazil, China, Mexico, South Africa and Thailand are priorities • New plants and expansions in Australia, Thailand, Brazil, Mexico and U.S. • Underlying margins solid – acquisitions and new programs have margin ramp-up plans • Continuous productivity initiatives fund investments for long-term growth • Improved capital structure with continued focus on cash flow, working capital and leverage More and faster! 17 (1) Defined as income and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix.
2012 Outlook Outlook as of 2/27/12 and 4/26/12 Outlook as of 7/30/12 Outlook as of 10/25/12 Sales Growth 7% to 10% 10% to 14% 15% to 17% Earnings Per Share, diluted(1) $1.75 to $1.85 $1.75 to $1.85 (Post May equity offering and 4 million incremental shares) $1.75 to $1.85 Free Cash Flow(2) $40 to $50 million $40 to $50 million $30 to $40 million Capital Expenditures 3% - 4% of sales 3.5% - 4% of sales ~ 4% of sales (1) Excluding Special Items (2) 2012 Free Cash Flow is defined as Cash Flow from Operating Activities less Capital Expenditures. Increasing our investments (bolt-ons, capex and people) for future growth and productivity. 18
Strategic Aspirations Strategic aspirations are the foundation for 2013. 19 • Generate high single-digit top-line growth • Invest in growing end markets through new products, global expansion and acquisitions • Drive 3% to 5% total gross cost productivity gains annually – utilize savings to fund growth • Grow earnings faster than revenue growth • Continue to decrease leverage ratio • Strive to be a great place to work
Questions & Answers
Appendix
YTD Summary • Sales increased 18% as compared to YTD Q3 2011 as a result of the successful execution of the Company’s growth initiatives • Productivity efforts continue to fund growth and offset commodity inflation • Income(1) and EPS(1) increased 23% and 14% compared to YTD Q3 2011 due to increased sales levels and improved debt structure – Record YTD earnings • Continued focus on cash flow and debt reduction (1) Defined as income and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix. (2) Free Cash Flow is defined as Cash Flows from Operating Activities Less Capital Expenditures. 22 (unaudited, $ in millions, except per share amounts) (from continuing operations) Q3 YTD 2012 Q3 YTD 2011 % Chg Revenue 971.9$ 824.3$ 17.9% Operating Profit 108.5$ 104.9$ 3.5% Excl. Special Items (1), Operating Profit would have been: 115.3$ 104.9$ 9.9% Excl. Special Items (1), Operating Profit margin would have been: 11.9% 12.7% -80 bps Income 49.4$ 43.7$ 13.0% Income attributable to TriMas Corporation (1) 47.8$ 43.7$ 9.5% Excl. Special Items (1), Income attributable to TriMas Corporation would have been: 56.7$ 46.1$ 23.0% Diluted earnings per share, attributable to TriMas Corporation 1.28$ 1.26$ 1.6% Excl. Special Items (1), diluted earnings per share attributable to TriMas Corporation would have been: 1.52$ 1.33$ 14.3% Free Cash Flow (2) (21.0)$ 12.0$ unfav Total Debt 430.0$ 476.0$ -9.7%
Condensed Consolidated Balance Sheet (Unaudited, dollars in thousands) 23 September 30, December 31, 2012 2011 Assets Current assets: Cash and cash equivalents …………………………………………...……………………………………….26,090$ 88,920$ Receivables, net of reserves ………………………………………………….………………………….. 185,040 135,610 Inventories .……………………………………………...……………………………………………………...220,450 178,030 Deferred income taxes …………………………………….……………………………………………………………………18,510 18,510 Prepaid expenses and other current assets ..……….………………….……………………………………………………10,150 10,620 Total current assets ………………………………...……….……………………………………………….. 460,240 431,690 Property and equipment, net ..……………………..…………………………………………180,100 159,210 Goodwill …………………………………………………………………………………………………269,260 215,360 Other intangibles, net ……………………………………………………………………….208,910 155,670 Other assets ...………………………………………………………………………………..26,780 24,610 Total assets …………………………………………………………………………………..1,145,290$ 986,540$ Liabilities and Shareholders' Equity Current liabilities: Current maturities, long-term debt ……………………...………………………………………………..17,950$ 7,290$ Accounts payable….…………………………………………….……………………………..148,890 146,930 Accrued liabilities ..………………………………………………….……………………………….79,480 70,140 Total current liabilities ……………………………………...………………………………..246,320 224,360 Long-term debt ………………………………………………..……………………………………412,040 462,610 Deferred income taxes ……………………………………………..…………………………….66,340 64,780 Other long-term liabilities ……………………………………….………………………………………78,780 61,000 Total liabilities …………………………………………………..…………………………………….803,480 812,750 Redeemable noncontrolling interests…………………………………………………..…………………………………….26,370 - Total shareholders' equity …………………………………………..………………….315,440 173,790 Total liabilities and shareholders' equity …………………………….……………………1,145,290$ 986,540$
