UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
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.) |
38505 Woodward Avenue, Suite 200, Bloomfield Hills, Michigan | 48304 | |
(Address of principal executive offices) | (Zip Code) |
Emerging growth company | o |
Exhibit No. | Description | |||
99.1 | ||||
99.2 |
TRIMAS CORPORATION | ||||||
Date: | February 28, 2019 | By: | /s/ Robert J. Zalupski | |||
Name: | Robert J. Zalupski | |||||
Title: | Chief Financial Officer |
CONTACT: |
Sherry Lauderback |
VP, Investor Relations & Communications |
(248) 631-5506 |
sherrylauderback@trimascorp.com |
• | Increased net sales by 7.3% to $877.1 million, with sales increases in all segments |
• | Increased operating profit to $122.1 million, while adjusted operating profit(1) increased by 8.5% to $116.1 million |
• | Increased net income to $83.3 million, while adjusted net income(1) increased by 25.8% to $81.0 million |
• | Increased diluted EPS to $1.80, while adjusted diluted EPS(1) increased by 25.0% to $1.75 |
• | Increased Adjusted EBITDA(2) by $12.4 million to $167.3 million, or 19.1% of sales |
• | Increased net cash provided by operating activities by 7.7% to $129.3 million, and ended 2018 with $108.2 million of cash on hand |
• | Reduced debt less cash and cash equivalents by $90.1 million, to $185.4 million as of December 31, 2018 |
(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 Adjusted EBITDA as net income (loss) plus expense (benefit) for interest, taxes, depreciation, amortization and non-cash compensation, all as adjusted for the impact of Special Items. Please see Appendix I for additional details. |
(3) | The Company defines Net Debt as Total Debt less Cash and Cash Equivalents. Please see Appendix I for additional details. |
(4) | 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. |
December 31, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 108,150 | $ | 27,580 | ||||
Receivables, net | 123,110 | 112,220 | ||||||
Inventories | 173,120 | 155,350 | ||||||
Prepaid expenses and other current assets | 7,430 | 16,120 | ||||||
Total current assets | 411,810 | 311,270 | ||||||
Property and equipment, net | 187,800 | 190,250 | ||||||
Goodwill | 316,650 | 319,390 | ||||||
Other intangibles, net | 174,530 | 194,220 | ||||||
Deferred income taxes | 1,080 | 9,100 | ||||||
Other assets | 8,650 | 8,970 | ||||||
Total assets | $ | 1,100,520 | $ | 1,033,200 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 93,430 | $ | 72,410 | ||||
Accrued liabilities | 48,300 | 49,470 | ||||||
Total current liabilities | 141,730 | 121,880 | ||||||
Long-term debt, net | 293,560 | 303,080 | ||||||
Deferred income taxes | 5,560 | 5,650 | ||||||
Other long-term liabilities | 39,220 | 58,570 | ||||||
Total liabilities | 480,070 | 489,180 | ||||||
Total shareholders' equity | 620,450 | 544,020 | ||||||
Total liabilities and shareholders' equity | $ | 1,100,520 | $ | 1,033,200 |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(unaudited) | ||||||||||||||||
Net sales | $ | 211,350 | $ | 195,210 | $ | 877,140 | $ | 817,740 | ||||||||
Cost of sales | (154,110 | ) | (146,000 | ) | (633,020 | ) | (598,350 | ) | ||||||||
Gross profit | 57,240 | 49,210 | 244,120 | 219,390 | ||||||||||||
Selling, general and administrative expenses | (31,600 | ) | (32,800 | ) | (121,800 | ) | (129,140 | ) | ||||||||
Net gain (loss) on dispositions of assets | (180 | ) | 2,140 | (250 | ) | (1,080 | ) | |||||||||
Operating profit | 25,460 | 18,550 | 122,070 | 89,170 | ||||||||||||
Other expense, net: | ||||||||||||||||
