Engineered and applied products maker TriMas Corp. announced its board has approved a plan to pursue a tax-free spin-off of all of its Cequent businesses into a new stand-alone, publicly traded company as part of efforts to spur growth and enhance shareholder value. RTT News reported the transaction is expected to be completed by mid-2015.
Cequent makes custom-engineered towing, trailer and cargo management products, and other accessories, and generated revenues of about $614 million for the trailing 12-month period ended September 2014.
Explaining the rationale for the spin-off, TriMas CEO Dave Wathen said the move was a commitment to enhance shareholder value through the active management of its business portfolio and organizational focus.
“We believe the spin-off will provide both companies greater flexibility to focus on their distinct growth and margin improvement strategies within their respective core markets, enabling them to further improve competitiveness,” Wathen said.
Mark Zeffiro, the current executive vice president and chief financial officer of TriMas, will serve as CEO of the new entity, and TriMas Chairman Samuel Valenti III will participate on the new company’s board to support the transition.
Upon completion of the transaction, the new Cequent company will consist of TriMas’ current Cequent Americas and Cequent APEA segments.
Meanwhile, post separation, TriMas is expected to have a higher growth and margin profile and be a more focused, diversified engineered products company, consisting of the Packaging, Aerospace, Energy and Engineered Components segments. These segments reported annual revenue of about $855 million for the trailing 12 month period ended September 2014.
TriMas expects to complete the transaction by distributing all of the shares of the new Cequent company to TriMas shareholders, who will initially own 100% of the shares.
It is expected that the transaction will be tax-free to TriMas’ U.S. shareholders, subject to the receipt of an opinion regarding the tax-free nature of the transaction.
The company estimates third party and legal entity reorganization-related expenses to be about $20 million to effect the transaction, and such costs will be incurred over the next several quarters.
Wells Fargo Securities is serving as financial advisor and Jones Day is serving as legal advisor to TriMas.
In September, TriMas, based in Bloomfield Hills, Mich., cut its earnings outlook for 2014, citing mainly external market pressures and operational challenges in its Energy and Aerospace businesses. The company also agreed to buy Allfast Fastening Systems Inc. for nearly $360 million in a bid to strengthen its aerospace business.
Revenue during the period grew to $367.7 million, an increase of 8.9% compared to first quarter 2013. Net income attributable to TriMas totaled $18.6 million, or $0.41 per diluted share, as compared to income of $13.2 million, or $0.33 per diluted share, a year ago.
“We are off to a good start in 2014 as our team is focused on the many growth and margin improvement programs in each of our businesses and headquarters,” said David Wathen, TriMas president and CEO. “These initiatives contributed positively to our quarter, and will also position TriMas for continued sales and earnings growth, driving additional shareholder value into the future.”
The company’s Cequent division, which supplies the RV industry, saw first quarter sales that were relatively flat compared to the year ago period. TriMas noted that “increased sales within the retail channel were offset by a decrease in sales in the aftermarket channel related to higher than normal sales levels in the first quarter of 2013 as customers built safety stock in anticipation of the move of production to lower cost country facilities.” First quarter operating profit and the related margin percentage were also relatively flat compared to the prior year period.
Other highlights included:
• TriMas reported operating profit of $32.6 million in first quarter 2014, an increase of 37.3% as compared to first quarter 2013. The company continued to generate significant savings from capital investments, productivity projects and lean initiatives, which contributed to the funding of growth initiatives.
• Reduced interest expense by more than 30% as compared to first quarter 2013. In October 2013, the company entered into new senior secured credit facilities, which reduced interest rates, extended maturities and increased available liquidity. Also in April 2014, TriMas amended its $105.0 million accounts receivable facility to lower rates and extend the maturity until October 2018.
• Continued to invest in a lean and flexible manufacturing footprint to optimize manufacturing costs long-term, add needed capacity, enhance customer service and support future growth.
To view the full report click here.
TriMas Corp., parent to Cequent Performance Products, today (Feb. 20) reported record revenue for its fourth quarter and full year, ended Dec. 31.
