Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 6, 2007
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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001-10716 |
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38-2687639 |
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(State or other jurisdiction |
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(Commission |
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(IRS Employer |
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of incorporation) |
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File Number) |
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Identification No.) |
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39400 Woodward Avenue, Suite 130, Bloomfield Hills, Michigan |
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48304 |
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(Address of principal executive offices) |
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(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 “Company”) issued a press release and held a teleconference on November 6, 2007, reporting its financial results for the third quarter ending September 30, 2007. 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 Company’s website at www.trimascorp.com.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are filed herewith:
Exhibit No. |
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Description |
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99.1 |
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Press Release |
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99.2 |
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The Company’s visual presentation titled “Third Quarter 2007 Earnings Call” |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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TRIMAS CORPORATION |
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Date: |
November 6, 2007 |
By: |
/s/ Grant H. Beard |
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Name: |
Grant H. Beard |
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Title: |
Chief Executive Officer |
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3
Exhibit 99.1
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For more information, contact: |
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Sherry Lauderback |
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VP, Investor Relations & Communications |
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(248) 631-5506 |
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sherrylauderback@trimascorp.com |
FOR IMMEDIATE RELEASE
TRIMAS CORPORATION REPORTS RECORD THIRD QUARTER
SALES AND EARNINGS
BLOOMFIELD HILLS, Mich. — November 6, 2007 — TriMas Corporation (NYSE: TRS) today announced financial results for the quarter ended September 30, 2007. Sales and earnings performance for the quarter ended September 30, 2007 represented a third quarter record for the Company.
Third Quarter Highlights
• Sales for the third quarter were up 7.2% to $262.2 million, as compared to $244.6 million in the third quarter of 2006.
• Operating profit improved 6.1% to $27.3 million, as compared to $25.7 million in the third quarter of 2006.
• Adjusted EBITDA(1) from continuing operations for third quarter 2007 increased 8.4% to $37.1 million, as compared to $34.2 million in the third quarter of 2006.
• Income from continuing operations increased to $6.6 million, or $0.20 per share on a fully-diluted basis, as compared to a loss from continuing operations of $2.3 million, or $0.11 per share on a fully-diluted basis in third quarter 2006. The results from third quarter 2006 included a non-cash, after-tax charge of $5.4 million, or $0.26 per share, related to the Company’s successful refinancing of its bank debt.
“The third quarter of 2007 represents the eighth consecutive quarter of improved year-over-year operating performance,” said Grant Beard, TriMas’ President and Chief Executive Officer. “With 7.2% sales growth for the quarter, we are seeing the positive results of our growth strategies and our business model as a diversified industrial company. Industrial Specialties continued its strong performance as sales and operating profit increased 22.3% and 19.8%, respectively, compared to the year ago period as this segment benefited from product expansion and market share gains. We are also pleased with the quarterly performance of our RV & Trailer Products and Recreational Accessories business segments which increased both sales and operating profit against a back drop of weak end markets.”
Beard continued, “While we are feeling the impact of the recent challenges facing some of the end markets of our Packaging Systems and Energy Products business segments, we still firmly believe in the long-term growth prospects for these segments. We will continue to drive organic growth through new product development and international expansion initiatives, while continuing to focus on improving our operational efficiency.”
(1) See Appendix I for reconciliation of Non-GAAP financial measure Adjusted EBITDA to the Company’s reported results of operations prepared in accordance with U.S. GAAP.
1
Third Quarter Financial Summary
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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(unaudited - in thousands, except per share amounts) |
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2007 |
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2006 |
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2007 |
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2006 |
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Sales |
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$ |
262,180 |
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$ |
244,590 |
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$ |
839,700 |
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$ |
797,260 |
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Operating profit |
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$ |
27,320 |
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$ |
25,740 |
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$ |
82,360 |
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$ |
85,360 |
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Income (loss) from continuing operations |
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$ |
6,580 |
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$ |
(2,260 |
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$ |
11,780 |
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$ |
9,210 |
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Loss from discontinued operations, net of income taxes |
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$ |
— |
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$ |
(10,870 |
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$ |
(1,340 |
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$ |
(16,240 |
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Net income (loss) |
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$ |
6,580 |
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$ |
(13,130 |
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$ |
10,440 |
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$ |
(7,030 |
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Adjusted EBITDA, continuing operations |
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$ |
37,070 |
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$ |
34,210 |
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$ |
109,430 |
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$ |
112,040 |
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Earnings (loss) per share - basic: |
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- Continuing operations |
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$ |
0.20 |
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$ |
(0.11 |
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$ |
0.44 |
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$ |
0.46 |
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- Discontinued operations |
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— |
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(0.54 |
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(0.05 |
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(0.81 |
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- Net income (loss) |
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$ |
0.20 |
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$ |
(0.65 |
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$ |
0.39 |
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$ |
(0.35 |
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Weighted average common shares - basic |
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33,409,500 |
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20,132,201 |
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26,843,749 |
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20,051,181 |
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Earnings (loss) per share - diluted: |
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- Continuing operations |
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$ |
0.20 |
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$ |
(0.11 |
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$ |
0.44 |
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$ |
0.44 |
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- Discontinued operations |
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— |
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(0.54 |
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(0.05 |
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(0.78 |
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- Net income (loss) |
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$ |
0.20 |
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$ |
(0.65 |
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$ |
0.39 |
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$ |
(0.34 |
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Weighted average common shares - diluted |
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33,457,027 |
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20,132,201 |
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26,859,766 |
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20,759,973 |
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Other Data - Continuing Operations: |
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- Depreciation and amortization |
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$ |
10,920 |
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$ |
9,680 |
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$ |
30,380 |
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$ |
29,800 |
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- Interest expense |
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$ |
15,720 |
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$ |
19,370 |
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$ |
52,920 |
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$ |
59,320 |
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- Debt extinguishment costs |
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$ |
— |
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$ |
8,610 |
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$ |
7,440 |
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$ |
8,610 |
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- Other expense, net |
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$ |
1,170 |
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$ |
1,200 |
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$ |
3,310 |
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$ |
3,120 |
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- Income tax expense (benefit) |
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$ |
3,850 |
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$ |
(1,180 |
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$ |
6,910 |
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$ |
5,100 |
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- Advisory Services Agreement termination fee |
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$ |
— |
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$ |
— |
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$ |
10,000 |
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$ |
— |
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- Costs for early termination of operating leases |
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$ |
— |
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$ |
— |
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$ |
4,230 |
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$ |
— |
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Third Quarter Segment Results
Packaging Systems - Sales decreased 3.1% primarily due to reduced sales of the core industrial closure products resulting from lower end market demand in portions of the industrial chemical, paint and construction markets. Overall, this product group’s margins exceed the margins of the tapes, laminates and consumer dispensing products, which experienced relatively flat sales in the quarter. Operating profit declined due to the decrease in sales levels, increases in steel and resin costs not able to be recovered from customers and additional labor, overhead and selling costs associated with new product growth initiatives. The Company is focused on developing specialty product applications for growing end markets and expanding geographically to generate long-term growth, while recovering increases in raw material costs in the near-term.
