Exhibit 99.1
[Slide 1]
TriMas Corporation Logo
A Heartland Industrial Partners' Company
Second Quarter 2004 Earnings Review Conference Call
August 11, 2004
[Slide 2]
Safe Harbor Statement:
This document contains "forward-looking" statements, as that term is defined by
the federal securities laws, about our financial condition, results of
operations and business. Forward-looking statements include certain anticipated,
believed, planned, forecasted, expected, targeted and estimated results along
with TriMas' outlook concerning future results. The words "estimates,"
"expects," "anticipates," "projects," "plans," "intends," "believes,"
"forecasts," or future or conditional verbs, such as "will," "should," "could,"
or "may," and variations of such words or similar expressions are intended to
identify forward-looking statements. All forward-looking statements, including,
without limitation, management's examination of historical operating trends and
data are based upon our current expectations and various assumptions. Our
expectations, beliefs and projections are expressed in good faith and we believe
there is a reasonable basis for them. However, there can be no assurance that
management's expectations, beliefs and projections will be achieved. These
forward-looking statements are subject to numerous assumptions, risks and
uncertainties and accordingly, actual results may differ materially from those
expressed or implied by the forward-looking statements. We caution readers not
to place undue reliance on the statements, which speak only as of the date of
this document. The cautionary statements set forth above should be considered in
connection with any subsequent written or oral forward-looking statements that
we or persons acting on our behalf may issue. We do not undertake any obligation
to review or confirm analysts' expectations or estimates or to release publicly
any revisions to any forward-looking statements to reflect events or
circumstances after the date of this document or to reflect the occurrence of
unanticipated events. Risks and uncertainties that could cause actual results to
vary materially from those anticipated in the forward-looking statements
included in this document include general economic conditions in the markets in
which we operate and industry-based factors such as: technological developments
that could competitively disadvantage us, increases in our raw material, energy,
and healthcare costs, our dependence on key individuals and relationships,
exposure to product liability, recall and warranty claims, compliance with
environmental and other regulations, and competition within our industries. In
addition, factors more specific to us could cause actual results to vary
materially from those anticipated in the forward-looking statements included in
this document such as our substantial leverage, limitations imposed by our debt
instruments, our ability to successfully pursue our stated growth strategies and
opportunities, including our ability to identify attractive and other strategic
acquisition opportunities and to successfully integrate acquired businesses and
complete actions we have identified as providing cost-saving opportunities.
[Slide 3]
Agenda
o 2004 Second Quarter Financial Highlights
o 2004 Second Quarter Operating Highlights
o 2004 Second Quarter Financial Performance
o TriMas Capitalization
o 2004 Key Performance Drivers
o Q&A
o Appendix
[Slide 4]
2004 Second Quarter Financial Highlights
o TriMas had sales of $284.2 million, representing an increase of $34.0
million or 13.6% over 2003.
o Second quarter net income was $10.3 million, or $0.51 per share,
representing a significant improvement over 2003 second quarter's net
loss of $1.4 million, or $(0.07) per share.
o Operating profit increased $16.5 million to $33.0 million and
approximated 11.6% of sales.
o Total Company Adjusted EBITDA increased $8.2 million to $42.9 million,
or 23.6% compared to a year ago.
o Earnings reflect the absorption of $5.4 million in costs from direct
and indirect steel-related issues.
o TriMas ended the quarter with $759.8 million of debt and borrowings on
its receivables securitization facility of $48.3 million, reflecting
the Company's sales growth and investment in working capital.
o The Company's bank LTM EBITDA was $160.1 million which supports our
lending ratios:
- The Company's leverage ratio was 5.05x vs. the leverage covenant
of 5.50x.
- The interest coverage ratio was 2.59x vs. the interest coverage
covenant of 2.25x.
o TriMas had $5.8 million in cash at quarter end.
[Slide 5]
2004 Second Quarter Operating Highlights
During the second quarter, TriMas realized the benefits of continuing overall
macro-economic expansion and operational initiatives.
o Cequent Transportation Accessories
- Net sales for the quarter improved to $150.6 million, a 19.5%
increase from the prior year.
