TriMas Reports First Quarter 2019 Results
Delivers Sales and Earnings Growth; Reaffirms Previously Provided Guidance
TriMas Highlights
-
Increased net sales by 1.9% to
$221.3 million , with sales increases in all segments -
Achieved operating profit of
$25.9 million , while adjusted operating profit(1) increased by 1.2% to$28.4 million -
Achieved net income of
$19.1 million , while adjusted net income(1) increased by 10.9% to$21.1 million -
Achieved diluted EPS of
$0.42 , while adjusted diluted EPS(1) increased by 12.2% to$0.46 -
Ended the first quarter with
$84.4 million of cash on hand,$369.3 million of cash and aggregate availability under its revolving credit facility, and a leverage ratio of 1.4x -
Acquired Taplast S.p.A., a designer and manufacturer of dispensers,
closures and containers for the beauty and personal care, household,
and food and beverage packaging end markets in
Europe andNorth America , with approximately$32 million in annual net sales
First Quarter 2019
The Company reported first quarter 2019 net income of
"We are pleased to begin 2019 with another quarter of solid performance,
in line with our expectations, and we achieved adjusted earnings per
share growth of 12.2% compared to the prior year," said
"We are committed to allocating capital on a balanced basis, focusing on our highest return opportunities of organic investment, bolt-on acquisitions and share repurchases, all while maintaining a sound balance sheet. Our increased deployment of cash has been made possible by our excellent cash generation over the past couple of years. Throughout the remainder of 2019, we will continue to drive performance under the TriMas Business Model, better position our businesses and brands strategically to grow through innovation, and capitalize on market opportunities through operational excellence. Based on our encouraging start to the year and current expectations, we are reaffirming our full year 2019 sales, earnings per share and free cash flow guidance," Amato concluded.
Financial Position
The Company reported net cash provided by operations of
First Quarter Segment Results
Packaging (Approximately 42% of
Aerospace (Approximately 18% of
Specialty Products (Approximately 40% of
2019 Modification to Reporting Segments
Effective with the first quarter of 2019, the Company reported its
machined components operations, located in
Outlook
The Company reaffirms its full year 2019 outlook provided on
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: 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
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 Net Debt as Total Debt less Cash and Cash Equivalents. Please see Appendix I for additional details. | |
| (3) | 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. | |
About
| TriMas Corporation | |||||||
| Condensed Consolidated Balance Sheet | |||||||
| (Dollars in thousands) | |||||||
|
March 31, |
December 31, 2018 |
||||||
| Assets | (unaudited) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 84,410 | $ | 108,150 | |||
| Receivables, net | 139,360 | 123,110 | |||||
| Inventories | 179,170 | 173,120 | |||||
| Prepaid expenses and other current assets | 7,020 | 7,430 | |||||
| Total current assets | 409,960 | 411,810 | |||||
| Property and equipment, net | 197,090 | 187,800 | |||||
| Operating lease right-of-use assets | 38,190 | — | |||||
| Goodwill | 325,520 | 316,650 | |||||
| Other intangibles, net | 173,680 | 174,530 | |||||
| Deferred income taxes | 380 | 1,080 | |||||
| Other assets | 12,260 | 8,650 | |||||
| Total assets | $ | 1,157,080 | $ | 1,100,520 | |||
| Liabilities and Shareholders' Equity | |||||||
| Current liabilities: | |||||||
| Current maturities, long-term debt | $ | 90 | $ | — | |||
| Accounts payable | 96,720 | 93,430 | |||||
| Accrued liabilities | 38,830 | 48,300 | |||||
| Operating lease liabilities, current portion | 7,950 | — | |||||
| Total current liabilities | 143,590 | 141,730 | |||||
| Long-term debt, net | 293,840 | 293,560 | |||||
| Operating lease liabilities | 30,680 | — | |||||
| Deferred income taxes | 10,600 | 5,560 | |||||
| Other long-term liabilities | 37,860 | 39,220 | |||||
| Total liabilities | 516,570 | 480,070 | |||||
| Total shareholders' equity | 640,510 | 620,450 | |||||
| Total liabilities and shareholders' equity | $ | 1,157,080 | $ | 1,100,520 | |||
| TriMas Corporation | ||||||||
| Consolidated Statement of Income | ||||||||
| (Unaudited - dollars in thousands, except per share amounts) | ||||||||
| Three months ended March 31, |
||||||||
| 2019 | 2018 | |||||||