2
Energy Products - Sales increased 4.8% due to continued strong growth of specialty gasket sales to the refinery and petrochemical industries. The increase in gasket sales was partially offset by a decline in the sales of compressor engines and repair parts resulting from the lower levels of natural gas drilling activity in Western Canada. Operating profit declined primarily due to the change in product sales mix, specifically volume declines in the engine and repair parts business. While the timing of the recovery of the natural gas market in Canada remains uncertain, the Company plans to continue to launch new products to complement its engine business, while expanding its gasket business internationally.
Industrial Specialties - Sales increased 22.3% due to continued strong market demand and product expansion in the Company’s aerospace fastener, industrial cylinder, defense and precision cutting tool businesses. The segment also benefited from the August 2007 acquisition of a medical device manufacturer. Operating profit increased in line with revenue growth. The Company plans to leverage its successful growth strategies by continuing to develop specialty products for growing end markets and expand international sales efforts.
RV & Trailer Products - Sales increased 6.0% primarily due to new product sales in the electrical products business, partially offset by weak end market demand in the trailer products business. Operating profit improved due to the increased sales of electrical products and margin improvement in the Company’s Australian business. The Company’s focus is to continue to leverage strong brand positions for increased market share, cross-sell the product portfolio into all channels and expand internationally, while continuing to proactively manage costs and operational efficiency.
Recreational Accessories - Sales increased 7.4% due to the introduction of new programs and market share gains, despite a weak end market. Operating profit continued to improve as a result of full run-rate savings from sourcing initiatives and productivity improvements implemented throughout 2006. The Company plans to continue to increase market share in the United States and Canada and pursue new market opportunities in select international markets.
Financial Position
TriMas ended the quarter with total debt of $624.5 million and funding under receivables securitization of $44.3 million for a total of $668.8 million. Total debt and receivables securitization decreased by $85.4 million when compared to the year ago period, due primarily to the retirement of $100 million face value of senior subordinated notes with proceeds from the Company’s Initial Public Offering in the second quarter of 2007. TriMas ended the quarter with cash of $4.2 million and $112.5 million of availability under its existing revolving credit and receivables securitization facilities.
Acquisitions
On August 1, 2007, TriMas acquired DEW Technologies, Inc., a manufacturer of specialty, high-precision spinal and trauma implant products serving the orthopedic device industry. The addition of DEW Technologies provides the Company access to new markets and broadens its product portfolio into the medical industry, a market with significant growth opportunities. DEW Technologies operates as part of the Industrial Specialties business segment. On July 12, 2007, the Company also acquired the “Fifth Gear” product line from Quest Technologies LLC to complement the Recreational Accessories segment’s product portfolio, targeting the recreational vehicle market.
3
Manufacturing Consolidation
As previously announced on October 4, 2007, TriMas plans to close its Huntsville, Ontario, Canada plant that manufactures trailer hitches and related accessories for the automobile and light-duty truck aftermarket. The Huntsville plant operations, included in the Recreational Accessories business segment, will be phased out by December 2007 and consolidated into the Company’s Goshen, Indiana facility. This action, which was enabled by significant productivity gains at the Goshen facility, is expected to result in annual pre-tax savings of approximately $2 to $3 million. TriMas will record an estimated pre-tax charge of approximately $11 million, of which $10 million will be recognized in the fourth quarter of 2007, when management approved this action. The remaining amount will be recognized in 2008. Approximately $4 million of the fourth quarter 2007 charge will represent non-cash charges related to accelerated depreciation on property and equipment.
Outlook
In its August 2, 2007 second quarter earnings release, TriMas provided full year 2007 Adjusted EBITDA from continuing operations guidance of $148 million to $156 million, compared to $138 million in Adjusted EBITDA from continuing operations earned in 2006. This range excludes approximately $14 million of costs and expenses related to the use of IPO proceeds and the estimated fourth quarter charges associated with the Huntsville plant closure.
As a result of weakness in certain end markets, most notably the paint and construction industries, and continued low levels of natural gas drilling activity in Western Canada, the Company now expects to be at the low-end of the previously disclosed Adjusted EBITDA from continuing operations range of $148 million to $156 million.
The above outlook does not include the impact of any future unidentified restructuring charges and sales or acquisitions of operating assets that may occur from time to time due to management decisions and changing business circumstances. The outlook above also does not include the impact of any potential future non-cash impairment charges of goodwill, intangibles and fixed assets. The Company is currently unable to forecast the likelihood of occurrence, timing and/or magnitude of any such amounts or events. See also “Cautionary Notice Regarding Forward-looking Statements” on page 5 of this release.
Conference Call
TriMas will broadcast its third quarter earnings conference call today, Tuesday, November 6, 2007, at 11:00 a.m. EST. President and Chief Executive Officer Grant Beard and Chief Financial Officer E.R. “Skip” Autry will discuss the Company’s recent financial performance and respond to questions from the investment community. The visual presentation that will accompany the call will be available on the Company’s website at www.trimascorp.com prior to the call.
To participate by phone, please dial: (866) 261-3331. Participants should ask to be connected to the TriMas third quarter conference call (reservation number 1162282). The conference call will be web cast simultaneously on the Company’s website at www.trimascorp.com. A replay of the conference call will be available on TriMas’ website or by dialing (866) 837-8032 (reservation number 1162282) beginning November 6, 2007 at 2:00 p.m. EST through November 13, 2007 at 11:59 p.m. EST.
4
Cautionary Notice Regarding Forward-looking Statements
This release contains “forward-looking” statements, as that term is defined by the federal securities laws, about our financial condition, results of operations and business. Forward-looking statements include: certain anticipated, believed, planned, forecasted, expected, targeted and estimated results along with TriMas’ outlook concerning future results. When used in this release, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including without limitation, management’s examination of historical operating trends and data, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for these views. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved. These forward-looking statements are subject to numerous assumptions, risks and uncertainties and accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution readers not to place undue reliance on the statements, which speak to conditions only as of the date of this release. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Risks and uncertainties that could cause actual results to vary materially from those anticipated in the forward-looking statements included in this release include general economic conditions in the markets in which we operate and industry-based factors such as: technological developments that could competitively disadvantage us, increases in our raw material, energy, and healthcare costs, our dependence on key individuals and relationships, exposure to product liability, recall and warranty claims, compliance with environmental and other regulations, and competition within our industries. In addition, factors more specific to us could cause actual results to vary materially from those anticipated in the forward-looking statements included in this release such as our substantial leverage, limitations imposed by our debt instruments, our ability to successfully pursue our stated growth strategies and opportunities, as well as our ability to identify attractive and other strategic acquisition opportunities and to successfully integrate acquired businesses and complete actions we have identified as providing cost-saving opportunities.
About TriMas
Headquartered in Bloomfield Hills, Mich., TriMas is a diversified growth company of high-end, specialty niche businesses manufacturing a variety of products for commercial, industrial and consumer markets worldwide. TriMas is organized into five strategic business groups: Packaging Systems, Energy Products, Industrial Specialties, RV & Trailer Products, and Recreational Accessories. TriMas has nearly 5,000 employees at 80 different facilities in 10 countries. For more information, visit www.trimascorp.com.
