EX-99.1 2 a06-17894_1ex99d1.htm PRESS RELEASE

Exhibit 99.1

 

For more information, contact:

 

E.R. “Skip” Autry

 

Chief Financial Officer

 

TriMas Corporation

 

(248) 631-5496

 

MEDIA RELEASE

 

TRIMAS CORPORATION REPORTS IMPROVED SECOND QUARTER RESULTS

 

BLOOMFIELD HILLS, MICH. – August 11, 2006 – TriMas Corporation today announced its financial results for the three months ended June 30, 2006. TriMas reported sales of $279.6 million, operating profit of $31.5 million and income from continuing operations of $6.9 million, or $0.33 per share on a fully-diluted basis for the three months ended June 30, 2006, compared to the prior year second quarter sales of $269.6 million, operating profit of $29.2 million and income from continuing operations of $4.9 million, or $0.24 per share on a fully-diluted basis.

 

Second Quarter Highlights

 

“In second quarter, we saw continued solid year-over-year growth in sales and an even greater improvement in earnings performance as our profit improvement initiatives continued, and we benefited from economic expansion in key market segments,” said Grant Beard, TriMas’ President and Chief Executive Officer. “The benefits of being a diversified industrial products company were evident as our businesses within Packaging Systems, Energy Products and Recreational Accessories enjoyed particularly strong earnings results.”

 

“While sales within Recreational Accessories declined and were essentially flat within RV & Trailer Products compared to the year ago period, our profitability continued to improve as a result of sourcing and other cost reduction initiatives implemented in the second half of 2005,” Beard further commented. “While the economic outlook for the majority of our companies remains positive, we are watching end market demand within our Recreational Accessories and RV & Trailer Products businesses closely, given fuel prices and the current interest rate environment.”

 

“We were also pleased,” Beard commented, “with the successful refinancing of our existing $410.0 million senior secured credit facilities, which closed in early August. The new credit facilities, will reduce the Company’s borrowing costs, substantially increase our liquidity and operational flexibility going forward. Both Moody’s and S&P upgraded their ratings of our new senior secured credit facilities to B1 and B+, respectively, with a ratings outlook of stable.”

 

Our priorities within TriMas remain clear - to continue to drive earnings performance and free cash flow in order to reduce debt and further improve our balance sheet,” Beard said.

 

1



 

Results of Continuing Operations

 

                  The Company’s 2006 second quarter net sales increased 3.7% to $279.6 million, from $269.6 million for the three months ended June 30, 2005, as three of the Company’s five business segments reported year-over-year revenue growth. Notably, net sales increased 8.0% at Packaging Systems, 23.6% at Energy Products and 2.2% within Industrial Specialties. Net sales reported for RV & Trailer Products were approximately flat compared with the year ago period while Recreational Accessories reported a decrease in net sales of 1.8% when compared to the second quarter a year ago.

 

                  Operating profit improved 7.9% or $2.3 million as compared to the same period a year ago and reflected strong earnings performance in three of the Company’s five business segments. Material margins improved compared to the year ago period primarily as a result of sourcing initiatives and moderating raw material costs. Operating profit margin as a percent of sales improved to 11.3% in second quarter 2006 compared to 10.8% for the same period a year ago.

 

                  Expenses related to plant consolidation and restructuring activities were $0.3 million and $1.3 million, in the three months ended June 30, 2006 and 2005, respectively as the Company has essentially completed its major restructuring and integration activities.

 

                  The Company reported net income from continuing operations of $6.9 million, or $0.33 per share on a fully-diluted basis in the quarter ended June 30, 2006, compared to net income from continuing operations of $4.9 million or $0.24 per share on a fully-diluted basis in the second quarter 2005. This represented an increase of 40.8% in income from continuing operations compared to the year ago period.

 

Results of Discontinued Operations

 

                  In second quarter 2006, the Company disposed of its asphalt-coated paper business which was part of our Packaging Systems segment. The loss on sale was $1.7 million, net of related tax benefits of $1.4 million, and is reported as part of discontinued operations.

 

                  Sales from discontinued operations were $25.1 million in each of the quarters ended June 30, 2006 and 2005. The loss from discontinued operations, net of tax benefits, increased to $4.0 million in the quarter ended June 30, 2006 from $0.9 million in the quarter ended June 30, 2005, due to costs associated with the closure of our steel processing facility and the aforementioned loss on disposal of our asphalt-coated paper business.

