TriMas Reports First Quarter 2021 Results
TriMas' Packaging Group Posts Record First Quarter Sales and Operating Profit
TriMas Highlights
-
Increased first quarter net sales by 13.1%, driven by record first quarter sales in
TriMas' Packaging segment -
Increased operating profit due to continued momentum in
TriMas' Packaging segment and margin expansion in the Specialty Products segment - Completed the successful refinancing of its capital structure, extending maturities on both its credit facility and senior notes, and locking in a historically low rate on its fixed rate debt
- Announced Chief Financial Officer transition as part of succession planning
First Quarter 2021
TriMas reported first quarter net sales of
The Company reported a first quarter 2021 net income of
"Overall, we are off to an encouraging start to 2021 with first quarter results that exceeded our initial expectations," said
"Our solid execution in the quarter was complemented by our disciplined and balanced approach to capital allocation and managing our balance sheet. We continue to balance investing in our businesses for long-term growth, augmenting organic growth with M&A and providing shareholder returns through share repurchases. During the quarter, we also successfully completed the refinancing of our revolver and fixed rate debt by extending maturities and taking advantage of historically low rates.
"One year removed from the global pandemic's initial impact, through our proactive actions, we believe we are a stronger company and well-positioned for the future when demand recovers in several of our businesses. We are a leaner organization and are poised to capitalize on new market opportunities as they arise. While there are still continued market uncertainties arising from the global COVID-19 pandemic, we remain focused on leveraging our TriMas Business Model to improve all of our businesses, thereby creating long-term shareholder value," Amato concluded.
Financial Position
The Company reported net cash provided by operating activities of
In addition, during the first quarter of 2021, the Company repurchased approximately
TriMas also refinanced its capital structure during the first quarter, closing on its offering of
The Company received the
First Quarter Segment Results
Packaging (Approximately 65% of TriMas
Aerospace (Approximately 21% of TriMas
Specialty Products (Approximately 14% of TriMas
TriMas' Specialty Products segment, which includes the Norris Cylinder™ and Arrow® Engine brands, designs, manufactures and distributes highly-engineered steel cylinders and wellhead engines and compressor systems, for use within the welding and HVAC, military, industrial, and oil and gas end markets. Norris Cylinder is the only remaining steel cylinder manufacturer in
Outlook
Given the continued market and related demand uncertainties arising from the global COVID-19 pandemic, the Company is providing second quarter outlook only at this time, with the objective of reverting to full year outlook as the impacts of the pandemic and related economic recovery are better understood and visibility improves. For the second quarter of 2021, the Company expects TriMas’ consolidated sales to range between
All of the above amounts considered as 2021 guidance are after adjusting for any current or future amounts that may be considered Special Items, and in the case of adjusted diluted earnings per share, acquisition-related intangible asset amortization expense for deals that have not yet been consummated. The inability to predict the amount and timing of the impacts of these Special Items makes a detailed reconciliation of these forward-looking non-GAAP financial measures impracticable.(4)
Conference Call Information
TriMas will host its first quarter 2021 earnings conference call today,
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 TriMas’ business, financial condition or future results, involve risks and uncertainties with respect to, including, but not limited to: the severity and duration of the ongoing coronavirus (“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, climate change legislation and other environmental regulations, as well as 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 and public health crises; the potential impact of Brexit; our future prospects; 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. Management believes that presenting these non-GAAP financial measures 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 and to the Company’s peers. These non-GAAP financial measures should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies.
