-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TRkUISTHV+B3FTR8K07eNCZbm6Dp3ftOkJjDUmD/NHAVOt+8U5h0stNk0YAtr9R/ ABXYUy+MGfMkROoMBddDBw== 0000842633-94-000010.txt : 19941122 0000842633-94-000010.hdr.sgml : 19941122 ACCESSION NUMBER: 0000842633-94-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941109 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIMAS CORP CENTRAL INDEX KEY: 0000842633 STANDARD INDUSTRIAL CLASSIFICATION: 3452 IRS NUMBER: 382687639 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10716 FILM NUMBER: 94558215 BUSINESS ADDRESS: STREET 1: 315 E EISENHOWER PKWY CITY: ANN ARBOR STATE: MI ZIP: 48108 BUSINESS PHONE: 3137477025 MAIL ADDRESS: STREET 1: 315 E EISENHOWER PKWY CITY: ANN ARBOR STATE: MI ZIP: 48108 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1994 Commission file number 1-10716 TRIMAS CORPORATION (Exact name of registrant as specified in its charter) Delaware 38-2687639 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 315 East Eisenhower Parkway, Ann Arbor, Michigan 48108 (Address of principal executive offices) (Zip Code) (313) 747-7025 (Telephone number) 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 X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Shares Outstanding at Class October 31, 1994 Common Stock, $.01 Par Value 36,644,101 PAGE TRIMAS CORPORATION INDEX Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Condensed Balance Sheets - September 30, 1994 and December 31, 1993 1 Consolidated Condensed Statements of Income for the Three Months and Nine Months Ended September 30, 1994 and 1993 2 Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 30, 1994 and 1993 3 Notes to Consolidated Condensed Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Part II. Other Information and Signature 9 PAGE PART I. FINANCIAL INFORMATION Item 1. Financial Statements TRIMAS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS September 30, December 31, 1994 1993 (Unaudited) Assets Current assets: Cash and cash equivalents $ 96,200,000 $ 69,770,000 Receivables 70,080,000 58,710,000 Inventories 77,870,000 76,700,000 Prepaid expenses 9,500,000 9,790,000 Total current assets 253,650,000 214,970,000 Property and equipment 166,330,000 162,230,000 Excess of cost over net assets of acquired companies 149,730,000 152,210,000 Notes receivable 9,090,000 8,160,000 Other assets 24,080,000 26,560,000 Total assets $602,880,000 $564,130,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 19,540,000 $ 20,330,000 Accrued liabilities 36,280,000 30,550,000 Current portion of long-term debt 320,000 320,000 Total current liabilities 56,140,000 51,200,000 Deferred income taxes and other 29,250,000 29,190,000 Long-term debt 238,600,000 238,890,000 Total liabilities 323,990,000 319,280,000 Shareholders' equity: Common stock, $.01 par value, authorized 100 million shares, outstanding 36.6 million shares 370,000 370,000 Paid-in capital 154,080,000 154,190,000 Retained earnings 125,810,000 91,700,000 Cumulative translation adjustments (1,370,000) (1,410,000) Total shareholders' equity 278,890,000 244,850,000 Total liabilities and shareholders' equity $602,880,000 $564,130,000 The accompanying notes are an integral part of the consolidated financial statements. 1 PAGE TRIMAS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
Nine Months Ended Three Months Ended September 30, September 30, 1994 1993 1994 1993 Net sales $414,990,000 $335,230,000 $133,590,000 $109,710,000 Cost of sales (280,830,000) (229,200,000) (90,010,000) (74,690,000) Selling, general and administrative expenses (63,460,000) (52,520,000) (20,710,000) (17,790,000) Operating profit 70,700,000 53,510,000 22,870,000 17,230,000 Interest expense (9,310,000) (6,250,000) (3,380,000) (2,170,000) Other income (expense), net 2,710,000 2,350,000 1,300,000 820,000 (6,600,000) (3,900,000) (2,080,000) (1,350,000) Income before income taxes 64,100,000 49,610,000 20,790,000 15,880,000 Income taxes 25,960,000 20,090,000 8,420,000 6,430,000 Net income $ 38,140,000 $ 29,520,000 $ 12,370,000 $ 9,450,000 Preferred stock dividends, MascoTech, Inc. $ 5,250,000 $ 1,750,000 Earnings available for common stock $ 38,140,000 $ 24,270,000 $ 12,370,000 $ 7,700,000 Earnings per common share: Primary $1.03 $.83 $.33 $.26 Fully diluted $.97 $.79 $.32 $.25 Dividends declared per common share $.11 $.085 $.04 $.03 Weighted average number of common and common equivalent shares outstanding: Primary 37,033,000 29,165,000 37,022,000 29,189,000 Fully diluted 42,116,000 37,997,000 42,104,000 40,016,000