 

 

2



 

Second Quarter Financial Summary

 

 

 

For the Quarter Ended June 30,

 

(unaudited - in millions, except per share amounts)

 

2006

 

2005

 

% Change

 

 

 

 

 

 

 

 

 

Sales

 

$

279.6

 

$

269.6

 

3.7

%

Operating profit

 

31.5

 

29.2

 

7.9

%

Income from continuing operations

 

6.9

 

4.9

 

40.8

%

Loss from discontinued operations, net of tax benefit

 

(4.0

)

(0.9

)

344.4

%

Net income

 

$

2.9

 

$

4.0

 

(27.5

%)

 

 

 

 

 

 

 

 

Earnings (loss) per share - basic

 

 

 

 

 

 

 

- Continuing operations

 

$

0.34

 

$

0.24

 

41.7

%

- Discontinued operations

 

(0.20

)

(0.04

)

400.0

%

- Net income

 

$

0.14

 

$

0.20

 

(30.0

%)

 

 

 

 

 

 

 

 

Earnings (loss) per share - diluted

 

 

 

 

 

 

 

- Continuing operations

 

$

0.33

 

$

0.24

 

37.5

%

- Discontinued operations

 

(0.19

)

(0.04

)

375.0

%

- Net income

 

$

0.14

 

$

0.20

 

(30.0

%)

 

 

 

 

 

 

 

 

Other Data - Continuing Operations:

 

 

 

 

 

 

 

- Depreciation and amortization

 

$

9.7

 

$

9.6

 

1.0

%

- Interest expense

 

$

20.0

 

$

18.7

 

7.0

%

- Other expense, net

 

$

1.1

 

$

2.8

 

(60.7

%)

- Income tax expense

 

$

3.5

 

$

2.8

 

25.0

%

 

Segment Results

 

Packaging Systems

 

Net sales increased $4.0 million, or 8.0% to $53.9 million in second quarter 2006 from $49.9 million in the year ago period. Packaging Systems had sales increases of 6.4% for industrial closure products, 21.7% for specialty consumer dispensing product applications and 4.5% for specialty tapes, laminates and insulation products. Operating profit increased 8.6% to $10.1 million during second quarter 2006 from $9.3 million in second quarter 2005, as this segment benefited primarily from higher sales volumes in the current year’s quarter.

 

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Energy Products

 

Net sales increased $7.4 million or 23.6% to $38.7 million in the quarter ended June 30, 2006 compared to $31.3 million in the year ago period, as this segment benefited from continued favorable market conditions for oil and gas producers in the United States and Canada, market share gains due to expanded parts offerings and higher turnaround activity at petrochemical refineries. Operating profit improved $2.0 million or 57.1% to $5.5 million in the quarter ended June 30, 2006 from $3.5 million in the year ago period due to improved material margins, better absorption of fixed overhead costs and lower selling costs in relation to sales due to the relatively fixed cost nature of this segment’s distribution network.

 

Industrial Specialties

 

Net sales increased $1.0 million or 2.2% to $47.1 million in the quarter ended June 30, 2006, from $46.1 million in the year ago period as four of this segment’s five businesses continued to experience increased, albeit moderating, demand driven by new products, market share gains and economic expansion. Notably, sales increased 7.9% in our aerospace fastener business, 11.4% in our precision tooling business and 6.3% in our industrial cylinder business. Operating profit in the second quarter 2006 decreased slightly to $9.9 million from $10.2 million a year ago due principally to the impact of increased variable manufacturing spending and employee compensation and benefit costs.

 

RV & Trailer Products

 

Net sales were approximately flat at $51.5 million for the quarter ended June 30, 2006 compared to $52.3 million in the year ago period. Increased sales to the marine, RV distribution, specialty retail and OE automotive market sectors, were more than offset by lower sales to the agricultural/industrial and horse/livestock markets due to soft market demand and increased foreign competition. Operating profit decreased slightly from $6.8 million in second quarter 2005 to $6.4 million in the current year as cost savings initiatives approximately offset increased employee compensation and benefits costs.

