EX-99.1 2 a06-11591_2ex99d1.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

STRONG FIRST QUARTER RESULTS

 

BLOOMFIELD HILLS, MICH. — May 11, 2006 — TriMas Corporation today announced its financial results for the three months ended March 31, 2006.  TriMas reported sales of $275.3 million, operating profit of $29.3 million and income from continuing operations of $5.3 million, or $0.26 per share on a fully-diluted basis for the three months ended March 31, 2006, compared to the prior year first quarter sales of $262.4 million, operating profit of $25.0 million and income from continuing operations of $3.6 million, or $0.17 per share on a fully-diluted basis.

First Quarter Highlights

“In first quarter, we saw solid year-over-year growth in sales and an even greater improvement in earnings performance as our profit improvement initiatives take hold and we benefit from continued 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 Industrial Specialties enjoyed particularly strong earnings results.”

“Although sales within Transportation Accessories declined and RV & Trailer Products segment sales were flat 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 remains positive, we are watching market demand within our Transportation Accessories and RV & Trailer Products businesses closely, and are prepared to respond with production schedule changes and other actions as needed.”

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

 

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Results of Continuing Operations

                  The Company’s 2006 first quarter net sales increased 4.9% to $275.3 million, from $262.4 million for the three months ended March 31, 2005, as three of the Company’s five business segments reported significant year-over-year revenue growth.  Notably, net sales increased 7.6% at Packaging Systems, 18.9% at Energy Products and 15.3% within Industrial Specialties.  Net sales reported for RV & Trailer Products were flat compared with the year ago period while Transportation Accessories reported a decrease in net sales of 3.7% when compared to the first quarter a year ago.

                  Operating profit improved 17.1% or $4.3 million as compared to the same period a year ago and reflected strong earnings performance in four of the Company’s five business segments.  Material margins improved 90 basis points compared to the year ago period as a result of sourcing initiatives and ability to recover material cost increases via pricing.  Operating profit margin as a percent of sales improved to 10.6% in first quarter 2006 compared to 9.5% for the same period a year ago.

                  Expenses related to plant consolidation and restructuring activities were $0.4 million and comparable to the year ago period.

                  The Company reported net income from continuing operations of $5.3 million, or $0.26 per share on a fully-diluted basis in the quarter ended March 31, 2006, compared to net income from continuing operations of $3.6 million or $0.17 per share on a fully-diluted basis in the first quarter 2005.  This represented an increase in reported income from continuing operations of 47.2% compared to the year ago period.

Results of Discontinued Operations

                  Sales from discontinued operations were $23.5 million in the quarter ended March 31, 2006, a decrease of $6.9 million from $30.4 million in the same period a year ago.  The decline in sales between years was principally the result of working down a significant sales backlog which existed at the end of 2004, during the first quarter 2005.  The loss from discontinued operations was $1.3 million and $1.1 million in the quarters ended March 31, 2006 and 2005, respectively, net of tax benefits recorded of $0.8 million and $0.7 million.

Grant Beard, TriMas’ President and Chief Executive Officer, further commented, “In the first quarter of 2006, we re-aligned our operating segments and management structure to better focus our various businesses’ product line offerings by industry and end customer markets and related channels of distribution.  Our prior period segment financial information has been revised to reflect this new structure and presentation.

 

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First Quarter Financial Summary

 

 

 

For the Quarter Ended March 31

 

(unaudited - in millions, except per share amounts)

 

2006

 

2005

 

% Change

 

 

 

 

 

 

 

 

 

Sales

 

$

275.3

 

$

262.4

 

4.9

%

Operating profit

 

29.3

 

25.0

 

17.1

%

Income from continuing operations

 

5.3

 

3.6

 

47.2

%

Loss from discontinued operations, net of tax benefit

 

(1.3

)

(1.1

)

18.2

%

Net income

 

$

4.0

 

$

2.5

 

60.0

%

 

 

 

 

 

 

 

 

Earnings (loss) per share - basic

 

 

 

 

 

 

 

- Continuing operations

 

$

0.27

 

$

0.18

 

50.0

%

- Discontinued operations

 

(0.07

)

(0.05

)

40.0

%

- Net income

 

