Slide 1: Fourth Quarter and Full Year 2015 Earnings Presentation
Fourth Quarter and Full Year 2015 Earnings Presentation February 25, 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 • 2015 sales of approximately $864 million – significant external headwinds – Organic initiatives and acquisition growth were able to offset impact of lower oil prices and currency during first nine months of 2015 – Energy-facing and industrial markets weakened in Q4, resulting in 14
Slide 5: External Headwinds and Tailwinds
External Headwinds and Tailwinds Headwinds • Macroeconomic conditions ‒ Industrial activity continues to slow ‒ Interest rate environment • Low oil and commodity prices ‒ Drilling and well completion activity ‒ Capex deferrals and reductions ‒ Resin and specialty steel prices • Inventory reductions
Slide 6: Financial Improvement Plan Update
Financial Improvement Plan Update • Recently increased target from $15 million to $22 million of annual savings on a full run-rate basis as top-line pressures intensified in fourth quarter • Includes reductions in fixed overhead and SG&A costs – all businesses and corporate included • Recognized sav
Slide 7: Other Key Business Initiatives
Other Key Business Initiatives 7 Initiatives remain consistent to achieve profitable growth and increased margins – balancing short and long-term objectives. • Packaging – Leverage global, end market focused sales force to drive incremental sales – Add lower-cost capacity to support global customers
Slide 8: Financial Highlights
Financial Highlights
Slide 9: Fourth Quarter Summary
Fourth Quarter Summary • Q4 sales declined 13.7% as compared to Q4 2014 – increased weakness in the energy-facing and industrial end markets and unfavorable currency exchange more than offset organic initiatives and the results of acquisitions • Q4 operating profit dollars and margin percentage decr
Slide 10: Full Year 2015 Summary
Full Year 2015 Summary • Sales decreased 2.6% as organic and acquisition sales increases were more than offset by sales declines resulting from the impact of lower oil prices, macroeconomic uncertainty and unfavorable currency exchange • Operating profit margin increased slightly as increases in Pac
Slide 11: Segment Highlights
Segment Highlights
Slide 12: Packaging
Packaging 12 • Sales decreased due to unfavorable currency exchange and lower closure sales as a result of a weaker industrial end market • Profit declined slightly due to lower sales levels and unfavorable currency exchange • Margin consistent, as lower material costs, productivity and cost reducti
Slide 13: Aerospace
Aerospace 13 • Sales increased due to acquisitions of Allfast in Q4 2014 and Parker Hannifin’s machined components facility in Q4 2015 • Higher demand from large OE customers, while lower demand from large distributors reducing inventory levels • Margin improved 450 basis points due to higher sales,
Slide 14: Energy
Energy 14 • Sales decreased due to capex reductions and deferrals at large refinery and chemical customers, reduced demand levels from upstream oil customers and the impact of unfavorable currency exchange • Cost savings achieved due to the restructuring were more than offset by the impact of the re
Slide 15: Engineered Components
Engineered Components 15 • Engine and compressor 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 pri
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. Q4 2015 Q3 2015 Q4 2014 FY 2015 FY 2014 Packaging $
Slide 17: Outlook and Summary
Outlook and Summary
Slide 18: FY 2016 Segment Assumptions
FY 2016 Segment Assumptions 18 Sales Growth(1) Operating Profit Margin(2) 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; continued weakness expected in
Slide 19: FY 2016 Outlook
FY 2016 Outlook Full Year Outlook (as of 2/25/16) 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 foreign import competition
Slide 20: FY 2016 Outlook – Additional Assumptions
FY 2016 Outlook – Additional Assumptions Full Year Outlook as of 2/25/16 Comments Interest Expense $14 – $16 million • Effective July 1, 2016, interest expense on the majority of variable-rate debt in the Credit Agreement fixed via interest rate swap agreements (through 2020) • Impact of higher inte
Slide 21: View into Q1 2016
View into Q1 2016 • Expect similar environment to Q4 2015 – Macroeconomic uncertainty remains – Packaging’s industrial products sales remain soft given end market weakness – Low oil prices continue to impact energy-facing businesses’ sales – No change in Aerospace build rates • “Pluses” versus Q4 20
Slide 22: Financial Targets
Financial Targets Grow Packaging and Aerospace sales 2x other businesses; improve Aerospace and Energy margins to historical levels. Segment Target Revenue Growth Target 2018 Operating Profit Margin Packaging • Mid single-digit organic growth, complemented by acquisitions 22% – 24% Aerospace • Mid-t
Slide 23: Summary
Summary • Mitigate impact of external headwinds via Financial Improvement Plan – continue to evaluate end markets and costs • Grow higher-margin Packaging and Aerospace – continue to invest and leverage • Drive improved profitability from restructured Energy business • Improve cash flow conversion a
Slide 24: Questions and Answers
Questions and Answers
Slide 25: Appendix
Appendix
Slide 26: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 26 December 31, December 31, 2015 2014 Assets Current assets: Cash and cash equivalents............................................................ 19,450$ 24,420$ Receivables, net........................................................................... 121,990
Slide 27: Consolidated Statement of Operations
Three months ended Twelve months ended 2015 2014 2015 2014 Net sales................................................................................................. 192,760$ 223,430$ 863,980$ 887,300$ 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 (loss)..................................................................................................................... (33,400)$ 69,280$ Income (loss) from discont
Slide 29: Segment Operating Profit Excluding Special Items
Three months ended 2015 2014 2015 2014 Packaging Net sales................................................................................................................................................ 77,800$ 80,710$ 334,270$ 337,710$ Operating profit...............................................
Slide 30: Additional Information Regarding Special Items
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 30 Three months ended Twelve months ended December 31, December 31, 2015 2014 2015 2014 Income (loss) from continuing operations, as reported.....................................................................
Slide 31: Current Debt Structure
Current Debt Structure 31 (Unaudited, dollars in thousands) As of December 31, 2015, TriMas had $126.9 million of cash and available liquidity under its revolving credit and accounts receivable facilities. December 31, December 31, 2015 2014 Cash and Cash Equivalents……………………………..………………… 19,450$ 24,4
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. (33,400)$ Interest expense....................................................................................................................... 14,060 Inc