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UNITED STATES |
OMB APPROVAL |
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SECURITIES AND EXCHANGE COMMISSION |
OMB Number: 3235-0060 |
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Washington, D.C. 20549 |
Expires: March 31, 2006 |
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Estimated average burden |
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FORM 8-K |
hours per response . 28.0 |
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 10, 2008
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware |
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001-10716 |
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38-2687639 |
(State or other jurisdiction |
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(Commission |
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(IRS Employer |
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) |
Registrants telephone number, including area code (248) 631-5400
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
TriMas Corporation (the Corporation) issued a press release and held a teleconference on November 10, 2008, reporting its financial results for the third quarter ending September 30, 2008. A copy of the press release and teleconference visual presentation are attached hereto as exhibits and are incorporated herein by reference. The press release and teleconference visual presentation are also available on the Corporations website at www.trimascorp.com.
The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Corporation under the Securities Act of 1933 or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are furnished herewith:
Exhibit No. |
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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 Corporations visual presentation titled Third Quarter 2008 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.
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TRIMAS CORPORATION |
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Date: |
November 10, 2008 |
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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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2
Exhibit 99.1
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 |
TRIMAS CORPORATION REPORTS THIRD QUARTER 2008 RESULTS
BLOOMFIELD HILLS, Michigan, November 10, 2008 TriMas Corporation (NYSE: TRS) today announced financial results for the quarter ended September 30, 2008. The Company reported quarterly net sales from continuing operations of $276.9 million, an increase of 7.1% from the third quarter of 2007. Third quarter 2008 income from continuing operations increased 53.1% from third quarter 2007 to $8.3 million, or $0.25 diluted earnings per share, including ($0.01) per share in severance and facility closure costs(1). In comparison, the third quarter 2007 income from continuing operations was $5.4 million, or a $0.16 per diluted share.
THIRD QUARTER SUMMARY From Continuing Operations
· TriMas reported third quarter net sales of $276.9 million, an increase of 7.1% in comparison to $258.6 million in the third quarter 2007. Sales in the Packaging Systems, Energy Products and Industrial Specialties segments increased 13.0%, 37.4% and 16.1%, respectively. Sales in the RV & Trailer Products and Recreational Accessories segments declined 8.6% and 11.3%, respectively, due to lower demand as a result of reduced consumer discretionary spending and current economic uncertainty.
· The Company reported operating profit of $27.9 million for the third quarter 2008, an increase of 9.5% in comparison to operating profit of $25.5 million in the third quarter 2007.
· Adjusted EBITDA(2) for the third quarter 2008 increased 8.5% to $38.1 million, as compared to $35.1 million in the third quarter 2007, consistent with the increase in operating profit.
· Income from continuing operations for the third quarter 2008 increased 53.1% to $8.3 million, or $0.25 per diluted share, compared to income from continuing operations of $5.4 million, or $0.16 per diluted share, in the third quarter 2007.
· The Company reduced total indebtedness, including amounts utilized under its receivables securitization facility, by $42.0 million compared to the end of the third quarter 2007. TriMas ended the quarter with $4.6 million of cash and $141.6 million of aggregate availability under its revolving credit and receivables securitization facilities.
· The Company is announcing an acceleration of its $30 million Profit Improvement Plan designed to reduce its fixed cost structure and improve productivity across all of its business segments. The plan includes manufacturing and distribution center consolidations, consolidation of business unit activities, staffing reductions and other cost saving actions. The projected savings resulting from these activities is expected to approximate $15 million in 2009, with a $20 million effective run-rate
1
by the end of 2009. The Company expects to record pre-tax charges of approximately $7 to $9 million as actions are implemented associated with the $15 million in 2009 savings.
· The Company is revising its full year 2008 diluted earnings per share from continuing operations guidance range to $0.71 to $0.75, excluding Special Items(1) and any charges related to the Profit Improvement Plan, as a result of recent economic events and other drivers. The Company has experienced additional demand weakness in the RV & Trailer Products and Recreational Accessories segments and moderated growth in some of its other businesses. The other drivers of the decrease in guidance are the impact of commodity cost volatility and managements decision to reduce production and inventory levels during the fourth quarter which will result in lower absorption of fixed costs.
(1) See Appendix I for additional information regarding Special Items impacting reported GAAP financial measures. In evaluating the quality of the Companys operating performance, management considers Adjusted EBITDA, among other metrics, as a key indicator of financial operating performance together with a careful review of results reported under GAAP. Appendix I details certain one-time costs, expenses and other charges, collectively described as Special Items, that are included in the determination of net income (loss) under GAAP and are not added back to net income (loss) in determining Adjusted EBITDA, but that management would consider important in evaluating the quality of the Companys Adjusted EBITDA and operating results under GAAP.
(2) See Appendix II for reconciliation of Non-GAAP financial measure Adjusted EBITDA to the Companys reported results of operations prepared in accordance with GAAP.
During the third quarter, the Packaging Systems, Energy Products and Industrial Specialties segments collectively grew sales by 21% year over year, and generated 88% of our segment operating profit, said Grant H. Beard, TriMas President and Chief Executive Officer. While we believe our RV & Trailer Products and Recreational Accessories outperformed their end markets, these businesses were down approximately 10% in sales. During the quarter, it was evident that the diversity of our businesses and end markets remain a benefit as the U.S. faces challenging economic times.
The recent economic events of October have dramatically changed our demand outlook, most notably in our RV & Trailer Products and Recreational Accessories segments, Beard continued. Accordingly, we are reducing plant hours and taking other aggressive cost actions now to right-size these businesses. We will leverage our capabilities across these two segments, while consolidating our footprint, driving costs out and improving efficiency.
We expect our Profit Improvement Plan to mitigate the effects of these volatile economic conditions and drive enhanced future results, Beard noted. We will be better positioned to take advantage of growing markets when the economy recovers. In the meantime, we continue to focus on organic growth through the launch of innovative products, the pursuit of new end-market opportunities and the execution of our geographic expansion plans. We continue to employ disciplined capital allocation, proactively manage working capital and drive free cash flow to enable continued debt pay-down.
