TRS - Earnings call transcript Q3 2020

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Operator

Thank you and welcome to the TriMas Third Quarter 2020 Earnings Call. Participating on the call today are Tom Amato, TriMas's President and CEO; and Bob Zalupski, our Chief Financial Officer. After our prepared remarks on our results, we will open the call up for your questions. In order to assist with the review of our results, we have included the press release and PowerPoint presentation on our company website www.trimascorp.com under the Investors section.

In addition, a replay of this call will be available later today by calling 888-203-1112 with the replay code of 3061032.

statements I which to your risks are TriMas contain started, our everyone understanding and get subject may today, inherently from comments intended forward-looking uncertainties, we including would number COVID-XX. remind like that of to impacts Before a are of that to supplement those today forward-looking XX-K our of list factors could cause Please Form third XX-Q a and refer to any that for quarter to anticipated differ from results our statements. our will in be filed that undertake we publicly or Also, obligation no update as revise to except statements required any forward-looking by law. your to may direct also would more considerably website information We found. attention our where be

the call In the on non-GAAP impact you excluding during financial issued the CEO, presentation to turn will reconciliations items. addition, the will Today between special Amato, Tom Tom? press financial refer basis this included of release conference to this regarding call. our adjusted would on we the morning the President, measures appendix TriMas of be as used call for GAAP like the to and our and over in I or part an that, discussion results With a

Tom Amato

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as we foundational in reminder, XX% markets Expanding the Packaging will XX% are applications. of manufacturer of scope our jars a the hand global secular a lotions, fabricated military of supply as As outperformed Packaging and shortly, which resulting within have platform sanitizers, hygiene, acquisition, in Sales report cleanliness. packaging against more cleaning. fight applications expectations a trend of fasteners in our to early in our for fourth packaging development, in janitorial Therefore, products help and TriMas's this from what TriMas's emerged Several segment company products of that improved provide product used just applications. a since packaging completion to believe We our wide purchase our Upon such the design, with segment soaps, heightened have segment reported & and overall has excited we overall into revenues engineered and of will I where sales. closures, closures, and caps XXXX. industrial which of assemblies that represents breadth and of personal awareness we consumer-packaged defense household enhancing jet, given and is Euro-CPG into further TriMas's am again group. and hand-washing, over spread are we Affaba acquired our a agreement detail business industrial germs goods and lines our variety in supplier and and growth I Ferrari; Aerospace a cover TriMas's signed of commercial, strategy. specializes niche and dispensers,

rates. decline our at the quarter of an significantly we prior-year about segment this have businesses basis. given organic below second impacted aircraft and severely the in effects are Sales build been As previously, XX% in revenue by to the discussed began running reduced production on pandemic, the currently

prior realign we structures on to taken As segment. in with calls, significant better demand lower actions cost our have this noted

leverage our Given balance manufacturer when The recovers. steel natural to significant being only under more business the is ultimately as high-pressure in name. well gas and footprint including cost Arrow engines cylinders Product compressors we what Engine market we prolonged a anticipate predominantly remaining operating of Cylinder The segment manufacturing the gain period aerospace supply in Specialty cylinders of brand as brand Norris name. we to steel under steps where recovery States actions, continue realignment the to better the United TriMas take TriMas's position rationalization

into military, including which nearly markets business, end revenue segment's XX% HVAC, variety and defense. the and supplies welding wide of medical represents Cylinder a Norris of Our and

our our been swift also segment, to will due is the subside. business volume the when realignment in Product Product begin TriMas's from This efforts. off Cylinder particularly pandemic Specialty pandemic begin Specialty anticipate to first segment overall segment recover earnings effects flow. to cash Norris and the contributing has to we through positively While our Moreover,

X. strong Despite shifts pandemic, the strategy to priority begins Executing the with strategy. turn against the from business remain to model. to growth our now Slide of overall TriMas's Let's effects resulting commitment committed TriMas we our

environments rapidly the to TriMas drive the or facilitated fact, process performance. our protect changing cases to In in swift Business some Model response

our to in an investing of their our each key organic TriMas's to is Another remain therefore we benefiting accelerate building long-term top structure our products managing our and committed our business businesses M&A. in To bolt-on out overall reinvest our and TriMas appropriate also processes maintaining investors. growth well. to as and commitment platforms priority capital of through strategy

execute strategy we continue announced with to noted, against acquisition. today's our As

ability Our is to our cash commitment to execute our strategy free predicated exceptional generate on flow.