Capitalization 24 (Unaudited, dollars in thousands) As of September 30, 2012, TriMas had $217.2 million of cash and available liquidity under its revolving credit and accounts receivable facilities. September 30, December 31, 2012 2011 Cash and Cash Equivalents……………………………..………………… 26,090$ 88,920$ Term loan…………………………………………………. 217,190 223,870 Receivables securitization facility……………………………….. - - Revolving credit facilities……………………………….. - - Non-U.S. bank debt and other………………………..….. 15,780 140 232,970 224,010 9 3/4% senior secured notes, due December 2017………………………………………………………………………………. 197,020 245,890 Total Debt………………………...………………………...………………………… 429,990$ 469,900$ Key Ratios: Bank LTM EBITDA……………………………………………………………………………….……………………………………… 195,560$ 176,380$ Interest Coverage Ratio………………………………………………………………… 5.08 x 4.37 x Leverage Ratio…………………………………………………………………... 2.29 x 2.67 x Bank Covenants: Minimum Interest Coverage Ratio………………………………………………………………… 2.75 x 2.50 x Maximum Leverage Ratio………………………………………………………………………………… 3.75 x 4.00 x
Consolidated Statement of Operations (Unaudited, dollars in thousands, except for per share amounts) 25 Nine months ended 2012 2011 2012 2011 Net sales.................................................................................... 335,870$ 277,660$ 971,870$ 824,310$ Cost of sales............................................................................... (245,730) (195,720) (706,930) (582,260) Gross profit.............................................................................. 90,140 81,940 264,940 242,050 Selling, general and administrative expenses.................................. (53,550) (46,170) (156,730) (137,180) Net gain on dispositions of property and equipment......................... 10 20 330 50 Operating profit......................................................................... 36,600 35,790 108,540 104,920 Other expense, net:..................................................................... Interest expense....................................................................... (9,450) (10,730) (30,420) (34,370) Debt extinguishment costs........................................................ - - (6,560) (3,970) Other income (expense), net...................................................... 140 540 (2,410) (1,170) Other expense, net................................................................ (9,310) (10,190) (39,390) (39,510) Income from continuing operations before income tax expense......... 27,290 25,600 69,150 65,410 Income tax expense..................................................................... (7,330) (8,620) (19,770) (21,730) Income from continuing operations................................................. 19,960 16,980 49,380 43,680 Income from discontinued operations, net of income tax expense..... - 1,290 - 3,430 Net income.................................................................................. 19,960 18,270 49,380 47,110 Less: Net income attributable to noncontrolling interests................. 1,290 - 1,560 - Net income attributable to TriMas Corporation................................. 18,670$ 18,270$ 47,820$ 47,110$ Earnings per share attributable to TriMas Corporation - basic: Continuing operations …………………………...….…………………………………………………………………………….…………………….. 0.48$ 0.49$ 1.29$ 1.28$ Discontinued operations…………………….……………………..……. - 0.04 - 0.10 Net income per share…………………………………...……………… 0.48$ — 0.53$ 1.29$ 1.38$ Weighted average common shares - basic …………………………...………………….….. 39,045,282 34,417,879 36,994,192 34,182,592 Earnings per share attributable to TriMas Corporation - diluted: Continuing operations …………………………...….……………………………… 0.47$ 0.49$ 1.28$ 1.26$ Discontinued operations……………………..…………………………… - 0.03 - 0.10 Net income per share…………………………………...………………… 0.47$ 0.52$ 1.28$ 1.36$ Weighted average common shares - diluted …………………………...………………….….. 39,508,503 34,901,277 37,379,292 34,736,307 September 30, September 30, Three months ended
