Document



 
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)  February 28, 2019
 
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.)
 
38505 Woodward Avenue, Suite 200, 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 (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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 
 
 
Emerging growth company
o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o






Item 2.02 Results of Operations and Financial Condition.
TriMas Corporation (the “Corporation”) issued a press release on February 28, 2019, reporting its financial results for the fourth quarter and year ending December 31, 2018. A copy of the press release is attached hereto a an exhibit and is incorporated herein by reference. The press release is also available on the Corporation's website at www.trimascorp.com.
In addition, on February 28, 2019, the Company announced, effective in the first quarter of 2019, it will begin reporting its machined components operations, located in Stanton, California and Tolleson, Arizona, in its Specialty Products reportable segment, as it has transitioned leadership responsibilities from TriMas Aerospace to Specialty Products. This modification allows the Company to better leverage the machining competencies and resources of these operations with the other businesses within the Specialty Products reportable segment, as well as provide the Company with the opportunity to expand sales of these products to customers outside of the aerospace market. In addition, this change enables the Company's Aerospace reportable segment to better focus on driving growth and innovation in its aerospace fastener and related product lines.
This realignment has no impact on the Company's historical consolidated balance sheet, statement of operations or cash flows. To provide historical information on a basis consistent with its new reporting structure, the Company has recast certain historical segment information in the attached Exhibit 99.2 for the years ended December 31, 2018, 2017 and 2016, as well as the quarterly periods in the years ended December 31, 2018 and 2017. This information should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2018.
The information furnished pursuant to this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Corporation under the Securities Act of 1933 or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.


(d)    Exhibits. The following exhibits are furnished herewith:
Exhibit No.
 
Description
 
 
 
 
 
99.1
 
 
 
 
 
 
99.2
 

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.

 
 
 
 
TRIMAS CORPORATION
 
 
 
 
 
 
 
Date:
 
February 28, 2019
 
By:
 
/s/ Robert J. Zalupski
 
 
 
 
Name:
 
Robert J. Zalupski
 
 
 
 
Title:
 
Chief Financial Officer


 



Exhibit


https://cdn.kscope.io/f0217310999121b932a4afd42cff6714-trslogoa04.jpg                
CONTACT:
Sherry Lauderback
VP, Investor Relations & Communications
(248) 631-5506
sherrylauderback@trimascorp.com

TRIMAS REPORTS FOURTH QUARTER AND FULL YEAR 2018 RESULTS
Delivers Strong Sales and Earnings Growth; Provides 2019 Outlook
BLOOMFIELD HILLS, Michigan, February 28, 2019 - TriMas (NASDAQ: TRS) today announced financial results for the fourth quarter and full year ended December 31, 2018.
2018 Highlights
Increased net sales by 7.3% to $877.1 million, with sales increases in all segments
Increased operating profit to $122.1 million, while adjusted operating profit(1) increased by 8.5% to $116.1 million
Increased net income to $83.3 million, while adjusted net income(1) increased by 25.8% to $81.0 million
Increased diluted EPS to $1.80, while adjusted diluted EPS(1) increased by 25.0% to $1.75
Increased Adjusted EBITDA(2) by $12.4 million to $167.3 million, or 19.1% of sales
Increased net cash provided by operating activities by 7.7% to $129.3 million, and ended 2018 with $108.2 million of cash on hand
Reduced debt less cash and cash equivalents by $90.1 million, to $185.4 million as of December 31, 2018
Fourth Quarter 2018
TriMas reported fourth quarter net sales of $211.4 million, an increase of 8.3% compared to $195.2 million in fourth quarter 2017. The Company reported operating profit of $25.5 million in fourth quarter 2018 compared to $18.6 million in fourth quarter 2017. Adjusting for Special Items(1), fourth quarter 2018 adjusted operating profit was $25.7 million, an increase of 9.4% compared to the prior year period, as the favorable impact of volume increases was partially offset by higher material costs.
The Company reported fourth quarter 2018 net income of $16.7 million, or $0.36 per diluted share, compared to a net loss of $4.0 million, or $0.09 per diluted share, in fourth quarter 2017 primarily related to one-time tax charges of approximately $12.7 million resulting from the enactment of the Tax Cuts and Jobs Act of 2017. Fourth quarter 2018 adjusted net income(1) was $17.5 million, or $0.38 per diluted share, a 21.0% increase from $14.5 million, or $0.31 per diluted share, in the prior year period.
Full Year 2018
For the full year 2018, TriMas reported net sales of $877.1 million, an increase of 7.3% compared to $817.7 million in 2017. The Company reported operating profit of $122.1 million in 2018 compared to $89.2 million in 2017. Adjusting for Special Items(1), 2018 adjusted operating profit was $116.1 million, an increase of 8.5% compared to the prior year.
The Company reported full year net income of $83.3 million, or $1.80 per diluted share, compared to $31.0 million, or $0.67 per diluted share, in 2017. Full year 2018 adjusted net income(1) was $81.0 million, or $1.75 per diluted share, a 25.8% increase from $64.4 million, or $1.40 per diluted share, in 2017.
"We are pleased to report another strong quarter to conclude 2018, a year in which we achieved 7% organic sales growth and 25% adjusted earnings per share growth compared to the prior year," said Thomas Amato, TriMas President and Chief Executive Officer. "This performance demonstrated great execution by our team, as we continued to leverage the TriMas Business Model to enhance our businesses and better serve our customers, all while generating excellent cash flow and completing the year with a strong balance sheet. During the year, we successfully overcame the impact of higher material costs and the onset of tariffs through improved operating performance, incremental volume and commercial actions."
"In addition to the strong operational and financial performance, we achieved continued progress on numerous strategic initiatives that better position TriMas for profitable growth in the future. For example, we completed numerous Kaizen projects which accelerated our continuous improvement efforts and ramped-up our corporate development initiatives, closing on the acquisition of Plastic Srl in January 2019. We also executed upon our share buyback program, retiring nearly 1% of shares outstanding, or approximately 443,000 shares, during the year."

