UNITED STATES | OMB APPROVAL | |
SECURITIES AND EXCHANGE COMMISSION | OMB Number: 3235-0060 Expires: March 31, 2014 Estimated average burden hours per response. . . 5.0 | |
Washington, D.C. 20549 | ||
FORM 8-K |
Delaware | 001-10716 | 38-2687639 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) |
39400 Woodward Avenue, Suite 130, Bloomfield Hills, Michigan | 48304 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit No. | Description | |||
99.1 | Press Release | |||
99.2 | The Corporation's visual presentation titled "Second Quarter 2013 Earnings Presentation" |
TRIMAS CORPORATION | ||||||
Date: | July 25, 2013 | By: | /s/ David M. Wathen | |||
Name: | David M. Wathen | |||||
Title: | Chief Executive Officer |
CONTACT: | |||
Sherry Lauderback | |||
VP, Investor Relations & Communications | |||
(248) 631-5506 | |||
sherrylauderback@trimascorp.com |
• | Reported record second quarter net sales of $378.0 million, an increase of 11.7% as compared to second quarter 2012, due to results from bolt-on acquisitions and the successful execution of numerous growth initiatives. |
• | Improved income from continuing operations attributable to TriMas Corporation(1) by 19.7%, excluding the impact of Special Items, compared to second quarter 2012. Improved diluted earnings per share(1), while absorbing costs related to several acquisitions and approximately 6% higher weighted average shares outstanding for second quarter 2013, as compared to second quarter 2012. |
• | Completed five bolt-on acquisitions for approximately $47 million, net of cash acquired, or approximately one-times revenue acquired, through second quarter year to date to expand and globalize existing product offerings, gain access to new customers and end markets, expand the geographic footprint internationally, further enhance management capacity, and capitalize on scale and cost efficiencies. |
• | Reduced interest expense by more than 45% as compared with second quarter 2012. |
• | Continued to invest in a flexible manufacturing footprint to optimize manufacturing costs long-term, add necessary capacity, enhance customer service and support future growth. |
• | Today announced the acquisition of substantially all of the assets of a towbar manufacturer located in Germany and Finland. These assets, combined with the April 2013 acquisition of C.P. Witter Limited, a leading manufacturer of highly-engineered towbars and cargo management products located in the United Kingdom, position Cequent to capitalize on growth opportunities in new markets through product and geographic expansion. |
• | TriMas reported record second quarter net sales of $378.0 million, an increase of 11.7% as compared to $338.4 million in second quarter 2012. During second quarter, net sales increased in five of the six reportable segments, primarily as a result of additional sales from bolt-on acquisitions, market share gains, new product introductions, geographic expansion and increased market demand as compared to second quarter 2012. More than half of the sales increase was due to organic growth, while the remainder was the result of recent acquisitions, partially offset by approximately $1.2 million of unfavorable currency exchange. |
• | The Company reported operating profit of $41.6 million in second quarter 2013. Excluding Special Items(1) related to facility consolidation and relocation projects within Cequent, second quarter 2013 operating profit would have been $43.6 million, as compared to $46.2 million during second quarter 2012. Second quarter 2013 operating profit and the related margin percentage were impacted by costs related to recent acquisitions including purchase accounting adjustments, higher costs associated with global growth initiatives and new plant and equipment ramp-up costs. The Company continued to generate significant savings from capital investments, productivity projects and Lean initiatives, which contributed to the funding of growth initiatives. |
