TRS - Earnings call 4 2023 | TriMas Corporation

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Operator

Greetings, and welcome to the TriMas Fourth Quarter and Full Year 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, Vice President of Investor Relations and Communications. Thank you.

You may begin.

Sherry Lauderback

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

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

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

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

items. measures an our special impact In call will be our addition, during the or reconciliations excluding financial in adjusted for results presentation we discussion non-GAAP used basis, the release would the like press the financial to GAAP refer our appendix you to on call. of our the regarding on between Today, and

to Tom? and that, I over Tom TriMas' Amato, President will CEO. With the turn call

Thomas Amato

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

X. begin on Let's Slide

and the it's of uncertainty reflect important we amount to in At impacting many businesses. there market end note demand, previous our challenges of of was XXXX, was we market faced. dislocation significant which year, the a onset the As on

quarter had we TriMas start which XXXX market operating we the see planning a towards When anticipated our model, recovery unfortunately occur. to second would group, that our developed in the largest we not of did Packaging, end

only similar Our consumer XXXX. packaging a in industrial one affected, packaging our packaging not peers was and customers and dynamic encountered even group products the as

course, of challenges, actions important for to seizing spirit in Of proactively the the initiated amidst position we opportunities better savings future. ourselves

For manufacturing and other, a example, in one we warehouse. X packaging exited California, locations the

into also locations We consolidated China, a new the one X in facility Haining Hangzhou, other in in and Haining. in single

growth facility in Our is future with region. the aligned support China new strategy in better to our

note more as gains, will years. with few would executing to It along in savings been sales more from Structural coming initiatives, levels to other return actions over is these have risky the these normalized considerably yield operating a actions, that demand important costly regular and environment. leverage

I while X would XXXX, that to in encouraged of not did and start year the we turn by last TriMas our Aerospace, also Packaging we further we particularly experience now segments. TriMas began like how trends to within fourth largest quarter, the at out note expected are

many return that Aerospace. rates across reset for actions growth foundation we our to believe our As we a conversion within have and we Packaging begin XXXX, upon improvement within taken continued organic businesses

Packaging which customers' larger sales were quarter, X.X%, is organic to Aerospace group, were most to our consolidated of with inventory up With positive, started have come levels into as and fourth the balance. trend sales a In respect Packaging favorable up XX.X% X.X%. our flat to up slightly

capital fourth demand into sales and Packaging chose and at sales defer overcame Specialty quarter, rates their end With segment the we expenditure that Aerospace growth customers said, to sales within that Products anticipated our the can better more XXXX. within the purchases than as assess of

a fourth within sudden quarter we our bright while Specialty several worked overall Aerospace expectations. Products in the groups, demand had our shift and spots So within against Packaging

portfolio in the Despite and dynamics we gain segment our implemented. EBITDA further expect did given momentum diversified actions XXXX, model, we these in upside inherent have already

we our allocation the our strength the given businesses core confidence especially of proactively we have capital Finally, shares balance and strategy. sheet repurchase component strategy, for as continue a in long-term outlook our and to

on completed than in In acquisitions, despite the XXXX, environment. we challenging with X shares, paid dividends nothing operating finished more year and a repurchased quarterly XXX,XXX economic still revolver, drawn our

we XXXX. Slide would X. like I important move turn highlight as to into few to a Let's changes forward

have Engine we process sale a initiated formally business. for Aero First, our

focused end our our divestiture now the just of the gas remaining oil Aero business in and is Engine only market. Following layman's business pandemic, before the

sales million, $XX Aero EBITDA expect adjusted forecasted approximately over XXXX We Engine's with to of be XX%. just

is management end markets, manufacturing Engine processes plans the executing experienced better and by believe business yet within served led business aligned very long-term a team, by its product business be similar we will great a more Aero lines. growth a and