$

0.20

 

$

0.13

 

53.8

%

 

 

 

 

 

 

 

 

Earnings (loss) per share - diluted

 

 

 

 

 

 

 

- Continuing operations

 

$

0.26

 

$

0.17

 

52.9

%

- Discontinued operations

 

(0.07

)

(0.05

)

40.0

%

- Net income

 

$

0.19

 

$

0.12

 

58.3

%

 

 

 

 

 

 

 

 

Other Data - Continuing Operations:

 

 

 

 

 

 

 

- Depreciation and amortization

 

$

9.3

 

$

9.6

 

(3.1

%)

- Interest expense

 

$

19.9

 

$

18.2

 

9.3

%

- Other expense, net

 

$

0.8

 

$

1.1

 

(27.3

%)

- Income tax expense

 

$

3.3

 

$

2.1

 

57.1

%

 

 

Segment Results

Packaging Systems

Net sales increased $3.8 million, or 7.6% to $53.4 million in first quarter 2006 from $49.6 million in the year ago period as sales of industrial closure products (5.4%), consumer product dispensing applications (9.1%) and specialty tapes, laminates and insulation products (11.0%) all increased.  Operating profit increased 15.0% to $8.5 million during first quarter 2006 from $7.4 million in first quarter 2005, as this segment benefited from higher sales volumes ($0.6 million), facility consolidation costs that did not recur in the current year ($0.3 million) and lower selling costs as a percentage of sales between years.

 

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Transportation Accessories

Net sales decreased $3.1 million or 3.7% to $81.7 million in the quarter ended March 31, 2006 compared to $84.8 million in the year ago period due primarily to reduced sales activity in our towing products business.  However, operating profit increased $0.6 million or 16.0% to $4.4 million in first quarter 2006 from $3.8 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.

RV & Trailer Products

Net sales were approximately flat at $55.9 million for the quarter ended March 31, 2006 compared to the year ago period.  Higher sales to the horse/livestock and OE automotive sectors were approximately offset by lower sales to the agricultural/industrial markets and RV wholesalers and distributors due to soft market demand and increased foreign competition.  Operating profit decreased slightly from $8.5 million in first quarter 2005 to $8.3 million in the current year as cost savings initiatives approximately offset increased transportation and slightly higher employee benefits costs.

Energy Products

Net sales increased $6.4 million or 18.9% to $40.0 million in the quarter ended March 31, 2006 compared to $33.6 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 increased international sales, and higher than expected turnaround activity at petrochemical refineries.  Operating profit improved $0.9 million or 17.7% to $5.9 million in the quarter ended March 31, 2006 from $5.0 million in the year ago period essentially consistent with the increase in net sales.

Industrial Specialties

Net sales increased $5.9 million or 15.3% to $44.4 million in the quarter ended March 31, 2006, from $38.5 million in the year ago period as four of this segment’s five business continued to experience strong demand driven by new products, market share gains and economic expansion.  Notably, sales increased 27.1% in our aerospace fastener business, 23.7% in our specialty automotive fittings business and 14.3% in our industrial cylinder business.   Operating profit in the first quarter 2006 increased $2.5 million or 42.3% to $8.4 million from $5.9 million a year ago due to improved material margins and proportionately greater sales of higher margin aerospace fasteners.

 

4



 

Financial Position

TriMas ended the first quarter with total assets of $1,440.7 million, debt of $719.3 million and $59.6 million outstanding under its receivables securitization facility.  Net cash provided by operating activities for the quarter ended March 31, 2006, was $11.0 million, compared to net cash used for operating activities in the year ago period of $11.4 million, as the Company significantly reduced its investment in net working capital.

Conference Call

TriMas will broadcast its first quarter earnings conference call on Thursday, May 11, 2006 at 2:00 p.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: (800) 266-1764.   Callers should ask to be connected to the TriMas first quarter conference call (reservation number 21291788).  If you are unable to participate during the live teleconference, a replay of the conference call will be available beginning May 11th at 2:00 pm. EDT through May 18th at 4:30 p.m. EDT.  To access the replay, please dial:  (800) 633-8284 and use reservation number 21291788.

