TRS - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the TriMas Second Quarter 2024 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. Thank you.

begin. may You

Sherry Lauderback

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

We for results we'll outlook, quarter our and our will the and call prepared provide up on second remarks open questions. then

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

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

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

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

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

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

Thomas Amato

and on second call. our Good Sherry. us morning, quarter you, you thank joining for Thank earnings

X. Slide to turn Let's

by evident, businesses demand yet point have TriMas' resiliency in year. industrial Products have this have within morning, occurred As businesses the the this recovery would earnings not the our our Specialty more aerospace and you release have anticipated the I'm certain become packaging we seen of seen from markets while

long-term opportunities and believe However, of for challenges. number discrete the into half encountering despite which will positive we we developments, as creation the reflect of first some on experienced translate we the quarter year, a value

demand I'll from cut last provide example year, we one our costs. When tempted deeply group, were TriMas pulled back Packaging. largest to

we While drive we in our long-term we XX-XX commercial customer also model, variable new relationship into flex in reengineering application some management commercial approach. instead replicating reorganizing invested approach invested leaned growth. costs, and a We our to an

Although of are with these coupled we our recovery, these the are we changes, in experiencing initiatives today. early now rates natural market still the to in stages Packaging integration, contributing core group internal growth are strong believe

foundational rates I'm about the improve remain confident move and upon Given forward. will growth TriMas excited revenue, in Packaging's very we potential, conversion I as we

quarter I say, TriMas we an second supply of aerospace constraints Next, customers most to recent as call. last I the to we our the several by be Aerospace last turned past prospect would too the have more top labor rating quarter, like of leadership implemented couldn't changes. are Aerospace. list from year over and The faced voluntary suffice quarter different. But to broad-based the Group. TriMas In year compounded and leadership When numerous snapback a around this to compare actions for we for dynamics provide this successfully well for it example the year, demand second of our as

more specifically, conversion higher sales. of XX% levels, shocks market, aerospace further rate XXXX we but nearing business, anticipate no pre-COVID specific importantly, our a Aerospace business approximately Assuming at in or the exiting A&D our at rate

excited very for remain Aerospace. also TriMas prospect long-term I the about

our Norris Moreover, last our this recover begin planned positive since second few dynamics within few XXXX. examples, segment the year to demand the While a since different we those of a examples even are Cylinder QX unfortunately, -- very experienced quarter market Products quarter set business. for of in Specialty a have end year, and the predominantly same

total and half. actually Products Specialty prompting lower sales for within us to bookings the forecast second softened However, demand further, our

Cylinder main our change the our with is business fact, and the volume outlook. negative driver our in annual In Norris first that half impacted

be throughout I this the dynamic will Both Scott detail more in call. covering and

So for Packaging the groups with backdrop, respectively. quarter XX%, sales XX.X% our that consolidated were with X.X%, our increasing Aerospace up and and

of XX%. a segment As sales, quarter. approximately of performance overstocking products reduction noted, total impact profound portfolio other of large in experienced from our and Specialty representing given in scale, Products sales the factors XX% driven a prior TriMas' year change specialty rate had the approximately our Despite

share a in of outstanding. like now repurchases XXX,XXX half place share the and to basis, net way would shareholders. second that our room our will on to for in opportunistic assess for buyback will X.X% the return actions and year. shares we including continue This rate shares we events than turn share On year-to-date the to approximately is we reducing believe shares higher I to is approximately note a quarter, last to a outstanding a our value buybacks long-term dislocating tax-efficient reduction the market. that the continue year we authorization attention the ample of to of first I have of as share repurchases priority under value repurchased also

will quarter, sequential we to better We start year. X.X% to believe Let's investors QX view would current minutes demand inventory We status. beginning few we channels helpful quarterly of stocks a it in the organic as review performance, were is to to refill XXXX. pipelines customers to in On experienced believe Starting as turn growth with after a compared which depleted return with of to last our growth this TriMas X. Packaging. key provide thought slide, Slide take nuances given be this

