Post on 08-Jul-2018
2014 Outlook Update and
Allfast Fastening Systems Acquisition Presentation
S e p t e m b e r 2 2 , 2 0 1 4
NASDAQ • TRS
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
general economic and currency conditions, various conditions specific to the Company’s business and industry,
the Company’s ability to complete the acquisition on the terms described, or other acceptable terms or at all
because of a number of factors, including the failure to satisfy closing conditions, 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 ending 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 available on the Company’s website. Additional information is available at
www.trimascorp.com under the “Investors” section.
2
Opening Remarks3
Agenda
• Opening Remarks Dave Wathen
• 2014 Updated Outlook Dave Wathen
• What Has Changed
• Updated Actions
• Allfast Fastening Systems Acquisition• Strategic Rationale Dave Wathen
• Allfast Overview Bob Zalupski
• Opportunities and Synergies Tom Aepelbacher/Jim Randall
• Financial Impact Mark Zeffiro
• Closing Remarks Dave Wathen
• Foundation for 2015
• Questions and Answers All
4
2014 Updated Outlook5
External and Internal Headwinds
6
Taking actions to respond to recent headwinds.
External Factors Action
Energy end market has not improved to expectations • Accelerate identified programs; added funding and
people resources
Consumer spending in Australia (Cequent) • Reconfigure aftermarket organization
Brazil economy (Energy and Cequent) • Right sizing energy footprint
• Evaluating scope of Cequent business activity
South Africa (Cequent) • Delay ramp-up of activity until late 2015
Internal Factors Action
Cequent Americas move to Mexico – production levels as
expected, but productivity gains and supply chain lagging
• Prioritization of projects
Aerospace inefficiency responding to order choppiness • Added operating management horsepower
Standard product margins in Energy • Accelerate identified programs – add funding and
people resources
Cequent APEA behind plan on integration of businesses • Accelerate programs and adding resources
Tax rate • Refocus on top impact projects
Areas of Positive Momentum
• Packaging continues strong revenue and margin performance
• Rieke accelerated Asian footprint movement
• Lion Holdings integration going well
• Engineered Components businesses continue to perform as expected
• Free Cash Flow guidance unchanged
• SG&A leverage
7
Actions in 2013 positively impacting 2014 results.
EPS Bridge (2013 versus 2014 Projections)
8
Operating profit growth offset by higher share count and taxes.
$2.06$1.85-$1.95
FY 2013 Actual to FY 2014 Projected EPS Walk
2014 Outlook Update
Outlook as of 9/22/14*
Sales Growth 6% to 7%
Earnings Per Share, diluted(1) $1.85 to $1.95
Free Cash Flow(2) $55 to $65 million
(1) Defined as diluted earnings per share from continuing operations attributable to TriMas Corporation, excluding “Special Items.”
(2) Defined as Cash Flow from Operating Activities less Capital Expenditures. 9
The Company expects $0.41 to $0.46 EPS for third quarter 2014.
* 2014 Outlook excludes the impact of the Allfast acquisition post-closing and related financing.
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Announcing Allfast Fastening Systems Acquisition
Strategic Aspirations
11
Allfast acquisition advances TriMas’ Strategic Aspirations.
G E N E R A T E high single-digit top-line growth
I N V E S Tin growing end markets through new products, global expansion and acquisitions
E N H A N C Emargins through productivity initiatives, leveraging costs and business mix
G R O W earnings faster than revenue growth
O P T I M I Z E capital structure
S T R I V E to be a great place to work
Strategic Rationale
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Aerospace is a strategic platform with significant opportunities to grow.
