TriMas Corporation

Good day and welcome to the Trimass Second Quarter 2022 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sherry Launderback. Please go ahead.

Thank you and welcome to Trimass Corporation's Second Quarter 2022 Earnings Call. Participating on the call today are Thomas Amato, Trimass' President and CEO, Scott Mell, our Chief Financial Officer, and Paul Ford, our Chief Accounting Officer. We will provide a prepared remarks on our second quarter results and our outlook, and then we will open up the call for your questions. In order to assist with the review of our results, we've included the press release and PowerPoint presentation on our company website at trimaskcorp.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 7250176. 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 Second Quarter 10-Q 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 statement. 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'll turn the call over to Tom Amato, Trimus' President and CEO. Tom?

Thank you, Sherry. Good morning, and welcome to our second quarter earnings call. Let's turn to slide three. As we reflect on our second quarter performance and take into consideration the challenging economic period we are in, I would like to acknowledge and thank our global team members for their continued commitment and dedication. It will come as no surprise that our businesses are not immune to the lingering effects of the pandemic, inflationary pressures, and other factors impacting production such as labor availability and supply constraints. To add to these dynamics, we are experiencing in certain product lines higher customer demand, as compared to our planning models, while on other product lines we are seeing softer demand, all driven by our customers seeking to bring into balance their inventories in order to be responsive to their customers' needs. These effects translate, in some cases, to operating at less than our pre-pandemic efficiency levels in our production facilities, as our daily and weekly scheduling is often adjusted to accommodate our available labor force or material constraints. As we remain flexible in this economic environment, the relentless commitment of our local teams to support our customers makes a significant performance difference. So again, I thank our global team for their continued strong efforts. With that background, despite this very dynamic operating and demand environment, we are pleased to report adjusted earnings per share of $0.60, which is in line with our planning model for the quarter. Additionally, in light of the many actions we have taken over the past few years to strengthen our balance sheet, and given the recent dislocation in the equity markets, we have repurchased nearly 1 million shares since the beginning of the year, reducing our shares outstanding this year alone by approximately 1.8%. We have approximately 115 million available under our share repurchase authorization, which is adequate to allow us to opportunistically repurchase shares in combination with investing to execute against our long-term strategy. I'd also like to note that we believe companies with a strong balance sheet and exceptional cash flow are the ones that will be best positioned to thrive in uncertain times. With that said, Scott will discuss in his section additional cash generation actions we are taking to ensure we maintain a strong balance sheet and to solidify second half performance. Let's turn to slide four, where I'll cover our financial performance for the quarter. Sales were approximately $238 million, up 8.5% as compared to the prior year quarter, driven by organic sales of 3.5%, and sales from acquisitions, which contributed 7.2%, partially offset by unfavorable foreign currency exchange of 2.2%. Sales increased in all three of our segments, with the most significant increase in our specialty product segment, driven by continued industrial demand for products within our north cylinder and aero engine businesses. Sales were also up within TriMAS packaging, driven by acquisitions, and sales were up within TriMass Aerospace as we continued to see signs of returning demand in the aerospace market generally. Adjusted operating profit for the quarter was $32 million, or 13.5% of sales, which was $2.1 million higher than the prior year quarter, but 20 basis points lower in margin largely due to product mix and higher energy costs in Europe. Adjusted net income was $28.8 million, or $0.60 per share, And this was slightly lower than the prior year quarter due to an approximately $3 million or $0.07 per share tax planning benefit that occurred in the second quarter of 2021. Finally, adjusted EBITDA was $48.3 million in the quarter, or 20.3% of sales, and on an LTM basis was $176.8 million, a $12.7 million increase over June 2021 adjusted LTM EBITDA of $164 million. We accomplished this earnings growth while also keeping net leverage in check and reducing our shares outstanding. We believe, over time, that our momentum in growing cash earnings coupled with maintaining a strong balance sheet will drive long-term shareholder value. At this point, I will turn the call over to Scott, who will take us through our balance sheet and segment performance.