Conversion of sales year XXXX. higher we last rate production in-bookings rate certain anticipate product much into on high essentially of as conversion on and through We improve and off-standard are business freight improved rate activity. lines. the based from costs to second hampered expedited will from dynamics quoting from was new and between demand continues on do first commercial XXXX move rates our pull-through the a and our comparable year as Additionally, be quarters

compared year Aerospace results the this commercial and Within operational our the first to have to quarter we from group, sweeping positive as actions over of the on continuing past the first been TriMas we year. see of are we quarter compared to -- focused year, this

we believe upside have still get on we to achieve levels. While some pre-COVID conversion to to back

team, As is at now on therefore, TriMas absolute with a sales, EBITDA. to operating growth the mentioned, a improvements. commercial focusing supplier This higher operational we are partners in rate of and Aerospace much also our excellence improvement driving collaborating testament and

trough. sales X.X%. as we Specialty first base the this segment is to beginning Products of revenues The this very low our rate Group, a and now are Specialty resulting our we cyclical quarter year, Products for compared exit softened Within by to demand believe

sales second our in However, have been Cylinder quarter. second in tempered rate our for half Norris the for business, given expectations the demand experienced of the

implemented experiencing base sales As Norris where historically at we today. structural we performance our actions not taking rates now sales. of business know out such, off too deeper to -- further have this Cylinder a improve of out we performed from better are costs far at have flexing is we as even And lower of Norris Cylinder possible

through go Let's I'll to briefly for turn X, consolidated the our and Slide results quarter.

the quarter to $XX.X within due did up favorable the lower prior quarter. profit products in million, prior year sales the $XXX.X of than lower as reporting certain challenges the the compared well as factors anticipated businesses TriMas operating our as of given was year X.X% the EPS which are year we second than to benefiting million prior to demand as to discussed. of factors due We quarter factors quarter specialty Adjusted $X.XX, quarter this Adjusted in was XXXX, previously repeat. not lower noted and which was previously compared

year with shortfall or than driven and the vast the million our sales Specialty demand related prior Products $XX.X conversion was by quarter the majority of EBITDA Adjusted businesses. within changes lower XX.X% of

despite low our noted do important balance As it senior notes to generated enhancing as for focus remains sheet XXXX. last this lower until cash interest-bearing our We we we in that flow base have on note free strong, line of is cash quarter, flow -- $XX.X with in and calls, EBITDA mature of also continue we million not on absolute to year TriMas. prior a

finished with the this who last point, quarter over TriMas' year, ratio to with I in first At us higher we the will now the Scott, slightly the will line a same leverage but through quarter XXXX. quarter finally, of than call Scott? X.Xx, of take results. And turn segment

Scott Mell

Thanks, Tom.

which X, the quarter This prior to Let's Net results, $XXX markets, year will Slide great than million which products, up for and million to is and in our increase industrial more of was as beauty were demand and turn quarter, to our end the markets. $XXX primarily starting and recovery basis in of closure respectively. on year-over-year by dispensing compared XX%, driven an my XX% personal TriMas review growth see organic end increase the an organic XX%. with segment care for serve and increased these sales important I Packaging. begin It

prior points quarter On essentially Operating or a prior the XX% but versus basis basis by $XX.X period. year-over-year margin versus net flat costs the a in year quarter-over-quarter sequential was specific certain on within increased and products, XXXX, for sales, basis, accounted QX which approximately profit million is for XXX million, sales of X%. down of QX XXXX, decline which $X.X of with This of is costs $X.X commercial allocation primarily settlement period to operating associated corporate not demand period did IT related were costs increased dispensing for repeat. million a the year which in

second compared sales Adjusted conversion the pro of XXXX million we $XXX,XXX EBITDA up nominal We profit Considering operational higher by the to of been net customer move impact with to of remain a flat sales, when XX.X% through momentum approximately expect XX% orders. increase prior the compared was pinch we of at pleased rates QX points organic TriMas these sales QX of close to when through operating period and significantly half would our very within the year work created adjusted Packaging improve as $XX.X XX.X%. with year-to-date forma XXXX. or items, have to as

