TRS - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to TriMas First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Sherry Lauderback, VP, Investor Relations and Communications. Thank you, Ms. Lauderback, you may begin.

Sherry Lauderback

to first welcome earnings and you, TriMas quarter Corporation's call. Thank Thomas the our President call on Amato, Chief today Officer. Mell, Participating Scott are: TriMas' and and Financial CEO;

results, prepared call the your questions. our provide open for remarks will we will a first We quarter and then up on

In assist section. at website trimas.com, review the Investors with of have results, we company order today's on press our to included release the our and presentation under

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

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

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

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

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

Thomas Amato

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

to Slide turn Let's X.

up that Within our now continued as virtually in and markets strengthening. all a XXXX Packaging has observe TriMas TriMas' and of displaying depressed begin XXXX positive of in that cyclical at to X our end in momentum to markets began are end start. in largest say great drop organically signs of off the The the First, me segments we're certain let demand were the end of performance Group, we we a year.

Additionally, prior year-to-date delays only related customers used converting basis, European-based dairy lower in to applications in products quarter, the certain primarily year certain a by tether beverage compared caps. and to into on driven applications orders softened as to sales

Packaging for X.X%, group organic were up to up For the X.X%. Sales the strategies confidence sales our are foundational intake XXXX our sales executing Packaging within right are total and with overall, financial targets. Group order that TriMas indicators reinforcing deliver our we important TriMas

sales acquisition driven Aerospace were our up Within with manufacturing. XX.X%, higher up total organic of by Weldmac TriMas our and throughput Group, sales Aerospace XX.X%, fastener

intake supports through on we availability robust, TriMas order within labor efforts demand we most prior and market and the for of remains and Aerospace which recovery sub-supply year. believe had been given which backlog dislocation Our our the continued in working

sales in of over as to our our segments and XX% our While in last Aerospace an represent Products the rate Packaging sales sales segment the of Specialty year. first first weakened compared in exceptional quarter quarter significantly quarter, in the

in detail Two which this factors rate will change, main more of later. Scott cover drove

than planned higher sales to to in as sought the years. due XXXX was from lead challenges customers and First, rate logistics of while of cylinder lower overstocking anticipated, time change prior were cylinders mitigate

of the to customers gas one no and oil compressors sales had we of market. Additionally, meaningful in

half anticipated also the to to continue while businesses Products ability second levels, Specialty the demand in and of preserving higher Our flex demand XXXX. practical where meet costs current rightsize to

move recover volatility as businesses will our we begin past, We Specialty through that to have in we within demand the year. the confident remain experienced and volumes Products

And share shares XXX,XXX would a also our today's repurchases our XXX,XXX repurchased like as value of increased reducing share consolidated year. slightly capital of This basis, approximately of approximately net the shares market. call, shares On attention sales way return believe provide repurchase the expectations. TriMas a the start X.X%, a rate on is a are turn to our year of for metrics. tax-efficient to X%. first to outstanding this we when reduction just for adding of to shares ahead first dislocating We is to quarter shareholders, basis, to total events long-term in further of valuation were as quarter up particularly to have outstanding I year-to-date last there over higher than we of the

and $X.XX, start adjusted earnings year noted to prior as increase to in release, Finally, certain are the of we demand as continued a today's reaffirming In for press adjusted markets, guidance are of year. EPS solid the we considering an year, X.X% of in of end per in achieved and the when quarter. we our share our compared light seeing even trends volatility, some cases, sales

X, will turn Let's I detail. to first Slide go more through our in quarter and briefly results

factors rates sales discussed. previously million, $XXX of than and by offsetting earnings in as lower million year $XX.X the within beginning Packaging, profit and of Specialty Products TriMas reporting due compensation, which prior slightly are was by year. as burdened last quarter the quarter. of TriMas operating the We stock year more improved X.X% conversion to was operating of Aerospace performance Adjusted compared noncash up and This driven the treatment leverage the gains X.X% compared up quarter the to was to prior

of the $X.XX was quarter quarter compared prior to prior year EPS as million, adjusted the XX.X% as adjusted $XX by compared noted, up quarter. to And finally, $X.XX. for the was previously year As EBITDA

is markets. $XXX.X trend we make in demonstrates quarter to is end recovering now million. LTM see the momentum We continuing which This are at EBITDA, as to as million it performance like in our important $XXX last approximately to an gains of compared

