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 "First Quarter 2014 Earnings Presentation" |
TRIMAS CORPORATION | ||||||
Date: | April 29, 2014 | 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 first quarter net sales of $367.7 million, an increase of 8.9% as compared to first quarter 2013, due to results from bolt-on acquisitions and the successful execution of numerous growth initiatives. |
• | Improved net income attributable to TriMas Corporation(1) by 10.7%, excluding the impact of Special Items, compared to first quarter 2013. |
• | Continued initiatives to expand operating profit margins with a 30 basis point improvement, after Special Items(1), in first quarter 2014 as compared to first quarter 2013, while investing in the many recent acquisitions completed in 2013 and absorbing the lower margin rates associated with these acquisitions. The Company will continue to improve margins through a variety of initiatives. |
• | Acquired the remaining 30% interest of Arminak & Associates, a leader in the design, manufacture and supply of foamers, lotion pumps, fine mist sprayers and other packaging solutions for the cosmetic, personal care, beauty aids and household product markets. |
• | Reduced interest expense by more than 30% as compared to first quarter 2013. In October 2013, the Company entered into new senior secured credit facilities, which reduced interest rates, extended maturities and increased available liquidity. Also in April 2014, the Company amended its $105.0 million accounts receivable facility to lower rates and extend the maturity until October 2018. |
• | Continued to invest in a lean and flexible manufacturing footprint to optimize manufacturing costs long-term, add needed capacity, enhance customer service and support future growth. |
• | TriMas reported record first quarter net sales of $367.7 million, an increase of 8.9% as compared to $337.8 million in first quarter 2013. During first quarter, net sales increased in four of the six reportable segments, primarily as a result of additional sales from bolt-on acquisitions, as well as geographic expansion, new customer wins and strength in certain end markets as compared to first quarter 2013. These sales increases were partially offset by approximately $3.6 million of unfavorable currency exchange. |
• | The Company reported operating profit of $32.6 million in first quarter 2014, an increase of 37.3% as compared to first quarter 2013. Excluding Special Items(1) related to the facility consolidation and relocation projects within Cequent Americas in both years, first quarter 2014 operating profit would have been $33.6 million, an increase of 13.5% as compared to $29.6 million during first quarter 2013. First quarter 2014 operating profit margin percentage, excluding Special Items, improved due to productivity and cost reduction initiatives primarily in the Packaging and Engineered Components segments, partially offset by a less favorable product sales mix related to recent acquisitions, which have lower initial margins. 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, first quarter 2014 net income attributable to TriMas Corporation was $18.6 million, or $0.41 per diluted share, compared to net income attributable to TriMas Corporation of $13.2 million, or $0.33 per diluted share, during first quarter 2013. Excluding Special Items(1), first quarter 2014 net income attributable to TriMas Corporation would have been $19.2 million, an improvement of 10.7%, and diluted earnings per share would have been $0.43, as compared to $0.44 in first quarter 2013, primarily due to higher operating profit and lower interest expense which was more than offset by significantly higher income tax expense and 13.6% higher weighted average shares outstanding in first quarter 2014 as compared to first quarter 2013. |
• | The Company reported a Free Cash Flow use (defined as Cash Flow from Operating Activities less Capital Expenditures) of $33.7 million for first quarter 2014, compared to a use of $51.9 million in first quarter 2013. The Company expects to generate between $55 million and $65 million in Free Cash Flow for 2014, while continuing to invest in capital expenditures, working capital investments in acquisitions and future growth and productivity programs. |
