TriMas Reports Fourth Quarter and Full Year 2018 Results

Delivers Strong Sales and Earnings Growth; Provides 2019 Outlook

BLOOMFIELD HILLS, Mich.–(BUSINESS WIRE)–TriMas (NASDAQ: TRS) today announced financial results for the fourth
quarter and full year ended December 31, 2018.

2018 Highlights

  • Increased net sales by 7.3% to $877.1 million, with sales increases in
    all segments
  • Increased operating profit to $122.1 million, while adjusted operating
    profit(1) increased by 8.5% to $116.1 million
  • Increased net income to $83.3 million, while adjusted net income(1)
    increased by 25.8% to $81.0 million
  • Increased diluted EPS to $1.80, while adjusted diluted EPS(1)
    increased by 25.0% to $1.75
  • Increased Adjusted EBITDA(2) by $12.4 million to $167.3
    million, or 19.1% of sales
  • Increased net cash provided by operating activities by 7.7% to $129.3
    million, and ended 2018 with $108.2 million of cash on hand
  • Reduced debt less cash and cash equivalents by $90.1 million, to
    $185.4 million as of December 31, 2018

Fourth Quarter 2018

TriMas reported fourth quarter net sales of $211.4 million, an increase
of 8.3% compared to $195.2 million in fourth quarter 2017. The Company
reported operating profit of $25.5 million in fourth quarter 2018
compared to $18.6 million in fourth quarter 2017. Adjusting for Special
Items(1), fourth quarter 2018 adjusted operating profit was
$25.7 million, an increase of 9.4% compared to the prior year period, as
the favorable impact of volume increases was partially offset by higher
material costs.

The Company reported fourth quarter 2018 net income of $16.7 million, or
$0.36 per diluted share, compared to a net loss of $4.0 million, or
$0.09 per diluted share, in fourth quarter 2017 primarily related to
one-time tax charges of approximately $12.7 million resulting from the
enactment of the Tax Cuts and Jobs Act of 2017. Fourth quarter 2018
adjusted net income(1) was $17.5 million, or $0.38 per
diluted share, a 21.0% increase from $14.5 million, or $0.31 per diluted
share, in the prior year period.

Full Year 2018

For the full year 2018, TriMas reported net sales of $877.1 million, an
increase of 7.3% compared to $817.7 million in 2017. The Company
reported operating profit of $122.1 million in 2018 compared to $89.2
million in 2017. Adjusting for Special Items(1), 2018
adjusted operating profit was $116.1 million, an increase of 8.5%
compared to the prior year.

The Company reported full year net income of $83.3 million, or $1.80 per
diluted share, compared to $31.0 million, or $0.67 per diluted share, in
2017. Full year 2018 adjusted net income(1) was $81.0
million, or $1.75 per diluted share, a 25.8% increase from $64.4
million, or $1.40 per diluted share, in 2017.

“We are pleased to report another strong quarter to conclude 2018, a
year in which we achieved 7% organic sales growth and 25% adjusted
earnings per share growth compared to the prior year,” said Thomas
Amato, TriMas President and Chief Executive Officer. “This performance
demonstrated great execution by our team, as we continued to leverage
the TriMas Business Model to enhance our businesses and better serve our
customers, all while generating excellent cash flow and completing the
year with a strong balance sheet. During the year, we successfully
overcame the impact of higher material costs and the onset of tariffs
through improved operating performance, incremental volume and
commercial actions.”

“In addition to the strong operational and financial performance, we
achieved continued progress on numerous strategic initiatives that
better position TriMas for profitable growth in the future. For example,
we completed numerous Kaizen projects which accelerated our continuous
improvement efforts and ramped-up our corporate development initiatives,
closing on the acquisition of Plastic Srl in January 2019. We also
executed upon our share buyback program, retiring nearly 1% of shares
outstanding, or approximately 443,000 shares, during the year.”

“In 2019, our objectives are to continue our momentum under the TriMas
Business Model, better position our businesses strategically to drive
growth through innovation, and capitalize on market opportunities
through manufacturing efficacy. We anticipate organic sales growth of 3%
to 5% compared to 2018, and free cash flow conversion greater than 100%
of net income, both in line with our longer-term targets. We expect full
year 2019 diluted EPS to range between $1.82 to $1.92 per share. Our
performance in 2018 was outstanding, and we remain excited about our
prospects for 2019 and beyond,” Amato concluded.

Financial Position

TriMas ended 2018 with $108.2 million of cash, $393.1 million of cash
and aggregate availability under its revolving credit facility, and a
leverage ratio of 1.3x as defined in the Company’s credit agreement.
TriMas reported total debt of $293.6 million as of December 31, 2018,
compared to $303.1 million as of December 31, 2017. In addition, the
Company reduced Net Debt(3) during 2018 by $90.1 million to
$185.4 million, compared to $275.5 million as of December 31, 2017.

During the fourth quarter, the Company purchased 318,494 shares of its
outstanding common stock for approximately $8.6 million, bringing the
total for the year ended December 31, 2018 to 442,632 shares for $12.1
million. As announced this morning, TriMas’ Board of Directors has
authorized an increase in the Company’s share repurchase program,
enabling the Company to purchase up to $75 million of its outstanding
common stock.

The Company reported net cash provided by operations of $46.2 million
for fourth quarter 2018, compared to $47.4 million in fourth quarter
2017. On a full year basis, TriMas reported net cash provided by
operations of $129.3 million, an increase of 7.7% compared to $120.1
million for 2017. As a result, the Company reported Free Cash Flow(4)
of $37.6 million for fourth quarter 2018, compared to $36.7
million in fourth quarter 2017. For 2018, TriMas reported a record Free
Cash Flowof $108.3 million, an increase of 8.0% compared to
$100.2 million in 2017. The Company exceeded its previously provided
2018 Free Cash Flow guidance. Please see Appendix I for further details.

