SEC Filing | TriMas Corporation

View:

Download DOC

Download PDF

Download XLS

Download XBRL

Document

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q



(Mark One)
☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended		June 30, 2020
Or
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from to .

Commission file number 001-10716

TRIMAS CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		38-2687639
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

38505 Woodward Avenue, Suite 200

Bloomfield Hills, Michigan 48304

(Address of principal executive offices, including zip code)

(248) 631-5450

(Registrant's telephone number, including area code)



Title of each class	Trading symbol(s)	Name of exchange on which registered
Common stock, $0.01 par value	TRS	The NASDAQ Global Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 22, 2020, the number of outstanding shares of the Registrant's common stock, $0.01 par value, was 45,503,644 shares.

Table of Contents

TriMas Corporation

Index



Part I.	Financial Information

		Forward-Looking Statements	2

	Item 1.	Consolidated Financial Statements	3

		Consolidated Balance Sheet as of June 30, 2020 and December 31, 2019	3

		Consolidated Statement of Operations for the Three and Six Months Ended June 30, 2020 and 2019	4

		Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30, 2020 and 2019	5

		Consolidated Statement of Cash Flows for the Six Months Ended June 30, 2020 and 2019	6

		Consolidated Statement of Shareholders' Equity for the Three and Six Months Ended June 30, 2020 and 2019	7

		Notes to Consolidated Financial Statements	8

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42

	Item 4.	Controls and Procedures	42

Part II.	Other Information

	Item 1.	Legal Proceedings	43

	Item 1A.	Risk Factors	43

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

	Item 3.	Defaults Upon Senior Securities	44

	Item 4.	Mine Safety Disclosures	44

	Item 5.	Other Information	44

	Item 6.	Exhibits	45

	Signatures		46

Table of Contents

Forward-Looking Statements

This report may contain 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 about our financial condition, results of operations and business. 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.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to: the severity and duration of the ongoing corona virus (“COVID-19”) pandemic on our operations, customers and suppliers, as well as related actions taken by governmental authorities and other third parties in response, each of which is uncertain, rapidly changing and difficult to predict; 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; our ability to realize our business strategies; our 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 our subcontractors and suppliers; supply constraints; market demand; intellectual property factors; litigation; government and regulatory actions, including, without limitation, the impact of tariffs, quotas and surcharges; our leverage; liabilities imposed by our 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 or public health crises; the potential impact of Brexit; tax considerations relating to the Cequent spin-off; our future prospects; and other risks that are discussed in Part I, Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2019 and elsewhere in this report. The risks described in our Annual Report on Form 10-K and elsewhere in this report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows.

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 caution readers not to place undue reliance on the statements, which speak only as of the date of this report. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by law.

We disclose important factors that could cause our actual results to differ materially from our expectations implied by our forward-looking statements under Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations, prospects and ability to service our debt.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

TriMas Corporation

Consolidated Balance Sheet

(Dollars in thousands)



	June 30, 2020			December 31, 2019
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	65,250		$	172,470
Receivables, net of reserves of approximately $3.7 million and $2.1 million as of June 30, 2020 and December 31, 2019, respectively	123,320			108,860
Inventories	140,890			132,660
Prepaid expenses and other current assets	18,900			20,050
Total current assets	348,360			434,040
Property and equipment, net	210,960			214,330
Operating lease right-of-use assets	35,270			27,850
Goodwill	376,320			334,640
Other intangibles, net	188,170			161,390
Deferred income taxes	3,630			500
Other assets	22,190			19,950
Total assets	$	1,184,900		$	1,192,700
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	60,180		$	72,670
Accrued liabilities	46,680			42,020
Operating lease liabilities, current portion	6,480			5,100
Total current liabilities	113,340			119,790
Long-term debt, net	295,260			294,690
Operating lease liabilities	29,330			23,100
Deferred income taxes	27,960			16,830
Other long-term liabilities	57,910			40,810
Total liabilities	523,800			495,220
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: 43,502,103 shares at June 30, 2020 and 44,562,679 shares at December 31, 2019	440			450
Paid-in capital	753,430			782,880
Accumulated deficit	(82,430		)	(79,850		)
Accumulated other comprehensive loss	(10,340		)	(6,000		)
Total shareholders' equity	661,100			697,480
Total liabilities and shareholders' equity	$	1,184,900		$	1,192,700

The accompanying notes are an integral part of these financial statements.

