TriMas Reports First Quarter 2017 Results; Diluted EPS, Excluding Special Items, Increased by 11% to $0.30
The Company reported first quarter 2017 net income of
TriMas Highlights
- Increased first quarter operating profit, excluding Special Items, by 9.2% compared to the prior year period.
- Generated Free Cash
Flow(2) of
$17.7 million for first quarter 2017, compared to a use of cash of$5.9 million in the prior year period. - Reduced Net Debt(3) by
$68.2 million , or 16.5%, to$344.2 million , compared toMarch 31, 2016 . - Reaffirmed 2017 outlook of full-year diluted earnings per share to be between
$1.35 to$1.45 , excluding any current or future events that may be considered Special Items, and Free Cash Flow to be greater than 100% of net income.
"Our accelerated realignment efforts and renewed operating discipline have started to boost our performance," said
"In the near-term, we will continue our relentless attention to the performance improvement plans in the
Financial Position
The Company reported Free Cash
Flow of
First Quarter Segment Results
Packaging (Approximately 43% of
The Packaging segment, which consists primarily of the
Aerospace (Approximately 23% of
The Aerospace segment, which is comprised of the Monogram Aerospace Fasteners™,
Energy (Approximately 20% of
The Energy segment, which consists of the Lamons® brand, designs, manufactures and distributes industrial sealing and fastener
products for the petrochemical, petroleum refining, oil field and other industrial markets. First quarter net sales were lower by 8.5% compared to the year ago period, primarily due to the impact of de-emphasizing less profitable regions and lower demand levels from oil and gas customers. Excluding Special Items, first quarter operating profit increased by
Engineered Components (Approximately 14% of
The Engineered Components segment, which is comprised of the Norris Cylinder™ and Arrow®
brands, designs and manufactures highly-engineered steel cylinders, wellhead engines and compression products for use within the industrial, and oil and gas markets. First quarter net sales were lower by 13.3% compared to the year ago period, primarily due to lower sales of high-pressure cylinders as a result of continued softness in general industrial end markets and the impact of customer consolidations. Sales of oil field-related products also decreased as a result of lower levels of oil and natural gas well completions. While first quarter operating profit decreased
Conference Call Information
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 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
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, on an after Special Items basis, 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 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.
(3) The Company defines Net Debt as Long-term Debt less Cash and Cash Equivalents. Please see Appendix I for additional details.
About
| Condensed Consolidated Balance Sheet | ||||||||
| (Dollars in thousands) | ||||||||
|
2017 | 2016 | |||||||
| Assets | (unaudited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 22,640 | $ | 20,710 | ||||
| Receivables, net | 119,240 | 111,570 | ||||||
| Inventories | 159,010 | 160,460 | ||||||
| Prepaid expenses and other current assets | 7,980 | 16,060 | ||||||
| Total current assets | 308,870 | 308,800 | ||||||
| Property and equipment, net | 184,000 | 179,160 | ||||||
| 316,110 | 315,080 | |||||||
| Other intangibles, net | 209,100 | 213,920 | ||||||
| Other assets | 34,810 | 34,690 | ||||||
| Total assets | $ | 1,052,890 | $ | 1,051,650 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Current maturities, long-term debt | $ | 13,770 | $ | 13,810 | ||||
| Accounts payable | 76,850 | 72,270 | ||||||
| Accrued liabilities | 40,880 | 47,190 | ||||||
| Total current liabilities | 131,500 | 133,270 | ||||||
| Long-term debt, net | 353,110 | 360,840 | ||||||
| Deferred income taxes | 8,070 | 5,910 | ||||||