- Operating profit improved to $25.0 million, an increase of 72.4%,
while Segment Adjusted EBITDA was $29.9 million, an increase of
53.3% compared to the prior year.
- Initial strong order activity in all channels; late quarter
slowing in installer and WD channels
- Continued order fill improvements in retail, installer and WD
channels
- Goshen, IN and Reynosa, Mexico performance step-change continues
- Inventory build in all channels - steel price and distribution
optimism drivers
- New product introductions on plan
- Trailer Products' integration & Wausau closure complete; Mosinee,
WI and Juarez, Mexico performance improvements continue
-2-
- Distribution restructuring on track; South Bend, IN distribution
center now in commercial mode
- Oakville, Ontario manufacturing closure announced; distribution
consolidation planning underway
- Cequent's strategic value proposition continues to have great
support across all channels served
[Slide 6]
2004 Second Quarter Operating Highlights
o Rieke Packaging Systems
- Net sales for the quarter were $34.7 million, up 4.8% compared to
the prior year. Adjusted for a one-time government order in
Q2-03, revenues increased by 8%.
o Core products sales volume increased by 4.0% while new product
revenues were up 62% in the month of June.
- Segment Adjusted EBITDA was $11.6 million, an improvement of
12.6% compared to the prior year.
- Operating income increased to $9.3 million from $8.4 million.
- Customer commitments in Q2-04 for new products introduced in 2004
total $3.2 million on FRR.
- Currently working on incremental revenue projects for Hamilton
and China facilities totaling $19 million FRR.
- Segment Adjusted EBITDA margins improved to 33.4% from 31.1%
despite absorbing steel price increases.
o Fastening Systems
- Net sales for the quarter were $37.0 million, flat compared to
the prior year.
- Improved demand for aerospace fasteners, mainly in military and
commercial aircraft spending, resulted in a 14.6% increase in
year-over-year second quarter sales at Monogram.
- Industrial fastening demand remains very strong due to Class 8
truck and off-road/agricultural machinery.
- Steel availability and cost increases negatively impacted results
in Q2 by about $2.4 million. Industrial fasteners unshipped order
backlog increased to $5.0 million. Steel issues are expected to
remain critical during the second half.
- Lakewood, OH closure is scheduled for the end of Q3.
[Slide 7]
2004 Second Quarter Operating Highlights
o Industrial Specialties
- Net sales for the quarter were $61.9 million, an increase of
13.4% over the prior year second quarter.
- Strong revenue growth continues across all SBU's, mainly driven
by economic expansion and market share gains.
- Lamons is benefiting from very strong increase in demand (+30%)
at Exxon and the continuation of a new Dow contract.
-3-
- Compac consolidation is progressing well. All office activity and
half of the machinery have been relocated, and remaining
equipment is on schedule for completion in Q4.
-4-
[Slide 8]
($ in millions)
Three Months Ended June 30 Six Months Ended June 30
Net Sales 2004 2003 Variance 2004 2003 Variance
- --------- ---- ---- -------- ---- ---- --------
Cequent Transportation Accessories... $ 150.6 $ 126.0 19.5% $ 280.1 $ 224.8 24.6%
Rieke Packaging Systems.............. $ 34.7 $ 33.1 4.8% $ 65.1 $ 63.4 2.7%
Fastening Systems.................... $ 37.0 $ 36.5 1.4% $ 75.6 $ 71.5 5.7%
Industrial Specialties............... $ 61.9 $ 54.6 13.4% $ 124.3 $ 108.4 14.7%
---------- ---------- --------- ---------- ---------- ---------
Total Net Sales................... $ 284.2 $ 250.2 13.6% $ 545.1 $ 468.1 16.4%
Adjusted EBITDA (1)
Cequent Transportation Accessories... $ 29.9 $ 19.5 53.3% $ 48.6 $ 31.9 52.4%
Rieke Packaging Systems.............. $ 11.6 $ 10.3 12.6% $ 20.1 $ 19.8 1.5%
Fastening Systems.................... $ (1.2) $ 1.3 N/A $ (1.1) $ 5.0 N/A
Industrial Specialties............... $ 8.6 $ 7.6 13.2% $ 18.1 $ 16.0 13.1%
---------- ---------- --------- ---------- ---------- ---------
Segment Adjusted EBITDA........... $ 48.9 $ 38.7 26.4% $ 85.7 $ 72.7 17.9%
% Margin....................... 17.2% 15.5% 1.7% 15.7% 15.5% 0.2%
Corporate operating expenses and
management fee.................... $ (5.3) $ (4.4) 20.5% $ (11.0) $ (8.8) 25.0%
Corporate other income (expense)..... $ (0.7) $ 0.4 N/A $ (1.2) $ 0.5 N/A