Table of Contents

TriMas Corporation

Consolidated Statement of Operations

(Unaudited—dollars in thousands, except for per share amounts)



	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Net sales	$	199,550		$	190,830		$	382,340		$	364,200
Cost of sales	(162,320		)	(137,040		)	(298,740		)	(263,620		)
Gross profit	37,230			53,790			83,600			100,580
Selling, general and administrative expenses	(55,380		)	(26,730		)	(81,920		)	(53,720		)
Operating profit (loss)	(18,150		)	27,060			1,680			46,860
Other expense, net:
Interest expense	(4,230		)	(3,490		)	(7,810		)	(6,930		)
Other income, net	1,130			1,220			1,050			650
Other expense, net	(3,100		)	(2,270		)	(6,760		)	(6,280		)
Income (loss) before income tax expense	(21,250		)	24,790			(5,080		)	40,580
Income tax benefit (expense)	5,550			(6,070		)	2,500			(7,310		)
Income (loss) from continuing operations	(15,700		)	18,720			(2,580		)	33,270
Income from discontinued operations, net of tax	—			3,300			—			7,840
Net income (loss)	$	(15,700	)	$	22,020		$	(2,580	)	$	41,110
Basic earnings (loss) per share:
Continuing operations	$	(0.36	)	$	0.41		$	(0.06	)	$	0.73
Discontinued operations	—			0.07			—			0.17
Net income (loss) per share	$	(0.36	)	$	0.48		$	(0.06	)	$	0.90
Weighted average common shares—basic	43,463,235			45,592,075			43,832,144			45,585,445
Diluted earnings (loss) per share:
Continuing operations	$	(0.36	)	$	0.41		$	(0.06	)	$	0.72
Discontinued operations	—			0.07			—			0.17
Net income (loss) per share	$	(0.36	)	$	0.48		$	(0.06	)	$	0.89
Weighted average common shares—diluted	43,463,235			45,828,315			43,832,144			45,910,249

The accompanying notes are an integral part of these financial statements.

Table of Contents

TriMas Corporation

Consolidated Statement of Comprehensive Income

(Unaudited—dollars in thousands)



	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Net income (loss)	$	(15,700	)	$	22,020		$	(2,580	)	$	41,110
Other comprehensive income (loss):
Defined benefit plans (Note 18)	160			100			310			200
Foreign currency translation	1,310			(900		)	(6,950		)	(200		)
Derivative instruments (Note 11)	(2,130		)	(730		)	2,300			1,490
Total other comprehensive income (loss)	(660		)	(1,530		)	(4,340		)	1,490
Total comprehensive income (loss)	$	(16,360	)	$	20,490		$	(6,920	)	$	42,600

The accompanying notes are an integral part of these financial statements.

Table of Contents

TriMas Corporation

Consolidated Statement of Cash Flows

(Unaudited—dollars in thousands)