5
TriMas
Corporation
Consolidated Balance Sheet
(Unaudited — dollars in thousands)
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September 30, |
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December 31, |
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2007 |
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2006 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
4,160 |
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$ |
3,600 |
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Receivables, net |
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105,600 |
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99,240 |
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Inventories, net |
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180,390 |
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165,360 |
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Deferred income taxes |
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24,310 |
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24,310 |
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Prepaid expenses and other current assets |
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7,420 |
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7,320 |
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Assets of discontinued operations held for sale |
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— |
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11,770 |
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Total current assets |
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321,880 |
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311,600 |
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Property and equipment, net |
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192,280 |
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165,200 |
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Goodwill |
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538,320 |
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529,730 |
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Other intangibles, net |
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228,720 |
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240,120 |
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Other assets |
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35,810 |
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39,410 |
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Total assets |
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$ |
1,317,010 |
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$ |
1,286,060 |
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Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Current maturities, long-term debt |
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$ |
10,190 |
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$ |
9,700 |
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Accounts payable |
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111,890 |
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100,070 |
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Accrued liabilities |
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75,580 |
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71,970 |
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Liabilities of discontinued operations |
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— |
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23,530 |
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Total current liabilities |
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197,660 |
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205,270 |
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Long-term debt |
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614,340 |
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724,790 |
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Deferred income taxes |
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90,560 |
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89,940 |
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Other long-term liabilities |
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40,110 |
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33,280 |
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Total liabilities |
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942,670 |
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1,053,280 |
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Preferred stock $0.01 par: Authorized 100,000,000 shares; |
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Issued and outstanding: None |
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— |
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— |
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Common stock, $0.01 par: Authorized 400,000,000 shares; |
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Issued and outstanding: 33,409,500 and 20,759,500 shares at September 30, 2007 and December 31, 2006, respectively |
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330 |
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210 |
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Paid-in capital |
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525,750 |
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399,070 |
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Accumulated deficit |
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(204,900 |
) |
(215,220 |
) |
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Accumulated other comprehensive income |
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53,160 |
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48,720 |
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Total shareholders’ equity |
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374,340 |
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232,780 |
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Total liabilities and shareholders’ equity |
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$ |
1,317,010 |
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$ |
1,286,060 |
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6
TriMas
Corporation
Consolidated Statement of Operations
(Unaudited — dollars in thousands, except for share amounts)
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Three months ended |
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Nine months ended |
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September 30, |
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September 30, |
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2007 |
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2006 |
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2007 |
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2006 |
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Net sales |
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$ |
262,180 |
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$ |
244,590 |
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$ |
839,700 |
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$ |
797,260 |
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Cost of sales |
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(190,380 |
) |
(177,690 |
) |
(607,310 |
) |
(581,960 |
) |
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Gross profit |
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71,800 |
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66,900 |
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232,390 |
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215,300 |
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Selling, general and administrative expenses |
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(42,980 |
) |
(41,670 |
) |
(134,430 |
) |
(130,350 |
) |
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Advisory services agreement termination fee |
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— |
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— |
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(10,000 |
) |
— |
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||||
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Costs for early termination of operating leases |
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— |
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— |
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(4,230 |
) |
— |
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||||
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Gain (loss) on dispositions of property and equipment |
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(1,500 |
) |
510 |
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(1,370 |
) |
410 |
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||||
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Operating profit |
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27,320 |
|
25,740 |
|
82,360 |
|
85,360 |
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||||
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Other expense, net: |
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|
|
|
|
|
||||
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Interest expense |
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(15,720 |
) |
(19,370 |
) |
(52,920 |
) |
(59,320 |
) |
||||
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Debt extinguishment costs |