Fourth Quarter Segment Results

Packaging (Approximately 42% of TriMas 2018 net sales)

TriMas’ Packaging segment, which consists primarily of the Rieke®
brand, develops and manufactures specialty dispensing and closure
applications for the health, beauty and home care, food and beverage,
and industrial markets. Net sales for the fourth quarter increased 5.1%
compared to the year ago period, primarily as a result of higher sales
of health, beauty and home care, and industrial products, related to new
product introductions and continued growth in Asia. Fourth quarter
operating profit and the related margin percentage increased, as the
favorable impact of increased sales volumes more than offset a less
favorable product sales mix.

Aerospace (Approximately 21% of TriMas 2018 net sales)

TriMas’ Aerospace segment, which includes the Monogram Aerospace
Fasteners, Allfast Fastening Systems®, Mac
Fasteners and Martinic Engineering brands,
develops, qualifies and manufactures highly-engineered, precision
fasteners and machined products to serve the aerospace market. Net sales
for the fourth quarter increased 6.2% compared to the year ago period,
due to higher demand levels for more complex fasteners. Fourth quarter
operating profit increased and the related margin percentage decreased
slightly, as the impact of higher sales was mitigated primarily by the
lower profit level of the standard fastener plant.

Specialty Products (Approximately 37% of TriMas 2018
net sales)

TriMas’ Specialty Products segment, which includes the Norris Cylinder,
Lamons® and Arrow® Engine brands, designs,
manufactures and distributes highly-engineered steel cylinders, sealing
and fastener products, and wellhead engines and compression systems for
use within the industrial, petrochemical, and oil and gas exploration
and refining markets. Fourth quarter net sales increased 13.6% compared
to the year ago period, with higher sales levels of all brands due to
refocused commercial efforts and increased end market demand. Fourth
quarter operating profit and the related margin level increased, as the
impact of higher sales levels and prior realignment actions offset the
impact of higher material costs.

2019 Modification to Reporting Segments

Effective with the first quarter of 2019, the Company will report its
machined components operations, located in Stanton, California and
Tolleson, Arizona, in the Specialty Products segment. These operations
were previously reported in the Aerospace segment. This modification
allows the Company to better leverage its machining competencies and
resources across the businesses within the Specialty Products segment,
as well as provides the opportunity to expand sales of these products to
customers outside of the aerospace market. In addition, this change
enables the TriMas Aerospace team to better focus on driving growth and
innovation in the aerospace fastener and related product lines. Please
see today’s 8-K, Exhibit 99.2, for historical quarterly information
related to this segment change.

Outlook

The Company is estimating that 2019 full year organic sales growth will
be 3% to 5% compared to 2018. The Company expects full year 2019 diluted
earnings per share range to be between $1.82 to $1.92 per share. In
addition, the Company is targeting 2019 Free Cash Flow(4) to
be greater than 100% of net income. All of the above amounts considered
as 2019 guidance are after adjusting for any current or future amounts
that may be considered Special Items.

Conference Call Information

TriMas will host its fourth quarter and full year 2018 earnings
conference call today, Thursday, February 28, 2019, at 10:00 a.m. ET.
The call-in number is (877) 260-1479. Participants should request to be
connected to the TriMas Corporation fourth quarter and full year 2018
earnings conference call (Confirmation Code 533510). The conference call
will also be simultaneously webcast via TriMas’ website at www.trimascorp.com,
under the “Investors” section, with an accompanying slide presentation.
A replay of the conference call will be available on the TriMas website
or by dialing (888) 203-1112 (Replay Passcode 533510) beginning
February 28, 2019 at 3:00 p.m. ET through March 7, 2019 at 3:00 p.m. ET.

Notice Regarding Forward-Looking Statements

Any “forward-looking” statements, within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, contained herein, including those relating to the Company’s
business, financial condition or future results, involve risks and
uncertainties with respect to, including, but not limited to: general
economic and currency conditions; material and energy costs; risks and
uncertainties associated with intangible assets, including goodwill or
other intangible asset impairment charges; competitive factors; future
trends; the Company’s ability to realize its business strategies; the
Company’s ability to identify attractive acquisition candidates,
successfully integrate acquired operations or realize the intended
benefits of such acquisitions; information technology and other
cyber-related risks; the performance of subcontractors and suppliers;
supply constraints; market demand; intellectual property factors;
litigation; government and regulatory actions, including, but not
limited to, the impact of tariffs, quotas and surcharges; the Company’s
leverage; liabilities imposed by debt instruments; labor disputes;
changes to fiscal and tax policies; contingent liabilities relating to
acquisition activities; the disruption of operations from catastrophic
or extraordinary events, including natural disasters; the potential
impact of Brexit; tax considerations relating to the Cequent spin-off;
the Company’s future prospects; and other risks that are detailed in the
Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2018. 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, except as required by law.

Non-GAAP Financial Measures

In this release, certain non-GAAP financial measures are used.
Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measure may be found in Appendix I at
the end of this release. Additional information is available at www.trimascorp.com
under the “Investors” section.

(1)

  Appendix I details certain costs, expenses and other amounts or
charges, collectively described as “Special Items,” that are
included in the determination of net income, earnings per share
and/or cash flows from operating activities under GAAP, but that
management believes should be separately considered when evaluating
the quality of the Company’s core operating results, given they may
not reflect the ongoing activities of the business. Management
believes that presenting these non-GAAP financial measures, adjusted
to remove the impact of Special Items, provides useful information
to investors by helping them identify underlying trends in the
Company’s businesses and facilitating comparisons of performance
with prior and future periods. These non-GAAP financial measures
should be considered in addition to, and not as a replacement for or
superior to, the comparable GAAP financial measures.