XX% adjusted to our full XX%. tightening margin EBITDA increasing are to guidance we TriMas X% guidance for XX% and year Accordingly, full for our year to sales Packaging to

growth and expect in further by the of America such our end of new both general our in and we forward, for and Packaging markets growth emerging driven TriMas future innovative expansion South Looking we markets industrial all as products to within for improvement demand continuing consumer demand, serve. be new geographical presence in

when I for almost provide volumes our sales as compared to an continue to to XX.X% efficiencies same during a $X.X million update or sales commercial XX% now TriMas to while when contributed the previous Aerospace input Acquisitions period from by and benefit $XX.X million sales segment. will aerospace we and or recoveries by Turning organic improved on of costs. quarter, general recover, Net compared the operational increased million quarter higher with Slide associated the X. year the period. ago year $XX increased

of sales, Operating Adjusted or EBITDA profit million XXX XXXX than to XX.X% XXX were was approximately $XX when a on recent was XXXX. improvement for the QX sales previous in when quarter the sales. point net were the same a the year a Aerospace, TriMas the second improvement we basis and for of which represents compared quarter LTM period bit point XX% Expanding of for compared XX.X% XXXX. higher million to basis rate $XX.X or of for improvement the the at net at point performance quarter

impact LTM of the pre-COVID XXXX of Aerospace than higher post addition, TriMas sales the acquisitions. we are when for period XXXX now exclude In

full this for with growth pleased Accordingly, continuity. very manufacturing year guidance we there margin recovery, TriMas incremental in do in XX% is to Aerospace supply EBITDA are as capacity and chain to we within demand year see are to to improvements invest XX%. further we continue believe full margin opportunity we our sales guidance While XX% XX% to increasing adjusted and full

sales customer of first supply Specialty Net of the which ever stock which chain was our quarterly the builds. Slide to as resulting compared was $XX driven million ordering prior were on million for review led let's year demand high sales quarter, Specialty to by highest $XX concerns, This rates rate Now half XXXX X, for in Products segment. performance elevated the Products. and

lesser Sales extent, largely by in to gas negatively position serving sales industry. the the of oil quarter industrial of and overstock continued compressors cylinders to a be lower the impacted and

normalized deferred now a cylinders start of and have expected In run XXXX. applications not been into the at of addition, sales to are rate until defense-related

our recovery book first moderate demand to for second and we While we continue cylinders some for order previously rate, to see do our demand expect steel point, for cylinders businesses. half in second half modestly foresee, improve this run expected improvement these not over steel at half the industrial

net profit guidance decline XX% we or revising XX%. million X strategic for mention Specialty quarter. was profitability quarter, the operational or Norris sales. to I to million like Operating the full complete took to further environment to while $X.X adjusted the future during advantage of while X.X% our to was sales performance EBITDA Products sales, critical improvement, Accordingly, that $X.X the for lower of during net quarter driving are the of Cylinder quarter initiatives, would business burdened demand our in which year for X.X%

First, they structural to of expectations. pivoting the time a shifts system delivery in completed to in inventory process customer pull response

they negatively share. the repairs manufacturing key and necessary completed and that by X significant per assets. initiatives $X.XX alone to Second, these estimate maintenance We impacted quarter

XXXX structural we demand early while half earlier given tempered additional maintaining the As late in performance beginning cost recoveries flexibility by Products to Specialty to second respond of reductions to necessary or our Tom, quarter second begun have anticipated XXXX execute mentioned within and XXXX. demand, view

originally addition, the by growth Illinois implement [indiscernible], assess In profit and Toolworks. originally based and consultancy strategic model XX-XX engaged Cylinder the growth we've to firm, enhancement on Norris with within developed and opportunities profit

And these XX%. expect EBITDA are products time to improve performance. for our our take for rates, current efforts adjusted accordingly, conversion margin year we implement in full to realized we and While guidance will to time, they XX% reducing be at meaningfully specialty this to financial

Tom? provide sales to EPS point, closing to to remarks. call discuss adjusted this over full updated our Tom back At to like some and I'd the turn guidance year and

Thomas Amato

Thank you, Scott.

to X. Let's Slide turn

to results slightly the the originally X% the We XXXX. revising second with point outlook to sales sales quarter than X% in Products the and the expectations modified lower segment second to our EPS half, our related we be in Given center are Specialty range planned. and now in for expect

$X.XX EPS we range compared to revising $X.XX anticipated We as the are $X.XX our to year. to to begin as also to $X.XX

on If of we our turn attention the X. right summary to bridge Slide the

the our to in continue estimate this year. within show see ranges change our internal remain this We outlook. can will do for not bridge You discrete our the we on drivers TriMas planning packaging that of because group

this for to half. internal is the will With continue ranges above currently and to respect Aerospace, track TriMas the it trending second planning year, remain our anticipate for group on we

is forecast demand for our to -- the are While be year, current our specialty believe we businesses main a now higher to anticipated different will and profile than our products EPS the interest rates in driver for for recovery revised outlook we XXXX.

