Exhibit 99.2
[TriMas Corporation Logo
For more information, contact:
Benson Woo
Chief Financial Officer
TriMas Corporation
248-631-5453
MEDIA RELEASE
TRIMAS CORPORATION REPORTS SALES UP 13.6% AND OPERATING PROFITS
JUMP IN SECOND QUARTER
BLOOMFIELD HILLS, Mich. - August 11, 2004 - TriMas Corporation today announced
its financial results for the three months ended June 30, 2004. Compared to the
prior year second quarter period, sales increased 13.6%, operating profit jumped
to $33.0 million from $16.5 million, and net income was $10.3 million versus a
$1.4 million loss in the year ago period. Diluted earnings per share were $0.51
versus a loss per share of $0.07 in the second quarter of 2003.
Second Quarter Highlights
o The Company's second quarter net sales increased 13.6% from $250.2 million
to $284.2 million.
o Operating profit in the quarter increased from $16.5 million to $33.0
million and approximated 11.6% of net sales.
o The Company earned net income for the quarter of $10.3 million, or $0.51
per share, compared to a net loss of $1.4 million, or $0.07 per share, a
year ago.
o Second quarter results reflect the absorption of $2.5 million in net,
unrecovered price increases from steel suppliers, as well as an estimated
$2.9 million earnings impact of manufacturing inefficiencies and lost sales
resulting from the unavailability of steel.
o The Company spent $4.4 million during the quarter in consolidation,
restructuring and integration efforts, principally in its Fastening Systems
and Industrial Specialties groups.
"Our momentum from late 2003 is continuing through the first half of 2004.
Improved business conditions, new products, and the execution of performance
initiatives helped to
Exhibit 99.2
achieve a solid quarter for all of our business segments, notwithstanding the
environment for steel," said Grant Beard, President and Chief Executive Officer.
Second Quarter Financial Summary
(In millions, except per share amounts and percentages)
For the Quarter Ended
June 30, 2004 June 30, 2003 % Change
Sales $ 284.2 $ 250.2 13.6%
Gross profit 77.4 65.6 18.0%
Operating profit 33.0 16.5 100.0%
Net income (loss) $ 10.3 $ (1.4) N/A
Earnings (loss) per share $ 0.51 $ (0.07) N/A
Other Data
- -Depreciation and amortization $ 10.3 $ 11.7 (12.0%)
- -Other income/expense $ (0.4) $ (0.3) N/A
- -Adjusted EBITDA $ 42.9 $ 34.7 23.6%
- -Cash flows used operating activities $ (14.2) $ (41.3) N/A
The Company's quarterly earnings include the adverse impact of approximately
$2.5 million pre-tax in net, unrecovered surcharges from steel suppliers. The
Company has implemented cost pass-throughs to customers on the steel surcharges,
and currently anticipates recovering over 85% of the steel surcharges during the
full year. In addition to steel price issues, lack of steel also constrained
manufacturing efficiencies and sales, and depressed earnings by an estimated
$2.9 million pre-tax during the quarter.
Adjusted EBITDA improved 23.6% to $42.9 million for the quarter ended June 30,
2004 compared to the same period a year ago as the benefits of increased sales
volumes and higher operational efficiencies more than offset the impact of
steel-related issues and increased lease expense of $1.6 million related to
financing activities. The Company also had reduced non-recurring charges of $0.8
million from 2003 related to restructuring and integration activities.
Segment Results
Rieke Packaging Systems Group
Exhibit 99.2
Rieke's second quarter sales of $34.7 million were up 4.8% compared to the year
ago period. Operating profit increased during the quarter to $9.3 million from
$8.4 million, due to ramp-ups of new products as well as improved core product
sales. Rieke launched another five new products during the quarter, and expects
to realize continued increasing sales from recent new product launches during
the balance of the year.