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— |
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(8,610 |
) |
(7,440 |
) |
(8,610 |
) |
||||
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Other, net |
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(1,170 |
) |
(1,200 |
) |
(3,310 |
) |
(3,120 |
) |
||||
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Other expense, net |
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(16,890 |
) |
(29,180 |
) |
(63,670 |
) |
(71,050 |
) |
||||
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Income (loss) from continuing operations before income tax benefit (expense) |
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10,430 |
|
(3,440 |
) |
18,690 |
|
14,310 |
|
||||
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Income tax benefit (expense) |
|
(3,850 |
) |
1,180 |
|
(6,910 |
) |
(5,100 |
) |
||||
|
Income (loss) from continuing operations |
|
6,580 |
|
(2,260 |
) |
11,780 |
|
9,210 |
|
||||
|
Loss from discontinued operations, net of income tax benefit (expense) |
|
— |
|
(10,870 |
) |
(1,340 |
) |
(16,240 |
) |
||||
|
Net income (loss) |
|
$ |
6,580 |
|
$ |
(13,130 |
) |
$ |
10,440 |
|
$ |
(7,030 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings (loss) per share - basic: |
|
|
|
|
|
|
|
|
|
||||
|
Continuing operations |
|
$ |
0.20 |
|
$ |
(0.11 |
) |
$ |
0.44 |
|
$ |
0.46 |
|
|
Discontinued operations, net of income tax benefit (expense) |
|
— |
|
(0.54 |
) |
(0.05 |
) |
(0.81 |
) |
||||
|
Net income (loss) per share |
|
$ |
0.20 |
|
$ |
(0.65 |
) |
$ |
0.39 |
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average common shares - basic |
|
33,409,500 |
|
20,132,201 |
|
26,843,749 |
|
20,051,181 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings (loss) per share - diluted: |
|
|
|
|
|
|
|
|
|
||||
|
Continuing operations |
|
$ |
0.20 |
|
$ |
(0.11 |
) |
$ |
0.44 |
|
$ |
0.44 |
|
|
Discontinued operations, net of income tax benefit (expense) |
|
— |
|
(0.54 |
) |
(0.05 |
) |
(0.78 |
) |
||||
|
Net income (loss) per share |
|
$ |
0.20 |
|
$ |
(0.65 |
) |
$ |
0.39 |
|
$ |
(0.34 |
) |
|
Weighted average common shares - diluted |
|
33,457,027 |
|
20,132,201 |
|
26,859,766 |
|
20,759,973 |
|
||||
7
TriMas Corporation
Consolidated Statement of Cash Flows
(Unaudited — dollars in thousands)
|
|
|
Nine months ended |
|
||||
|
|
|
September 30, |
|
||||
|
|
|
2007 |
|
2006 |
|
||
|
Net income (loss) |
|
$ |
10,440 |
|
$ |
(7,030 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities, net of acquisition impact: |
|
|
|
|
|
||
|
Loss on dispositions of property and equipment |
|
1,570 |
|
2,690 |
|
||
|
Impairment of assets |
|
— |
|
15,850 |
|
||
|
Depreciation |
|
18,730 |
|
17,430 |
|
||
|
Amortization of intangible assets |
|
11,650 |
|
12,390 |
|
||
|
Amortization of debt issue costs |
|
4,580 |
|
11,590 |
|
||
|
Deferred income taxes |
|
700 |
|
(700 |
) |
||
|
Non-cash compensation expense |
|
340 |
|
1,270 |
|
||
|
Net proceeds from (reductions in) sale of receivables and receivables securitization |
|
28,610 |
|
(2,360 |
) |
||
|
Increase in receivables |
|
(30,970 |
) |
(7,090 |
) |
||
|
Increase in inventories |
|
(10,790 |
) |
(6,440 |
) |
||
|
(Increase) decrease in prepaid expenses and other assets |
|
2,320 |
|
(360 |
) |
||
|
Increase (decrease) in accounts payable and accrued liabilities |
|
8,090 |
|
(10,690 |
) |
||
|
Other, net |
|
1,610 |
|
(90 |
) |
||
|
Net cash provided by operating activities, net of acquisition impact |
|
46,880 |
|
26,460 |
|
||
|
|
|
|
|
|
|
||
|
Cash Flows from Investing Activities: |
|
|
|
|
|
||
|
Capital expenditures |
|
(22,520 |
) |
(16,440 |
) |
||
|
Acquisition of leased assets |
|
(29,960 |
) |
(3,140 |
) |
||
|
Acquisition of businesses, net of cash acquired |
|
(13,540 |
) |
— |
|
||
|
Net proceeds from disposition of businesses and other assets |
|
6,150 |
|
980 |
|
||
|
Net cash used for investing activities |
|
(59,870 |
) |
(18,600 |
) |
||
|
|
|
|
|
|
|
||
|
Cash Flows from Financing Activities: |
|
|
|
|
|
||
|
Proceeds from sale of common stock in connection with the Company’s initial public offering, net of issuance costs |
|
126,460 |
|
— |
|
||
|
Repayments of borrowings on senior credit facilities |
|
(2,600 |
) |
(2,130 |
) |
||
|
Repayments of borrowings on term loan facilities |
|
— |
|
(254,960 |
) |
||
|
Proceeds from term loan facilities |
|
— |
|
260,000 |
|
||
|
Proceeds from borrowings on revolving credit facilities |
|
399,580 |
|
576,960 |
|
||
|
Repayments of borrowings on revolving credit facilities |
|
(409,890 |
) |
(585,420 |
) |
||
|
Debt issuance costs |
|
— |
|
(2,160 |
) |
||
|
Retirement of senior subordinated notes |
|
(100,000 |
) |
— |
|
||
|
Net cash provided by (used for) financing activities |
|
13,550 |
|
(7,710 |
) |
||
|
|
|
|
|
|
|
||
|
Cash and Cash Equivalents: |
|
|
|
|
|
||
|
Increase for the period |
|
560 |
|
150 |
|
||
|
At beginning of period |
|
3,600 |
|
3,730 |
|
||
|
At end of period |
|
$ |
4,160 |
|
$ |
3,880 |
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
||
|
Cash paid for interest |
|
$ |
40,880 |
|
$ |
42,170 |
|
|
Cash paid for taxes |
|
$ |
6,840 |
|
$ |
9,020 |
|
8
TriMas Corporation
Company
and Business Segment Financial Information
Continuing Operations
|
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
(unaudited - dollars in thousands) |
|
September 30, |
|
September 30, |
|
||||||||
|
|
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|
||||
|
Packaging Systems |
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
51,770 |
|
$ |
53,410 |
|
$ |
162,220 |
|
$ |
158,450 |
|
|
Operating profit |
|
$ |
8,110 |
|
$ |
9,940 |
|
$ |
27,930 |
|
$ |
27,970 |
|
|
Operating profit as a % of sales |
|
15.7 |
% |
18.6 |
% |
17.2 |
% |
17.7 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Energy Products |
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
40,330 |
|
$ |
38,500 |
|
$ |
122,930 |
|
$ |
117,170 |
|
|
Operating profit |
|
$ |
4,860 |
|
$ |
5,810 |
|
$ |
16,930 |
|
$ |
17,280 |
|
|
Operating profit as a % of sales |
|
12.1 |
% |
15.1 |
% |
13.8 |
% |
14.7 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Industrial Specialties |
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
54,560 |
|
$ |
44,600 |
|
$ |
163,410 |
|
$ |
136,110 |
|
|
Operating profit |
|
$ |
11,860 |
|
$ |
9,900 |
|
$ |
36,770 |
|
$ |
28,170 |
|
|
Operating profit as a % of sales |
|
21.7 |
% |
22.2 |
% |
22.5 |
% |
20.7 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
RV & Trailer Products |
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
45,940 |
|
$ |
43,320 |
|
$ |
152,420 |
|
$ |
150,660 |
|
|
Operating profit |
|
$ |
4,270 |
|
$ |
2,920 |
|
$ |
16,740 |
|
$ |
17,560 |
|
|
Operating profit as a % of sales |
|
9.3 |
% |
6.7 |
% |
11.0 |
% |
11.7 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Recreational Accessories |
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
69,580 |
|
$ |
64,760 |
|
$ |
238,720 |
|
$ |
234,870 |
|
|
Operating profit |
|
$ |
4,920 |
|
$ |
3,910 |
|
$ |
17,420 |
|
$ |
14,270 |
|
|
Operating profit as a % of sales |
|
7.1 |
% |
6.0 |
% |
7.3 |
% |
6.1 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total Company |
|
|
|
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
262,180 |
|
$ |
244,590 |
|
$ |
839,700 |
|
$ |
797,260 |
|
|
Operating profit |
|
$ |
27,320 |
|
$ |
25,740 |
|
$ |
82,360 |
|
$ |
85,360 |
|
|
Operating profit as a % of sales |
|
10.4 |
% |
10.5 |
% |
9.8 |
% |
10.7 |
% |
||||
|
Corporate expenses and management fees |
|
$ |
6,700 |
|
$ |
6,740 |
|
$ |
33,430 |
|
$ |
19,890 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other Data: |
|
|
|
|
|
|
|
|
|
||||
|
- Depreciation and amortization |
|
$ |
10,920 |
|
$ |
9,680 |
|
$ |
30,380 |
|
$ |
29,800 |
|
|
- Interest expense |
|
$ |
15,720 |
|
$ |
19,370 |
|
$ |
52,920 |
|
$ |
59,320 |
|
|
- Debt extinguishment costs |
|
$ |
— |
|
$ |
8,610 |
|
$ |
7,440 |
|
$ |
8,610 |
|
|
- Other expense, net |
|
$ |
1,170 |
|
$ |
1,200 |
|
$ |
3,310 |
|
$ |
3,120 |
|
|
- Income tax expense (benefit) |
|
$ |
3,850 |
|
$ |
(1,180 |
) |
$ |
6,910 |
|
$ |
5,100 |
|
|
- Advisory Services Agreement termination fee |
|
$ |
— |
|
$ |
— |
|
$ |
10,000 |
|
$ |
— |
|
|
- Costs for early termination of operating leases |
|
$ |
— |
|
$ |
— |
|
$ |
4,230 |
|
$ |
— |
|
9
Appendix I
TriMas Corporation
Reconciliation of Non-GAAP Measure Adjusted EBITDA (1)
(Unaudited — dollars in thousands)
|
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|
||||
|
Net income (loss) |
|
$ |
6,580 |
|
$ |
(13,130 |
) |
$ |
10,440 |
|
$ |
(7,030 |
) |
|
Income tax expense (benefit) |
|
3,850 |
|
(8,350 |
) |
6,960 |
|
(5,720 |
) |
||||
|
Interest expense |
|
15,720 |
|
19,370 |
|
52,920 |
|
59,350 |
|
||||
|
Debt extinguishment costs |
|
— |
|
8,610 |
|
7,440 |
|
8,610 |
|
||||
|
Impairment of assets |
|
— |
|
15,850 |
|
— |
|
15,850 |
|
||||
|
Depreciation and amortization |
|
10,920 |
|
9,680 |
|
30,380 |
|
29,820 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
Adjusted EBITDA, total company |
|
37,070 |
|
32,030 |
|
108,140 |
|
100,880 |
|
||||
|
Negative Adjusted EBITDA, discontinued operations |
|
— |
|
2,180 |
|
1,290 |
|
11,160 |
|
||||
|
Adjusted EBITDA, continuing operations |
|
$ |
37,070 |
|
$ |
34,210 |
|
$ |
109,430 |
|
$ |
112,040 |
|
The following represents certain costs and expenses relating to our use of IPO proceeds that are included in the determination of net income (loss) under GAAP and are not added back to net income in determining Adjusted EBITDA, but that we would consider in evaluating the quality of our Adjusted EBITDA.
