TriMas (TRS) Q1 2025 Earnings Call April 29, 2025 10:00 AM ET Company Participants Sherry Lauderback - VP, Investor Relations & CommunicationsThomas Amato - President & Chief Executive OfficerTeresa Finley - CFOHamed Khorsand - Principal Conference Call Participants Ken Newman - VP & Equity Research Analyst Operator Ladies and gentlemen, greetings, and welcome to the TriMas Corporation First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A brie ...

Financial Data and Key Metrics Changes - Consolidated net sales increased by 6.4% year over year to $241.7 million, with organic revenue growth exceeding 8% when excluding currency impacts and acquisitions [10] - Adjusted EBITDA rose by 13.5% to $39.7 million, with a margin improvement of 100 basis points to 16.4% [10] - Adjusted earnings per share increased to $0.46, representing a 24.3% growth year over year [11] - Consolidated operating profit increased by over 50% compared to Q1 2024, reflecting strong revenue growth and an expanded operating margin of 290 basis points [10] Business Line Data and Key Metrics Changes - Aerospace business achieved record sales of nearly $90 million, with organic growth of 27.8% [4][18] - Packaging segment experienced organic growth of 3.3%, with solid growth in dispensing products, although operating profit conversion rates were slightly lower due to proactive material procurement costs [13][14] - Specialty Products segment sales decreased by $7.9 million, primarily due to the divestiture of AeroEngine and lower demand for cylinders [19] Market Data and Key Metrics Changes - The Aerospace segment benefited from a robust aerospace and defense market, with improved throughput and a strong order book [18] - The Packaging segment faced challenges from elevated customer inventory levels and geopolitical tariff dynamics, impacting demand in the food and beverage market [14][16] Company Strategy and Development Direction - The company is focused on navigating tariff-related challenges and is prepared to relocate production as necessary to mitigate risks [16][17] - A new facility in Vietnam has been launched to serve as a manufacturing hub for Asia, reflecting a strategy to regionalize production [17] - The company aims to maintain a strong balance sheet to support both near-term operations and future strategic investments [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the long-term growth outlook, particularly in the aerospace sector, despite current uncertainties related to tariffs [22][45] - The company reaffirmed its 2025 outlook, indicating that while challenges exist, they are well-positioned to capitalize on opportunities in the aerospace market [21][22] Other Important Information - The acquisition of GMT Aerospace is expected to enhance the company's positioning in the aerospace market, particularly with Airbus [40] - The company has successfully refinanced its senior secured revolving credit facility, extending its maturity to February 2030 [11] Q&A Session Summary Question: Any change to the segment guidance provided last quarter? - Management indicated no changes to segment guidance at this point due to uncertainty in the environment [28] Question: How to think about other investments or potential headwinds relative to packaging? - Management noted that they do not foresee additional abnormal expenses beyond those incurred in Q1 and are focused on procurement strategies to mitigate exposure [30] Question: Aerospace organic growth was solid; how to think about the cadence of growth? - Management acknowledged the expectation of modest operating leverage gains but emphasized a conservative approach due to uncertainty [34][35] Question: How does the acquisition of GMT Aerospace impact capacity and pricing? - Management expressed excitement about the acquisition and its potential to improve positioning, while also acknowledging the competitive dynamics in the market [40] Question: Are there any signs of pre-buying activity among customers? - Management noted some signs of pre-buying, particularly in the Norris Cylinder segment, but did not observe significant abnormal inventory levels across other product lines [56] Question: How is the company thinking about organic pricing relative to volumes? - Management indicated that if tariffs persist, there may be an impact on the sales guidance, with more clarity expected after Q2 [58]

Company Performance - TriMas reported quarterly earnings of $0.46 per share, exceeding the Zacks Consensus Estimate of $0.43 per share, and up from $0.37 per share a year ago [1] - The quarterly earnings surprise was 6.98%, while the previous quarter saw a negative surprise of -10.42% [2] - Revenues for the quarter reached $241.67 million, surpassing the Zacks Consensus Estimate by 3.53%, compared to $227.1 million in the same quarter last year [3] Market Outlook - TriMas shares have declined approximately 14.6% year-to-date, contrasting with the S&P 500's decline of -6% [4] - The current consensus EPS estimate for the upcoming quarter is $0.49, with expected revenues of $247.52 million, and for the current fiscal year, the EPS estimate is $1.80 on revenues of $975.36 million [8] Industry Context - The Metal Products - Procurement and Fabrication industry, to which TriMas belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [9]

