-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PeKFQfdLTpAW7kaskQBjkDb9jrF5N2FHwAx79biXgiVyq2HLUcYwTzO4J9Dko5RY EKUlhI8V3fNBPW2/NRCRWA== 0000842633-97-000002.txt : 19970513 0000842633-97-000002.hdr.sgml : 19970513 ACCESSION NUMBER: 0000842633-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIMAS CORP CENTRAL INDEX KEY: 0000842633 STANDARD INDUSTRIAL CLASSIFICATION: METAL FORGING & STAMPINGS [3460] 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: 97600326 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 TRIMAS 1ST QUARTER 10-Q 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 March 31, 1997 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 April 30, 1997 Common Stock, $.01 Par Value 41,345,529 TRIMAS CORPORATION INDEX Page No. Part I. Financial Information Item 1. Financial Statements Consolidated Condensed Balance Sheets - March 31, 1997 and December 31, 1996 1 Consolidated Condensed Statements of Income for the Three Months Ended March 31, 1997 and 1996 2 Consolidated Condensed Statements of Cash Flows for the Three Months Ended March 31, 1997 and 1996 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 10 PART I. FINANCIAL INFORMATION Item 1. Financial Statements TRIMAS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS March 31, December 31, 1997 1996 (Unaudited) Assets Current assets: Cash and cash equivalents $ 89,660,000 $105,890,000 Receivables 102,630,000 80,390,000 Inventories 97,070,000 92,210,000 Other current assets 5,340,000 4,130,000 Total current assets 294,700,000 282,620,000 Property and equipment 194,930,000 194,540,000 Excess of cost over net assets of acquired companies 174,490,000 174,710,000 Other assets 41,670,000 44,800,000 Total assets $705,790,000 $696,670,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 36,260,000 $ 33,750,000 Other current liabilities 44,730,000 45,430,000 Total current liabilities 80,990,000 79,180,000 Deferred income taxes and other 40,880,000 39,920,000 Long-term debt 74,330,000 187,120,000 Total liabilities 196,200,000 306,220,000 Shareholders' equity: Common stock, $.01 par value, authorized 100 million shares, outstanding 41.3 million shares in 1997; 36.6 million shares in 1996 410,000 370,000 Paid-in capital 259,660,000 155,690,000 Retained earnings 251,980,000 238,290,000 Cumulative translation adjustments (2,460,000) (3,900,000) Total shareholders' equity 509,590,000 390,450,000 Total liabilities and shareholders' equity $705,790,000 $696,670,000 The accompanying notes are an integral part of the consolidated financial statements. 1 TRIMAS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended March 31, 1997 1996 Net sales $164,220,000 $147,700,000 Cost of sales (111,680,000) (100,240,000) Selling, general and administrative expenses (26,110,000) (22,990,000) Operating profit 26,430,000 24,470,000 Interest expense (1,800,000) (2,690,000) Other, net (principally interest income) 1,390,000 1,390,000 (410,000) (1,300,000) Income before income taxes 26,020,000 23,170,000 Income taxes 9,850,000 9,040,000 Net income $ 16,170,000 $ 14,130,000 Earnings per common share: Primary $.43 $.38 Fully diluted $.40 $.36 Dividends declared per common share $.06 $.05 Weighted average number of common and common equivalent shares outstanding: Primary 37,651,000 36,966,000 Fully diluted 41,655,000 42,067,000 The accompanying notes are an integral part of the consolidated condensed financial statements. 2 TRIMAS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31, 1997 1996 CASH FROM (USED FOR): OPERATIONS: Net income $16,170,000 $14,130,000 Adjustments to reconcile net income to net cash from operations: Depreciation and amortization 6,570,000 5,740,000 Deferred income taxes 750,000 1,100,000 (Increase) decrease in receivables (21,580,000) (24,300,000) (Increase) decrease in inventories (4,860,000) (6,500,000) Increase (decrease) in accounts payable and other current liabilities 460,000 5,060,000 Other, net (960,000) (360,000) Net cash from (used for) operations (3,450,000) (5,130,000) INVESTMENTS: Capital expenditures (6,770,000) (6,070,000) Net cash from (used for) investments (6,770,000) (6,070,000) FINANCING: Long-term debt: Issuance 16,780,000 Retirement (20,590,000) (200,000) Common stock dividends paid (2,200,000) (1,830,000) Net cash from (used for) financing (6,010,000) (2,030,000) CASH AND CASH EQUIVALENTS: Increase (decrease) for the period (16,230,000) (13,230,000) At beginning of period 105,890,000 92,390,000 At end of period $89,660,000 $79,160,000 SUPPLEMENTAL CASH FLOW INFORMATION: Noncash financing transaction: Conversion of convertible subordinated debentures into common stock $106,000,000