|
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
|
2007 |
|
2006 |
|
2007 |
|
2006 |
|
||||
|
Costs and expenses related to use of IPO Proceeds: |
|
|
|
|
|
|
|
|
|
||||
|
Advisory Services Agreement termination fee |
|
$ |
— |
|
$ |
— |
|
$ |
10,000 |
|
$ |
— |
|
|
Costs for early termination of operating leases |
|
— |
|
— |
|
4,230 |
|
— |
|
||||
|
Total |
|
$ |
— |
|
$ |
— |
|
$ |
14,230 |
|
$ |
— |
|
(1) The Company defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change, interest, taxes, depreciation, amortization, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. Lease expense and non-recurring charges are included in Adjusted EBITDA and include both cash and non-cash charges related to restructuring and integration expenses. In evaluating our business, management considers and uses Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability. Management believes this measure is useful as an analytical indicator of leverage capacity and debt servicing ability, and uses it to measure financial performance as well as for planning purposes. However, Adjusted EBITDA should not be considered as an alternative to net income, cash flow from operating activities or any other measures calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definition of Adjusted EBITDA used here may differ from that used by other companies.
10
Appendix II
TriMas Corporation
Impact of Costs and Expenses Related to Use of IPO Proceeds
(Unaudited)
|
|
|
|
|
|
|
Earnings |
|
|
|
||||
|
|
|
Operating |
|
|
|
Per Share |
|
Adjusted |
|
||||
|
(dollars in thousands, except for share amounts) |
|
Income |
|
Income (2) |
|
Diluted (3) |
|
EBITDA(4) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
|
As reported(1) - Nine months ended September 30, 2007 |
|
$ |
82,360 |
|
$ |
11,780 |
|
$ |
0.44 |
|
$ |
109,430 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Costs and expenses related to use of IPO proceeds that have reduced our results as reported under U.S. GAAP (5): |
|
|
|
|
|
|
|
|
|
||||
|
Advisory Services Agreement termination fee |
|
$ |
10,000 |
|
$ |
6,300 |
|
$ |
0.24 |
|
$ |
10,000 |
|
|
Costs for early termination of operating leases |
|
4,230 |
|
2,660 |
|
0.10 |
|
4,230 |
|
||||
|
Debt extinguishment costs |
|
— |
|
4,690 |
|
0.17 |
|
— |
|
||||
|
Total |
|
$ |
14,230 |
|
$ |
13,650 |
|
$ |
0.51 |
|
$ |
14,230 |
|
(1) Operating Income, Income, Earnings Per Share - Diluted and Adjusted EBITDA, all from continuing operations.
(2) Impact of costs and expenses related to the use of IPO proceeds, tax-effected at 37%.
(3) Per share impacts of costs and expenses related to the use of IPO proceeds based on diluted shares outstanding of 26,859,766 for the nine months ended September 30, 2007.
(4) The Company defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change, interest, taxes, depreciation, amortization, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. Lease expense and non-recurring charges are included in Adjusted EBITDA and include both cash and non-cash charges related to restructuring and integration expenses. In evaluating our business, management considers and uses Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability. Management believes this measure is useful as an analytical indicator of leverage capacity and debt servicing ability, and uses it to measure financial performance as well as for planning purposes. However, Adjusted EBITDA should not be considered as an alternative to net income, cash flow from operating activities or any other measures calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definition of Adjusted EBITDA used here may differ from that used by other companies.
(5) Represents certain costs and expenses relating to our use of IPO proceeds that are included in the determination of net income, earnings per share and operating income under U.S. GAAP and are not added back to net income in determining Adjusted EBITDA, but that we would consider in evaluating the quality of our Adjusted EBITDA and underlying financial results under U.S. GAAP.
