Slide 1: Third Quarter 2015 Earnings Presentation
Third Quarter 2015 Earnings Presentation October 29, 2015
Slide 2: Forward-Looking Statement
Forward-Looking Statement Forward-Looking Statement Any “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, contained herein, including, but not limited to, those relating to the Company’s business, fin
Slide 3: Agenda
Agenda • Opening Remarks • Financial Highlights • Segment Highlights • Outlook and Summary • Questions and Answers • Appendix 3
Slide 4: Opening Remarks
Opening Remarks • Third quarter sales of approximately $222.2 million – relatively flat year- over-year due to external headwinds • Attained $0.39(1) EPS for the quarter, an increase of 34.5% as compared to third quarter 2014 • Operating profit margin(1) improvement of approximately 300 basis points
Slide 5: External Headwinds and Tailwinds
External Headwinds and Tailwinds Headwinds • Oil and commodity price declines ‒ Drilling and well completion activity ‒ Capex reductions ‒ Resin and specialty steel prices • Inventory reductions at distributors ‒ Large aerospace distributors ‒ Overall supply chain reductions • Strength of U.S. dolla
Slide 6: Key Business Initiatives
Key Business Initiatives 6 Profitable Growth Margin Packaging • Reorganize globally to end market focus • Develop new products • Optimize global footprint Aerospace • Leverage one aerospace platform • Develop new products and expand product lines • Improve operational efficiency at all locations Ene
Slide 7: Financial Highlights
Financial Highlights
Slide 8: Third Quarter Summary
Third Quarter Summary • Q3 sales were relatively flat as compared to Q3 2014 – acquisition and organic sales growth offset by impact of lower oil-related activity and unfavorable currency exchange • Q3 operating profit dollars and margin percentage increased – margin increased 300 basis points as a
Slide 9: EPS Bridge from Q3 2014 to Q3 2015
9 • Continued low oil-related activity resulted in $0.06 decline in Q3 2015 versus Q3 2014 • 300 basis point operating profit margin improvement – organic margin expansion and lower corporate expenses • Allfast acquisition continues to contribute significantly, despite top-line pressure from key dis
Slide 10: Financial Improvement Plan
Financial Improvement Plan • Announced in September 2015 – implementation in progress • $15 million of annual savings – $5 million related to acceleration of Energy business restructuring – $10 million of fixed overhead and SG&A reductions across rest of Company – One-time charges of approximately $
Slide 11: Segment Highlights
Segment Highlights
Slide 12: Packaging
Packaging 12 • Sales decreased due to $2.5 million of unfavorable currency exchange • Margin percentage increased due to reductions in certain acquisition-related liabilities, lower material costs, a favorable shift in product mix and lower SG&A Strategies • Deployed new brand and completed global r
Slide 13: Aerospace
Aerospace 13 • Sales increased due to Allfast acquisition completed in Q4 2014 • Higher demand from large OE customers, but lower demand from large distributors reducing inventory levels • Margin improved 400 basis points due to higher sales and related operating leverage, a more favorable product s
Slide 14: Energy
Energy 14 • Sales increased in North America due to higher engineering and construction activity • Lower oil price impact on upstream customers, lower international sales due to restructuring and unfavorable currency exchange continued to be headwinds • Margins improved 260 basis points as a result
Slide 15: Engineered Components
Engineered Components 15 • Engine-related sales decreased more than 60% as a result of lower oil prices – remained breakeven by aligning cost structure • Cylinder sales declined due to softness in industrial end markets and lower export sales due to stronger U.S. dollar • Margins declined primarily
Slide 16: Segment Performance Summary
Segment Performance Summary 16 (Unaudited, excluding Special Items, dollars in millions) Sales Operating Profit Margin(1) (1) Excludes the impact of “Special Items.” For a detailed reconciliation, excluding “Special Items,” please see the Appendix. Q3 2015 Q2 2015 FY 2014 Q3 2014 Packaging $87.9 $89
Slide 17: Outlook and Summary
Outlook and Summary
Slide 18: Updated FY 2015 Segment Assumptions
Updated FY 2015 Segment Assumptions 18 Segment Revenue Margin Q4 Commentary Packaging • Low single-digit growth after considering 2% to 3% currency headwind • Maintain 22% to 24% operating profit margins • Expecting lower sequential sales in Q4 due to customer product launch delays and industrial en
Slide 19: Updated FY 2015 Outlook
Updated FY 2015 Outlook Full Year Outlook as of 8/4/15 Updated Full Year Outlook as of 10/29/15 Comments Sales Growth • Increased top-line pressure on all businesses due to external headwinds • Continued macro-economic weakness in industrial markets • Acquisition growth more than offset by impact of
Slide 20: 2016 Preliminary Thoughts
2016 Preliminary Thoughts 20 Packaging Aerospace Energy Engineered Components Corporate Expense • Consumer-based specialty dispensing products ~75% of sales • Industrial closures impacted by end market weakness • ~25% to 30% of sales outside of North America – China slowing; India up mid- single dig
Slide 21: Financial Targets
Financial Targets Grow Packaging and Aerospace sales 2x other businesses; improve Aerospace and Energy margins to historical levels. Segment Target Revenue Growth Target 2018 Operating Profit Margin Packaging • Mid single-digit organic growth, complemented by acquisitions 22% – 24% Aerospace • Mid-t
Slide 22: Summary
Summary • Ongoing margin improvement – all tactics implemented – Grow higher-margin Packaging and Aerospace – Execute Financial Improvement Plan – each business and corporate – Restructure Energy – fixed and variable cost-out; added program managers – Continuous productivity pipeline – Selectively e
Slide 23: Questions and Answers
Questions and Answers
Slide 24: Appendix
Appendix
Slide 25: Third Quarter YTD Summary
Third Quarter YTD Summary 25 (1) Defined as income from continuing operations and diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.” “Special Items” for each period are provided in the Appendix. (2) Free Cash Flow is defined as Net Ca
Slide 26: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 26 September 30, December 31, 2015 2014 (unaudited) Assets Current assets: Cash and cash equivalents............................................................ 22,460$ 24,420$ Receivables, net......................................................................
Slide 27: Consolidated Statement of Income
Consolidated Statement of Income 27 Three months ended Nine months ended 2015 2014 2015 2014 Net sales................................................................................................. 222,190$ 222,330$ 671,220$ 663,870$ Cost of sales...................................................
Slide 28: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow (Unaudited, dollars in thousands) 28 2015 2014 Cash Flows from Operating Activities: Net income.............................................................................................................................. 27,400$ 67,810$ Income (loss) from discont
Slide 29: Company and Business Segment Financial Information
Company and Business Segment Financial Information 29 Three months ended 2015 2014 2015 2014 Packaging Net sales................................................................................................................................................ 87,930$ 89,320$ 256,470$ 257,000$ Operating
Slide 30: Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 30 Three months ended Nine months ended September 30, September 30, 2015 2014 2015 2014 Income from continuing operations, as reported............................................................................
Slide 31: Current Debt Structure
Current Debt Structure 31 (Unaudited, dollars in thousands) As of September 30, 2015, TriMas had $129.7 million of cash and available liquidity under its revolving credit and accounts receivable facilities. September 30, December 31, 2015 2014 Cash and Cash Equivalents……………………………..………………… 22,460$ 24
Slide 32: LTM Bank EBITDA as Defined in Credit Agreement
LTM Bank EBITDA as Defined in Credit Agreement 32 (Unaudited, dollars in thousands) (1) As defined in the Credit Agreement dated June 30, 2015. 28,870$ Interest expense....................................................................................................................... 13,890 Incom