Fourth-quarter sales from continuing operations totaled $323.4 million, an increase of 7.4% compared to fourth quarter 2012. Net income from continuing operations attributable to TriMas was $6.9 million, or 15 cents per diluted share, as compared to a loss of $13.9 million, or 35 cents per diluted share during fourth quarter 2012.
For the year, the company reported sales from continuing operations of $1.395 billion, an increase of 9.6% compared to 2012. Full year income from continuing operations attributable to TriMas was $74.9 million, or $1.81 per diluted share, compared to income from continuing operations of $33.9 million, or 89 cents per diluted share, in 2012.
“We completed 2013 with record net sales of approximately $1.4 billion, a 9.6% sales growth as compared to 2012, despite the challenges we faced in our energy end markets,” said David Wathen, TriMas President and CEO. “During the year, we pursued many key initiatives with actions focused on fine-tuning our business portfolio via acquisition and divestiture, enhancing our capital structure through our recent equity offering and debt refinancing, moving and consolidating multiple plants for cost reduction, integrating acquisitions and evaluating many potential acquisitions. We also continued to focus on our growth and productivity programs in each of our businesses. These initiatives will position TriMas for continued sales and earnings growth and will drive additional shareholder value into the future.”
Regarding prospects for the coming year, Wathen stated, “Looking forward, we remain committed to TriMas’ ability to attain our strategic aspirations, while intensifying our efforts to increase earnings, operating margins and cash flow. We are estimating 2014 top-line growth of 6% to 8% as compared to 2013. We expect full-year 2014 diluted earnings per share from continuing operations to range between $2.15 and $2.25 per share, taking into account the uncertainty in our energy end markets, a higher effective tax rate and currency fluctuations, as well as approximately 9% higher weighted average shares outstanding expected for 2014 as compared to 2013. We continue to be confident in our ability to grow the top-line faster than the economy, improve our margins and generate strong cash flow – to deliver increased returns on capital.”
For the full report click here.
TriMas Corp., parent to Cequent Performance Products, said its third-quarter earnings jumped more than 50% as it benefited from acquisitions and lower interest expenses.
The company reported that it has been working to make its manufacturing operations more efficient, while at the same time absorbing several small acquisitions. It announced another acquisition on Monday, paying $34 million for Mac Fasteners Inc. Mac makes stainless steel aerospace fasteners used by a variety of manufacturers and aftermarket repair companies.
Third-quarter net income rose 53% to $28.6 million, or 71 cents per share, from $18.7 million, or 48 cents per share, in the 2012 third quarter. Excluding costs related to restructuring and the sale of a business, results came to 64 cents per share. Revenue rose 6% to $355.6 million.
The company now expects sales for the full year to rise 8% to 10% from 2012, up from a prior outlook for a 6% to 8% increase. Based on sales of $1.27 million last year, that implies guidance for sales of $1.37 million to $1.4 million.
Cequent Performance Products Inc. (CPP) partnered with Habitat for Humanity on Tuesday (Sept. 10) to create a safe and affordable home for an area family, according to a press release. CPP, a subsidiary of TriMas Corp., was part of a week-long blitz to refurbish the location.
“CPP came out and worked on the home for one day this week,” says Sara Piatt, human resources representative. “Other TriMas employees will volunteer at the home for the remainder of the week.”
The company had approximately 20 volunteers covering various home improvement tasks. Multiple teams worked to paint both the interior and exterior of the house. Others helped to construct walls and rebuild a breezeway. The day ended with assembly of kitchen cabinetry.
“We recently renovated our headquarters and donated a portion of our kitchen appliances to Habitat,” says Piatt. “It’s great to be able to come full circle and support the opportunity for homeownership for families in need.”
Per their mission statement, Habitat for Humanity provides decent, safe, and affordable places to live. Houses are built and repaired all over the world using volunteer labor and donations. To learn more visit www.Habitat.org.
TriMas Corp., parent to Cequent Performance Products, reported record revenue for its fiscal second quarter, ended March 31. In its earnings report, the Bloomfield Hills, Mich.-based firm also announced the acquisition of a towbar manufacturer located in Germany and Finland.