Packaging our to Next, more quarter. making change to as focus in business our envision Cylinder We portfolio. segment, we beginning the plan third report TriMas' part this bringing of Norris

will We in group strategic change will time are our than Upon have industrial in for building change, our more our this completing revenue. now more to gas, of total and billion some formally. packaging represent $X discussed and general packaged to Norris preparing packaging used XX% Cylinder are be products applications that our make this step sales, objective one closer platform of nearly TriMas out to

we QX, adjusted this compensation be Also, definitions. a adding expense believe earnings better share adjusted will sense We back provide earnings investors in TriMas' net and beginning per to with stock of change, will power. income our noncash cash

costs global our businesses the in a forward. going model be will, IT completed have shared to we into Finally, allocating turn, of our service and certain IT function centralization

move earnings in normally journey, we as comparison nuances, call, the of will in methodology we through would highlight operating result excited further sort we transformation an our tech-based not year. on is something decisions. supporting this better Scott of This digital While data-driven some advance making are to may which discuss our quarter-to-quarter

improve while this note would our approach not I it ability assimilate to prohibit changes. acquisitions, will further portfolio will make ability IT to also that our in our shift optimization

and our results. quarter turn will now X, Let's through year-end Slide to go I and

are reporting as X.X% previously. year For the sales noted quarter, as the quarter, $XXX.X with million, prior of up compared the to drivers, we

Before the rates, quarters I generating earnings to sale which third and as do covering length repeat projects, in not highlight, want at XXXX. special XXXX, we discussed in fourth from cash we in of conversion benefit XXXX did property did

year. for to We compare this have nuance further XXXX the to normalized prior better

of quarter million XXXX. property in higher operating sale last gain, the same fourth adjusted $XX.X the $X.XX that million the of same for than gain EPS normalizing fourth when Therefore, for XXXX normalizing the our $X.XX. XX.X% adjusted was than year, prior sale profit the of $XX.X occurred property of When quarter year was quarter of quarter slightly higher

I would EPS normalizing property for adjusted note the Please like these gains. compensation when the point same year that also for the $X.XX, was figures out XXXX, stock include over expense. do noncash to sales a of not EPS increase the slight add-back

while exited largest a we TriMas experienced and the order TriMas again, was segments, Aerospace, we our year, Packaging within year. positive intake X as earnings So challenging XXXX momentum within

as levels of sales of reporting Slide was we to with when turning XXXX which or are And LTM gains sales, $XXX.X adjusting noted. adjusted EBITDA XX.X% the for consistent million X. property

improved leverage a TriMas growth as Packaging slides, cover sales and adjusted within further rates we will Aerospace. TriMas conversion in few I in growth absolute expect in As within we EBITDA XXXX,

driven change our on slightly adjusted naturally low leverage our the through EBITDA, While the X.Xx. modeling, year. at would increased by And remains in leverage we based deleverage

notes a senior of do that Overall, our until based low mature interest is rate on balance sheet foundation and XXXX. remains strong not

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

Scott Mell

Thanks, Tom.

Let's and I starting turn to begin X, our my results, review Slide segment TriMas with will packaging. of

currency $XXX.X for increase net the of $X.X as prior million compared of sales $XXX.X while Acquisitions contributed $X.X during translation quarter. the another to million favorable quarter, of fourth million X.X%. an year the were of the For impact sales, contributed million sales quarter, foreign

Organic sales closure slightly, & products Sciences our and TriMas improvements by continuing we Beverage both increased see sales Personal end continuing sequential offset year-over-year Life Care & market. noted, our Beauty and markets, The within Food were primarily the encouraging, to and as slight bookings for serving improvement which, products demand by are demand weakness was for end year-over-year the Packaging. in within led up Tom is

for higher sales of profit than increase million, more previous was of and $XX.X account an of quarter on cost on Operating the our actions. the X% basis, benefits primarily year-over-year a savings