(2)

The Company defines Adjusted EBITDA as net income (loss) plus
expense (benefit) for interest, taxes, depreciation, amortization
and non-cash compensation, all as adjusted for the impact of Special
Items. Please see Appendix I for additional details.

(3)

The Company defines Net Debt as Total Debt less Cash and Cash
Equivalents. Please see Appendix I for additional details.

(4)

The Company defines Free Cash Flow as Net Cash Provided by/Used for
Operating Activities, excluding the cash impact of Special Items,
less Capital Expenditures. Please see Appendix I for additional
details.

About TriMas

TriMas is a diversified industrial manufacturer of products for
customers in the consumer products, aerospace, industrial,
petrochemical, refinery and oil & gas end markets with approximately
4,000 dedicated employees in 15 countries. We provide customers with a
wide range of innovative and quality product solutions through our
market-leading businesses, which operate in three segments: Packaging,
Aerospace and Specialty Products. The TriMas family of businesses has
strong brand names in the markets served, and operates under a common
set of values and strategic priorities under the TriMas Business Model.
TriMas is publicly traded on the NASDAQ under the ticker symbol “TRS,”
and is headquartered in Bloomfield Hills, Michigan. For more
information, please visit www.trimascorp.com.

TriMas Corporation

Condensed Consolidated Balance Sheet

(Dollars in thousands)

 
  December 31,
2018
  December 31,
2017
Assets
Current assets:
Cash and cash equivalents $ 108,150 $ 27,580
Receivables, net 123,110 112,220
Inventories 173,120 155,350
Prepaid expenses and other current assets 7,430   16,120
Total current assets 411,810 311,270
Property and equipment, net 187,800 190,250
Goodwill 316,650 319,390
Other intangibles, net 174,530 194,220
Deferred income taxes 1,080 9,100
Other assets 8,650   8,970
Total assets $ 1,100,520   $ 1,033,200
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 93,430 $ 72,410
Accrued liabilities 48,300   49,470
Total current liabilities 141,730 121,880
Long-term debt, net 293,560 303,080
Deferred income taxes 5,560 5,650
Other long-term liabilities 39,220   58,570
Total liabilities 480,070 489,180
Total shareholders’ equity 620,450   544,020
Total liabilities and shareholders’ equity $ 1,100,520   $ 1,033,200

TriMas Corporation

Consolidated Statement of Operations

(Dollars in thousands, except share and per share amounts)

 
  Three months ended
December 31,
  Twelve months ended
December 31,
2018   2017 2018   2017
(unaudited)
Net sales $ 211,350 $ 195,210 $ 877,140 $ 817,740
Cost of sales (154,110 ) (146,000 ) (633,020 ) (598,350 )
Gross profit 57,240 49,210 244,120 219,390
Selling, general and administrative expenses (31,600 ) (32,800 ) (121,800 ) (129,140 )
Net gain (loss) on dispositions of assets (180 ) 2,140   (250 ) (1,080 )
Operating profit 25,460   18,550   122,070   89,170  
Other expense, net:
Interest expense (3,250 ) (4,040 ) (13,910 ) (14,400 )
Debt financing and related expenses (6,640 )
Other income (expense), net 150   (630 ) (2,180 ) (1,920 )
Other expense, net (3,100 ) (4,670 ) (16,090 ) (22,960 )
Income before income tax expense 22,360 13,880 105,980 66,210
Income tax expense (5,650 ) (17,890 ) (22,680 ) (35,250 )
Net income (loss) 16,710   (4,010 ) 83,300   30,960  
Basic earnings (loss) per share:        
Net income (loss) per share $ 0.37   $ (0.09 ) $ 1.82   $ 0.68  
Weighted average common shares – basic 45,747,659   45,721,160   45,824,555   45,682,627  
Diluted earnings (loss) per share:        
Net income (loss) per share $ 0.36   $ (0.09 ) $ 1.80   $ 0.67  
Weighted average common shares – diluted 46,085,202   45,721,160   46,170,464   45,990,252  

TriMas Corporation

Consolidated Statement of Cash Flow

(Dollars in thousands)

 
  Twelve months ended
December 31,
2018   2017
Cash Flows from Operating Activities:
Net income $ 83,300 $ 30,960
Adjustments to reconcile net income to net cash provided by
operating activities:
Loss on dispositions of assets 250 1,080
Depreciation 24,580 26,950
Amortization of intangible assets 19,440 19,920
Amortization of debt issue costs 1,290 1,320
Deferred income taxes 7,200 15,260
Non-cash compensation expense 7,170 6,780
Debt financing and related expenses 6,640
(Increase) decrease in receivables (11,420 ) 1,220
(Increase) decrease in inventories (18,690 ) 4,350
(Increase) decrease in prepaid expenses and other assets 9,060 (310 )
Increase in accounts payable and accrued liabilities 4,340 3,640
Other operating activities 2,800   2,250  
Net cash provided by operating activities 129,320   120,060  
Cash Flows from Investing Activities:
Capital expenditures (25,050 ) (36,800 )
Net proceeds from dispositions of property and equipment 250   4,450  
Net cash used for investing activities (24,800 ) (32,350 )
Cash Flows from Financing Activities:
Proceeds from borrowings on revolving credit and accounts receivable
facilities
59,060 401,300
Repayments of borrowings on revolving credit and accounts receivable
facilities
(68,490 ) (517,310 )
Payments to purchase common stock (12,140 )
Shares surrendered upon exercise and vesting of equity awards to
cover taxes
(2,380 ) (510 )
Proceeds from issuance of senior notes 300,000
Repayments of borrowings on term loan facilities (257,940 )
Debt financing fees (6,070 )
Other financing activities   (310 )
Net cash used for financing activities (23,950 ) (80,840 )
Cash and Cash Equivalents:
Increase for the year 80,570 6,870
At beginning of year 27,580   20,710  
At end of year $ 108,150   $ 27,580  
Supplemental disclosure of cash flow information:
Cash paid for interest $ 13,800   $ 9,430  
Cash paid for income taxes $ 7,380   $ 16,230  

