Attached files
| file | filename |
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| 8-K - FORM 8-K - TRIMAS CORP | d834695d8k.htm |
| EX-99.2 - EX-99.2 - TRIMAS CORP | d834695dex992.htm |
 Spin-Off
of TriMas’ Cequent Businesses
Separation Will Create Two New, Industry-Leading Companies
December 8, 2014
NASDAQ
•
TRS
Exhibit 99.1 |
 Forward-Looking Statements
Any "forward-looking" statements contained herein, including those relating to
market conditions or the Company's financial condition and results, expense reductions,
liquidity expectations, business goals and sales growth, involve risks and
uncertainties, including, but not limited to, risks and uncertainties with respect to the Company’s plans for
successfully executing the spin-off within the expected timeframe or at all, the taxable
nature of the spin-off, future prospects of the companies as independent
companies, general economic and currency conditions, various conditions specific
to the Company's business and industry, the Company’s ability to integrate Allfast and attain the expected
synergies, and the acquisition being accretive, the Company's leverage, liabilities imposed by
the Company's debt instruments, market demand, competitive factors, supply constraints,
material and energy costs, technology factors, litigation, government and regulatory
actions, the Company's accounting policies, future trends, and other risks which are
detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and in the
Company's Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual
results to differ materially from those indicated by the forward-looking
statements. All forward-looking statements made herein are based on information
currently available, and the Company assumes no obligation to update any forward-looking statements.
In this presentation, certain non-GAAP financial measures may be used. Reconciliations of
these non-GAAP financial measures to the most directly comparable GAAP financial
measure may be found at the end of this presentation or in the
earnings
releases
available
on
the
Company’s
website.
Additional
information
is
available
at
www.trimascorp.com
under the “Investors”
section.
2 |
 Agenda
•
Transaction Overview
•
New Stand-alone Cequent
•
New TriMas
•
Summary
•
Questions and Answers
•
Appendix
3 |
 Transaction
Overview |
 Strategic
Rationale •
Significant progress has been made over the last several years to improve
and
refine
the
portfolio
and
strengthen
TriMas’
financial
position
•
Thorough review of strategic options led to the decision to spin-off
Cequent businesses
•
Spin-off will result in two independent, publicly traded companies with
increased strategic flexibility
•
Value creation for shareholders, customers and employees:
•
Allows each company to pursue a more focused strategy that leverages its strengths
•
Optimizes the financial profiles of each company to pursue distinct investment,
growth and capital allocation strategies
•
Provides two different and compelling investment opportunities that can be
achieved in a tax efficient manner
5
We believe a tax-free spin-off will create value for shareholders, customers and
employees while accelerating strategic transformation. |
 Transaction
Overview •
Creates two strong, highly competitive stand-alone public
companies
•
Distribute 100% of shares to TriMas shareholders
•
Expected
to
be
tax-free
to
TriMas’
U.S.
shareholders
•
Completion targeted for mid-year 2015
•
Subject to customary closing conditions, final approval by the
TriMas Board of Directors and tax-free opinion
•
Third party and legal entity reorganization-related expenses
estimated to be approximately $20 million over the next several
quarters
6
Transaction will result in two companies better positioned to
increase long-term value for shareholders. |
 7
Creating Two Strong Public Companies
(TTM figures as 9/30/14; Dollars in millions; from continuing operations)
Two independent publicly traded companies with unique characteristics.
New TriMas
New “Cequent”
•
TTM Revenue:
$855 million
•
TTM Segment Operating Profit
(1)
:
$131 million
•
Operating Margin
(1)
%:
~15%
•
President & CEO:
Dave Wathen
•
TTM Revenue:
$614 million
•
TTM Segment Operating Profit
(1)
: $48 million
•
Operating Margin
(1)
%:
~8%
•
Future President & CEO:
Mark Zeffiro
PACKAGING
Revenue: $335.2
Op.
profit
margin
(1)
:
23.4%
AEROSPACE
Revenue: $113.7
Op. profit margin: 18.8%
ENERGY
Revenue: $199.6
Op.
profit
margin
(1)
:
0.7%
ENGINEERED
COMPONENTS
Revenue: $206.6
Op. profit margin: 14.5%
CEQUENT
AMERICAS
Revenue: $445.8
Op.
profit
margin
(1)
:
7.8%
CEQUENT
APEA
Revenue: $167.8
Op.
profit
margin
(1)
:
7.7%
(1)
All figures are trailing twelve months (TTM) as of September 30, 2014. Operating
profit margin excludes “Special
Items.” TTM figures and Special Items are provided in the Appendix. |
 Two Strong
Companies with Unique Characteristics 8
Different approaches will accelerate value creation; spin-off will drive
enhanced focus on distinct growth and margin improvement initiatives.