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, 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

 

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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)

 

 

March 31,

 

December 31,

 

 

 

2006

 

2005

 

Assets

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,710

 

$

3,730

 

Receivables, net

 

95,000

 

89,960

 

Inventories

 

162,020

 

149,210

 

Deferred income taxes

 

20,120

 

20,120

 

Prepaid expenses and other current assets

 

7,450

 

7,050

 

Assets of discontinued operations held for sale

 

47,000

 

45,590

 

Total current assets

 

333,300

 

315,660

 

Property and equipment, net

 

163,180

 

164,630

 

Goodwill

 

645,530

 

644,780

 

Other intangibles, net

 

252,060

 

255,220

 

Other assets

 

46,700

 

48,220

 

Total assets

 

$

1,440,770

 

$

1,428,510

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

Current liabilities:

 

 

 

 

 

Current maturities, long-term debt

 

$

8,560

 

$

13,820

 

Accounts payable

 

125,790

 

111,250

 

Accrued liabilities

 

65,830

 

62,800

 

Due to Metaldyne

 

4,840

 

4,850

 

Liabilities of discontinued operations

 

37,270

 

38,410

 

Total current liabilities

 

242,290

 

231,130

 

Long-term debt

 

710,780

 

713,860

 

Deferred income taxes

 

95,820

 

95,980

 

Other long-term liabilities

 

34,230

 

34,760

 

Due to Metaldyne

 

3,480

 

3,480

 

Total liabilities

 

1,086,600

 

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

 

397,400

 

396,980

 

Retained deficit

 

(82,330

)

(86,310

)

Accumulated other comprehensive income

 

38,900

 

38,430

 

Total shareholders’ equity

 

354,170

 

349,300

 

Total liabilities and shareholders’ equity

 

$

1,440,770

 

$

1,428,510

 

 

7



 

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

 

 

For the Three Months Ended March 31,

 

 

 

2006

 

2005

 

 

 

 

 

 

 

Net sales

 

$

275,280

 

$

262,370

 

Cost of sales

 

(201,790

)

(197,270

)

Gross profit

 

73,490

 

65,100

 

Selling, general and administrative expense

 

(44,050

)

(40,290

)

Gain (loss) on dispositions of property and equipment

 

(180

)

170

 

Operating profit

 

29,260

 

24,980

 

Other expense, net:

 

 

 

 

 

Interest expense

 

(19,920

)

(18,240

)

Other, net

 

(780

)

(1,090

)

Other expense, net

 

(20,700

)

(19,330

)

 

 

 

 

 

 

Income from continuing operations before income tax expense

 

8,560

 

5,650

 

Income tax expense

 

(3,250

)

(2,080

)

Income from continuing operations

 

5,310

 

3,570

 

Loss from discontinued operations, net of income tax benefit

 

(1,330

)

(1,060

)

Net income

 

$

3,980

 

$

2,510

 

 

 

 

 

 

 

Earnings (loss) per share - basic:

 

 

 

 

 

Continuing operations

 

$

0.27

 

$

0.18

 

Discontinued operations, net of income tax benefit

 

(0.07

)

(0.05

)

 

 

 

 

 

 

Net income per share

 

$

0.20

 

$

0.13

 

 

 

 

 

 

 

Weighted average common shares - basic

 

20,010,000

 

20,010,000

 

 

 

 

 

 

 

Earnings (loss) per share - diluted:

 

 

 

 

 

Continuing operations

 

$

0.26

 

$

0.17

 

Discontinued operations, net of income tax benefit

 

(0.07

)

(0.05

)

 

 

 

 

 

 

Net income per share

 

$

0.19

 

$

0.12

 

 

 

 

 

 

 

Weighted average common shares - diluted

 

20,760,000

 

20,760,000

 

 

8



 

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

 

 

 

For the Three Months Ended March 31,

 

 

 

2006

 

2005

 

Cash Flows from Operating Activities:

 

 

 

 

 

Net income

 

$

3,980

 

$

2,510

 

Adjustments to reconcile net income to net cash provided by (used for) operating activities:

 

 

 

 

 

(Gain) loss on dispositions of property and equipment

 

100

 

(240

)

Depreciation and amortization

 

9,300

 

10,510

 

Amortization of debt issue costs

 