Appendix I

TriMas Corporation

Additional Information Regarding Special Items Impacting

Reported GAAP Financial Measures

(Unaudited – dollars in thousands)

 
  Three months ended
December 31,
  Twelve months ended
December 31,
2018   2017 2018   2017
Packaging
Net sales $ 89,660 $ 85,310 $ 368,200 $ 344,570
Operating profit $ 20,140 $ 18,980 $ 84,590 $ 80,610
Special Items to consider in evaluating operating profit:
Business restructuring and severance costs 40 1,710
Adjusted operating profit $ 20,140 $ 19,020 $ 84,590 $ 82,320
 
Aerospace
Net sales $ 45,420 $ 42,760 $ 185,920 $ 184,310
Operating profit $ 6,610 $ 6,550 $ 27,290 $ 26,410
Special Items to consider in evaluating operating profit:
Business restructuring and severance costs 250 250
Adjusted operating profit $ 6,860 $ 6,550 $ 27,540 $ 26,410
 
Specialty Products
Net sales $ 76,270 $ 67,140 $ 323,020 $ 288,860
Operating profit $ 7,650 $ 510 $ 34,260 $ 12,280
Special Items to consider in evaluating operating profit:
Business restructuring and severance costs 30 4,550 1,910 15,350
Adjusted operating profit $ 7,680 $ 5,060 $ 36,170 $ 27,630
 
Corporate Expenses
Operating loss $ (8,940 ) $ (7,490 ) $ (24,070 ) $ (30,130 )
Special Items to consider in evaluating operating loss:
Business restructuring and severance costs 390 750
Reversal of legacy related party liability $ $ $ (8,150 ) $
Adjusted operating loss $ (8,940 ) $ (7,100 ) $ (32,220 ) $ (29,380 )
 
Total Company
Net sales $ 211,350 $ 195,210 $ 877,140 $ 817,740
Operating profit $ 25,460 $ 18,550 $ 122,070 $ 89,170
Total Special Items to consider in evaluating operating profit 280 4,980 (5,990 ) 17,810
Adjusted operating profit $ 25,740 $ 23,530 $ 116,080 $ 106,980

Appendix I

TriMas Corporation

Additional Information Regarding Special Items Impacting

Reported GAAP Financial Measures

(Unaudited – dollars in thousands, except share and per share
amounts)

 
  Three months ended
December 31,
  Twelve months ended
December 31,
2018   2017 2018   2017
Net income (loss), as reported $ 16,710 $ (4,010 ) $ 83,300 $ 30,960
Special Items to consider in evaluating quality of net income (loss):
Business restructuring and severance costs 250 5,580 2,830 18,130
Reversal of legacy related party liability (8,150 )
Debt financing and related expenses 6,640
Defined benefit pension plan settlement charge 2,500
Tax reform adjustments (1) 700 12,660 (400 ) 12,660
Income tax effect of Special Items (2) (120 ) 270   910   (4,010 )
Adjusted net income $ 17,540   $ 14,500   $ 80,990   $ 64,380  
 
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017 2018 2017
Diluted earnings (loss) per share, as reported $ 0.36 $ (0.09 ) $ 1.80 $ 0.67
Special Items to consider in evaluating quality of EPS:
Business restructuring and severance costs 0.12 0.06 0.40
Reversal of legacy related party liability (0.17 )
Debt financing and related expenses 0.14
Defined benefit pension plan settlement charge 0.05
Tax reform adjustments (1) 0.02 0.28 (0.01 ) 0.28
Income tax effect of Special Items (2)     0.02   (0.09 )
Adjusted diluted EPS $ 0.38   $ 0.31   $ 1.78   $ 1.40  
Weighted-average shares outstanding 46,085,202   45,721,160   46,170,464   45,990,252  

(1)

  As a result of the Tax Cuts and Jobs Act of 2017, the Company
recognized one-time charges of $12.7 million in December 2017 from
the estimated impact of the inclusion of foreign earnings and
revaluation of deferred tax assets and liabilities. In 2018, the
Company finalized its accounting related to foreign earnings and
recognized approximately $0.7 million of additional tax obligation
in the three months ended December 31, 2018. In the twelve months
ended December 31, 2018, the Company recognized a net tax benefit of
$0.4 million associated with finalizing its estimates of the impact
of the Tax Cuts and Jobs Act of 2017.

(2)

Income tax effect of Special Items is calculated on an item-by-item
basis, utilizing the tax rate in the jurisdiction where the Special
Item occurred. For the three and twelve month periods ended December
31, 2018 and 2017, the income tax effect of Special Items varied
from the tax rate inherent in the Company’s reported GAAP results,
primarily as a result of certain of the Special Items in each period
being incurred in jurisdictions where no tax benefit could be
recorded due to valuation allowance assessments.