The accompanying notes are an integral part of the consolidated condensed financial statements. 3 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, 1996. B. Inventories by component are as follows: March 31, December 31, 1997 1996 Finished goods $55,080,000 $53,380,000 Work in process 14,330,000 14,340,000 Raw material 27,660,000 24,490,000 $97,070,000 $92,210,000 C. Property and equipment reflects accumulated depreciation of $135.1 million and $131.7 million as of March 31, 1997 and December 31, 1996, respectively. D. During the first quarter of 1997 the Company announced that it would redeem for cash its outstanding issue of $115.0 million of 5% Convertible Subordinated Debentures Due 2003. On March 21, 1997, $9.0 million of Convertible Subordinated Debentures were redeemed for cash. The remaining $106.0 million of Convertible Subordinated Debentures were converted into 4.7 million shares of TriMas Corporation common stock at the conversion price of $22 5/8 per share. 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Consolidated net sales during the first quarter of 1997 were a record $164.2 million, an increase of 11.2 percent over sales of $147.7 million in last year's first quarter. All four of the Company's reporting segments recorded increased sales compared to the prior year's first quarter. First quarter 1997 sales by the Specialty Container Products segment increased 31.6 percent to $56.3 million, compared to the prior year's first quarter results of $42.8 million. Segment sales were affected by the results of businesses acquired in 1996, increased demand for cylinders from industrial gas distributors and moderately increased sales of gasket products to industrial processing industries. First quarter sales by the Towing Systems segment increased modestly to $49.7 million, compared to $49.2 million in the first quarter of 1996. Sales increases attributable to Queensland Towbars Pty. Ltd., acquired in 1996, as well as continuing penetration of the specialty automotive retail market and ongoing new product introductions were partially offset by lower sales to domestic independent hitch installers as well as the effects of unseasonal weather conditions in the Pacific Northwest. Unusually cold temperatures during both first quarters negatively affected segment sales performance. First quarter 1997 sales by the Specialty Fasteners segment increased to $38.0 million, compared to $36.0 million during the same quarter in 1996. 5 Stronger demand for large diameter industrial fasteners and continued strength in the aerospace markets the Company serves resulted in the improved sales performance. The Corporate Companies segment first quarter sales equaled $20.2 million, compared to last year's first quarter sales of $19.7 million, primarily reflecting increased sales of insulation related products used in commercial and industrial construction and maintenance markets, and also modest improvement in markets for precision tools. The Company's consolidated gross margin percentage for the first quarter 1997 was 32.0 percent, compared to 32.1 percent during last year's first quarter. The results of businesses acquired during the second half of 1996 affected the consolidated measure of selling, general and administrative expenses as a percentage of net sales, which increased to 15.9 percent during the 1997 first quarter, compared to 15.6 percent for the first quarter of 1996. It is anticipated that this category of expenses at the recently acquired entities will provide an opportunity for improved results as the Company's cost reduction, distribution efficiency and marketing programs are integrated into these businesses. The Company's consolidated operating profit for the first quarter 1997 was $26.4 million, or 16.1 percent of net sales, compared to $24.5 million, or 16.6 percent of net sales in 1996. Interest expense decreased in the 1997 first quarter primarily because of the conversion during the period of $106.0 million of the Company's issue of $115.0 million of 5% Convertible Subordinated Debentures Due 2003 into 4.7 million shares of Company common stock. 6 Net income of $16.2 million resulted in primary earnings per common share of $.43 based on 37.7 million shares outstanding, compared to first quarter 1996 primary earnings per common share of $.38, based on 37.0 million shares outstanding. Fully diluted earnings per common share were $.40 based on 41.7 million shares outstanding, compared to $.36 in the first quarter of 1996, based on 42.1 million shares outstanding. Liquidity, Working Capital and Cash Flows The Company's financial strategies include maintaining a relatively high level of liquidity. Historically, TriMas Corporation on an annual basis has generated sufficient cash flows from operating activities to fund capital expenditures, debt service and dividends while maintaining its strategic level of liquidity. At March 31, 1997, the current ratio was 3.6 to 1 and working capital equaled $213.7 million, including $89.7 million of cash and cash equivalents. The Company had available credit of $330.0 million under its domestic and foreign revolving credit facilities at March 31, 1997. Cash and cash equivalents decreased $16.2 million and $13.2 million during the first quarters of 1997 and 1996, respectively. The