1,360

 

1,230

 

Non-cash compensation expense

 

420

 

80

 

Net proceeds from sale of receivables and receivables securitization

 

25,120

 

26,560

 

Increase in receivables

 

(29,630

)

(60,540

)

(Increase) decrease in inventories

 

(14,490

)

3,440

 

Decrease in prepaid expenses and other assets

 

200

 

860

 

Increase in accounts payable and accrued liabilities

 

14,330

 

3,820

 

Other, net

 

320

 

420

 

Net cash provided by (used for) operating activities

 

11,010

 

(11,350

)

 

 

 

 

 

 

Cash Flows from Investing Activities:

 

 

 

 

 

Capital expenditures

 

(5,290

)

(4,550

)

Proceeds from sales of fixed assets

 

640

 

940

 

Net cash used for investing activities

 

(4,650

)

(3,610

)

 

 

 

 

 

 

Cash Flows from Financing Activities:

 

 

 

 

 

Repayments of borrowings on term loan facilities

 

(700

)

(720

)

Proceeds from borrowings on revolving credit facilities

 

167,710

 

286,810

 

Repayments of borrowings on revolving credit facilities

 

(175,390

)

(270,200

)

Payments on notes payable

 

 

(100

)

Net cash provided by (used for) financing activities

 

(8,380

)

15,790

 

 

 

 

 

 

 

Cash and Cash Equivalents:

 

 

 

 

 

Increase (decrease) for the period

 

(2,020

)

830

 

At beginning of period

 

3,730

 

3,090

 

At end of period

 

$

1,710

 

$

3,920

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid for interest

 

$

5,280

 

$

5,780

 

Cash paid for taxes

 

$

4,930

 

$

3,600

 

 

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TriMas Corporation

Company and Business Segment Financial Information

 

(unaudited - in thousands)

 

Three Months Ended
March 31,

 

 

 

2006

 

2005

 

Packaging Systems

 

 

 

 

 

Net sales

 

$

53,350

 

$

49,600

 

Operating profit

 

$

8,500

 

$

7,390

 

Operating profit as a % of sales

 

15.9

%

14.9

%

 

 

 

 

 

 

Transportation Accessories

 

 

 

 

 

Net sales

 

$

81,680

 

$

84,810

 

Operating profit

 

$

4,410

 

$

3,800

 

Operating profit as a % of sales

 

5.4

%

4.5

%

 

 

 

 

 

 

RV & Trailer Products

 

 

 

 

 

Net sales

 

$

55,860

 

$

55,840

 

Operating profit

 

$

8,280

 

$

8,480

 

Operating profit as a % of sales

 

14.8

%

15.2

%

 

 

 

 

 

 

Energy Products

 

 

 

 

 

Net sales

 

$

39,950

 

$

33,590

 

Operating profit

 

$

5,920

 

$

5,030

 

Operating profit as a % of sales

 

14.8

%

15.0

%

 

 

 

 

 

 

Industrial Specialties Group

 

 

 

 

 

Net sales

 

$

44,440

 

$

38,530

 

Operating profit

 

$

8,410

 

$

5,910

 

Operating profit as a % of sales

 

18.9

%

15.3

%

 

 

 

 

 

 

Total Company - Continuing Operations

 

 

 

 

 

Net sales

 

$

275,280

 

$

262,370

 

Operating profit

 

$

29,260

 

$

24,980

 

Operating profit as a % of sales

 

10.6

%

9.5

%

 

 

 

 

 

 

Corporate expenses and management fee

 

$

6,260

 

$

5,630

 

 

 

 

 

 

 

Other Data - Continuing Operations:

 

 

 

 

 

 - Depreciation and amortization

 

$

9,300

 

$

9,570

 

 - Interest expense

 

$

19,920

 

$

18,240

 

 - Other expense, net

 

$

780

 

$

1,090

 

 - Income tax expense

 

$

3,250

 

$

2,080

 

 

 

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 groups: Packaging Systems, Transportation Accessories, RV & Trailer Products, Energy Products, and Industrial Specialties.  TriMas has nearly 5,000 employees at 80 different facilities in 10 countries.  For more information, visit www.trimascorp.com.

 

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