Contacts

Sherry Lauderback
VP, Investor Relations & Communications
(248)
631-5506
sherrylauderback@trimascorp.com

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TriMas Reports Fourth Quarter and Full Year 2018 Results

Delivers Strong Sales and Earnings Growth; Provides 2019 Outlook

BLOOMFIELD HILLS, Mich.–(BUSINESS WIRE)–TriMas (NASDAQ: TRS) today announced financial results for the fourth
quarter and full year ended December 31, 2018.

2018 Highlights

  • Increased net sales by 7.3% to $877.1 million, with sales increases in
    all segments
  • Increased operating profit to $122.1 million, while adjusted operating
    profit(1) increased by 8.5% to $116.1 million
  • Increased net income to $83.3 million, while adjusted net income(1)
    increased by 25.8% to $81.0 million
  • Increased diluted EPS to $1.80, while adjusted diluted EPS(1)
    increased by 25.0% to $1.75
  • Increased Adjusted EBITDA(2) by $12.4 million to $167.3
    million, or 19.1% of sales
  • Increased net cash provided by operating activities by 7.7% to $129.3
    million, and ended 2018 with $108.2 million of cash on hand
  • Reduced debt less cash and cash equivalents by $90.1 million, to
    $185.4 million as of December 31, 2018

Fourth Quarter 2018

TriMas reported fourth quarter net sales of $211.4 million, an increase
of 8.3% compared to $195.2 million in fourth quarter 2017. The Company
reported operating profit of $25.5 million in fourth quarter 2018
compared to $18.6 million in fourth quarter 2017. Adjusting for Special
Items(1), fourth quarter 2018 adjusted operating profit was
$25.7 million, an increase of 9.4% compared to the prior year period, as
the favorable impact of volume increases was partially offset by higher
material costs.

The Company reported fourth quarter 2018 net income of $16.7 million, or
$0.36 per diluted share, compared to a net loss of $4.0 million, or
$0.09 per diluted share, in fourth quarter 2017 primarily related to
one-time tax charges of approximately $12.7 million resulting from the
enactment of the Tax Cuts and Jobs Act of 2017. Fourth quarter 2018
adjusted net income(1) was $17.5 million, or $0.38 per
diluted share, a 21.0% increase from $14.5 million, or $0.31 per diluted
share, in the prior year period.

Full Year 2018

For the full year 2018, TriMas reported net sales of $877.1 million, an
increase of 7.3% compared to $817.7 million in 2017. The Company
reported operating profit of $122.1 million in 2018 compared to $89.2
million in 2017. Adjusting for Special Items(1), 2018
adjusted operating profit was $116.1 million, an increase of 8.5%
compared to the prior year.

The Company reported full year net income of $83.3 million, or $1.80 per
diluted share, compared to $31.0 million, or $0.67 per diluted share, in
2017. Full year 2018 adjusted net income(1) was $81.0
million, or $1.75 per diluted share, a 25.8% increase from $64.4
million, or $1.40 per diluted share, in 2017.

“We are pleased to report another strong quarter to conclude 2018, a
year in which we achieved 7% organic sales growth and 25% adjusted
earnings per share growth compared to the prior year,” said Thomas
Amato, TriMas President and Chief Executive Officer. “This performance
demonstrated great execution by our team, as we continued to leverage
the TriMas Business Model to enhance our businesses and better serve our
customers, all while generating excellent cash flow and completing the
year with a strong balance sheet. During the year, we successfully
overcame the impact of higher material costs and the onset of tariffs
through improved operating performance, incremental volume and
commercial actions.”

“In addition to the strong operational and financial performance, we
achieved continued progress on numerous strategic initiatives that
better position TriMas for profitable growth in the future. For example,
we completed numerous Kaizen projects which accelerated our continuous
improvement efforts and ramped-up our corporate development initiatives,
closing on the acquisition of Plastic Srl in January 2019. We also
executed upon our share buyback program, retiring nearly 1% of shares
outstanding, or approximately 443,000 shares, during the year.”

“In 2019, our objectives are to continue our momentum under the TriMas
Business Model, better position our businesses strategically to drive
growth through innovation, and capitalize on market opportunities
through manufacturing efficacy. We anticipate organic sales growth of 3%
to 5% compared to 2018, and free cash flow conversion greater than 100%
of net income, both in line with our longer-term targets. We expect full
year 2019 diluted EPS to range between $1.82 to $1.92 per share. Our
performance in 2018 was outstanding, and we remain excited about our
prospects for 2019 and beyond,” Amato concluded.

Financial Position

TriMas ended 2018 with $108.2 million of cash, $393.1 million of cash
and aggregate availability under its revolving credit facility, and a
leverage ratio of 1.3x as defined in the Company’s credit agreement.
TriMas reported total debt of $293.6 million as of December 31, 2018,
compared to $303.1 million as of December 31, 2017. In addition, the
Company reduced Net Debt(3) during 2018 by $90.1 million to
$185.4 million, compared to $275.5 million as of December 31, 2017.

During the fourth quarter, the Company purchased 318,494 shares of its
outstanding common stock for approximately $8.6 million, bringing the
total for the year ended December 31, 2018 to 442,632 shares for $12.1
million. As announced this morning, TriMas’ Board of Directors has
authorized an increase in the Company’s share repurchase program,
enabling the Company to purchase up to $75 million of its outstanding
common stock.

The Company reported net cash provided by operations of $46.2 million
for fourth quarter 2018, compared to $47.4 million in fourth quarter
2017. On a full year basis, TriMas reported net cash provided by
operations of $129.3 million, an increase of 7.7% compared to $120.1
million for 2017. As a result, the Company reported Free Cash Flow(4)
of $37.6 million for fourth quarter 2018, compared to $36.7
million in fourth quarter 2017. For 2018, TriMas reported a record Free
Cash Flowof $108.3 million, an increase of 8.0% compared to
$100.2 million in 2017. The Company exceeded its previously provided
2018 Free Cash Flow guidance. Please see Appendix I for further details.