Third Quarter Segment Results From Continuing Operations
Packaging Systems - Sales for the third quarter of 2008 increased 13.0% compared to the prior year. Sales of industrial closures and specialty dispensing products, which comprise the majority of sales in this segment, increased, while laminate and insulation product sales were essentially flat in the third quarter 2008. Operating profit for the quarter improved 6.9% due to increased sales volumes, which were partially offset by increases in raw material costs and expenses incurred to support sales growth initiatives. The Company continues to diversify its product offering by developing specialty dispensing
2
product applications for growing end markets, including pharmaceutical, personal care and food/beverage markets, and expanding geographically to generate long-term growth.
Energy Products - Sales increased 37.4% for the third quarter due to strong market demand and continued high utilization rates at refinery and petrochemical facilities. These trends, combined with the Companys initiatives to gain additional share, resulted in increased sales of engines and related parts, new compressor and gas production equipment products for use at well-sites, and specialty gaskets and related fastening hardware for the refinery and petrochemical industries. Operating profit for the quarter increased 68.1%, in line with higher sales volumes, favorable cost leverage and as a result of prior investments to support the segments growth initiatives. The Company plans to continue to launch new products to complement its engine business, while expanding its gasket business internationally.
Industrial Specialties - Sales for the third quarter increased 16.1% compared to the prior year, primarily due to strong growth in the aerospace fastener and industrial cylinder businesses resulting from market share gains, the introduction of new products and applications, international expansion and strong overall market demand. Operating profit for the quarter increased 22.0% due to higher sales volumes and improved margins in the specialty tools, defense and aerospace businesses, which were partially offset by lower absorption of fixed costs in the specialty fittings business. The Company continues to drive growth in this segment by developing specialty products for growing end markets such as medical and aerospace, while continuing to expand international sales efforts.
RV & Trailer Products - Sales for the third quarter declined a net 8.6%, as sales growth in the Australian business was more than offset by the continued weak demand in most end markets in the United States. Operating profit decreased 69.6% due to reduced sales volumes and lower absorption of fixed costs as the Company reduced its production to manage inventory levels. The Companys focus in this segment is to aggressively reduce fixed costs and to leverage strong brand positions for increased market share, cross-sell the product portfolio into all channels and expand internationally.
Recreational Accessories - Sales decreased 11.3% for the third quarter, as the Company continued to experience weak consumer demand for towing accessories. Operating profit declined 45.1% as a result of lower sales volumes and a less favorable sales mix. The Company plans to continue to aggressively reduce costs and increase market share in the United States and Canada.
Financial Position
TriMas ended the quarter with cash of $4.6 million and $141.6 million of aggregate availability under its revolving credit and receivables securitization facilities. The Company reduced total indebtedness, including amounts outstanding under its receivables securitization facility, by $42.0 million from September 30, 2007 to September 30, 2008. TriMas ended the quarter with total debt of $615.8 million and funding under its receivables securitization facility of $11.0 million for a total of $626.8 million. The Company does not have any significant debt maturities under its credit agreement or subordinated notes until 2012.
Outlook
The Company is revising its full year 2008 diluted earnings per share from continuing operations guidance range to $0.71 to $0.75, excluding Special Items(1) and any charges related to the Profit Improvement Plan, as a result of recent economic events and other drivers. The Company has experienced additional demand weakness in the RV & Trailer Products and Recreational Accessories
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segments and moderated growth in some of its other businesses. The other drivers of the decrease in guidance are the impact of commodity cost volatility and managements decision to reduce production and inventory levels during the fourth quarter which will result in lower absorption of fixed costs.
This outlook does not include the impact of any future unidentified restructuring charges and divestitures 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. This outlook also excludes benefit costs related to contractual obligations to Metaldyne or discontinued operations. 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 below.
Conference Call Information
TriMas Corporation will host its third quarter 2008 earnings conference call today, Monday, November 10, 2008 at 11:00 a.m. EST. The call-in number is (866) 261-2650. Participants should request to be connected to the TriMas Corporation third quarter conference call (conference ID number 1300101). The presentation that will accompany the call will be available on the Companys website at www.trimascorp.com prior to the call.
The conference call will also be webcast simultaneously on the Companys website at www.trimascorp.com. A replay of the conference call will be available on the TriMas website or by dialing (866) 837-8032 (access code 1300101) beginning November 10th at 1:00 p.m. EST through November 17th at 11:59 p.m. EST.
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, managements 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 managements 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
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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, Michigan, TriMas Corporation is a diversified growth company of specialty niche businesses manufacturing a variety of highly engineered products for commercial, industrial and consumer markets worldwide. TriMas is organized into five strategic business segments: Packaging Systems, Energy Products, Industrial Specialties, RV & Trailer Products and Recreational Accessories. TriMas has approximately 5,000 employees at 70 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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2008 |
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2007 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
4,650 |
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$ |
4,800 |
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Receivables, net |
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136,500 |
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89,370 |
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Inventories, net |
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198,690 |
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190,590 |
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Deferred income taxes |
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18,860 |
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18,860 |
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Prepaid expenses and other current assets |
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8,730 |
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7,010 |