TriMas
Cequent
Main Growth Drivers
New products; growing middle-class
economies; new geographies
Additional content in markets already
served; construction, agriculture and
consumer exposure
Market Share
High share; narrowly focused markets
High share in certain channels and
geographies; broad-line provider
Products
IP protected; highly-engineered; many
newer technologies
IP protected; full-line of products with
well-established brands
Margins
Higher margins; lower cost country
manufacturing opportunities
Opportunity with recent low cost country
moves
Customer Relationships
Business to business; longer-term
customer contracts
Closer to consumer
Auto Exposure
None
Medium
E-commerce Impact
Transactional
Growth platform
Outsourced Manufacturing
Low
Medium
Material Specifications
High
Medium |
 Strategic
Aspirations – Impact to “New”
TriMas
9
GENERATE
high single-digit top-line growth
INVEST
in growing end markets through new
products, global expansion and acquisitions
ENHANCE
margins through productivity initiatives,
leveraging costs and business mix
GROW
earnings faster than revenue growth
OPTIMIZE
capital structure
STRIVE
to be a great place to work
Neutral
Impact of Spin-off:
Neutral
Spin-off of Cequent accelerates TriMas’ achievement of its Strategic Aspirations.
|
 New
Stand-alone “Cequent” |
 Cequent
– A Growing Global Company
•
Margin expansion
•
“Heavy lifting”
complete –
optimization
•
Product line assessments
•
Acquisition improvement
•
Global/local customer-centric growth
platforms
•
Asia
•
South America
•
Europe
•
Africa
•
Capital allocation
11
Cequent Net Sales
(includes Cequent APEA and
Cequent Americas segments)
(1)
Operating
profit
excludes
“Special
Items”
and
corporate
expense
(in
calculation
of
segment
contribution).
Special
Items
and
separate
Cequent
APEA
and
Cequent
Americas
financial
data
for
each
period
are
provided
in
the
Appendix.
($ in millions)
Net
Sales
&
Operating
Profit
Margins
(1)
Key Initiatives
Financial Snapshot
Globalize presence; increase margins and return on invested capital.
$373
$529
5.1%
9.6%
9.9%
9.5%
$415
$478
8.2%
$589
$614
7.8%
2009
2010
2011
2012
2013
TTM
9/30/14 |
 Cequent
– A Unique Position as a Global Market Leader
12
•
Market leader in North America
and Asia
•
Footprint established for
emerging markets
•
Recent acquisitions to penetrate
the European market
•
Portfolio of well-established
brands serving each channel
•
Leverage existing product and
customer relationships for global
growth
•
Broadest product set available
•
Market-leading products
•
Flexibility to serve current and
future transportation trends
OES
Retail/
E-commerce
OEM
Aftermarket
Approximate
Revenue
(1)
By:
North
America
Asia
Pacific
Africa
Europe
South
America
Heavy Duty
Towing
Hitches
Trailer
Accessories
Towing
Accessories
Brake
Controllers
Cargo
Management
Vehicle
Protection
Electrical
Other
Channel
Geography
Product
Position
as
one
global
company
for
customers
–
only
global
provider
with
full
product
line.
(1)
Based on management estimates. |
 Cequent
– Opportunities for the Future
Following our major customers into key regional markets; opportunities to
drive enhanced growth, margins and ROIC.