Fourth Quarter Segment Results

Packaging (Approximately 42% of TriMas 2018 net sales)

TriMas’ Packaging segment, which consists primarily of the Rieke®
brand, develops and manufactures specialty dispensing and closure
applications for the health, beauty and home care, food and beverage,
and industrial markets. Net sales for the fourth quarter increased 5.1%
compared to the year ago period, primarily as a result of higher sales
of health, beauty and home care, and industrial products, related to new
product introductions and continued growth in Asia. Fourth quarter
operating profit and the related margin percentage increased, as the
favorable impact of increased sales volumes more than offset a less
favorable product sales mix.

Aerospace (Approximately 21% of TriMas 2018 net sales)

TriMas’ Aerospace segment, which includes the Monogram Aerospace
Fasteners, Allfast Fastening Systems®, Mac
Fasteners and Martinic Engineering brands,
develops, qualifies and manufactures highly-engineered, precision
fasteners and machined products to serve the aerospace market. Net sales
for the fourth quarter increased 6.2% compared to the year ago period,
due to higher demand levels for more complex fasteners. Fourth quarter
operating profit increased and the related margin percentage decreased
slightly, as the impact of higher sales was mitigated primarily by the
lower profit level of the standard fastener plant.

Specialty Products (Approximately 37% of TriMas 2018
net sales)

TriMas’ Specialty Products segment, which includes the Norris Cylinder,
Lamons® and Arrow® Engine brands, designs,
manufactures and distributes highly-engineered steel cylinders, sealing
and fastener products, and wellhead engines and compression systems for
use within the industrial, petrochemical, and oil and gas exploration
and refining markets. Fourth quarter net sales increased 13.6% compared
to the year ago period, with higher sales levels of all brands due to
refocused commercial efforts and increased end market demand. Fourth
quarter operating profit and the related margin level increased, as the
impact of higher sales levels and prior realignment actions offset the
impact of higher material costs.

2019 Modification to Reporting Segments

Effective with the first quarter of 2019, the Company will report its
machined components operations, located in Stanton, California and
Tolleson, Arizona, in the Specialty Products segment. These operations
were previously reported in the Aerospace segment. This modification
allows the Company to better leverage its machining competencies and
resources across the businesses within the Specialty Products segment,
as well as provides the opportunity to expand sales of these products to
customers outside of the aerospace market. In addition, this change
enables the TriMas Aerospace team to better focus on driving growth and
innovation in the aerospace fastener and related product lines. Please
see today’s 8-K, Exhibit 99.2, for historical quarterly information
related to this segment change.

Outlook

The Company is estimating that 2019 full year organic sales growth will
be 3% to 5% compared to 2018. The Company expects full year 2019 diluted
earnings per share range to be between $1.82 to $1.92 per share. In
addition, the Company is targeting 2019 Free Cash Flow(4) to
be greater than 100% of net income. All of the above amounts considered
as 2019 guidance are after adjusting for any current or future amounts
that may be considered Special Items.

Conference Call Information

TriMas will host its fourth quarter and full year 2018 earnings
conference call today, Thursday, February 28, 2019, at 10:00 a.m. ET.
The call-in number is (877) 260-1479. Participants should request to be
connected to the TriMas Corporation fourth quarter and full year 2018
earnings conference call (Confirmation Code 533510). The conference call
will also be simultaneously webcast via TriMas’ website at www.trimascorp.com,
under the “Investors” section, with an accompanying slide presentation.
A replay of the conference call will be available on the TriMas website
or by dialing (888) 203-1112 (Replay Passcode 533510) beginning
February 28, 2019 at 3:00 p.m. ET through March 7, 2019 at 3:00 p.m. ET.

Notice Regarding Forward-Looking Statements

Any “forward-looking” statements, within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, contained herein, including those relating to the Company’s
business, financial condition or future results, involve risks and
uncertainties with respect to, including, but not limited to: general
economic and currency conditions; material and energy costs; risks and
uncertainties associated with intangible assets, including goodwill or
other intangible asset impairment charges; competitive factors; future
trends; the Company’s ability to realize its business strategies; the
Company’s ability to identify attractive acquisition candidates,
successfully integrate acquired operations or realize the intended
benefits of such acquisitions; information technology and other
cyber-related risks; the performance of subcontractors and suppliers;
supply constraints; market demand; intellectual property factors;
litigation; government and regulatory actions, including, but not
limited to, the impact of tariffs, quotas and surcharges; the Company’s
leverage; liabilities imposed by debt instruments; labor disputes;
changes to fiscal and tax policies; contingent liabilities relating to
acquisition activities; the disruption of operations from catastrophic
or extraordinary events, including natural disasters; the potential
impact of Brexit; tax considerations relating to the Cequent spin-off;
the Company’s future prospects; and other risks that are detailed in the
Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2018. 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, except as required by law.

Non-GAAP Financial Measures

In this release, certain non-GAAP financial measures are used.
Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measure may be found in Appendix I at
the end of this release. Additional information is available at www.trimascorp.com
under the “Investors” section.

(1)

  Appendix I details certain costs, expenses and other amounts or
charges, collectively described as “Special Items,” that are
included in the determination of net income, earnings per share
and/or cash flows from operating activities under GAAP, but that
management believes should be separately considered when evaluating
the quality of the Company’s core operating results, given they may
not reflect the ongoing activities of the business. Management
believes that presenting these non-GAAP financial measures, adjusted
to remove the impact of Special Items, provides useful information
to investors by helping them identify underlying trends in the
Company’s businesses and facilitating comparisons of performance
with prior and future periods. These non-GAAP financial measures
should be considered in addition to, and not as a replacement for or
superior to, the comparable GAAP financial measures.