by Before our after set near moving value opportunity to lines that Q&A, LTM anticipate well I'll conclude XX% the and these sales, very momentum our represent of performance positive the prepared groups, refreshing TriMas: First, together XXXX Aerospace, challenged which two operating a nearly into remarks different and carry of Packaging TriMas at business recovery high-quality stages XXXX. We for creating largest long-term TriMas will are of our beyond. and

already but have XXXX as this to Next, expect reversion, XXXX. we as yet Products we the benefiting well period, are our it group, we financially many products which significant Specialty convert businesses to so do specialty we experience experienced through have while completed we when in into that move occurs, in not should challenges Moreover, our and demand expect business. actions

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

our of and business, TriMas' planned divestiture We announced the of our would market. presence exit Engine facilitate which end gas oil the have Aero already in

building value. building acquisitions M&A and Packaging TriMas Aerospace platform out enhance its the sciences, focus platform markets food a and placed through on beverage TriMas strategic priority end beauty to We long-term life and our also a out on with through our secondarily

we'll like continued interest Sherry. our Sherry? now their would the to support, turn and and back investors for again call thank to I

Sherry Lauderback

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

Operator

Instructions] [Operator

first Ken Markets. Our question comes KeyBanc from Newman Capital with

Kenneth Newman

of disappointing. this was quarter this changed term? longer portfolio maybe has the what Specialty company. that I'm to mean, of around if could your been Obviously, for way the of start off, curious one vocal thinking your has I performance a overall look to about changes, out performance So trying of bit just I more like the investors quarter But portfolio advocate think performance improved ultimate

Thomas Amato

Well, thanks for question. the

occurred list this of We quarter Specialty to today, we through already one that sale, portfolio. some working the in our group changed and our of are at wouldn't think Products process necessarily sort this we're What focusing businesses. well is all related moment, Barrington statements the constructive step our -- sales, terms that that much of by businesses appreciate quarter Norris their which But ensuring certainly, mentioned, will say better. as one being base investors. and I in our that if and we our perform up very made priority what's our we marketed aware Specialty in focus know we public and for has be And in specifically. you feedback from investment I this around turn company. strategically the of at it our changed operationally about business, moved actions of this thinking Cylinder of generally placed is the we within Products of can But rate all

Kenneth Newman

Just, question. as I guess, a clarification

I ago, Is into to fold is intention? this how X case, packaging Or would you given think had be? that in the no quarter that Norris still a or longer dilutive segment. mentioned your it the quarters expectation

Thomas Amato

hold on given Yes. I Cylinder of would the quarter. say this developments Norris that's

Kenneth Newman

visibility here. you days an Okay. saying just are recovery And Norris that then market? perspective? the in getting within with just is On but and for channel limited, Where comfortable are what customers visibility Cylinder, curious do from I And view the I'm inventory? a understand follow-up your inventory how that

Thomas Amato

certainly when of past the course been over experienced businesses, weeks. at we've customers, -- of is that although spending And largest our it in our saw little a well. we've the that We was of position that to set right, the raw -- in in the and some some was one and ones we any very good of we bit each have our Yes. question. occurred there few XXXX time more obviously business lot material were years, much on several patterns get believe And this look what's were at it's this buying an could. Aerospace a the Norris It's clearly of all we past related difficult and a over steel related goods. It's securing of to overstock -- to we material when as unique

to certainly that working been share is you in see and business point be for products. it's that of is do customer where is be delayed movement the ours based with allocation, a back, ours spending probably there, of customer demand overstock possibly customer because and later time still might expect from larger We companies. on not channel of Another It's we revert. the expect to government-related position, we in of shopping will demand another the has demand Cylinder other to to large time think, election, it's price but bit then of what to may happen the little to they and more And until customer a tends the year, something get Norris occur next a complete because share different possibly our in year And pricing. factors. but but we while like start long-term don't into in that chemical we're market think

Kenneth Newman

Understood.

