-----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, aLOpp3NEOqBmN+sWHXlQhbmZgke3ZMW+is/x9/z8kIeP5ImyeVTz3JNJAlWvtRO8 Lgyd/GFk2tV2W9sRGj/XQg== 0000842633-94-000008.txt : 19940817 0000842633-94-000008.hdr.sgml : 19940817 ACCESSION NUMBER: 0000842633-94-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940810 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: 94542743 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 1994 TRIMAS CORPORATION 2ND 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 June 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 August 5, 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 - June 30, 1994 and December 31, 1993 1 Consolidated Condensed Statements of Income for the Three Months and Six Months Ended June 30, 1994 and 1993 2 Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 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 June 30, December 31, 1994 1993 (Unaudited) Assets Current assets: Cash and cash equivalents $ 72,330,000 $ 69,770,000 Receivables 81,770,000 58,710,000 Inventories 78,400,000 76,700,000 Prepaid expenses 10,150,000 9,790,000 Total current assets 242,650,000 214,970,000 Property and equipment 164,740,000 162,230,000 Excess of cost over net assets of acquired companies 150,630,000 152,210,000 Notes receivable 8,390,000 8,160,000 Other assets 24,600,000 26,560,000 Total assets $591,010,000 $564,130,000 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 21,650,000 $ 20,330,000 Accrued liabilities 33,080,000 30,550,000 Current portion of long-term debt 320,000 320,000 Total current liabilities 55,050,000 51,200,000 Deferred income taxes and other 29,600,000 29,190,000 Long-term debt 238,630,000 238,890,000 Total liabilities 323,280,000 319,280,000 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 114,900,000 91,700,000 Cumulative translation adjustments (1,620,000) (1,410,000) Total shareholders' equity 267,730,000 244,850,000 Total liabilities and shareholders' equity $591,010,000 $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) Six Months Ended Three Months Ended June 30, June 30, 1994 1993 1994 1993 Net sales $281,400,000 $225,520,000 $146,940,000 $118,600,000 Cost of sales (190,820,000) (154,510,000) (97,620,000) (80,360,000) Selling, general and administrative expenses (42,750,000) (34,730,000) (21,890,000) (17,470,000) Operating profit 47,830,000 36,280,000 27,430,000 20,770,000 Interest expense (5,930,000) (4,080,000) (3,090,000) (1,790,000) Other income (expense), net 1,410,000 1,530,000 780,000 670,000 (4,520,000) (2,550,000) (2,310,000) (1,120,000) Income before income taxes 43,310,000 33,730,000 25,120,000 19,650,000 Income taxes 17,540,000 13,660,000 10,180,000 8,000,000 Net income $ 25,770,000 $ 20,070,000 $ 14,940,000 $ 11,650,000 Preferred stock dividends, MascoTech, Inc. $ 3,500,000 $ 1,750,000 Earnings available for common stock $ 25,770,000 $ 16,570,000 $ 14,940,000 $ 9,900,000 Earnings per common share: Primary $.70 $.57 $.40 $.34 Fully diluted $.66 $.54 $.38 $.32 Dividends declared per common share $.07 $.055 $.04 $.03 Weighted average number of common and common equivalent shares outstanding: Primary 37,038,000 29,152,000 37,038,000 29,171,000 Fully diluted 42,121,000 36,974,000 42,120,000 36,974,000
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) Six Months Ended June 30, 1994 1993 CASH FROM (USED FOR): OPERATIONS: Net income $25,770,000 $20,070,000 Adjustments to reconcile net income to net cash from operations: Depreciation and amortization 10,490,000 8,960,000 Deferred income taxes 600,000 500,000 (Increase) decrease in receivables (23,290,000) (18,310,000) (Increase) decrease in inventories (1,700,000) 5,020,000 Increase (decrease) in accounts payable and accrued liabilities 4,670,000 4,020,000 Other, net (490,000) (2,200,000) Net cash from (used for) operations 16,050,000 18,060,000 INVESTMENTS: Capital expenditures (11,030,000) (8,870,000) Net cash from (used for) investments (11,030,000) (8,870,000) FINANCING: Retirement of long-term debt (260,000) (50,000) Preferred stock dividends paid to MascoTech, Inc. (8,750,000) Common stock dividends paid (2,200,000) (1,440,000) Net cash from (used for) financing (2,460,000) (10,240,000) CASH AND CASH EQUIVALENTS: Increase (decrease) for the period 2,560,000 (1,050,000) At beginning of period 69,770,000 64,770,000 At end of period $72,330,000 $63,720,000 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: June 30, December 31, 1994 1993 Finished goods $39,230,000 $41,950,000 Work in process 13,130,000 12,230,000 Raw material 26,040,000 22,520,000 $78,400,000 $76,700,000 C. Property and equipment reflects accumulated depreciation of $97.3 million and $92.3 million as of June 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 second quarter of 1994 equalled $146.9 million, exceeding last year's second quarter sales by 23.9 percent, and established a new quarterly sales record for the Company. First half 1994 sales increased 24.8 percent over the comparable period in 1993 to $281.4 million, again representing a record for the relevant period. Operating results during 1994 include those of Lamons Metal Gasket Co., acquired in November, 1993. All four of the Company's business segments experienced an increase in sales during the second quarter of 1994 over the comparable period last year. Net sales of the Towing Systems segment increased 19.1 percent over 1993's second quarter to $53.8 million. Sales for the six month period were $95.5 million, an 18.5 percent increase over the $80.6 million achieved in the comparable period in 1993. These increases were the result of several factors, including the strength of the automotive industry, primarily the continuing trend in new vehicle sales toward light trucks and sport utility vehicles which are more apt to use towing systems products, ongoing new product introductions and strong demand for marine aftermarket products. The seasonality of the end-markets served by this segment cause its sales to be concentrated in the second and third quarters of each year. Second quarter 1994 sales by the Specialty Fasteners segment were $35.7 million, a 15.0 percent increase over the comparable period in 1993. Strong demand from the heavy-duty truck, distribution, and other original equipment industrial markets continue to favorably impact the performance of this segment. For the first six months of 1994, sales by the Specialty Fasteners segment increased 15.3 percent over the first six months of 1993 to $71.0 million. 5 PAGE Specialty Container Products segment sales for the second quarter of 1994 were $40.2 million, a 42.6 percent increase over the second quarter of 1993, reflecting the inclusion of the results of Lamons Metal Gasket Co. in 1994. For the first six months sales increased 54.0 percent to $81.4 million. In addition to the effect of the Lamons Metal Gasket acquisition, year-to-date sales of specialty container closures, dispensing equipment and compressed gas cylinders improved as the strength of the general economy continued to impact the markets served by these products. Second quarter sales by the Corporate Companies segment increased 21.2 percent to $17.3 million over 1993's revenues of $14.3 million. For the first six months of 1994, sales exceeded 1993 results by 9.9 percent equalling $33.6 million. The segment continues to benefit from record demand for specialty industrial tape products, and strong demand for vapor barrier products used in many construction applications. The Company's consolidated gross margin for the second quarter of 1994 was 33.6 percent compared to 32.2 percent for the second quarter of 1993. For the first six months of 1994 and 1993 gross margin was 32.2 percent and 31.5 percent, respectively. Because of the seasonal factors relating to the Towing Systems segment and the volume sensitive nature of the Company's operations, gross margin recorded in the second quarter is typically higher than that which is realized during the first quarter. 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 of $27.4 million during the second quarter of 1994 represents a 32.1 percent increase over the second quarter of 1993. The operating margin increased to 18.7 percent from 17.5 percent achieved in the second quarter of 1993. Operating profit for the first six months of 1994 was $47.8 million and represented an operating margin 6 PAGE of 17.0 percent compared to 1993's first six months operating profit of $36.3 million or 16.1 percent of net sales. The operating profits of all of the Company's reporting segments increased during the second quarter and the first six months of 1994 compared to comparable periods in 1993. This improvement in profit is primarily the result of the successful cost reduction efforts employed by the operating units, as well as the previously mentioned sales