Slide 1: Second Quarter 2016 Earnings Presentation
Second Quarter 2016 Earnings Presentation July 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 • Introductions and Opening Remarks • Financial Highlights • Segment Highlights • Outlook and Summary • Questions and Answers • Appendix 3
Slide 4: Introductions and Opening Remarks
Introductions and Opening Remarks
Slide 5: New CEO – Thomas Amato
New CEO – Thomas Amato • Comprehensive search conducted using external firm • Experienced leader of global, multi-billion dollar, diversified businesses • Understanding of TriMas businesses as a result of prior roles • Proven track record in: – Driving operational improvements through a relentless f
Slide 6: Initial Observations of TriMas
Initial Observations of TriMas • Great portfolio of diversified businesses • Market-leading brands and positions • Valued “blue-chip” customers with critical supply positions and solid relationships • Highly-engineered, proprietary products • Significant opportunities for organic growth and bolt-on
Slide 7: Opening Remarks – Second Quarter
Opening Remarks – Second Quarter • Second quarter sales of approximately $203 million – external top-line pressures 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 – Se
Slide 8: 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 in chan
Slide 9: Business Update
Business Update 9 Initiatives to drive profitable growth and increased margins – balancing short and long-term objectives. Packaging • Completed staffing of sales team – added leaders with end market expertise • Selected site in Mexico to add manufacturing capacity in support of growth in the Americ
Slide 10: Financial Highlights
Financial Highlights
Slide 11: Second Quarter Summary
( fro m co ntinuing o perat io ns) Q2 2016 Q2 2015 Variance Revenue $203.3 $224.9 -9.6% Operating profit $18.7 $19.2 -2.9% Excl. Total Special Items, Operating profit would have been: $25.7 $24.3 5.6% Excl. Total Special Items, Operating profit margin would have been: 12.6% 10.8% 180 bps Income $10.
Slide 12: EPS Bridge from Q2 2015 to Q2 2016
$0.30 $0.34 2015 Q2 EPS, excluding Special Items 2015 Energy legal claim Energy-facing business volume Aerospace operating profit FIP savings / operating improvements Corporate costs and non- cash stock compensation Interest / taxes / other 2016 Q2 EPS, excluding Special Items EPS Bridge from Q2 201
Slide 13: Segment Highlights
Segment Highlights
Slide 14: Packaging
Packaging 14 • Sales were relatively flat, excluding the impact of unfavorable currency exchange • Profit and the related margin, excluding Special Items, increased due to a more favorable product mix and ongoing productivity initiatives, offsetting the continued investment in global capabilities In
Slide 15: Aerospace
Aerospace 15 • Sales increased due to the acquisition of Parker Hannifin’s machined components facility in Q4 2015; partially offset by lower demand from certain larger distribution customers • Profit and the related margin, excluding Special Items, declined due to incremental costs due to short-ter
Slide 16: Aerospace Macro Environment
Aerospace Macro Environment Macro Changes • Supply chain disruption ‒ BASN-driven inventory reductions in channel Large aerospace distributors OE warehouse consolidation ‒ Increased focus on “just in time” inventory • Build rate increases • Shift to composite aircraft 16 Impacts on TriMas • Min/
Slide 17: Monogram Aerospace Fasteners
17 Monogram Aerospace Fasteners • Executing comprehensive recovery plan to meet current order demand, eliminate past dues and improve profitability • Implemented revised scheduling and production recovery plans for both fastener and collar facilities for remainder of year • Added capacity to improve
Slide 18: Energy
Energy 18 • Sales decreased due to reduced demand from upstream oil customers and the impact of lower levels of downstream capex spending • Cost savings achieved from restructuring actions more than offset the impact of the reduced sales levels and lower related fixed cost absorption Initiatives • L
Slide 19: Engineered Components
Engineered Components 19 • Cylinder sales declined due to weaker industrial end markets • Engine and compressor sales decreased more than 50% as a result of lower oil prices – operated at a slight loss due to reduced demand • Operating profit, excluding Special Items, decreased as a result of reduce
Slide 20: Segment Performance Summary
Segment Performance Summary 20 (Unaudited, dollars in millions) Sales Operating Profit Margin (excluding Special Items) Q2 2016 Q1 2016 Q2 2015 FY 2015 Packaging $88.1 $80.1 $89.6 $334.3 Aerospace $44.1 $40.5 $43.2 $176.5 Energy $40.0 $44.8 $50.2 $193.4 Engineered Components $31.2 $37.5 $42.0 $159.8