11
Exhibit 99.2
|
|
Third Quarter 2007 Earnings Presentation INNOVATION • INDUSTRY • GROWTH November 6, 2007 |
|
|
This document contains “forward-looking” statements, as that term is defined by the federal securities laws, about our financial condition, results of operations and business. Forward-looking statements include certain anticipated, believed, planned, forecasted, expected, targeted and estimated results along with TriMas’ outlook concerning future results. The words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, management’s examination of historical operating trends and data are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved. These forward-looking statements are subject to numerous assumptions, risks and uncertainties and accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution readers not to place undue reliance on the statements, which speak only as of the date of this document. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Risks and uncertainties that could cause actual results to vary materially from those anticipated in the forward-looking statements included in this document include general economic conditions in the markets in which we operate and industry-based factors such as: technological developments that could competitively disadvantage us, increases in our raw material, energy, and healthcare costs, our dependence on key individuals and relationships, exposure to product liability, recall and warranty claims, work stoppages at our facilities, or our customers or suppliers, risks associated with international markets, protection of or liability associated with our intellectual property, lower cost foreign manufacturers, compliance with environmental and other regulations, and competition within our industries. In addition, factors more specific to us could cause actual results to vary materially from those anticipated in the forward-looking statements included in this document such as our substantial leverage, limitations imposed by our debt instruments, our ability to successfully pursue our stated growth strategies and opportunities, including our ability to identify attractive and other strategic acquisition opportunities and to successfully integrate acquired businesses and complete actions we have identified as providing cost-saving opportunities. Safe Harbor Statement |
|
|
2007 Third Quarter Summary Record third quarter sales and earnings Third quarter revenues were $262.2 million, increasing $17.6 million or 7.2% from Q3-2006 Operating profit improved 6.1% to $27.3 million Adjusted EBITDA from continuing operations was $37.1 million, up $2.9 million or 8.4% over Q3-2006 Income from continuing operations was $6.6 million versus a loss of $2.3 million in Q3-2006 Diluted EPS was $0.20 versus a loss of $0.11 in Q3-2006 ($ in millions, except per share amounts) *Before non-cash, after-tax charge of $5.4 million or $0.26 per share related to the Q3-2006 debt refinancing (from continuing operations, except for operating cash flow) 2007 2006 Increase Net Sales 262.2 $ 244.6 $ 7.2% Operating Profit 27.3 $ 25.7 $ 6.1% Adjusted EBITDA 37.1 $ 34.2 $ 8.4% EPS (fully-diluted) 0.20 $ 0.15 $ * 33.3% Gross Margin % 27.4% 27.4% Operating Cash Flow 20.9 $ 9.1 $ 129.7% Three months ended September 30, |
|
|
Third Quarter 2007 Operating Highlights INNOVATION • INDUSTRY • GROWTH |
|
|
Packaging Systems Net Sales Adjusted EBITDA Q3-07 Q3-06 Operating Profit $53.4 $51.8 ($ in millions) Q3-07 Q3-06 $13.4 $11.3 Q3-07 Q3-06 $9.9 $8.1 -3.1% -15.5% -18.4% Sales decreased due to lower demand for core industrial closure products for the paint, construction and chemical markets Laminates business was steady despite weakness in North American construction markets Continue to develop new specialty products for growing end markets Decline in Adjusted EBITDA and operating profit driven by decreased sales levels, less favorable sales mix and increases in steel and resin costs, in combination with increased investment in growth-oriented SG&A Continue to develop specialty product applications for growing end markets and expand geographically |
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Energy Products Strong specialty gasket sales to refinery and petrochemical industries due to product expansion and continued high levels of capacity utilization Sales of engine and well-site repair parts declined between years due to sluggish natural gas drilling activity in Western Canada Continue to introduce products complementary to engine business – compressors and gas production equipment Expand gasket business internationally - expect continued strong end-market demand in the refining and petrochemical industries Q3-07 Q3-06 $38.5 $40.3 Q3-07 Q3-06 $6.3 $5.7 Q3-07 Q3-06 $5.8 $4.9 +4.8% -10.4% -16.4% ($ in millions) Net Sales Adjusted EBITDA Operating Profit |
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Industrial Specialties Q3-07 Q3-06 $44.6 $54.6 Q3-07 Q3-06 $11.1 $13.5 Q3-07 Q3-06 $9.9 $11.9 +22.3% +21.7% +19.8% ($ in millions) Net Sales Adjusted EBITDA Operating Profit Sales of aerospace products continue to be strong due to the introduction of new products and a strong market Demand for industrial cylinders and shell casings remains strong Precision cutting tool business continues to expand its “specials” cutting tool product offering with a focus on medical applications Acquired DEW Technologies, a medical device manufacturer, during quarter Continued product innovation and expansion of international sales |
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RV & Trailer Products Q3-07 Q3-06 $43.3 $45.9 Q3-07 Q3-06 $4.5 $6.5 Q3-07 Q3-06 $2.9 $4.3 +6.0% +44.3% +46.2% ($ in millions) Net Sales Adjusted EBITDA Operating Profit Sales increased 6.0% vs. a weak end market due to sales in the electrical products business Profitability increase driven by prior cost initiatives and an increase in sales Drive continued growth by leveraging strong brand names for additional market share and introducing new products Cross-sell the product portfolio into all channels and expand internationally Proactively manage costs through sourcing and continuously improve operational efficiency |
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Recreational Accessories Q3-07 Q3-06 $64.8 $69.6 Q3-07 Q3-06 $6.5 $7.7 Q3-07 Q3-06 $3.9 $4.9 +7.4% +17.9% +25.8% ($ in millions) Net Sales Adjusted EBITDA Operating Profit Sales for group increased 7.4% vs. weak end market due to introduction of new programs and market share gains Operating profit and Adjusted EBITDA improvements due to increase in sales and savings from sourcing initiatives and productivity improvements Acquired “Fifth Gear” product line from Quest Technologies in July 2007 – integrated into Goshen, Indiana plant Growth in 2008 will be driven by continued market share gains, new product initiatives and expanded penetration within the retail channel |
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Third Quarter 2007 Financial Highlights INNOVATION • INDUSTRY • GROWTH |
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2007 Third Quarter Results ($ in thousands) 2007 2006 Change Net Sales Packaging Systems. 51,770 $ 53,410 $ -3.1% Energy Products 40,330 38,500 4.8% Industrial Specialties 54,560 44,600 22.3% RV & Trailer Products 45,940 43,320 6.0% Recreational Accessories 69,580 64,760 7.4% Net sales from continuing operations. 262,180 $ 244,590 $ 7.2% Three months ended September 30, |