For the quarter, TriMas posted sales from continuing operations of $378 million, an increase of 11.7% from $338.4 million in the prior-year period. Net income from continuing operations was $27.8 million, or 66 cents per share, compared with $17.2 million, or 45 cents per share, a year ago.
The company’s Cequent America unit saw a 7% increase in sales compared with the year-ago period, resulting primarily from increased sales within the original equipment, aftermarket and retail channels, as well as the sales related to the July 2012 acquisition of Engetran in Brazil.
Highlights from the quarter included:
• Completed five bolt-on acquisitions to expand and globalize existing product offerings.
• Reduced interest expense by more than 45% as compared with second quarter 2012.
• Continued to invest in a flexible manufacturing footprint to optimize manufacturing costs long-term, add necessary capacity, enhance customer service and support future growth.
“In the midst of a challenging global economic environment, we continue to identify the bright spots and successfully execute on new product introductions, geographic expansion and market share initiatives, as well as leverage our recent bolt-on acquisitions,” said David Wathen, TriMas president and CEO. These initiatives have contributed to our year-over-year sales increases in five of our six segments during the second quarter. We also continued with footprint consolidation projects within our Cequent segments, moving toward more efficient and flexible manufacturing facilities.
Mark Zeffiro, executive vice president and CFO, added, “As we look to the second half of the year, we maintain a conservative macroeconomic outlook, while remaining confident in our ability to deliver our previous guidance for full year 2013.”
To view the entire report click here.
TriMas Corp, parent to Cequent Performance Products, will report its second quarter earnings on July 25. The company will also host a conference call 10 a.m. Eastern.
To participate on the earnings conference call, dial (888) 523-1228 (Conference ID #5087909) and ask to be connected to the TriMas second quarter 2013 earnings conference call. The conference call will also be simultaneously webcast via TriMas’ website at www.trimascorp.com, under the “Investors” section, with an accompanying slide presentation.
If you are unable to participate during the live teleconference, a replay of the conference call will be available beginning July 25 at 3 p.m. Eastern through Aug. 1. To access the replay, dial: (888) 203-1112 (Replay Passcode #5087909) or visit the “Investors” section of the company’s website.
Bloomfield Hills, Mich.-based TriMas Corp., parent to industry supplier Cequent Performance Products, announced record revenue for its first quarter, ended March 31, as sales rose 13.5% to $337.8 million from $297.6 million in the year-ago period.
During the first quarter, sales increased in five of the six reportable segments, primarily as a result of additional sales from bolt-on acquisitions, market share gains, new product introductions and geographic expansion as compared to first quarter 2012.
Excluding noncontrolling interests, first-quarter net income was $13.2 million, or 33 cents per diluted share, compared to $12.5 million, or 36 cents per diluted share, during first quarter 2012.
“Our record first quarter sales demonstrates our continued ability to successfully execute on our growth strategies,” said President and CEO David Wathen. “In the midst of an uncertain global economic environment, we continue to identify the bright spots where we believe we can capture growth for our businesses through product innovation, market share gains and geographic expansion.
“Looking forward, our full year 2013 view is essentially unchanged from our previous guidance. We remain committed to TriMas’ ability to outperform the economy, with expected 2013 sales growth of 6% to 8%, as compared to 2012.”
Other highlights from the quarter included:
• Reduced interest expense by more than 50% as compared with first quarter 2012, resulting from a reduction in overall interest rates due to the 2012 redemption of the company’s 9 3/4% senior notes and the refinancing of the credit facilities.
• Completed three additional bolt-on acquisitions year-to-date to expand existing product offerings, gain access to new customers and end markets, expand the geographic footprint internationally, and capitalize on scale and cost efficiencies.
• The company reported operating profit of $23.7 million in first quarter. Operating profit and the related margin percentage were impacted by costs related to recent acquisitions including purchase accounting adjustments, higher costs associated with global growth initiatives, new plant and equipment ramp-up costs and higher costs associated with long-term incentive programs, with the majority of these incremental costs included in selling, general and administrative expenses. The company continued to generate significant savings from capital investments, productivity projects and lean initiatives, which contributed to the funding of growth initiatives.