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Assets of discontinued operations held for sale |
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2,860 |
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3,330 |
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Total current assets |
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370,290 |
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313,960 |
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Property and equipment, net |
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191,630 |
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195,120 |
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Goodwill |
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377,450 |
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377,340 |
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Other intangibles, net |
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205,300 |
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214,290 |
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Other assets |
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21,340 |
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27,280 |
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Total assets |
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$ |
1,166,010 |
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$ |
1,127,990 |
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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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$ |
12,440 |
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$ |
8,390 |
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Accounts payable |
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127,150 |
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121,860 |
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Accrued liabilities |
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72,310 |
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71,830 |
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Liabilities of discontinued operations |
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1,250 |
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1,450 |
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Total current liabilities |
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213,150 |
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203,530 |
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Long-term debt |
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603,350 |
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607,600 |
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Deferred income taxes |
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83,990 |
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73,280 |
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Other long-term liabilities |
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34,870 |
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35,090 |
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Total liabilities |
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935,360 |
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919,500 |
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Preferred stock $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None |
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Common stock, $0.01 par: Authorized 400,000,000 shares; Issued and outstanding: 33,445,841 shares at September 30, 2008 and 33,409,500 shares December 31, 2007 |
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330 |
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330 |
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Paid-in capital |
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527,120 |
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525,960 |
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Accumulated deficit |
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(348,330 |
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(373,970 |
) |
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Accumulated other comprehensive income |
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51,530 |
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56,170 |
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Total shareholders equity |
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230,650 |
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208,490 |
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Total liabilities and shareholders equity |
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$ |
1,166,010 |
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$ |
1,127,990 |
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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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2008 |
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2007 |
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2008 |
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2007 |
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Net sales |
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$ |
276,900 |
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$ |
258,650 |
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$ |
853,540 |
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$ |
830,760 |
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Cost of sales |
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(205,150 |
) |
(188,730 |
) |
(629,700 |
) |
(603,190 |
) |
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Gross profit |
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71,750 |
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69,920 |
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223,840 |
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227,570 |
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Selling, general and administrative expenses |
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(43,910 |
) |
(42,650 |
) |
(137,820 |
) |
(133,510 |
) |
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Advisory services agreement termination fee |
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(10,000 |
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Costs for early termination of operating leases |
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|
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(4,230 |
) |
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Gain (loss) on dispositions of property and equipment |
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50 |
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(1,790 |
) |
(170 |
) |
(1,680 |
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Operating profit |
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27,890 |
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25,480 |
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85,850 |
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78,150 |
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Other expense, net: |
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|
|
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Interest expense |
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(13,570 |
) |
(15,720 |
) |
(42,160 |
) |
(52,920 |
) |
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Debt extinguishment costs |
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|
|
|
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(7,440 |
) |
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Other, net |
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(480 |
) |
(1,230 |
) |
(3,010 |
