TriMas Corporation

Good day and welcome to the Trimath fourth quarter and full year 2021 earnings conference call. Today's conference is being recorded. Now at this time, I would like to turn the conference over to Sherry Lauterbach. Please go ahead, ma'am.

Thank you and welcome to Trimath Corporation's fourth quarter and full year 2021 earnings call. Participating on the call today are Thomas Amato, Trimath's president and CEO, and Scott Mell, our chief financial officer. We will provide our prepared remarks on our results and on our 2022 outlook, and then we'll 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 investor section. In addition, a replay of this call will be available later today by calling 888-203-1112 with a replay code of 9503603. 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 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 during this conference call. Today, the discussion on the call regarding our financial results will be on an adjusted basis, excluding the impact of special items. With that, I will turn the call over to Tom Amato, TriMAS' President and CEO. Tom?

Thank you, Sherry. Good morning, and welcome to TriMAS' fourth quarter and full-year earnings call. Let's turn to slide three. Overall, 2021 was a very strong year for TriMAS. we had many accomplishments while continuing to overcome pandemic-related challenges and rising input costs. Our strategic repositioning and our diversified end market model has allowed us to deliver solid sales, earnings, and cash flow performance, continuing our positive momentum. Our operational execution was complemented by our balanced approach to capital allocation. For example, in the fourth quarter, we added a quarterly dividend for the first time since our IPO in 2007 and completed two acquisitions and share buybacks, all while maintaining a strong balance sheet. Throughout 2021, we also continue to make substantial progress on our ESG journey, and we are committed to further enhancing our sustainability performance. I believe TriMAS is better positioned today than ever before to create long-term value for our customers, employees and shareholders while benefiting the regions where we live and work. Let's turn to slide four. Starting with packaging, some of our 2021 highlights include excellent progress in the launch of our new 235,000 square foot production facility in New Albany, Ohio, adding more than 175,000 square feet of new production space. This not only allows us to grow further in North America, it also repositions production closer to many of our customers' facilities, thereby increasing our competitive advantage. Further developed are ready-to-recycle single-polymer dispensers, including the launch of our new Singolo brand. Expanding our beauty and personal care product offering into Latin America, a region we believe has much future growth opportunity for TriMass, by adding a new captive distribution location in Brazil. Acquired two businesses, Omega and, as announced this morning, Intertech, which add applications to support customers in the medical and health-related product lines. Within Trimass Aerospace, we successfully produced nearly $30 million of engineered fasteners to fulfill special stocking orders for certain non-US customers. This was a great opportunity which allowed Trimass Aerospace to dampen the effect of the significant aerospace production fall-off since mid-2020. We launched a new facility in Mesa, Arizona. This facility allows us to grow our aerospace faster product lines and vertically integrate selected outsourced components for our recently acquired RSA engineered products operation. We successfully consolidated aerospace component machining operations from three separate leased facilities in California into one of our owned facilities in Tolosa, Arizona. We believe, as the aerospace market recovers, this will put us in a better position to convert well on machined and assembled component sales. And we completed a fastener product line acquisition, which we believe will be nicely additive to TriMAS as markets recover. And within specialty products, we enhanced our Norris Cylinder brand by achieving Made in USA status, which has proven to be impeccably timed given the logistics constraints we are seeing in the U.S. for imported products. We successfully enhanced throughput to meet the increased demand within our Norris Cylinder business and remain on pathway to add incremental capacity through continued factory floor improvements. We developed a new line of natural gas-fueled, EPA-certified stationary engines, allowing our aero engine business to expand into agricultural and off-highway power generation applications. So 2021 was an exciting year for the TriMAS team as we advanced against our long-term strategies within each of our businesses. Let's turn to slide five to discuss two recent acquisitions for which I'm particularly excited. Specifically, they enable us to expand our product offering into the life sciences market, which we believe has attractive long-term growth characteristics. Today, we announce the acquisition of Intertech, a precision injection molding manufacturer with two facilities in Denver, Colorado area. Intertech specializes in custom injection molded products used in medical, consumer, and industrial applications. Intertech previously operated as a family-owned company and generated 2021 sales of approximately $32 million. Intertech's medical-related product offering, manufactured in a dedicated facility with a Class A controlled environment, includes highly engineered and tight tolerance components predominantly used in vascular access and in vitro diagnostic applications. In a separate facility, Intertek manufactures injection molded products for food, wellness, hospitality, and e-commerce logistics applications. I would like to welcome the Intertek team into the TriMass family of businesses, and we look forward to their future contributions. Omega Plastics, acquired in December and located in Clinton Township, Michigan, manufactures custom components and devices for drug delivery, diagnostics, and orthopedic medical applications. Omega leverages its core injection molding capabilities, Class A clean room, and advanced in-house tool-making competency to provide its customers a faster product development to production cycle. Omega generated approximately 18 million in sales in 2021. These two businesses will report into TriMass packaging, and we will seek to accelerate growth in life sciences applications, which will also include our current pharmaceutical and nutraceutical product lines. Let's turn to slide six, where I will cover our financial performance. As noted to start the call, 2021 was a strong year. In the fourth quarter, sales were $209 million, up 11.1% as compared to the prior year quarter. Adjusted operating profit for the quarter was $24.5 million, up 16.4% as compared to the prior year period. This increase was largely driven by conversion on higher sales within TriMass' aerospace business, driven by a specialty fastener stocking order, which we fulfilled in the quarter. and within specialty products driven by higher demand-related volume. A key attribute of our long-term strategy is to seek to continuously drive EBITDA higher while maintaining a strong balance sheet. In this regard, we ended fourth quarter with LTM EBITDA of 172 million as compared to 168.5 million at the end of the third quarter in 2021. Adjusted diluted EPS for the quarter was $0.56 per share, an increase of 19.1% as compared to $0.47 in the prior year quarter. On a full year basis, sales were $857.1 million, up 11.3% as compared to prior year. Sales in our packaging group were just over half a billion, achieving a new full year sales level record. Additionally, both TriMass Aerospace and TriMass Specialty Products businesses had strong sales as compared to 2020, driven by special stocking orders for TriMass Aerospace and demand increases within specialty products. For the full year, organic sales increased 4.1%, acquisitions added 6.1%, and currency had a favorable impact of approximately 1%. Adjusted operating profit for the year was $112.8 million, up 12.6% as compared to the prior year, with higher operating profit in each of our three segments in 2021. Adjusted EBITDA for the year was $172 million as compared to prior year of $156.8 million. Adjusted diluted EPS for the year was $2.24, up 16.7% as compared to the prior year. So as I said, it is an exciting time to be at TriMet. So before turning the call over to Scott, I want to thank our global TriMAS team for their commitment and dedication as we report these strong results for the quarter and year. Scott?