TriMas Corporation

Thank you for standing by. Good day and welcome to the Trimass First Quarter 2021 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 Trimass Corporation's First Quarter 2021 Earnings Call. Participating on the call today are Tom Amato, Trimass' President and CEO, and Bob Zalewski, our Chief Financial Officer. We also have with us Scott Mell, who, as we announced yesterday, will succeed Bob as CFO effective May 1st. We will provide our prepared remarks on our results and our outlook, and then we will open the call up for your questions. In order to assist with the review of our results, we have included the press release and PowerPoint presentation on our company website, www.trimaskorp.com, under the Investors section. In addition, a replay of this call will be available later today by calling 888-203-1112 with a replay code of 7033-534. 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. Please refer to our Form 10-K and our First Quarter 10-Q that will be filed 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 are included as part of this presentation for the reconciliations between GAAP and non-GAAP financial measures used during this conference call. Today, the discussion on our 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' first quarter earnings call. On behalf of our global leadership team, we are very pleased with our performance to start the year. Despite continued challenges in accurately forecasting given the pandemic and related demand changes, we are reporting strong first quarter earnings today. Let's turn to slide three. As a reminder, for the first quarter of 2021, we are largely comparing results from a pandemic quarter to essentially a pre-pandemic quarter in 2020. While we work on integrating more recent acquisitions, we continue to have momentum in TriMass' packaging segment which was up 32% for the quarter to $132 million, a record first quarter sales level. We have previously stated that our specialty products businesses would be the first beneficiary from a market recovery. Indeed, we are excited to see sales levels at the high end of our outlook range and with better than anticipated conversion, which we attribute to prior year factory floor improvements. While it is still difficult to predict, we hope this trend continues and perhaps even dovetails into an additional future benefits from increased infrastructure spending that may occur in the US. We did experience higher raw material costs in the quarter, which we largely overcame through better than anticipated volume. So again, we are very pleased with our financial results for the quarter. Additionally, in late March, we announced a successful refinancing of our revolver facility which was otherwise expiring in 2022, and the refinancing of our fixed-rate notes. Given historically low interest rates, we elected to upsize our senior notes from $300 million to $400 million, putting additional cash net of refinancing costs of $86.5 million on our balance sheet. While we have no immediate need for the additional cash, we remain well capitalized and in a solid position to execute our long-range strategy. we are also well positioned to continue to execute share buybacks as part of our overall capital allocation strategy. In the first quarter, we repurchased approximately 0.2% of shares outstanding and have $159 million of availability under our most recent share repurchase authorization. To increase transparency on our earnings, we are also announcing today that we will be redefining adjusted earnings per share, to add back non-cash acquisition-related amortization expense. Given that we currently have more than $20 million of pre-tax non-cash acquisition amortization expense annually, modifying this definition provides our investors a better view of the cash earnings power of TriMass. Now, before I move to our specific results for the quarter, we also announced yesterday that Bob Zalupski, our CFO, will be retiring. Bob has done an incredible job over his career at TriMass, and I personally feel fortunate to have partnered with Bob over my nearly five years with the company as we repositioned TriMass and greatly improved our performance and potential. We also announced that we have hired Scott Mell as our new CFO. Scott comes to TriMass with strong financial acumen and a deep skill set on performance improvement. He has also worked with TriMass on a few high-impact projects over the last couple of years, so he has good familiarity with the company. I've asked Scott to introduce himself, after which he will be leaving the call to continue his onboarding work with the wider TriMAS team. Scott?