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

and quarter I'd X additional results. TriMas comments full fourth on to year like Packaging's make

in million for during of XXXX, TriMas an million $X.X this profit in acquisition-related XX.X% for Adjusting operating gain profit the QX reduction QX increased Packaging's a the quarter. of XXXX, or benefited $X.X from liability. First, of item, by operating

approach in functional TriMas sales. of in IT allocated allocating starting approximately QX costs Had X% XXXX. our to have Second, been be XXXX, a SG&A centralized we have created businesses IT these will turn by of we costs further would burdened support costs and in Packaging's certain

as Slide will and solution, have and our the Care legislative, future the end I slide on social Turning requirements. fully the regulatory for which recyclable underpin developed we tailored has meet growth. responsibility clockwise, product, top been product first This X. & sales will branded to our a our to few of highlight Packaging's I'd to dispensing is new Beauty designed innovations, Singolo. initially of which market, dispensing like TriMas Personal now and Starting single-polymer customers' which highlight organic corporate left moving

science to like innovations, recent part highlight life we of to acquired a acquisitions. of medical Sciences few I'd Life Moving as our capabilities product and our the

also In and addition are prototyping, able production room capabilities, provide manufacturing to we to molding clean tooling, assembly.

in bottom of the full and broad closure as highlight end innovative the for tamper-resistant We closures, a Life of of X development TriMas of to And product types. range and represent faced we child-resistant XXXX, the development pipeline of a in that as markets. growth on Beverage offer our we new Food order small we Science to Finally, design tethered for in support projects well beverage note variety a array a Packaging. caps & challenges of slide, solutions our important application within These objectives. continue and although demand to ongoing long-term invest it's our sample

we quarter continue X. continue more TriMas aerospace our ago, period strong products, $XX intake sales for million XX% as general recover. to now compared an same will to volumes our provide to I order than year Turning Slide as increased of a for update many see segment. to Aerospace the by aerospace on when the or Net

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

quarter the which previous for represents year $X.X was a million of compared or basis when XXX point profit X.X% the improvement net Operating to sales, period.

improve and in that that XXXX. challenges negatively through chain continue TriMas remain impacted as XXXX supply will macroeconomic inefficiencies have into progressively be we We disruptions including optimistic the labor and move cautiously quarters, Aerospace we largely to and us behind recent

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

were Products purchases Now to on Slide demand customers sales compared review for end expenditure million XX, year deferred quarter, expectations Specialty inventories the $XX segment. let's cylinder the as as year. beyond to industrial capital of $XX million the toward general well our rebalance as prior weakened Net

We through positions. anticipate Specialty the remain work of first inventory half demand elevated through Products within the that environment customers will soft as their XXXX,

Of monitor appropriate course, order we taking we'll to as continue changes, necessary. actions flexing continue our and closely

as sector serve fourth While with engines the demand will in including growing segment, product the manufacturing within as our which quarter, power, market. America, weakened the electronic related the during more expected which industrial auxiliary encouraged within remain for North support we Products natural products, gas-fueled do general cylinder innovation well Specialty than

the net quarter adjusted the of for sales. $X.X net $X while million was XX.X% profit million XX.X% sales, of was Operating quarter EBITDA in or or

to the to At this Tom? like call and closing for Tom XXXX our turn over point, review some I'd to outlook remarks. back

Thomas Amato

Thank Scott. you,

turn for XX. Let's discuss would Slide now I outlook like our now to to We XXXX.

trends consider X% $X.XX adjusted year, are end emerged overall earnings the last of $X.XX. sales of that the to X%, forecasting As and between per growth at the in and range we we share

noncash will year adjusted and at of basis, have this both X% outlook compared as which represent would comparable is adding to an information back compensation would XXXX the filed Our share. adjusted per shown be change expense to stock EPS when reported a X-K, $X.XX the in share prior More on morning. On this periods. as increase per been earnings midpoint about our

range our be adjusted X% Consistent our approximately XXXX as $XXX adjusted to or in million to EBITDA to adjusted we year anticipate million with also outlook, up $XXX the EBITDA. approximately EPS ending compared