Financial Performance - TriMas reported Q1 2025 net income of $12.4 million, or $0.30 per diluted share, up from $5.1 million, or $0.12 per diluted share in Q1 2024[2] - Adjusted net income for Q1 2025 was $18.8 million, compared to $15.1 million in Q1 2024, with adjusted diluted EPS increasing by 24.3% to $0.46[2] - Q1 2025 net sales reached $241.7 million, a 6.4% increase from $227.1 million in Q1 2024, driven by growth in Packaging and Aerospace segments[2] - Operating profit for Q1 2025 was $21.8 million, with adjusted operating profit rising 50.2% to $24.4 million compared to $16.3 million in the prior year[2] - Net income for Q1 2025 was $12.42 million, compared to $5.14 million in Q1 2024, resulting in a diluted earnings per share of $0.30, up from $0.12[28] - The company reported a free cash flow of $(3.75) million for Q1 2025, compared to $(16.94) million in Q1 2024, indicating improved cash generation[31] Segment Performance - Aerospace segment net sales increased by 32.5% to $89.2 million in Q1 2025, with operating profit margin up 650 basis points[6] - Aerospace segment net sales increased by 32.5% year-over-year, from $67.34 million in Q1 2024 to $89.21 million in Q1 2025[26] - Specialty Products segment net sales decreased by 24.0% to $24.9 million, impacted by the divestiture of Arrow Engine and lower cylinder demand[7] - Specialty Products segment experienced a decline in net sales of 24.0%, from $32.74 million in Q1 2024 to $24.89 million in Q1 2025[26] Cash and Debt Management - TriMas ended Q1 2025 with $32.7 million in cash and a net leverage ratio of 2.7x, with total debt reported at $434.2 million[3] - Cash and cash equivalents at the end of Q1 2025 were $32.71 million, an increase from $30.47 million at the end of Q1 2024[31] Shareholder Actions - During Q1 2025, TriMas repurchased 20,491 shares for $0.5 million, with $67.2 million remaining under the repurchase authorization[3] Future Guidance - The company expects full year 2025 adjusted diluted EPS in the range of $1.70 to $1.85, reaffirming its guidance[8] - The company expects adjusted diluted earnings per share for the twelve months ending December 31, 2025, to be between $1.70 and $1.85[34] Acquisitions and Special Items - The acquisition of GMT Aerospace was completed in Q1 2025, enhancing TriMas' capabilities in aerospace applications[2] - Total special items impacting operating profit were $2.62 million in Q1 2025, compared to $3.81 million in Q1 2024[26] - The company reported a net gain on dispositions of assets of $5.29 million in Q1 2025, compared to $60,000 in Q1 2024[24]

Fourth Quarter and Full Year 2024 Earnings Presentation February 27, 2025 Disclaimer Forward-Looking Statements Packaging: Strong organic growth of nearly 10%, while continuing to improve efficiency related to the high demand rates for certain dispenser product lines as customer orders rebounded from prior year levels – Positioned well for 2025 Aerospace: Record sales levels with growth of 22%, accompanied by improved conversion rates of ~450 basis points – Entering 2025 with a record backlog Specialty Prod ...