Company's operating activities used $3.5 million during the first quarter 1997, compared to $5.1 million during the same quarter of 1996. Due primarily to the seasonality of the Company's Towing Systems segment, first quarter sales are stronger than the preceding year's fourth quarter, thereby causing substantial increases in receivables and, to a lesser extent, inventories during any first 7 quarter. Cash flow resulting from these increased receivables and inventories has historically been realized later in the year. Total changes in working capital items were approximately the same in each of the first quarters. Capital expenditures equaled $6.8 million in the first quarter of 1997 and $6.1 million in the first quarter of 1996. The 1997 expenditures include $5.4 million invested in the Specialty Fasteners and Specialty Container Products segments. During the first quarter of 1997 the Company announced that it would redeem for cash its outstanding issue of $115.0 million of 5% Convertible Subordinated Debentures Due 2003. On March 21, 1997, after $106.0 million of the Debentures had been converted into Company common stock, the remaining $9.0 million of Debentures were redeemed for cash. Long-term debt issuances and retirements during the first quarter of 1997 also include the consolidation of borrowings, originally incurred or acquired in connection with acquisitions made in 1996, under certain of the Company's revolving credit facilities. Dividends paid on common stock totaled $2.2 million for the first quarter of 1997, compared to $1.8 million for the first quarter of 1996. The Company believes its cash flows from operations, along with its unused 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 Under a Stock Repurchase Agreement which expires in December 1998, Masco Corporation and MascoTech, Inc. have the right to sell to the Company, at approximate fair market value, shares of Company common stock following the occurrence of certain events that would result in an increase in their respective ownership percentage of the then outstanding shares of Company common stock. In all cases, the Company has control over the amount of Company common stock it would ultimately acquire. Neither Masco Corporation nor MascoTech, Inc. have ever exercised their right to sell Company common stock to the Company. To the extent these rights have been exercised at any balance sheet date, the Company would reclassify from permanent capital an amount representative of the repurchase obligation. In February 1997 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings per Share. The Company will adopt the provisions of this Statement during the fourth quarter of 1997 and it is not expected to have a material effect on the Company's financial statements. 9 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 March 31, 1997. 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: May 12, 1997 By: /s/William E. Meyers William E. Meyers Vice President - Controller (Chief accounting officer and authorized signatory) 10 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 TRIMAS 1ST QUARTER 10-Q EXHIBIT 11 Exhibit 11 TRIMAS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (In Thousands, Except Per Share Amounts) Three Months Ended March 31, 1997 1996 Primary: Net income $16,170 $14,130 Weighted average common shares outstanding 37,326 36,644 Dilution of stock options 325 322 Weighted average common and common equivalent shares outstanding after assumed exercise of options 37,651 36,966 Primary earnings per common share $.43 $.38 Fully diluted: Net income $16,170 $14,130 Add after tax convertible debenture related expenses 300 920 Net income as adjusted $16,470 $15,050 Weighted average common shares outstanding 36,644 36,644 Dilution of stock options 325 340 Addition from assumed conversion of convertible debentures 4,686 5,083 Weighted average common and common equivalent shares outstanding on a fully diluted basis 41,655 42,067 Fully diluted earnings per common share $.40 $.36 EX-12 3 TRIMAS 1ST QUARTER 10-Q EXHIBIT 12 Exhibit 12 TRIMAS CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (Dollar Amounts in Thousands) Three Months Ended March 31, 1997 1996 Earnings: Income before income taxes $26,020 $23,170 Fixed charges 2,130 2,980 Earnings before fixed charges $28,150 $26,150 Fixed Charges: Interest $ 1,890 $ 2,780 Portion of rental expense 290 250 Fixed charges $ 2,180 $ 3,030 Ratios of earnings to fixed charges 12.9 8.6 EX-27 4 TRIMAS 1ST QUARTER 10-Q EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TRIMAS CORPORATION'S FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1997 MAR-31-1997 89,660,000 0 104,660,000 2,030,000 97,070,000 294,700,000 330,040,000 135,110,000 705,790,000 80,990,000 74,330,000 0 0 410,000 509,180,000 705,790,000 164,220,000 164,220,000 111,680,000 111,680,000 0 0 1,800,000 26,020,00 9,850,000 16,170,000 0 0 0 16,170,000 .43 .40
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