	Six months ended June 30,
	2020			2019
Cash Flows from Operating Activities:
Net income (loss)	$	(2,580	)	$	41,110
Income from discontinued operations	—			7,840
Income (loss) from continuing operations	(2,580		)	33,270
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities, net of acquisition impact:
Loss on dispositions of assets	1,010			30
Depreciation	14,770			11,990
Amortization of intangible assets	10,150			9,380
Amortization of debt issue costs	570			560
Deferred income taxes	(1,460		)	4,130
Non-cash compensation expense	4,680			3,040
Non-cash change in legacy liability estimate	23,400			—
Increase in receivables	(12,300		)	(5,720		)
Decrease in inventories	5,260			380
Decrease in prepaid expenses and other assets	290			1,430
Decrease in accounts payable and accrued liabilities	(14,530		)	(24,410		)
Other operating activities	1,580			(1,310		)
Net cash provided by operating activities of continuing operations	30,840			32,770
Net cash used for operating activities of discontinued operations	—			(3,490		)
Net cash provided by operating activities, net of acquisition impact	30,840			29,280
Cash Flows from Investing Activities:
Capital expenditures	(9,250		)	(11,500		)
Acquisition of businesses, net of cash acquired	(95,160		)	(67,030		)
Net proceeds from disposition of business, property and equipment	2,110			—
Net cash used for investing activities of continuing operations	(102,300		)	(78,530		)
Net cash used for investing activities of discontinued operations	—			(780		)
Net cash used for investing activities	(102,300		)	(79,310		)
Cash Flows from Financing Activities:
Proceeds from borrowings on revolving credit facilities	245,700			93,220
Repayments of borrowings on revolving credit facilities	(247,320		)	(92,410		)
Shares surrendered upon exercise and vesting of equity awards to cover taxes	(2,570		)	(3,230		)
Payments to purchase common stock	(31,570		)	(15,420		)
Net cash used for financing activities of continuing operations	(35,760		)	(17,840		)
Net cash provided by financing activities of discontinued operations	—			—
Net cash used for financing activities	(35,760		)	(17,840		)
Cash and Cash Equivalents:
Decrease for the period	(107,220		)	(67,870		)
At beginning of period	172,470			108,150
At end of period	$	65,250		$	40,280
Supplemental disclosure of cash flow information:
Cash paid for interest	$	7,150		$	6,190
Cash paid for taxes	$	3,410		$	10,160

The accompanying notes are an integral part of these financial statements.

Table of Contents

TriMas Corporation

Consolidated Statement of Shareholders' Equity

Six Months Ended June 30, 2020 and 2019

(Unaudited—dollars in thousands)



	Common Stock			Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balances, December 31, 2019	$	450		$	782,880		$	(79,850	)	$	(6,000	)	$	697,480
Net income	—			—			13,120			—			13,120
Other comprehensive loss	—			—			—			(3,680		)	(3,680		)
Purchase of common stock	(20		)	(31,550		)	—			—			(31,570		)
Shares surrendered upon exercise and vesting of equity awards to cover taxes	—			(1,830		)	—			—			(1,830		)
Non-cash compensation expense	—			1,940			—			—			1,940
Balances, March 31, 2020	$	430		$	751,440		$	(66,730	)	$	(9,680	)	$	675,460
Net loss	—			—			(15,700		)	—			(15,700		)
Other comprehensive loss	—			—			—			(660		)	(660		)
Shares surrendered upon exercise and vesting of equity awards to cover taxes	—			(740		)	—			—			(740		)
Non-cash compensation expense	10			2,730			—			—			2,740
Balances, June 30, 2020	$	440		$	753,430		$	(82,430	)	$	(10,340	)	$	661,100



	Common Stock			Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total
Balances, December 31, 2018	$	460		$	816,500		$	(179,660	)	$	(16,850	)	$	620,450
Net income	—			—			19,090			—			19,090
Other comprehensive income	—			—			—			3,020			3,020
Purchase of common stock	—			(670		)	—			—			(670		)
Shares surrendered upon exercise and vesting of equity awards to cover taxes	—			(2,620		)	—			—			(2,620		)
Non-cash compensation expense	—			1,320			—			—			1,320
Impact of accounting standards adoption	—			—			1,190			(1,270		)	(80		)
Balances, March 31, 2019	$	460		$	814,530		$	(159,380	)	$	(15,100	)	$	640,510
Net income	—			—			22,020			—			22,020
Other comprehensive loss	—			—			—			(1,530		)	(1,530		)
Purchase of common stock	(10		)	(14,740		)	—			—			(14,750		)
Shares surrendered upon exercise and vesting of equity awards to cover taxes	—			(610		)	—			—			(610		)
Non-cash compensation expense	—			1,720			—			—			1,720
Balances, June 30, 2019	$	450		$	800,900		$	(137,360	)	$	(16,630	)	$	647,360

The accompanying notes are an integral part of these financial statements.

Table of Contents

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation

TriMas Corporation ("TriMas" or the "Company"), and its consolidated subsidiaries, designs, engineers and manufactures innovative products under leading brand names for customers primarily in the consumer products, aerospace & defense, and industrial markets.

