TriMas Corporation (NASDAQ:TRS) – a diversified global manufacturer of
engineered and applied products – today announced its Board of Directors
has unanimously approved a plan to pursue a tax-free spin-off of 100% of
its Cequent businesses into a new stand-alone, publicly traded company.
Cequent is a leading designer, manufacturer and distributor of
custom-engineered towing, trailer and cargo management products, and
other accessories. This transaction is expected to be completed during
mid-2015.
Under this plan, the new, stand-alone Cequent company will operate as an
independent, publicly held company. The Cequent businesses generated
revenue of approximately $614 million in the aggregate for the trailing
12 month period ended September 30, 2014. Mark Zeffiro, the current
Executive Vice President and Chief Financial Officer of TriMas, will
serve as President and Chief Executive Officer of this new entity upon
completion of the transaction. TriMas Corporation (excluding Cequent)
generated revenue of approximately $855 million in the trailing 12 month
period ended September 30, 2014, and will continue to be led by
President and Chief Executive Officer, Dave Wathen. Current TriMas
Chairman of the Board, Samuel Valenti III, will also participate on the
new company’s board of directors to support the transition. The Company
plans to provide further details about the board and management teams of
the separated companies at a later date.
“Our announcement today reflects our continued commitment to enhance
shareholder value through the active management of our business
portfolio and organizational focus,” said Dave Wathen, President and
Chief Executive Officer. “Over the past five years, we have transformed
TriMas from a leveraged holding company into a diversified, global
manufacturer of engineered and applied products with a track record of
consistent growth and operating results. We have delivered improved
financial performance by expanding customer markets and product lines,
integrating accretive acquisitions, introducing new capabilities for our
customers around the world, and instilling a culture of continuous
improvement.”
“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 and create significant value for shareholders, customers
and employees,” Wathen continued. “Following the separation, each
company will be able to better allocate resources to meet the needs of
their respective businesses, pursue distinct capital allocation
strategies, intensify focus on growth and margin improvement priorities,
and provide a clearer investment thesis to attract a long-term investor
base best-suited to each company.”
The New Stand-Alone Cequent
Upon completion of the transaction, the new stand-alone Cequent company
will consist of TriMas’ current Cequent Americas and Cequent APEA
segments, with a combined annual revenue of $614 million for the
trailing 12 month period ended September 30, 2014. This set of
businesses is expected to have strong prospects for growth and margin
improvement, as it leverages its broad product portfolio, global
footprint and diverse customer base of aftermarket, original equipment
manufacturers and suppliers, and retail customers within the
agricultural, automotive, construction, horse/livestock, industrial,
marine, military, recreational, trailer and utility markets. Cequent’s
leading brands and product lines are among the most recognized in the
end markets that these businesses serve.
Over the past several years, the Cequent businesses have implemented
changes that are driving increased margins. At the same time, Cequent
has expanded its global presence through both organic initiatives and
bolt-on acquisitions, creating significant opportunities for future
global growth. The new stand-alone Cequent company will focus on
leveraging its broad product offering through innovation and global
penetration, while remaining committed to improved operational
performance, margin expansion, and enhanced cash flow and returns.
The New TriMas Corporation
Post separation, TriMas is expected to have a higher growth and margin
profile and will be a more focused, diversified engineered products
company, consisting of the current Packaging, Aerospace, Energy and
Engineered Components segments. These segments reported annual revenue
of approximately $855 million for the trailing 12 month period ended
September 30, 2014. As a result of the separation, the margin profile of
this company will significantly improve with a current segment operating
profit margin percentage, excluding Special Items(1),
exceeding 15%. TriMas will continue to focus on investment in its
higher-growth, higher-margin businesses, while employing capital
allocation strategies to maximize returns to shareholders.
TriMas will remain a company that concentrates on its proprietary,
highly engineered products, focused markets with leading market
positions and well-established customer relationships. TriMas will
continue to serve its global customers with quality, speed and agility
to capture additional growth opportunities, while enhancing margins
through continuous productivity and lean initiatives. Following the
separation, TriMas’ common stock will continue to be listed on NASDAQ
under the symbol “TRS” and will remain headquartered in Bloomfield
Hills, Michigan.
Planned Capital Structures
Although the capital structures are not finalized and specific terms
remain to be determined, following the spin-off transaction, both
companies are expected to be well capitalized with sufficient liquidity
and flexibility to pursue future growth opportunities. Additionally, the
capital allocation policy at both companies is expected to remain
disciplined with a focus on the highest return opportunities.
Transaction Details
TriMas anticipates completing the transaction by distributing all of the
shares of the new stand-alone, publicly traded 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. TriMas currently expects the transaction to be
completed during mid-2015. The Company estimates third party and legal
entity reorganization-related expenses to be approximately $20 million
to effect the transaction. Such costs will be incurred over the next
several quarters.
