Cequent Performance Products is marking a milestone this year for its Tekonsha brand of brake controls and electrical products. According to a press release, the company has achieved 50 years in the automotive aftermarket.
Since Tekonsha’s inception in 1964, products have ranged from RV steps to its flagship line of trailer brake controls. Tekonsha, named after its home-based operations in Tekonsha, Mich., was founded by Jim Melluish. In 2003 it was incorporated into the Cequent family of brands.
“Tekonsha has a long history of success and adaptation,” says Tom Benson, president of Cequent Performance Products. “It is one of our premier brands that has stood the test of time and is in great demand by new and existing customers alike.”
With 50 years under its belt, the Tekonsha brand is looking toward the future, confident in meeting the needs of the next generation of customers.
“We’ve been fortunate to have such a successful brand over the past 50 years, and would like to thank our dedicated customers and employees for putting their trust in Tekonsha. We couldn’t have done this without you,” said Benson.
Cequent has created a video highlighting major breakthroughs and turning points throughout its five decade history. Click here to view.
A turnaround strategy by diversified holding company TriMas Corp. is paying off on Wall Street, according to Crain’s Detroit Business.
Debt has fallen, analyst consensus is climbing, share prices hit another all-time high of $24.52 a few weeks ago, and several investment fund and pension plan managers are buying up large stakes in the Bloomfield Hills, Mich., company – even as many of its traditional major holders are selling. Trimas is parent to Cequent Performance Products, a Plymouth, Mich.-based trailer and recreational vehicle accessory division.
Moody’s Investors Service this month slightly upgraded TriMas’ corporate family rating, a measure of its ability to cover debt obligations – improving its outlook from stable to positive.
Why the newfound confidence? Analysts generally are convinced that a turnaround strategy carried out after David Wathen became CEO in 2009 has worked. It included streamlining management, changing incentive criteria for executives, refinancing debt, building sales in developing global markets and improving its new product pipeline.
Also helping TriMas, and its competitors, is a stronger financial market and overseas opportunities for U.S. manufacturers.
Some threats linger too, like rising oil and commodity prices and U.S. currency exchange rates. But Wathen, 58, is convinced the holding company’s mix of manufacturing businesses is well-positioned for the risks.
“I felt coming in, and I’m even more convinced now, that TriMas had been under-investing in two things,” he said.
“One is what I call the “front end’ — automating functions like a computer system (for purchase orders) that’s more accessible to customers, which meant fewer people devoted to clerical work and greater resources for intellectual work. The other area was investment in product.”
Two years ago, TriMas’ stock price reached a low of around $1, its debt-to-EBITDA ratio was more than 5 to 1, and the company reported a $136.2 million net loss for 2008 on revenue of $1.01 billion. Revenue fell further in 2009, but grew in 2010 to $942 million and is expected to surpass $1 billion this year – with a profit.
The company first closed plants and cut more than 10% of its 4,000-plus workforce, eliminated one group of executives to streamline management and developed an incentive system for more than 75 remaining executives. A new incentive system tied performance to a mix of sales, new product development, earnings per share and other criteria.
Since then sales have advanced heavily in new products and new global markets such as Brazil, Thailand and India. Wathen said non-U.S. sales in 2011 should account for more than 28% of the top line.
TriMas even started hiring again in mid-2010, a trend that accelerated into the first quarter. The headcount is now around 3,900, and Wathen estimates total new hires are around half of the previous job cuts. Debt is down almost $25 million since last spring, and the debt-to-EBITDA ratio is now about 3 to 1.
Richard Hoss, research analyst at Roth Capital Partners in Newport Beach, Calif., said TriMas is faring better than some in its peer group, and he maintains a “buy” rating for its stock.
He also said energy and materials prices remain a risk for its high-margin packaging business segment as well as Cequent, its largest by revenue.
“As far as oil prices, the majority of the hit comes on the raw materials side that affects their packaging segment. And they’ve been able so far to push nearly 50% of the material costs along to customers,” Hoss said.
TriMas Corp., Bloomfield Hills, Mich., a manufacturer of hitches through its Cequent division along with other divisions that make an assortment of non-RV related products, has announced financial results for the quarter ended March 31.
The company reported quarterly net sales from continuing operations of $220.1 million, an increase of 9.1% from first quarter 2009, according to a new release.
First quarter 2010 income from continuing operations was $5.8 million, a 24.5% improvement from $4.6 million in first quarter 2009. TriMas reported first quarter 2010 diluted earnings per share from continuing operations of $0.17, as compared to $0.14 during first quarter 2009. Excluding special items, first quarter 2009 loss from continuing operations would have been $0.7 million, or ($0.01) per share.
The company reported operating profit of $25.1 million in first quarter 2010, as compared to operating profit of $5.2 million during first quarter 2009. Excluding the impact of special items, operating profit would have improved 110%, from $12.0 million in first quarter 2009 to $25.1 million in first quarter 2010, which represents an increase in operating profit margin of 550 basis points.
In its Cequent division, TriMas reported sales for the first quarter increased 6.8% compared to the year-ago period, resulting from increased sales in the Australian/Asia Pacific and North American towing, trailer and electrical products businesses, and the favorable impact of currency exchange, partially offset by a decline in sales in the retail business.
Due to cost-reduction actions and improved sales levels, operating profit margin improved more than 840 basis points compared to first quarter 2009. The company continues to aggressively reduce fixed costs, decrease working capital and leverage strong brand positions for increased market share.
TriMas raised its outlook for full-year 2010 diluted earnings per share (EPS) from continuing operations to $0.65 to $0.75 per share, as compared to $0.43 per share in 2009, excluding special items in both periods. The company previously provided an outlook for 2010 EPS to exceed $0.60 per share. TriMas also raised its 2010 sales outlook from an increase of 4% to 7% to a range of 5% to 9% compared to 2009. In addition, the company expects its 2010 operating profit margin to improve by 80 to 120 basis points compared to 2009, excluding special items.
TriMas Corp. announced Wednesday (Aug. 12) that it will voluntarily transfer its stock exchange listing in the U.S. from the New York Stock Exchange to the NASDAQ Global Market effective Aug. 24.
The company’s stock will continue to trade under the symbol “TRS.”
“We believe that NASDAQ offers TriMas and its shareholders advanced technologies and cost-effective services, as well as efficient and transparent market access and execution,” said David Wathen, TriMas president and CEO of the Bloomfield Hills, Mich.-based manufacturer whose Cequent family of towing products serves the RV industry.
“We are delighted that TriMas selected NASDAQ as their market of choice,” said Bruce Aust, executive vice president, NASDAQ OMX. “We look forward to providing them and their shareholders with the best products and services NASDAQ OMX has to offer.”