the we products recover, year. some continue demand which our markets are We seeing are and indications to gradually early industrial consumer that is for beginning for to packaging forecasting through end the

expect as demand flow continue continue within balancing anticipate also rates with demand. We we to improve we to Aerospace TriMas production and will strong remain conversion

year demand with demand businesses environment our of start Finally, that enter consistent in this Products Specialty with increases second however, fourth half. to we we in expect the quarter, the a as

improved to group, XXXX and we expect QX Aerospace line for be in with EPS start the our we groups, year. slower in Specialty light While performance QX Products anticipate Packaging of last to with our in

Slide few we just by TriMas. remain a prospects to I prepared shareholder of and long-term remarks providing turn XX. creation Let's the why conclude will excited for examples about near value our

beginning First, increases after within segment, see to a intake are our TriMas demand Packaging. challenge year, order we largest

rates should XXXX. to experience operating XXXX we higher-than-planned are While we we would gains enhancing into make also conversion growth, about are positioned cautiously and revenue in optimistic growth, further XXXX, leverage expect

the the allow XXXX to Finally, we long-term in a despite for innovation growth sustained in challenges trajectory. to invest continue year, in

actions our labor TriMas confident group improve within skilled also constraints. are taken to We have in and we Aerospace supply our

our talent production advantage further we We to operating into within customer better bring of with planning group, to the have synchronization we expect top-graded and our continue gains leadership demand. as take leverage

steps proactive portfolio. focus taking our to are We

oil addition Aerospace. Engine TriMas also attractive and business of X the soon divestiture presentation Engine In -- Aero to and moving into planned the our be presence segments, exit we our the our and markets, to Packaging of will gas Aero highly end announcing in

& on a Sciences, continue end TriMas Food markets. building through Life also our the with M&A, Packaging out We platform place Beverage and to on priority Beauty focus the

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

and to for a again investors team society, to contribute our way responsible in their In our communities the addition, live would leadership I like remains we to to work. in and committed TriMas operating where thank sustainable support. particularly

believe an exciting TriMas to in. company invest is continue We to

And with the I'll Sherry. that, call turn back to

Sherry Lauderback

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

Operator

[Operator Hamed Instructions] comes from Khorsand with first Financial. Our question BWS

Hamed Khorsand

you you're provide So to than gradual just detail what 'XX? Is Is that seeing 'XX back -- of was kind little related there you any first more of levels seeing? I question way us had signs to bit material the it a is there better the are they that? Packaging, normal? how you're Are seeing recovery, or could

Thomas Amato

various great intake. a now the right Yes. number of we're would that Thank studying you, positive say And of analytics I rolling trends. running frequently That's we're things one a Hamed. question. of averages looking for is order our

months So order intake in we've seen momentum of product in order that many we'll multiple across increases call intake lines. our momentum. And of

positive least customers, we're a saying, that And for the off really, at the And conclusion is are of some a most a we're order to triangulate our the customers which sign. with last that's momentum lines are what intake seeing have very on that product had matters, us. inventory behind coming the few we outside really data year, customers of technical as gained years of just that --

I of back mid-XXXX the happen. would to that did most but to and we're the midyear signs not what year I XXXX. at call yet, see last of these see the we shoots not green pre year, we're that beginning levels that did to some was for I for are looking Now starting occur not talked part

hope pretty we sustainable. they're that. robust. look, Now starting to see we're And They seem

to but a Aerospace. -- technical we about. we're Our talking going with to excited customers, pretty like We're saw snapback be not it's

Hamed Khorsand

Are ramping getting that Got is more the you? other progressing orders? was up for current question related you Sciences. it. And Life Are customers to my customers? How

Thomas Amato

continue is we much a one and that move I for we as Thank question that great to talk about yes. can question. answer hope forward. The both you very that to That's Yes.

