TRS - Earnings call 3 2023 | TriMas Corporation

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Operator

Greetings, and welcome to the TriMas Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sherry Lauderback, Investor Relations and Communications. Thank you, ma'am.

You may begin.

Sherry Lauderback

to Third welcome Call. XXXX and you, TriMas Quarter Corporation's Earnings Thank on Thomas Mell, and Officer. are call our Trimas' Financial Participating today CEO; Amato, the President and Chief Scott

under results remarks open included will call today's Investors we presentation the up the order and our prepared review then questions. In the our on your press website assist provide outlook, and release will third We at our have quarter to and for of our we results, trimas.com on section. company with our

In replay later this meeting will today call by XXX-XX-XXX. a of addition, with of a be calling available (XXX) ID XXX-XXXX

and Before comments Please Form our and would today our we are factors refer like our our forward-looking XX-K Form differ XX-Q cause any could third contain of everyone results risks forward-looking statements those list that that to a I for from uncertainties. get statements. may in that to a inherently to to started, subject quarter remind of anticipated number

no attention except your as found. Also, we law. may statements, any where more direct by also information obligation revise or undertake considerably would be We our required forward-looking website, to update publicly to

the In and used our to addition, like you in call. between refer this or during we press our non-GAAP release presentation to reconciliations would the measures for appendix GAAP financial

call will the basis, an the impact discussion turn Today, and on to of that, the CEO. financial TriMas' results excluding President the adjusted I items. call be on Tom our will Tom? regarding special Amato, With over

Thomas Amato

morning, call. Good to earnings Thank third and our welcome you, quarter Sherry.

sincere to and the like I new Middle our East. into heartfelt expressing conflict we our the get Before update, by in would business concern regarding begin

the region, raw region direct generally. not within in operations suppliers energy rely activity on we does have and sales or TriMas that partners Although broader have trading material any the

new of from we no call, conflict. have economic As this this had effect

turn to to like our our Aerospace Group. would attention I Now TriMas

and join that agreed successful premier contributions. excellence He Fastener TriMas Arconic to of and welcome President its operational are to Rusakov supplier President TriMas few experience as recently, the As Alcoa. Most comes aerospace Vitaliy Aerospace responsibility a Aerospace. of we to forward new the announced defense days years ago, increasing Vitaliy TriMas future industry. Group, of look the predecessor has Vitaliy of within excited a our Aerospace with Howmet positions held Howmet's large industries. team, at aerospace and the he to to and we companies, his We was TriMas

interim TriMas I Bill of this and Group driving on with to in done Weldmac short recent integrating who an begin amazing a connection job Vitaliy. to reigniting excellence, time, transition group's Bill step the Aerospace announcement, asked basis, In operational an lead has period commitment the renewed a acquisition. to relatively to personally to will the Dickey, performance, in lead

to and deep improvement Bill's performance is operations sequential improve meaningful have the excellence, experience within group. operational reason enjoying we passion been the

for thank I So on Bill important project. this taking

smooth on further Also, with performance momentum and XXXX. move we increase Bill Vitaliy a as our and continue to ensure to help stay will support into transition, TriMas,

to the like investors late presented would What's we note September, William I that X. Slide at for Industrials to for turn Let's Conference. Next our Virtual Blair, in

core the our presentation and we and section, under on While to Investors slide this the is full Presentations Events presented. was website what

and largest of into expanding recoveries TriMas, on of ranging our new many from innovative we to in the products, new On geographies new and to the benefiting examples introduction levers growth case presented markets. this some for studies from slide, and applications, several market for

since [ beauty in and our emerging expansion Western we of have Brazil, Packaging. go the our in won't through I While applications into about ] masstige which growth Europe Aarts levers particularly gains for this on these call, advanced each excited are we TriMas acquisition tangible of in

gain to Life specifically continuing about Sciences surgical products, orthopedic excited traction are in applications. we more in and our Additionally,

While sciences beginning us and key expand the believe are in volume, which currently tend we requirements will and be future. and lower customers, applications breadth in life with our we programs sciences life with benefit to to program wins high qualification

X. Slide to turn Let's

performance, While like cover of will to overall. the Scott each quarter our discuss I segments' would now

QX beginning TriMas As started a third within the when products year, quarter is applications the the believe reminder, we quarter end we a prior demand since a falloff experience versus within Packaging to our the Group. better comparison of the was consumer of XXXX

largely pleased our with line our was improvement we this and continuing in with expectations, QX such, are As in quarter. performance momentum

the constraints improvement into we quarter, group, supply Aerospace balance better to against Within we reporting TriMas as with bring are continue year our high prior production significant and demand.

expect Although more to we future work enjoy much have XXXX. in we do, to gains still