• | Excluding noncontrolling interests related to Arminak & Associates, second quarter 2013 income from continuing operations attributable to TriMas Corporation was $26.2 million, or $0.65 per diluted share, compared to income from continuing operations attributable to TriMas Corporation of $16.7 million, or $0.44 per diluted share, during second quarter 2012. Excluding Special Items(1), second quarter 2013 income from continuing operations attributable to TriMas Corporation would have been $27.6 million, an improvement of 19.7%, and diluted earnings per share from continuing operations would have been $0.69, a 13.1% improvement from second quarter 2012, primarily due to lower interest expense, while absorbing approximately 6% higher weighted average shares outstanding. |
• | The Company reported Free Cash Flow (defined as Cash Flow from Operating Activities less Capital Expenditures) of $39.5 million for second quarter 2013, compared to $19.3 million in second quarter 2012. The Company reported a year to date Free Cash Flow use of $12.4 million for 2013, compared to a use of $31.5 million year to date 2012. The Company expects to generate between $40 million and $50 million in Free Cash Flow for 2013, while continuing to invest in capital expenditures, working capital investments in acquisitions and future growth and productivity programs. |
• | Through June 30, 2013, the Company invested $25.9 million in capital expenditures (included in Free Cash Flow above) primarily in support of future growth and productivity opportunities and $46.6 million, net of cash acquired, in bolt-on acquisitions. |
(1) | Appendix I details certain costs, expenses and other charges, collectively described as “Special Items,” that are included in the determination of income from continuing operations attributable to TriMas Corporation under GAAP, but that management would consider important in evaluating the quality of the Company's operating results. |
(2) | Business Segment Results include Operating Profit that excludes the impact of Special Items. For a complete schedule of Special Items by segment, see “Company and Business Segment Financial Information - Continuing Operations.” |
June 30, 2013 | December 31, 2012 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 18,830 | $ | 20,580 | ||||
Receivables, net | 207,860 | 150,390 | ||||||
Inventories | 246,060 | 238,020 | ||||||
Deferred income taxes | 17,990 | 18,270 | ||||||
Prepaid expenses and other current assets | 12,770 | 10,530 | ||||||
Total current assets | 503,510 | 437,790 | ||||||
Property and equipment, net | 200,330 | 185,030 | ||||||
Goodwill | 285,360 | 270,940 | ||||||
Other intangibles, net | 208,850 | 206,160 | ||||||
Other assets | 41,270 | 31,040 | ||||||
Total assets | $ | 1,239,320 | $ | 1,130,960 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Current maturities, long-term debt | $ | 20,840 | $ | 14,370 | ||||
Accounts payable | 163,830 | 158,410 | ||||||
Accrued liabilities | 74,120 | 74,420 | ||||||
Total current liabilities | 258,790 | 247,200 | ||||||
Long-term debt | 459,810 | 408,070 | ||||||
Deferred income taxes | 65,160 | 60,370 | ||||||
Other long-term liabilities | 87,140 | 84,960 | ||||||
Total liabilities | 870,900 | 800,600 | ||||||
Redeemable noncontrolling interests | 27,200 | 26,780 | ||||||
Total shareholders' equity | 341,220 | 303,580 | ||||||
Total liabilities and shareholders' equity | $ | 1,239,320 | $ | 1,130,960 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net sales | $ | 378,030 | $ | 338,430 | $ | 715,810 | $ | 636,000 | ||||||||
Cost of sales | (274,720 | ) | (242,540 | ) | (529,100 | ) | (461,200 | ) | ||||||||
Gross profit | 103,310 | 95,890 | 186,710 | 174,800 | ||||||||||||
Selling, general and administrative expenses | (61,670 | ) | (52,710 | ) | (121,320 | ) | (103,180 | ) | ||||||||
Net gain (loss) on dispositions of property and equipment | — | 20 | (10 | ) | 320 | |||||||||||
Operating profit | 41,640 | 43,200 | 65,380 | 71,940 | ||||||||||||
Other expense, net: | ||||||||||||||||
Interest expense | (5,540 | ) | (10,300 | ) | (10,750 | ) | (20,970 | ) | ||||||||
Debt extinguishment costs | — | (6,560 | ) | — | (6,560 | ) | ||||||||||
Other income (expense), net | 300 | (910 | ) | (1,930 | ) | (2,550 | ) | |||||||||