share growth, period few the our years steps Our flow we challenging take in even which cash to to through and in to treasury benefit and and both debt characteristics reinvest our It allows both oxygen. past done our us is acquisition over businesses, organic shareholders, successfully have buybacks. strategies reduction

Slide to Let's X. turn

announce San appropriate energetic and is were are equipped Ferrari applications and specializes into plant the and a operation with highly applications. or juice markets. entered of to in with industrial agreement for beverage sold in Affaba we other for acquire Euro-CPG Italy, and Borgo earlier, manufacture sales that Ferrari balance development, which sold & into automated manufacturing supply industrial a and Affaba located & applications. agricultural we excited design, an certifications of aseptic noted into dairy Affaba sales Ferrari, & Giovanni, Approximately XX% into the caps closures the As and single plastic to company that is of

X.XX of included we sales XXXX report margin will part to around is times there at segment. Affaba a and EURXX which Packaging total EBITDA XX% ultimately paid with TriMas's Rieke Ferrari expect EBITDA. be million into an of division, value a We enterprise & approximately our as about rate of

on execute Ferrari We the agreed they founder - both ownership Affaba to Affaba against both by & Ferrari welcome also the son Guglielmo have Silvia TriMas's businesses. strategy. We of of of where with Ferrari family that the are forward is original daughter stay to transaction, to pleased end year very and the and look Ferrari siblings to and which team to the & under occur the continue overall and will closing the under growth the we expected TriMas's the

and $XXX.X momentum and now strong cover $XX.X was up our to our $X prior-year million ground our $XX.X we In million to assess to higher will and share the Net when sales. At share, LTM, EBITDA $X.XX $XXX segment uncertainty sales adjusted up much Consolidated were quarter income per $XXX.X million results versus of million, Slide a and to $X.X and June many prior-year track performance in XXXX sales despite net in up for Net were exceptional the per or a nearly our X, or or financial consolidated was as periods. $X.XX XXXX XX% performance. Let's $XX.X how million the period. to in on was of again third which X.X%, by gaining period, compared as profit prior-year operating basis up million million quarter regard, X.X% Rieke adjusted $X.X challenging was XX.X% than this LTM. our or on to versus the sales, June division, particularly are we sales, end like LTM period compared September of the was of Driven for XX.X% quarter turn a million, the XXXX acquisitions. our of EBITDA or and consolidated of million markets. currency XX.X% I XX.X% basis, up TriMas

repurchase in million gain model. remain evident, of business we just certain reduced given at strategies acquisition end and challenges of at EBITDA debt Further, from we ground to momentum we the organic the were to to able $XXX markets, end share end TriMas under June comfortable executing So net growth. our under becomes despite million our with $XXX September, that both on it augment while

X.X% period, flat, was Slide Bob, and prior-year per the will cash versus million net our sheet, Let's net On per consolidated operating take prior-year $XXX.X basis, up $XX.X Year-to-date and sales, call Bob? to results. million. million, of flow, of over compared now XX.X% balance period the I'll segment turn $XX.X or was who a share to was prior-year and profit sales comparison. up $X.XX to which the X,X% a currency on than essentially $X.XX through year-to-date higher us or year-to-date X. income $XX Net now acquisitions. million share, were as turn

Bob Zalupski

to capital flow our improvement taken X, the and review despite balance quarter to second prior the will dislocation financial XXXX, as of management working continue comments strengthen If exiting strong to position, over half we to Thank QX actions benefit remain operating our turn year. sheet our you, $XX.X a Tom. my strong we of on million we in free second year-over-year performance solid would in unprecedented generated like of $XX.X Slide million us a of operating to I with continued confident XXX%. period begin that compared cash in Capitalizing of the the quarter

period to a adjusted $XXX net Affaba through this compared & $XXX result Ferrari times, it basis, capital unrestricted given cash same is resulting And our times. below year-to-date capacity EBITDA targeted X.X in two to have million to XXX,XXX buyback our programmatic remain a a at million and million the the for repurchased will quarter of QX sufficient our a million, two and leverage the anticipate quarter repurchases. as roughly businesses, In compared of story. investors net approximately Pro M&A, forma $XX.X announced quarter-end, of of to million times. earlier to As flow resumed of $XXX increased in as well of to shares generated we cash $XX X.X million of shareholders. million. We of reinvestment in priorities for in ended we our million allocation level return morning, during capital LTM program for our similar net continue our $XXX repurchasing of million with year ago liquidity we leverage $XX.X free shares below our approximately share summary, acquisition and a and execute ago to share We capital in year return a the debt $X.X available