1



"In 2019, our objectives are to continue our momentum under the TriMas Business Model, better position our businesses strategically to drive growth through innovation, and capitalize on market opportunities through manufacturing efficacy. We anticipate organic sales growth of 3% to 5% compared to 2018, and free cash flow conversion greater than 100% of net income, both in line with our longer-term targets. We expect full year 2019 diluted EPS to range between $1.82 to $1.92 per share. Our performance in 2018 was outstanding, and we remain excited about our prospects for 2019 and beyond," Amato concluded.
Financial Position
TriMas ended 2018 with $108.2 million of cash, $393.1 million of cash and aggregate availability under its revolving credit facility, and a leverage ratio of 1.3x as defined in the Company's credit agreement. TriMas reported total debt of $293.6 million as of December 31, 2018, compared to $303.1 million as of December 31, 2017. In addition, the Company reduced Net Debt(3) during 2018 by $90.1 million to $185.4 million, compared to $275.5 million as of December 31, 2017.
During the fourth quarter, the Company purchased 318,494 shares of its outstanding common stock for approximately $8.6 million, bringing the total for the year ended December 31, 2018 to 442,632 shares for $12.1 million. As announced this morning, TriMas' Board of Directors has authorized an increase in the Company's share repurchase program, enabling the Company to purchase up to $75 million of its outstanding common stock.
The Company reported net cash provided by operations of $46.2 million for fourth quarter 2018, compared to $47.4 million in fourth quarter 2017. On a full year basis, TriMas reported net cash provided by operations of $129.3 million, an increase of 7.7% compared to $120.1 million for 2017. As a result, the Company reported Free Cash Flow(4) of $37.6 million for fourth quarter 2018, compared to $36.7 million in fourth quarter 2017. For 2018, TriMas reported a record Free Cash Flow of $108.3 million, an increase of 8.0% compared to $100.2 million in 2017. The Company exceeded its previously provided 2018 Free Cash Flow guidance. Please see Appendix I for further details.
Fourth Quarter Segment Results
Packaging (Approximately 42% of TriMas 2018 net sales)
TriMas' Packaging segment, which consists primarily of the Rieke® brand, develops and manufactures specialty dispensing and closure applications for the health, beauty and home care, food and beverage, and industrial markets. Net sales for the fourth quarter increased 5.1% compared to the year ago period, primarily as a result of higher sales of health, beauty and home care, and industrial products, related to new product introductions and continued growth in Asia. Fourth quarter operating profit and the related margin percentage increased, as the favorable impact of increased sales volumes more than offset a less favorable product sales mix.
Aerospace (Approximately 21% of TriMas 2018 net sales)
TriMas' Aerospace segment, which includes the Monogram Aerospace Fasteners, Allfast Fastening Systems®, Mac Fasteners and Martinic Engineering brands, develops, qualifies and manufactures highly-engineered, precision fasteners and machined products to serve the aerospace market. Net sales for the fourth quarter increased 6.2% compared to the year ago period, due to higher demand levels for more complex fasteners. Fourth quarter operating profit increased and the related margin percentage decreased slightly, as the impact of higher sales was mitigated primarily by the lower profit level of the standard fastener plant.
Specialty Products (Approximately 37% of TriMas 2018 net sales)
TriMas' Specialty Products segment, which includes the Norris Cylinder, Lamons® and Arrow® Engine brands, designs, manufactures and distributes highly-engineered steel cylinders, sealing and fastener products, and wellhead engines and compression systems for use within the industrial, petrochemical, and oil and gas exploration and refining markets. Fourth quarter net sales increased 13.6% compared to the year ago period, with higher sales levels of all brands due to refocused commercial efforts and increased end market demand. Fourth quarter operating profit and the related margin level increased, as the impact of higher sales levels and prior realignment actions offset the impact of higher material costs.
2019 Modification to Reporting Segments
Effective with the first quarter of 2019, the Company will report its machined components operations, located in Stanton, California and Tolleson, Arizona, in the Specialty Products segment. These operations were previously reported in the Aerospace segment. This modification allows the Company to better leverage its machining competencies and resources across the businesses within the Specialty Products segment, as well as provides the opportunity to expand sales of these products to customers outside of the aerospace market. In addition, this change enables the TriMas