Reconciliations of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are provided only for the expected impact of amortization of acquisition-related intangible assets for completed acquisitions, as the Company is unable to provide estimates of future Special Items(1) or amortization from future acquisitions without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of such items impacting comparability and the periods in which such items may be recognized. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
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. |
|
|
(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 Total Debt less Cash and Cash Equivalents. Please see Appendix I for additional details. |
|
| (4) |
The Company defines adjusted diluted earnings per share as net income (per GAAP), plus or minus the after-tax impact of Special Items(1), plus the after-tax impact of non-cash acquisition-related intangible asset amortization expense. While the acquisition-related intangible assets aid in the Company’s revenue generation, the Company adjusts for the non-cash amortization expense because the Company believes it (i) enhances management’s and investors’ ability to analyze underlying business performance, (ii) facilitates comparisons of financial results over multiple periods, and (iii) provides more relevant comparisons of financial results with the results of other companies as the amortization expense associated with these assets may fluctuate significantly from period to period based on the timing, size, nature, and number of acquisitions. |
About TriMas
TriMas is a global manufacturer and provider of products for customers primarily in the consumer products, aerospace and industrial end markets, with approximately 3,200 dedicated employees in 11 countries. We provide customers with a wide range of innovative and quality product solutions through our market-leading businesses. Our TriMas family of businesses has strong brand names in the end 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
|
Condensed Consolidated Balance Sheet (Dollars in thousands) |
|||||||
|
|
|
|
|
|
|||
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Assets |
|
(unaudited) |
|
|
|||
|
Current assets: |
|
|
|
|
|||
|
Cash and cash equivalents |
|
$ |
421,140 |
|
|
$ |
73,950 |
|
Receivables, net |
|
128,000 |
|
|
113,410 |
||
|
Inventories |
|
151,820 |
|
|
149,380 |
||
|
Prepaid expenses and other current assets |
|
17,960 |
|
|
15,090 |
||
|
Total current assets |
|
718,920 |
|
|
351,830 |
||
|
Property and equipment, net |
|
251,150 |
|
|
253,060 |
||
|
Operating lease right-of-use assets |
|
36,450 |
|
|
37,820 |
||
|
|
|
300,610 |
|
|
303,970 |
||
|
Other intangibles, net |
|
199,010 |
|
|
206,200 |
||
|
Deferred income taxes |
|
15,700 |
|
|
19,580 |
||
|
Other assets |
|
21,460 |
|
|
21,420 |
||
|
Total assets |
|
$ |
1,543,300 |
|
|
$ |
1,193,880 |
|
Liabilities and Shareholders' Equity |
|
|
|
|
|||
|
Current liabilities: |
|
|
|
|
|||
|
Current portion, long-term debt |
|
$ |
300,000 |
|
|
$ |
— |
|
Accounts payable |
|
$ |
76,650 |
|
|
$ |
69,910 |
|
Accrued liabilities |
|
57,490 |
|
|
60,540 |
||
|
Operating lease liabilities, current portion |
|
6,350 |
|
|
6,740 |
||
|
Total current liabilities |
|
440,490 |
|
|
137,190 |
||
|
Long-term debt, net |