in you've fourth quarter on a If seasonally in about the down quarter easier tough Obviously, here next maybe positive just this you I squeeze -- maybe last Packaging. then year. help you got in comp don't the if could mind, growth rate a one is one the quarter. and order think pretty us just Maybe can

longer the for how the Just help all then that And there. about potential pieces? think margin think term, about longer-term moving do EBIT segment given the us you cadence

Thomas Amato

we Packaging I'll at rate look comps Well, take -- some quarterly the rate We in. conversion why. Aerospace the -- the part reasons spots business. we not I'm question, do going second hot of of have within that We our those know in saw then the are our potential, to performing And Scott and will board. take know the what we that jump true and and is across at interestingly,

our time, some products customers and are that rates are when pulling freight. had run expedited over supplying there Specifically, very that happens, you important above capacity we're you where

off-standard of lot costs are a There's your business. that impacting

that the mean bps improve that XXXX, year. online I into that term. have is this move we towards sort of I and -- profile the of Now should want. performance pressure, some least sort pressure nearer full the to if term I look at coming But and some our -- the questions the as at and we you you we saw of answer of will beyond. in coming, XXXX allow at the end opportunity and relieve have where that Scott, we're into And at probably our XXX capacity the when of all business least we look we're in I'll set, let nearer quarterly potential be us below

Scott Mell

was that on Yes, Packaging? Ken, question or Aerospace

Thomas Amato

Packaging.

Scott Mell

year-over-year what into range growth sales we're Packaging. second anticipating half mean is look think what year-over-year similar to I if back in the anticipating for be Yes. year, growth it's half that year, full expect the you going the year. around kind of same look, second for of of I the half year. second the can guidance XX% you of quarterly the to I mean for for we're the see at we the

Operator

Hamed next with Financial. from Our comes question BWS Khorsand

Hamed Khorsand

So first question I had was packaging. related to

you're emphasized capacity being taken saying issues. now You that you're guys year last off and and bottlenecks capacity hitting

you why that you So ordered are what going talking year to It why bringing being like capacity? on what's about just this around. different What's year now seems everything did happen? that last from is and did

Thomas Amato

question. fair It's repositioned last good year. not question. We a take We out capacity. a did Yes, capacity Hamed, that's

low in demand for -- you're in product more location operational concentrated made to is specifically, market physical lines. a what So assets reposition to closure caps referring a we our into changes and very

our were very dispenser a product where different in experiencing line which predominantly points product that's today, are pinch -- we're line. So

different movements product capacity So of different for lines. are these

us because dispenser quarter, a demand that's affecting in of of we way in now robust way, this a -- -- that movement a But related have in is to in which is and problem a positions, to Midwest we is predominantly and products. reduction points. a what's XXXX we line, related demand high-class and we've experienced product overstock strange most significant coming coming So in our the year assets, line, have moved back very where on those into and so closed to we what plant closure referred pinch California a product different last assets

Hamed Khorsand

is. That's concerned helpful. it like as would in doing guidance why up And first and to well far reporting be been I'm And coordinate lining you're half commentary with then down as business just what the packaging? what's sales is with what second seasonality modestly or it is trying the that sales. for seems the revenue packaging, understand and that doesn't versus saying, half Again,

Scott Mell

Yes.

the But of we year-over-year basis back I as we be we the holiday to the pattern prior half the to still think that's second fourth a business up primarily our related see order a to to on the Ken, to as year bit it get quarter year, to relates the tend relative to just of towards naturally year. specifically season. expect of lower cyclicality the my point

other surprising our nothing order of than there natural just cyclicality So business. the pattern

Hamed Khorsand

and the in delayed? Aerospace. to on lines with What's and being last production my the And is inventory Airbus? question what's on Boeing exposure, if going anything anything And it. your about Got

Thomas Amato

important distribution both Okay. collectively Xs. and Well, through large and Airbus directly are through very customers, look, and Boeing both Tier

this have to a us because of some So would What year, an we next through. their tied we're don't specifically. already working naturally, to impact much we're have we're much I into of on say very backlog, and year booked expect related the still announcements success. about that to We

what's change our up as all year. production we're So planning on at likely is -- balance we build very for the it's line schedule of the our to

Operator

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

Thomas Amato

to back it turn does Operator, us?

Operator

further there at are no questions Yes. It that this time. appears

Thomas Amato

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

Operator

today's concludes This teleconference.

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

TriMas (TRS) 30 Jul 242024 Q2 Earnings call transcript