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Aerospace team to better focus on driving growth and innovation in the aerospace fastener and related product lines. Please see today's 8-K, Exhibit 99.2, for historical quarterly information related to this segment change.
Outlook
The Company is estimating that 2019 full year organic sales growth will be 3% to 5% compared to 2018. The Company expects full year 2019 diluted earnings per share range to be between $1.82 to $1.92 per share. In addition, the Company is targeting 2019 Free Cash Flow(4) to be greater than 100% of net income. All of the above amounts considered as 2019 guidance are after adjusting for any current or future amounts that may be considered Special Items.
Conference Call Information
TriMas will host its fourth quarter and full year 2018 earnings conference call today, Thursday, February 28, 2019, at 10:00 a.m. ET. The call-in number is (877) 260-1479. Participants should request to be connected to the TriMas Corporation fourth quarter and full year 2018 earnings conference call (Confirmation Code 533510). The conference call will also be simultaneously webcast via TriMas' website at www.trimascorp.com, under the "Investors" section, with an accompanying slide presentation. A replay of the conference call will be available on the TriMas website or by dialing (888) 203-1112 (Replay Passcode 533510) beginning February 28, 2019 at 3:00 p.m. ET through March 7, 2019 at 3:00 p.m. ET.
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: general economic and currency conditions; material and energy costs; risks and uncertainties associated with intangible assets, including goodwill or other intangible asset impairment charges; competitive factors; future trends; the Company’s ability to realize its business strategies; the Company’s ability to identify attractive acquisition candidates, successfully integrate acquired operations or realize the intended benefits of such acquisitions; information technology and other cyber-related risks; the performance of subcontractors and suppliers; supply constraints; market demand; intellectual property factors; litigation; government and regulatory actions, including, but not limited to, the impact of tariffs, quotas and surcharges; the Company’s leverage; liabilities imposed by debt instruments; labor disputes; changes to fiscal and tax policies; contingent liabilities relating to acquisition activities; the disruption of operations from catastrophic or extraordinary events, including natural disasters; the potential impact of Brexit; tax considerations relating to the Cequent spin-off; the Company’s future prospects; and other risks that are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018. 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, except as required by law.
Non-GAAP Financial Measures
In this release, certain non-GAAP financial measures are used. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure may be found in Appendix I at the end of this release. Additional information is available at www.trimascorp.com under the “Investors” section.
(1) 
Appendix I details certain costs, expenses and other amounts or charges, collectively described as "Special Items," that are included in the determination of net income, earnings per share and/or cash flows from operating activities under GAAP, but that management believes should be separately considered when evaluating the quality of the Company’s core operating results, given they may not reflect the ongoing activities of the business. Management believes that presenting these non-GAAP financial measures, adjusted to remove the impact of Special Items, provides useful information to investors by helping them identify underlying trends in the Company’s businesses and facilitating comparisons of performance with prior and future periods. These non-GAAP financial measures should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP financial measures.