(2)

The Company defines Adjusted EBITDA as net income (loss) plus
expense (benefit) for interest, taxes, depreciation, amortization
and non-cash compensation, all as adjusted for the impact of Special
Items. Please see Appendix I for additional details.

(3)

The Company defines Net Debt as Total Debt less Cash and Cash
Equivalents. Please see Appendix I for additional details.

(4)

The Company defines Free Cash Flow as Net Cash Provided by/Used for
Operating Activities, excluding the cash impact of Special Items,
less Capital Expenditures. Please see Appendix I for additional
details.

About TriMas

TriMas is a diversified industrial manufacturer of products for
customers in the consumer products, aerospace, industrial,
petrochemical, refinery and oil & gas end markets with approximately
4,000 dedicated employees in 15 countries. We provide customers with a
wide range of innovative and quality product solutions through our
market-leading businesses, which operate in three segments: Packaging,
Aerospace and Specialty Products. The TriMas family of businesses has
strong brand names in the markets served, and operates under a common
set of values and strategic priorities under the TriMas Business Model.
TriMas is publicly traded on the NASDAQ under the ticker symbol “TRS,”
and is headquartered in Bloomfield Hills, Michigan. For more
information, please visit www.trimascorp.com.

TriMas Corporation

Condensed Consolidated Balance Sheet

(Dollars in thousands)

 
  December 31,
2018
  December 31,
2017
Assets
Current assets:
Cash and cash equivalents $ 108,150 $ 27,580
Receivables, net 123,110 112,220
Inventories 173,120 155,350
Prepaid expenses and other current assets 7,430   16,120
Total current assets 411,810 311,270
Property and equipment, net 187,800 190,250
Goodwill 316,650 319,390
Other intangibles, net 174,530 194,220
Deferred income taxes 1,080 9,100
Other assets 8,650   8,970
Total assets $ 1,100,520   $ 1,033,200
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 93,430 $ 72,410
Accrued liabilities 48,300   49,470
Total current liabilities 141,730 121,880
Long-term debt, net 293,560 303,080
Deferred income taxes 5,560 5,650
Other long-term liabilities 39,220   58,570
Total liabilities 480,070 489,180
Total shareholders’ equity 620,450   544,020
Total liabilities and shareholders’ equity $ 1,100,520   $ 1,033,200

TriMas Corporation

Consolidated Statement of Operations

(Dollars in thousands, except share and per share amounts)

 
  Three months ended
December 31,
  Twelve months ended
December 31,
2018   2017 2018   2017
(unaudited)
Net sales $ 211,350 $ 195,210 $ 877,140 $ 817,740
Cost of sales (154,110 ) (146,000 ) (633,020 ) (598,350 )
Gross profit 57,240 49,210 244,120 219,390
Selling, general and administrative expenses (31,600 ) (32,800 ) (121,800 ) (129,140 )
Net gain (loss) on dispositions of assets (180 ) 2,140   (250 ) (1,080 )
Operating profit 25,460   18,550   122,070   89,170  
Other expense, net:
Interest expense (3,250 ) (4,040 ) (13,910 ) (14,400 )
Debt financing and related expenses (6,640 )
Other income (expense), net 150   (630 ) (2,180 ) (1,920 )
Other expense, net (3,100 ) (4,670 ) (16,090 ) (22,960 )
Income before income tax expense 22,360 13,880 105,980 66,210
Income tax expense (5,650 ) (17,890 ) (22,680 ) (35,250 )
Net income (loss) 16,710   (4,010 ) 83,300   30,960  
Basic earnings (loss) per share:        
Net income (loss) per share $ 0.37   $ (0.09 ) $ 1.82   $ 0.68  
Weighted average common shares – basic 45,747,659   45,721,160   45,824,555   45,682,627  
Diluted earnings (loss) per share:        
Net income (loss) per share $ 0.36   $ (0.09 ) $ 1.80   $ 0.67  
Weighted average common shares – diluted 46,085,202   45,721,160   46,170,464   45,990,252  

TriMas Corporation

Consolidated Statement of Cash Flow

(Dollars in thousands)

 
  Twelve months ended
December 31,
2018   2017
Cash Flows from Operating Activities:
Net income $ 83,300 $ 30,960
Adjustments to reconcile net income to net cash provided by
operating activities:
Loss on dispositions of assets 250 1,080
Depreciation 24,580 26,950
Amortization of intangible assets 19,440 19,920
Amortization of debt issue costs 1,290 1,320
Deferred income taxes 7,200 15,260
Non-cash compensation expense 7,170 6,780
Debt financing and related expenses 6,640
(Increase) decrease in receivables (11,420 ) 1,220
(Increase) decrease in inventories (18,690 ) 4,350
(Increase) decrease in prepaid expenses and other assets 9,060 (310 )
Increase in accounts payable and accrued liabilities 4,340 3,640
Other operating activities 2,800   2,250  
Net cash provided by operating activities 129,320   120,060  
Cash Flows from Investing Activities:
Capital expenditures (25,050 ) (36,800 )
Net proceeds from dispositions of property and equipment 250   4,450  
Net cash used for investing activities (24,800 ) (32,350 )
Cash Flows from Financing Activities:
Proceeds from borrowings on revolving credit and accounts receivable
facilities
59,060 401,300
Repayments of borrowings on revolving credit and accounts receivable
facilities
(68,490 ) (517,310 )
Payments to purchase common stock (12,140 )
Shares surrendered upon exercise and vesting of equity awards to
cover taxes
(2,380 ) (510 )
Proceeds from issuance of senior notes 300,000
Repayments of borrowings on term loan facilities (257,940 )
Debt financing fees (6,070 )
Other financing activities   (310 )
Net cash used for financing activities (23,950 ) (80,840 )
Cash and Cash Equivalents:
Increase for the year 80,570 6,870
At beginning of year 27,580   20,710  
At end of year $ 108,150   $ 27,580  
Supplemental disclosure of cash flow information:
Cash paid for interest $ 13,800   $ 9,430  
Cash paid for income taxes $ 7,380   $ 16,230  