Interest expense | (3,250 | ) | (4,040 | ) | (13,910 | ) | (14,400 | ) | ||||||||
Debt financing and related expenses | — | — | — | (6,640 | ) | |||||||||||
Other income (expense), net | 150 | (630 | ) | (2,180 | ) | (1,920 | ) | |||||||||
Other expense, net | (3,100 | ) | (4,670 | ) | (16,090 | ) | (22,960 | ) | ||||||||
Income before income tax expense | 22,360 | 13,880 | 105,980 | 66,210 | ||||||||||||
Income tax expense | (5,650 | ) | (17,890 | ) | (22,680 | ) | (35,250 | ) | ||||||||
Net income (loss) | 16,710 | (4,010 | ) | 83,300 | 30,960 | |||||||||||
Basic earnings (loss) per share: | ||||||||||||||||
Net income (loss) per share | $ | 0.37 | $ | (0.09 | ) | $ | 1.82 | $ | 0.68 | |||||||
Weighted average common shares - basic | 45,747,659 | 45,721,160 | 45,824,555 | 45,682,627 | ||||||||||||
Diluted earnings (loss) per share: | ||||||||||||||||
Net income (loss) per share | $ | 0.36 | $ | (0.09 | ) | $ | 1.80 | $ | 0.67 | |||||||
Weighted average common shares - diluted | 46,085,202 | 45,721,160 | 46,170,464 | 45,990,252 |
Twelve months ended December 31, | ||||||||
2018 | 2017 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 83,300 | $ | 30,960 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Loss on dispositions of assets | 250 | 1,080 | ||||||
Depreciation | 24,580 | 26,950 | ||||||
Amortization of intangible assets | 19,440 | 19,920 | ||||||
Amortization of debt issue costs | 1,290 | 1,320 | ||||||
Deferred income taxes | 7,200 | 15,260 | ||||||
Non-cash compensation expense | 7,170 | 6,780 | ||||||
Debt financing and related expenses | — | 6,640 | ||||||
(Increase) decrease in receivables | (11,420 | ) | 1,220 | |||||
(Increase) decrease in inventories | (18,690 | ) | 4,350 | |||||
(Increase) decrease in prepaid expenses and other assets | 9,060 | (310 | ) | |||||
Increase in accounts payable and accrued liabilities | 4,340 | 3,640 | ||||||
Other operating activities | 2,800 | 2,250 | ||||||
Net cash provided by operating activities | 129,320 | 120,060 | ||||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | (25,050 | ) | (36,800 | ) | ||||
Net proceeds from dispositions of property and equipment | 250 | 4,450 | ||||||
Net cash used for investing activities | (24,800 | ) | (32,350 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from borrowings on revolving credit and accounts receivable facilities | 59,060 | 401,300 | ||||||
Repayments of borrowings on revolving credit and accounts receivable facilities | (68,490 | ) | (517,310 | ) | ||||
Payments to purchase common stock | (12,140 | ) | — | |||||
Shares surrendered upon exercise and vesting of equity awards to cover taxes | (2,380 | ) | (510 | ) | ||||
Proceeds from issuance of senior notes | — | 300,000 | ||||||
Repayments of borrowings on term loan facilities | — | (257,940 | ) | |||||
Debt financing fees | — | (6,070 | ) | |||||
Other financing activities | — | (310 | ) | |||||
Net cash used for financing activities | (23,950 | ) | (80,840 | ) | ||||
Cash and Cash Equivalents: | ||||||||
Increase for the year | 80,570 | 6,870 | ||||||
At beginning of year | 27,580 | 20,710 | ||||||
At end of year | $ | 108,150 | $ | 27,580 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 13,800 | $ | 9,430 | ||||
Cash paid for income taxes | $ | 7,380 | $ | 16,230 |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Packaging | ||||||||||||||||
Net sales | $ | 89,660 | $ | 85,310 | $ | 368,200 | $ | 344,570 | ||||||||
Operating profit | $ | 20,140 | $ | 18,980 | $ | 84,590 | $ | 80,610 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Business restructuring and severance costs | — | 40 | — | 1,710 | ||||||||||||