13
Future Opportunities for Cequent Product Set
(1)
North America
Europe
Asia Pacific
Africa
South America
Aftermarket
Retail/
E-commerce
OEM/OES
Key Initiatives
•
Expand TriMotive
(OEM/OES) presence
•
Drive improvement in
manufacturing footprint
and costs
•
Participate in
E-commerce expansion
•
Foundation in place with
aftermarket and OE
product set
•
Expand presence into
Retail/E-commerce
•
Margin improvement of
acquisitions
•
Low cost footprint in place
•
New market growth in
China –
in infancy
•
Leverage existing OE
relationships
•
Leverage footprint in
South Africa
•
Towing common, also
driven by mining sector
•
Leverage footprint in
South America
•
Towing becoming more
popular
•
Opportunities for
tubular products
Market Indicator
(Approximate annual
vehicle sales)
16M units
11M units
23M units
2M units
7M units
(1)
Based on management estimates – for illustrative purposes only. Opportunity potential
indicated by white portion of pie.
|
 Cequent
– Advantages as One Global Company
•
Global platform for global customers
•
Local platform for local relevance and supply
•
Broadest product set
•
Strong brand equity
•
Leading technology
•
Talented, experienced management team
14
Opportunity to create significant shareholder value through growth,
productivity and capital allocation. |
 New
TriMas |
 New TriMas
– Positioned for the Future
•
Simplified portfolio of engineered and applied products
•
Well-positioned in attractive growth and higher margin markets
within Packaging and Aerospace
•
Multiple platforms for long-term organic and acquisition growth
•
Strong brand recognition and customer loyalty driven by quality,
speed, agility and innovation
•
Higher margins with opportunities for continued improvement
Spin-off better positions TriMas to drive its strategic initiatives
of organic revenue growth and margin expansion.
16 |
 Packaging
(1)
Operating
profit
excludes
“Special
Items”
and
corporate
expense
(in
calculation
of
segment
contribution).
Special
Items
for
each
period
are
provided
in
the
Appendix.
23.2%
28.5%
25.9%
21.8%
•
Target specialty dispensing and closure products
in higher growth end markets
•
Beverage, food, nutrition, personal care and
pharmaceutical
•
Increase focus on Asian market and other
emerging market opportunities
•
Ramp-up plants in Asia to improve cost structure
and flexibility
•
Provide customized solutions focused on
intellectual property, customer needs,
differentiation and delivery speed
•
Further integrate acquisitions into global sales
network, while expanding margins
Key Initiatives
Net Sales
Financial Snapshot
($ in millions)
Net
Sales
&
Operating
Profit
Margins
(1)
Proven model for product development and growth.
17 |
 Aerospace
•
Integrate Allfast Fastening Systems
•
Optimize Martinic Engineering and Mac
Fasteners acquisitions
•
Expand aerospace fastener product lines to
increase content and applications per aircraft
•
Leverage positive end market trends
including composite aircraft and robotic
assembly
•
Capture incremental opportunities in
emerging markets
•
Drive ongoing lean initiatives
18
(1)
Operating profit excludes “Special Items”
and corporate expense (in calculation of segment
contribution).
Special
Items
for
each
period
are
provided
in
the
Appendix.
Net Sales
Key Initiatives
Financial Snapshot
Combining four distinct businesses into TriMas Aerospace to drive
an integrated go-to-market strategy and margin expansion.
($ in millions)
Net Sales & Operating Profit Margins
(1) |
 Energy
Energy
•
Optimize and refine manufacturing footprint and
branch strategy
•
Reduce costs of standard products –
preliminary
decision to move portion of Houston facility to
new Lamons facility in Mexico
•
Design and sell additional highly-engineered
specialty products
•
Vertically integrate, maximize supply chain and
drive lean initiatives to lower costs and improve
margins
•
Install upgraded SIOP processes to reduce cycle
time and inventory
•
Expand business capabilities with major
customers globally
19
Net Sales
(1)
Operating profit excludes “Special Items”
and corporate expense (in calculation of segment
contribution).
Special
Items
for
each
period
are
provided
in
the
Appendix.
($ in millions)
Net
Sales
&
Operating
Profit
Margins
(1)
Key Initiatives
Financial Snapshot
Focus on increasing margins and optimizing the footprint. |
 Engineered
Components •
Expand complementary product lines at well-site
and grow compression products
•
Grow products to support the shift toward
increased use of natural gas and production in
shale formations
•
Further integrate cost structure of cylinder
acquisition
•
Continue to expand product offering and
geographies
20
Net Sales
(1)
Operating profit excludes “Special Items”
and corporate expense (in calculation of segment
contribution).
Special
Items
for
each
period
are
provided
in
the
Appendix.