To view the entire report click here.
TriMas Corp. announced that Heartland Industrial Associates LLC. has agreed to sell 1.5 million shares of its common stock to Goldman, Sachs & Co. as the sole underwriter in the registered public offering of those shares.
All net proceeds from the sale of the common stock will be received by the selling stockholder. TriMas Corp. will not receive any of the proceeds. The total number of outstanding shares of TriMas Corp.’s common stock will not change as a result of this offering, according to the company.
The shares are being sold by the selling stockholder pursuant to an effective shelf registration statement. Goldman, Sachs & Co. may offer the shares of common stock from time to time for sale in one or more transactions on the NASDAQ Global Market, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices, states a press release from TriMas.
TriMas Corp., parent to Cequent Performance Products, incurred a loss for the fourth quarter versus a profit last year, in spite of a revenue rise.
RTT News reported that the firm suffered from increased expenses for the quarter which upset the rise in revenue, further exacerbated by debt extinguishment costs which led it to post a loss for the period.
For the quarter, the firm posted a net loss of $13.94 million compared with a profit of $13.25 million last year. On a per share basis, the firm posted loss of $0.35 versus a profit of $0.38 last year.
Excluding special items related to business restructuring costs, debt extinguishment costs and tax restructuring, the company reported income from continuing operations of $0.33 per share.
Net sales for the period rose to $301.04 million from $259.65 million last year, which the company attributed to additional sales from bolt-on acquisitions, market share gains, new product introductions and geographic expansion as compared to fourth quarter 2011. Analysts were looking for revenue of $291.23 million for the quarter.
The firm suffered from debt extinguishment costs of $40.25 million for the three-months versus none last year.
Looking forward, for the full-year, the firm sees earnings per share from continuing operations to be between $2.15 and $2.25, excluding any future events that may be considered special items and revenue to rise between 6% and 8% compared to 2012.
United Steelworkers Local 9550 voted Friday (Feb. 22) to accept what union representatives are calling a retention bonus from Cequent Performance Products, according to a report by the Goshen News. Mike O’Brien, director of United Steelworkers Sub District 4, said the union will not be going to arbitration.
Cequent parent company Trimas Corp. announced in November it would lay off 450 workers at the Goshen, Ind., Cequent plant. Company officials said they were moving the facility’s operations to Reynosa, Mexico, to cut down on shipping costs since it has other plants in Texas and Mexico.
The “retention bonus” amounts to a $3.5 million package with another month of insurance for workers and “a payment of $500 for those on the low end with less than a year in seniority to $36,000 for the top end and it depends on how long the others have been there. They will be paid within that range,” O’Brien said.
Cequent officials plan to close the Goshen plant at the end of this year. The first layoffs were set to take place Friday. The work force will be down to half after July, and the plant will remain open and operating until December.
The immediate fate of nearly 350 members of the United Steelworkers at the Cequent Performance Products plant in Goshen, Ind., is in their own hands.
The South Bend Tribune reported that on Friday (Feb. 22), members of USW Local 9550 will vote on whether to accept a closure offer from Cequent, which is moving its plant to Mexico, or reject it and go to arbitration.
If workers reject the offer, an arbitration hearing is slated for April 18-19, according to Mike O’Brien, United Steelworkers Sub District 4 director.
Cequent’s parent Trimas Corp. officially announced in late November it would lay off 450 employees, almost 75% of them union workers. At the time, the company said it was moving its operations to Reynosa, Mexico, to reduce shipping costs since it has other plants in Texas and Mexico.
The company makes parts for the automotive and recreational vehicle industries.
In January, U.S. District Court Judge Robert L. Miller Jr. ruled against the union’s attempt to be granted a preliminary injunction that would have prevented Cequent from moving equipment out of its Goshen plant in preparation for its move to Mexico.
However, Miller did affirm a previous ruling that the dispute over the company being able to outsource jobs while laying people off was subject to arbitration.
The company has informed the court that the Goshen facility is not scheduled to close permanently until the end of this year, and that the first layoffs will not occur until Friday. In addition, the company said more than half the employees will remain through the end of June and the remainder will be let go in December.