Acquisition of Allfast Transforms TriMas’ Aerospace Platform
Expands Value-added
Product Portfolio
• Nearly 50% increase in overall aerospace revenue
• Significantly expands fastener product portfolio
• More proprietary products for existing OE and distribution customers
• Mid-single digit growth in global aerospace market
• Both companies have track record of more than 2x end market growth
• Combined product offering uniquely positions TriMas to benefit from
platform-wide supply opportunities
Capitalizes on
Growing End Markets
• Complementary products and customers
• Industry reputations for product quality and on-time delivery
• Strong operating systems and emphasis on lean manufacturing
Leverages Strengths
of Both Companies
• Significant opportunities to grow high margin business
• Revenue and cost synergies
• EPS accretive and strong Free Cash Flow in 2015Financially Compelling
Allfast Overview
13
• Leading global manufacturer of solid and blind rivets, blind bolts, temporary
fasteners and installation tools for aerospace industry
• Content on substantially all commercial, defense and general aviation platforms
• Manufactures 30,000+ different qualified fastener styles
• Highly experienced senior management team
• 165,000 sq. ft. state-of-the-art manufacturing facility
• Strong application engineering capabilities
• IP portfolio with a high level of proprietary products and processes
• Approximately 250 employees
• Located in City of Industry, California (15 miles from Monogram)
Generational asset that aligns well with Strategic Aspirations.
Summary
Key Metrics
• $55M in revenue (12 months ended August 2014) – 13% Sales CAGR 2010 – 2014E
• Superior margins – accretive to TriMas’ aerospace platform
• Significant growth opportunities under LTAs for existing products with customers
• New products in pipeline able to drive additional growth
• Low capital expenditure needs and strong Free Cash Flow profile
Allfast Overview – Products
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Allfast manufactures over 30,000 different qualified fastener styles.
OverviewA leading U.S. domestic approved solid rivets supplier
Core, heritage business
Poised for major European and Asian expansion
Solid Rivets
A leader in blind rivets
Wide variety of alloys, grip ranges and sizes to
tailor to each customer’s specifications
Qualifying on key new products and platforms
Blind Rivets
Temporary fasteners, which are designed to facilitate
automated metallic riveting and composite assembly
Proprietary products include: FasTACK® and SuperTACK®
Well-positioned for outsized growth
Temporary Fasteners
Installation Tools & Miscellaneous
MBC & Specialty Fasteners
Products include MBC (high strength monobolt hybrid
pending qualification) and CF Spacer rivet
New/pending qualifications provide significant runway
for growth
Blind Bolts
Blind bolts for both metallic and composite structures
Product design features are highly composite-friendly
High growth products correlated to composite aircraft
platform deliveries
SO
LID
SB
LIN
DS
15
Allfast’s fasteners are employed throughout the aircraft aerostructure.
Allfast Overview – Product Placement
Allfast Overview - Customers
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Unparalleled reputation for product quality, reliability and on-time delivery.
Select Key
Customers
OEM/Tier 1 Distributors Government/Defense
Selected Awards for Recognition of Excellence
Boeing President’s Boeing Quality Northrop Platinum Embraer Supplier of Lockheed Star
Award for Excellence 100 Club Source Supplier Award the Year Award Supplier Award
Content on Nearly All Major Platforms
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Expected increases in deliveries of major commercial aircraft platforms provide
significant opportunity for continued growth.
Platforms
� 737 (all variants)
� 767
� 777
� 747
� 787
Products
� Solid Rivets
� Blind Rivets 1
� Blind Bolts 1
� Temporary
Fasteners
BOEING
Platforms
� A320 (all variants)
� A330
� A340
� A350
� A380
Products
� Solid Rivets
� Blind Rivets
� Temporary
Fasteners
AIRBUS
Platforms
� Embraer 170
� Embraer 175
� Embraer 190
� Embraer 195
� ERJ 145/145 XR
� ERJ 135/140
Products
� Solid Rivets
� Blind Rivets
� Temporary
Fasteners
EMBRAER
Platforms
� CSeries (CS100 and
CS300)
� CRJ
� Q-Series/Q400
Products
� Solid Rivets
� Blind Rivets
� Temporary
Fasteners
BOMBARDIER
Platforms
� Comac C919
� MA700
� Mitsubishi
Regional Jet (MRJ)
Products
� Solid Rivets
� Blind Rivets
� Blind Bolts
� Temporary
Fasteners
OTHERS
Note: Includes select platforms and is not a comprehensive list of all platforms where the Company is certified(1) Indicates products where Allfast is qualified, but not currently supplying
Opportunities and Synergies
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Significant product and customer synergies – with minimal overlap.