The accompanying notes are an integral part of the consolidated condensed financial statements. 2 PAGE TRIMAS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, 1994 1993 CASH FROM (USED FOR): OPERATIONS: Net income $38,140,000 $29,520,000 Adjustments to reconcile net income to net cash from operations: Depreciation and amortization 15,810,000 13,560,000 Deferred income taxes 1,100,000 750,000 (Increase) decrease in receivables (12,300,000) (12,440,000) (Increase) decrease in inventories (1,170,000) 3,000,000 Increase (decrease) in accounts payable and accrued liabilities 5,580,000 5,210,000 Other, net (120,000) (1,630,000) Net cash from (used for) operations 47,040,000 37,970,000 INVESTMENTS: Capital expenditures (16,660,000) (16,130,000) Net cash from (used for) investments (16,660,000) (16,130,000) FINANCING: Issuance of convertible subordinated debt, net 112,050,000 Retirement of long-term debt (290,000) (115,070,000) Preferred stock dividends paid to MascoTech, Inc. (10,500,000) Common stock dividends paid (3,660,000) (2,310,000) Net cash from (used for) financing (3,950,000) (15,830,000) CASH AND CASH EQUIVALENTS: Increase (decrease) for the period 26,430,000 6,010,000 At beginning of period 69,770,000 64,770,000 At end of period $96,200,000 $70,780,000 The accompanying notes are an integral part of the consolidated condensed financial statements. 3 PAGE TRIMAS CORPORATION AND SUBSIDIARIES Notes to Consolidated Condensed Financial Statements A. Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included, and such adjustments are of a normal recurring nature. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1993. Certain amounts in the 1993 financial statements have been reclassified to conform with the current presentation. B. Inventories by component are as follows: September 30, December 31, 1994 1993 Finished goods $41,050,000 $41,950,000 Work in process 12,270,000 12,230,000 Raw material 24,550,000 22,520,000 $77,870,000 $76,700,000 C. Property and equipment reflects accumulated depreciation of $101.3 million and $92.3 million as of September 30, 1994 and December 31, 1993, respectively. 4 PAGE Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net sales during the third quarter of 1994 equaled $133.6 million, exceeding last year's third quarter sales by 21.8 percent. Sales during 1994's first nine months increased 23.8 percent over the comparable period in 1993 to $415.0 million. Both third quarter and year-to-date sales represent records for the relevant periods as all four of the Company's reporting segments experienced increases in sales over the corresponding periods of 1993. Operating results during 1994 include those of Lamons Metal Gasket Co., acquired in November, 1993. Net sales of the Towing Systems segment increased 9.8 percent in the third quarter of 1994, and 15.7 percent in the first nine months of 1994. Sales for this segment reached $40.8 million for the third quarter of 1994, and $136.2 million for the first nine months of 1994. Factors contributing to these sales increases include a stronger automotive sales cycle, particularly sales of light trucks and sport utility vehicles which are more apt to use towing system products, strong demand for marine OEM and aftermarket products, and continuing new product introductions. Because of the seasonality of the demand for the products provided by this segment, its sales are concentrated in the second and third quarters of each year. Third quarter 1994 sales by the Specialty Fasteners segment increased 11.0 percent over 1993's level to $34.0 million. For the first nine months of the year, sales increased 13.9 percent to $105.0 million. Increased sales to heavy- duty truck, distribution, and other original equipment industrial markets have favorably impacted the operating results of this segment. As customers in these markets have continued to consolidate their vendor bases, 5 preferred suppliers like the TriMas Specialty Fasteners companies have increased their market shares. Sales of the Specialty Container Products segment for the third