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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(MARK ONE)
| [X] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the Quarterly Period Ended September 30, 2003 |
or
| [ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the Transition Period from to . |
Commission File Number 333-100351
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware | |
38-2687639 | ||||
| (State or other jurisdiction of incorporation or organization) |
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(IRS Employer Identification No.) |
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39400 Woodward Avenue, Suite
130
Bloomfield Hills, Michigan 48304
(Address of principal executive offices, including zip code)
(248) 631-5450
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ].
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 6-2 of the Exchange Act). Yes [ ] No [X].
As of November 10, 2003, the number of outstanding shares of
the Registrant's common stock, $.01 par value, was 20,010,000
shares.
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TriMas Corporation
Index
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Page No. | ||||||||||||
| Part I. | |
Financial Information | |
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Forward-Looking Statements | |
1 | ||||||||||||
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Item 1. | |
Financial Statements | |
3 | ||||||||||
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Balance Sheets – September 30, 2003 and December 31, 2002 | |
3 | |||||||||||
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Combined Statement of Operations for the Nine and Three Months Ended September 30, 2003 and September 29, 2002 | |
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Combined Statement of Cash Flows for the Nine Months Ended September 30, 2003 and September 29, 2002 | |
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Statement of Shareholders' Equity for the Nine Months Ended September 30, 2003 | |
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Notes to Financial Statements | |
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Item 2. | |
Management's Discussion and Analysis of Financial Condition and Results of Operations | |
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Item 3. | |
Quantitative and Qualitative Disclosure about Market Risk | |
32 | |
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Item 4. | |
Controls and Procedures | |
32 | |
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| Part II. | |
Other Information and Signature | |
33 | |||||||||||
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Forward-Looking Statements
This report contains forward-looking statements about our financial condition, results of operations and business. You can find many of these statements by looking for words such as "may," "expect," "anticipate," "believe," "estimate" and similar words used in this report.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. We caution readers not to place undue reliance on the statements, which speak only as of the date of this report.
The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.
Risks and uncertainties that could cause actual results to vary materially from those anticipated in the forward-looking statements contained in this report include general economic conditions in the markets in which we operate and industry-based and other factors more specific to us such as:
| • | General Economic Conditions—our business depends upon general economic conditions and we serve some customers in highly cyclical industries. |
| • | Acquisition Strategy—if we are unable to identify attractive acquisition candidates, successfully integrate our acquired operations or realize the intended benefits of our acquisitions including actions we have identified as providing cost-saving opportunities, our business strategy and financial condition and results would be negatively affected. |
| • | Labor Stoppages—we may be subject to work stoppages at our facilities or our customers may be subjected to work stoppages. |
| • | Product Liability and Warranty Claims—we may incur material losses and costs as a result of product liability and warranty claims, as well as legacy liability issues. |
| • | Environmental Matters—we may be materially and adversely affected by compliance obligations and liabilities under environmental laws and regulations. |
| • | Raw Material and Other Costs—increases in our raw material, labor, or energy costs or the loss of a substantial number of our suppliers could adversely affect us. |
| • | Competition—we operate in competitive industries and may experience increased competition. |
| • | Changing Technology—our products are typically highly engineered or customer-driven and, as such, we are subject to risks associated with changing technology and manufacturing techniques. |
| • | Dependence on Key Individuals and Relationships—we depend on the services of key individuals and relationships. |
| • | International Operations—a growing portion of our sales may be derived from international sources, which exposes us to certain risks. |
| • | Goodwill and Intangible Assets—we have significant goodwill and intangible assets, and future impairment could have a material negative impact on our financial condition and results. |
| • | Control by Principal Stockholder—we are controlled by Heartland Industrial Partners ("Heartland"), whose interests in our business may be different than those of our other investors. |
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| • | Substantial Leverage and Debt Service—we have substantial debt, interest and lease payment requirements that may restrict our future operations and impair our ability to meet our obligations. |
| • | Substantial Restrictions and Covenants—restrictions in our credit facility and under the indenture governing our notes may impact our ability to implement certain operational and financial strategies. |
We disclose important factors that could cause our actual results to differ materially from our expectations under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this report. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations and ability to make payments required under our debt agreements.
2
Part I. Financial Information
Item 1. Financial Statements
TriMas
Corporation
Balance Sheets
September 30, 2003 and December 31,
2002
(unaudited — dollars in
thousands)
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Consolidated September 30, 2003 |
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Combined December 31, 2002 |
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| Assets | |
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| Current assets: | |
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| Cash and cash equivalents | |
$ | 10,780 | |
$ | 100,440 | ||||
| Receivables | |
136,010 | |
97,960 | ||||||
| Inventories | |
117,990 | |
93,110 | ||||||
| Deferred income taxes | |
18,740 | |
18,400 | ||||||
| Prepaid expenses and other current assets | |
10,900 | |
9,830 | ||||||
| Total current assets | |
294,420 | |
319,740 | ||||||
| Property and equipment, net | |
184,120 | |
244,110 | ||||||
| Goodwill | |
638,940 | |
517,060 | ||||||
| Other intangibles | |
354,070 | |
286,270 | ||||||
| Other assets | |
76,080 | |
62,600 | ||||||
| Total assets | |
$ | 1,547,630 | |
$ | 1,429,780 | ||||
| Liabilities,
Shareholders' Equity and Metaldyne Corporation Net Investment and Advances |
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| Current liabilities: | |
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| Current maturities, long-term debt | |
$ | 11,010 | |
$ | 2,990 | ||||
| Accounts payable | |
85,420 | |
57,400 | ||||||
| Accrued liabilities | |
82,890 | |
64,010 | ||||||
| Due to Metaldyne | |
8,270 | |
9,960 | ||||||
| Total current liabilities | |
187,590 | |
134,360 | ||||||
| Long-term debt | |
725,750 | |
693,190 | ||||||
| Deferred income taxes | |
194,520 | |
157,950 | ||||||
| Other long-term liabilities | |
22,540 | |
31,080 | ||||||
| Due to Metaldyne. | |
7,010 | |
11,960 | ||||||
| Total liabilities | |
1,137,410 | |
1,028,540 | ||||||
| Commitments and contingencies | |
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| Preferred stock $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None | |
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| Common stock, $0.01 par: Authorized 400,000,000 shares; Issued and outstanding 20,010,000 and 19,250,000 shares, respectively | |
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190 | ||||||
| Paid-in capital | |
396,510 | |
387,500 | ||||||
| Retained deficit. | |
(12,080 | ) | |
(6,940 | ) | ||||
| Accumulated other comprehensive income. | |
25,590 | |
7,300 | ||||||
| Metaldyne Corporation net investment and advances | |
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13,190 | ||||||
| Total shareholders' equity and Metaldyne Corporation net investment and advances | |
410,220 | |
401,240 | ||||||
| Total liabilities, shareholders' equity and Metaldyne Corporation net investment and advances | |
$ | 1,547,630 | |
$ | 1,429,780 | ||||
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The accompanying notes are an integral part of these financial statements.
3
TriMas Corporation
Combined Statement
of Operations
For the Three and Nine Months Ended
September
30, 2003 and September 29, 2002
(Unaudited — in thousands,
except for per share
amounts)
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Three
Months Ended September |
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Nine Months
Ended September |
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2003 | |
2002 | |
2003 | |
2002 | |||||||||||
| Net sales | |
$ | 235,990 | |
$ | 185,750 | |
$ | 704,110 | |
$ | 586,740 | ||||||
| Cost of sales | |
(176,110 | ) | |
(147,820 | ) | |
(529,340 | ) | |
(438,640 | ) | ||||||
| Gross profit | |
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