Cequent Transportation Accessories Group
Cequent's second quarter sales of $150.6 million represented an improvement of
19.5% compared to the prior year period. Cequent experienced strong demand
across all of its business units reflecting solid organic growth due to improved
consumer demand and overall economic conditions. In particular, Cequent's Towing
Products business continued to capitalize on increased demand, improved order
fill rates and delivery performance at its Goshen, IN manufacturing operations.
Cequent's operating margin improved to 16.6% as second quarter operating profit
increased to $25.0 million from $14.5 million a year ago.
Industrial Specialties Group
Sales of the Industrial Specialties Group increased 13.4%, or $7.3 million to
$61.9 million, during the quarter as all of the group's six businesses
experienced good demand and increased sales levels compared to the second
quarter a year ago. The group's quarterly operating profit increased 19.3%, or
$1.1 million to $6.8 million, despite steel-related issues. Compac continues to
increase its presence in the residential facings market, and is on schedule to
complete the move to its new Hackettstown, NJ plant during the fourth quarter.
Fastening Systems Group
Sales of the Fastening Systems Group were approximately flat compared to 2003
second quarter levels at $37.0 million. While aerospace fastener sales
experienced an increase of 14.6%, industrial fastener sales were flat as steel
availability issues restricted production output. The group reported an overall
operating loss for the quarter of $2.8 million, an improvement of $3.6 million
from the $6.4 million operating loss in the second quarter of 2003. This change
was due to a loss of $5.3 million related to the sale/leaseback of equipment in
the quarter a year ago, offset in the current year's quarter by the impact of
unrecovered steel price increases, steel availability which constrained
production and sales, and closure and other costs
Exhibit 99.2
related to the consolidation of its Lakewood, OH plant into remaining facilities
in Frankfort, IN and Wood Dale, IL. Steel-related issues depressed operating
results by an estimated $2.0 million while consolidation-related costs
approximated $2.0 million. The Fastening Systems Group's restructuring
activities are expected to be completed this year.
Financial Position
TriMas ended the second quarter with total assets of $1,540.5 million, debt of
$759.8 million, and $48.3 million outstanding under its receivables
securitization facility. The increase in amounts outstanding under our credit
facilities during the first six months in 2003 is due to increased working
capital requirements to support higher sales levels, particularly at Cequent
during the spring selling season, increased capital spending compared to the
prior year's first half, accelerated payment terms required by our steel
suppliers and the January acquisition of Bargman. Net cash provided by operating
activities for the six months ended June 30, 2004 was $ 7.5 million compared to
$ 6.6 million in the same period a year ago, as the impact of improvement in net
income from operations was largely offset by the aforementioned increase in
working capital requirements.
Conference Call
TriMas will broadcast its second quarter earnings conference call on Wednesday,
August 11, 2004 at 3:30 p.m. EDT. President and Chief Executive Officer Grant
Beard and Chief Financial Officer Benson Woo will discuss the Company's recent
financial performance and respond to questions from the investment community.
To participate by phone, please dial: (888) 275-8177. Callers should ask to be
connected to the TriMas second quarter conference call.
If you are unable to participate during the live teleconference, a replay of the
conference call will be available beginning August 11th at 6:30 p.m. EDT through
August 18th at 6:30 p.m. EDT. To access the replay, please dial: (800) 633-8284
and use reservation number 21204790.
A Note on Adjusted EBITDA
Exhibit 99.2
The Company defines Adjusted EBITDA as net income (loss) before interest, taxes,
depreciation, amortization, impairment of goodwill, non-cash losses on
sale-leaseback of property and equipment, and legacy stock award expense. Lease
expense and non-recurring charges are included in Adjusted EBITDA and include
both cash and non-cash charges related to restructuring and integration
expenses. In evaluating our business, management considers and uses Adjusted
EBITDA as a key indicator of financial operating performance and as a measure of
cash generating capability. Management believes this measure is useful as an
analytical indicator of leverage capacity and debt servicing ability, and uses
it to measure financial performance as well as for planning purposes. However,
Adjusted EBITDA should not be considered as an alternative to net income, cash
flow from operating activities or any other measures calculated in accordance
with U.S. GAAP, or as an indicator of operating performance. The definition of
Adjusted EBITDA used here may differ from that used by other companies.
