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TriMas Corp. Reports Operating Results (10-Q)

May 06, 2009 | About:

TriMas Corp. (TRS) filed Quarterly Report for the period ended 2009-03-31.

TRIMAS CORPORATION headquartered in Bloomfield Hills Michigan is a diversified growth company of specialty niche businesses manufacturing a variety of highly engineered products for commercial industrial and consumer markets worldwide. TriMas Corporation is organized into five strategic business segments: Packaging Systems Energy Products Industrial Specialties RV & Trailer Products and Recreational Accessories. TriMas Corp. has a market cap of $92.4 million; its shares were traded at around $2.75 with a P/E ratio of 3.1 and P/S ratio of 0.1.

Highlight of Business Operations:

Overall, net sales decreased $61.9 million, or approximately 23.4%, for the three months ended March 31, 2009, as compared with the three months ended March 31, 2008. Net sales were unfavorably impacted by approximately $7.1 million as a result of currency exchange, as our reported results in U.S. dollars were negatively impacted by weaker foreign currencies. Packaging Systems' net sales decreased $10.8 million, or approximately 26.3%, primarily as a result of decreases in sales of our ring, lever and closure products and unfavorable currency exchange. Net sales within Energy Products decreased $8.5 million, or 17.5%, primarily as a result of reduced demand for our specialty gaskets due to lower levels of turn-around activity in petrochemical refineries and reduced sales of engine and related components due to lower drilling activity and deferred completion of previously drilled wells. Net sales within Industrial Specialties decreased $11.8 million, or approximately 21.9%, due to the impact of the economic recession on the majority of our businesses in this segment. Net sales within RV & Trailer Products decreased $15.6 million, or approximately 30.7%, as this segment experienced reduced sales across all market channels, due to declining end market demand resulting from the economic slowdown. Recreational Accessories' net sales decreased $15.2 million, or approximately $21.6%, primarily as a result of continued soft demand in our installer and distributor customer groups, which were partially offset by increases in retail sales as a result of new customers and significant additional products sold at a current customer.

Gross profit margin (gross profit as a percentage of sales) approximated 22.6% and 26.4% for the three months ended March 31, 2009 and 2008, respectively. Packaging Systems' gross profit margin decreased to 33.4% for the three months ended March 31, 2009, from 34.0% for the three months ended March 31, 2008, primarily due to the reduction in sales volumes and unfavorable currency exchange. Energy Products' gross profit margin decreased to 24.8% for the three months ended March 31, 2009, from 29.8% for the three months ended March 31, 2008, due to lower sales volumes, higher commodity and sourced component costs and lower absorption of fixed costs. Gross profit margin within Industrial Specialties decreased to 25.6% for the three months ended March 31, 2009, from 29.6% in the three months ended March 31, 2008, due principally to lower sales volumes, sales of higher-cost inventory and lower absorption of fixed costs. RV & Trailer Products' gross profit margin decreased to 12.5% for the three months ended March 31, 2009, from 17.9% for the three months ended March 31, 2008, due to lower sales volumes, sales of higher-cost inventory, lower absorption of fixed costs and costs incurred in connection with the planned closure of the Mosinee, WI facility. Recreational Accessories' gross profit margin decreased to 19.3% for the three months ended March 31, 2009, from 23.4% for the three months ended March 31, 2008, primarily due to lower sales volumes and sales of higher-cost inventory.

Operating profit margin (operating profit as a percentage of sales) approximated 2.1% and 10.5% for the three months ended March 31, 2009 and 2008, respectively. Operating profit decreased

$23.4 million, or 84.4%, to $4.3 million for the three months ended March 31, 2009, from $27.8 million for the three months ended March 31, 2008. Packaging Systems' operating profit margin was 17.9% and 21.0% in the three months ended March 31, 2009 and 2008, respectively. Operating profit decreased $3.2 million, or approximately 37.3%, for the three months ended March 31, 2009, as compared with the three months ended March 31, 2008, due to the lower sales volumes and unfavorable currency exchange, which were partially offset by lower selling, general and administrative expenses in response to the lower sales volumes. Energy Products' operating profit margin was 8.7% and 16.2% for the three months ended March 31, 2009 and 2008, respectively. Operating profit decreased $4.4 million, or approximately 55.5%, for the three months ended March 31, 2009, as compared with the three months ended March 31, 2008, due primarily to lower sales levels in our both our specialty gasket and engine businesses. Industrial Specialties' operating profit margin was 15.2% and 20.9% for the three months ended March 31, 2009 and 2008, respectively. Operating profit decreased $4.8 million, or approximately 43.3%, for the three months ended March 31, 2009, as compared with the three months ended March 31, 2008, due primarily to lower sales volumes, sales of higher-cost inventory and lower absorption of fixed costs, which were partially offset by reduced discretionary spending in selling, general and administrative expenses in light of the reduced sales volumes. RV & Trailer Products' operating profit (loss) margin declined to (6.2%) for the quarter ended March 31, 2009, from 5.4% for the quarter ended March 31, 2008. Operating profit decreased $4.9 million in the three months ended March 31, 2009, as compared with the three months ended March 31, 2008, due primarily to lower sales volumes, unfavorable currency exchange and costs incurred in connection with the closure of the Mosinee, WI facility. Recreational Accessories' operating profit margin was (2.1%) and 3.7% in the three months ended March 31, 2009 and 2008, respectively. Operating profit decreased $3.8 million in the three months ended March 31, 2009, compared with the three months ended March 31, 2008, primarily due to the lower sales volumes and sales of higher-cost inventory, which were partially offset by cost savings realized in connection with our Profit Improvement Plan.

Adjusted EBITDA margin (Adjusted EBITDA as a percentage of sales) approximated 14.7% and 13.9% for the three months ended March 31, 2009 and 2008, respectively. Adjusted EBITDA decreased $7.0 million for the three months ended March 31, 2009, as compared to the three months ended March 31, 2008. After consideration of the $15.8 million gross gain on extinguishment of debt, the change in Adjusted EBITDA is consistent with the change in operating profit between years.

Packaging Systems' Adjusted EBITDA decreased $3.4 million to $8.6 million, or 28.6% of sales, in the three months ended March 31, 2009, as compared to $12.0 million, or 29.4% of sales, in the three months ended March 31, 2008, consistent with the change in operating profit between years.

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