Adjusted operating profit | $ | 20,140 | $ | 19,020 | $ | 84,590 | $ | 82,320 | ||||||||
Aerospace | ||||||||||||||||
Net sales | $ | 45,420 | $ | 42,760 | $ | 185,920 | $ | 184,310 | ||||||||
Operating profit | $ | 6,610 | $ | 6,550 | $ | 27,290 | $ | 26,410 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Business restructuring and severance costs | 250 | — | 250 | — | ||||||||||||
Adjusted operating profit | $ | 6,860 | $ | 6,550 | $ | 27,540 | $ | 26,410 | ||||||||
Specialty Products | ||||||||||||||||
Net sales | $ | 76,270 | $ | 67,140 | $ | 323,020 | $ | 288,860 | ||||||||
Operating profit | $ | 7,650 | $ | 510 | $ | 34,260 | $ | 12,280 | ||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||
Business restructuring and severance costs | 30 | 4,550 | 1,910 | 15,350 | ||||||||||||
Adjusted operating profit | $ | 7,680 | $ | 5,060 | $ | 36,170 | $ | 27,630 | ||||||||
Corporate Expenses | ||||||||||||||||
Operating loss | $ | (8,940 | ) | $ | (7,490 | ) | $ | (24,070 | ) | $ | (30,130 | ) | ||||
Special Items to consider in evaluating operating loss: | ||||||||||||||||
Business restructuring and severance costs | — | 390 | — | 750 | ||||||||||||
Reversal of legacy related party liability | $ | — | $ | — | $ | (8,150 | ) | $ | — | |||||||
Adjusted operating loss | $ | (8,940 | ) | $ | (7,100 | ) | $ | (32,220 | ) | $ | (29,380 | ) | ||||
Total Company | ||||||||||||||||
Net sales | $ | 211,350 | $ | 195,210 | $ | 877,140 | $ | 817,740 | ||||||||
Operating profit | $ | 25,460 | $ | 18,550 | $ | 122,070 | $ | 89,170 | ||||||||
Total Special Items to consider in evaluating operating profit | 280 | 4,980 | (5,990 | ) | 17,810 | |||||||||||
Adjusted operating profit | $ | 25,740 | $ | 23,530 | $ | 116,080 | $ | 106,980 |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss), as reported | $ | 16,710 | $ | (4,010 | ) | $ | 83,300 | $ | 30,960 | |||||||
Special Items to consider in evaluating quality of net income (loss): | ||||||||||||||||
Business restructuring and severance costs | 250 | 5,580 | 2,830 | 18,130 | ||||||||||||
Reversal of legacy related party liability | — | — | (8,150 | ) | — | |||||||||||
Debt financing and related expenses | — | — | — | 6,640 | ||||||||||||
Defined benefit pension plan settlement charge | — | — | 2,500 | — | ||||||||||||
Tax reform adjustments (1) | 700 | 12,660 | (400 | ) | 12,660 | |||||||||||
Income tax effect of Special Items (2) | (120 | ) | 270 | 910 | (4,010 | ) | ||||||||||
Adjusted net income | $ | 17,540 | $ | 14,500 | $ | 80,990 | $ | 64,380 | ||||||||
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Diluted earnings (loss) per share, as reported | $ | 0.36 | $ | (0.09 | ) | $ | 1.80 | $ | 0.67 | |||||||
Special Items to consider in evaluating quality of EPS: | ||||||||||||||||
Business restructuring and severance costs | — | 0.12 | 0.06 | 0.40 | ||||||||||||
Reversal of legacy related party liability | — | — | (0.17 | ) | — | |||||||||||
Debt financing and related expenses | — | — | — | 0.14 | ||||||||||||
Defined benefit pension plan settlement charge | — | — | 0.05 | — | ||||||||||||
Tax reform adjustments (1) | 0.02 | 0.28 | (0.01 | ) | 0.28 | |||||||||||
Income tax effect of Special Items (2) | — | — | 0.02 | (0.09 | ) | |||||||||||
Adjusted diluted EPS | $ | 0.38 | $ | 0.31 | $ | 1.75 | $ | 1.40 | ||||||||
Weighted-average shares outstanding | 46,085,202 | 45,721,160 | 46,170,464 | 45,990,252 | ||||||||||||
Three months ended December 31, | ||||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||