($ in millions)
Net
Sales
&
Operating
Profit
Margins
(1)
Key Initiatives
Financial Snapshot
Create new products and new applications; capture emerging market growth.
|
 Summary |
 Summary
•
We believe the decision to spin-off the Cequent businesses is the
next step in transforming and improving TriMas
•
We believe this transaction will create value for shareholders,
customers and employees
•
Spin-off will result in two independent, publicly traded companies
with increased strategic flexibility
•
We have established a comprehensive plan which we are focused
on executing
•
More information to come; plan on a mid-2015 completion
22
We believe a tax-free spin-off of our Cequent businesses will accelerate our strategic
transformation and create value for shareholders, customers and employees.
|
 Strategic
Aspirations 23
GENERATE
high single-digit top-line growth
INVEST
in growing end markets through new
products, global expansion and acquisitions
ENHANCE
margins through productivity initiatives,
leveraging costs and business mix
GROW
earnings faster than revenue growth
OPTIMIZE
capital structure
STRIVE
to be a great place to work |
 Questions
and Answers |
 Appendix |
 Business
Segment TTM Financial Information 26
(Unaudited, dollars in thousands)
Trailing
Twelve
Months
12/31/2013
3/31/2014
6/30/2014
9/30/2014
9/30/2014
Packaging
Net
sales......................................................................................................
78,220
$
81,430
$
86,250
$
89,320
$
335,220
$
Operating
profit..............................................................................................
18,220
$
18,360
$
20,540
$
20,770
$
77,890
$
Special Items to consider in evaluating operating profit:
Severance and business restructuring
costs.............................................. -
$
-
$
-
$
620
$
620
$
Excluding Special Items, operating profit would have
been………….. 18,220
$
18,360
$
20,540
$
21,390
$
78,510
$
Energy
Net
sales......................................................................................................
44,160
$
52,780
$
52,320
$
50,290
$
199,550
$
Operating profit
(loss).....................................................................................
(3,910)
$
2,600
$
(630)
$
(1,100)
$
(3,040)
$
Special Items to consider in evaluating operating profit:
Severance and business restructuring
costs.............................................. -
$
-
$
2,350
$
2,080
$
4,430
$
Excluding Special Items, operating profit would have
been……………….. (3,910)
$
2,600
$
1,720
$
980
$
1,390
$
Aerospace
Net
sales......................................................................................................
27,300
$
27,180
$
31,820
$
27,410
$
113,710
$
Operating
profit..............................................................................................
7,010
$
4,850
$
5,690
$
3,870
$
21,420
$
Engineered Components
Net
sales......................................................................................................
41,540
$
55,430
$
54,320
$
55,310
$
206,600
$
Operating
profit..............................................................................................
5,000
$
7,880
$
8,950
$
8,090
$
29,920
$
"New
TriMas"
Net sales
191,220
$
216,820
$
224,710
$
222,330
$
855,080
$
Operating profit
26,320
$
33,690
$
34,550
$
31,630
$
126,190
$
Total Special Items to consider in evaluating operating profit
-
$
-
$
2,350
$
2,700
$
5,050
$
Excluding Special Items, operating profit would have been
26,320
$
33,690
$
36,900
$
34,330
$
131,240
$
Operating profit margin excluding special items
13.8%
15.5%
16.4%
15.4%
15.3%
Quarter To Date
………………………………………………………………………….
…………………………………………………………………
…………..
………….
(2)
(1) |
 Business
Segment TTM Financial Information (cont.) 27
(Unaudited, dollars in thousands)
Cequent APEA
Net
sales......................................................................................................
40,290
$
39,470
$
43,800
$
44,290
$
167,850
$
Operating
profit..............................................................................................
4,620
$
2,500
$
2,220
$
3,210
$
12,550
$
Special Items to consider in evaluating operating profit:
Severance and business restructuring costs..................................................
-
$
-
$
-
$
380
$
380
$
Excluding Special Items, operating profit would have been............................
4,620
$
2,500
$
2,220
$
3,590
$
12,930
$
Cequent Americas
Net
sales......................................................................................................
88,680
$
109,090
$
134,490
$
113,500
$
445,760
$
Operating profit
(loss).....................................................................................