|
390,190 |
|
|
346,290 |
||
|
Operating lease liabilities |
|
30,520 |
|
|
31,610 |
||
|
Deferred income taxes |
|
24,840 |
|
|
24,850 |
||
|
Other long-term liabilities |
|
61,290 |
|
|
69,690 |
||
|
Total liabilities |
|
947,330 |
|
|
609,630 |
||
|
Total shareholders' equity |
|
595,970 |
|
|
584,250 |
||
|
Total liabilities and shareholders' equity |
|
$ |
1,543,300 |
|
|
$ |
1,193,880 |
|
Consolidated Statement of Income (Unaudited - dollars in thousands, except per share amounts) |
||||||||
|
|
|
Three months ended
|
||||||
|
|
|
2021 |
|
2020 |
||||
|
Net sales |
|
$ |
206,730 |
|
|
$ |
182,790 |
|
|
Cost of sales |
|
(155,400 |
) |
|
(136,420 |
) |
||
|
Gross profit |
|
51,330 |
|
|
46,370 |
|
||
|
Selling, general and administrative expenses |
|
(30,220 |
) |
|
(26,540 |
) |
||
|
Operating profit |
|
21,110 |
|
|
19,830 |
|
||
|
Other expense, net: |
|
|
|
|
||||
|
Interest expense |
|
(3,550 |
) |
|
(3,580 |
) |
||
|
Debt financing and related expenses |
|
(200 |
) |
|
— |
|
||
|
Other expense, net |
|
(930 |
) |
|
(80 |
) |
||
|
Other expense, net |
|
(4,680 |
) |
|
(3,660 |
) |
||
|
Income before income tax expense |
|
16,430 |
|
|
16,170 |
|
||
|
Income tax expense |
|
(3,370 |
) |
|
(3,050 |
) |
||
|
Net income |
|
$ |
13,060 |
|
|
$ |
13,120 |
|
|
Basic earnings per share: |
|
|
|
|
||||
|
Net income per share |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
Weighted average common shares—basic |
|
43,185,007 |
|
|
44,201,053 |
|
||
|
Diluted earnings per share: |
|
|
|
|
||||
|
Net income per share |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
Weighted average common shares—diluted |
|
43,634,876 |
|
|
44,470,472 |
|
||
|
Consolidated Statement of Cash Flow (Unaudited - dollars in thousands) |
||||||||
|
|
|
Three months ended
|
||||||
|
|
|
2021 |
|
2020 |
||||
|
Cash Flows from Operating Activities: |
|
|
|
|
||||
|
Net income |
|
$ |
13,060 |
|
|
$ |
13,120 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: |
|
|
|
|
||||
|
Loss on dispositions of assets |
|
20 |
|
|
50 |
|
||
|
Depreciation |
|
7,850 |
|
|
6,660 |
|
||
|
Amortization of intangible assets |
|
5,390 |
|
|
4,850 |
|
||
|
Amortization of debt issue costs |
|
300 |
|
|
290 |
|
||
|
Deferred income taxes |
|
2,200 |
|
|
2,570 |
|
||
|
Non-cash compensation expense |
|
2,440 |
|
|
1,940 |
|
||
|
Debt financing and related expenses |
|
200 |
|
|
— |
|
||
|
Increase in receivables |
|
(15,640 |
) |
|
(10,610 |
) |
||
|
Increase in inventories |
|
(3,110 |
) |
|
(110 |
) |
||
|
Increase in prepaid expenses and other assets |
|
(2,070 |
) |
|
(110 |
) |
||
|
Increase (decrease) in accounts payable and accrued liabilities |
|
1,950 |
|
|
(14,780 |
) |
||
|
Other operating activities |
|
3,150 |
|
|
(470 |
) |
||
|
Net cash provided by operating activities, net of acquisition impact |
|
15,740 |
|
|
3,400 |
|
||
|
Cash Flows from Investing Activities: |
|
|
|
|
||||
|
Capital expenditures |
|
(9,370 |
) |
|
(3,930 |
) |
||
|
Acquisition of businesses, net of cash acquired |
|
— |
|
|
(84,270 |
) |
||
|
Net proceeds from disposition of business, property and equipment |
|
— |
|
|
1,880 |
|
||
|
Net cash used for investing activities |
|
(9,370 |
) |
|
(86,320 |
) |
||
|
Cash Flows from Financing Activities: |
|
|
|
|
||||
|
Proceeds from issuance of senior notes |