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(3,450 |
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Other expense, net |
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(14,050 |
) |
(16,950 |
) |
(45,170 |
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(63,810 |
) |
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Income from continuing operations before income tax expense |
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13,840 |
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8,530 |
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40,680 |
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14,340 |
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Income tax expense |
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(5,540 |
) |
(3,110 |
) |
(15,210 |
) |
(5,230 |
) |
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Income from continuing operations |
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8,300 |
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5,420 |
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25,470 |
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9,110 |
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Income from discontinued operations, net of income tax expense |
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20 |
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1,160 |
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170 |
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1,330 |
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Net income |
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$ |
8,320 |
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$ |
6,580 |
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$ |
25,640 |
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$ |
10,440 |
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Earnings per share - basic: |
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|
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Continuing operations |
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$ |
0.25 |
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$ |
0.16 |
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$ |
0.76 |
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$ |
0.34 |
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Discontinued operations, net of income tax expense |
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|
|
0.04 |
|
0.01 |
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0.05 |
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|
|
|
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Net income per share |
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$ |
0.25 |
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$ |
0.20 |
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$ |
0.77 |
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$ |
0.39 |
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|
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Weighted average common shares - basic |
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33,420,560 |
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33,409,500 |
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33,413,214 |
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26,843,749 |
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Earnings per share - diluted: |
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|
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|
|
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Continuing operations |
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$ |
0.25 |
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$ |
0.16 |
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$ |
0.76 |
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$ |
0.34 |
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Discontinued operations, net of income tax expense |
|
|
|
0.04 |
|
0.01 |
|
0.05 |
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||||
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|
|
|
|
|
|
|
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Net income per share |
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$ |
0.25 |
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$ |
0.20 |
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$ |
0.77 |
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$ |
0.39 |
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|
|
|
|
|
|
|
|
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Weighted average common shares - diluted |
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33,469,027 |
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33,409,500 |
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33,441,448 |
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26,843,749 |
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7
TriMas
Corporation
Consolidated Statement of Cash Flows
(Unaudited dollars in thousands)
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Nine months ended |
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September 30, |
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||||
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2008 |
|
2007 |
|
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Net income |
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$ |
25,640 |
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$ |
10,440 |
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Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: |
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Loss on dispositions of property and equipment |
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40 |
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1,570 |
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Depreciation |
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20,740 |
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18,730 |
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Amortization of intangible assets |
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11,700 |
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11,650 |
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Amortization of debt issue costs |
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1,840 |
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4,580 |
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Deferred income taxes |
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9,360 |
|
700 |
|
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Non-cash compensation expense |
|
1,160 |
|
340 |
|
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Net proceeds from (reductions in) sale of receivables and receivables securitization |
|
(26,730 |
) |
28,610 |
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Increase in receivables |
|
(19,270 |
) |
(30,970 |
) |
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Increase in inventories |
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(7,640 |
) |
(10,790 |
) |
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Decrease in prepaid expenses and other assets |
|
4,370 |
|
2,320 |
|
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Increase in accounts payable and accrued liabilities |
|
4,690 |
|
8,090 |
|
||
Other, net |
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(3,110 |
) |
1,610 |
|
||
Net cash provided by operating activities, net of acquisition impact |
|
22,790 |
|
46,880 |
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||
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|
|
|
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Cash Flows from Investing Activities: |
