Trimas Corporation · NASDAQ:TRS
Trimas — Q2 2015 Earnings Presentation
33 slides from Trimas's earnings presentation, Aug 4, 2015
Slide 1: Second Quarter 2015 Earnings Presentation
Second Quarter 2015 Earnings Presentation August 4, 2015
Slide 2: Forward-Looking Statement
Forward-Looking Statement Forward-Looking Statement 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 uncert
Slide 3: Agenda
Agenda • Opening Remarks • Financial Highlights • Segment Highlights • Outlook and Summary • Questions and Answers • Appendix 3
Slide 4: Opening Remarks
Opening Remarks • Successfully completed the tax-free spin-off of Cequent businesses as newly formed company named Horizon Global Corporation • Second quarter sales of approximately $224.9 million – relatively flat year-over-year due to external headwinds • Attained $0.30(1) EPS for the quarter – in
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 • Distributor inventory de-stocking and consolidation ‒ Aerospace distributors continue to reduce inventory • U.S. West Coast po
Slide 6: Vision and Strategic Priorities
Vision and Strategic Priorities VISION To be a trusted global leader in delivering innovative, engineered product solutions to our customers with superior quality, speed and value. 6 Strategies in place to drive increased shareholder value and returns. Be a Workplace of Choice for Great People Drive
Slide 7: Key Business Initiatives
Key Business Initiatives 7 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 8: Financial Highlights
Financial Highlights
Slide 9: Second Quarter Summary
Second Quarter Summary • Q2 sales were relatively flat as compared to Q2 2014 – Acquisition and organic sales growth significantly offset by impact of lower oil prices and unfavorable currency exchange • Q2 operating profit dollars and margin percentage were impacted by a $2.8 million charge to reso
Slide 10: EPS Bridge from Q2 2014 to Q2 2015
$0.37 $0.30 $(0.04) $(0.07) $0.03 $0.02 $(0.01) 2014 Q2 EPS (1) Energy legal claim Oil price impact Operations (excluding oil) Corporate expenses Interest, taxes & other 2015 Q2 EPS (1) EPS(1) Bridge from Q2 2014 to Q2 2015 10 Impact of low oil prices and challenges in Energy offsetting progress on
Slide 11: Segment Highlights
Segment Highlights
Slide 12: Packaging
Packaging 12 • Sales increased due to the acquisition of Lion Holdings and higher specialty product sales • Sales were impacted by $2.4 million of unfavorable currency exchange • Margin percentage declined slightly due to higher SG&A related to the acquisition and global initiatives Strategies • Lau
Slide 13: Aerospace
Aerospace 13 • Sales increased due to Allfast acquisition completed in Q4 2014 – margins still impacted by purchase accounting adjustments • Lower demand from distribution channel – inventory de-stocking continues with no improvement expected in back half of 2015 • Continued improvements in manufact
Slide 14: Energy
Energy 14 • Sales decreased due to the impact of lower oil prices on upstream customers, lower sales in China and Brazil due to restructuring, and $1.5 million of unfavorable currency exchange • Headwinds offset sales growth from international branches and new products • Incurred $2.8 million charge
Slide 15: Engineered Components
Engineered Components 15 • Norris Cylinder sales and margin levels increased • Arrow Engine sales decreased more than 60% as a result of lower oil prices – remained profitable by aligning cost structure • Lower export sales for cylinders due to stronger U.S. dollar Strategies • Continue to mitigate
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. Q2 2015 Q1 2015 FY 2014 Q2 2014 Packaging $89.6 $79
Slide 17: Outlook and Summary
Outlook and Summary
Slide 18: 2015 Updated Segment Assumptions
2015 Updated Segment Assumptions 18 Segment Revenue Margin Current Commentary Packaging • Low single-digit growth after considering 2% to 3% currency headwind • Maintain 22% to 24% operating margins – trending to low to mid portion of range • Lower industrial closure volumes impacting top-line and m
Slide 19: 2015 Outlook
2015 Outlook Updated TriMas Full Year Outlook as of 8/4/15 Comments Sales Growth Earnings Per Share, diluted(1) $1.15 to $1.25 • Result of spin-off • Many margin initiatives taking hold • Impact of lower oil prices • Energy margin improvement initiatives require more time • Mix impact of some top-li
Slide 20: 2015 Outlook – Additional Assumptions
2015 Outlook – Additional Assumptions Full Year Outlook as of 8/4/15 Comments Interest expense ~ $15 to $16 million • Dividend from spin used to reduce debt Capital expenditures ~ 3% to 4% of sales • Continuing to invest in growth businesses Tax rate ~ 30% to 32% • Income more heavily weighted towar
Slide 21: Bridge to Updated EPS Outlook Post Spin-off
Bridge to Updated EPS Outlook Post Spin-off 21 (1) See Company’s First Quarter Earnings Presentation dated April 28, 2015. (2) See Appendix for calculation for estimate of EPS related to Cequent businesses and interest savings in cash dividend received in the spin-off. (3) Based on 2015 Engine busin
Slide 22: Financial Targets
Financial Targets – 3 Year Horizon Grow Packaging and Aerospace sales 2x other businesses; improve Aerospace and Energy margins to historical levels. Segment Target Revenue Growth Target Operating Profit Margin Packaging • Mid single-digit organic growth, complemented by acquisitions 22% – 24% Aeros
Slide 23: Summary
Summary • Operational initiatives – Focus on margins in all businesses – Energy and Aerospace are highest priority – Mitigate external headwinds – Capitalize on profitable growth opportunities • Portfolio management – Continue to simplify – willing to exit lower margin products and geographies – Con
Slide 24: Questions and Answers
Questions and Answers
Slide 25: Appendix
Appendix
Slide 26: Consolidated Balance Sheet
June 30, December 31, 2015 2014 (unaudited) Assets Current assets: Cash and cash equivalents............................................................ 26,170$ 24,420$ Receivables, net........................................................................... 140,150 132,800 Inventories............
Slide 27: Consolidated Statement of Operations
Three months ended Six months ended 2015 2014 2015 2014 Net sales................................................................................................. 224,900$ 224,710$ 449,030$ 441,540$ 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......................................................................................................................... 15,690$ 45,580$ Income (loss) from discontinued
Slide 29: Company and Business Segment Financial Information
Company and Business Segment Financial Information 29 (Unaudited, dollars in thousands, from continuing operations) Three months ended 2015 2014 2015 2014 Packaging Net sales..............................................................................................................................
Slide 30: Additional Information Regarding Special Items
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 30 (Unaudited, dollars in thousands, except for per share amounts) Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Income from continuing operations, as reported.......................
Slide 31: Estimated 2015 Cequent-related Operating EPS
Estimated 2015 Cequent-related Operating EPS 31 (Amount in thousands, except per share amounts) (1) As presented in the TriMas Fourth Quarter Earnings Presentation dated February 25, 2015. (2) As per the Horizon Global Registration Statement filed on June 22, 2015. (3) TriMas approximate effective i
Slide 32: Current Debt Structure
Current Debt Structure 32 (Unaudited, dollars in thousands) As of June 30, 2015, TriMas had $149.2 million of cash and available liquidity under its revolving credit and accounts receivable facilities. June 30, December 31, 2015 2014 Cash and Cash Equivalents……………………………..………………… 26,170$ 24,420$ Cred
Slide 33: LTM Bank EBITDA as Defined in Credit Agreement
LTM Bank EBITDA as Defined in Credit Agreement 33 (Unaudited, dollars in thousands) 39,390$ Interest expense....................................................................................................................... 12,530 Income tax expense...............................................