|
400,000 |
|
|
— |
|
||
|
Proceeds from borrowings on revolving credit facilities |
|
— |
|
|
198,290 |
|
||
|
Repayments of borrowings on revolving credit facilities |
|
(48,620 |
) |
|
(48,330 |
) |
||
|
Debt financing fees |
|
(6,150 |
) |
|
— |
|
||
|
Shares surrendered upon exercise and vesting of equity awards to cover taxes |
|
(1,770 |
) |
|
(1,830 |
) |
||
|
Payments to purchase common stock |
|
(2,640 |
) |
|
(31,570 |
) |
||
|
Net cash provided by financing activities |
|
340,820 |
|
|
116,560 |
|
||
|
Cash and Cash Equivalents: |
|
|
|
|
||||
|
Increase for the period |
|
347,190 |
|
|
33,640 |
|
||
|
At beginning of period |
|
73,950 |
|
|
172,470 |
|
||
|
At end of period |
|
$ |
421,140 |
|
|
$ |
206,110 |
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
||||
|
Cash paid for interest |
|
$ |
520 |
|
|
$ |
370 |
|
|
Cash paid for taxes |
|
$ |
1,160 |
|
|
$ |
1,850 |
|
Appendix I
|
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited - dollars in thousands) |
||||||||
|
|
|
Three months ended
|
||||||
|
|
|
2021 |
|
2020 |
||||
|
Packaging |
|
|
|
|
||||
|
Net sales |
|
$ |
132,090 |
|
|
$ |
100,050 |
|
|
Operating profit |
|
$ |
21,300 |
|
|
$ |
18,280 |
|
|
Special Items to consider in evaluating operating profit: |
|
|
|
|
||||
|
Purchase accounting costs |
|
830 |
|
|
— |
|
||
|
Business restructuring and severance costs |
|
1,510 |
|
|
320 |
|
||
|
Adjusted operating profit |
|
$ |
23,640 |
|
|
$ |
18,600 |
|
|
|
|
|
|
|
||||
|
Aerospace |
|
|
|
|
||||
|
Net sales |
|
$ |
44,610 |
|
|
$ |
48,920 |
|
|
Operating profit |
|
$ |
4,500 |
|
|
$ |
5,080 |
|
|
Special Items to consider in evaluating operating profit: |
|
|
|
|
||||
|
Purchase accounting costs |
|
— |
|
|
510 |
|
||
|
Business restructuring and severance costs |
|
450 |
|
|
500 |
|
||
|
Adjusted operating profit |
|
$ |
4,950 |
|
|
$ |
6,090 |
|
|
|
|
|
|
|
||||
|
Specialty Products |
|
|
|
|
||||
|
Net sales |
|
$ |
30,030 |
|
|
$ |
33,820 |
|
|
Operating profit |
|
$ |
4,520 |
|
|
$ |
3,430 |
|
|
|
|
|
|
|
||||
|
Corporate Expenses |
|
|
|
|
||||
|
Operating loss |
|
$ |
(9,210 |
) |
|
$ |
(6,960 |
) |
|
Special Items to consider in evaluating operating loss: |
|
|
|
|
||||
|
M&A diligence and transaction costs |
|
490 |
|
|
810 |
|
||
|
Business restructuring and severance costs |
|
2,250 |
|
|
— |
|
||
|
Adjusted operating loss |
|
$ |
(6,470 |
) |
|
$ |
(6,150 |
) |
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Net sales |
|
$ |
206,730 |
|
|
$ |
182,790 |
|
|
Operating profit |
|
$ |
21,110 |
|
|
$ |
19,830 |
|
|
Total Special Items to consider in evaluating operating profit |
|
5,530 |
|
|
2,140 |
|
||
|
Adjusted operating profit |
|
$ |
26,640 |
|
|
$ |
21,970 |
|
Appendix I
|
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited - dollars in thousands, except per share amounts) |
||||||||
|
|
|
Three months ended
|
||||||
|
|
|
2021 |
|
2020 |
||||
|
Net income, as reported |
|
$ |
13,060 |
|
|
$ |
13,120 |
|
|
Special Items to consider in evaluating quality of net income: |
|
|
|
|
||||
|
Business restructuring and severance costs |
|
4,210 |
|
|
820 |
|
||
|
Purchase accounting costs |
|
830 |
|
|
510 |
|
||
|
M&A diligence and transaction costs |
|
490 |
|
|
1,110 |
|
||
|
Debt financing and related expenses |
|
200 |
|
|
— |
|
||
|