| Net sales | $ | 221,290 | $ | 217,100 | ||||
| Cost of sales | (161,470 | ) | (156,720 | ) | ||||
| Gross profit | 59,820 | 60,380 | ||||||
| Selling, general and administrative expenses | (33,970 | ) | (25,170 | ) | ||||
| Operating profit | 25,850 | 35,210 | ||||||
| Other expense, net: | ||||||||
| Interest expense | (3,440 | ) | (3,700 | ) | ||||
| Other expense, net | (680 | ) | (560 | ) | ||||
| Other expense, net | (4,120 | ) | (4,260 | ) | ||||
| Income before income tax expense | 21,730 | 30,950 | ||||||
| Income tax expense | (2,640 | ) | (6,630 | ) | ||||
| Net income | $ | 19,090 | $ | 24,320 | ||||
| Basic earnings per share: | ||||||||
| Net income per share | $ | 0.42 | $ | 0.53 | ||||
| Weighted average common shares—basic | 45,578,815 | 45,779,966 | ||||||
| Diluted earnings per share: | ||||||||
| Net income per share | $ | 0.42 | $ | 0.53 | ||||
| Weighted average common shares—diluted | 45,992,182 | 46,229,337 | ||||||
| TriMas Corporation | ||||||||
| Consolidated Statement of Cash Flow | ||||||||
| (Unaudited - dollars in thousands) | ||||||||
| Three months ended March 31, |
||||||||
| 2019 | 2018 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income | $ | 19,090 | $ | 24,320 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact: | ||||||||
| (Gain) loss on dispositions of assets | 50 | (10 | ) | |||||
| Depreciation | 6,230 | 6,330 | ||||||
| Amortization of intangible assets | 4,930 | 4,910 | ||||||
| Amortization of debt issue costs | 280 | 470 | ||||||
| Deferred income taxes | 2,300 | 5,010 | ||||||
| Non-cash compensation expense | 1,320 | 1,220 | ||||||
| Increase in receivables | (11,490 | ) | (16,160 | ) | ||||
| Increase in inventories | (4,770 | ) | (840 | ) | ||||
| (Increase) decrease in prepaid expenses and other assets | (50 | ) | 5,330 | |||||
| Decrease in accounts payable and accrued liabilities | (10,010 | ) | (15,140 | ) | ||||
| Other operating activities | 200 | 800 | ||||||
|
Net cash provided by operating activities, net of acquisition impact |
8,080 | 16,240 | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Capital expenditures | (6,640 | ) | (3,170 | ) | ||||
| Acquisition of businesses, net of cash acquired | (22,270 | ) | — | |||||
| Net proceeds from disposition of property and equipment | — | 250 | ||||||
| Net cash used for investing activities | (28,910 | ) | (2,920 | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from borrowings on revolving credit facilities | 26,250 | 32,040 | ||||||
| Repayments of borrowings on revolving credit facilities | (25,870 | ) | (33,970 | ) | ||||
| Shares surrendered upon exercise and vesting of equity awards to cover taxes | (2,620 | ) | (2,300 | ) | ||||
| Payments to purchase common stock | (670 | ) | — | |||||
| Net cash used for financing activities | (2,910 | ) | (4,230 | ) | ||||
| Cash and Cash Equivalents: | ||||||||
| Increase (decrease) for the period | (23,740 | ) | 9,090 | |||||
| At beginning of period | 108,150 | 27,580 | ||||||
| At end of period | $ | 84,410 | $ | 36,670 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 300 | $ | 470 | ||||
| Cash paid for taxes | $ | 1,870 | $ | 970 | ||||
| Appendix I | ||||||||
| TriMas Corporation | ||||||||
| Additional Information Regarding Special Items Impacting | ||||||||
| Reported GAAP Financial Measures | ||||||||
| (Unaudited - dollars in thousands) | ||||||||
| Three months ended March 31, |
||||||||
| 2019 | 2018 | |||||||
| Packaging | ||||||||
| Net sales | $ | 88,840 | $ | 88,200 | ||||
| Operating profit | $ | 17,640 | $ | 19,580 | ||||
| Special Items to consider in evaluating operating profit: | ||||||||
| Purchase accounting costs | 1,020 | — | ||||||
| Adjusted operating profit | $ | 18,660 | $ | 19,580 | ||||
| Aerospace | ||||||||
| Net sales | $ | 38,330 | $ | 37,790 | ||||
| Operating profit | $ | 5,740 | $ | 4,590 | ||||
| Special Items to consider in evaluating operating profit: | ||||||||
| Business restructuring and severance costs | 440 | — | ||||||
| Adjusted operating profit | $ | 6,180 | $ | 4,590 | ||||
| Specialty Products | ||||||||
| Net sales | $ | 94,120 | $ | 91,110 | ||||
| Operating profit | $ | 10,860 | $ | 10,140 | ||||
| Special Items to consider in evaluating operating profit: | ||||||||
| Business restructuring and severance costs | — | 1,030 | ||||||
| Adjusted operating profit | $ | 10,860 | $ | 11,170 | ||||
| Corporate Expenses | ||||||||
| Operating profit (loss) | $ | (8,390 | ) | $ | 900 | |||
| Special Items to consider in evaluating operating loss: | ||||||||
| M&A diligence and transaction costs | 1,120 | — | ||||||