(2)  
The Company defines Adjusted EBITDA as net income (loss) plus expense (benefit) for interest, taxes, depreciation, amortization and non-cash compensation, all as adjusted for the impact of Special Items. Please see Appendix I for additional details.

(3)  
The Company defines Net Debt as Total Debt less Cash and Cash Equivalents. Please see Appendix I for additional details.

(4)  
The Company defines Free Cash Flow as Net Cash Provided by/Used for Operating Activities, excluding the cash impact of Special Items, less Capital Expenditures. Please see Appendix I for additional details.

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About TriMas
TriMas is a diversified industrial manufacturer of products for customers in the consumer products, aerospace, industrial, petrochemical, refinery and oil & gas end markets with approximately 4,000 dedicated employees in 15 countries. We provide customers with a wide range of innovative and quality product solutions through our market-leading businesses, which operate in three segments: Packaging, Aerospace and Specialty Products. 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.




4



TriMas Corporation
Condensed Consolidated Balance Sheet
(Dollars in thousands)


 
 
December 31,
2018
 
December 31,
2017
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
108,150

 
$
27,580

Receivables, net
 
123,110

 
112,220

Inventories
 
173,120

 
155,350

Prepaid expenses and other current assets
 
7,430

 
16,120

Total current assets
 
411,810

 
311,270

Property and equipment, net
 
187,800

 
190,250

Goodwill
 
316,650

 
319,390

Other intangibles, net
 
174,530

 
194,220

Deferred income taxes
 
1,080

 
9,100

Other assets
 
8,650

 
8,970

Total assets
 
$
1,100,520

 
$
1,033,200

Liabilities and Shareholders' Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
93,430

 
$
72,410

Accrued liabilities
 
48,300

 
49,470

Total current liabilities
 
141,730

 
121,880

Long-term debt, net
 
293,560

 
303,080

Deferred income taxes
 
5,560

 
5,650

Other long-term liabilities
 
39,220

 
58,570

Total liabilities
 
480,070

 
489,180

Total shareholders' equity
 
620,450

 
544,020

Total liabilities and shareholders' equity
 
$
1,100,520

 
$
1,033,200







5



TriMas Corporation
Consolidated Statement of Operations
(Dollars in thousands, except share and per share amounts)


 
 
Three months ended
December 31,
 
Twelve months ended
December 31,
 
 
2018
 
2017
 
2018
 
2017
 
 
(unaudited)
 
 
 
 
Net sales
 
$
211,350

 
$
195,210

 
$
877,140

 
$
817,740

Cost of sales
 
(154,110
)
 
(146,000
)
 
(633,020
)
 
(598,350
)
Gross profit
 
57,240

 
49,210

 
244,120

 
219,390

Selling, general and administrative expenses
 
(31,600
)
 
(32,800
)
 
(121,800
)
 
(129,140
)
Net gain (loss) on dispositions of assets
 
(180
)
 
2,140

 
(250
)
 
(1,080
)
Operating profit
 
25,460

 
18,550

 
122,070

 
89,170

Other expense, net:
 
 
 
 
 
 
 
 
Interest expense
 
(3,250
)
 
(4,040
)
 
(13,910
)
 
(14,400
)
Debt financing and related expenses
 

 

 

 
(6,640
)
Other income (expense), net
 
150

 
(630
)
 
(2,180
)
 
(1,920
)
Other expense, net
 
(3,100
)
 
(4,670
)
 
(16,090
)
 
(22,960
)
Income before income tax expense
 
22,360

 
13,880

 
105,980

 
66,210

Income tax expense
 
(5,650
)
 
(17,890
)
 
(22,680
)
 
(35,250
)
Net income (loss)
 
16,710

 
(4,010
)
 
83,300

 
30,960

Basic earnings (loss) per share:
 
 
 
 
 
 
 
 
Net income (loss) per share
 
$
0.37

 
$
(0.09
)
 
$
1.82

 
$
0.68

Weighted average common shares - basic
 
45,747,659

 
45,721,160

 
45,824,555

 
45,682,627

Diluted earnings (loss) per share:
 