Specialty to to compared translated higher we margin into Products still improved year on quarter. planning than base have significantly to within savings sales we prior continue our compared performance And our convert the Within years. experiencing demand cost annual TriMas Packaging, Group, well our actions are prior lower importantly, model

also combined, on dividends, to for are We buybacks the track our disciplined cadence where we through and consistent return of to continue capital share year. shareholders returning and X% our over

valuations. like that TriMas has and to note $XX authorization, repurchase also million to shares, continue our purchase share would given remaining I under current

turn our X, we results. highlight third to quarter I Slide If now will

Specialty Packaging weakness consumer as sales sales compared demand our year within quarter, where to to XXXX reporting from market TriMas our more million, industrial groups, increased as and $XXX and Aerospace compared TriMas X.X% than QX end are the Products Group. of We up prior offset

our profit by sales. $XX.X We of million XX.X% $X.X increased operating million to or

we operational convert and sales efforts. gaining savings While higher prior cost excellence still below our traction level, period are long-term and from on target as we

share each $X.XX quarter, as and reduced prior XX.X% as earnings of of to the -- tax benefited project, reporting successful performance share, which expense per compared for up our $X.XX the the year stronger are of EPS groups per business We from our we a tax completion quarter. in

When up to that QX also the $X.X in sales, points. or Finally, XXX by normalizing quarter, year of gain, which a million. prior EBITDA of up sale property basis benefit, from quarter. for QX we would year basis reporting XX.X% over EBITDA prior this XXXX our for points we note like are was benefited XXX enjoyed the XXXX million I by $XX.X

we packaging when making we an are while our environment, each potential of we are to businesses. across demand are TriMas operating improved below by in we compared full So as believe encouraged our gains

Scott? now TriMas' At this I through call who segment Scott, will us will point, sheet turn over to the balance results. and take

Scott Mell

Tom. Thanks,

debt, Let's $XXX of now the quarter X.Xx and turn an liquidity. leverage net statistics. our of of credit of for ended available overview X $XXX million key Slide to a ratio net than million more We with

we of September we all of help the repaid manufacturing. used TriMas of business, Weldmac borrowings outstanding the our the acquisition revolving of had in XX, line fund Aerospace our to As earlier year under credit, which

the strong free another QX, of for cash in year. flow the generation, September and by period flow months had We to XX with cash more same quarter cash compared increased XX% our $XX ending free than in X last million when

liquidity opportunities We invest back shares, actions to take continue as to future in and bolt-on themselves. streamlining businesses, our pay acquisitions where strategic complete present have ample dividends appropriate, buy

$XXX while for Net favorable the $X.X and translation our foreign segment sales during I let's to of to of million contributed prior will Packaging. $X sales impact currency million starting the as quarter. review my quarter. compared the results, year TriMas contributed with were of Now of Slide $XXX sales, another Acquisitions million begin turn X million

As were compared when the lower quarter, expected, period. down year organic previous during to sales XX.X% the

QX prior of the As Tom packaging the a year, demand. deciding last many consumer of given given future quarter represents where softening uncertainty which we challenging in comparison customers our abrupt experience better the their to mentioned overstocked will into we demand in earlier, to believe third bring quarter, with the inventories of late year, last balance started the

We commercial activity which do within increased we benefits into believe XXXX. remain we encouraged yield this by underway segment, as move will the

we quarter when the on million, than improvement XX.X% was input beginning as actions, and point $XX.X Operating costs, of our compared to of a year-over-year Operating sales, the more to materials a QX profit such XXX savings initiatives X.X% benefits raw are an as reduce last basis was to of including increase key previous of margin basis. cost net year, energy. for realize

we end production relocated other Rohnert certain Hangzhou those at quarter, and locations of as activity our locations have and assets the key U.S. our to also facilities, TriMas shuttered China I in China the in of highlight all will that from Park of packaging had operating the

or EBITDA XX.X% year-over-year. million net Adjusted point $XX.X was basis XXX a improvement of sales,

TriMas or ago. XX% for our Turning I when than $XX a will Net sales increased period same by million compared the an now Aerospace on to provide Slide the segment. year to more update X. quarter

expectations. general as continue to our continue see to recover order of products, we of many intake ahead market As for aerospace volumes strong aerospace

the the million during sales XX.X% by of year previous or sales period. compared million when while $X.X contributed increased Acquisitions to quarter, $XX.X organic

This for operating basis profit in million $X.X sales. margin of improved the was Operating excluding of $X.X as more gain points. And represents net the quarter a XXXX, basis for than or of QX property quarter XXX impact from by point sale mentioned million the earlier, Tom a improvement. a XX.X% X,XXX

rates important, starting as improved As we operating see sales. points, conversion to sequential quarterly are than on more margin by XXX improved higher basis

or Adjusted EBITDA net was for XX.X% the million, of $XX quarter sales.