• | Through March 31, 2014, the Company invested $9.0 million in capital expenditures (included in Free Cash Flow above) primarily in support of future growth and productivity opportunities and used $51.0 million to acquire the remaining interest of Arminak & Associates in the Packaging reportable segment. |
(1) | Appendix I details certain costs, expenses and other charges, collectively described as “Special Items,” that are included in the determination of net income 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.” |
March 31, 2014 | December 31, 2013 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 31,820 | $ | 27,000 | ||||
Receivables, net | 226,380 | 180,210 | ||||||
Inventories | 269,900 | 270,690 | ||||||
Deferred income taxes | 18,340 | 18,340 | ||||||
Prepaid expenses and other current assets | 19,780 | 18,770 | ||||||
Total current assets | 566,220 | 515,010 | ||||||
Property and equipment, net | 208,360 | 206,150 | ||||||
Goodwill | 310,700 | 309,660 | ||||||
Other intangibles, net | 214,760 | 219,530 | ||||||
Other assets | 48,910 | 50,430 | ||||||
Total assets | $ | 1,348,950 | $ | 1,300,780 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Current maturities, long-term debt | $ | 14,000 | $ | 10,290 | ||||
Accounts payable | 159,460 | 166,090 | ||||||
Accrued liabilities | 80,240 | 85,130 | ||||||
Total current liabilities | 253,700 | 261,510 | ||||||
Long-term debt | 384,190 | 295,450 | ||||||
Deferred income taxes | 53,920 | 64,940 | ||||||
Other long-term liabilities | 102,270 | 99,990 | ||||||
Total liabilities | 794,080 | 721,890 | ||||||
Redeemable noncontrolling interests | — | 29,480 | ||||||
Total shareholders' equity | 554,870 | 549,410 | ||||||
Total liabilities and shareholders' equity | $ | 1,348,950 | $ | 1,300,780 |
Three months ended March 31, | ||||||||
2014 | 2013 | |||||||
Net sales | $ | 367,740 | $ | 337,780 | ||||
Cost of sales | (271,160 | ) | (254,380 | ) | ||||
Gross profit | 96,580 | 83,400 | ||||||
Selling, general and administrative expenses | (63,990 | ) | (59,660 | ) | ||||
Operating profit | 32,590 | 23,740 | ||||||
Other expense, net: | ||||||||
Interest expense | (3,470 | ) | (5,210 | ) | ||||
Other expense, net | (1,020 | ) | (2,230 | ) | ||||
Other expense, net | (4,490 | ) | (7,440 | ) | ||||
Income before income tax expense | 28,100 | 16,300 | ||||||
Income tax expense | (8,720 | ) | (2,260 | ) | ||||
Net income | 19,380 | 14,040 | ||||||
Less: Net income attributable to noncontrolling interests | 810 | 860 | ||||||
Net income attributable to TriMas Corporation | $ | 18,570 | $ | 13,180 | ||||
Basic earnings per share attributable to TriMas Corporation: | ||||||||
Net income per share | $ | 0.41 | $ | 0.34 | ||||
Weighted average common shares—basic | 44,768,594 | 39,234,780 | ||||||
Diluted earnings per share attributable to TriMas Corporation: | ||||||||
Net income per share | $ | 0.41 | $ | 0.33 | ||||
Weighted average common shares—diluted | 45,186,114 | 39,790,524 |
Three months ended March 31, | ||||||||
2014 | 2013 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 19,380 | $ | 14,040 | ||||
Adjustments to reconcile net income to net cash used for operating activities, net of acquisition impact: | ||||||||
Loss on dispositions of property and equipment | 70 | 10 | ||||||
Depreciation | 8,030 | 7,050 | ||||||
Amortization of intangible assets | 5,480 | 5,080 | ||||||
Amortization of debt issue costs | 480 | 440 | ||||||
Deferred income taxes | (2,820 | ) | (1,640 | ) | ||||
Non-cash compensation expense | 2,280 | 2,680 | ||||||
Excess tax benefits from stock based compensation | (760 | ) | (910 | ) | ||||
Increase in receivables | (44,960 | ) | (38,280 | ) | ||||
(Increase) decrease in inventories | 1,800 | (3,690 | ) | |||||
(Increase) decrease in prepaid expenses and other assets | 100 | (3,560 | ) | |||||
Decrease in accounts payable and accrued liabilities | (13,910 | ) | (18,710 | ) | ||||