segment. to Slide operating sales I second for quarter of like that represented and the highlight in and XX review to QX a Packaging TriMas's of profit terms our consecutive record first Turning Group. would Packaging

globally, members in nature to this work all been of its the the dedication packaging of is a certain strong, accomplishment testimony impacts. hard end and many demand certainly markets despite our has and unprecedented the pandemic While team of

products dispensing versus sales million achieved net increased foreign foreign of million of to sales. currency, used the for in and approximately higher applications more net applications personal as $X.X higher quarter. the in year an demand million Sales to to our prior-year the offset to prior the million. incremental and as but increasing quarter impact and pandemic. of in million operating points Sales Organically, sales $XX.X and our the quarter XXX of $X.X food COVID-XX in to industrial help XX% beauty basis that Adjusted were XX.X% or ago. Third acquisition of we aforementioned approximately activity the primarily industrial of currency dispensers, in XX.X% due traditional approximately care aforementioned growth of of $XX $XX acquisitions period $XX.X negligible products sales, while contributed lower to the profit approximately used million compared also the well continues margin to $XXX experience than $X.X food Sales million due to the million, spread and of by used cleaning million America fight as due applications. pandemic. the markets sales the in million used also in sales germs, overall home way EBITDA demand as The the by $XX applications million was robust of caps, declined XX.X% quarter driven period. was and the Europe $XX.X Rieke million $X.X care or products and robust closures COVID-related led increased Operating increased translation impact same increased versus more beverage than up a North of year-ago year's beverage $X.X versus industrial of products increasing increases

our and increase order soap experience products, working products, and to and our foaming requirements personal closure meet and in for demand. of to are beauty pumps, related pumps, pumps, high sanitizer and care increased and customer continue capacity home We lotion more to market many actively our demand care specifically

Turning the core result to compared and TriMas machine declined QX I of sales build million and XX% will pandemic. low the fasteners our year-ago aircraft XXXX Group. on declined XX. or you Sales or travel to rates due fastener global reductions the Products of compared to noted $X.X Aerospace lower XX.X% in decline Engineered to sales million as the period also million components fixed less quarter update of and for to MAX demand to XX.X% profit as a volumes XXXX to Slide February $XX.X now profit in associated approximately million. of lower Net to $XX.X sales, $X.X approximately of the products X.X% a due favorable the in down Sales were on continued Operating helped RSA grounding was which also of lower XXX related due expected. as offset ago for organic million result significantly $X.X QX on sales above. portion acquired was year production decline which and at declined lower Operating contributed sales QX of costs from million of mix. with inefficiencies margin the a absorption sales impacts global pandemic. a $XX.X

asset point, amortization non-cash, demand chain late charge travel supply required a and as in impairment this the still the to earnings resulted have The carry challenged we was this companies been non-cash reductions impact new the able Aerospace quarter, which intangible air morning's At combined impairment. of do wanted amount financial significant potential duration I also significant Aerospace on Like Group's the many a reported in in has and fall-off we demand. achieve around on our since TriMas in in EBITDA end-market XX.X% significant and adjusted of depreciation second results, future intangible also aerospace decline sales for aircraft and pandemic's However, when the for goodwill release. of asset magnitude in with uncertainty the comment this quarter by reassess to segment. in we

million end by third its and financial continues review, of quarter of its steps totaling As customers. refer the to these structure related further support experienced details impairment and products approaches our investing to footprint charges. goodwill we being lower Form The to asset statements regarding balancing markets TriMas in on timing, amount $XXX.X while team determining the new segment. further the a in and intangible the and for priority XX-Q manufacturing our Please Aerospace non-cash to impacted demand leadership rationale, related a innovative pandemic to practical in Aerospace cost with the evaluate filed align charges this global recorded result of utilized pre-tax valuation

the review XX% to as XX; in upstream quarter Net applications $X.X sales cylinders decline the now to compressors profit versus approximately industrial million HVAC compared to as engines for global for sales I or million construction Moving a well oil was gas Operating declined This period lower the in $X.X quarter our and $X.X down compared of was in used Slide of slightly - lower XXXX to will third and sales steel million. segment. Products year's markets $X.X million decline quarter the continues by severely driven of adjusted be as activity year the the North Specialty QX same used pandemic. in end also ago. the of was sales economic by of prior as market effects hampered while EBITDA million $X.X each American and