remote steel prior power review Now demand million Net quarter. year to cylinders $XX on the $XX Products our let's as compared X, industrial units generation sales as the remained applications during were for for Specialty for and segment. Slide million strong quarter,

positively Operating on compared previous continued as million to million demand. profit in net XX.X% significantly the robust improved benefit specialty in sales conversion of to as year was from period, $X.X $XX.X or the products quarter

for or million Adjusted quarter EBITDA of the sales. net was $XX.X XX.X%

book third and in While capital close Products rate more We pleased customers are performance out we've balance compared we throughout as the Specialty the year. into our the see to seeking of to year. their are to with spending bring experienced they the we quarter, very starting better are high believe order moderation during inventories the as

our call closing outlook for like our we Tom? order back over actions course, some monitor as to appropriate to I'd review the to changes, point, turn this Of flexing At remarks. Tom closely and will necessary. continue take XXXX and to

Thomas Amato

Scott. you, Thank

Slide Let's XX. now turn to

in noted the press issued reaffirming this our our release outlook for are we As morning, year.

model escalation in Middle the While impact conflict no of East. the we continue from outlook the to scenarios, this assumes various

we enter on that are will anticipating our We XXXX. and conversion groups QX as within continue the through each gains of

market these reduced and lead more a segments. also within on measured TriMas near-term growth taking Packaging Given view Products groups, we Specialty our are times in

investors prospects value Let's I for remain I just of TriMas. few will our support. examples again, remarks prepared excited Slide why we like their continued to, long-term shareholder about our providing We creation would by the a to turn thank XX. for conclude

improving demand. our First, within our and are geographic attractive multiple characteristics we Life TriMas diverse and TriMas continue long-term there through markets, to group Packaging Sciences presence end believe

many We medical gaining and some have such market of and the pipeline future. caps new the with as TriMas And tether mono-polymer traction product applications. solutions, coming also dispensers we in the sustainable and noted innovative to as are in earlier,

We in certain benefit anticipate of also Aerospace sustained have growing and within in Weldmac spending Engineered and confidence commercial the defense will aerospace RSA Martinic. future end Products, specifically increased markets, defense and TriMas businesses, recovery a

We gains constraints, leverage operating continue bring to and skilled to planning long-term production expect labor remaining take work XXXX. supply customer better demand our through as synchronization and into with we into advantage of

Specialty adjacencies Cylinder future sales, and new TriMas and and convert to on businesses. expect continue Norris Products Within Aero product growth our within market Engine well Group, to we drive to assess

for continue capital to businesses Given shareholders, also our relentless will share both in reinvest cash dividends buybacks. commitment and we our growth, through returning our to generation, to long-term flow while

Again, our to to to the communities in believe invest TriMas society, operating addition, company And that, with TriMas contribute to an live continue in the where way work. responsible we call Sherry? to exciting Sherry. remains we and I'll particularly turn committed leadership In back to in. team is a

Sherry Lauderback

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

Operator

We'll question-and-answer conducting Our BWS first question session. with [Operator Hamed a now be comes Financial. Khorsand from Instructions]

Hamed Khorsand

going to is a life about packaging, when talk Is Or 'XX, just there products you you saying sciences in especially it, larger in that about detail? ramp the the time? the is materially timing Could at for you're talking you're part. new of it these

Thomas Amato

Hamed, it. it's I'm you a great question. glad asked

applications today. we'll in second launch think that we we're investing beginning packaging in a us customers, number the new largest from caps total, for have of volume one on Coca-Cola, with year, a innovative closer to that exciting incremental range additional they I new award. jar wins dispensers of for additional Brazil, our next new tether P&G, half And of Henkel awards for in in with new

or let's new be -- power in These growth is able we've haven't just have a wins period that base that are we even we on next our all layering should our yet flat programs year packaging to but top book slow in current these that just of slow that through to if got today, say sales growth, launched.

some are Sciences, it's a result extended what very and seeing volume penetration we're different expectations. as They're into is excited take we're mean not in actually penetration those maybe probably yet, But a story. ramping will of them pretty Within these opportunities important Life nice we're medical XXXX. customers, And and additional customers. is XXXX I for about that are But with programs, pretty sticky some new those what's bit new as that. are with about little those longer, QX they and our today. up wins large

programs, those them I As our I'll as bring bring win discussions. to we --

Hamed Khorsand

in supply for just you've create of linear revenue Boeing what that given you Aerospace, that does saying, a question Airbus? are was labor my And chain, improved given and Aerospace growth and seen kind other

Thomas Amato

quite Yes, think don't I we're there. yet

not least XX% we of have not commercial range plus have we . to is should there's we still think next that able done fulfilled we in that -- my the expectation we be at for growth a if backlog yet, expectation to the jets commercial forecasting still -- rate, so our are have our are XXXX, at with quite fully or production -- least should is I is minus, market we able my still be but because more grow yet. backlog there year, a strong above linear to be for

Operator

Thank you.