Appendix I

TriMas Corporation

Additional Information Regarding Special Items Impacting

Reported GAAP Financial Measures

(Unaudited – dollars in thousands)

 
  Three months ended
December 31,
  Twelve months ended
December 31,
2018   2017 2018   2017
Packaging
Net sales $ 89,660 $ 85,310 $ 368,200 $ 344,570
Operating profit $ 20,140 $ 18,980 $ 84,590 $ 80,610
Special Items to consider in evaluating operating profit:
Business restructuring and severance costs 40 1,710
Adjusted operating profit $ 20,140 $ 19,020 $ 84,590 $ 82,320
 
Aerospace
Net sales $ 45,420 $ 42,760 $ 185,920 $ 184,310
Operating profit $ 6,610 $ 6,550 $ 27,290 $ 26,410
Special Items to consider in evaluating operating profit:
Business restructuring and severance costs 250 250
Adjusted operating profit $ 6,860 $ 6,550 $ 27,540 $ 26,410
 
Specialty Products
Net sales $ 76,270 $ 67,140 $ 323,020 $ 288,860
Operating profit $ 7,650 $ 510 $ 34,260 $ 12,280
Special Items to consider in evaluating operating profit:
Business restructuring and severance costs 30 4,550 1,910 15,350
Adjusted operating profit $ 7,680 $ 5,060 $ 36,170 $ 27,630
 
Corporate Expenses
Operating loss $ (8,940 ) $ (7,490 ) $ (24,070 ) $ (30,130 )
Special Items to consider in evaluating operating loss:
Business restructuring and severance costs 390 750
Reversal of legacy related party liability $ $ $ (8,150 ) $
Adjusted operating loss $ (8,940 ) $ (7,100 ) $ (32,220 ) $ (29,380 )
 
Total Company
Net sales $ 211,350 $ 195,210 $ 877,140 $ 817,740
Operating profit $ 25,460 $ 18,550 $ 122,070 $ 89,170
Total Special Items to consider in evaluating operating profit 280 4,980 (5,990 ) 17,810
Adjusted operating profit $ 25,740 $ 23,530 $ 116,080 $ 106,980

Appendix I

TriMas Corporation

Additional Information Regarding Special Items Impacting

Reported GAAP Financial Measures

(Unaudited – dollars in thousands, except share and per share
amounts)

 
  Three months ended
December 31,
  Twelve months ended
December 31,
2018   2017 2018   2017
Net income (loss), as reported $ 16,710 $ (4,010 ) $ 83,300 $ 30,960
Special Items to consider in evaluating quality of net income (loss):
Business restructuring and severance costs 250 5,580 2,830 18,130
Reversal of legacy related party liability (8,150 )
Debt financing and related expenses 6,640
Defined benefit pension plan settlement charge 2,500
Tax reform adjustments (1) 700 12,660 (400 ) 12,660
Income tax effect of Special Items (2) (120 ) 270   910   (4,010 )
Adjusted net income $ 17,540   $ 14,500   $ 80,990   $ 64,380  
 
Three months ended
December 31,
Twelve months ended
December 31,
2018 2017 2018 2017
Diluted earnings (loss) per share, as reported $ 0.36 $ (0.09 ) $ 1.80 $ 0.67
Special Items to consider in evaluating quality of EPS:
Business restructuring and severance costs 0.12 0.06 0.40
Reversal of legacy related party liability (0.17 )
Debt financing and related expenses 0.14
Defined benefit pension plan settlement charge 0.05
Tax reform adjustments (1) 0.02 0.28 (0.01 ) 0.28
Income tax effect of Special Items (2)     0.02   (0.09 )
Adjusted diluted EPS $ 0.38   $ 0.31   $ 1.78   $ 1.40  
Weighted-average shares outstanding 46,085,202   45,721,160   46,170,464   45,990,252  

(1)

  As a result of the Tax Cuts and Jobs Act of 2017, the Company
recognized one-time charges of $12.7 million in December 2017 from
the estimated impact of the inclusion of foreign earnings and
revaluation of deferred tax assets and liabilities. In 2018, the
Company finalized its accounting related to foreign earnings and
recognized approximately $0.7 million of additional tax obligation
in the three months ended December 31, 2018. In the twelve months
ended December 31, 2018, the Company recognized a net tax benefit of
$0.4 million associated with finalizing its estimates of the impact
of the Tax Cuts and Jobs Act of 2017.

(2)

Income tax effect of Special Items is calculated on an item-by-item
basis, utilizing the tax rate in the jurisdiction where the Special
Item occurred. For the three and twelve month periods ended December
31, 2018 and 2017, the income tax effect of Special Items varied
from the tax rate inherent in the Company’s reported GAAP results,
primarily as a result of certain of the Special Items in each period
being incurred in jurisdictions where no tax benefit could be
recorded due to valuation allowance assessments.

Contacts

Sherry Lauderback
VP, Investor Relations & Communications
(248)
631-5506
sherrylauderback@trimascorp.com

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