 

Recreational Accessories

 

Net sales decreased $1.6 million or 1.8% to $88.4 million in the quarter ended June 30, 2006 compared to $90.0 million in the year ago period due primarily to reduced sales activity in our towing products business. However, operating profit increased $2.8 million or 75.7% to $6.5 million in first quarter 2006 from $3.7 million in the year ago period as a result of improved material margins due to sourcing initiatives and lower variable and fixed overhead spending as a result of cost reduction actions implemented in the second half of 2005, offset in part by higher sales promotion expense to support retail channel sales activity.

 

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Financial Position

 

TriMas ended the second quarter with total assets of $1,444.4 million, debt of $721.5 million and $52.0 million outstanding under its receivables securitization facility. Net cash provided by operating activities for the six months ended June 30, 2006, was $17.3 million, compared to $14.2 million in the year ago period.

 

Other Matters

 

On August 3, 2006, the Company announced it had filed a registration statement on Form S-1 with the Securities and Exchange Commission for a proposed initial public offering of shares of its common stock.

 

Conference Call

 

TriMas will broadcast its second quarter earnings conference call on Friday, August 11, 2006 at 10:00 a.m. EDT. President and Chief Executive Officer Grant Beard and Chief Financial Officer E.R. “Skip” Autry will discuss the Company’s recent financial performance and respond to questions from the investment community.

 

To participate by phone, please dial: (888) 675-7686. Callers should ask to be connected to the TriMas second quarter conference call (reservation number 950218). If you are unable to participate during the live teleconference, a replay of the conference call will be available beginning August 11th at 2:00 p.m. EDT through August 18th at 11:59 p.m. EDT. To access the replay, please dial:  (866) 837-8032, access code 950218#.

 

Cautionary Notice Regarding Forward-Looking Statements

 

This release contains “forward-looking” statements, as that term is defined by the federal securities laws, about our financial condition, results of operations and business. Forward-looking statements include: certain anticipated, believed, planned, forecasted, expected, targeted and estimated results along with TriMas’ outlook concerning future results. When used in this release, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including without limitation, management’s examination of historical operating trends and data, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for these views. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved. These forward-looking statements are subject to numerous assumptions, risks and uncertainties and accordingly, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution readers not to place undue reliance on the statements,

 

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which speak to conditions only as of the date of this release. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Risks and uncertainties that could cause actual results to vary materially from those anticipated in the forward-looking statements included in this release include general economic conditions in the markets in which we operate and industry-based factors such as: technological developments that could competitively disadvantage us, increases in our raw material, energy, and healthcare costs, our dependence on key individuals and relationships, exposure to product liability, recall and warranty claims, compliance with environmental and other regulations, and competition within our industries. In addition, factors more specific to us could cause actual results to vary materially from those anticipated in the forward-looking statements included in this release such as our substantial leverage, limitations imposed by our debt instruments, our ability to successfully pursue our stated growth strategies and opportunities, as well as our ability to identify attractive and other strategic acquisition opportunities and to successfully integrate acquired businesses and complete actions we have identified as providing cost-saving opportunities.

 

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TriMas Corporation
Consolidated Balance Sheet
(Unaudited — dollars in thousands)

 

 

 

June 30,

 

December 31,

 

 

 

2006

 

2005

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,400

 

$

3,730

 

Receivables, net

 

104,680

 

89,960

 

Inventories

 

157,940

 

148,450

 

Deferred income taxes

 

20,120

 

20,120

 

Prepaid expenses and other current assets

 

7,450

 

7,050

 

Assets of discontinued operations held for sale

 

43,290

 

46,730

 

Total current assets

 

334,880

 

316,040

 

Property and equipment, net

 

164,130

 

164,250

 

Goodwill

 

650,650

 

644,780

 

Other intangibles, net

 

249,050

 

255,220

 

Other assets

 

45,700

 

48,220

 

Total assets

 

$

1,444,410

 

$

1,428,510

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities, long-term debt

 

$

7,780

 

$

13,820

 

Accounts payable

 

114,230

 

111,250

 

Accrued liabilities

 

72,980

 

62,800

 

Due to Metaldyne

 

4,910

 

4,850

 

Liabilities of discontinued operations

 

33,290

 

38,410

 

Total current liabilities

 

233,190

 

231,130

 

Long-term debt

 

713,690

 

713,860

 

Deferred income taxes

 

95,680

 

95,980

 

Other long-term liabilities

 

34,410

 

34,760

 

Due to Metaldyne

 

3,480

 

3,480

 