X. Slide to Turning

share manage a with We reminder, We is interest finished trade-off out continue dislocation quarter which, debt the our terming strong discussed, and X.Xx. the share was appropriate the until did sheet. as million a We not debt we $XXX.X ratio a quarter as million price. And on of majority repurchases, our leverage $XX and in over given rate balance of believe just vast to in net low a at XXXX. of spend an

driven the seasonal sales builds. use quarter Additionally, and cash we higher did inventory by have strategic a in timing, of activity

While the not cash historically norm this year, from we QX. as move as last rate to for TriMas use of the rate same QX is

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

Scott Mell

Thanks, Tom.

compared favorable basis quarter. Operating turn increase profit in I the another contributed more Let's contributed during Acquisitions segment foreign of million quarter, than TriMas $XXX while will of our prior sales year Packaging. the translation $X.X were and starting $XXX an sales, X, the of X%. for Net my the Slide impact currency to of with review of as begin million sales primarily was results, do million on million $XXX,XXX to quarter of net the of EBITDA year-over-year. benefits sales, increase a quarter million, an XXX higher to or year-over-year year-over-year our point a for I $XX improvement of the on and previous XX% XX.X% of the item highlight cost than TriMas account want impacted for an structural savings Packaging. that Adjusted was $XX.X more sales comparison actions. basis,

million costs was the fourth function points. quarter XXXX, the our model, first have case are As or quarter service completed costs in $X.X a not the about earnings basis were IT into we XXXX. in approximately now Packaging certain call, which that XXXX XX we to shared centralization IT global allocating of in These highlighted during businesses for our our TriMas

rates customers CPG input picked to global we and higher as to start incur Additionally, expedited did costs up demand some year, rates. order the freight off-standard meet

order of XX much points off-standard the this wasn't now approximated of as dynamic are margin which erosion, and the another positive. While overall undercurrent basis quarter, behind a us, in view the costs we

overall, for confidence Packaging achieving the great segment. and start So to supports our which guidance is in year XXXX, full TriMas earnings sales a off in our

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

of sales, million sales end XXXX. the consecutive X quarters full EBITDA are than guidance. will point at the the of approximately for million basis Adjusted Likewise, our quarter for or the Operating in second LTM XX% at we XXX experienced year period is of EBITDA net the XXX a profit and exceed points period. that represents was be XX.X% higher we margin when of of approximately year remain $XX.X half previous was to for sales now adjusted $X.X quarter XX% ago, or LTM year quarter compared which LTM improvement confident a the We've or margin and than of higher increasing XX.X% Aerospace, same for high basis the our sales. net operating this rate were TriMas our

full on let's Now rate Specialty extent, continues demand of high the in Products to million review year to to Products as guidance. be were sales segment. a due $XX.X for result, $XX.X this prior industrial likely as to to a challenged Slide Specialty year industrial XXXX that no million second compared cylinder the sales quarter anticipate will as X, And be and and very continue and larger demand lesser one our quarter. sales customer. to soft previously for through our Net in general We quarter the our soft cylinders oil subsequent environment sales provided meet compressor a gas overstocking will

year-over-year for recent and improvements business orders received continue half. decline we Specialty see in our Products. for to customers While this XXXX, compressor in primary to expect X% see we for order to XX% steel started point, in have the now At second will some have believe already our cylinders deliveries growth sales book

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

XX% Packaging adjusted million the of net this made $X.X will quarter full or or of EBITDA was believe lower to achieve than segments, the Operating allow sales for in the progress the our for the Specialty our us profit business, TriMas Products quarter sales sales. point, guidance. million sales Aerospace we in largest and was year expected our or X Despite being $X.X at performance earnings net X% TriMas and

the improvements be and year we higher sales line year-over-year be to adjusted prior tax profit. operating expect expected as while is interest QX EPS incremental to expenses comparable QX to addition, in performance, QX In offset with

back some closing At to turn this for like Tom Tom? the point, I'd call remarks. to