The completion of the spin-off is subject to customary conditions,
including effectiveness of appropriate filings with the U.S. Securities
and Exchange Commission and final approval of the spin-off by the TriMas
Board of Directors. No shareholder approval is necessary to complete the
transaction.
Wells Fargo Securities is serving as financial advisor and Jones Day is
serving as legal advisor to TriMas.
Conference Call and Webcast
TriMas Corporation will host a conference call today, Monday, December
8, 2014 at 10 a.m. ET to discuss the proposed transaction. The call-in
number is (888) 466-4509. Participants should request to be
connected to the TriMas Corporation Update Call (Passcode #578320). 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 Code #1180560).
Notice Regarding 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 the Company’s plans
for successfully executing the spin-off within the expected timeframe or
at all, the taxable nature of the spin-off, future prospects of the
companies as independent companies, general economic and currency
conditions, various conditions specific to the Company's business and
industry, 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 ended 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.
About TriMas
Headquartered in Bloomfield Hills, Michigan, TriMas Corporation
(NASDAQ:TRS) provides engineered and applied products for growing
markets worldwide. TriMas is organized into six reportable
segments: Packaging, Energy, Aerospace, Engineered Components, Cequent
APEA and Cequent Americas. TriMas has approximately 7,000 employees at
more than 60 facilities in 19 countries. For more information, visit www.trimascorp.com.
(1) Operating profit margin excludes “Special Items.” Special Items for
each period are provided in the Appendix.
|
Appendix
|
|
Company and Business Segment TTM Financial Information
|
Continuing Operations
|
(Unaudited - dollars in thousands)
|
|
|
Quarter To Date
|
|
Trailing Twelve Months
|
|
|
|
12/31/2013
|
|
|
|
3/31/2014
|
|
|
|
6/30/2014
|
|
|
|
9/30/2014
|
|
|
|
9/30/2014
|
|
Packaging
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
78,220
|
|
|
$
|
81,430
|
|
|
$
|
86,250
|
|
|
$
|
89,320
|
|
|
$
|
335,220
|
|
Operating profit
|
|
$
|
18,220
|
|
|
$
|
18,360
|
|
|
$
|
20,540
|
|
|
$
|
20,770
|
|
|
$
|
77,890
|
|
Special Items to consider in evaluating operating profit:
|
|
|
|
|
|
|
|
|
|
|
Severance and business restructuring costs
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
620
|
|
|
$
|
620
|
|
Excluding Special Items, operating profit would have been
|
|
$
|
18,220
|
|
|
$
|
18,360
|
|
|
$
|
20,540
|
|
|
$
|
21,390
|
|
|
$
|
78,510
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
44,160
|
|
|
$
|
52,780
|
|
|
$
|
52,320
|
|
|
$
|
50,290
|
|
|
$
|
199,550
|
|
Operating profit (loss)
|
|
$
|
(3,910
|
)
|
|
$
|
2,600
|
|
|
$
|
(630
|
)
|
|
$
|
(1,100
|
)
|
|
$
|
(3,040
|
)
|
Special Items to consider in evaluating operating profit:
|
|
|
|
|
|
|
|
|
|
|
Severance and business restructuring costs
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,350
|
|
|
$
|
2,080
|
|
|
$
|
4,430
|
|
Excluding Special Items, operating profit would have been
|
|
$
|
(3,910
|
)
|
|
$
|
2,600
|
|
|
$
|
1,720
|
|
|
$
|
980
|
|
|
$
|
1,390
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace (1)
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
27,300
|
|
|
$
|
27,180
|
|
|
$
|
31,820
|
|
|
$
|
27,410
|
|
|
$
|
113,710
|
|
Operating profit
|
|
$
|
7,010
|
|
|
$
|
4,850
|
|
|
$
|
5,690
|
|
|
$
|
3,870
|
|
|
$
|
21,420
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered Components
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
41,540
|
|
|
$
|
55,430
|
|
|
$
|
54,320
|
|
|
$
|
55,310
|
|
|
$
|
206,600
|
|
Operating profit
|
|
$
|
5,000
|
|
|
$
|
7,880
|
|
|
$
|
8,950
|
|
|
$
|
8,090
|
|
|
$
|
29,920
|
|
|
|
|
|
|
|
|
|
|
|
|
"New TriMas" (2)
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
191,220
|