|
|
|
|
|
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Capital expenditures |
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(20,100 |
) |
(22,520 |
) |
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Acquisition of leased assets |
|
|
|
(29,960 |
) |
||
Acquisition of businesses, net of cash acquired |
|
(6,350 |
) |
(13,540 |
) |
||
Net proceeds from disposition of businesses and other assets |
|
2,260 |
|
6,150 |
|
||
Net cash used for investing activities |
|
(24,190 |
) |
(59,870 |
) |
||
|
|
|
|
|
|
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Cash Flows from Financing Activities: |
|
|
|
|
|
||
Proceeds from sale of common stock in connection with the Companys initial public offering, net of issuance costs |
|
|
|
126,460 |
|
||
Repayments of borrowings on senior credit facilities |
|
(4,270 |
) |
(2,600 |
) |
||
Proceeds from term loan facilities |
|
490 |
|
|
|
||
Proceeds from borrowings on revolving credit facilities |
|
346,160 |
|
399,580 |
|
||
Repayments of borrowings on revolving credit facilities |
|
(341,130 |
) |
(409,890 |
) |
||
Retirement of senior subordinated notes |
|
|
|
(100,000 |
) |
||
Net cash provided by financing activities |
|
1,250 |
|
13,550 |
|
||
|
|
|
|
|
|
||
Cash and Cash Equivalents: |
|
|
|
|
|
||
Increase (decrease) for the period |
|
(150 |
) |
560 |
|
||
At beginning of period |
|
4,800 |
|
3,600 |
|
||
At end of period |
|
$ |
4,650 |
|
$ |
4,160 |
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
||
Cash paid for interest |
|
$ |
32,240 |
|
$ |
40,880 |
|
Cash paid for taxes |
|
$ |
6,460 |
|
$ |
6,840 |
|
8
TriMas
Corporation
Company and Business Segment Financial Information
Continuing
Operations
(Unaudited dollars in thousands)
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
||||
Packaging Systems |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
58,520 |
|
$ |
51,770 |
|
$ |
170,500 |
|
$ |
162,220 |
|
Operating profit |
|
$ |
8,670 |
|
$ |
8,110 |
|
$ |
26,700 |
|
$ |
27,930 |
|
Operating profit as a% of sales |
|
14.8 |
% |
15.7 |
% |
15.7 |
% |
17.2 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||
Energy Products |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
55,430 |
|
$ |
40,330 |
|
$ |
157,390 |
|
$ |
122,930 |
|
Operating profit |
|
$ |
8,170 |
|
$ |
4,860 |
|
$ |
24,670 |
|
$ |
16,930 |
|
Operating profit as a% of sales |
|
14.7 |
% |
12.1 |
% |
15.7 |
% |
13.8 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||
Industrial Specialties |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
59,250 |
|
$ |
51,030 |
|
$ |
168,930 |
|
$ |
154,470 |
|
Operating profit |
|
$ |
12,110 |
|
$ |
9,930 |
|
$ |
34,750 |
|
$ |
32,370 |
|
Operating profit as a% of sales |
|
20.4 |
% |
19.5 |
% |
20.6 |
% |
21.0 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||
RV & Trailer Products |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
41,970 |
|
$ |
45,940 |
|
$ |
142,370 |
|
$ |
152,420 |
|
Operating profit |
|
$ |
1,300 |
|
$ |
4,270 |
|
$ |
6,110 |
|
$ |
16,740 |
|
Operating profit as a% of sales |
|
3.1 |
% |
9.3 |
% |
4.3 |
% |
11.0 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||
Recreational Accessories |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
61,730 |
|
$ |
69,580 |
|
$ |
214,350 |
|
$ |
238,720 |
|
Operating profit |
|
$ |
2,700 |
|
$ |
4,920 |
|
$ |
11,820 |
|
$ |
17,420 |
|
Operating profit as a% of sales |
|
4.4 |
% |
7.1 |
% |
5.5 |
% |
7.3 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||
Corporate Expenses and Management Fees |
|
$ |
(5,060 |
) |
$ |
(6,610 |
) |
$ |
(18,200 |
) |
$ |
(33,240 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Total Company |
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
276,900 |
|
$ |
258,650 |
|
$ |
853,540 |
|
$ |
830,760 |
|
Operating profit |
|
$ |
27,890 |
|
$ |
25,480 |
|
$ |
85,850 |
|
$ |
78,150 |
|
Operating profit as a% of sales |
|
10.1 |
% |
9.9 |
% |
10.1 |
% |
9.4 |
% |
||||
|
|
|
|
|
|
|
|
|
|
||||
Other Data: |
|
|
|
|
|
|
|
|
|
||||
- Depreciation and amortization |
|
$ |
10,680 |
|
$ |
10,870 |
|
$ |
32,280 |
|
$ |
30,230 |
|
|
|
|
|
|
|
|
|
|
|
||||
- Interest expense |
|
$ |
13,570 |
|
$ |
15,720 |
|
$ |
42,160 |
|
$ |
52,920 |
|
|
|
|
|
|
|
|
|
|
|
||||
- Debt extinguishment costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
7,440 |
|
|
|
|
|
|
|
|
|
|
|
||||
- Other expense, net |
|
$ |
480 |
|
$ |
1,230 |
|
$ |
3,010 |
|
$ |
3,450 |
|
|
|
|
|
|
|
|
|
|
|
||||
- Income tax expense |
|
$ |
5,540 |
|
$ |
3,110 |
|
$ |
15,210 |
|
$ |
5,230 |
|
|
|
|
|
|
|
|
|
|
|
||||
- Advisory Services Agreement termination fee |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
10,000 |
|
|
|
|
|
|
|
|
|
|
|
||||
- Costs for early termination of operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
4,230 |
|
9
Appendix I
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
|
|
Three months ended |
|
Three months ended |
|
||||||||
|
|
September 30, 2008 |
|
September 30, 2007 |
|
||||||||
(dollars in thousands, except per share amounts) |
|
Income |
|
EPS |
|
Income |
|
EPS |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Income and Diluted EPS from continuing operations, as reported |
|
$ |
8,300 |
|
$ |
0.25 |
|
$ |
5,420 |
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of Special Items to consider in evaluating quality of income (loss) and diluted EPS from continuing operations: |
|
|
|
|
|
|
|
|
|
||||
Restructuring activities |
|
$ |
(430 |
) |
$ |
(0.01 |
) |
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items |
|
$ |
(430 |
) |
$ |
(0.01 |
) |
$ |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average diluted shares outstanding at September 30, 2008 and 2007 |
|
|
|
33,469,027 |
|
|
|
33,409,500 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
|
|
Nine months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, 2008 |
|
September 30, 2007 |
|
||||||||
(dollars in thousands, except per share amounts) |
|
Income |
|
EPS |
|
Income |
|
EPS |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Income and Diluted EPS from continuing operations, as reported |
|
$ |
25,470 |
|
$ |
0.76 |
|
$ |
9,110 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
||||
After-tax impact of Special Items to consider in evaluating quality of income and diluted EPS from continuing operations: |
|
|
|
|
|
|
|
|
|
||||
Advisory services agreement termination fee |
|
$ |
|
|
$ |
|
|
(6,300 |
) |
$ |
(0.23 |
) |
|
Costs for early termination of operating leases |
|
|
|
|
|
(2,660 |
) |
(0.10 |
) |
||||
Debt extinguishment costs |
|
|
|
|
|
(4,690 |
) |
(0.17 |
) |
||||
Restructuring activities |
|
(1,870 |
) |
(0.06 |
) |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items |
|
$ |
(1,870 |
) |
$ |
(0.06 |
) |
$ |
(13,650 |
) |
$ |
(0.50 |
) |
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average diluted shares outstanding at September 30, 2008 and 2007 |
|
|
|
33,441,448 |
|
|
|
26,843,749 |
|
10
Appendix I (contd)
TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
(dollars in thousands) |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Operating profit from continuing operations, as reported |
|
$ |
27,890 |
|
$ |
25,480 |
|
$ |
85,850 |
|
$ |
78,150 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating quality of earnings: |
|
|
|
|
|
|
|
|
|
||||
Advisory services agreement termination fee |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(10,000 |
) |
Costs for early termination of operating leases |
|
|
|
|
|
|
|
(4,230 |
) |
||||
Restructuring activities |
|
(710 |
) |
|
|
(2,970 |
) |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items |
|
$ |
(710 |
) |
$ |
|
|
$ |
(2,970 |
) |
$ |
(14,230 |
) |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, |