quarter points However, XX.X%. margin higher more adjusted QX was than XX.X% the of in year's XXX of level prior EBITDA the than basis

declined to The demand and significant narrowed flat products, mitigated. Specialty sales in adjusted the fall substantially approximately approximately was engine a in was margin compared the XX% commercial off change business non-core by exiting with we reductions As cost last Products. executed realignment implemented a seeing within of manufacturing benefits quarter changing call, series on We to are and discussed our the structure process cylinder during the of the the flex quarter's business of and operating aero prior year. to customer of changes although operational number significant second cost of actions QX focus EBITDA the in better Specialty our align Product

operating of continuing in that, monitor XXXX the remarks. position turn realignment back economic We to to early will an increased of his concluding the pandemic businesses With discuss these outlook as for a I will actions. Tom? the wins while end-market our recovery Tom by result with closely to over call leverage demand effects and the challenged

Tom Amato

Thank you, Bob.

Slide turn Let's to XX.

As remains a activities fragile and we we better tracking, also near the confidence end ordering year consumer recognize our we change while have of customers' are patterns sense of the how can swiftly. the

in that ship historically earlier to with compared We also lowest less our sales year. as quarters quarter QX days know is the

two evaluate period, in occurred segment in some quarters the strong sales growth, slowing prior-year as we it of the customers the anticipate expect versus has our We positions. will remain past Packaging although rate year-end inventory over

Full as in that than cash expect quarter $X.XX million continue of was these X% Packaging with off in of the given remain conversion full Aerospace XXXX. rates rates our of year compared if up expect the the to X% range range to production the travel year run low order Therefore, cash and also our rate intake of $XX with to corresponding to jets. current well the through to be We of to our achieved sales commercial EPS year to assumptions, segment solid. TriMas higher We deliveries full Product year finally, $X.XX be proving prior anticipate of end year. challenging to Specialty the Group again, we in even remains greater anticipated commitment anticipate segment our we and low times sales light remains XXXX in strong. And in flow be balance to the

We are outlook. on our also working XXXX

companies to this benefit the should do to to rate significantly Product TriMas begin believe the a as call, the market of the vaccine segments. Aerospace COVID-XX While most Specialty on market I come or specific this with vaccine that that a TriMas come don't we and any offer will subsides cases should have numbers

United On need we are second in significant outbreak States the also take hand, should a occur contemplating or other globally. we action would the the to

Conference and we beyond our attended we what in we to recently are XXXX trend they what Virtual a and will personal products. cleaning modified business a TriMas, in companies turn a Investor investing XX. period. hygiene William ask value shows the now new the continue Let's for organic Rieke well growth to a We for now global This way refreshing focusing to believe largest discuss environment leverage post-pandemic Slide drivers in where positioning long-term specifically, Blair on slide for is rationale believe secular

of will For cost gains. opportunity taking the when future for demand expect we structures, challenged period will have during some recover, our lower we more businesses, operating markets improve an leverage this and steps we are have so

growth this We on but acquisitions priority through TriMas with continue challenging the even in platforms will to largest during our also enhance by aerospace packaging period. leveraging

managing Of our course, we buybacks. capital shift executing and debt value return to will and level to by continue our share shareholders

execute solid are to predicated strategy strong having and liquidity ability sheet cash on balance flow. our ample our maintaining Finally, against generating is a

continue believe back to call as company to exciting to the We Sherry? in. I'll invest with TriMas that, an And Sherry. turn

Sherry Lauderback

call Tom. At like open this Thanks, your to we'd the point, up questions. to

Operator

this I'm time. you. Thank right. questions [Operator All Instructions] no showing at

Tom Amato

operator. Thank you,

circling analyst have We day a us this terms of of by that being would later. alerted been with is reported earnings they how in up number given busy be our

Thank For we'll those safe next on much. you and the to next call healthy for thank call, your and the quarter. I stay Please very time. at talk you earnings you want to

Operator

and you, concludes This today's teleconference. Thank ladies gentlemen.

may You disconnect. now

TriMas (TRS) 2 Nov 202020 Q3 Earnings call transcript