Other expense, net | (5,240 | ) | (17,770 | ) | (12,680 | ) | (30,080 | ) | ||||||||
Income from continuing operations before income tax expense | 36,400 | 25,430 | 52,700 | 41,860 | ||||||||||||
Income tax expense | (9,300 | ) | (8,260 | ) | (11,560 | ) | (12,440 | ) | ||||||||
Income from continuing operations | 27,100 | 17,170 | 41,140 | 29,420 | ||||||||||||
Income from discontinued operations, net of income tax expense | 700 | — | 700 | — | ||||||||||||
Net income | 27,800 | 17,170 | 41,840 | 29,420 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 910 | 510 | 1,770 | 270 | ||||||||||||
Net income attributable to TriMas Corporation | $ | 26,890 | $ | 16,660 | $ | 40,070 | $ | 29,150 | ||||||||
Basic earnings per share attributable to TriMas Corporation: | ||||||||||||||||
Continuing operations | $ | 0.66 | $ | 0.45 | $ | 1.00 | $ | 0.81 | ||||||||
Discontinued operations | 0.02 | — | 0.02 | — | ||||||||||||
Net income per share | $ | 0.68 | $ | 0.45 | $ | 1.02 | $ | 0.81 | ||||||||
Weighted average common shares—basic | 39,425,471 | 37,345,026 | 39,330,125 | 35,968,646 | ||||||||||||
Diluted earnings per share attributable to TriMas Corporation: | ||||||||||||||||
Continuing operations | $ | 0.65 | $ | 0.44 | $ | 0.99 | $ | 0.80 | ||||||||
Discontinued operations | 0.02 | — | 0.02 | — | ||||||||||||
Net income per share | $ | 0.67 | $ | 0.44 | $ | 1.01 | $ | 0.80 | ||||||||
Weighted average common shares—diluted | 39,886,593 | 37,694,221 | 39,790,349 | 36,421,387 |
Six months ended June 30, | ||||||||
2013 | 2012 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | 41,840 | 29,420 | ||||||
Adjustments to reconcile net income to net cash provided by (used for) operating activities, net of acquisition impact: | ||||||||
(Gain) loss on dispositions of property and equipment | 10 | (320 | ) | |||||
Depreciation | 14,560 | 12,690 | ||||||
Amortization of intangible assets | 10,230 | 9,180 | ||||||
Amortization of debt issue costs | 870 | 1,600 | ||||||
Deferred income taxes | (3,470 | ) | 200 | |||||
Debt extinguishment costs | — | 6,560 | ||||||
Non-cash compensation expense | 4,750 | 3,510 | ||||||
Excess tax benefits from stock based compensation | (1,180 | ) | (2,130 | ) | ||||
Increase in receivables | (54,460 | ) | (41,630 | ) | ||||
(Increase) decrease in inventories | 1,320 | (31,270 | ) | |||||
Increase in prepaid expenses and other assets | (2,240 | ) | (1,740 | ) | ||||
Increase in accounts payable and accrued liabilities | 2,320 | 8,470 | ||||||
Other, net | (1,010 | ) | 580 | |||||
Net cash provided by (used for) operating activities, net of acquisition impact | 13,540 | (4,880 | ) | |||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | (25,920 | ) | (26,640 | ) | ||||
Acquisition of businesses, net of cash acquired | (46,610 | ) | (61,820 | ) | ||||
Net proceeds from disposition of assets | 700 | 2,770 | ||||||
Net cash used for investing activities | (71,830 | ) | (85,690 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of common stock in connection with the Company's equity offering, net of issuance costs | — | 79,040 | ||||||
Proceeds from borrowings on term loan facilities | 106,420 | 69,530 | ||||||
Repayments of borrowings on term loan facilities | (104,830 | ) | (69,150 | ) | ||||
Proceeds from borrowings on revolving credit and accounts receivable facilities | 475,890 | 412,900 | ||||||
Repayments of borrowings on revolving credit and accounts receivable facilities | (418,900 | ) | (412,900 | ) | ||||
Repurchase of 9¾% senior secured notes | — | (50,000 | ) | |||||
Senior secured notes redemption premium and debt financing fees | — | (4,880 | ) | |||||
Distributions to noncontrolling interests | (1,350 | ) | (410 | ) | ||||
Proceeds from contingent consideration related to disposition of businesses | 1,030 | — | ||||||
Shares surrendered upon vesting of options and restricted stock awards to cover tax obligations | (3,760 | ) | (990 | ) | ||||
Proceeds from exercise of stock options | 860 | 5,660 | ||||||
Excess tax benefits from stock based compensation | 1,180 | 2,130 | ||||||
Net cash provided by financing activities | 56,540 | 30,930 | ||||||