quarter 1994 were $40.9 million, a 57.7 percent increase over the comparable period in 1993. For the first nine months of the year, sales increased 55.2 percent to $122.3 million. In addition to the impact of the Lamons Metal Gasket acquisition which is reflected in 1994's results, sales of specialty container closures and compressed gas cylinders improved as the industrial and commercial markets requiring these products strengthened along with the general economy. Corporate Companies segment sales were $17.9 million during the 1994 third quarter, an 11.9 percent increase over 1993's third quarter. Sales for the first nine months of 1994 increased 10.6 percent to $51.5 million. Strong demand for cutting tools, specialty industrial tape products and vapor barrier products used in construction applications contributed to the improved performance of this segment. The Company's consolidated gross margin for the third quarter of 1994 was 32.6 percent compared to 31.9 percent for the third quarter of 1993. For the first nine months of 1994 and 1993, the gross margins were 32.3 percent and 31.6 percent, respectively. The volume sensitive nature of the Company's operations results in improved gross margins as sales increase. Maintaining high gross margins is an important operating strategy of the Company as it helps maximize earnings growth as a result of sales increases. The Company's consolidated operating profit for the third quarter of 1994 was $22.9 million, a 32.7 percent increase over the similar period of 1993. The operating margins for the three months ended September 30, 1994 and 1993 were 17.1 percent and 15.7 percent, respectively. For the first nine 6 months of 1994, operating profit increased 32.1 percent to $70.7 million and represented an operating margin of 17.0 percent, compared to operating profit of $53.5 million or 16.0 percent of net sales in 1993. All four of the Company's segments reported an increase in operating profit for the third quarter and the first nine months of 1994. This improvement in profit is primarily the result of successful cost reduction programs employed by the operating units, as well as the previously discussed increased sales volumes including the effect of the Lamons acquisition. Interest expense increased in both the third quarter and first nine months of 1994 compared to last year principally because of the borrowings associated with the Lamons acquisition and higher prevailing interest rates. Higher interest rates and increased average cash balances resulted in more interest income, the major component of other income, in both 1994 periods. Earnings available for common stock for the nine months and three months ended September 30, 1994 were $38.1 million and $12.4 million respectively, compared to $24.3 million and $7.7 million respectively, after provisions for preferred stock dividends, in last year's comparable periods. Primary earnings per common share equalled $1.03 on 37.0 million shares for the first nine months of 1994 compared to 1993's primary earnings per common share of $.83 on 29.2 million shares. The increase in common shares outstanding was the result of the conversion of the Company's $100 Convertible Participating Preferred Stock in December, 1993. Fully diluted earnings per common share were $.97 on 42.1 million shares versus $.79 on 38.0 million shares for the nine months ended September 30, 1994 and 1993, respectively. The increase in fully diluted shares was the result of the issuance of 5% Convertible Subordinated Debentures in August, 1993. Primary and fully diluted earnings per common share for the third quarter of 1994 were $.33 and $.32, compared to $.26 and $.25 in 1993's third quarter. 