Income tax effect of Special Items(1) |
|
(1,390 |
) |
|
(460 |
) |
||
|
Adjusted net income |
|
$ |
17,400 |
|
|
$ |
15,100 |
|
|
|
|
|
|
|
||||
|
|
|
Three months ended
|
||||||
|
|
|
2021 |
|
2020 |
||||
|
Diluted earnings per share, as reported |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
Special Items to consider in evaluating quality of EPS: |
|
|
|
|
||||
|
Business restructuring and severance costs |
|
0.10 |
|
|
0.02 |
|
||
|
Purchase accounting costs |
|
0.02 |
|
|
0.01 |
|
||
|
M&A diligence and transaction costs |
|
0.01 |
|
|
0.02 |
|
||
|
Debt financing and related expenses |
|
— |
|
|
— |
|
||
|
Income tax effect of Special Items(1) |
|
(0.03 |
) |
|
(0.01 |
) |
||
|
Adjusted diluted EPS |
|
$ |
0.40 |
|
|
$ |
0.34 |
|
|
Weighted-average shares outstanding |
|
43,634,876 |
|
|
44,470,472 |
|
||
| (1) |
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 month periods ended |
Appendix I
|
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited - dollars in thousands) |
||||||||||||||||||||||||||||
|
|
|
Three months ended |
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|
|
|
2021 |
|
2020 |
||||||||||||||||||||||||
|
|
|
As
|
|
Special
|
|
As
|
|
As
|
|
Special
|
|
As
|
||||||||||||||||
|
Net cash provided by operating activities |
|
$ |
15,740 |
|
|
|
$ |
3,920 |
|
|
$ |
19,660 |
|
|
|
$ |
3,400 |
|
|
|
$ |
2,290 |
|
|
$ |
5,690 |
|
|
|
Less: Capital expenditures |
|
(9,370 |
) |
|
|
— |
|
|
(9,370 |
) |
|
|
(3,930 |
) |
|
|
— |
|
|
(3,930 |
) |
|
||||||
|
Free Cash Flow |
|
6,370 |
|
|
|
3,920 |
|
|
10,290 |
|
|
|
(530 |
) |
|
|
2,290 |
|
|
1,760 |
|
|
||||||
|
Net income |
|
13,060 |
|
|
|
4,340 |
|
|
17,400 |
|
|
|
13,120 |
|
|
|
1,980 |
|
|
15,100 |
|
|
||||||
|
Free Cash Flow as a percentage of net income |
|
49 |
|
% |
|
|
|
59 |
|
% |
|
(4 |
) |
% |
|
|
|
12 |
|
% |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
||||||
|
Current portion, long-term debt |
|
$ |
300,000 |
|
|
$ |
— |
|
|
$ |
— |
|
|
Long-term debt, net |
|
390,190 |
|
|
346,290 |
|
|
444,980 |
|
|||
|
Total Debt |
|
690,190 |
|
|
346,290 |
|
|
444,980 |
|
|||
|
Less: Cash and cash equivalents |
|
421,140 |
|
|
73,950 |
|
|
206,110 |
|
|||
|
Net Debt |
|
$ |
269,050 |
|
|
$ |
272,340 |
|
|
$ |
238,870 |
|
Appendix I
|
Reconciliation of GAAP to Non-GAAP Financial Measures Forecasted Diluted Earnings Per Share Guidance (Unaudited - dollars per share) |
||||||||
|
|
|
Three months ended |
||||||
|
|
|
|
||||||
|
|
|
Low |
|
High |
||||
|
Diluted earnings per share (GAAP) |
|
$ |
0.41 |
|
|
$ |
0.48 |
|
|
Pre-tax amortization of acquisition-related intangible assets(1) |
|
0.12 |
|
|
0.12 |
|
||
|
Income tax benefit on amortization of acquisition-related intangible assets |
|
(0.03 |
) |
|
(0.03 |
) |
||
|
Impact of Special Items(2) |
|
— |
|
|
— |
|
||
|
Adjusted diluted earnings per share |
|
$ |
0.50 |
|
|
$ |
0.57 |
|
| (1) |
These amounts relate to acquisitions completed prior to |
|
| (2) |
The Company is unable to provide forward-looking estimates of Special Items without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of such items and the periods in which such items may be recognized. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210429005363/en/
VP, Investor Relations
(248) 631-5506
sherrylauderback@trimascorp.com
Source: TriMas
