Trimas Corporation · NASDAQ:TRS
Trimas — Debt Investor Presentation (September 2012)
45 slides from Trimas's debt investor presentation, Sep 19, 2012
Slide 1: Lender Meeting Presentation September 19, 2012
Lender Meeting Presentation September 19, 2012 NASDAQ • TRS Confidential – for Public-Siders
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: Special Notice for Public-Siders
Special Notice for Public-Siders THE BORROWER HAS REPRESENTED AND WARRANTED TO THE ARRANGERS THAT THE INFORMATION IN THIS DOCUMENT DOES NOT CONSTITUTE OR CONTAIN ANY MATERIAL NON-PUBLIC INFORMATION WITH RESPECT TO THE BORROWER OR ANY PARTY RELATED THERETO (COLLECTIVELY, “PARTIES”) OR THEIR RESPECTIV
Slide 4: Agenda
Agenda • TriMas Overview David Wathen, President and CEO, TriMas • Segment Overview • Financial Results and Highlights Mark Zeffiro, CFO, TriMas • Outlook and Summary • Transaction Overview J.P. Morgan Securities • Questions and Answers • Appendix 4
Slide 5: Executive Summary
Executive Summary • Today we are launching new $650 million Senior Secured Credit Facilities for TriMas Corporation, comprised of: • $250 million Senior Secured Revolving Credit Facility; • $150 million Senior Secured Term Loan A; and • $250 million Senior Secured Term Loan B • Proceeds from the Fac
Slide 6: Company Overview
Company Overview Dave Wathen, TriMas President and CEO
Slide 7: TriMas Key Messages
7 TriMas Key Messages • Highly-engineered products serving defensible, focused markets • TriMas Operating Model is working well and delivering results • Ongoing productivity improvements fund growth initiatives and margin expansion • Significant opportunities for organic growth and bolt-on acquisiti
Slide 8: TriMas Operating Model Drives New Performance Level
TriMas Operating Model Drives New Performance Level Turnaround & Stability • Implemented repeatable planning process including strategic, people and operating plans/reviews • Restructured businesses and consolidated management teams • Enhanced accountability and aligned incentive system with busines
Slide 9: Common Attributes Across Businesses
Common Attributes Across Businesses • Focused markets with leading market positions • Strong brand names • Well-established customer relationships • Proprietary, highly-engineered products • Common operating processes • Opportunities for growth and productivity • Strong cash flow generation Cequent
Slide 10: Highly Diversified Business and Customer Profile
Packaging 17% Energy 15% A&D 7% Engineered Components 16% Cequent North America 36% Cequent Asia Pacific 9% By Segment U.S. (domestic) 70% U.S. (export) 12% APAC 9% Europe 6% RoW 3% By Geography Highly Diversified Business and Customer Profile Leading product offerings across businesses and end mark
Slide 11: Segment Overview
Segment Overview
Slide 12: Packaging - Segment Overview
Packaging - Segment Overview 12 (1) Operating profit margin excludes corporate expense and “Special Items.” “Special Items” for each period are provided in the Appendix. 23.2% 28.5% 25.9% 21.8% • 50+ years providing industrial closures - high margin and cash flow • 10 years focus on dispensing syste
Slide 13: Packaging - Key Strategies
Packaging - Key Strategies 13 23.2% 28.5% 25.9% 21.8% • Target specialty dispensing and closure products into higher growth end markets – Food, beverage, nutrition, cosmetic, personal care and pharmaceutical • Increasing focus on Asian market and begin to cultivate other geographic opportunities • L
Slide 14: Energy - Segment Overview
2009 2010 2011 LTM 6/30/12 Energy - Segment Overview 14 $112 $181 $167 Net Sales & Operating Profit Margins(1) Net Sales ($ in millions) $129 11.4% 11.8% 11.1% 11.1 % Overview Segment Contribution (2011) Financial History 10.4% 15% By Revenue 12% By Operating Profit (1) • Experts at manufacturing an
Slide 15: Energy - Key Strategies
Energy - Key Strategies 15 Rapid growth through product and geographic expansion, as well as the successful integration of bolt-on acquisitions. ($ in millions) Q2 2011 YTD Q2 2012 YTD Revenue $83.1 $97.8 Operating Profit $10.4 $10.7 Margin % 12.5% 11.0% Recent Financial Snapshot • Expand business c
Slide 16: Aerospace & Defense - Segment Overview