| Reversal of legacy related party liability | — | (8,150 | ) | |||||
| Adjusted operating loss | $ | (7,270 | ) | $ | (7,250 | ) | ||
| Total Company | ||||||||
| Net sales | $ | 221,290 | $ | 217,100 | ||||
| Operating profit | $ | 25,850 | $ | 35,210 | ||||
| Total Special Items to consider in evaluating operating profit | 2,580 | (7,120 | ) | |||||
| Adjusted operating profit | $ | 28,430 | $ | 28,090 | ||||
| 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 |
||||||||
| 2019 | 2018 | |||||||
| Net Income, as reported | $ | 19,090 | $ | 24,320 | ||||
| Special Items to consider in evaluating quality of net income: | ||||||||
| M&A diligence and transaction costs | 1,120 | — | ||||||
| Purchase accounting costs | 1,020 | — | ||||||
| Business restructuring and severance costs | 440 | 1,210 | ||||||
| Reversal of legacy related party liability | — | (8,150 | ) | |||||
| Income tax effect of Special Items(1) | (560 | ) | 1,650 | |||||
| Adjusted net income | $ | 21,110 | $ | 19,030 | ||||
| Three months ended March 31, |
||||||||
| 2019 | 2018 | |||||||
| Diluted earnings per share, as reported | $ | 0.42 | $ | 0.53 | ||||
| Special Items to consider in evaluating quality of EPS: | ||||||||
| M&A diligence and transaction costs | 0.02 | — | ||||||
| Purchase accounting costs | 0.02 | — | ||||||
| Business restructuring and severance costs | 0.01 | 0.03 | ||||||
| Reversal of legacy related party liability | — | (0.18 | ) | |||||
| Income tax effect of Special Items(1) | (0.01 | ) | 0.03 | |||||
| Adjusted diluted EPS | $ | 0.46 | $ | 0.41 | ||||
| Weighted-average shares outstanding | 45,992,182 | 46,229,337 | ||||||
| (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 period ended March 31, 2019, 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 discrete items that occurred during the period for GAAP reporting purposes. For the three month period ended March 31, 2018, 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 being incurred in jurisdictions where no tax benefit could be recorded due to valuation allowance assessments. |
| Appendix I | ||||||||||||||||||||||||
| TriMas Corporation | ||||||||||||||||||||||||
| Additional Information Regarding Special Items Impacting | ||||||||||||||||||||||||
| Reported GAAP Financial Measures | ||||||||||||||||||||||||
| (Unaudited - dollars in thousands) | ||||||||||||||||||||||||
| Three months ended March 31, | ||||||||||||||||||||||||
| 2019 | 2018 | |||||||||||||||||||||||
|
As |
Special |
As |
As |
Special |
As |
|||||||||||||||||||
| Net cash provided by operating activities | $ | 8,080 | $ | 1,130 | $ | 9,210 | $ | 16,240 | $ | 1,350 | $ | 17,590 | ||||||||||||
| Less: Capital expenditures | (6,640 | ) | — | (6,640 | ) | (3,170 | ) | — | (3,170 | ) | ||||||||||||||
| Free Cash Flow | 1,440 | 1,130 | 2,570 | 13,070 | 1,350 | 14,420 | ||||||||||||||||||
| Net Income | 19,090 | 2,020 | 21,110 | 24,320 | (5,290 | ) | 19,030 | |||||||||||||||||
| Free Cash Flow as a percentage of net income | 8 | % | 12 | % | 54 | % | 76 | % | ||||||||||||||||
| March 31, 2019 |
December 31, 2018 |
March 31, 2018 |
|||||||||
| Current maturities, long-term debt | $ | 90 | $ | — | $ | — | |||||
| Long-term debt, net | 293,840 | 293,560 | 301,710 | ||||||||
| Total Debt | 293,930 | 293,560 | 301,710 | ||||||||
| Less: Cash and cash equivalents | 84,410 | 108,150 | 36,670 | ||||||||
| Net Debt | $ | 209,520 | $ | 185,410 | $ | 265,040 | |||||
| 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 |
Twelve months ended |
|||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Net income, as reported | $ | 19,090 | $ | 24,320 | $ | 78,070 | $ | 48,290 | ||||||||
| Depreciation expense | 6,230 | 6,330 | 24,480 | 27,480 | ||||||||||||
| Amortization expense | 4,930 | 4,910 | 19,460 | 19,840 | ||||||||||||
| Interest expense | 3,440 | 3,700 | 13,650 | 14,550 | ||||||||||||
| Income tax expense | 2,640 | 6,630 | 18,690 | 37,290 | ||||||||||||
| Non-cash compensation expense | 1,320 | 1,220 | 7,270 | 6,530 | ||||||||||||
| Adjusted EBITDA, before Special Items | $ | 37,650 | $ | 47,110 | $ | 161,620 | $ | 153,980 | ||||||||
| Adjusted EBITDA impact of Special Items | 2,580 | (7,120 | ) | 5,870 | 5,290 | |||||||||||
| Adjusted EBITDA | $ | 40,230 | $ | 39,990 | $ | 167,490 | $ | 159,270 | ||||||||
| Adjusted EBITDA as a percentage of net sales | 18.2 | % | 18.4 | % | 19.0 | % | 19.1 | % | ||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20190430005157/en/
Source:
CONTACT:
Sherry Lauderback
VP, Investor Relations &
Communications
(248) 631-5506
sherrylauderback@trimascorp.com