 
 
 
 
 
 
 
Net income (loss) per share
 
$
0.36

 
$
(0.09
)
 
$
1.80

 
$
0.67

Weighted average common shares - diluted
 
46,085,202

 
45,721,160

 
46,170,464

 
45,990,252






6



TriMas Corporation
Consolidated Statement of Cash Flow
(Dollars in thousands)
 
 
Twelve months ended
December 31,
 
 
2018
 
2017
Cash Flows from Operating Activities:
 
 
 
 
Net income
 
$
83,300

 
$
30,960

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Loss on dispositions of assets
 
250

 
1,080

Depreciation
 
24,580

 
26,950

Amortization of intangible assets
 
19,440

 
19,920

Amortization of debt issue costs
 
1,290

 
1,320

Deferred income taxes
 
7,200

 
15,260

Non-cash compensation expense
 
7,170

 
6,780

Debt financing and related expenses
 

 
6,640

(Increase) decrease in receivables
 
(11,420
)
 
1,220

(Increase) decrease in inventories
 
(18,690
)
 
4,350

(Increase) decrease in prepaid expenses and other assets
 
9,060

 
(310
)
Increase in accounts payable and accrued liabilities
 
4,340

 
3,640

Other operating activities
 
2,800

 
2,250

Net cash provided by operating activities
 
129,320

 
120,060

Cash Flows from Investing Activities:
 
 
 
 
Capital expenditures
 
(25,050
)
 
(36,800
)
Net proceeds from dispositions of property and equipment
 
250

 
4,450

Net cash used for investing activities
 
(24,800
)
 
(32,350
)
Cash Flows from Financing Activities:
 
 
 
 
Proceeds from borrowings on revolving credit and accounts receivable facilities
 
59,060

 
401,300

Repayments of borrowings on revolving credit and accounts receivable facilities
 
(68,490
)
 
(517,310
)
Payments to purchase common stock
 
(12,140
)
 

Shares surrendered upon exercise and vesting of equity awards to cover taxes
 
(2,380
)
 
(510
)
Proceeds from issuance of senior notes
 

 
300,000

Repayments of borrowings on term loan facilities
 

 
(257,940
)
Debt financing fees
 

 
(6,070
)
Other financing activities
 

 
(310
)
Net cash used for financing activities
 
(23,950
)
 
(80,840
)
Cash and Cash Equivalents:
 
 
 
 
Increase for the year
 
80,570

 
6,870

At beginning of year
 
27,580

 
20,710

At end of year
 
$
108,150

 
$
27,580

Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest
 
$
13,800

 
$
9,430

Cash paid for income taxes
 
$
7,380

 
$
16,230


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Appendix I

TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited - dollars in thousands)
 
 
Three months ended
December 31,
 
Twelve months ended
December 31,
 
 
2018
 
2017
 
2018
 
2017
Packaging
 
 
 
 
 
 
 
 
Net sales
 
$
89,660

 
$
85,310

 
$
368,200

 
$
344,570

Operating profit
 
$
20,140

 
$
18,980

 
$
84,590

 
$
80,610

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 

 
40

 

 
1,710

Adjusted operating profit
 
$
20,140

 
$
19,020

 
$
84,590

 
$
82,320

 
 
 
 
 
 
 
 
 
Aerospace
 
 
 
 
 
 
 
 
Net sales
 
$
45,420

 
$
42,760

 
$
185,920

 
$
184,310

Operating profit
 
$
6,610

 
$
6,550

 
$
27,290

 
$
26,410

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 
250

 

 
250

 

Adjusted operating profit
 
$
6,860

 
$
6,550

 
$
27,540

 
$
26,410

 
 
 
 
 
 
 
 
 
Specialty Products
 
 
 
 
 
 
 
 
Net sales
 
$
76,270

 
$
67,140

 
$
323,020

 
$
288,860

Operating profit
 
$
7,650

 
$
510

 
$
34,260

 
$
12,280

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 
30

 
4,550

 
1,910

 
15,350

Adjusted operating profit
 
$
7,680

 
$
5,060

 
$
36,170

 
$
27,630

 
 
 
 
 
 
 
 
 
Corporate Expenses
 
 
 
 
 
 
 
 
Operating loss
 
$
(8,940
)
 
$
(7,490
)
 
$
(24,070
)
 