In the first quarter of 2020, TriMas began reporting its machined components operations, located in Stanton, California and Tolleson, Arizona, as part of its Aerospace segment. The operations were previously reported in the Specialty Products segment. The move of these operations into TriMas Aerospace facilitates a more rapid approach to achieving anticipated synergies from the recent RSA Engineered Products ("RSA") acquisition, allowing the Company to better leverage the machining competencies and resources across its aerospace businesses. See Note 15, "Segment Information," for further information on each of the Company's reportable segments.

In addition, on December 20, 2019, the Company completed the sale of its Lamons division (“Lamons”), a transaction entered into with an investment fund sponsored by First Reserve on November 1, 2019. Lamons was sold for approximately $135 million in cash. The financial results of Lamons were previously reported within the Company's Specialty Products segment, and are presented as discontinued operations for all periods presented in the financial statements attached hereto.

In the second quarter of 2020, the Company elected to change its method of accounting for asbestos-related defense costs from accruing for probable and reasonably estimable defense costs associated with known claims expected to settle to accrue for all future defense costs for both known and unknown claims, which the Company now believes are reasonably estimable. The Company believes this change is preferable, as asbestos-related defense costs represent expenditures related to legacy activities that do not contribute to current or future revenue generating activities, and recording an estimate of the full liability for asbestos-related costs, where estimable with reasonable precision, provides a more complete assessment of the liability associated with resolving asbestos-related claims. This accounting change has been reflected as a change in accounting estimate effected by a change in accounting principle. See Note 14, "Commitments and Contingencies," for further information on this change.

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries and, in the opinion of management, contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of financial position and results of operations. The preparation of financial statements also requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results may differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the ongoing outbreak of a new strain of the coronavirus (“COVID-19”). While the full impact of COVID-19 is unknown and cannot be reasonably estimated at this time, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are differences between these estimates and actual results, the Company's consolidated financial statements may be materially affected.

Results of operations for interim periods are not necessarily indicative of results for the full year, and certain prior year amounts have been reclassified to conform to current year presentation. The accompanying consolidated financial statements and notes thereto should be read in conjunction with the Company's 2019 Annual Report on Form 10-K.

2. New Accounting Pronouncements

Recently Issued Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which removes specific exceptions to the general principles in Topic 740, simplifies the accounting for income taxes and provides clarification of certain aspects of current guidance. ASU 2019-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted. The Company is in the process of assessing the impact of adoption on its consolidated financial statements.

Table of Contents

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)" ("ASU 2018-14"), which modifies the disclosure requirements for employers who sponsor defined benefit pension or other postretirement plans. ASU 2018-14 is effective for fiscal years ending after December 15, 2020, with early adoption permitted. ASU 2018-14 is to be applied retrospectively to all periods presented. The Company is in the process of assessing the impact of adoption on its consolidated financial statements.

3. Discontinued Operations

On December 20, 2019, the Company completed the sale of Lamons to two wholly-owned subsidiaries of an investment fund sponsored by First Reserve, pursuant to an Asset and Stock Purchase Agreement dated as of November 1, 2019 (the “Purchase Agreement”), for a purchase price of $135 million, subject to certain adjustments as set forth in the Purchase Agreement. The transaction was finalized in the first quarter of 2020 and resulted in a $1.8 million payment to the Company.

The Company's historical results for Lamons are shown in the accompanying consolidated statement of operations as a discontinued operation. Results of discontinued operations are summarized as follows (dollars in thousands):



	Three months ended June 30,			Six months ended June 30,
	2019			2019
Net sales	$	48,540		$	96,460
Cost of sales	(36,980		)	(71,870		)
Gross profit	11,560			24,590
Selling, general and administrative expenses	(7,510		)	(14,490		)
Operating profit	4,050			10,100
Other income, net	130			20
Income from discontinued operations, before income taxes	4,180			10,120
Income tax expense	(880		)	(2,280		)
Income from discontinued operations, net of tax	$	3,300		$	7,840

4. Revenue

The following table presents the Company’s disaggregated net sales by primary market served (dollars in thousands):



	Three months ended June 30,				Six months ended June 30,
Customer Markets	2020		2019		2020		2019
Consumer Products	$	104,530	$	82,060	$	183,590	$	149,980
Aerospace & Defense	42,610		49,510		91,530		95,090
Industrial	52,410		59,260		107,220		119,130
Total net sales	$	199,550	$	190,830	$	382,340	$	364,200

The Company’s Packaging segment earns revenues from the consumer products (comprised of the beauty and personal care, home care, food and beverage, pharmaceutical and nutraceutical submarkets) and industrial markets. The Aerospace segment earns revenues from the aerospace & defense market (comprised of commercial, regional and business jet and military submarkets). The Specialty Products segment earns revenues from a variety of submarkets within the industrial market.