|
September 30, |
|
||||||||
(dollars in thousands) |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA from continuing operations, as reported |
|
$ |
38,110 |
|
$ |
35,130 |
|
$ |
115,140 |
|
$ |
104,930 |
|
|
|
|
|
|
|
|
|
|
|
||||
Special Items to consider in evaluating quality of earnings: |
|
|
|
|
|
|
|
|
|
||||
Advisory services agreement termination fee |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
(10,000 |
) |
Costs for early termination of operating leases |
|
|
|
|
|
|
|
(4,230 |
) |
||||
Restructuring activities |
|
(710 |
) |
|
|
(2,970 |
) |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Total Special Items |
|
$ |
(710 |
) |
$ |
|
|
$ |
(2,970 |
) |
$ |
(14,230 |
) |
11
Appendix II
TriMas Corporation
Reconciliation of Non-GAAP Measure Adjusted EBITDA
(Unaudited dollars in thousands)
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
September 30, |
|
September 30 |
|
||||||||
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
||||
Net income |
|
$ |
8,320 |
|
$ |
6,580 |
|
$ |
25,640 |
|
$ |
10,440 |
|
Income tax expense |
|
5,560 |
|
3,850 |
|
15,310 |
|
6,960 |
|
||||
Interest expense |
|
13,630 |
|
15,720 |
|
42,320 |
|
52,920 |
|
||||
Debt extinguishment costs |
|
|
|
|
|
|
|
7,440 |
|
||||
Depreciation and amortization |
|
10,740 |
|
10,920 |
|
32,440 |
|
30,380 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA(1), total company |
|
38,250 |
|
37,070 |
|
115,710 |
|
108,140 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA(1), discontinued operations |
|
140 |
|
1,940 |
|
570 |
|
3,210 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA(1), continuing operations |
|
$ |
38,110 |
|
$ |
35,130 |
|
$ |
115,140 |
|
$ |
104,930 |
|
(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.
12
Exhibit 99.2
1 Third Quarter 2008 Earnings Presentation November 10, 2008 |
2 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 w ill, 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, managements 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 w e believe there is a reasonable basis for them. How ever, there can be no assurance that managements expectations, beliefs and projections w ill 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 w e 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 |
3 Agenda Third Quarter 2008 Results Segment Highlights Financial Highlights Outlook and Summary Questions and Answers Appendix |
4 Third Quarter 2008 Results |
5 Overview Strong performance in a difficult environment - Grew net sales 7.1% for the quarter - Increased income from continuing operations by 53.1% - Delivered Q3-2008 EPS from continuing ops of $0.25(1) Effective management of balance sheet - Total debt pay-down in the quarter of $22.6 million and $42.0 million compared to Q3-2007 - $146.2 million in aggregate availability and cash at quarter end - No significant debt maturities until 2012 Accelerated execution of Profit Improvement Plan - Plan of $30 million in annualized fixed cost savings; projected savings of approx. $15 million in 2009 - Decisive steps to strengthen TriMas in a tough environment - Designed to reduce overall cost structure and improve productivity Continued execution of business strategy - Focused on the specialty packaging, energy, aerospace and medical markets - Positioned for long-term growth growing list of commercial opportunities - Growth initiatives driving channel, geographic and end market diversity (1) Including ($0.01) per share in severance and facility closure costs. |
6 2008 Third Quarter Results Quarterly sales increased 7.1% to $276.9 million - Packaging Systems, Energy Products and Industrial Specialties sales increased 21.0% combined - Strong relative performance in RV & Trailer Products and Recreational Accessories - Sales declined 10.2%, but end markets down approximately 20% Adjusted EBITDA increased 8.5% due to the strength in our Aerospace and Energy businesses Income and Diluted EPS improved 53.1% and 56.3%, respectively Total indebtedness decreased by $42.0 million compared to Q3 2007 Ended the quarter with $4.6 million in cash and $141.6 million in aggregate availability under revolving credit and receivables securitization facilities ($ in millions, except EPS) (1) Special Items to consider in evaluating quality of earnings include $0.7 million of severance and facility closure costs in Q3-2008. (from continuing operations) Q3 2008 Q3 2007 % Chg Revenue 276.9 $ 258.6 $ 7.1% Adjusted EBITDA(1) 38.1 $ 35.1 $ 8.5% Income(1) 8.3 $ 5.4 $ 53.1% Diluted EPS(1) 0.25 $ 0.16 $ 56.3% Debt and AR Securitization 626.8 $ 668.8 $ -6.3% |
7 Segment Highlights |
8 Segment Breakout Third Quarter 21% 15% 23% 21% 20% Segment Key 3 Months Ended September 30, 2008 3 Months Ended September 30, 2008 4% 8% 26% 25% 37% Approximately 88% of Q3 Segment Operating Profit is from the Packaging Systems, Energy Products and Industrial Specialties segments Packaging Systems Energy Products Industrial Specialties RV & Trailer Products Recreational Accessories % of Revenue % of Segment Operating Profit |
9 Packaging Systems Sales of core industrial closure products and specialty dispensing products to pharmaceutical, food/beverage and personal care end markets were up year-over-year Laminate and insulation product sales were essentially flat with increases in new specialty tape products offsetting the decline in traditional products sold into the continued weak North American commercial construction markets Adjusted EBITDA and operating profit improved due to increased sales volumes, partially offset by increases in raw material costs and expenses incurred to support sales growth initiatives Develop specialty dispensing product applications for growing end markets and expand geographically to drive growth ($ in millions) Net Sales Adjusted EBITDA Operating Profit $8.1 $8.7 Q3 2007 Q3 2008 $11.3 $12.6 Q3 2007 Q3 2008 $51.8 $58.5 Q3 2007 Q3 2008 11.3% 6.9% 13.0% |
10 Energy Products New product initiatives to add content at the well-site and increased engine demand drove sales increases of engine and related products year-over-year Product expansion efforts, a superior service model and continued high levels of capacity utilization increased specialty gasket sales to refinery and petrochemical industries Adjusted EBITDA and operating profit improved with strong conversion Introduce additional products complementary to engine business compressors and gas production equipment Further expand gasket business with major customers into Southeast Asia, Europe and South America ($ in millions) Net Sales Adjusted EBITDA Operating Profit $4.9 $8.2 Q3 2007 Q3 2008 $5.7 $8.9 Q3 2007 Q3 2008 $40.3 $55.4 Q3 2007 Q3 2008 37.4% 56.1% 68.1% |
11 Industrial Specialties ($ in millions) Sales of aerospace fasteners were robust due to the introduction of new products and a strong market International initiatives drove growth of industrial cylinders Specialty fittings business experienced a softening driven by reduced automotive demand Adjusted EBITDA and operating profit increased due to higher sales volumes and improved margins in the specialty tools, defense and aerospace businesses, which were partially offset by lower absorption of fixed costs in the specialty fittings business Develop specialty products for growing end markets such as aerospace and medical and continue to expand international sales efforts Net Sales Adjusted EBITDA Operating Profit $12.1 $9.9 Q3 2007 Q3 2008 $13.6 $11.6 Q3 2007 Q3 2008 $59.3 $51.0 Q3 2007 Q3 2008 17.7% 22.0% 16.1% |
