Slide 1: Second Quarter 2014 Earnings Presentation
Second Quarter 2014 Earnings Presentation J u l y 3 1 , 2 0 1 4 NASDAQ • TRS
Slide 2: Forward-Looking Statements
Forward-Looking Statements Any “forward-looking” statements contained herein, including those relating to market conditions or the Company’s financial condition and results, expense reductions, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including, but n
Slide 3: Agenda
Agenda • Opening Remarks • Financial Highlights • Segment Highlights • Outlook and Summary • Questions and Answers • Appendix 3
Slide 4: Opening Remarks – Second Quarter Results
Opening Remarks – Second Quarter Results • Record quarterly sales of approximately $404 million – growth of nearly 7% compared to Q2 2013 – Bolt-on acquisitions and organic growth initiatives adding to top-line – Packaging and Aerospace leading growth • Q2 2014 operating profit(1) improved nearly 10
Slide 5: Focus on "Bright Spots"
Focus on “Bright Spots” 5 Growth focused on faster growing markets as we follow and support our customers. “Bright Spot” Packaging • Asia • Higher-end products Energy • Customers’ willingness to adopt advanced, safety-related products Aerospace & Defense • Boeing and Airbus build rates • Increasing
Slide 6: Innovation Drives Long-Term Growth
6 Maintaining investments for growth. Innovation Drives Long-Term Growth Innovation Examples Packaging • Large customer foam pumps now in stores • Ohio “Beauty Park” plant adding new products • “Instant” color change capability in process • Lion Holdings acquisition supports the pursuit of opportuni
Slide 7: Long-Term Margin Expansion
Long-Term Margin Expansion • Grow Packaging and Aerospace revenue twice as fast as the rest of TriMas; hold mid-20s operating profit percentage • Elevate acquisitions to core business margins via productivity, consolidations and synergies • Achieve historically demonstrated margins at all businesses
Slide 8: Productivity, cost reductions and pricing actions drive increased margins
8 Productivity, cost reductions and pricing actions drive increased margins. Impacts on Margin Response Packaging + Price increases due to resin cost increases ‒ Higher than anticipated sales in China requiring manual assembly ‒ Outsourcing for capacity • Ramping-up China II plant • Acquired Lion Ho
Slide 9: Continued Portfolio Management
9 All actions improve TriMas – revenue and/or margin; Focus on strategic, bolt-on acquisitions in packaging and aerospace. Continued Portfolio Management Packaging • Divested industrial rings and levers business in Italy – low growth, low tech • Acquired remaining 30% of Arminak – ability to acceler
Slide 10: Financial Highlights
Financial Highlights
Slide 11: Second Quarter Summary
Second Quarter Summary • Sales increased 6.9% as compared to Q2 2013 as a result of acquisitions and organic growth initiatives, offsetting challenges in energy end markets and the Q3 2013 disposition of the Italian rings and levers business • Q2 operating profit(1) and the related margin percentage
Slide 12: Segment Highlights
Segment Highlights
Slide 13: Packaging
Packaging Q2 2014 Results: • Sales increased primarily as a result of specialty systems product sales gains — Increased demand from North American, European and Asian dispensing customers — Improved demand for industrial closures, offset by the divestiture of the Italian industrial rings and levers
Slide 14: Energy
Energy Q2 2014 Results: • Sales decreased from record prior year quarter due to the lower levels of turnaround and maintenance activity combined with reduced sales to engineering and construction customers • Operating profit and margin were negatively impacted by the slow down, which resulted in a l
Slide 15: Aerospace & Defense
Aerospace & Defense Key Initiatives: • Expand aerospace fastener product lines to increase content and applications • Leverage positive end market trends of composite aircraft and robotic assembly • Capture incremental opportunities in emerging markets • Drive ongoing lean initiatives to lower worki
Slide 16: Engineered Components
Engineered Components Key Initiatives: • Expand complementary product lines at well-sites and grow compression products • Grow products to support the shift toward increased use of natural gas and production in shale formations • Integrate recent cylinder acquisition to leverage cost structure • Con
Slide 17: Cequent (APEA & Americas)
Cequent (APEA & Americas) $46.4 Q2 2014 Results: • Sales in Americas increased to a record level, with increases in the aftermarket and retail channels • Americas operating profit(1) improved and margin percentage increased 210 basis points due to labor savings generated from the manufacturing move
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Slide 19: 2014 Outlook
2014 Outlook Outlook as of 7/31/14 Tailwinds Headwinds Sales Growth 6% to 8% • Packaging • Energy • Cequent Australia/ Thailand Earnings Per Share, diluted(1) $2.15 to $2.25 • Packaging growth • Engineered Components margin improvement • Cequent Americas margin improvement • Energy volumes/ product
Slide 20: Future Aspirations
Future Aspirations 20 • Ongoing organic and acquisition growth • Disciplined focus on higher growth markets • Business mix, ongoing productivity and cost leverage • Deploy cash for growth and productivity • Hurdle rate goal We are working toward these performance metrics of success.
Slide 21: TriMas Value Proposition
TriMas Value Proposition 21 Clear goals, high-performance teams and streamlined processes drive enhanced results. S T A B I L I T Y • Industrial • Aerospace • Agricultural • Consumer • Energy • Geographic diversity • Customer diversity BALANCED PORTFOLIO M A R G I N E X P A N S I O N F U N D S G R O
Slide 22: Questions and Answers
Questions and Answers
Slide 23: Appendix
Appendix
Slide 24: First Half 2014 Summary
First Half 2014 Summary • Sales increased 7.8% as compared to YTD 2013 as a result of acquisitions and organic growth initiatives, offsetting challenges in energy end markets and the Q3 2013 disposition of the Italian rings and levers business • YTD operating profit(1) and the related margin percent
Slide 25: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 25 (Dollars in thousands) June 30, December 31, 2014 2013 (unaudited) Assets Current assets: Cash and cash equivalents............................................................. 38,380$ 27,000$ Receivables, net...................................................
Slide 26: Consolidated Statement of Income
Consolidated Statement of Income 26 Three months ended Six months ended 2014 2013 2014 2013 Net sales................................................................................................. 403,980$ 378,030$ 771,720$ 715,810$ Cost of sales....................................................
Slide 27: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow (Unaudited, dollars in thousands) 27 2014 2013 Cash Flows from Operating Activities: Net income......................................................................................................................... 45,580$ 41,840$ Adjustments to reconcile net in
Slide 28: Company and Business Segment Financial Information
Company and Business Segment Financial Information 28 Three months ended 2014 2013 2014 2013 Packaging Net sales......................................................................................................... 86,250$ 78,640$ 167,680$ 152,990$ Operating profit................................
Slide 29: Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 29 Three months ended Six months ended June 30, June 30, 2014 2013 2014 2013 Income from continuing operations, as reported............................................................ 26,200$ 27,100$ 45,580$ 41
Slide 30: Enhanced Debt Structure
Enhanced Debt Structure 30 (Unaudited, dollars in thousands) As of June 30, 2014, TriMas had $394.8 million of cash and available liquidity under its revolving credit and accounts receivable facilities. June 30, December 31, 2014 2013 Cash and Cash Equivalents……………………………..………………… 38,380$ 27,000$ Cre
Slide 31: LTM Bank EBITDA as Defined in Credit Agreement
LTM Bank EBITDA as Defined in Credit Agreement 31 (Unaudited, dollars in thousands) 83,810$ Interest expense, net (as defined)............................................................................................... 14,490 Income tax expense.....................................................