Aerospace & Defense - Segment Overview 16 Net Sales & Operating Profit Margins(1) Monogram Net Sales ($ in millions) Segment Contribution (2011) Overview Financial History 7% By Revenue 12% By Operating Profit (1) • Provider of highly-engineered mechanical fasteners for temporary and permanent appli
Slide 17: Aerospace & Defense - Key Strategies
Aerospace & Defense - Key Strategies Expect to have approximately 4x more content on newer, composite aircraft programs compared to legacy programs. Recent Financial Snapshot ($ in millions) Q2 2011 YTD Q2 2012 YTD Revenue $39.8 $37.2 Operating Profit $8.6 $9.7 Margin % 21.5% 26.0% 17 • Expand aeros
Slide 18: Engineered Components - Segment Overview
2009 2010 2011 LTM 6/30/12 Engineered Components - Segment Overview 18 Net Sales ($ in millions) Net Sales & Operating Profit Margins(1) $73 $175 $113 $197 6.0% 11.2% 15.8% 16.6% Segment Contribution (2011) Overview Financial History 16% By Revenue 17% By Operating Profit (1) • Two businesses that p
Slide 19: Engineered Components - Key Strategies
Engineered Components - Key Strategies Create new products and new applications; capture emerging market growth. Recent Financial Snapshot ($ in millions) Q2 2011 YTD Q2 2012 YTD Revenue $80.9 $102.3 Operating Profit $11.3 $16.3 Margin % 14.0% 15.9% 19 • Expand complementary product lines at well-si
Slide 20: Cequent - Segment Overview
Cequent - Segment Overview 20 Cequent North America Net Sales ($ in millions) Cequent Net Sales & Operating Profit Margins(1) Segment Contribution (2011) Overview 29% Operating Profit (1) 45% By Revenue Financial History • Diverse channels and end markets including agricultural, utility, marine, rec
Slide 21: Cequent - Key Strategies
($ in millions) Q2 2011 YTD Q2 2012 YTD Asia Pacific Revenue $41.4 $56.8 Asia Pacific Operating Profit (1) $4.5 $7.3 Margin % (1) 10.8% 12.9% North America Revenue $209.7 $217.0 North America Operating Profit (1) $21.1 $22.0 Margin % (1) 10.0% 10.1% Cequent - Key Strategies Increase margins and retu
Slide 22: Financial Highlights
Financial Highlights Mark Zeffiro, TriMas CFO
Slide 23: Historical Financials
Historical Financials 23 Revenue and EBITDA1 ($ millions) Debt2 and Leverage3 ($ millions) Gross Margin ($ millions) Interest Coverage Ratio4 ($ millions) $777 $902 $1,084 $1,173 $140 $162 $176 $195 $- $100 $200 $300 $400 $- $250 $500 $750 $1,000 $1,250 $1,500 2009 2010 2011 LTM 6/30/12 Revenue Bank
Slide 24: Second Quarter YTD Summary
(unaudited, $ in millions, except per share amounts) (from continuing operations) Q2 YTD 2012 Q2 YTD 2011 % Chg Revenue $ 636.0 $ 546.7 16.3% Operating Profit $ 71.9 $ 69.1 4.1% Excl. Special Items (1) , Operating Profit would have been: $ 76.6 $ 69.1 10.7% Excl. Special Items (1) , Operating Profit
Slide 25: Second Quarter Summary
Second Quarter Summary • Sales increased 17.5% vs. Q2 2011 – record sales quarter in several businesses and total company • Investments in new products, geographic expansion and bolt-on acquisitions driving positive results • Productivity efforts continued to fund growth initiatives – Productivity s
Slide 26: Capitalization and Total Debt and Leverage Ratio
26 ($ in millions) Capitalization Total Debt and Leverage Ratio (including A/R Facility) Comments: • Redeemed $50 million of the 9¾% senior secured notes in Q2 2012 • Reduced interest expense by $1.3M in Q2 2012, as compared to Q2 2011 • Q2 2012 leverage ratio of 2.19x • Credit rating upgrades from
Slide 27: Outlook and Summary
Outlook and Summary
Slide 28: First Half 2012 Summary
First Half 2012 Summary • Nine consecutive quarters of double-digit quarter-over-quarter sales and earnings growth(1) • Strong organic growth through product innovation, geographic expansion, market share gains and increased end market demand • Acquisitions on schedule with revenue and cost synergie
Slide 29: 2012 Outlook
2012 Outlook Outlook as of 2/27/12 and 4/26/12 Outlook as of 7/30/12 Sales Growth 7% to 10% 10% to 14% Earnings Per Share, diluted(1) $1.75 to $1.85 $1.75 to $1.85 (Post May equity offering and 4 million incremental shares) Free Cash Flow(2) $40 to $50 million $40 to $50 million Capital Expenditures
Slide 30: Strategic Aspirations
Strategic Aspirations TriMas provides engineered and applied product solutions that customers in growing end markets need and value. 30 • Generate high single-digit top-line growth • Invest in growing end markets through new products, global expansion and acquisitions • Drive 3% to 5% total gross co