Our question comes KeyBanc Katie from Fleischer Markets. next Capital with

Katie Fleischer

for on you your originally achieve just It seems was had gives in step-up in quarter, guide to quarter. about it big dig pretty to Packaging, like you little segment anticipated. the within a fourth because ability year, bit talk wanted little guide full the I than a bit. confidence this what the Packaging a you the Can for implies the weaker

to wanted So the within just what kind and dynamics seeing you're of understand markets? of there your end some

Thomas Amato

little little still personal -- closure a the and and bit bit a different. food -- bit it's right Well, each still is still weakness now is industrial most on in end. have care, a closures market end where dispensing we We're the

up our we a hard ago, Scott our for flat QX stay believe -- Our And long QX provide is we're it to is trends was bit. this stay if on our packaging year. in win group. But we rates outcome even it's a base to should -- that have above of now if that, incredibly growth and our that -- we versus sort that -- little that, nicely nice mentioned QX bit expecting this, low. QX see we be was a it's of better for should what our organic to year been expectation But started some picked a packaging even a organic

inventory customers think I their We're greatly there's see right have work pipeline reduced now, what because a and starts snap I time we'll the is way. are or time, because and -- lead unless say, in levels, that available necessarily. not the refill. more about would would normally in until capacity, seeing down, before normally would through the And volumes Katie, occurred market as see this that to don't back we a meaningful cycle the you talked market

difficult a but revenue bit we'll to pretty low we a QX It's precisely, down. are than that year. times we're coming do we're confident last in off lead did better such So predict that our base

Katie Fleischer

that this from -- in your Packaging. switching just going And think helpful. Or within for pretty improvements leverage you're we you cost those that Packaging then the the forward? assume saw to on quarter you I getting be savings margins. know to assumption impact do Should discussed a That's we next Is Okay. fair and year? that margin you'll get operating additional able the from cost margins

Thomas Amato

XXXX, we wasn't guidance I'm with think operating look our term, start surprised about I for I We'll sales our go QX, pleased I leverage assumptions some Well, we'll good a see back gains into was very too rate, occur. I conversion. pretty mindful But nearest our we as pretty be at when QX-ish. 'til there. with the assumption expecting when give to probably that But but it's

said to things to nonfinancial I've the through And before year. started in I see QX. us And early we we started and see pretty come think, nicely can for that numbers our indicators, calls, through benefits started typically, And in this we working. the follow, the because efforts, savings cost in

we nice experience in assuming I'd operating leverage some year new expect So should later launch get gains. the we back, a comes we which revenue and run rate programs to some happens And XXXX. as hope year, full in

Katie Fleischer

Okay. Great. last at like less to become now? just your does on look had -- given the the the environment, strategy attractive? all one high it And What shift you rate pipeline or then Have M&A. right has more

Thomas Amato

So order. I'll reverse take that in

are things force question, things we're all, capital on higher companies. number We've that already respect fit That's Strategically, First very strategy are looking of that. With make not differently. all, a market our of things the anything. we've increased that cost our a first M&A to great the rates. and we there. just We're we're at able clear given out bit going interest overall, to companies interesting adjusted for modeling a to and of decisions of

some we're ago, The see, a many, we we're as nice was not there's markets where for we -- pretty market. a adds I in, want and would M&A there's mean at say, to X market, hot years products the would it not generally for are globally. example, opportunities where I many end in the grow, looking lot we But

a rates there out that what interested companies to working start companies I I of and privately that structure will to owned capital there's catalyzing those interest bringing think to market down more them those think bit, a time. think in at being market, come owners are in because start lot I point their with than companies if tick this

Katie Fleischer

Okay. then quick sorry, one Great. modeling. in And -- of question just terms last

a just about assume going forward? lower taxes the benefit of tax should -- quarter. you detail that tax give little talked a on Can level your we if You more this and bit

Scott Mell

Yes.

activity this and region. a the a entity that were entity We of to jurisdiction. foreign related in assets given legacy tax item repurpose quarter able to tax in for renewed the the some So leverage was

view should to necessarily -- as continue that go you a think -- we I have benefit necessarily we it not benefit onetime and won't as forward.

Operator

I [Operator no this further at time. Instructions] see have questions we

So I would like to comments. for turn the management to back over floor closing

Thomas Amato

thank you all updating and you Well, you. look on again joining call, again our Thank we for us next quarter. to forward earnings

Operator

This concludes today's teleconference.

You for disconnect at Thank you your lines participation. your may this time.

TriMas (TRS) 26 Oct 232023 Q3 Earnings call transcript