|
|
$
|
216,820
|
|
|
$
|
224,710
|
|
|
$
|
222,330
|
|
|
$
|
855,080
|
|
Operating profit
|
|
$
|
26,320
|
|
|
$
|
33,690
|
|
|
$
|
34,550
|
|
|
$
|
31,630
|
|
|
$
|
126,190
|
|
Total Special Items to consider in evaluating operating profit
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,350
|
|
|
$
|
2,700
|
|
|
$
|
5,050
|
|
Excluding Special Items, operating profit would have been
|
|
$
|
26,320
|
|
|
$
|
33,690
|
|
|
$
|
36,900
|
|
|
$
|
34,330
|
|
|
$
|
131,240
|
|
Operating profit margin excluding special items
|
|
|
13.8
|
%
|
|
|
15.5
|
%
|
|
|
16.4
|
%
|
|
|
15.4
|
%
|
|
|
15.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Cequent APEA
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
40,290
|
|
|
$
|
39,470
|
|
|
$
|
43,800
|
|
|
$
|
44,290
|
|
|
$
|
167,850
|
|
Operating profit
|
|
$
|
4,620
|
|
|
$
|
2,500
|
|
|
$
|
2,220
|
|
|
$
|
3,210
|
|
|
$
|
12,550
|
|
Special Items to consider in evaluating operating profit:
|
|
|
|
|
|
|
|
|
|
|
Severance and business restructuring costs
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
380
|
|
|
$
|
380
|
|
Excluding Special Items, operating profit would have been
|
|
$
|
4,620
|
|
|
$
|
2,500
|
|
|
$
|
2,220
|
|
|
$
|
3,590
|
|
|
$
|
12,930
|
|
|
|
|
|
|
|
|
|
|
|
|
Cequent Americas
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
88,680
|
|
|
$
|
109,090
|
|
|
$
|
134,490
|
|
|
$
|
113,500
|
|
|
$
|
445,760
|
|
Operating profit (loss)
|
|
$
|
(12,180
|
)
|
|
$
|
5,710
|
|
|
$
|
16,940
|
|
|
$
|
8,660
|
|
|
$
|
19,130
|
|
Special Items to consider in evaluating operating profit (loss):
|
|
|
|
|
|
|
|
|
|
Severance and business restructuring costs
|
|
$
|
13,000
|
|
|
$
|
980
|
|
|
$
|
1,460
|
|
|
$
|
360
|
|
|
$
|
15,800
|
|
Excluding Special Items, operating profit would have been
|
|
$
|
820
|
|
|
$
|
6,690
|
|
|
$
|
18,400
|
|
|
$
|
9,020
|
|
|
$
|
34,930
|
|
|
|
|
|
|
|
|
|
|
|
|
"New Cequent" (2)
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
128,970
|
|
|
$
|
148,560
|
|
|
$
|
178,290
|
|
|
$
|
157,790
|
|
|
$
|
613,610
|
|
Operating profit
|
|
$
|
(7,560
|
)
|
|
$
|
8,210
|
|
|
$
|
19,160
|
|
|
$
|
11,870
|
|
|
$
|
31,680
|
|
Total Special Items to consider in evaluating operating profit
|
|
$
|
13,000
|
|
|
$
|
980
|
|
|
$
|
1,460
|
|
|
$
|
740
|
|
|
$
|
16,180
|
|
Excluding Special Items, operating profit would have been
|
|
$
|
5,440
|
|
|
$
|
9,190
|
|
|
$
|
20,620
|
|
|
$
|
12,610
|
|
|
$
|
47,860
|
|
Operating profit margin excluding special items
|
|
|
4.2
|
%
|
|
|
6.2
|
%
|
|
|
11.6
|
%
|
|
|
8.0
|
%
|
|
|
7.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Expenses
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
$
|
(8,320
|
)
|
|
$
|
(9,640
|
)
|
|
$
|
(9,270
|
)
|
|
$
|
(11,230
|
)
|
|
$
|
(38,460
|
)
|
|
|
|
|
|
|
|
|
|
|
|
TriMas Total Company
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
320,190
|
|
|
$
|
365,380
|
|
|
$
|
403,000
|
|
|
$
|
380,120
|
|
|
$
|
1,468,690
|
|
Operating profit
|
|
$
|
10,440
|
|
|
$
|
32,260
|
|
|
$
|
44,440
|
|
|
$
|
32,270
|
|
|
$
|
119,410
|
|
Total Special Items to consider in evaluating operating profit
|
|
$
|
13,000
|
|
|
$
|
980
|
|
|
$
|
3,810
|
|
|
$
|
3,440
|
|
|
$
|
21,230
|
|
Excluding Special Items, operating profit would have been
|
|
$
|
23,440
|
|
|
$
|
33,240
|
|
|
$
|
48,250
|
|
|
$
|
35,710
|
|
|
$
|
140,640
|
|
Operating profit margin excluding special items
|
|
|
7.3
|
%
|
|
|
9.1
|
%
|
|
|
12.0
|
%
|
|
|
9.4
|
%
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(1) Results have been adjusted for the discontinued
operations of NI in the third quarter 2014
|
(2) Represents operating results before corporate
expense allocations
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations (1)
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,240
|
|
|
$
|
2,360
|
|
|
$
|
980
|
|
|
$
|
-
|
|
|
$
|
6,580
|
|
Operating profit
|
|
$
|
1,420
|
|
|
$
|
330
|
|
|
$
|
(400
|
)
|
|
$
|
-
|
|
|
$
|
1,350
|
|
Copyright Business Wire 2014