| Other long-term liabilities | 50,130 | 51,910 | ||||||
| Total liabilities | 542,810 | 551,930 | ||||||
| Total shareholders' equity | 510,080 | 499,720 | ||||||
| Total liabilities and shareholders' equity | $ | 1,052,890 | $ | 1,051,650 | ||||
| Consolidated Statement of Income | ||||||||
| (Unaudited - dollars in thousands, except per share amounts) | ||||||||
| Three months ended | ||||||||
| 2017 | 2016 | |||||||
| Net sales | $ | 199,830 | $ | 202,880 | ||||
| Cost of sales | (148,070 | ) | (146,960 | ) | ||||
| Gross profit | 51,760 | 55,920 | ||||||
| Selling, general and administrative expenses | (36,020 | ) | (39,470 | ) | ||||
| Operating profit | 15,740 | 16,450 | ||||||
| Other expense, net: | ||||||||
| Interest expense | (3,550 | ) | (3,440 | ) | ||||
| Other expense, net | (610 | ) | (60 | ) | ||||
| Other expense, net | (4,160 | ) | (3,500 | ) | ||||
| Income before income tax expense | 11,580 | 12,950 | ||||||
| Income tax expense | (4,590 | ) | (4,650 | ) | ||||
| Net income | $ | 6,990 | $ | 8,300 | ||||
| Basic earnings per share: | ||||||||
| Net income per share | $ | 0.15 | $ | 0.18 | ||||
| Weighted average common shares—basic | 45,570,495 | 45,278,990 | ||||||
| Diluted earnings per share: | ||||||||
| Net income per share | $ | 0.15 | $ | 0.18 | ||||
| Weighted average common shares—diluted | 45,908,958 | 45,654,816 | ||||||
| Consolidated Statement of Cash Flow | ||||||||
| (Unaudited - dollars in thousands) | ||||||||
| Three months ended | ||||||||
| 2017 | 2016 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | 6,990 | $ | 8,300 | ||||
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||||||
| Loss on dispositions of assets | 4,170 | 590 | ||||||
| Depreciation | 5,800 | 5,940 | ||||||
| Amortization of intangible assets | 4,990 | 5,100 | ||||||
| Amortization of debt issue costs | 350 | 340 | ||||||
| Deferred income taxes | 1,870 | (20 | ) | |||||
| Non-cash compensation expense | 1,470 | 1,970 | ||||||
| Tax effect from stock based compensation | — | 620 | ||||||
| Increase in receivables | (7,590 | ) | (11,210 | ) | ||||
| (Increase) decrease in inventories | (420 | ) | 330 | |||||
| Decrease in prepaid expenses and other assets | 8,070 | 7,700 | ||||||
| Decrease in accounts payable and accrued liabilities | (3,160 | ) | (23,660 | ) | ||||
| Other operating activities | (570 | ) | 660 | |||||
| Net cash provided by (used for) operating activities | 21,970 | (3,340 | ) | |||||
| Cash Flows from Investing Activities: | ||||||||
| Capital expenditures | (10,740 | ) | (5,980 | ) | ||||
| Net proceeds from disposition of property and equipment | 30 | 120 | ||||||
| Net cash used for investing activities | (10,710 | ) | (5,860 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Repayments of borrowings on term loan facilities | (3,470 | ) | (3,470 | ) | ||||
| Proceeds from borrowings on revolving credit and accounts receivable facilities | 186,640 | 117,130 | ||||||
| Repayments of borrowings on revolving credit and accounts receivable facilities | (191,760 | ) | (97,220 | ) | ||||
| Shares surrendered upon options and restricted stock vesting to cover taxes | (450 | ) | (650 | ) | ||||
| Other financing activities | (290 | ) | (620 | ) | ||||
| Net cash provided by (used for) financing activities | (9,330 | ) | 15,170 | |||||
| Cash and Cash Equivalents: | ||||||||
| Net increase for the period | 1,930 | 5,970 | ||||||
| At beginning of period | 20,710 | 19,450 | ||||||
| At end of period | $ | 22,640 | $ | 25,420 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 3,050 | $ | 2,980 | ||||
| Cash paid for taxes | $ | 1,230 | $ | 1,780 | ||||
Appendix I
| Additional Information Regarding Special Items Impacting | ||||||||
| Reported GAAP Financial Measures | ||||||||
| (Unaudited - dollars in thousands) | ||||||||
| Three months ended | ||||||||
| 2017 | 2016 | |||||||
| Packaging | ||||||||
| Net sales | $ | 80,960 | $ | 80,110 | ||||