$
(30,130
)
Special Items to consider in evaluating operating loss:
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 

 
390

 

 
750

Reversal of legacy related party liability
 
$

 
$

 
$
(8,150
)
 
$

Adjusted operating loss
 
$
(8,940
)
 
$
(7,100
)
 
$
(32,220
)
 
$
(29,380
)
 
 
 
 
 
 
 
 
 
Total Company
 
 
 
 
 
 
 
 
Net sales
 
$
211,350

 
$
195,210

 
$
877,140

 
$
817,740

Operating profit
 
$
25,460

 
$
18,550

 
$
122,070

 
$
89,170

Total Special Items to consider in evaluating operating profit
 
280

 
4,980

 
(5,990
)
 
17,810

Adjusted operating profit
 
$
25,740

 
$
23,530

 
$
116,080

 
$
106,980



8



Appendix I

TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited - dollars in thousands, except share and per share amounts)
 
 
Three months ended
December 31,
 
 Twelve months ended
December 31,
 
 
2018
 
2017
 
2018
 
2017
Net income (loss), as reported
 
$
16,710

 
$
(4,010
)
 
$
83,300

 
$
30,960

Special Items to consider in evaluating quality of net income (loss):
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 
250

 
5,580

 
2,830

 
18,130

Reversal of legacy related party liability
 

 

 
(8,150
)
 

Debt financing and related expenses
 

 

 

 
6,640

Defined benefit pension plan settlement charge
 

 

 
2,500

 

Tax reform adjustments (1)
 
700

 
12,660

 
(400
)
 
12,660

Income tax effect of Special Items (2)
 
(120
)
 
270

 
910

 
(4,010
)
Adjusted net income
 
$
17,540

 
$
14,500

 
$
80,990

 
$
64,380

 
 
 
 
 
 
 
 
 
 
 
Three months ended
December 31,
 
Twelve months ended
December 31,
 
 
2018
 
2017
 
2018
 
2017
Diluted earnings (loss) per share, as reported
 
$
0.36

 
$
(0.09
)
 
$
1.80

 
$
0.67

Special Items to consider in evaluating quality of EPS:
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 

 
0.12

 
0.06

 
0.40

Reversal of legacy related party liability
 

 

 
(0.17
)
 

Debt financing and related expenses
 

 

 

 
0.14

Defined benefit pension plan settlement charge
 

 

 
0.05

 

Tax reform adjustments (1)
 
0.02

 
0.28

 
(0.01
)
 
0.28

Income tax effect of Special Items (2)
 

 

 
0.02

 
(0.09
)
Adjusted diluted EPS
 
$
0.38

 
$
0.31

 
$
1.75

 
$
1.40

Weighted-average shares outstanding
 
46,085,202

 
45,721,160

 
46,170,464

 
45,990,252

 
 
 
 
 
 
 
 
 
(1) As a result of the Tax Cuts and Jobs Act of 2017, the Company recognized one-time charges of $12.7 million in December 2017 from the estimated impact of the inclusion of foreign earnings and revaluation of deferred tax assets and liabilities. In 2018, the Company finalized its accounting related to foreign earnings and recognized approximately $0.7 million of additional tax obligation in the three months ended December 31, 2018. In the twelve months ended December 31, 2018, the Company recognized a net tax benefit of $0.4 million associated with finalizing its estimates of the impact of the Tax Cuts and Jobs Act of 2017.
(2) Income tax effect of Special Items is calculated on an item-by-item basis, utilizing the tax rate in the jurisdiction where the Special Item occurred. For the three and twelve month periods ended December 31, 2018 and 2017, the income tax effect of Special Items varied from the tax rate inherent in the Company’s reported GAAP results, primarily as a result of certain of the Special Items in each period being incurred in jurisdictions where no tax benefit could be recorded due to valuation allowance assessments.