we space AVL, we that to want can do our are And that We're in ability in existing list we're a We disclose growing then our with but doing qualify approved customers the customer we're them don't significant to in the process, some base. adding customers. customer, the anything would with certainly I or hope their more on jeopardize get brand-new to work vendor future. with

to levels capability, X our extremely the of call One in Sciences circulation we clean what and with grow to filtering there's of airflow, to But that. customers, current Class drivers with biggest is production grow at our our customers room clean often, looking different are these clean ability and Life as continuous new rooms air and environments seek capability. and reflow room clean we expanding customers, they're our

do clean we footage that's investors our much driver tried last forward we'll things with in the continue medical have we particularly of and but how you to growing to life in because and one area, room is square to on do area. year we the as the sciences speak the So capacity, move

Operator

next from Our question comes Cranial Burns with ] Capital. Tim [

Unknown Analyst

head of my was with Tom, that the of Specialty regard [ combination cylinders scratching Products I'm with to kind the action? What ] slash rationale for Packaging.

Thomas Amato

taken what It's you the better of that a has we business, action I do some we Well, call our that legacy look the look part something for talking as in in gas it's go we haven't a industrial. at about groups. But packaged When into, the in a sort see packaging peer business at presence the as we would have of year. of been had our yet. component general when we end markets Packaging we end market. groups have well, peer And

appreciate broadest industrial if packaged business our and be better core reported to was So that business sense with our view our TriMas, in would it packaging to our for the in gas segment. investors is Packaging that was it

Unknown Analyst

sell I guess would From premier it's products? growth ask And margins the you, and to going dumb dilute view, not why I business. specialty my your in

Thomas Amato

announce Cylinder And our providing business. at business appreciate Cylinder Norris prior if you some feedback and I a on Products. look talk selling Well, But our calls, is basis we tax on we're Specialty about it. that extremely I'll Norris talked things the yes, portion we've that about in maybe of you're our did low

would So at a come cash monetizing drag, that one. number

two, fairly business, a historically over quarter lows on EBITDA highs business. normalized and respectable that Historically, Its that a but great it's that had generator. come long last with it's some are a a a margins that Number very a high-performing are It of okay? year, we've seen tough at and it's cash time, basis period reliable. level, there

a be, will run, it that contributor our think do I Packaging in the long So segment. to

Unknown Analyst

Okay. disagree. I Well,

like some kind cloud a I the I move up It's structural that protect it's there's then of I on if just to be feel going it's And think great business mistake. such it got. like company. business, its -- let great you've own. feel reported on going a to a it's

And so I'm I'm voting Tom, man. against one just but it,

Thomas Amato

I Thank you Tim, Well, appreciate your much. very feedback.

Operator

Our with [ New comes Instructions] Raw next York Peter [Operator Life. ] question from

Unknown Analyst

of on of X% you showing sales of Just X%. -- that quarter the outlook, helpful. for to you're growth And is especially then just cadence How be Packaging, volume? when sort by much will

Scott Mell

I growth, the sales provide quarter, the toward a later but see part around we're Yes. should to not it's I extrapolate -- acquisition-related relative think we recovery. hence, forecasting of by to more the get it's what it's as is versus fair for X.X% year. guidance the you we going growth. Relative believe And acquisition-related growth momentum that we're mean to gradual organic

sequentially the to the I think year. course about you that's sales think relative pretty how Packaging of over guidance want to So probably good

Unknown Analyst

organic Most a Or is in? that growth. And Okay. the follow-up, of terms just is of volume? price -- baked just there just in

Scott Mell

and most price broadly, within Well, the more discussion. a to say, will into very pricing I the volume get end excess we're But environment. given it's in the Packaging of capacity demand challenging not environment markets, going versus

can assume volume-driven. the So growth that our organic is I of you vast majority think

Operator

to there the I It like to floor closing this further turn appears at no would questions time. back over management for are now comments.

Thomas Amato

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

Operator

teleconference. This concludes today's

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

TriMas (TRS) 29 Feb 242023 Q4 Earnings call transcript