12 RV & Trailer Products ($ in millions) Sales decreased due to continued weak demand in U.S. end markets resulting from the decline in consumer discretionary spending, consumer confidence and credit availability - Sales in Australia and Southeast Asia increased year-over-year Adjusted EBITDA and operating profit decreased due to the decline in sales, lower absorption of fixed costs as the Company reduced production to manage inventory levels Continued aggressive reduction of fixed costs and inventory management Drive growth by leveraging strong brand names for additional market share and introducing new products Net Sales Adjusted EBITDA Operating Profit $4.3 $1.3 Q3 2007 Q3 2008 $3.4 $6.5 Q3 2007 Q3 2008 $45.9 $42.0 Q3 2007 Q3 2008 (8.6%) (46.9%) (69.6%) |
13 Recreational Accessories ($ in millions) Sales decreased due to continued weak demand resulting from the decline in consumer discretionary spending, consumer confidence and credit availability Adjusted EBITDA and operating profit declined as a result of lower sales volumes and a less favorable sales mix Aggressively reduce fixed cost footprint and working capital investment Drive growth by leveraging strong brand names for additional market share and introducing new products Net Sales Adjusted EBITDA Operating Profit $5.1 $7.7 Q3 2007 Q3 2008 $2.7 $4.9 Q3 2007 Q3 2008 $69.6 $61.7 Q3 2007 Q3 2008 (11.3%) (45.1%) (33.6%) |
14 Financial Highlights & Outlook |
15 Statement of Operations ($ in thousands) 2008 2007 2008 2007 Net sales 276,900 $ 258,650 $ 853,540 $ 830,760 $ Cost of sales (205,150) (188,730) (629,700) (603,190) Gross profit 71,750 69,920 223,840 227,570 Selling, general and administrative expenses (43,910) (42,650) (137,820) (133,510) Advisory services agreement termination fee - - - (10,000) Costs for early termination of operating leases - - - (4,230) Gain (loss) on dispositions of property and equipmen 50 (1,790) (170) (1,680) Operating profit 27,890 25,480 85,850 78,150 Other expense, net: Interest expense (13,570) (15,720) (42,160) (52,920) Debt extinguishment costs - - - (7,440) Other, net (480) (1,230) (3,010) (3,450) Other expense, net (14,050) (16,950) (45,170) (63,810) Income from continuing operations before income tax expense 13,840 8,530 40,680 14,340 Income tax expense (5,540) (3,110) (15,210) (5,230) Income from continuing operations 8,300 $ 5,420 $ 25,470 $ 9,110 $ Income (loss) from discontinued operations, net of income taxes 20 1,160 170 1,330 Net income 8,320 $ 6,580 $ 25,640 $ 10,440 $ Three months ended Nine months ended September 30, September 30, |
16 Statement of Operations (contd) Note: Special Items to consider in evaluating quality of earnings include $0.7 million in severance and facility closure costs in Q3-2008, $2.3 million of restructuring charges in Q2-2008 and $14.2 million in costs and expenses related to the use of IPO proceeds in Q2-2007. Please see slides 29 and 30 for additional information regarding these Special Items. 2008 2007 2008 2007 Earnings per share - basic: Continuing operations 0.25 $ 0.16 $ 0.76 $ 0.34 $ Discontinued operations, net of income taxes - 0.04 0.01 0.05 Net income per share 0.25 $ 0.20 $ 0.77 $ 0.39 $ Weighted average common shares - basic 33,420,560 33,409,500 33,413,214 26,843,749 Earnings per share - diluted: Continuing operations 0.25 $ 0.16 $ 0.76 $ 0.34 $ Discontinued operations, net of income taxes - 0.04 0.01 0.05 Net income per share 0.25 $ 0.20 $ 0.77 $ 0.39 $ Weighted average common shares - diluted 33,469,027 33,409,500 33,441,448 26,843,749 Three months ended Nine months ended September 30, September 30, |
17 Balance Sheet ($ in thousands) September 30, December 31, 2008 2007 Current assets: Cash and cash equivalents 4,650 $ 4,800 $ Receivables, net 136,500 89,370 Inventories, net 198,690 190,590 Deferred income taxes 18,860 18,860 Prepaid expenses and other current assets 8,730 7,010 Assets of discontinued operations held for sale 2,860 3,330 Total current assets 370,290 313,960 Property and equipment, net 191,630 195,120 Goodwill 377,450 377,340 Other intangibles, net 205,300 214,290 Other assets 21,340 27,280 Total assets 1,166,010 $ 1,127,990 $ Current liabilities: Current maturities, long-term debt 12,440 $ 8,390 $ Accounts payable 127,150 121,860 Accrued liabilities 72,310 71,830 Liabilities of discontinued operations 1,250 1,450 Total current liabilities 213,150 203,530 Long-term debt 603,350 607,600 Deferred income taxes 83,990 73,280 Other long-term liabilities 34,870 35,090 Total liabilities 935,360 919,500 Preferred stock $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None - - Common stock, $0.01 par: Authorized 400,000,000 shares; Issued and outstanding: 33,445,841 shares at September 30, 2008 and 33,409,500 shares December 31, 2007 330 330 Paid-in capital 527,120 525,960 Accumulated deficit (348,330) (373,970) Accumulated other comprehensive income 51,530 56,170 Total shareholders equity 230,650 208,490 Total liabilities and shareholders equity 1,166,010 $ 1,127,990 $ Assets Liabilities and Shareholders Equity |
18 Capitalization ($ in thousands) September 30, 2008 December 31, 2007 Cash and Cash Equivalents 4,650 $ 4,800 $ Senior Secured Bank Debt 278,710 279,020 9.875% Senior Sub Notes due 2012 337,080 336,970 Total Debt 615,790 $ 615,990 $ Total Shareholders Equity 230,650 $ 208,490 $ Total Capitalization 846,440 $ 824,480 $ Memo: A/R Securitization 11,000 $ 41,500 $ Total Debt + A/R Securitization 626,790 $ 657,490 $ Key Ratios: Bank LTM EBITDA 153,680 $ 161,040 $ Interest Coverage Ratio 2.66x 2.21x Leverage Ratio 4.08x 4.08x Bank Covenants: Interest Coverage Ratio 2.00x 1.90x Leverage Ratio 5.00x 5.25x As of September 30, 2008, TriMas had $4.6 million in cash and approximately $141.6 million of available liquidity under its revolving credit and receivables securitization facilities. |
19 Outlook and Summary |
20 During first 9 months of 2008, performed well against the objectives incorporated into outlook provided at the beginning of the year Anticipated softened demand resulting from the economic events of October Proactively moved to reduce production levels and inventory position in Q4 Impact of volatile commodity costs TriMas updated 2008 earnings guidance: - EPS range from continuing operations of $0.71 per share to $0.75 per share, excluding Special Items(1) and any charges related to the Profit Improvement Plan 2008 Outlook Full Year Note: Special Items to consider in evaluating quality of earnings include $0.7 million in severance and facility closure costs in Q3-2008, $2.3 million of restructuring charges in Q2-2008 and $14.2 million in costs and expenses related to the use of IPO proceeds in Q2-2007. Please see slides 29 and 30 for additional information regarding these Special Items. |
21 Profit Improvement Plan Description Accelerate existing plan Across all TriMas segments Leverage previously made low-cost country investments - China - Mexico - Thailand Match production and staffing to commercial expectations Execute lean manufacturing and continuous improvement initiatives Minimize cash outlay - Focus capex spending on growth initiatives with quick returns Areas of Focus Manufacturing consolidations Distribution center consolidations Increased sourcing initiatives Consolidation of business activities Reduced staffing levels Expect approximate $15 million of savings in fixed costs in 2009; $30 million annualized savings plan in total |
22 TriMas Priorities Drive operating profit improvement in businesses - Reduce fixed costs - Improve productivity Effectively manage the balance sheet - Protect liquidity - Deploy capital prudently - Pay-down debt Focus capital on strategic growth - Specialty packaging, energy, aerospace, medical components and geographic expansion |