9



Appendix I

TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited - dollars in thousands, except per share amounts)

 
 
Three months ended December 31,
 
 
2018
 
2017
 
 
As reported
 
Special Items
 
As adjusted
 
As reported
 
Special Items
 
As adjusted
Net cash provided by operating activities
 
$
46,230

 
$
530

 
$
46,760

 
$
47,410

 
$
1,970

 
$
49,380

Less: Capital expenditures
 
(9,160
)
 

 
(9,160
)
 
(12,680
)
 

 
(12,680
)
Free Cash Flow
 
37,070

 
530

 
37,600

 
34,730

 
1,970

 
36,700

Net income (loss)
 
16,710

 
830

 
17,540

 
(4,010
)
 
18,510

 
14,500

Free Cash Flow as a percentage of net income (loss)
 
222
%
 
 
 
214
%
 
n/m

 
 
 
253
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve months ended December 31,
 
 
2018
 
2017
 
 
As reported
 
Special Items
 
As adjusted
 
As reported
 
Special Items
 
As adjusted
Net cash provided by operating activities
 
$
129,320

 
$
3,980

 
$
133,300

 
120,060

 
$
16,970

 
$
137,030

Less: Capital expenditures
 
(25,050
)
 

 
(25,050
)
 
(36,800
)
 

 
(36,800
)
Free Cash Flow
 
104,270

 
3,980

 
108,250

 
83,260

 
16,970

 
100,230

Net income
 
83,300

 
(2,310
)
 
80,990

 
30,960

 
33,420

 
64,380

Free Cash Flow as a percentage of net income
 
125
%
 
 
 
134
%
 
269
%
 
 
 
156
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
December 31,
2018
 
December 31,
2017
Long-term debt, net
 
$
293,560

 
$
303,080

Less: Cash and cash equivalents
 
108,150

 
27,580

Net Debt
 
$
185,410

 
$
275,500



10



Appendix I

TriMas Corporation
Additional Information Regarding Special Items Impacting
Reported GAAP Financial Measures
(Unaudited - dollars in thousands, except per share amounts)
 
 
Three months ended
December 31,
 
 Twelve months ended
December 31,
 
 
2018
 
2017
 
2018
 
2017
Net income (loss), as reported
 
$
16,710

 
$
(4,010
)
 
$
83,300

 
$
30,960

Depreciation expense
 
5,950

 
8,060

 
24,580

 
26,950

Amortization expense
 
4,840

 
5,000

 
19,440

 
19,920

Interest expense
 
3,250

 
4,040

 
13,910

 
14,400

Income tax expense
 
5,650

 
17,890

 
22,680

 
35,250

Non-cash compensation expense
 
2,770

 
1,690

 
7,170

 
6,780

Adjusted EBITDA, before Special Items
 
$
39,170

 
$
32,670

 
$
171,080

 
$
134,260

Adjusted EBITDA impact of Special Items
 
350

 
3,010

 
(3,830
)
 
20,570

Adjusted EBITDA
 
$
39,520

 
$
35,680

 
$
167,250

 
$
154,830

Adjusted EBITDA as a percentage of net sales
 
18.7
%
 
18.3
%
 
19.1
%
 
18.9
%



11
Exhibit


Exhibit 99.2
TriMas Corporation
Supplemental Business Segment Financial Information - Segment Reclassification
(Unaudited, dollars in thousands)
 
 
2018 quarterly periods ended
 
 
 
 
March 31
 
June 30
 
September 30
 
December 31
 
Year ended December 31, 2018
Aerospace
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
45,810

 
$
45,620

 
$
49,070

 
$
45,420

 
$
185,920

Operating profit
 
$
5,080

 
$
7,310

 
$
8,290

 
$
6,610

 
$
27,290

Special Items(1) to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 

 

 

 
250

 
250

Adjusted operating profit
 
$
5,080

 
$
7,310

 
$
8,290

 
$
6,860

 
$
27,540

 
 
 
 
 
 
 
 
 
 
 
Specialty Products
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
83,090

 
$
84,200

 
$
79,460

 
$
76,270

 
$
323,020

Operating profit
 
$
9,650

 
$
9,240

 
$
7,720

 
$
7,650

 
$
34,260

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 
1,030

 
580

 
270

 
30

 
1,910

Adjusted operating profit
 
$
10,680

 
$
9,820

 
$
7,990

 
$
7,680

 
$
36,170

 
 
 
 
 
 
 
 
 
 
 
Aerospace - Recast
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
37,790

 
$
39,100

 
$
40,890

 
$
38,600

 
$
156,380

Operating profit
 
$
4,590

 
$
6,450

 
$
7,680

 
$
6,190

 
$
24,910

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 

 

 

 
250

 
250

Adjusted operating profit
 
$
4,590

 
$
6,450

 
$
7,680

 
$
6,440

 
$
25,160

 
 
