TriMas Corporation

and welcome to the Trimass Fourth Quarter and Full Year 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Sherry Lauterbach. Please go ahead.

Thank you, and welcome to the Trimass Corporation's Fourth Quarter and Full Year 2020 Earnings Call. Participating on the call today are Tom Amato, Trimass' President and CEO, and Bob Zalewski, our Chief Financial Officer. After our prepared remarks on our results and our outlook, we will open the call up for your questions. In order to assist with review of our results, we have included the press release and PowerPoint presentation on our company website at www.trimaskorp.com under the Investor section. In addition, a replay of this call will be available later today by calling 888-203-1112 with a replay code of 6413483. Before we get started, I would like to remind everyone that our comments today, which are intended to supplement your understanding of TriMAS, may contain forward-looking statements that are inherently subject to a number of risks and uncertainties, including impacts from COVID-19. Please refer to our Form 10-K and our 10-K that will be filed later today for a list of factors that could cause our results to differ from those anticipated in any forward-looking statements. Also, we undertake no obligation to publicly update or revise any forward-looking statements except as required by law. We would also direct your attention to our website where considerably more information may be found. In addition, we would like to refer you to the appendix in our press release issued this morning or included as part of this presentation for the reconciliations between GAAP and non-GAAP financial measures used today during this conference call. The discussion on the call regarding our financial results will be on an adjusted basis, excluding the impact of special items. With that, I'll turn the call over to Tom Amato, TriMass' president and CEO. Tom?

Good morning, and welcome to TriMass' fourth quarter earnings call. As discussed over the past few quarters, we have all learned to endure changes to our daily routines to protect the health and safety of individuals in the communities where we live and work. At TriMass, we continue to take steps in each of our facilities to enhance social distancing and increase awareness of cleanliness and personal hygiene. It remains our hope that in the coming months, as vaccine availability increases, our employees choose to get vaccinated. We also look forward to a time when COVID-19 is fully treatable or better yet, eradicated, and when air travel and the related hotel and entertainment industries revert to pre-pandemic activity levels. This will not only benefit society, but we believe will benefit our company and our shareholders as TriMass is well positioned for a broader economic recovery in a number of product areas. As I have said on earlier calls, I extend my deepest appreciation to our employees around the world for their commitment and dedication during these challenging times. Let's turn to slide three. As we reflect on 2020, we were able to continue our momentum toward executing against TriMass' overarching strategy. Of course, we started the year newly repositioned as we successfully exited the vast majority of our activity in oil and gas-related product lines in December of 2019 and thereby created a natural leveraging of TriMass' packaging business on TriMass. While this was in line with our strategy, we didn't recognize how important it would be to TriMass until later in the year. Thanks to robust demand in our product lines, which support personal hygiene and cleaning to help fight the spread of germs, Performance and TriMass' packaging group overcame weak demand in TriMass' aerospace and specialty product segments to deliver solid sales, earnings, and cash flow results. When disruption from the pandemic set in now one year ago, we relied on our TriMass business model to immediately address the rapid changes we were anticipating and seeing across our multi-industry businesses. I won't recap the many actions we took along the way, but I can report that our leadership team worked tirelessly throughout the year to support customer demands and also take steps to adjust and protect our longer range plans. During 2020, we also completed three bolt-on acquisitions, RSA Engineer Products, Afaba and Ferrari, and Raypak, as we continue to make progress against our strategy to build out our packaging and aerospace platforms. We look forward to the contributions these businesses will make to TriMass in the coming years. Additionally, we repurchased about 3.6% of our shares outstanding, which we continue to view as an efficient way to enhance value for our shareholders. Finally, As we closed out the year, we launched our inaugural sustainability report. We have always been committed to improving TriMAS with a keen focus on the environments in which we operate, so it is exciting to start to share more of this data. We look forward to updating our progress on these ESG initiatives as we go forward. Let's turn to slide four. As a reminder, 63% of TriMAS' revenues are reported in our packaging segment. where we again outperformed our expectations given what we believe has emerged as a secular global trend, resulting from a heightened awareness of hand washing, improved personal hygiene, and overall cleanliness. TriMass's aerospace segment represents about 22% of our annual sales, where we supply engineered fasteners and fabricated products and assemblies into commercial, business jet, and military defense applications. Our businesses in this segment have been severely impacted by the effects of the pandemic given the reduced aircraft production build rates. The balance of TriMass' business, or 15%, is in our specialty product segment where we predominantly supply steel cylinders and natural gas engines and compressors into the welding and HVAC, military and defense, and oil and gas end markets. While volume in our specialty product segment has been weak due to the pandemic, Through swift realignment efforts, this segment is also positively contributing to TriMass' overall earnings and cash flow generation. Moreover, we anticipate our specialty product segment, particularly our Norris Cylinder business, will begin to recover first when the effects from the pandemic begin to subside. Driven by the exceptional performance of TriMass' packaging group, and favorable tax planning actions, our consolidated fourth quarter results were better than expected. Net sales for the quarter were $188.2 million, up 10.1% as compared to prior year period, and up 2.7% net of currency and acquisitions. Consolidated operating profit for the quarter was $21.1 million, or 11.2% of sales, essentially flat as compared to the prior year quarter, where conversion on higher sales in our packaging segment was more than offset by weak demand in our aerospace segment and the impact the fall-off of demand had on aerospace's profitability. Net income was $16.5 million, or $0.38 per share, an increase of 22.6% as compared to $0.31 per share in the prior year period, driven by lower Q4 2020 tax rate, which is aided by tax planning actions. As noted, despite challenges from the pandemic, we performed well for the year. Net sales were $770 million, up 6.4% as compared to the prior year period, and up 0.5% net of currency and acquisitions. Consolidated operating profit for the year was $100.2 million, or 13% of sales, up 4.1% as the benefit of higher sales was partially offset by demand-related production inefficiencies and higher non-cash DNA in stock comp. Net income was $68.9 million, or $1.57 per share, up nearly 8.3% as compared to $1.45 per share in 2019. Let's turn to slide five. While in the fourth quarter of last year, we had surplus cash from a recent divestiture, we also finished 2020 with a strong balance sheet even after stock buybacks and completing three acquisitions during the year. Net debt was $272 million and our leverage was 1.7 times. We have ample liquidity with cash and availability under our credit agreement in excess of $300 million. We also finished the year by continuing to increase our momentum in LTM EBITDA, which was $156.8 million at the end of the year as compared to $154.1 million at the end of Q3 in 2020. So again, we are very pleased with these results for the quarter and the year, and thank the wider TriMass team for their dedication and commitment. I will now turn the call over to Bob, who will take us through our segment results.