Financial Data and Key Metrics Changes - Consolidated sales increased by 8.8% in Q4 2024 compared to the prior year, driven by solid organic growth in the Packaging and Aerospace segments [19][21] - Net income rose by 13.2% year-over-year, with earnings per share (EPS) at $0.43 [21] - Adjusted EBITDA for the quarter was $42.2 million, representing 18.5% of sales [20] Business Line Data and Key Metrics Changes - TriMas Packaging, representing 55% of total sales, achieved organic growth of nearly 10% year-over-year, with sales of $123 million in Q4 [7][24] - TriMas Aerospace, accounting for 32% of total sales, saw a 22% increase in net sales compared to the previous year, with a record backlog exceeding $350 million [30] - Specialty Products segment, representing 13% of total sales, experienced a decline in sales by about 6.5%, with net sales of $26.6 million [12][33] Market Data and Key Metrics Changes - The beauty and personal care markets drove significant growth in the Packaging segment, with over 25% year-over-year organic sales growth [25] - The aerospace and defense market is recovering, contributing to improved EBITDA rates in the Aerospace segment [10] Company Strategy and Development Direction - The company is focused on enhancing its portfolio through strategic acquisitions and divestitures, including the acquisition of GMT Aerospace and the sale of its aero engine business [15][17] - TriMas aims to leverage its strong balance sheet to invest in growth, return capital to shareholders, and pursue bolt-on acquisitions [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the Packaging and Aerospace segments, anticipating continued growth in 2025 [39][41] - The company is taking proactive steps to address challenges in the North Cylinder business, expecting improvements as demand recovers [41] Other Important Information - The company completed the acquisition of GMT Aerospace, which adds a manufacturing location in Europe and is expected to enhance its presence in the aerospace market [15][16] - The divestiture of the aero engine business is part of a strategic shift to reduce exposure to the oil and gas market [17] Q&A Session Summary Question: Can you quantify the implied incremental margins in each business for 2025? - Management expects margin uplift in Packaging of 100 to 150 basis points, Aerospace of 150 to 200 basis points, and North Cylinder of 100 to 150 basis points [52][53] Question: What is the impact of tariffs on margins and how quickly can the company respond? - Management indicated that they can respond relatively quickly to tariff changes on a commercial front, but long-term adjustments may take 12 to 18 months [56][58] Question: Any updates on the CEO replacement search and portfolio focus? - The board is actively working on the CEO search and assessing the best ways to unlock value from the business segments [60][66]

Core Insights - TriMas Corporation (TRS) reported fourth-quarter 2024 adjusted earnings per share (EPS) of 43 cents, missing the Zacks Consensus Estimate of 48 cents, but showing a 13.2% increase from the prior-year quarter [1][8] - The company's revenues increased 8.8% year over year to $228 million, driven by growth in the Packaging and Aerospace segments, although it missed the Zacks Consensus Estimate of $229 million [2][8] Financial Performance - The cost of sales rose 12.4% year over year to $187 million, leading to a gross profit decline of 4.9% to $41 million, resulting in a gross margin of 18% compared to 20.6% in the prior-year quarter [3] - Selling, general and administrative expenses increased by 6.6% year over year to $32 million, while adjusted operating profit rose 23.5% to $23 million, with an adjusted operating margin of 10.2% [3] Segment Performance - **Packaging Segment**: Net sales were $123 million, up from $114 million year over year, but adjusted operating profit decreased 2.5% to $15.7 million, missing estimates [4] - **Aerospace Segment**: Net sales increased 22.3% year over year to $78 million, exceeding estimates, with adjusted operating profit rising to $10.9 million from $6 million [5] - **Specialty Products Segment**: Revenues fell 16.8% year over year to $27 million, with adjusted operating profit dropping to $0.76 million from $4 million, missing estimates [6] Cash Flow and Balance Sheet - In 2024, the company repurchased approximately 771,067 shares for $19.3 million, ending the year with $23.1 million in cash and $239.8 million in available borrowing capacity [7] - TriMas generated $64 million in cash flow from operations in 2024, down from $88 million in the prior year [7] Annual Results and Guidance - For 2024, TriMas reported an adjusted EPS of $1.65, missing the Zacks Consensus Estimate of $1.69, with sales rising 3.5% year over year to $925 million, also missing estimates [8] - The company expects year-over-year sales growth of 4-6% for 2025, with adjusted EPS projected to be between $1.70 and $1.85 [9] Stock Performance - TriMas shares have declined by 12.3% over the past year, contrasting with the industry's growth of 30.8% [10] Peer Comparisons - Kaiser Aluminum reported a fourth-quarter adjusted EPS of 33 cents, missing estimates, while Northwest Pipe Co. and ESAB Corporation both exceeded their EPS estimates for the quarter [12][13][14]