O’Brien said he won’t try to sway union members either way on the vote.
“There is no such thing as a guarantee,” O’Brien said regarding winning in arbitration. “While we feel confident about our case, we think membership should make that decision, and I am not going to push them one way or the other.”
The union will hold the vote in the Masonic Temple in Goshen, with the results expected sometime between 6 p.m and 7 p.m. Friday.
Despite losing one battle Wednesday (Jan. 31), United Steelworkers Local 9550 still plans to fight the war as the union tries to save 450 jobs at the Cequent Performance Products plant in Goshen, Ind.
In fact, they won another battle in the ruling handed down by Judge Robert L. Miller Jr. Wednesday in U.S. District Court Northern District of Indiana. Miller ruled against the union’s attempt to be granted a preliminary injunction that would have prevented Cequent from moving equipment out of its Goshen plant in preparation for its move to Mexico.
“Obviously we are disappointed in that portion of the ruling of the court,” said Jim Robinson, United Steelworkers District 7 director.
However, Miller did affirm a previous ruling that the dispute over the company being able to outsource jobs while laying people off, is subject to arbitration.
“The court confirmed that grievance was arbitrable, and confirmed that the arbitrator had sufficient authority to remedy what the company is doing,” Robinson said.
“So to that extent we feel positive about the decision. What we’re saying is, you are sending work to Mexico and laying people off and that violates the contract.”
Cequent officials could not be reached for comment. The company is owned by Detroit, Mich.-based Trimas Corp., which announced the layoffs in late November.
No date has been set for the arbitration hearing, said Mike O’Brien, Sub District 4 director for much of northern Indiana.
The union has received dates from the arbitrator, O’Brien said, and is waiting for the company to respond.
To read the entire story click here.
Cequent Performance Products is moving out from its Goshen. Ind. plant and shipping production to a facility in Reynosa, Mexico, parent company TriMas Corp. announced Wednesday (Nov. 21).
As reported by the Elkhart Truth, it was an unwelcome piece of Thanksgiving news for hundreds of employees of the Goshen facility, where they make hitches and structural components for RVs and trailers. The 450 local jobs will end throughout next year, the company announced.
“They told us they made the decision and then they wished us ‘Happy Thanksgiving,’” said Deb Hathaway, vice president of steelworkers local 9550, which represents more than 350 of the 450 affected people.
“It was a very gloomy situation,” she said, and it will loom heavily on hundreds of family Thanksgiving gatherings tomorrow. “We’re all so thankful we just lost our jobs,” Hathaway said.
In a written announcement of the closing, Dave Wathen, president of Bloomfield Hills, Mich.-based TriMas, said, “While these types of decisions are never easy, we make them with significant consideration.”
He continued, “For those employees affected by the closure, the company is committed to working with them during this transition,” said Wathen.
According to the Elkhart Truth report, it’s been a contentious process since the company announced the possibility of moving the jobs last month. The union representing most of the local employees filed a federal lawsuit against the company, the company started having police come to the plant, and earlier today production stopped due to a bomb threat.
That had workers waiting outside for about 2 1/2 hours, Hathaway said. Then company officials made the announcement just before the end of the first shift. The company did allow second-shift workers to use vacation time to take the afternoon off without forfeiting holiday pay, she said.
At the first of next year, the company will tell workers how they’ll start to eliminate departments. Hathaway expects production to move to a single shift as things ramp down.
Meanwhile, the union continues to fight the move, she said. “We’re still fighting,” hoping to push the move into 2014.
To view the entire story click here.
A spokesman for Michigan-based Cequent Performance Products Inc. said “no decision will be made or announced today (Nov. 19)” regarding a potential move of the company’s Goshen, Ind., operation to Mexico, according to Inside INdiana Business.
The trailer hitch manufacturer employs more than 400 at the Elkhart County plant.
Cequent makes aftermarket towing and trailer products. The company announced a preliminary decision a few weeks ago to move production to Mexico. It had anticipated announcing a final decision by today.
Unionized steelworkers at the plant have a pending suit in federal court if Cequent decides to move.