Total Company Adjusted EBITDA..... $ 42.9 $ 34.7 23.6% $ 73.5 $ 64.4 14.1%
% Margin....................... 15.1% 13.9% 1.2% 13.5% 13.8% (0.3%)
Memo Items:
Restructuring, consolidation and
integration costs (2)............. $ (4.4) $ (5.2) $ 0.8 $ (9.8) $ (8.6) $ (1.2)
---------- ---------- --------- ---------- ---------- ---------
Legacy stock award expense........... $ -- $ (1.2) $ 1.2 $ -- $ (2.5) $ 2.5
---------- ---------- --------- ---------- ---------- ---------
(1) The Company has established Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA") as an indicator of our operating performance and as
a measure of our cash generating capabilities. The Company defines "Adjusted
EBITDA" as net income
-5-
before interest, taxes, depreciation, amortization, impairment of goodwill,
non-cash losses on sale-leaseback of property and equipment, and legacy stock
award expense.
(2) Represents certain charges related to our consolidation, restructuring and
integration activities intended to eliminate duplicative costs or achieve cost
efficiencies related to integrating acquisitions or other restructurings related
to expense reduction efforts. Such costs are not eliminated in the determination
of Company Adjusted EBITDA, however we would eliminate these costs to better
evaluate our underlying business performance.
-6-
[Slide 9]
2004 Second Quarter Financial Performance
o Total company net sales increased 13.6% from 2003 to 2004. Adjusting
for the acquisition of Bargman, we experienced a healthy 12.4% sales
growth rate.
o Operational efficiencies improved as top line revenue recovered.
o We absorbed $2.5 million in net, unrecovered surcharges on steel
purchases in Q2.
- Implemented cost pass-throughs on steel surcharges and anticipate
recovery of 85% of surcharges during the full year 2004.
o Also absorbed additional $2.9 million earnings impact during Q2 due to
manufacturing inefficiencies and lost sales resulting from shortages
of steel.
o Restructuring, consolidation and integration costs of $4.4 million in
the quarter related primarily to:
- Plant closure and restructuring activities within Fastening
Systems;
- Consolidation of Compac's operations in our new facility in
Hackettstown, NJ
[Slide 10]
($ in millions)
- --------------------------------------------------- ------------------ ------------------
30-Jun-04 % of Total
- --------------------------------------------------- ------------------ ------------------
Cash and Cash Equivalents..................... $5.8
- --------------------------------------------------- ------------------ ------------------
Working Capital Revolver...................... $33.0 2.8%
Term Loan B................................... $290.4 25.0%
Other Debt.................................... $0.3 0.0%
Subtotal, Senior Secured Debt............ $323.7 27.8%
9.875% Senior Sub Notes due 2012.............. $436.1 37.5%
- --------------------------------------------------- ------------------ ------------------
Total Debt................................. $759.8 65.3%
- --------------------------------------------------- ------------------ ------------------
- --------------------------------------------------- ------------------ ------------------
Total Shareholders' Equity................. $403.2 34.7%
- --------------------------------------------------- ------------------ ------------------
- --------------------------------------------------- ------------------ ------------------
Total Capitalization....................... $1,163.0 100.0%
- --------------------------------------------------- ------------------ ------------------
Memo: A/R Securitization..................... $48.3
- --------------------------------------------------- ------------------ ------------------
Total Debt + A/R Securitization............ $808.1
- --------------------------------------------------- ------------------ ------------------
Key Ratios:
Bank LTM EBITDA............................... $160.1
Coverage Ratio................................ 2.59x
Leverage Ratio................................ 5.05x
- --------------------------------------------------- ------------------ ------------------
Second Quarter 2004 Update:
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o TriMas had $5.8 million of cash and cash equivalents at June 30, 2004.
o The Credit Agreement leverage ratio was 5.05x Bank LTM EBITDA at June
30, 2004.