Consolidated Statement of Cash Flow (Unaudited, dollars in thousands) 26 2012 2011 Cash Flows from Operating Activities: Net income..................................................................................................................... 49,380$ 47,110$ Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: Gain on dispositions of property and equipment............................................................... (330) (30) Depreciation................................................................................................................. 18,990 19,160 Amortization of intangible assets................................................................................... 14,460 10,780 Amortization of debt issue costs.................................................................................... 2,240 2,230 Deferred income taxes.................................................................................................. (3,480) 14,420 Debt extinguishment costs............................................................................................ 6,560 3,970 Non-cash compensation expense.................................................................................. 6,640 2,580 Excess tax benefits from stock based compensation....................................................... (2,310) (3,840) Increase in receivables.................................................................................................. (38,750) (39,080) Increase in inventories................................................................................................... (31,440) (13,500) Increase in prepaid expenses and other assets............................................................... (600) (2,320) Decrease in accounts payable and accrued liabilities....................................................... (6,130) (4,750) Other, net.................................................................................................................... 170 (1,180) Net cash provided by operating activities, net of acquisition impact................................ 15,400 35,550 Cash Flows from Investing Activities: Capital expenditures..................................................................................................... (36,440) (23,520) Acquisition of businesses, net of cash acquired.............................................................. (84,600) (28,620) Net proceeds from disposition of assets......................................................................... 2,950 2,240 Net cash used for investing activities........................................................................... (118,090) (49,900) Cash Flows from Financing Activities: Proceeds from sale of common stock in connection with the Company's equity offering, net of issuance ……………...……………………...……………………………………………….… 79,040 - Proceeds from borrowings on term loan facilities............................................................. 140,370 226,520 Repayments of borrowings on term loan facilities............................................................. (130,850) (250,170) Proceeds from borrowings on revolving credit facilities and accounts receivable facility........ 555,300 551,900 Repayments of borrowings on revolving credit facilities and accounts receivable facility....... (555,300) (547,020) Retirement of 9¾% senior secured notes........................................................................ (50,000) - Senior secured notes redemption premium and debt financing fees................................... (4,880) (6,680) Distributions to noncontrolling interests.......................................................................... (820) - Shares surrendered upon vesting of options and restricted stock awards to cover tax obligations…………..………...…….………………….....………………………………………. (990) (830) Proceeds from exercise of stock options........................................................................ 5,680 960 Excess tax benefits from stock based compensation....................................................... 2,310 3,840 Net cash provided by (used for) financing activities........................................................ 39,860 (21,480) Cash and Cash Equivalents: Decrease for the period................................................................................................. (62,830) (35,830) At beginning of period................................................................................................... 88,920 46,370 At end of period......................................................................................................... 26,090$ 10,540$ Supplemental disclosure of cash flow information: Cash paid for interest................................................................................................. 20,990$ 25,350$ Cash paid for taxes.................................................................................................... 23,000$ 12,140$ Nine months ended September 30,