 
 
 
 
 
 
 
 
 
Specialty Products - Recast
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
91,110

 
$
90,720

 
$
87,640

 
$
83,090

 
$
352,560

Operating profit
 
$
10,140

 
$
10,100

 
$
8,330

 
$
8,070

 
$
36,640

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 
1,030

 
580

 
270

 
30

 
1,910

Adjusted operating profit
 
$
11,170

 
$
10,680

 
$
8,600

 
$
8,100

 
$
38,550

(1) Certain costs, expenses and other amounts or charges, collectively described as "Special Items," that are included in the determination of net income, earnings per share and/or cash flows from operating activities under GAAP, but that management believes should be separately considered when evaluating the quality of the Company’s core operating results, given they may not reflect the ongoing activities of the business. Management believes that presenting these non-GAAP financial measures, adjusted to remove the impact of Special Items, provides useful information to investors by helping them identify underlying trends in the Company’s businesses and facilitating comparisons of performance with prior and future periods. These non-GAAP financial measures should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP financial measures.






TriMas Corporation
Supplemental Business Segment Financial Information - Segment Reclassification
(Unaudited, dollars in thousands)
 
 
2017 quarterly periods ended
 
 
 
 
March 31
 
June 30
 
September 30
 
December 31
 
Year ended December 31, 2017
Aerospace
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
45,420

 
$
47,580

 
$
48,550

 
$
42,760

 
$
184,310

Operating profit
 
$
5,060

 
$
6,990

 
$
7,810

 
$
6,550

 
$
26,410

 
 
 
 
 
 
 
 
 
 
 
Specialty Products
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
73,450

 
$
77,050

 
$
71,220

 
$
67,140

 
$
288,860

Operating profit
 
$
1,510

 
$
5,260

 
$
5,000

 
$
510

 
$
12,280

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 
6,440

 
3,890

 
470

 
4,550

 
15,350

Adjusted operating profit
 
$
7,950

 
$
9,150

 
$
5,470

 
$
5,060

 
$
27,630

 
 
 
 
 
 
 
 
 
 
 
Aerospace - Recast
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
38,440

 
$
39,880

 
$
40,230

 
$
35,500

 
$
154,050

Operating profit
 
$
5,510

 
$
6,410

 
$
7,470

 
$
5,570

 
$
24,960

 
 
 
 
 
 
 
 
 
 
 
Specialty Products - Recast
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
80,430

 
$
84,750

 
$
79,540

 
$
74,400

 
$
319,120

Operating profit
 
$
1,060

 
$
5,840

 
$
5,340

 
$
1,490

 
$
13,730

Special Items to consider in evaluating operating profit:
 
 
 
 
 
 
 
 
 
 
Business restructuring and severance costs
 
6,440

 
3,890

 
470

 
4,550

 
15,350

Adjusted operating profit
 
$
7,500

 
$
9,730

 
$
5,810

 
$
6,040

 
$
29,080






TriMas Corporation
Supplemental Business Segment Financial Information - Segment Reclassification
(Unaudited, dollars in thousands)
 
 
 
 
 
Year ended December 31, 2016
Aerospace
 
 
Net sales
 
$
174,920

Operating loss
 
$
(90,540
)
Special Items to consider in evaluating operating profit:
 
 
Business restructuring and severance costs
 
9,700

Impairment of goodwill and indefinite-lived intangible assets
 
98,900

Adjusted operating profit
 
$
18,060

 
 
 
Specialty Products
 
 
Net sales
 
$
277,760

Operating profit
 
$
2,900

Special Items to consider in evaluating operating profit:
 
 
Business restructuring and severance costs
 
19,990

Adjusted operating profit
 
$
22,890

 
 
 
Aerospace - Recast
 
 
Net sales
 
$
148,980

Operating loss
 
$
(89,020
)
Special Items to consider in evaluating operating profit:
 
 
Business restructuring and severance costs
 
9,190

Impairment of goodwill and indefinite-lived intangible assets
 
98,900

Adjusted operating profit
 
$
19,070

 
 
 
Specialty Products - Recast
 
 
Net sales
 
$
303,700

Operating profit
 
$
1,380

Special Items to consider in evaluating operating profit:
 
 
Business restructuring and severance costs
 
20,500

Adjusted operating profit
 
$
21,880