Other, net | 160 | (440 | ) | |||||
Net cash used for operating activities, net of acquisition impact | (24,670 | ) | (37,930 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | (9,030 | ) | (13,950 | ) | ||||
Acquisition of businesses, net of cash acquired | — | (28,230 | ) | |||||
Net proceeds from disposition of assets | 240 | 520 | ||||||
Net cash used for investing activities | (8,790 | ) | (41,660 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from borrowings on term loan facilities | 46,750 | 54,110 | ||||||
Repayments of borrowings on term loan facilities | (46,340 | ) | (48,840 | ) | ||||
Proceeds from borrowings on revolving credit and accounts receivable facilities | 331,120 | 268,800 | ||||||
Repayments of borrowings on revolving credit and accounts receivable facilities | (239,900 | ) | (190,800 | ) | ||||
Distributions to noncontrolling interests | (580 | ) | (550 | ) | ||||
Payment for noncontrolling interests | (51,000 | ) | — | |||||
Shares surrendered upon vesting of options and restricted stock awards to cover tax obligations | (2,670 | ) | (3,530 | ) | ||||
Proceeds from exercise of stock options | 140 | 170 | ||||||
Excess tax benefits from stock based compensation | 760 | 910 | ||||||
Net cash provided by financing activities | 38,280 | 80,270 | ||||||
Cash and Cash Equivalents: | ||||||||
Increase for the period | 4,820 | 680 | ||||||
At beginning of period | 27,000 | 20,580 | ||||||
At end of period | $ | 31,820 | $ | 21,260 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 3,010 | $ | 3,900 | ||||
Cash paid for taxes | $ | 2,660 | $ | 7,280 |
Three months ended March 31, | ||||||||
2014 | 2013 | |||||||
Packaging | ||||||||
Net sales | $ | 81,430 | $ | 74,350 | ||||
Operating profit | $ | 18,360 | $ | 14,630 | ||||
Energy | ||||||||
Net sales | $ | 52,780 | $ | 54,920 | ||||
Operating profit | $ | 2,600 | $ | 5,870 | ||||
Aerospace & Defense | ||||||||
Net sales | $ | 29,540 | $ | 20,970 | ||||
Operating profit | $ | 5,180 | $ | 3,750 | ||||
Engineered Components | ||||||||
Net sales | $ | 55,430 | $ | 46,270 | ||||
Operating profit | $ | 7,880 | $ | 5,700 | ||||
Cequent APEA | ||||||||
Net sales | $ | 39,470 | $ | 32,090 | ||||
Operating profit | $ | 2,500 | $ | 3,180 | ||||
Cequent Americas | ||||||||
Net sales | $ | 109,090 | $ | 109,180 | ||||
Operating profit | $ | 5,710 | $ | 700 | ||||
Special Items to consider in evaluating operating profit: | ||||||||
Severance and business restructuring costs | $ | 980 | $ | 5,830 | ||||
Excluding Special Items, operating profit would have been | $ | 6,690 | $ | 6,530 | ||||
Corporate Expenses | ||||||||
Operating loss | $ | (9,640 | ) | $ | (10,090 | ) | ||
Total Company | ||||||||
Net sales | $ | 367,740 | $ | 337,780 | ||||
Operating profit | $ | 32,590 | $ | 23,740 | ||||
Total Special Items to consider in evaluating operating profit: | $ | 980 | $ | 5,830 | ||||
Excluding Special Items, operating profit would have been | $ | 33,570 | $ | 29,570 |
Three months ended March 31, | ||||||||
2014 | 2013 | |||||||
Net Income, as reported | $ | 19,380 | $ | 14,040 | ||||
Less: Net income attributable to noncontrolling interests | 810 | 860 | ||||||
Net Income attributable to TriMas Corporation | 18,570 | 13,180 | ||||||
After-tax impact of Special Items to consider in evaluating quality of net income: | ||||||||
Severance and business restructuring costs | 670 | 4,200 | ||||||
Excluding Special Items, net income attributable to TriMas Corporation would have been | $ | 19,240 | $ | 17,380 | ||||
Three months ended March 31, | ||||||||
2014 | 2013 | |||||||
Diluted earnings per share attributable to TriMas Corporation, as reported | $ | 0.41 | $ | 0.33 | ||||
After-tax impact of Special Items to consider in evaluating quality of EPS: | ||||||||
Severance and business restructuring costs | 0.02 | 0.11 | ||||||
Excluding Special Items, EPS would have been | $ | 0.43 | $ | 0.44 | ||||
Weighted-average shares outstanding for the three months ended March 31, 2014 and 2013 | 45,186,114 | 39,790,524 | ||||||
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