As reported | Special Items | As adjusted | As reported | Special Items | As adjusted | |||||||||||||||||||
Net cash provided by operating activities | $ | 46,230 | $ | 530 | $ | 46,760 | $ | 47,410 | $ | 1,970 | $ | 49,380 | ||||||||||||
Less: Capital expenditures | (9,160 | ) | — | (9,160 | ) | (12,680 | ) | — | (12,680 | ) | ||||||||||||||
Free Cash Flow | 37,070 | 530 | 37,600 | 34,730 | 1,970 | 36,700 | ||||||||||||||||||
Net income (loss) | 16,710 | 830 | 17,540 | (4,010 | ) | 18,510 | 14,500 | |||||||||||||||||
Free Cash Flow as a percentage of net income (loss) | 222 | % | 214 | % | n/m | 253 | % | |||||||||||||||||
Twelve months ended December 31, | ||||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||||
As reported | Special Items | As adjusted | As reported | Special Items | As adjusted | |||||||||||||||||||
Net cash provided by operating activities | $ | 129,320 | $ | 3,980 | $ | 133,300 | 120,060 | $ | 16,970 | $ | 137,030 | |||||||||||||
Less: Capital expenditures | (25,050 | ) | — | (25,050 | ) | (36,800 | ) | — | (36,800 | ) | ||||||||||||||
Free Cash Flow | 104,270 | 3,980 | 108,250 | 83,260 | 16,970 | 100,230 | ||||||||||||||||||
Net income | 83,300 | (2,310 | ) | 80,990 | 30,960 | 33,420 | 64,380 | |||||||||||||||||
Free Cash Flow as a percentage of net income | 125 | % | 134 | % | 269 | % | 156 | % | ||||||||||||||||
December 31, 2018 | December 31, 2017 | |||||||
Long-term debt, net | $ | 293,560 | $ | 303,080 | ||||
Less: Cash and cash equivalents | 108,150 | 27,580 | ||||||
Net Debt | $ | 185,410 | $ | 275,500 |
Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net income (loss), as reported | $ | 16,710 | $ | (4,010 | ) | $ | 83,300 | $ | 30,960 | |||||||
Depreciation expense | 5,950 | 8,060 | 24,580 | 26,950 | ||||||||||||
Amortization expense | 4,840 | 5,000 | 19,440 | 19,920 | ||||||||||||
Interest expense | 3,250 | 4,040 | 13,910 | 14,400 | ||||||||||||
Income tax expense | 5,650 | 17,890 | 22,680 | 35,250 | ||||||||||||
Non-cash compensation expense | 2,770 | 1,690 | 7,170 | 6,780 | ||||||||||||
Adjusted EBITDA, before Special Items | $ | 39,170 | $ | 32,670 | $ | 171,080 | $ | 134,260 | ||||||||
Adjusted EBITDA impact of Special Items | 350 | 3,010 | (3,830 | ) | 20,570 | |||||||||||
Adjusted EBITDA | $ | 39,520 | $ | 35,680 | $ | 167,250 | $ | 154,830 | ||||||||
Adjusted EBITDA as a percentage of net sales | 18.7 | % | 18.3 | % | 19.1 | % | 18.9 | % |
2018 quarterly periods ended | ||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | Year ended December 31, 2018 | ||||||||||||||||
Aerospace | ||||||||||||||||||||
Net sales | $ | 45,810 | $ | 45,620 | $ | 49,070 | $ | 45,420 | $ | 185,920 | ||||||||||
Operating profit | $ | 5,080 | $ | 7,310 | $ | 8,290 | $ | 6,610 | $ | 27,290 | ||||||||||
Special Items(1) to consider in evaluating operating profit: | ||||||||||||||||||||
Business restructuring and severance costs | — | — | — | 250 | 250 | |||||||||||||||
Adjusted operating profit | $ | 5,080 | $ | 7,310 | $ | 8,290 | $ | 6,860 | $ | 27,540 | ||||||||||
Specialty Products | ||||||||||||||||||||
Net sales | $ | 83,090 | $ | 84,200 | $ | 79,460 | $ | 76,270 | $ | 323,020 | ||||||||||
Operating profit | $ | 9,650 | $ | 9,240 | $ | 7,720 | $ | 7,650 | $ | 34,260 | ||||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
Business restructuring and severance costs | 1,030 | 580 | 270 | 30 | 1,910 | |||||||||||||||
Adjusted operating profit | $ | 10,680 | $ | 9,820 | $ | 7,990 | $ | 7,680 | $ | 36,170 | ||||||||||
Aerospace - Recast | ||||||||||||||||||||
Net sales | $ | 37,790 | $ | 39,100 | $ | 40,890 | $ | 38,600 | $ | 156,380 | ||||||||||