Thomas Amato

Scott. Thank you,

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

intake demand to are after XXXX, beginning increases challenge see First, within order we Packaging. TriMas

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

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

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

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

to of Additionally, to continue our we steps focus businesses. portfolio and improve take

we sciences, Packaging life the First, food M&A platform our placed end on beverage through TriMas out with priority on and a beauty building and markets. a focus

gains would midterm. Next, steps in of exit planned which end already in in have of operating shift position the the businesses recovery we leverage facilitate oil a anticipated presence our the divestiture and to we demand Engine finally, from our to continue of market. certain our take industrial business gas Arrow TriMas' announced to make And better

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

team our live society, remains to sustainable leadership in responsible to work. particularly committed in communities operating a and where addition, In contribute and the to TriMas way we

off the are time. of XXXX mentioned we start, and a great outlook to I reaffirming beginning the at this are As at our call, we

investors would again like to our I their support. for thank

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

Sherry Lauderback

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

Operator

line The Markets. Instructions] Capital of from Newman Ken comes question first with [Operator the KeyBanc

Kenneth Newman

anything segment clarify you're just this it the provided correctly, this you reaffirmed guide you're high sales the of that wanted are that -- If to on guidance Specialty for Scott, Is are all It I segment margin Aerospace margin should for of the last there some or there of? to and we that and quarter. you sounds down expecting year kind I from end the sales above caught X% year. to within at be XX%. else minor aware guidance like guide changes

Scott Mell

No.

key X there. call. the Everything last as items up the picked guided to same else we You on is earnings the in

Kenneth Newman

on the then and consolidated the help appreciate for XQ maybe on earnings. revenue sequential expectations And I Okay.

any in relates there's curious first segments to X as think about Just across how it moves if sequential the help revenue the the on quarter? to

Scott Mell

I the year-over-year. growth to look, Well, I spoke expected think

be For to basis. year-over-year QX, a what on similar it's going we QX very to for saw

I to nice continue think we grow continue expect at to to rate. Aerospace a

I think you Packaging, point I year's QX. I think again, toward would last

see we year of as very a in for QX this expect to We QX. growth similar experienced rate

Kenneth Newman

Maybe Is just was you'd like that Packaging it. for then back hear a an your fold Got provide? expectations in jump to update there segment. Okay. couple But whether in on the I me update I'll in a there line. to more and timing North or didn't there not

Thomas Amato

interested call TriMas segments. our on we're Yes. Thanks, the in that something for this moving Ken, mentioned is X we that to Yes, question. last

we're against into with we sort further as Norris. point, our process there might update which this Arrow do is what at second half and our we get think tracking underway with business, of I on Engine the

Kenneth Newman

out Got Boeing it. obviously Maybe production and maybe one more headlines seeing cuts on some of about MAX. are we jump the I'll some In XXX back. for Aerospace, me

the seeing you your color it Or expecting any or are As year? business, to this impacts from visibility relates there? in just that any

Thomas Amato

expecting at year, year. bookings this our this anyway. from Actually, into Aerospace, that So not within point are, the XXXX almost in any going impact

fully So we're pretty much booked.

seeing all. So XXXX we're impact any from at not that near-term

Operator

Financial. Next Khorsand the BWS question comes Hamed line from of with

Hamed Khorsand

you're conversations with and now customers just So what Could differs first you year? you the last Packaging side. about seeing how were that having off, with talk on the