Financial Performance - TriMas Corporation reported net sales of $925.01 million for the year ended December 31, 2024, an increase of 3.9% compared to $893.55 million in 2023[260]. - The company's gross profit for 2024 was $199.46 million, a decrease of 0.4% from $201.32 million in 2023[260]. - Operating profit decreased to $47.19 million in 2024, down 28% from $65.44 million in 2023[260]. - Net income for 2024 was $24.25 million, a decline of 40% compared to $40.36 million in 2023[260]. - Basic earnings per share for 2024 were $0.60, down from $0.97 in 2023[260]. - Total net sales for 2024 reached $925.0 million, a slight increase from $893.6 million in 2023[320]. - Income before income taxes for the year ended December 31, 2024, was $30.04 million, down from $50.59 million in 2023 and $87.67 million in 2022[426]. - The total current income tax expense for 2024 was $8.33 million, compared to $12.10 million in 2023 and $22.94 million in 2022[426]. Assets and Liabilities - Total assets decreased to $1.32 billion as of December 31, 2024, from $1.34 billion in 2023[258]. - Total liabilities remained relatively stable at $656.88 million in 2024, compared to $658.71 million in 2023[258]. - The company reported a goodwill balance of $356.36 million as of December 31, 2024, down from $363.77 million in 2023[258]. - Long-term debt, net, increased slightly to $398.1 million in 2024 from $395.7 million in 2023, with $400.0 million in senior notes due April 2029[336]. - The fair value of the 4.125% senior notes was $365.0 million as of December 31, 2024, compared to a carrying amount of $400.0 million[349]. Cash Flow and Investments - Net cash provided by operating activities decreased to $63,780,000 in 2024 from $88,160,000 in 2023, reflecting a decline of approximately 28%[266]. - Capital expenditures for 2024 were $50,960,000, slightly lower than $54,190,000 in 2023[266]. - Net cash used for investing activities was $46,960,000 in 2024, a significant reduction from $134,420,000 in 2023[266]. - Proceeds from borrowings on revolving credit facilities increased to $308,930,000 in 2024, compared to $117,990,000 in 2023[266]. - Cash and cash equivalents at the end of 2024 were $23,070,000, down from $34,890,000 at the end of 2023[266]. Comprehensive Income - Other comprehensive loss for 2024 was $19.20 million, compared to a gain of $9.27 million in 2023[263]. - The company experienced a net current-period other comprehensive loss of $19.2 million in 2024, primarily due to foreign currency translation losses[411]. Acquisitions and Divestitures - The Company acquired Weldmac Manufacturing Company for a purchase price of $34.0 million, with contingent consideration of up to $10 million based on earnings targets[313]. - The acquisition of Aarts Packaging B.V. was completed for $37.8 million, with historical annual revenue of €23 million[314]. - The company completed the sale of its Arrow Engine business for a purchase price of $22.0 million on January 31, 2025[436]. - The acquisition of GMT Aerospace was completed for approximately €34.0 million, with annual net sales of about €22.0 million[437]. Shareholder Returns - The company declared dividends of $6,630,000 in 2024, slightly lower than $6,700,000 in 2023[268]. - Total dividends declared and paid on common shares were $6.6 million in 2024, slightly down from $6.7 million in 2023 and $6.9 million in 2022[410]. - The company repurchased 771,067 shares in 2024 for $19.3 million, compared to 680,594 shares for $18.8 million in 2023, indicating an increase in share repurchase activity[409]. - The company has $67.6 million remaining under the stock repurchase authorization as of December 31, 2024[409]. Pension and Asbestos Liabilities - The net periodic pension benefit expense for defined benefit pension plans was $(40,000) in 2024, compared to $780,000 in 2023[382]. - The funded status of the Company's defined benefit pension plans as of December 31, 2024, was a net liability of $1.34 million, down from a net asset of $330,000 in 2023[388]. - The total asbestos-related liability as of December 31, 2024, was $29.7 million, reflecting the Company's ongoing assessment of claims and settlements[374]. - The Company recorded a pre-tax charge of $5.5 million in 2024 to increase the asbestos-related liability estimate to $31.0 million, based on a study indicating a potential future liability range of $31.0 million to $39.8 million[374]. Segment Performance - Segment adjusted operating profit for the Packaging segment in 2024 was $71.2 million, while Aerospace and Specialty Products segments reported $37.2 million and $6.4 million, respectively, leading to a total segment adjusted operating profit of $114.8 million[419]. - The Aerospace & Defense segment generated $294.2 million in revenue for 2024, up from $241.4 million in 2023[320]. - The Company’s Packaging segment earned revenues from various markets, including beauty and personal care, food and beverage, and industrial markets[320]. Derivative Financial Instruments - The company utilized derivative financial instruments to manage currency risks and interest rate risks associated with its operations[245][246]. - The Company records derivative financial instruments at fair value, with changes recognized in earnings unless designated as effective hedges[304]. - The Company entered into two cross-currency swap agreements in 2024, each with a notional amount of $75.0 million, to hedge against currency volatility[352][353]. - The income recognized from foreign exchange contracts was $8,590 thousand for the year ended December 31, 2024, compared to $(1,880) thousand in 2023[359].