Complementary
Products
Complementary
Customers
Complexity and Price
Industry Volume
Higher
Higher
Lower
Lower
Composi-Lok
Rotary Blind Bolts
OSI Bolts
Blind Bolts
Blind Rivets
Solid Rivets
Temporary Fasteners
12-Point Fasteners
PMA Fasteners
Increases penetration
into key customers;
Long-term customer
agreements in place
Highly complementary
to TriMas’ existing
aerospace fastener
business
Monogram > Allfast
Allfast > Monogram
Allfast > MonogramAllfast > Monogram
Monogram > AllfastAllfast > Monogram
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• Combine commercial initiatives to better leverage broad product portfolio
• Leverage new product development and application engineering capabilities
to provide better customer solutions
• Consolidate supply chain and procurement activities
• Utilize manufacturing footprints to provide flexibility and capacity for growth
• Cross-source and in-source certain processing activities
• Share better practices
• Talented, experienced management teams
• Quality programs and systems
• Min / Max inventory management experience
• Structure organization to facilitate growth in Europe and improve tax
efficiency
Estimated cost and commercial synergies of up to 10%
of acquired revenue within five years.
Opportunities and Synergies
Financially Compelling Transaction
20
The combination of TriMas and Allfast enhances shareholder value.
Complementary
Products
Transaction
• Approximately $360M purchase price
• Structured in tax efficient manner to maximize future tax deductions
• Target close by end of October 2014; subject to customary regulatory approvals
Financing
• Financing through use of revolving capacity and incremental TLA of $250 million
• Financing 100% committed at signing
• Company committed to managing leverage ratio under 2x over time
Value Creation
• Projected double-digit top-line growth with installed capacity to achieve
• Historical margins 25% higher than TriMas aerospace
• EPS accretive in 2015 more than covering incremental interest and purchase accounting costs
• FCF accretive in 2015 by 30%+ to total TriMas
• IRR of approximately 12% to 13%
TriMas’ Aerospace Segment
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• Promoted Tom Aepelbacher as president TriMas aerospace
• Jim Randall of Allfast to stay on in an advisory capacity
• Sold NI Industries assets
• Cartridge case manufacturing business
• Received approximately $6.7 million for intellectual property and
related inventory and tooling
• Will consist of four aerospace businesses, serving a variety of
customers – opportunities to combine and integrate
• Renamed Aerospace & Defense segment to Aerospace
Increased emphasis on this growing, high margin platform.
Closing Remarks
TriMas’ New Aerospace Segment
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• Inclusion of Allfast will accelerate TriMas’ progress on Strategic Aspirations
• Strategic focus on faster growing, higher margin businesses
• Growth expected on new airframes for many years
• Complementary products and customers will accelerate growth
• Combination of management teams expected to drive best practices and
superior results across all aerospace businesses
The acquisition of Allfast aligns well with TriMas’ Strategic Aspirations.
Preliminary Thoughts on 2015
24
Additional progress toward Strategic Aspirations.
Segment 2015 Expectations
Packaging Approximately 8-10% revenue growth; strength in Asian market;
pursuit of product-related acquisition; maintain current operating
margin performance
Aerospace Continued approximate 6%+ OE build rates; TriMas content adds more
growth; Allfast acquisition mixes margins up; Monogram and Martinic
Engineering realize improved margins
Energy Few percent market growth; cost-out programs begin favorably
impacting results and ramping throughout 2015 (not completed until
2016); Brazil right-sized for market
Engineered Components GDP growth; Norris and Arrow continue performing at current
operating profit margin level; potential upsides at Arrow in Mexico
market and related to Year 2 of cylinder acquisition
Cequent U.S. business supply chain to “normal” and Mexico transition Year 2
progress; Brazil and South Africa improvements; APEA integration
progress
Corporate Office Interest expense increases with more debt; flat share count; lower tax
rate
Strategic Aspirations
25
TriMas’ Strategic Aspirations remain consistent.
G E N E R A T E high single-digit top-line growth
I N V E S Tin growing end markets through new products, global expansion and acquisitions
E N H A N C Emargins through productivity initiatives, leveraging costs and business mix
G R O W earnings faster than revenue growth
O P T I M I Z E capital structure
S T R I V E to be a great place to work
Questions and Answers