Table of Contents

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

5. Realignment Actions

In the three months ended June 30, 2020, the Company executed certain realignment actions, primarily in its Aerospace and Specialty Products segments, in response to reductions in current and expected future end market demand. The Company recorded a non-cash charge of approximately $13.2 million related to inventory reductions, primarily as a result of a strategic decision in its Arrow Engine division to narrow its product line focus. The Company also recorded a non-cash charge of approximately $2.2 million related to certain production equipment removed from service given reduced demand levels. In addition, the Company reduced its employment levels given lower customer demand during second quarter 2020, incurring approximately $3.1 million in severance charges, of which approximately $1.9 million was paid by June 30, 2020. For the three months ended June 30, 2020, approximately $16.0 million and $2.5 million of these charges were included in cost of sales and selling, general and administrative expenses, respectively, in the accompanying consolidated statement of operations.

6. Acquisitions

2020 Acquisitions

On April 17, 2020, the Company acquired the Rapak® brand, including certain bag-in-box product lines and assets ("Rapak") for an aggregate amount of approximately $11.4 million, subject to normal course adjustments. Rapak, which is reported in the Company's Packaging segment, has manufacturing locations in Indiana, California and Illinois, and historically generated approximately $30 million in annual revenue.

On February 27, 2020, the Company acquired RSA Engineered Products, a manufacturer of complex, highly-engineered and proprietary ducting, connectors and related products for air management systems used in aerospace and defense applications, for an aggregate amount of approximately $83.7 million, net of cash acquired, subject to normal course adjustments. The fair value of assets acquired and liabilities assumed included approximately $80.2 million of goodwill and intangible assets, $10.1 million of net working capital, $2.1 million of property and equipment, and $8.7 million of net deferred tax liabilities. RSA, which is reported in the Company's Aerospace segment, is located in Simi Valley, California and historically generated approximately $30 million in annual revenue.

In connection with the acquisitions, the Company recorded approximately $2.3 million and $2.8 million of non-cash purchase accounting-related expenses during the three and six months ended June 30, 2020, respectively, within cost of sales related to the step-up in value and subsequent sale of inventory.

2019 Acquisitions

In April 2019, the Company acquired Taplast S.p.A. ("Taplast"), a designer and manufacturer of dispensers, closures and containers for the beauty and personal care, home care, and food and beverage packaging markets, for an aggregate amount of approximately $44.7 million, net of cash acquired. With manufacturing locations in both Italy and Slovakia, Taplast serves markets in Europe and North America and historically generated approximately $32 million in annual revenue. Taplast is reported in the Company's Packaging segment.

In January 2019, the Company acquired Plastic Srl, a manufacturer of single-bodied and assembled polymeric caps and closures for use in home care products, for an aggregate amount of approximately $22.4 million, net of cash acquired. Located in Italy, Plastic Srl serves the home care market throughout Italy and other European countries and historically generated approximately $12 million in annual revenue. Plastic Srl is reported in the Company's Packaging segment.

In connection with the acquisitions, the Company recorded approximately $0.2 million and $1.2 million of non-cash purchase accounting-related expenses during the three and six months ended June 30, 2019, respectively. Of these amounts, approximately $0.9 million was recognized during the six months ended June 30, 2019, within selling, general and administrative expenses, primarily related to the write-off of the Plastic Srl trade name acquired that will not be used. In addition, approximately $0.2 million and $0.3 million was recognized during the three and six months ended June 30, 2019, respectively, within cost of sales related to the step-up in value and subsequent sale of inventory.

Table of Contents

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

7. Goodwill and Other Intangible Assets

The Company assesses goodwill and other intangible assets for impairment on an annual basis as of October 1, and more frequently if there are changes in the business climate or as a result of a triggering event taking place. The Company considered the current and potential future market and economic impacts that may result from the COVID-19 pandemic, including its impact on the Company's reporting units, and also assessed the change in its market capitalization during the first and second quarter of 2020. Based on this review, and after consideration of the historical excess in fair value over carrying value within the Company's reporting units, the Company determined that there was not a triggering event which would require an interim impairment test to be performed.