Slide 31: Transaction Overview
Transaction Overview J.P. Morgan Securities
Slide 32: Investment Highlights
Investment Highlights • Focused end-markets with leading market positions and brand name products • Longstanding, established client relationships • Proprietary, highly engineered products 32 Strength of business portfolio Streamlined operating model drives enhanced results Significant opportunities
Slide 33: Proposed Sources & Uses and Capitalization
Proposed Sources & Uses and Capitalization 33 06/30/2012 % of Capitalization x LTM EBITDA PF 06/30/2012 % of PF Capitalization x LTM PF EBITDA Cash and equivalents $29.3 $29.3 Existing $125mm Revolver 1 $0.0 0.0% 0.00x -- -- -- Existing $225mm Term Loan B 217.8 30.3% 1.11x -- -- -- Existing 9.75% Se
Slide 34: Proposed Facilities Structure and Overview
Proposed Facilities Structure and Overview 34 Borrowers: TriMas Company LLC and certain subsidiaries of the Borrower Guarantors: TriMas Corporation (“Holdings”) and certain domestic subsidiaries Joint Lead Arrangers / Bookrunners: J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner and Smit
Slide 35: Proposed Pro-Rata Pricing Information
Proposed Pro-Rata Pricing Information 35 Level I Level II Level III Level IV Level V1 Leverage Ratio < 1.50x > 1.50x > 2.00x > 2.75x > 3.50x Undrawn (bps) 25.0 30.0 35.0 40.0 45.0 Drawn LIBOR Spread (bps) L + 150.0 L + 175.0 L + 200.0 L + 225.0 L + 250.0 Pro-Rata Pricing Grid (RC & TLA only) Pricing
Slide 36: Illustrative Timeline
Illustrative Timeline 36 Wednesday, September 19th Lenders’ Meeting to launch new Senior Secured Credit Facilities Launch tender offer and consent solicitation Wednesday, October 3rd Commitments due from Lenders Thursday, October 4th Distribution of Draft Credit Agreement Tuesday, October 9th Lender
Slide 37: Public-Side Questions & Answers
Public-Side Questions & Answers
Slide 38: Appendix
Appendix
Slide 39: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet (Unaudited, dollars in thousands) 39 June 30, December 31, 2012 2011 Assets Current assets: Cash and cash equivalents …………………………………………...……………………………………….29,280$ 88,920$ Receivables, net of reserves ………………………………………………….………………………….. 186,720 135,610 Inventories .………
Slide 40: Capitalization
Capitalization 40 (Unaudited, dollars in thousands) June 30, December 31, 2012 2011 Cash and Cash Equivalents……………………………..………………… 29,280$ 88,920$ Term loan…………………………………………………. 217,750 223,870 Receivables securitization facility……………………………….. - - Revolving credit facilities……………………………….. - - Non-U.S.
Slide 41: Consolidated Statement of Operations
Consolidated Statement of Operations (Unaudited, dollars in thousands, except for per share amounts) 41 Six months ended 2012 2011 2012 2011 Net sales.................................................................................... 338,430$ 288,090$ 636,000$ 546,650$ Cost of sales................
Slide 42: Additional Information Regarding Special Items
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures (Unaudited, dollars in thousands, except per share amounts) 2012 2011 2012 2011 Income from continuing operations, as reported 17,170$ 16,010$ 29,420$ 26,700$ Less: Net income attributable to noncontrolling int
Slide 43: Company and Business Segment Financial Information
Company and Business Segment Financial Information – Cont. Ops 43 (Unaudited, dollars in thousands) Three months ended 2012 2011 2012 2011 Packaging Net sales 70,700$ 47,900$ 125,010$ 91,800$ Operating profit 16,570$ 15,070$ 26,460$ 26,900$ Energy Net sales 47,170$ 42,170$ 97,760$ 83,120$ Operating
Slide 44: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow (Unaudited, dollars in thousands) 44 2012 2011 Cash Flows from Operating Activities: Net income..................................................................................................................... 29,420$ 28,840$ Adjustments to reconcile net income
Slide 45: LTM Bank EBITDA as Defined in Credit Agreement
LTM Bank EBITDA as Defined in Credit Agreement 45 (Unaudited, dollars in thousands) 6/30/12(1) 12/31/12(1) 12/31/10(2) 12/31/09(2) Net income (loss) attributable to TriMas Corporation for the twelve months ended ……………………………………………………………….. 60,670$ 60,360$ 45,270$ (220)$ Net income attributable to par