Slide 1: Fourth Quarter and Full Year 2013 Earnings Presentation
Fourth Quarter and Full Year 2013 Earnings Presentation February 20, 2014 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 – 2013 Accomplishments
Opening Remarks – 2013 Accomplishments • Record sales of approximately $1.4 billion – growth of nearly 10% compared to 2012 – Results from bolt-on acquisitions adding to top-line – Investments in new products and higher growth markets generating results • Continued investments in short and long-term
Slide 5: Opening Remarks – 2013 Results
Opening Remarks – 2013 Results • Improved 2013 income(1) by 22% as compared to 2012 • Improved diluted EPS(1) by 12%, while absorbing costs related to numerous acquisitions and 9% higher weighted average shares outstanding for 2013 as compared to 2012 • Challenges in energy end markets impacted four
Slide 6: Financial Highlights
Financial Highlights
Slide 7: Fourth Quarter Summary
Fourth Quarter Summary • Sales increased 7.4% as compared to Q4 2012 as a result of bolt-on acquisitions and organic growth initiatives, offsetting challenges in energy end markets • Operating profit was impacted by a less favorable product sales mix in many of the businesses, costs related to acqui
Slide 8: 2013 Summary
2013 Summary • Sales increased 9.6% as compared to 2012 – sales increased in five of six segments • Operating profit and the related margin were impacted by the favorable effect of ongoing productivity initiatives and operating leverage gained on higher sales levels and gains from sale of property/b
Slide 9: Operating Profit Margin Bridge: 2012 to 2013
Operating Profit Margin Bridge: 2012 to 2013 9 Note: Above reflects operating profit margin excluding Special Items and corporate expenses. “Special Items” and corporate expense for the period are provided in the Appendix. Opportunities • Address mix through synergies identified and lean implementat
Slide 10: Capitalization and Total Debt and Leverage Ratio
10 ($ in millions) Capitalization Total Debt and Leverage Ratio (including A/R Facility) Comments: • Reduced interest expense by $17.5 million, or almost 50%, in 2013 as compared to 2012 • Q4 2013 leverage ratio of 1.67x as compared to 2.30x as of Q4 2012 • October refinance further reduced rates, e
Slide 11: Segment Highlights
Segment Highlights
Slide 12: Packaging
Packaging Q4 and FY 2013 Results: • Q4 and FY 2013 sales increased primarily as a result of specialty systems product sales gains — Increased demand from North American and European dispensing customers, as well as additional business wins in Asia — Impacted by divestiture of Italian industrial ring
Slide 13: Energy
Energy Q4 and FY 2013 Results: • Q4 sales decreased due the significant slow down and postponement of turnaround activity and maintenance spend in refining and petrochemical markets • Q4 operating profit and margin was negatively impacted by slow down, which resulted in less favorable product mix, a
Slide 14: 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 15: Engineered Components
Engineered Components Key Initiatives: • Expand complementary product lines at well-sites and grow compression products – product diversification decreases cyclicality • Grow products to support the shift toward increased use of natural gas and production in shale formations • Integrate recent cylin
Slide 16: Cequent (APEA & Americas)
Cequent (APEA & Americas) $46.4 Q4 and FY 2013 Results: • Q4 and FY 2013 sales in Americas increased primarily due to higher sales within the automotive OE, aftermarket and retail channels • Q4 and FY 2013 Americas operating profit(1) and related margin percentage declined as increased sales levels
Slide 17: Outlook and Summary
Outlook and Summary
Slide 18: Strategic Aspirations
Strategic Aspirations Strategic aspirations are the foundation for the future. 18 • 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 cost productivity gains annually – utilize savings to fu
Slide 19: 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 20: Driving Long Term Productivity Gains
Driving Long Term Productivity Gains 20 2010 •Global Sourcing Organization formation •Low cost country sourcing •Aggregate spend •Back office sourcing •Working capital improvements 2011 •Emerging markets •New low cost countries •Functional summits launched •National contracts •Capital equipment leve
Slide 21: 2014 Key Initiatives
2014 Key Initiatives Initiatives in place to drive revenue growth and margin expansion. 21 Packaging • Complete second plant in China to improve cost structure and flexibility • Continue to globalize; grow in emerging markets and expand sales of acquired products Energy • Optimize geographic footpri
Slide 22: 2014 Outlook
2014 Outlook Outlook as of 2/20/14 Sales Growth 6% to 8% Earnings Per Share, diluted(1) $2.15 to $2.25 Free Cash Flow(2) $55 to $65 million (1) Defined as diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” (2) Defined as Cash Flow fro
Slide 23: 2013 to 2014 EPS Bridge
2013 to 2014 EPS Bridge 2013 EPS(1) Higher estimated tax rate Share Count(2) 2014 EPS(1) $2.06 ($0.18) ($0.12) $0.53 - $0.63 Business Operations $0.05 $2.15 - $2.25 Commodity Inflation Investments in Growth & Future Productivity Productivity ($0.19) Other non- operational items Price Existing Acquis
Slide 24: TriMas Value Proposition
TriMas Value Proposition Growth > End Markets Clear goals, high-performance teams and streamlined processes drive enhanced results. 24 • Multiple projects in all businesses • Geographic • Product • Customer penetration • Acquisitions • Services Stability • Energy • Aerospace • Industrial • Consumer
Slide 25: Questions & Answers
Questions & Answers
Slide 26: Appendix
Appendix
Slide 27: 2014 Additional Assumptions
2014 Additional Assumptions 2014 Estimates Interest expense ~$17 – $18 million Capital expenditures ~4% – 4.5% of sales Tax rate ~27% – 29% 27
Slide 28: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 28 December 31, December 31, 2013 2012 Assets Current assets: Cash and cash equivalents............................................................. 27,000$ 20,580$ Receivables, net............................................................................ 180,2
Slide 29: Consolidated Statement of Income
Consolidated Statement of Income (Dollars in thousands, except for per share amounts) 29 Three months ended Twelve months ended 2013 2012 2013 2012 Net sales................................................................................................. 323,430$ 301,040$ 1,394,860$ 1,272,910$ Cost
Slide 30: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow (Dollars in thousands) 30 2013 2012 Cash Flows from Operating Activities: Net income......................................................................................................................... 80,070$ 36,290$ Adjustments to reconcile net income to net
Slide 31: Company and Business Segment Financial Information
Company and Business Segment Financial Information 31 Three months ended 2013 2012 2013 2012 Packaging Net sales......................................................................................................... 78,220$ 72,910$ 313,220$ 275,160$ Operating profit................................
Slide 32: Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 32 Three months ended Twelve months ended December 31, December 31, 2013 2012 2013 2012 Income (loss) from continuing operations, as reported………….……………………………………………………8,280$ (13,090)$ 79,370$ 36,290$ Less: Net i
Slide 33: Enhanced Debt Structure
Enhanced Debt Structure 33 As of December 31, 2013, TriMas had $387.3 million of cash and available liquidity under its revolving credit and accounts receivable facilities. December 31, December 31, 2013 2012 Cash and Cash Equivalents……………………………..………………… 27,000$ 20,580$ Credit Agreement…………………………………
Slide 34: LTM Bank EBITDA as Defined in Credit Agreement
LTM Bank EBITDA as Defined in Credit Agreement 34 (Unaudited, dollars in thousands) 75,550$ Net income attributable to partially-owned subsidiaries................................................................. 4,520 Interest expense, net (as defined)...............................................