7 PAGE Liquidity, Working Capital and Cash Flows The Company's financial strategies include maintaining a relatively high level of liquidity. Historically, TriMas Corporation has generated sufficient cash flows from operating activities to fund capital expenditures, debt service and dividends, while maintaining its strategic level of liquidity. At September 30, 1994 the current ratio was 4.5 to 1 and working capital equalled $197.5 million, including $96.2 million of cash and cash equivalents. At December 31, 1993 the current ratio was 4.2 to 1 and working capital equalled $163.8 million. At September 30, 1994, the Company had available credit of $228.0 million under its revolving credit facility. Cash flows from operations provided $47.0 million and $38.0 million during the first nine months of 1994 and 1993, respectively. These operating cash flows were net of increases in receivables of $12.3 million in 1994 and $12.4 million in 1993. This increase in receivables during the first nine months of each year is due mainly to the seasonality of the Towing Systems segment, and increased sales volumes. Capital expenditures equalled $16.7 million and $16.1 million in 1994 and 1993, respectively. The conversion of the Company's Preferred Stock in December, 1993 and an increase in the dividend rate resulted in common stock dividends paid in 1994 of $3.7 million versus $2.3 million in 1993. No preferred stock dividends have been paid in 1994 compared to $10.5 million paid in the first nine months of 1993. The Company believes its cash flows from operations, along with its borrowing capacity and access to financial markets, are adequate to fund its strategies for future growth, including working capital, expenditures for manufacturing expansion and efficiencies, market share initiatives, and corporate development activities. 8 PAGE PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: 11 Computation of Earnings Per Common Share 12 Computation of Ratios of Earnings to Fixed Charges 27 Financial Data Schedule (b) Reports on Form 8-K: None were filed during the quarter ended September 30, 1994. SIGNATURE 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 thereunto duly authorized. TRIMAS CORPORATION Date: November 9, 1994 By: /s/William E. Meyers William E. Meyers Vice President - Controller (Chief accounting officer and authorized signatory) 9 PAGE Exhibit Index Exhibit Number Description of Document 11 Computation of Earnings Per Common Share 12 Computation of Ratios of Earnings to Fixed Charges 27 Financial Data Schedule EX-11 2 Exhibit 11 TRIMAS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (In Thousands, Except Per Share Amounts) Nine Months Ended Three Months Ended September 30, September 30, 1994 1993 1994 1993 Primary: Net income $38,140 $29,520 $12,370 $ 9,450 Preferred stock dividend requirement (5,250) (1,750) Earnings available for common stock $38,140 $24,270 $12,370 $ 7,700 Weighted average common shares outstanding 36,644 28,867 36,644 28,867 Dilution of stock options 389 298 378 322 Weighted average common and common equivalent shares outstanding after assumed exercise of options 37,033 29,165 37,022 29,189 Primary earnings per common share $1.03 $.83 $.33 $.26 Fully diluted: Net income $38,140 $29,520 $12,370 $ 9,450 Add after tax convertible debenture related expenses 2,760 920 Net income as adjusted $40,900 $29,520 $13,290 $ 9,450 Weighted average common shares outstanding 36,644 28,867 36,644 28,867 Dilution of stock options 389 326 377 326 Addition from assumed conversion of convertible preferred stock 7,778 7,778 Addition from assumed conversion of convertible debentures 5,083 1,026 5,083 3,045 Weighted average common and common equivalent shares outstanding on a fully diluted basis 42,116 37,997 42,104 40,016 Fully diluted earnings per common share $.97 $.79 $.32 $.25 EX-12 3 Exhibit 12 TRIMAS CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (Dollar Amounts in Thousands) Nine Months Ended Three Months Ended September 30, September 30, 1994 1993 1994 1993 Earnings: Income before income taxes $64,100 $49,610 $20,790 $15,880 Fixed charges 10,030 6,840 3,620 2,350 Earnings before fixed charges $74,130 $56,450 $24,410 $18,230 Fixed Charges: Interest $ 9,490 $6,430 $3,440 $2,230 Portion of rental expense 660 510 220 150 Fixed charges $10,150 $6,940 $3,660 $2,380 Ratios of earnings to fixed charges 7.3 8.1 6.7 7.7 EX-27 4
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TRIMAS CORPORATION'S 3RD QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. QTR-3 DEC-31-1994 SEP-30-1994 96,200,000 0 72,140,000 2,060,000 77,870,000 253,650,000 267,650,000 101,320,000 602,880,000 56,140,000 238,600,000 370,000 0 0 278,520,000 602,880,000 414,990,000 414,990,000 280,830,000 280,830,000 0 0 9,310,000 64,100,000 25,960,000 38,140,000 0 0 0 38,140,000 1.03 .97
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