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2007 Third Quarter Results ($ in thousands) (1) The Company has established Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") as an indicator of our operating performance and as a measure of our cash generating capabilities. The Company defines “Adjusted EBITDA” as net income before interest, taxes, depreciation, amortization, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. 2007 2006 Change Adjusted EBITDA (1) Packaging Systems. 11,300 $ 13,370 $ -15.5% Energy Products 5,670 6,330 -10.4% Industrial Specialties 13,540 11,130 21.7% RV & Trailer Products 6,480 4,490 44.3% Recreational Accessories 7,710 6,540 17.9% Segment Adjusted EBITDA 44,700 41,860 6.8% % Margin 17.0% 17.1% -0.6% Corporate expenses, management fees and other. (7,630) (7,650) 0.3% Adjusted EBITDA from continuing operations. 37,070 $ 34,210 $ 8.4% % Margin. 14.1% 14.0% 0.7% Three months ended September 30, |
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TriMas Capitalization As of September 30, 2007, TriMas had $4.2 million in cash and approximately $112.5 million of available liquidity under its existing revolving credit facilities and securitization program ($ in thousands) September 30, 2007 September 30, 2006 December 31, 2006 Cash and Cash Equivalents 4,160 $ 3,880 $ 3,600 $ 624,530 $ 722,250 $ 734,490 $ 374,340 $ 351,160 $ 232,780 $ 998,870 $ 1,073,410 $ 967,270 $ Memo: A/R Securitization 44,290 $ 32,000 $ 19,560 $ 668,820 $ 754,250 $ 754,050 $ Key Ratios: Bank LTM EBITDA. 162,630 $ 147,510 $ 147,760 $ Coverage Ratio 2.23x 1.87x 1.87x Leverage Ratio 4.11x 5.11x 5.10x Total Debt + A/R Securitization Total Capitalization Total Shareholders' Equity Total Debt |
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Third Quarter 2007 Summary Positive results of our growth strategies - revenue growth at 7.2% in Q3-2007 Improved year-over-year earnings performance for 8th consecutive quarter Short-term weakness in certain end markets Paint and construction industries Continued low levels of natural gas drilling in Western Canada Adjusted EBITDA guidance for 2007 – expected to be at the low-end of the previously disclosed range of $148 to $156 million Excludes approximately $14 million of one-time charges in Q2-2007 related to the use of IPO proceeds Excludes Q4-2007 charges associated with the planned Huntsville plant closure |
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TriMas Initiatives Focus on continued organic growth Develop new, innovative products for growing end markets – Medical, Specialty Packaging, Aerospace and Energy Expand internationally to service existing customers and acquire new customers Cross-sell product portfolio across customer bases Leverage brand positioning to increase market share Complete small, targeted acquisitions in growing end markets Niche product-based companies Leading market positions and strong brand names Good margins Manage costs and drive operational efficiency Decrease leverage |
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Q & A INNOVATION • INDUSTRY • GROWTH |
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Appendix INNOVATION • INDUSTRY • GROWTH |
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Balance Sheet (Unaudited - $ in thousands) September 30, December 31, 2007 2006 Current assets: Cash and cash equivalents 4,160 $ 3,600 $ Receivables, net . 105,600 99,240 Inventories, net 180,390 165,360 Deferred income taxes. 24,310 24,310 Prepaid expenses and other current assets 7,420 7,320 Assets of discontinued operations held for sale . - 11,770 Total current assets 321,880 311,600 Property and equipment, net 192,280 165,200 Goodwill 538,320 529,730 Other intangibles, net. 228,720 240,120 Other assets 35,810 39,410 Total assets 1,317,010 $ 1,286,060 $ Current liabilities: Current maturities, long-term debt 10,190 $ 9,700 $ Accounts payable 111,890 100,070 Accrued liabilities 75,580 71,970 Liabilities of discontinued operations . - 23,530 Total current liabilities 197,660 205,270 Long-term debt 614,340 724,790 Deferred income taxes 90,560 89,940 Other long-term liabilities 40,110 33,280 Total liabilities 942,670 1,053,280 Preferred stock $0.01 par: Authorized 100,000,000 shares; - - Common stock, $0.01 par: Authorized 400,000,000 shares; 330 210 Paid-in capital . 525,750 399,070 Accumulated deficit (204,900) (215,220) Accumulated other comprehensive income 53,160 48,720 Total shareholders' equity 374,340 232,780 Total liabilities and shareholders' equity. 1,317,010 $ 1,286,060 $ Assets Liabilities and Shareholders' Equity at September 30, 2007 and December 31, 2006, respectively Issued and outstanding: 33,409,500 and 20,759,500 shares Issued and outstanding: None. |
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Statement of Operations (Unaudited - $ in thousands) 2007 2006 2007 2006 Net sales 262,180 $ 244,590 $ 839,700 $ 797,260 $ Cost of sales (190,380) (177,690) (607,310) (581,960) Gross profit. 71,800 66,900 232,390 215,300 Selling, general and administrative expenses (42,980) (41,670) (134,430) (130,350) Advisory services agreement termination fee - - (10,000) - Costs for early termination of operating leases - - (4,230) - Gain (loss) on dispositions of property and equipment (1,500) 510 (1,370) 410 Operating profit 27,320 25,740 82,360 85,360 Other expense, net: Interest expense (15,720) (19,370) (52,920) (59,320) Debt extinguishment costs - (8,610) (7,440) (8,610) Other, net (1,170) (1,200) (3,310) (3,120) Other expense, net (16,890) (29,180) (63,670) (71,050) Income (loss) from continuing operations before income tax benefit (expense). 10,430 (3,440) 18,690 14,310 Income tax benefit (expense) (3,850) 1,180 (6,910) (5,100) Income (loss) from continuing operations 6,580 $ (2,260) $ 11,780 $ 9,210 $ Three months ended Nine months ended September 30, September 30, |
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(Unaudited - $ in thousands, except for per share amounts) Statement of Operations (cont’d) 2007 2006 2007 2006 Income (loss) from continuing operations 6,580 $ (2,260) $ 11,780 $ 9,210 $ Loss from discontinued operations, net of income taxes. - (10,870) (1,340) (16,240) Net income (loss) 6,580 $ (13,130) $ 10,440 $ (7,030) $ Earnings (loss) per share - basic: Continuing operations 0.20 $ (0.11) $ 0.44 $ 0.46 $ Discontinued operations, net of income taxes - (0.54) (0.05) (0.81) Net income (loss) per share 0.20 $ (0.65) $ 0.39 $ (0.35) $ Weighted average common shares - basic 33,409,500 20,132,201 26,843,749 20,051,181 Earnings (loss) per share - diluted: Continuing operations 0.20 $ (0.11) $ 0.44 $ 0.44 $ Discontinued operations, net of income taxes - (0.54) (0.05) (0.78) Net income (loss) per share 0.20 $ (0.65) $ 0.39 $ (0.34) $ Weighted average common shares - diluted 33,457,027 20,132,201 26,859,766 20,759,973 Three months ended Nine months ended September 30, September 30, |
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Cash Flow Highlights (Unaudited - $ in thousands) 2007 2006 Cash provided by operating activities 46,880 $ 26,460 $ Capital expenditures (22,520) (16,440) Acquisition of leased assets. (29,960) (3,140) Acquisition of businesses, net of cash acquired (13,540) - Net proceeds from disposition of businesses and other assets 6,150 980 Cash used for investing activities (59,870) (18,600) Proceeds from sale of common stock in connection with the 126,460 - Repayments of borrowings on senior credit facilities. (2,600) (2,130) Repayments of borrowings on term loan facilities - (254,960) Proceeds from term loan facilities - 260,000 Proceeds from borrowings on revolving credit facilities 399,580 576,960 Repayments of borrowings on revolving credit facilities (409,890) (585,420) Debt issuance costs - (2,160) Retirement of senior subordinated notes. (100,000) - Cash provided by (used for) financing activities 13,550 (7,710) Net decrease in cash and cash equivalents 560 $ 150 $ September 30, Nine months ended Company's initial public offering, net of issuance costs |