23 Summary Solid Q3 results driven by growth initiatives in Packaging Systems, Energy Products and Industrial Specialties Certain end-markets are challenged and less predictable but we know what we need to do Constrained credit markets, but limited near-term exposure Proactively taking action to mitigate risk and position TriMas for long-term growth Prioritization of and focus on strategic growth initiatives Balance between growth and cost management |
24 Questions and Answers |
25 Appendix |
26 Third Quarter 2008 Results ($ in thousands) (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. 2008 2007 Change 2008 2007 Change Net Sales Packaging Systems 58,520 $ 51,770 $ 13.0% 170,500 $ 162,220 $ 5.1% Energy Products 55,430 40,330 37.4% 157,390 122,930 28.0% Industrial Specialties 59,250 51,030 16.1% 168,930 154,470 9.4% RV & Trailer Products 41,970 45,940 -8.6% 142,370 152,420 -6.6% Recreational Accessories 61,730 69,580 -11.3% 214,350 238,720 -10.2% Net sales from continuing operations 276,900 $ 258,650 $ 7.1% 853,540 $ 830,760 $ 2.7% Operating Profit Packaging Systems 8,670 $ 8,110 $ 6.9% 26,700 $ 27,930 $ -4.4% Energy Products 8,170 4,860 68.1% 24,670 16,930 45.7% Industrial Specialties 12,110 9,930 22.0% 34,750 32,370 7.4% RV & Trailer Products 1,300 4,270 -69.6% 6,110 16,740 -63.5% Recreational Accessories 2,700 4,920 -45.1% 11,820 17,420 -32.1% Corporate expenses and management fees (5,060) (6,610) -23.4% (18,200) (33,240) -45.2% Operating profit from continuing operations 27,890 $ 25,480 $ 9.5% 85,850 $ 78,150 $ 9.9% % Margin 10.1% 9.9% 2.0% 10.1% 9.4% 7.4% Adjusted EBITDA(1) Packaging Systems 12,580 $ 11,300 $ 11.3% 38,250 $ 37,690 $ 1.5% Energy Products 8,850 5,670 56.1% 26,670 19,030 40.1% Industrial Specialties 13,590 11,550 17.7% 39,190 36,050 8.7% RV & Trailer Products 3,440 6,480 -46.9% 11,910 22,840 -47.9% Recreational Accessories 5,120 7,710 -33.6% 19,030 25,130 -24.3% Segment Adjusted EBITDA 43,580 42,710 2.0% 135,050 140,740 -4.0% % Margin 15.7% 16.5% -4.8% 15.8% 16.9% -6.5% Corporate expenses, management fees and other (5,470) (7,580) -27.8% (19,910) (35,810) -44.4% Adjusted EBITDA (1) from continuing operations 38,110 $ 35,130 $ 8.5% 115,140 $ 104,930 $ 9.7% % Margin 13.8% 13.6% 1.5% 13.5% 12.6% 7.1% Three months ended September 30, Nine months ended September 30, |
27 Statement of Cash Flows ($ in thousands) Nine months ended September 30, 2 008 20 07 Net income 25,640 $ 10,440 $ Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: Loss on dispositions of property and equipment 40 1,570 Depreciation 20,740 18,730 Amortization of intangible assets 11,700 11,650 Amortization of debt issue cost s 1,840 4,580 Deferred income taxes 9,360 700 Non-cash compensation expense 1,160 340 Net proceeds from (reductions in) sale of receivables and receivables securitization (26,730) 28,610 Increase in receivables (19,270) (30,970) Increase in inventories (7,640) (10,790) Decrease in prepaid expenses and other assets 4,370 2,320 Increase in accounts payable and accrued liabilities 4,690 8,090 Other , net (3,110) 1,610 Net cash provided by operating activities, net of acquisition impact 22,790 46,880 Cash Flows from Investing Activities: Capital expenditures (20,100) (22,520) Acquisition of leased assets - (29,960) Acquisition of businesses, net of cash acquired (6,350) (13,540) Net proceeds from disposition of businesses and other assets 2,260 6,150 Net cash used for investing activities (24,190) (59,870) Cash Flows from Financing Activities: Proceeds from sale of common stock in connection wit h the Companys initial public offering, net of issuance costs - 126,460 Repayments of borrowings on senior credit facilities (4,270) (2,600) Proceeds from term loan facilities 490 - Proceeds from borrowings on revolving credit facilities 346,160 399,580 Repayments of borrowings on revolving credit facilities (341,130) ( 409,890) Retirement of senior subordinated notes - (100,000) Net cash provided by financing activities 1,250 13,550 Cash and Cash Equivalents: Increase (decrease) for the period (150) 560 At beginning of period 4,800 3,600 At end of period 4,650 $ 4,160 $ Supplemental disclosure of cash flow information: Cash paid for interest 32,240 $ 40,880 $ Cash paid for taxes 6,460 $ 6,840 $ |
28 Reconciliation of Non-GAAP Measure Adjusted EBITDA ($ in thousands) (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 lever age 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 her e may differ from that used by other companies. 2008 2007 2008 2007 Net income 8,320 $ 6,580 $ 25,640 $ 10,440 $ Income tax expense (benefit) 5,560 3,850 15,310 6,960 Interest expense 13,630 15,720 42,320 52,920 Debt extinguishment costs - - - 7,440 Depreciation and amortization 10,740 10,920 32,440 30,380 Adjusted EBITDA (1) 38,250 37,070 115,710 108,140 Adjusted EBITDA (1), discontinued operations 140 1,940 570 3,210 Adjusted EBITDA (1), continuing operations 38,110 $ 35,130 $ 115,140 $ 104,930 $ Three Months Ended September 30, Nine Months Ended September 30, |
29 Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2008 2007 2008 2007 Operating profit from continuing operations, as reported 27,890 $ 25,480 $ 85,850 $ 78,150 $ Special Items to consider in evaluating quality of earnings: Advisory services agreement termination fee - $ - $ - $ (10,000) $ Cost s for early termination of operating leases - - - (4,230) Restructuring activities (710) - (2,970) - Total Special Items (710) $ - $ (2,970) $ (14,230) $ Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2008 2007 2008 2007 Adjusted EBITDA from continuing operations, as reported 38,110 $ 35,130 $ 115,140 $ 104,930 $ Special Items to consider in evaluating quality of earnings: Advisory services agreement termination fee - $ - $ - $ (10,000) $ Cost s for early termination of operating leases - - - (4,230) Restructuring activities (710) - (2,970) - Total Special Items (710) $ - $ (2,970) $ (14,230) $ |
30 Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures Three months ended Three months ended September 30, 2008 September 30, 2007 (dollars in thousands, except per share amounts) Income EPS Income EPS Income and Diluted EPS from continuing operations, as reported. 8,300 $ 0.25 $ 5,420 $ 0.16 $ After-tax impact of Special Items to consider in evaluating quality of income (loss) and diluted EPS from continuing operations: Restructuring activities (430) $ (0.01) $ - $ - $ Total Special Items (430) $ (0.01) $ - $ - $ Weighted-average diluted shares outstanding at September 30, 2008 and 2007 33,469,027 33,409,500 Nine months ended Nine months ended September 30, 2008 September 30, 2007 (dollars in thousands, except per share amounts) Income EPS Income EPS Income and Diluted EPS from continuing operations, as reported. 25,470 $ 0.76 $ 9,110 $ 0.34 $ After-tax impact of Special Items to consider in evaluating quality of income and diluted EPS from continuing operations: Advisory services agreement termination fee - $ - $ (6,300) (0.23) $ Costs for early termination of operating leases - - (2,660) (0.10) Debt extinguishment costs. - - (4,690) (0.17) Restructuring activities (1,870) (0.06) - - Total Special Items (1,870) $ (0.06) $ (13,650) $ (0.50) $ Weighted-average diluted shares outstanding at September 30, 2008 and 2007 33,441,448 26,843,749 |
31 (Unaudited - $ in thousands) LTM EBITDA as Defined in Credit Agreement Reported net loss for the twelve months ended September 30, 2008 (143,230) $ Interest expense, net (as defined) 57,690 Income tax expense (benefit) (2,060) Depreciation and amortization 43,410 Extraordinary non-cash charges 178,450 Interest equivalent costs 3,240 Non-cash expenses related to equity grants 1,380 Other non-cash expenses or losses 4,040 Non-recurring expenses or costs for cost savings projects 8,750 Permitted dispositions 1,890 Permitted acquisitions 120 Bank EBITDA - LTM Ended September 30, 2008 (1) 153,680 $ (1) As defined in the Amended and Restated Credit Agreement dated August 2, 2006. |