In the first quarter of 2020, the Company began reporting its machined products operations within the Aerospace segment. These operations were previously reported in the Company's Specialty Products segment. As a result of the reporting structure change, goodwill of approximately $12.7 million was reassigned from the Specialty Products segment to the Aerospace segment.

Changes in the carrying amount of goodwill for the six months ended June 30, 2020 are summarized as follows (dollars in thousands):



	Packaging			Aerospace		Specialty Products			Total
Balance, December 31, 2019	$	181,650		$	133,690	$	19,300		$	334,640
Goodwill from acquisitions	—			43,260		—			43,260
Goodwill reassigned in segment realignment	—			12,740		(12,740		)	—
Foreign currency translation and other	(1,580		)	—		—			(1,580		)
Balance, June 30, 2020	$	180,070		$	189,690	$	6,560		$	376,320

The Company amortizes its other intangible assets over periods ranging from one to 30 years. The gross carrying amounts and accumulated amortization of the Company's other intangibles are summarized below (dollars in thousands):



	As of June 30, 2020					As of December 31, 2019
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets:
Customer relationships, 5 – 12 years	$	100,160	$	(54,200	)	$	73,860	$	(49,910	)
Customer relationships, 15 – 25 years	122,280		(59,230		)	122,280		(56,010		)
Total customer relationships	222,440		(113,430		)	196,140		(105,920		)
Technology and other, 1 – 15 years	54,100		(31,240		)	52,430		(29,790		)
Technology and other, 17 – 30 years	43,300		(38,620		)	43,300		(37,620		)
Total technology and other	97,400		(69,860		)	95,730		(67,410		)
Indefinite-lived intangible assets:
Trademark/Trade names	51,620		—			42,850		—
Total other intangible assets	$	371,460	$	(183,290	)	$	334,720	$	(173,330	)

Table of Contents

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Amortization expense related to intangible assets as included in the accompanying consolidated statement of operations is summarized as follows (dollars in thousands):



	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Technology and other, included in cost of sales	$	1,260	$	1,200	$	2,470	$	2,400
Customer relationships, included in selling, general and administrative expenses	4,040		3,550		7,680		6,980
Total amortization expense	$	5,300	$	4,750	$	10,150	$	9,380

8. Inventories

Inventories consist of the following components (dollars in thousands):



	June 30, 2020		December 31, 2019
Finished goods	$	73,320	$	68,350
Work in process	30,670		30,560
Raw materials	36,900		33,750
Total inventories	$	140,890	$	132,660

9. Property and Equipment, Net

Property and equipment consists of the following components (dollars in thousands):



	June 30, 2020		December 31, 2019
Land and land improvements	$	19,560	$	19,110
Buildings	85,820		84,880
Machinery and equipment	329,120		326,990
	434,500		430,980
Less: Accumulated depreciation	223,540		216,650
Property and equipment, net	$	210,960	$	214,330

Depreciation expense as included in the accompanying consolidated statement of operations is as follows (dollars in thousands):



	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Depreciation expense, included in cost of sales	$	7,830	$	6,010	$	14,190	$	11,440
Depreciation expense, included in selling, general and administrative expenses	280		290		580		550
Total depreciation expense	$	8,110	$	6,300	$	14,770	$	11,990

Table of Contents

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

10. Long-term Debt

The Company's long-term debt consists of the following (dollars in thousands):



	June 30, 2020			December 31, 2019
4.875% Senior Notes due October 2025	$	300,000		$	300,000
Debt issuance costs	(4,740		)	(5,310		)
Long-term debt, net	$	295,260		$	294,690

Senior Notes

In September 2017, the Company issued $300.0 million aggregate principal amount of 4.875% senior notes due October 15, 2025 ("Senior Notes") at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended. The Senior Notes accrue interest at a rate of 4.875% per annum, payable semi-annually in arrears on April 15 and October 15, commencing on April 15, 2018. The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company (each a "Guarantor" and collectively the "Guarantors"). The Senior Notes are