[Slide 11]
2004 Key Performance Drivers
o Focus on earnings expansion through completion of integration
activities, organic growth initiatives, and debt reduction.
- Increase operational margins via incremental productivity
improvements
- Manage steel pricing and supply issues to mitigate impact to
operating earnings
o Evolving focus within TriMas to revenue growth through new product
launches and market development vs. integration and restructuring
initiatives.
- Finalize the closure of Fastening Systems' Lakewood, OH facility
and the legacy HammerBlow Wausau, WI facility and start-up of
Compac's new Hackettstown, NJ facility.
o Seek to broaden "core" businesses via aggressive product and market
development initiatives combined with selective acquisitions.
o Continue to expand capabilities internationally.
o Capitalize on benefits of key operational and strategic initiatives
and overall strengthening of the US economy to achieve additional
momentum across all four of TriMas' business segments.
[Slide 12]
Q&A
[Slide 13]
Appendix
[Slide 14]
Cash Flow Highlights
($ in millions)
2004 2003
-------- --------
Cash provided by operating activities.........................$7.5 $6.5
-------- --------
Capital expenditures........................................($26.9) ($10.4)
Proceeds from sales of fixed assets...........................$0.2 $68.0
Acquisition of businesses, net of cash acquired..............($5.5) ($205.8)
-------- --------
Cash used for investing activities..........................($32.2) ($148.2)
-------- --------
Proceeds from senior credit facility, net....................$31.6 $73.6
Payments on notes payable and other..........................($7.9) ($2.3)
Proceeds from sales of common stock, net......................$0.0 $15.0
Metaldyne financing items, net................................$0.0 ($22.7)
-------- --------
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Cash provided by financing activities........................$23.7 $63.6
-------- --------
Net change in cash and cash equivalents......................($1.0) ($78.1)
======== ========
[Slide 15]
Condensed Balance Sheet
($ in millions)
June 30, December 31,
2004 2003
----------------- ------------------
Assets
Current assets:
Cash and cash equivalents $5,810 $6,780
Receivables 131,670 118,970
Inventories 147,750 124,090
Deferred income taxes 10,980 10,900
Prepaid expenses and other current assets 9,290 8,440
----------------- ------------------
Total current assets 305,500 269,180
Property and equipment, net 201,640 187,420
Goodwill 656,890 658,900
Other intangibles 316,220 322,750
Other assets 60,260 61,780
----------------- ------------------
Total assets $ 1,540,510 $ 1,500,030
================= ==================
Liabilities and Shareholder's Equity
Current liabilities:
Current maturities, long-term debt $ 3,170 $ 10,920
Accounts payable 118,140 94,130
Accrued liabilities 66,580 75,100
Due to Metaldyne 210 4,400
----------------- ------------------
Total current liabilities 188,100 184,550
Long-term debt 756,590 725,060
Deferred income taxes 150,610 149,030
Other long-term liabilities 35,530 37,770
Due to Metaldyne 6,480 6,960
----------------- ------------------
Total liabilities 1,137,310 1,103,370
----------------- ------------------
Total Shareholders' Equity $403.2 $396.7
Total Liabilities and Shareholders' Equity $1,540.5 $1,500.1
----------------- ------------------
[Slide 16]
Condensed Statement of Operations
(in millions, except per share amounts)
For the Three Months Ended June 30,
2004 2003
Net Sales $ 284.2 $250.2
Cost of Sales (206.9) (184.6)
-9-
Gross Profit 77.3 65.6
Selling, general and administrative expenses (44.4) (43.1)
Gain (loss) on disposition of property
& equipment 0.1 (6.0)
Operating Profit 33.0 16.5
Other expense, net (16.7) (16.3)
Income before income taxes 16.3 0.2
Income taxes (6.0) (1.6)
Net Income (loss) $10.3 $(1.4)
Basic earnings (loss) per share $ 0.51 $ (0.07)
Diluted earnings (loss) per share $ 0.51 $ (0.07)
Weighted average common shares - basic 20.0 19.9
Weighted average common shares - diluted 20.3 19.9
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