| Operating profit | $ | 16,850 | $ | 17,840 | ||||
| Special Items to consider in evaluating operating profit: | ||||||||
| Business restructuring and severance costs | $ | 1,670 | $ | 470 | ||||
| Excluding Special Items, operating profit would have been | $ | 18,520 | $ | 18,310 | ||||
| Aerospace | ||||||||
| Net sales | $ | 45,420 | $ | 40,500 | ||||
| Operating profit | $ | 5,000 | $ | 3,460 | ||||
| Special Items to consider in evaluating operating profit: | ||||||||
| Business restructuring and severance costs | $ | — | $ | 70 | ||||
| Excluding Special Items, operating profit would have been | $ | 5,000 | $ | 3,530 | ||||
| Energy | ||||||||
| Net sales | $ | 40,930 | $ | 44,750 | ||||
| Operating loss | $ | (3,900 | ) | $ | (3,610 | ) | ||
| Special Items to consider in evaluating operating profit: | ||||||||
| Business restructuring and severance costs | $ | 6,440 | $ | 4,700 | ||||
| Excluding Special Items, operating profit would have been | $ | 2,540 | $ | 1,090 | ||||
| Engineered Components | ||||||||
| Net sales | $ | 32,520 | $ | 37,520 | ||||
| Operating profit | $ | 4,980 | $ | 5,580 | ||||
| Special Items to consider in evaluating operating profit: | ||||||||
| Business restructuring and severance costs | $ | — | $ | 150 | ||||
| Excluding Special Items, operating profit would have been | $ | 4,980 | $ | 5,730 | ||||
| Corporate Expenses | ||||||||
| Operating loss | $ | (7,190 | ) | $ | (6,820 | ) | ||
| Net sales | $ | 199,830 | $ | 202,880 | ||||
| Operating profit | $ | 15,740 | $ | 16,450 | ||||
| Total Special Items to consider in evaluating operating profit | $ | 8,110 | $ | 5,390 | ||||
| Excluding Special Items, operating profit would have been | $ | 23,850 | $ | 21,840 | ||||
| Additional Information Regarding Special Items Impacting | ||||||||
| Reported GAAP Financial Measures | ||||||||
| (Unaudited - dollars in thousands, except per share amounts) | ||||||||
| Three months
ended | ||||||||
| 2017 | 2016 | |||||||
| Net Income, as reported | $ | 6,990 | $ | 8,300 | ||||
| After-tax impact of Special Items to consider in evaluating quality of net income: | ||||||||
| Business restructuring and severance costs | 7,000 | 4,090 | ||||||
| Excluding Special Items, net income would have been | $ | 13,990 | $ | 12,390 | ||||
| Three months ended | ||||||||
| 2017 | 2016 | |||||||
| Diluted earnings per share, as reported | $ | 0.15 | $ | 0.18 | ||||
| After-tax impact of Special Items to consider in evaluating quality of EPS: | ||||||||
| Business restructuring and severance costs | 0.15 | 0.09 | ||||||
| Excluding Special Items, diluted EPS would have been | $ | 0.30 | $ | 0.27 | ||||
| Weighted-average shares outstanding | 45,908,958 | 45,654,816 | ||||||
| Three months ended | ||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||
| As reported | Special Items | Excluding Special Items | As reported | Special Items | Excluding Special Items | |||||||||||||||||||
| Net cash provided by (used for) operating activities | $ | 21,970 | $ | 6,490 | $ | 28,460 | $ | (3,340 | ) | $ | 3,440 | $ | 100 | |||||||||||
| Less: Capital expenditures | (10,740 | ) | — | (10,740 | ) | (5,980 | ) | — | (5,980 | ) | ||||||||||||||
| Free Cash Flow | 11,230 | 6,490 | 17,720 | (9,320 | ) | 3,440 | (5,880 | ) | ||||||||||||||||
| Net Income | 6,990 | 7,000 | 13,990 | 8,300 | 4,090 | 12,390 | ||||||||||||||||||
| Free Cash Flow as a percentage of net income | 161 | % | 127 | % | (112 | )% | (47 | )% | ||||||||||||||||
| Current maturities, long-term debt | $ | 13,770 | $ | 13,810 | $ | 13,840 | ||||||
| Long-term debt, net | 353,110 | 360,840 | 424,010 | |||||||||
| Long-term Debt | 366,880 | 374,650 | 437,850 | |||||||||
| Less: Cash and cash equivalents | 22,640 | 20,710 | 25,420 | |||||||||
| Net Debt | $ | 344,240 | $ | 353,940 | $ | 412,430 | ||||||
CONTACT:Sherry Lauderback VP, Investor Relations& Communications (248) 631-5506 sherrylauderback@trimascorp.com
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