increases and related volume sensitivity. Earnings available for common stock for the six months and three months ended June 30, 1994 were $25.8 million and $14.9 million respectively, compared to $16.6 million and $9.9 million respectively, after provisions for preferred stock dividends, in last year's comparable periods. Primary earnings per common share equalled $.70 on 37.0 million shares for the first six months of 1994 compared to 1993's primary earnings per common share of $.57 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 $.66 on 42.1 million shares versus $.54 on 37.0 million shares for the six months ended June 30, 1994 and 1993. The increase in fully diluted shares was the result of the issuance of Convertible Subordinated Debentures in August, 1993. Primary and fully diluted earnings per common share for the second quarters of 1994 and 1993 were $.40 and $.38, and $.34 and $.32, respectively. 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 7 PAGE service and dividends, while maintaining its strategic level of liquidity. At June 30, 1994 the current ratio was 4.4 to 1 and working capital equalled $187.6 million, including $72.3 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 June 30, 1994, the Company had available credit of $228.0 million under its revolving credit facility. Cash flows from operations provided $16.1 million and $18.1 million during the first six months of 1994 and 1993, respectively. These operating cash flows were net of increases in accounts receivable of $23.3 million in 1994 and $18.3 million in 1993 due mainly to the seasonality of the Towing Systems segment as well as increased sales by all of the Company's business segments. Historically, the cash flow provided by the seasonal increase in receivables is realized later in the year. Capital expenditures equalled $11.0 million in 1994 and $8.9 million in 1993. The conversion of the Company's Preferred Stock into common shares in December, 1993 and an increase in the common stock dividend rate resulted in an increase in common stock dividends paid to $2.2 million in 1994 versus $1.4 million in 1993. No preferred stock dividends were paid in the first six months of 1994, as compared to $8.8 million during 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 (b) Reports on Form 8-K: None were filed during the quarter ended June 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: August 10, 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. EX-11 2 1994 TRIMAS CORPORATION 2ND QUARTER 10-Q EX. 11 Exhibit 11 TRIMAS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE (In Thousands, Except Per Share Amounts) Six Months Ended Three Months Ended June 30, June 30, 1994 1993 1994 1993 Primary: Net income $25,770 $20,070 $14,940 $11,650 Preferred stock dividend requirement (3,500) (1,750) Earnings available for common stock $25,770 $16,570 $14,940 $ 9,900 Weighted average common shares outstanding 36,644 28,867 36,644 28,867 Dilution of stock options 394 285 394 304 Weighted average common and common equivalent shares outstanding after assumed exercise of options 37,038 29,152 37,038 29,171 Primary earnings per common share $.70 $.57 $.40 $.34 Fully diluted: Net income $25,770 $20,070 $14,940 $11,650 Add after tax convertible debenture related expenses 1,840 920 Net income as adjusted $27,610 $20,070 $15,860 $11,650 Weighted average common shares outstanding 36,644 28,867 36,644 28,867 Dilution of stock options 394 329 393 329 Addition from assumed conversion of convertible preferred stock 7,778 7,778 Addition from assumed conversion of convertible debentures 5,083 5,083 Weighted average common and common equivalent shares outstanding on a fully diluted basis 42,121 36,974 42,120 36,974 Fully diluted earnings per common share $.66 $.54 $.38 $.32 EX-12 3 1994 TRIMAS CORPORATION 2ND QUARTER 10-Q EX. 12 Exhibit 12 TRIMAS CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (Dollar Amounts in Thousands) Six Months Ended Three Months Ended June 30, June 30, 1994 1993 1994 1993 Earnings: Income before income taxes $43,310 $33,730 $25,120 $19,650 Fixed charges 6,420 4,490 3,330 2,010 Earnings before fixed charges $49,730 $38,220 $28,450 $21,660 Fixed Charges: Interest $6,050 $4,200 $3,150 $1,850 Portion of rental expense 440 360 220 200 Fixed charges $6,490 $4,560 $3,370 $2,050 Ratios of earnings to fixed charges 7.7 8.4 8.4 10.6 -----END PRIVACY-ENHANCED MESSAGE-----