Thomas Amato

very And the thank you position, smile overstock we throughout were wasn't last KPIs question. you against we we in as today. a we if see last Hamed, look conversations were order we could right? an sort year it -- we and that the other out of back plot certainly for year, I was because a and look that had of need. difficult, there trough right very my now, It's intakes have a year, me we're face and conclude the at can strange on There

quarter as cases key through We're how sequential Hamed, in most start One XXXX, more XXXX year. in with today ability in group. had lines, prior It's supply seeing quicker. it's different not only but pick But our cases, accelerated saying year. today, outlook forever. conversations of changed gains some into in we customers. all product the but from some some have a to might us Packaging feel our we performance very see year. is working we we certainly, behind for our this setting And pleased to we make Not needs. But a satisfy have In environment. order some and the much up we rates more time to this where can What not we're make some does optimal flag the the have we works to ship Our cases, cases, We're over not capacity. hard. product the because or get against expedite even cases, have

Hamed Khorsand

then my are that hesitant is, And you're far if Okay. seeing that holding why forth? you kind guidance you back? as What's as on of so and question activity,

Thomas Amato

Great -- great question. another

So the in short-cycle industry nature. is short-cycle still business, a

X. XXXX until book a a have say, that can So order, through in, if to is where with I times still strong a comes in then okay, very where the going Ken's don't point we could We that know not Packaging, full nature that's we confidence elongate, business. question be case. the on in be date the we're In an delivery see And I order I at mentioned the I'm depending quoting short-cycle not lead -- we unlike today, that are Aerospace, date.

further. we'll bit of So quarter, know this a the and little more you then end at update we'll

Hamed Khorsand

Okay. Products And What a Packaging, in What gives right, hiccup don't that you confidence have sort Aerospace Specialty of Specialty then sudden happening seeing from one in some sequential of that on had question a prevents of Aerospace? all decline in you're you you that XX%. that Aerospace.

Thomas Amato

historically today with than that That's revenue for through And can will more one all, backlog Well, that into because foundation first we look is -- sitting order an us that gives out confidence start to satisfy XXXX. of Okay. so we're a strong. point. XXXX

we is build around that point production there's military second I are others. say instances past dislocating future, Airline there see overall see still Boeing, there's discussion that again. the be But like certain is do rates we an strange The then in had That don't we up but today. at commercial only would anything is see strong, to look -- events. I The airliners are increase where and know and and increases when versus were still and travel in now. we forecast continues We for equipment. that thing we Embraer some the Airbus that

has all we -- has So metrics just for as it go but XXXX. it it's around us into high confidence only the XXXX, not with that

Operator

from Next Newman the Instructions] Markets. question line of KeyBanc Ken comes Capital [Operator with

Kenneth Newman

just you the that contained is on color softness a Can were were -- specific bit Packaging by little customers? Yes. issues in the to more give And what in just those the beverage-related segment? few driven a

Thomas Amato

end year, particular But contained first quarter really it region. our our market number. but was customers is, a a basis, few on down a not that pretty was a dairy sales It it was a relative slightly specific it's of in off. low from And and is change, customer the with last only the to big

that tethered ours back line. We we beverage seeing the And customers There are changing our expect I later of European the those are some in year. cap market, cutover innovation then in volumes come to are to mentioned.

tethered technology, inventory, through which was which is not working old our cap. a prior they're So

number. not pretty a So big discrete and

Kenneth Newman

then for more And me. just one maybe Okay.

out us weakness profile Norris with some the fold the And Packaging? relative of the there margin forward, Is we Norris business you cylinder about steel about way about think how combined of eventual that of and out I help think As any this of business going think the could Specialty? to quarter.

Thomas Amato

quarter XX% low of to maybe profit, at. to quarter look mean, I I Yes. close. volume. that's representative Aero would overall. over for a the think quarter I really really and Norris look And normalized But sort are pretty between not say time given is roughly it's tough operating Norris I XX% more this a and would comparably that back EBITDA, the margins

Operator

no would now this over are further like at the Amato time. There turn comments. for closing to Thomas questions I Instructions] floor to [Operator

Thomas Amato

Okay. Again, on I look joining Appreciate you call. our the forward commentary, to again and would us you. for like to updating thank next quarter. Thank you we questions earnings and

Operator

Thank teleconference. This you. concludes today's

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

TriMas (TRS) 30 Apr 242024 Q1 Earnings call transcript