Total liabilities

 

1,080,450

 

1,079,210

 

Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None

 

 

 

Common stock, $0.01 par: Authorized 400,000,000 shares; Issued and outstanding: 20,010,000 shares

 

200

 

200

 

Paid-in capital

 

397,810

 

396,980

 

Retained deficit

 

(79,470

)

(86,310

)

Accumulated other comprehensive income

 

45,420

 

38,430

 

Total shareholders’ equity

 

363,960

 

349,300

 

Total liabilities and shareholders’ equity

 

$

1,444,410

 

$

1,428,510

 

 

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TriMas Corporation
Consolidated Statement of Operations
(Unaudited — dollars in thousands, except for per share amounts)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

Net sales

 

$

279,640

 

$

269,580

 

$

552,670

 

$

529,550

 

Cost of sales

 

(204,580

)

(201,000

)

(404,270

)

(395,970

)

Gross profit

 

75,060

 

68,580

 

148,400

 

133,580

 

Selling, general and administrative expenses

 

(43,610

)

(39,000

)

(87,490

)

(79,130

)

Gain (loss) on dispositions of property and equipment

 

80

 

(380

)

(100

)

(210

)

Operating profit

 

31,530

 

29,200

 

60,810

 

54,240

 

Other expense, net:

 

 

 

 

 

 

 

 

 

Interest expense

 

(20,030

)

(18,710

)

(39,950

)

(36,950

)

Other, net

 

(1,140

)

(2,760

)

(1,920

)

(3,850

)

Other expense, net

 

(21,170

)

(21,470

)

(41,870

)

(40,800

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income tax expense

 

10,360

 

7,730

 

18,940

 

13,440

 

Income tax expense

 

(3,470

)

(2,830

)

(6,730

)

(4,930

)

Income from continuing operations

 

6,890

 

4,900

 

12,210

 

8,510

 

Loss from discontinued operations, net of income tax benefit

 

(4,030

)

(850

)

(5,370

)

(1,950

)

Net income

 

$

2,860

 

$

4,050

 

$

6,840

 

$

6,560

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - basic:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.34

 

$

0.24

 

$

0.61

 

$

0.43

 

Discontinued operations, net of income tax benefit

 

(0.20

)

(0.04

)

(0.27

)

(0.10

)

Net income per share

 

$

0.14

 

$

0.20

 

$

0.34

 

$

0.33

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - basic

 

20,010,000

 

20,010,000

 

20,010,000

 

20,010,000

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share - diluted:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.33

 

$

0.24

 

$

0.59

 

$

0.41

 

Discontinued operations, net of income tax benefit

 

(0.19

)

(0.04

)

(0.26

)

(0.09

)

Net income per share

 

$

0.14

 

$

0.20

 

$

0.33

 

$

0.32

 

Weighted average common shares - diluted

 

20,760,000

 

20,760,000

 

20,760,000

 

20,760,000

 

 

8



 

TriMas Corporation
Consolidated Statement of Cash Flows
(Unaudited — dollars in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2006

 

2005

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net income

 

$

6,840

 

$

6,560

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Loss on dispositions of property and equipment

 

3,130

 

130

 

Depreciation and amortization

 

18,950

 

21,020

 

Amortization of debt issue costs

 

2,710

 

2,470

 

Non-cash compensation expense

 

830

 

160

 

Net proceeds from sale of receivables and receivables securitization

 

18,100

 

24,440

 

Payment to Metaldyne to fund contractual liabilities

 

 

(330

)

Increase in receivables

 

(31,810

)

(47,040

)

(Increase) decrease in inventories

 

(7,070

)

8,810

 

(Increase) decrease in prepaid expenses and other assets

 

(160

)

990

 

Increase (decrease) in accounts payable and accrued liabilities

 

6,220

 

(2,530

)

Other, net

 

(400

)

(460

)

Net cash provided by operating activities

 

17,340

 

14,220

 

Cash Flows from Investing Activities:

 

 

 

 

 

Capital expenditures

 

(14,310

)

(9,410

)

Proceeds from sales of fixed assets

 

930

 

2,320

 

Net cash used for investing activities

 

(13,380

)

(7,090

)

Cash Flows from Financing Activities:

 

 

 

 

 

Repayments of borrowings on senior credit facilities

 

(1,360

)

(1,440

)

