UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
Washington, D.C. 20549 | ||
FORM 8-K | ||
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 28, 2017
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 001-10716 | 38-2687639 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) | ||
39400 Woodward Avenue, Suite 130, Bloomfield Hills, Michigan | 48304 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code (248) 631-5450
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:
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 2.05. Costs Associated with Exit or Disposal Activities.
Actions Taken
On March 28, 2017, TriMas Corporation (the “Company”) committed to a plan to cease production at its Lamons Gasket (“Lamons”) Reynosa, Mexico facility, which is included in its Energy segment. Management decided the added capacity from the recently launched Reynosa facility would not be needed as a result of prolonged lower crude exploration and refining activity, leading to significantly lower end market demand, as well as improved manufacturing efficiency at a sister production location. As such, Lamons will consolidate production at its Reynosa facility into its Houston, Texas facility. Lamons expects to exit the facility by June 30, 2017.
Charges associated with exit of the Reynosa facility are expected to range from $2.0 million to $2.5 million, approximately half of which are expected to be non-cash related. These charges are primarily related to planned asset relocation and disposition, as well as expected employee separation costs. In addition, Lamons is party to a lease agreement for the Reynosa facility, for which it has future non-cancellable rent obligations of approximately $4.5 million following the anticipated exit date. The Company may incur a charge to the extent this obligation is greater than estimated future sublease recoveries. All estimated amounts are subject to change until finalized. Charges related to plant relocation and employee separation costs are expected to be recognized during the period from March 28, 2017 through June 30, 2017, and the charge, if any, for unrecoverable lease obligations will be recognized upon the cease-use date of the plant, which is expected to be in second quarter 2017.
Forward-Looking Statements
This Current Report on Form 8-K contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties. In particular, the estimated costs and charges described in this Current Report on Form 8-K are forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to:
• | the timing of the exit from the affected facility; |
• | separation and severance amounts that differ from original estimates; |
• | amounts for non-cash charges relating to property, plant and equipment that differ from the original estimates; |
• | the ability to recover future lease obligations for the plant; and |
• | the success of our cost savings and restructuring measures. |
We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements.
We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You are advised, however, to consult any further disclosures we make on related subjects in our reports on Form 10-Q, 8-K and 10-K that we provide to the Securities and Exchange Commission. You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider any list to be a complete set of all potential risks or uncertainties.
Item 8.01. Other Events.
On April 3, 2017, the Company issued a press release announcing that it has exited a manufacturing plant located in Wolverhampton, United Kingdom and has taken actions to cease production at a plant located in Reynosa, Mexico. Both of these plants are part of the Company’s Lamons business, which is reported in its Energy segment. A copy of the press release is included as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit | Description |
99.1 | Press release dated April 3, 2017 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TRIMAS CORPORATION | |||
Date: April 3, 2017 | By: | /s/ Joshua A. Sherbin | |
Name: | Joshua A. Sherbin | ||
Title: | Senior Vice President, General Counsel and Corporate Secretary | ||
FOR IMMEDIATE RELEASE CONTACT: Christine Parker
Manager, Investor Relations & Communications
(248) 631-5438
christineparker@trimascorp.com
TRIMAS’ LAMONS BUSINESS RATIONALIZES MANUFACTURING FOOTPRINT
Announces Exit of Wolverhampton, UK and Reynosa, MX Plants
BLOOMFIELD HILLS, Michigan, April 3, 2017 - TriMas (NASDAQ: TRS), a diversified, global manufacturer of engineered products, today announced that it exited a manufacturing plant located in Wolverhampton, United Kingdom, and has taken actions to cease production at a plant located in Reynosa, Mexico. Both operations are part of TriMas’ Lamons business, which is included within its Energy segment.
“The decision to exit these two manufacturing locations is part of our overall Lamons performance improvement plan, which was initiated as a countermeasure to offset the prolonged reduced demand levels within the crude oil refinery and exploration end markets,” said Thomas Amato, TriMas’ president and chief executive officer. “While these are difficult actions, they are necessary steps to better focus Lamons’ commercial efforts on regions where our sealing products are in higher demand.”
During the past year, Lamons has significantly improved production throughput at its Houston, Texas facility, which has increased available capacity and improved on-time delivery performance. As a result, Lamons will consolidate the production from its Reynosa facility into its Houston facility, allowing Lamons to focus its resources in a manner to better serve its North American customers.
TriMas estimates charges associated with the exit of the Reynosa facility will range from $2.0 million to $2.5 million, including costs related to asset relocation and disposition, and employee separation. Of this amount, approximately half are expected to be non-cash charges. In addition, Lamons is party to a lease agreement for which it has future rent obligations of approximately $4.5 million following the anticipated exit date. TriMas may incur a charge to the extent this obligation is greater than estimated future sublease recoveries. Lamons expects to exit the facility by June 30, 2017.
In March 2017, TriMas exited its Lamons Wolverhampton facility, which manufactured certain components for subsea applications. However, Lamons will continue to support its sealing product customers in the United Kingdom from its branch in Antwerp, Belgium. The Company estimates charges associated with exiting the Wolverhampton facility to range from $3.0 million to $3.5 million during the first quarter of 2017, the majority of which are expected to be non-cash charges, and primarily related to the disposal of fixed assets and inventory.
Notice Regarding Forward-Looking Statements
Any "forward-looking" statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, contained herein, including those relating to the Company’s business, financial condition or future results, involve risks and uncertainties with respect to, including, but not limited to: the Company's leverage; liabilities imposed by the Company's debt instruments; market demand; competitive factors; supply constraints; material and energy costs; intangible assets, including goodwill or other intangible asset impairment charges; technology factors; litigation; government and regulatory actions; the Company's accounting policies; future trends; general economic and currency conditions; the potential impact of Brexit; various conditions specific to the Company's business and industry; the Company’s ability to identify attractive acquisition candidates, successfully integrate acquired operations
1
or realize the intended benefits of such acquisitions; potential costs and savings related to facility consolidation activities; future prospects of the Company; and other risks that are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.
About TriMas
TriMas is a diversified, global manufacturer of engineered products with approximately 4,000 dedicated employees in 13 countries. We provide customers with innovative product solutions through our businesses, which operate in four segments: Packaging, Aerospace, Energy and Engineered Components. The TriMas family of businesses has strong brand names in the markets served, and operates under a common set of values and strategic priorities under the TriMas Business Model. TriMas is publicly traded on the NASDAQ under the ticker symbol “TRS,” and is headquartered in Bloomfield Hills, Michigan. For more information, please visit www.trimascorp.com.
2