Slide 21: Outlook and Summary
Outlook and Summary
Slide 22: Updated FY 2016 Segment Assumptions
Updated FY 2016 Segment Assumptions 22 Sales(1) Operating Profit Margin (excl. Special Items) Full Year 2016 Commentary Packaging Previous 3% – 5% 4% – 8% 23% – 24% 22% – 24% • Organic growth driven primarily by new products and increased share in emerging markets – anticipate some customer launch d
Slide 23: Updated FY 2016 Additional Assumptions
Updated FY 2016 Additional Assumptions Full Year Outlook (Updated as of 7/28/16) Comments Interest Expense Previous $13 – $15 million $14 – $16 million • Effective July 1, 2016, interest expense on the majority of variable-rate debt in the Credit Agreement fixed via interest rate swap agreements (th
Slide 24: Updated FY 2016 Outlook
Updated FY 2016 Outlook Full Year Outlook (as of 4/28/16)(1) Full Year Outlook (as of 7/28/16) Comments Net Sales (2%) – 2% (4%) – (7%) • Top-line pressure across all segments • Expect some pressure resulting from currency moves following Brexit • Expect ~1% growth from existing acquisition Earnings
Slide 25: Summary
Summary • Focus on managing what we can control – align cost structure with expected end market demand • Grow higher-margin Packaging and Aerospace platforms – continue to invest and leverage – Immediate focus on achieving Aerospace’s operational improvements • Drive improved profitability from rest
Slide 26: Questions and Answers
Questions and Answers
Slide 27: Appendix
Appendix
Slide 28: Second Quarter YTD Summary
Second Quarter YTD Summary 28 (Unaudited, dollars in millions, except per share amounts) Note: Please see the Appendix for a detailed reconciliation to GAAP results. (1) Free Cash Flow is defined as Net Cash Provided by Operating Activities of Continuing Operations, excluding the cash impact of Spec
Slide 29: Condensed Consolidated Balance Sheet
Condensed Consolidated Balance Sheet 29 (Dollars in thousands) June 30, December 31, 2016 2015 (unaudited) Assets Current assets: Cash and cash equivalents............................................................ 23,660$ 19,450$ Receivables, net....................................................
Slide 30: Consolidated Statement of Operations
Consolidated Statement of Operations 30 (Unaudited, dollars in thousands, except for per share amounts) Three months ended Six months ended 2016 2015 2016 2015 Net sales................................................................................................. 203,320$ 224,900$ 406,200$ 449,03
Slide 31: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow (Unaudited, dollars in thousands) 31 2016 2015 Cash Flows from Operating Activities: Net income.............................................................................................................................. 18,780$ 15,690$ Loss from discontinued ope
Slide 32: Company and Business Segment Financial Information
Company and Business Segment Financial Information 32 (Unaudited, dollars in thousands, from continuing operations) Three months ended 2016 2015 2016 2015 Packaging Net sales..............................................................................................................................
Slide 33: Additional Information Regarding Special Items
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 33 (Unaudited, dollars in thousands, except for per share amounts) Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Income from continuing operations, as reported.......................
Slide 34: Additional Information Regarding Special Items
Additional Information Regarding Special Items Impacting Reported GAAP Financial Measures 34 (Unaudited, dollars in thousands) As reported Special Items Excluding Special Items As reported Special Items Excluding Special Items Net cash provided by operating activities of continuing operations.......
Slide 35: Current Debt Structure
Current Debt Structure 35 (Unaudited, dollars in thousands) As of June 30, 2016, TriMas had $123.7 million of cash and available liquidity under its revolving credit and accounts receivable facilities. June 30, December 31, 2016 2015 Cash and Cash Equivalents……………………………..………………… 23,660$ 19,450$ Cred
Slide 36: LTM Bank EBITDA as Defined in Credit Agreement
LTM Bank EBITDA as Defined in Credit Agreement 36 (Unaudited, dollars in thousands) (1) As defined in the Credit Agreement dated June 30, 2015. (30,310)$ Interest expense....................................................................................................................... 13,640 Inc