Operating profit | $ | 4,590 | $ | 6,450 | $ | 7,680 | $ | 6,190 | $ | 24,910 | ||||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
Business restructuring and severance costs | — | — | — | 250 | 250 | |||||||||||||||
Adjusted operating profit | $ | 4,590 | $ | 6,450 | $ | 7,680 | $ | 6,440 | $ | 25,160 | ||||||||||
Specialty Products - Recast | ||||||||||||||||||||
Net sales | $ | 91,110 | $ | 90,720 | $ | 87,640 | $ | 83,090 | $ | 352,560 | ||||||||||
Operating profit | $ | 10,140 | $ | 10,100 | $ | 8,330 | $ | 8,070 | $ | 36,640 | ||||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
Business restructuring and severance costs | 1,030 | 580 | 270 | 30 | 1,910 | |||||||||||||||
Adjusted operating profit | $ | 11,170 | $ | 10,680 | $ | 8,600 | $ | 8,100 | $ | 38,550 |
2017 quarterly periods ended | ||||||||||||||||||||
March 31 | June 30 | September 30 | December 31 | Year ended December 31, 2017 | ||||||||||||||||
Aerospace | ||||||||||||||||||||
Net sales | $ | 45,420 | $ | 47,580 | $ | 48,550 | $ | 42,760 | $ | 184,310 | ||||||||||
Operating profit | $ | 5,060 | $ | 6,990 | $ | 7,810 | $ | 6,550 | $ | 26,410 | ||||||||||
Specialty Products | ||||||||||||||||||||
Net sales | $ | 73,450 | $ | 77,050 | $ | 71,220 | $ | 67,140 | $ | 288,860 | ||||||||||
Operating profit | $ | 1,510 | $ | 5,260 | $ | 5,000 | $ | 510 | $ | 12,280 | ||||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
Business restructuring and severance costs | 6,440 | 3,890 | 470 | 4,550 | 15,350 | |||||||||||||||
Adjusted operating profit | $ | 7,950 | $ | 9,150 | $ | 5,470 | $ | 5,060 | $ | 27,630 | ||||||||||
Aerospace - Recast | ||||||||||||||||||||
Net sales | $ | 38,440 | $ | 39,880 | $ | 40,230 | $ | 35,500 | $ | 154,050 | ||||||||||
Operating profit | $ | 5,510 | $ | 6,410 | $ | 7,470 | $ | 5,570 | $ | 24,960 | ||||||||||
Specialty Products - Recast | ||||||||||||||||||||
Net sales | $ | 80,430 | $ | 84,750 | $ | 79,540 | $ | 74,400 | $ | 319,120 | ||||||||||
Operating profit | $ | 1,060 | $ | 5,840 | $ | 5,340 | $ | 1,490 | $ | 13,730 | ||||||||||
Special Items to consider in evaluating operating profit: | ||||||||||||||||||||
Business restructuring and severance costs | 6,440 | 3,890 | 470 | 4,550 | 15,350 | |||||||||||||||
Adjusted operating profit | $ | 7,500 | $ | 9,730 | $ | 5,810 | $ | 6,040 | $ | 29,080 |
Year ended December 31, 2016 | ||||
Aerospace | ||||
Net sales | $ | 174,920 | ||
Operating loss | $ | (90,540 | ) | |
Special Items to consider in evaluating operating profit: | ||||
Business restructuring and severance costs | 9,700 | |||
Impairment of goodwill and indefinite-lived intangible assets | 98,900 | |||
Adjusted operating profit | $ | 18,060 | ||
Specialty Products | ||||
Net sales | $ | 277,760 | ||
Operating profit | $ | 2,900 | ||
Special Items to consider in evaluating operating profit: | ||||
Business restructuring and severance costs | 19,990 | |||
Adjusted operating profit | $ | 22,890 | ||
Aerospace - Recast | ||||
Net sales | $ | 148,980 | ||
Operating loss | $ | (89,020 | ) | |
Special Items to consider in evaluating operating profit: | ||||
Business restructuring and severance costs | 9,190 | |||
Impairment of goodwill and indefinite-lived intangible assets | 98,900 | |||
Adjusted operating profit | $ | 19,070 | ||
Specialty Products - Recast | ||||
Net sales | $ | 303,700 | ||
Operating profit | $ | 1,380 | ||
Special Items to consider in evaluating operating profit: | ||||
Business restructuring and severance costs | 20,500 | |||
Adjusted operating profit | $ | 21,880 |