(12,180)
$
5,710
$
16,940
$
8,660
$
19,130
$
Special Items to consider in evaluating operating profit (loss):
Severance and business restructuring costs..................................................
13,000
$
980
$
1,460
$
360
$
15,800
$
Excluding Special Items, operating profit would have been............................
820
$
6,690
$
18,400
$
9,020
$
34,930
$
"New Cequent"
(2)
Net
sales......................................................................................................
128,970
$
148,560
$
178,290
$
157,790
$
613,610
$
Operating
profit...........................................................................................
(7,560)
$
8,210
$
19,160
$
11,870
$
31,680
$
Total Special Items to consider in evaluating operating profit....................
13,000
$
980
$
1,460
$
740
$
16,180
$
Excluding Special Items, operating profit would have been..................
5,440
$
9,190
$
20,620
$
12,610
$
47,860
$
Operating profit margin excluding special items
4.2%
6.2%
11.6%
8.0%
7.8%
Corporate Expenses
Operating
loss...............................................................................................
(8,320)
$
(9,640)
$
(9,270)
$
(11,230)
$
(38,460)
$
TriMas Total Company
Net
sales......................................................................................................
320,190
$
365,380
$
403,000
$
380,120
$
1,468,690
$
Operating
profit...........................................................................................
10,440
$
32,260
$
44,440
$
32,270
$
119,410
$
Total Special Items to consider in evaluating operating profit....................
13,000
$
980
$
3,810
$
3,440
$
21,230
$
Excluding Special Items, operating profit would have been..................
23,440
$
33,240
$
48,250
$
35,710
$
140,640
$
Operating profit margin excluding special items
7.3%
9.1%
12.0%
9.4%
9.6%
(1)
Results have been adjusted for the discontinued operations of NI in the third quarter 2014
(2)
Represents operating results before corporate expense allocations
Discontinued Operations
(1)
Net
sales.........................................................................................................................................
3,240
$
2,360
$
980
$
-
$
6,580
$
Operating
profit...............................................................................................................................
1,420
$
330
$
(400)
$
-
$
1,350
$
Trailing
Twelve
Months
12/31/2013
3/31/2014
6/30/2014
9/30/2014
9/30/2014
Quarter To Date |
 Cequent
– Historical Breakdown by Segment
28
(Unaudited, dollars in thousands)
Trailing
Twelve
Months
12/31/2009
12/31/2010
12/31/2011
12/31/2012
12/31/2013
9/30/2014
Cequent APEA
Net sales.......................................................................................
63,930
$
75,990
$
94,290
$
128,560
$
151,620
$
167,850
$
Operating profit...............................................................................
7,990
$
12,050
$
13,900
$
12,300
$
13,920
$
12,550
$
Special Items to consider in evaluating operating profit:
Severance and business restructuring costs...................................
270
$
-
$
-
$
3,150
$
-
$
380
$
Excluding Special Items, operating profit would have been.............
8,260
$
12,050
$
13,900
$
15,450
$
13,920
$
12,930
$
Cequent Americas
Net sales.......................................................................................
309,020
$
339,270
$
383,710
$
400,400
$
437,280
$
445,760
$
Operating profit (loss)......................................................................
(3,160)
$
27,840
$
32,730
$
27,420
$
8,850
$
19,130
$
Special Items to consider in evaluating operating profit (loss):
Severance and business restructuring costs...................................
13,820
$
-
$
520
$
7,530
$
25,570
$
15,800
$
Excluding Special Items, operating profit would have been.............
10,660
$
27,840
$
33,250
$
34,950
$
34,420
$
34,930
$
"New Cequent"
(1)
Net sales......................................................................................
372,950
$
415,260
$
478,000
$
528,960
$
588,900
$
613,610
$
Operating profit............................................................................
4,830
$
39,890
$
46,630
$
39,720
$
22,770
$
31,680
$
Total Special Items to consider in evaluating operating profit....
14,090
$
-
$
520
$
10,680
$
25,570
$
16,180
$
Excluding Special Items, operating profit would have been...
18,920
$
39,890
$
47,150
$
50,400
$
48,340
$
47,860
$
Operating profit margin excluding special items
5.1%
9.6%
9.9%
9.5%
8.2%
7.8%
(1)
Represents operating results before corporate expense allocations
Year To Date |