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited, dollars in thousands, except per share amounts) 27 2012 2011 2012 2011 Income from continuing operations, as reported 19,960$ 16,980$ 49,380$ 43,680$ Less: Net income attributable to noncontrolling interests 1,290 - 1,560 - Income from continuing operations attributable to TriMas Corporation 18,670 16,980 47,820 43,680 After-tax impact of Special Items to consider in evaluating quality of income from continuing operations: Severance and business restructuring costs 1,420 - 4,520 - Debt extinguishment costs - - 4,400 2,460 Excluding Special Items, income from continuing operations attributable to TriMas Corporation would have been 20,090$ 16,980$ 56,740$ 46,140$ 2012 2011 2012 2011 Diluted earnings per share from continuing operations attributable to TriMas Corporation, as reported $0.47 $0.49 $1.28 $1.26 After-tax impact of Special Items to consider in evaluating quality of EPS from continuing operations: Severance and business restructuring costs 0.04 - 0.12 - Debt extinguishment costs - - 0.12 0.07 Excluding Special Items, EPS from continuing operations would have been $0.51 $0.49 $1.52 $1.33 Weighted-average shares outstanding for the three and nine months ended September 30, 2012 and 2011 39,508,503 34,901,277 37,379,292 34,736,307 2012 2011 2012 2011 Operating profit from continuing operations, as reported 36,600$ 35,790$ 108,540$ 104,920$ Special Items to consider in evaluating quality of earnings: Severance and business restructuring costs 2,100 - 6,720 - Excluding Special Items, operating profit from continuing operations would have been 38,700$ 35,790$ 115,260$ 104,920$ Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
Company and Business Segment Financial Information – Cont. Ops 28 Three months ended 2012 2011 2012 2011 Packaging Net sales 77,240$ 46,090$ 202,250$ 137,890$ Operating profit 18,240$ 10,240$ 44,700$ 37,140$ Energy Net sales 45,460$ 42,690$ 143,220$ 125,810$ Operating profit 3,780$ 4,560$ 14,520$ 14,920$ Aerospace & Defense Net sales 20,810$ 20,330$ 58,000$ 60,160$ Operating profit 6,030$ 5,420$ 15,710$ 14,000$ Engineered Components Net sales 51,880$ 46,010$ 154,180$ 126,870$ Operating profit 6,310$ 7,730$ 22,620$ 19,010$ Cequent Asia Pacific Net sales 37,480$ 26,020$ 94,230$ 67,390$ Operating profit 3,950$ 5,250$ 9,000$ 9,720$ Special Items to consider in evaluating operating profit: - Severance and business restructuring costs 600$ -$ 2,880$ -$ Excluding Special Items, operating profit would have been 4,550$ 5,250$ 11,880$ 9,720$ Cequent Americas Net sales 103,000$ 96,520$ 319,990$ 306,190$ Operating profit 8,430$ 9,580$ 28,090$ 30,630$ Special Items to consider in evaluating operating profit: - Severance and business restructuring costs 1,500$ -$ 3,840$ -$ Excluding Special Items, operating profit would have been 9,930$ 9,580$ 31,930$ 30,630$ Corporate Expenses Operating loss (10,140)$ (6,990)$ (26,100)$ (20,500)$ Total Company Net sales 335,870$ 277,660$ 971,870$ 824,310$ Operating profit 36,600$ 35,790$ 108,540$ 104,920$ Total Special Items to consider in evaluating operating profit 2,100$ -$ 6,720$ -$ Excluding Special Items, operating profit would have been 38,700$ 35,790$ 115,260$ 104,920$ Nine months ended September 30, September 30, (Unaudited, dollars in thousands)
LTM Bank EBITDA as Defined in Credit Agreement 29 (Unaudited, dollars in thousands) Net income attributable to TriMas Corporation for the twelve months ended September 30, 2012 ……………………………………………………………….. 61,070$ Net income attributable to partially-owned subsidiaries…….………………………………………………………….. (3,650) Interest expense, net (as defined)…………………….………………………………………………………….. 40,530 Income tax expense.……………………………….…………………………………………………………. 30,000 Depreciation and amortization……………………………...…………………………………………………….. 41,240 Non-cash compensation expense………………….…………………..………………………………….. 7,570 Other non-cash expenses or losses………………………………………………………………………………….. 4,650 Non-recurring expenses or costs in connection with acquisition integration………………...…………………………………………………………… 300 Debt extinguishment costs……………………...………………………………………………………………… 6,560 Non-recurring expenses or costs for cost saving projects…………………………………………………………………. 5,730 Negative EBITDA from discontinued operations…………………...…………………………………………………………………….. 1,840 Permitted dispositions……………………...………………………………………………………………… (1,250) Permitted acquisitions………………………………………………………………………………… 970 Bank EBITDA - LTM Ended September 30, 2012 (1)…………………………………………………………………………………………… 195,560$ (1) As defined in the Credit Agreement dated June 21, 2011.