TriMas (TRS) came out with quarterly earnings of $0.43 per share, missing the Zacks Consensus Estimate of $0.48 per share. This compares to earnings of $0.37 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -10.42%. A quarter ago, it was expected that this maker of packaging materials, aerospace components and other engineered parts would post earnings of $0.57 per share when it actually produced earnings of $0.43, delivering a ...

Financial Performance - TriMas reported fourth quarter 2024 net sales of $228.1 million, an increase of 8.8% compared to $209.6 million in the same quarter of 2023[3]. - For full year 2024, TriMas achieved net sales of $925.0 million, reflecting a 3.5% increase from 2023, despite a 37.2% decline in the Specialty Products segment[4]. - The Aerospace group experienced a quarterly sales growth of 22.3%, contributing to record annual sales of $294.2 million[5]. - Adjusted operating profit for fourth quarter 2024 was $23.2 million, a 23.5% increase from $18.8 million in the prior year[3]. - Full year 2024 adjusted net income was $67.7 million, down from $79.9 million in 2023, with adjusted diluted earnings per share at $1.65 compared to $1.92 in the previous year[4]. - The Packaging group saw a sales increase of 8.4% in the fourth quarter, driven by growth in beauty and personal care markets[7]. - The Specialty Products group reported a 16.8% decrease in fourth quarter sales, attributed to a decline in demand and lower absorption of fixed costs[8]. - Reported net income for Q4 2024 was $5,640,000, a decrease of 29% compared to $7,940,000 in Q4 2023[27]. - Adjusted net income for Q4 2024 was $17,520,000, up 11% from $15,810,000 in Q4 2023[27]. - Diluted earnings per share (EPS) for Q4 2024 was $0.14, down from $0.19 in Q4 2023, while adjusted diluted EPS increased to $0.43 from $0.38[27]. Cash Flow and Debt - The Company ended 2024 with $23.1 million in cash and a net leverage ratio of 2.6x, with total debt reported at $398.1 million[6]. - Cash and cash equivalents at the end of 2024 were $23.07 million, down from $34.89 million at the end of 2023, indicating a decrease of 33.8%[24]. - The company reported a net cash provided by operating activities of $63.78 million for the twelve months ended December 31, 2024, compared to $88.16 million in 2023[24]. - Net cash provided by operating activities for the twelve months ended December 31, 2024, was $63,780,000, down from $88,160,000 in 2023[29]. - Net debt increased to $375,050,000 as of December 31, 2024, from $360,770,000 in 2023[29]. - Long-term debt as of December 31, 2024, was $398,120,000, slightly up from $395,660,000 in 2023[29]. Shareholder Actions - TriMas repurchased 771,067 shares for $19.3 million in 2024, reducing net shares outstanding by approximately 1.5%[6]. Future Projections - TriMas expects consolidated sales to increase by 4% to 6% in 2025, with adjusted diluted earnings per share projected between $1.70 to $1.85, a 7% increase compared to 2024[9]. - The company expects diluted EPS for the twelve months ending December 31, 2025, to range from $1.23 to $1.38, with adjusted diluted EPS projected between $1.70 and $1.85[31]. Special Items and Adjustments - The company incurred special items totaling $35.65 million in 2024, impacting the evaluation of operating profit significantly compared to $24.01 million in 2023[26]. - Special items impacting net income included $10,620,000 in business restructuring and severance costs for Q4 2024[27]. - Adjusted operating profit for the total company in 2024 was $82.84 million, down from $89.45 million in 2023, reflecting ongoing challenges in the market[26]. Asset and Liability Overview - Total current assets increased to $426.64 million in 2024 from $397.38 million in 2023, primarily driven by higher receivables and inventories[19]. - Total liabilities decreased slightly to $656.88 million in 2024 from $658.71 million in 2023, with long-term debt remaining stable at $398.12 million[19]. - Gross profit for the twelve months ended December 31, 2024, was $199.46 million, slightly down from $201.32 million in 2023, reflecting a gross margin of 21.5%[21]. - Operating profit for the fourth quarter of 2024 was $8.62 million, a decrease of 26.0% compared to $11.63 million in the fourth quarter of 2023[21]. - Net income for the twelve months ended December 31, 2024, was $24.25 million, down from $40.36 million in 2023, resulting in a basic earnings per share of $0.60 compared to $0.97 in the previous year[21].