Slide 1: First Quarter 2016 Earnings Presentation
First Quarter 2016 Earnings Presentation April 28, 2016
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 • First quarter sales of approximately $203 million – external headwinds continued – Organic initiatives and acquisition growth were more than offset by the impact of lower oil prices, lower aerospace distributor sales and unfavorable currency exchange – Sequential sales improvement
Slide 5: External Headwinds and Tailwinds
External Headwinds and Tailwinds Headwinds • Macroeconomic conditions ‒ Low industrial activity levels ‒ Interest rate environment • Low oil and commodity prices ‒ Drilling and well completion activity ‒ Capex deferrals and reductions ‒ Resin and specialty steel prices • Inventory reductions at dist
Slide 6: Key Business Initiatives
Key Business Initiatives 6 Initiatives remain consistent to achieve profitable growth and increased margins – balancing short and long-term objectives. • Packaging – Build out global marketing and sales force to align with end markets and customers – Add lower-cost capacity to support global custome
Slide 7: Financial Highlights
Financial Highlights
Slide 8: First Quarter Summary
First Quarter Summary • Q1 sales declined 9.5% as compared to Q1 2015 – weakness in the oil-related and industrial end markets, and unfavorable currency exchange more than offset organic initiatives and the results of a recent acquisition • Q1 operating profit dollars and margin percentage decreased
Slide 9: EPS Bridge from Q1 2015 to Q1 2016
EPS(1) Bridge from Q1 2015 to Q1 2016 9 (1) Excludes the impact of “Special Items.” For a detailed reconciliation, excluding “Special Items,” please see the Appendix. • Significant year-over-year impact related to lower oil production activity and aerospace distributor inventory reductions • Cost sa
Slide 10: Segment Highlights
Segment Highlights
Slide 11: Packaging
Packaging 11 • Sales increased slightly in the industrial, food & beverage, and health, beauty & home care end markets, partially offset by unfavorable currency exchange • Profit increased due to the higher sales level and ongoing productivity initiatives, offsetting the continued investment in glob
Slide 12: Aerospace
Aerospace 12 • Sales decreased due to lower demand from larger distribution customers, as well lower sales to OE customers due to production constraints ‒ Partially offset by the sales related to the acquisition of Parker Hannifin’s machined components facility in Q4 2015 • Margin declined due to lo
Slide 13: Energy
Energy 13 • Sales decreased due to reduced demand from upstream oil customers, lower sales from international branches that closed as part of the restructuring and the impact of unfavorable currency exchange • Cost savings achieved due to the restructuring were more than offset by the impact of the
Slide 14: Engineered Components
Engineered Components 14 • Engine and compressor sales decreased nearly 60% as a result of lower oil prices – remained approximately breakeven by reducing cost structure • Cylinder sales declined due to weaker industrial end markets and lower export sales due to stronger U.S. dollar • Margin increas
Slide 15: Segment Performance Summary
Segment Performance Summary 15 (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. Q1 2016 Q4 2015 Q1 2015 FY 2015 Packaging $80.1 $77
Slide 16: Outlook and Summary
Outlook and Summary
Slide 17: Updated FY 2016 Segment Assumptions
Updated FY 2016 Segment Assumptions 17 Sales Growth(1) Operating Profit Margin(2) Full Year 2016 Commentary Packaging 4% – 8% 22% – 24% • Organic growth driven primarily by new products and increased share in emerging markets • Expected growth primarily in specialty dispensing products • Continuous
Slide 18: 2016 Quarterly Earnings Expansion Drivers
2016 Quarterly Earnings Expansion Drivers • Packaging customers’ planned new product launches • Aerospace sales growth and improved profitability as a result of increased production throughput to meet OE demand levels • Aerospace execution on integration and margin improvement plans • Energy leverag
Slide 19: Updated FY 2016 Outlook
Updated FY 2016 Outlook Reaffirming Full Year Outlook (as of 4/28/16)(1) Comments Sales Growth (2%) – 2% • Continued global macroeconomic and industrial end market weakness • Currency not expected to be a significant driver year-over- year – except strong USD dampens export sales and facilitates for
Slide 20: Summary
Summary • Mitigate impact of external headwinds via Financial Improvement Plan – continue to evaluate end markets and costs • Grow higher-margin Packaging and Aerospace platforms – continue to invest and leverage – Focus on achieving Aerospace’s near-term operational improvements and longer- term gr
Slide 21: Questions and Answers
Questions and Answers
Slide 22: Appendix
Appendix
Slide 23: FY 2016 Outlook – Additional Assumptions
FY 2016 Outlook – Additional Assumptions Reaffirming Full Year Outlook (as of 4/28/16(1)) Comments Interest Expense $14 – $16 million • Effective July 1, 2016, interest expense on the majority of variable-rate debt in the Credit Agreement fixed via interest rate swap agreements (through 2020) • Impa
Slide 24: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 24 (Dollars in thousands) March 31, December 31, 2016 2015 (unaudited) Assets Current assets: Cash and cash equivalents............................................................ 25,420$ 19,450$ Receivables, net...................................................
Slide 25: Consolidated Statement of Operations
Consolidated Statement of Operations 25 Three months ended 2016 2015 Net sales................................................................................................. 202,880$ 224,130$ Cost of sales............................................................................................
Slide 26: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow (Unaudited, dollars in thousands) 26 2016 2015 Cash Flows from Operating Activities: Net income.............................................................................................................................. 8,300$ 13,980$ Income from discontinued op
Slide 27: Segment Special Items Reconciliation
Three months ended 2016 2015 Packaging Net sales................................................................................................................................................ 80,110$ 78,960$ Operating profit...........................................................................
Slide 28: Additional Information Regarding Special Items
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 28 (Unaudited, dollars in thousands, except for per share amounts) Three months ended March 31, 2016 2015 Income from continuing operations, as reported..........................................................
Slide 29: Current Debt Structure
Current Debt Structure 29 (Unaudited, dollars in thousands) As of March 31, 2016, TriMas had $92.2 million of cash and available liquidity under its revolving credit and accounts receivable facilities. March 31, December 31, 2016 2015 Cash and Cash Equivalents……………………………..………………… 25,420$ 19,450$ Cre
Slide 30: LTM Bank EBITDA as Defined in Credit Agreement
LTM Bank EBITDA as Defined in Credit Agreement 30 (Unaudited, dollars in thousands) (1) As defined in the Credit Agreement dated June 30, 2015. (39,080)$ Interest expense....................................................................................................................... 14,050 Inc