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2007 Third Quarter Results (1) The Company has established Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") as an indicator of our operating performance and as a measure of our cash generating capabilities. The Company defines “Adjusted EBITDA” as net income before interest, taxes, depreciation, amortization, non-cash asset and goodwill impairment write-offs, and non-cash losses on sale-leaseback of property and equipment. ($ in thousands) 2007 2006 Change 2007 2006 Change Net Sales Packaging Systems. 51,770 $ 53,410 $ -3.1% 162,220 $ 158,450 $ 2.4% Energy Products 40,330 38,500 4.8% 122,930 117,170 4.9% Industrial Specialties 54,560 44,600 22.3% 163,410 136,110 20.1% RV & Trailer Products 45,940 43,320 6.0% 152,420 150,660 1.2% Recreational Accessories 69,580 64,760 7.4% 238,720 234,870 1.6% Net sales from continuing operations. 262,180 $ 244,590 $ 7.2% 839,700 $ 797,260 $ 5.3% Operating Profit Packaging Systems. 8,110 $ 9,940 $ -18.4% 27,930 $ 27,970 $ -0.1% Energy Products 4,860 5,810 -16.4% 16,930 17,280 -2.0% Industrial Specialties 11,860 9,900 19.8% 36,770 28,170 30.5% RV & Trailer Products 4,270 2,920 46.2% 16,740 17,560 -4.7% Recreational Accessories 4,920 3,910 25.8% 17,420 14,270 22.1% Corporate expenses and management fees. (6,700) (6,740) 0.6% (33,430) (19,890) -68.1% Operating profit from continuing operations. 27,320 $ 25,740 $ 6.1% 82,360 $ 85,360 $ -3.5% % Margin 10.4% 10.5% -1.0% 9.8% 10.7% -8.4% Adjusted EBITDA (1) Packaging Systems. 11,300 $ 13,370 $ -15.5% 37,690 $ 38,400 $ -1.8% Energy Products 5,670 6,330 -10.4% 19,030 19,030 0.0% Industrial Specialties 13,540 11,130 21.7% 40,600 32,060 26.6% RV & Trailer Products 6,480 4,490 44.3% 22,840 22,890 -0.2% Recreational Accessories 7,710 6,540 17.9% 25,130 22,460 11.9% Segment Adjusted EBITDA 44,700 41,860 6.8% 145,290 134,840 7.7% % Margin 17.0% 17.1% -0.6% 17.3% 16.9% 2.4% Corporate expenses, management fees and other. (7,630) (7,650) 0.3% (35,860) (22,800) -57.3% Adjusted EBITDA from continuing operations. 37,070 $ 34,210 $ 8.4% 109,430 $ 112,040 $ -2.3% % Margin. 14.1% 14.0% 0.7% 13.0% 14.1% -7.8% Three months ended September 30, Nine months ended September 30, |
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Reconciliation of Non-GAAP Measure Adjusted EBITDA (1) The Company defines Adjusted EBITDA as net income (loss) before cumulative effect of accounting change, interest, taxes, depreciation, amortization, non-cash asset and goodwill impairment write-offs, non-cash losses on sale-leaseback of property and equipment. Lease expense and non-recurring charges are included in Adjusted EBITDA and include both cash and non-cash charges related to restructuring and integration expenses. In evaluating our business, management considers and uses Adjusted EBITDA as a key indicator of financial operating performance and as a measure of cash generating capability. Management believes this measure is useful as an analytical indicator of leverage capacity and debt servicing ability, and uses it to measure financial performance as well as for planning purposes. However, Adjusted EBITDA should not be considered as an alternative to net income, cash flow from operating activities or any other measures calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The definition of Adjusted EBITDA used here may differ from that used by other companies. (1) (Unaudited - $ in thousands) The following represents certain costs and expenses relating to our use of IPO proceeds that are included in the determination of net income (loss) under GAAP and are not added back to net income in determining Adjusted EBITDA, but that we would consider in evaluating the quality of our Adjusted EBITDA. 2007 2006 2007 2006 Net income (loss) 6,580 $ (13,130) $ 10,440 $ (7,030) $ Income tax expense (benefit). 3,850 (8,350) 6,960 (5,720) Interest expense. 15,720 19,370 52,920 59,350 Debt extinguishment costs. - 8,610 7,440 8,610 Impairment of assets. - 15,850 - 15,850 Depreciation and amortization. 10,920 9,680 30,380 29,820 Adjusted EBITDA, total company 37,070 32,030 108,140 100,880 Negative Adjusted EBITDA, discontinued operations. - 2,180 1,290 11,160 Adjusted EBITDA, continuing operations 37,070 $ 34,210 $ 109,430 $ 112,040 $ 2007 2006 2007 2006 Costs and expenses related to use of IPO Proceeds: Advisory Services Agreement termination fee. - $ - $ 10,000 $ - $ Costs for early termination of operating leases. - - 4,230 - Total - $ - $ 14,230 $ - $ Three months ended Nine months ended September 30, September 30, September 30, September 30, Three months ended Nine months ended . . |
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Impact of Costs and Expenses Related to Use of IPO Proceeds Operating Income, Income, Earnings Per Share - Diluted and Adjusted EBITDA, all from continuing operations, as adjusted for the impacts of transaction costs and expenses associated with the use of proceeds resulting from completion of the Company’s IPO in May 2007. Costs and expenses associated with the use of IPO proceeds, tax-effected at 37%. (3) Per share impacts based on diluted shares outstanding of 33,457,027 and 26,859,766, respectively, for the three and nine months ended September 30, 2007. See definition on slide 23. (Unaudited - $ in thousands, except for share amounts) Earnings Operating Income Income (2) Per Share- Diluted (3) Adjusted EBITDA (4) As reported (1) - Three months ended September 30, 2007 27,320 $ 6,580 $ 0.20 $ 37,070 $ Costs and expenses related to use of IPO Proceeds Advisory Services Agreement termination fee. - - - - Costs for early termination of operating leases. - - - - Debt extinguishment costs . - - - - Total - $ - $ - $ - $ Operating Income Income (2) Earnings Per Share- Diluted (3) Adjusted EBITDA (4) As reported (1) - Nine months ended September 30, 2007 82,360 $ 11,780 $ 0.44 $ 109,430 $ Costs and expenses related to use of IPO Proceeds Advisory Services Agreement termination fee. 10,000 6,300 0.24 10,000 Costs for early termination of operating leases. 4,230 2,660 0.10 4,230 Debt extinguishment costs . - 4,690 0.17 - Total 14,230 $ 13,650 $ 0.51 $ 14,230 $ |
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(Unaudited - $ in thousands) Key Covenant Calculations Leverage Ratio Total Indebtedness at September 30, 2007 (1) 668,820 $ LTM EBITDA, as defined (1) 162,630 $ Leverage Ratio - Actual 4.11 X Leverage Ratio - Covenant 5.50 X Coverage Ratio LTM EBITDA, as defined (1) 162,630 $ Cash Interest Expense (1) 72,830 $ Coverage Ratio - Actual 2.23 X Coverage Ratio - Covenant. 1.85 X Notes: (1) As defined in our Amended and Restated Credit Agreement. . |
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(Unaudited - $ in thousands) LTM EBITDA as Defined in Credit Agreement Reported net loss for the twelve months ended September 30, 2007 (111,440) $ Interest expense, net (as defined) 72,660 Income tax expense 6,160 Depreciation and amortization . 39,300 Extraordinary non-cash charges 116,410 Heartland monitoring fee 13,000 Interest equivalent costs 4,250 Non-recurring expenses in connection with acquisition integration 260 Other non-cash expenses or losses 3,770 Non-recurring expenses or costs for cost savings projects 980 Losses on early termination of operating leases from net proceeds of an IPO. 4,230 Debt extinguishment costs 7,440 Non-cash expenses related to equity grants. 430 Discontinued operations 5,180 Bank EBITDA - LTM Ended September 30, 2007 (1) 162,630 $ (1) As defined in the Amended and Restated Credit Agreement dated August 2, 2006. |