Proceeds from borrowings on revolving credit facilities

 

375,990

 

516,280

 

Repayments of borrowings on revolving credit facilities

 

(380,920

)

(521,100

)

Payments on notes payable

 

 

(100

)

Net cash used for financing activities

 

(6,290

)

(6,360

)

Cash and Cash Equivalents:

 

 

 

 

 

Increase (decrease) for the period

 

(2,330

)

770

 

At beginning of period

 

3,730

 

3,090

 

At end of period

 

$

1,400

 

$

3,860

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid for interest

 

$

28,640

 

$

33,760

 

Cash paid for taxes

 

$

6,730

 

$

5,750

 

 

9



 

TriMas Corporation

Company and Business Segment Financial Information

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

(unaudited - dollars in thousands)

 

2006

 

2005

 

2006

 

2005

 

Packaging Systems

 

 

 

 

 

 

 

 

 

Net sales

 

$

53,940

 

$

49,870

 

$

105,040

 

$

97,070

 

Operating profit

 

$

10,140

 

$

9,300

 

$

18,660

 

$

16,740

 

Operating profit as a % of sales

 

18.8

%

18.6

%

17.8

%

17.2

%

 

 

 

 

 

 

 

 

 

 

Energy Products

 

 

 

 

 

 

 

 

 

Net sales

 

$

38,720

 

$

31,260

 

$

78,670

 

$

64,850

 

Operating profit

 

$

5,550

 

$

3,490

 

$

11,470

 

$

8,520

 

Operating profit as a % of sales

 

14.3

%

11.2

%

14.6

%

13.1

%

 

 

 

 

 

 

 

 

 

 

Industrial Specialties

 

 

 

 

 

 

 

 

 

Net sales

 

$

47,070

 

$

46,080

 

$

91,510

 

$

84,610

 

Operating profit

 

$

9,860

 

$

10,180

 

$

18,270

 

$

16,090

 

Operating profit as a % of sales

 

20.9

%

22.1

%

20.0

%

19.0

%

 

 

 

 

 

 

 

 

 

 

RV & Trailer Products

 

 

 

 

 

 

 

 

 

Net sales

 

$

51,480

 

$

52,320

 

$

107,340

 

$

108,160

 

Operating profit

 

$

6,400

 

$

6,820

 

$

14,680

 

$

15,300

 

Operating profit as a % of sales

 

12.4

%

13.0

%

13.7

%

14.1

%

 

 

 

 

 

 

 

 

 

 

Recreational Accessories

 

 

 

 

 

 

 

 

 

Net sales

 

$

88,430

 

$

90,050

 

$

170,110

 

$

174,860

 

Operating profit

 

$

6,470

 

$

3,660

 

$

10,880

 

$

7,460

 

Operating profit as a % of sales

 

7.3

%

4.1

%

6.4

%

4.3

%

 

 

 

 

 

 

 

 

 

 

Total Company - Continuing Operations

 

 

 

 

 

 

 

 

 

Net sales

 

$

279,640

 

$

269,580

 

$

552,670

 

$

529,550

 

Operating profit

 

$

31,530

 

$

29,200

 

$

60,810

 

$

54,240

 

Operating profit as a % of sales

 

11.3

%

10.8

%

11.0

%

10.2

%

Corporate expenses and management fees

 

$

6,890

 

$

4,250

 

$

13,150

 

$

9,870

 

Other Data - Continuing Operations:

 

 

 

 

 

 

 

 

 

- Depreciation and amortization

 

$

9,660

 

$

9,550

 

$

18,950

 

$

19,110

 

- Interest expense

 

$

20,030

 

$

18,710

 

$

39,950

 

$

36,950

 

- Other expense, net

 

$

1,140

 

$

2,760

 

$

1,920

 

$

3,850

 

- Income tax expense

 

$

3,470

 

$

2,830

 

$

6,730

 

$

4,930

 

 

About TriMas

 

Headquartered in Bloomfield Hills, Mich., TriMas is a diversified growth company of high-end, specialty niche businesses manufacturing a variety of products for commercial, industrial and consumer markets worldwide. TriMas is organized into five strategic business segments: Packaging Systems, Energy Products, Industrial Specialties, RV & Trailer Products and Recreational Accessories. TriMas has about 5,000 employees at 80 different facilities in 10 countries. For more information, visit www.trimascorp.com.

 

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