Cautionary Notice Regarding Forward-Looking Statements
This release 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. When used in this release, 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 release. The cautionary statements set
forth above should be considered in connection with any subsequent written or
oral forward-looking
Exhibit 99.2
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 release 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 release 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 release such as our substantial leverage, limitations imposed
by our debt instruments, our ability to successfully pursue our stated growth
strategies and opportunities, as well as 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.
About TriMas
Headquartered in Bloomfield Hills, Mich., TriMas is a diversified growth company
of high-end, specialty niche businesses manufacturing a variety of products for
commercial, industrial and consumer markets worldwide. TriMas is organized into
four strategic business groups: Cequent Transportation Accessories, Rieke
Packaging Systems, Fastening Systems, and Industrial Specialties. TriMas has
nearly 5,000 employees at 80 different facilities in 10 countries. For more
information, visit www.trimascorp.com.
Exhibit 99.2
TriMas Corporation
Balance Sheet
June 30, 2004 and December 31, 2003
(unaudited - dollars in thousands)
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
---------------- -----------------
Commitments and contingencies (Note 9)
Preferred stock $0.01 par: Authorized 100,000,000 shares; Issued and
outstanding:
None - -
Common stock $0.01 par: Authorized 400,000,000 shares; Issued and outstanding:
20,010,000 shares 200 200
Paid-in capital 399,340 399,870
Retained deficit (25,410) (38,240)
Accumulated other comprehensive income 29,070 34,830
---------------- -----------------
Total Shareholder's equity 403,200 396,660
---------------- -----------------
Total liabilities and shareholders' equity $ 1,540,510 $ 1,500,030
================ =================
Exhibit 99.2
TriMas Corporation
Statement of Operations
For the Three and Six Months Ended
June 30, 2004 and 2003
(unaudited - dollars in thousands, except for per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Net sales $284,210 $250,150 $ 545,110 $468,120
Cost of sales (206,860) (184,570) (403,150) (347,050)
Gross profit 77,350 65,580 141,960 121,070
Selling, general and administrative expenses (44,440) (43,150) (88,150) (81,520)
Gain (loss) on dispositions of property and
equipment 70 (5,970) (180) (18,120)
Operating profit 32,980 16,460 53,630 21,430
Other expense, net:
Interest expense (16,280) (16,010) (32,590) (32,390)
Other income (expense), net (380) (290) (680) (510)
Other expense, net (16,660) (16,300) (33,270) (32,900)
Income (loss) before income tax (expense) benefit 16,320 160 20,360 (11,470)
Income tax (expense) benefit (6,030) (1,580) (7,530) 3,030
Net income (loss) $ 10,290 $ (1,420) $ 12,830 $ (8,440)
Basic earnings (loss) per share $ 0.51 $ (0.07) $ 0.64 $ (0.42)
=============== ================ =============== ===========
Diluted earnings (loss) per share $ 0.51 $ (0.07) $ 0.63 $ (0.42)
=============== ================ =============== ===========
Weighted average common shares - basic 20,010,000 19,913,890 20,010,000 19,956,940
=============== ================ =============== ===========
Weighted average common shares - diluted 20,323,060 19,913,890 20,316,330 19,956,940
=============== ================ =============== ===========
Exhibit 99.2
TriMas Corporation
Company and Business Segment Financial Information
Three Months Ended
June 30, 2004 and June 30, 2003
(in millions)
Cequent Transportation Accessories 2004 2003
Net sales $ 150.6 $126.0
Operating income
Rieke Packaging Systems
Net sales $ 34.7 $ 33.1
Operating income
Fastening Systems
Net sales $ 37.0 $ 37.6
Operating income (loss)
Industrial Specialties Group
Net sales $ 61.9 $ 54.6
Operating income
Total Company
Net sales $284.2 $250.2
Operating income (including office)
Adjusted EBITDA $ 43.8 $ 35.7