Cash and Cash Equivalents: | ||||||||
Decrease for the period | (1,750 | ) | (59,640 | ) | ||||
At beginning of period | 20,580 | 88,920 | ||||||
At end of period | $ | 18,830 | $ | 29,280 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 8,280 | $ | 17,790 | ||||
Cash paid for taxes | $ | 13,830 | $ | 13,840 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Packaging | ||||||||||||||||
Net sales | $ | 78,640 | $ | 70,700 | $ | 152,990 | $ | 125,010 | ||||||||
Operating profit | $ | 19,600 | $ | 16,570 | $ | 34,230 | $ | 26,460 | ||||||||
Energy | ||||||||||||||||
Net sales | $ | 58,820 | $ | 47,170 | $ | 113,740 | $ | 97,760 | ||||||||
Operating profit | $ | 5,210 | $ | 4,350 | $ | 11,080 | $ | 10,740 | ||||||||
Aerospace & Defense | ||||||||||||||||
Net sales | $ | 23,740 | $ | 19,330 | $ | 44,710 | $ | 37,190 | ||||||||
Operating profit | $ | 5,520 | $ | 4,820 | $ | 9,270 | $ | 9,680 | ||||||||
Engineered Components | ||||||||||||||||
Net sales | $ | 50,020 | $ | 52,620 | $ | 96,290 | $ | 102,300 | ||||||||
Operating profit | $ | 5,890 | $ | 8,600 | $ | 11,590 | $ | 16,310 | ||||||||
Cequent APEA | ||||||||||||||||
Net sales | $ | 38,290 | $ | 28,550 | $ | 70,380 | $ | 56,750 | ||||||||
Operating profit | $ | 2,550 | $ | 2,010 | $ | 5,730 | $ | 5,050 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | — | $ | 1,560 | $ | — | $ | 2,280 | ||||||||
Excluding Special Items, operating profit would have been | $ | 2,550 | $ | 3,570 | $ | 5,730 | $ | 7,330 | ||||||||
Cequent Americas | ||||||||||||||||
Net sales | $ | 128,520 | $ | 120,060 | $ | 237,700 | $ | 216,990 | ||||||||
Operating profit | $ | 12,890 | $ | 15,500 | $ | 13,590 | $ | 19,660 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Severance and business restructuring costs | $ | 1,960 | $ | 1,390 | $ | 7,790 | $ | 2,340 | ||||||||
Excluding Special Items, operating profit would have been | $ | 14,850 | $ | 16,890 | $ | 21,380 | $ | 22,000 | ||||||||
Corporate Expenses | ||||||||||||||||
Operating loss | $ | (10,020 | ) | $ | (8,650 | ) | $ | (20,110 | ) | $ | (15,960 | ) | ||||
Total Company | ||||||||||||||||
Net sales | $ | 378,030 | $ | 338,430 | $ | 715,810 | $ | 636,000 | ||||||||
Operating profit | $ | 41,640 | $ | 43,200 | $ | 65,380 | $ | 71,940 | ||||||||
Total Special Items to consider in evaluating operating profit: | $ | 1,960 | $ | 2,950 | $ | 7,790 | $ | 4,620 | ||||||||
Excluding Special Items, operating profit would have been | $ | 43,600 | $ | 46,150 | $ | 73,170 | $ | 76,560 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Income from continuing operations, as reported | $ | 27,100 | $ | 17,170 | $ | 41,140 | $ | 29,420 | ||||||||
Less: Net income attributable to noncontrolling interests | 910 | 510 | 1,770 | 270 | ||||||||||||
Income from continuing operations attributable to TriMas Corporation | 26,190 | 16,660 | 39,370 | 29,150 | ||||||||||||
After-tax impact of Special Items to consider in evaluating quality of income from continuing operations: | ||||||||||||||||
Severance and business restructuring costs | 1,390 | 1,980 | 5,590 | 3,100 | ||||||||||||
Debt extinguishment costs | — | 4,400 | — | 4,400 | ||||||||||||
Excluding Special Items, income from continuing operations attributable to TriMas Corporation would have been | $ | 27,580 | $ | 23,040 | $ | 44,960 | $ | 36,650 | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Diluted earnings per share from continuing operations attributable to TriMas Corporation, as reported | $ | 0.65 | $ | 0.44 | $ | 0.99 | $ | 0.80 | ||||||||
After-tax impact of Special Items to consider in evaluating quality of EPS from continuing operations: | ||||||||||||||||
Severance and business restructuring costs | 0.04 | 0.05 | 0.14 | 0.09 | ||||||||||||
Debt extinguishment costs | — | 0.12 | — | 0.12 | ||||||||||||
Excluding Special Items, EPS from continuing operations would have been | $ | 0.69 | $ | 0.61 | $ | 1.13 | $ | 1.01 | ||||||||
Weighted-average shares outstanding for the three and six months ended June 30, 2013 and 2012 | 39,886,593 | 37,694,221 | 39,790,349 | 36,421,387 | ||||||||||||
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