TriMas Corporation

Greetings and welcome to the TriMAS first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sherry Lauterbach. Thank you. You may begin.

Thank you, and welcome to Trimoth Corporation's first quarter 2023 earnings call. Participating on the call today are Thomas Amato, Trimoth's President and CEO, and Scott Mell, our Chief Financial Officer. We will provide our prepared remarks on our results and on our 2023 outlook, and then we will open up the call to your questions. In order to assist with the review of our results, we have included today's 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 877-660-6853 with a meeting ID of 1373-7667. Before we get started, I would like to remind everyone that our comments today 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, actually Form 10-Q filed later today, as 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 or presentation for the reconciliations between GAAP and non-GAAP financial measures used today on the call. The discussion on the call regarding our financial results will be on an adjusted basis, excluding the impact of special items. And 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 first quarter earnings call. As I begin today's call, I am pleased to report that we have closed on the acquisition of WeldMac Manufacturing. WeldMac, as we discussed on our prior earnings call, is a U.S.-based manufacturer of complex metal-fabricated components and assemblies for aerospace, defense, and industrial applications. This business, which we'll report into our TriMass Aerospace Group, is highly complementary to RSA Engineer Products and Martinique Engineering and is expected to add more than $30 million in analyzed revenues. So today, I would like to publicly welcome the WELDMAC team to TriMass' family of businesses. We are also well along in the process of integrating arts packaging into our TriMass Packaging Group. As a reminder, Arts Packaging, which we acquired earlier in the year, is the premier manufacturer of packaging products for the beauty, food, and medical end markets. In fact, we are leveraging our Arts Packaging brand and featuring, for the first time ever, TriMass Packaging at LuxPak 2023, which is a luxury beauty and brands trade show next month. Additionally, I am pleased to report that we will soon be posting our third annual TriMass Sustainability Report to our website. We are excited to share with our investors the continued progress TriMass is making in the overall area of sustainability and look forward to continuing our momentum over the coming year. I would like to now pivot to today's call to refresh what we discussed on our prior earnings call, specifically demand levels within TriMass Packaging's consumer products, and certain of our industrial end markets. These end markets continue to exhibit variability as expected compared to prior year booking levels. With that said, we are experiencing an increased level of global quoting activity, particularly with some of our larger CPG packaging customers. And while we recognize quoting is not in bookings or even forecasted sales, we view this activity as a potential leading indicator to demand needs expected later in the year and even into next. As stated previously, we will continue to closely monitor market activity, looking for green shoots that point to a return to more normalized demand levels. Additionally, we are proactively implementing steps to streamline certain infrastructure costs during this period so we may capitalize on future operating leverage gains as demand levels recover. We will cover more of these specific actions as we move through the year and into 2024. With respect to TriMass Aerospace, demand remains strong as the aerospace market continues to recover. With that said, a secondary effect of the high demand rate is strain in certain areas of our subsupply base, particularly with aerospace grade stainless steel wire. Given longer lead times for these engineered materials, we are working collaboratively with our sub-suppliers and customers as we continue to balance supply chain constraints. We do estimate that our sales would have been a few million higher in the quarter and with improved conversion rates had our manufacturing operations had the appropriate quantities and grades of material aligned with our higher demand levels. Again, this will be an area we will continue to focus on through the year. Finally, before going through our quarterly results, we continue to make progress against reducing our overall shares outstanding, which we view as a long-term and tax efficient way to return capital to our shareholders. We acquired about 350,000 shares, reducing net shares outstanding by approximately 0.5% in the first quarter of 2023 alone. In addition to retiring these shares, paying a dividend, and funding an acquisition in the quarter, our balance sheet remains strong and we have ample liquidity to execute against near-term streamlining actions and our long-term strategy. Let's now turn to slide four where I'll summarize our financial results for the quarter. Sales for the quarter were $215.5 million as compared to $224 million for the prior year quarter. As a result of reduced demand as previously discussed and unfavorable currency, which were only partially offset by acquisition sales. Scott will cover the specific effects in more detail when he reviews each of our segments' results. Operating profit for the quarter was $15.5 million as compared to the prior year quarter of $26.2 million. EBITDA for the quarter was $31.7 million, or 14.7% of sales, as compared to the prior year quarter, which was at a rate of 18.9% of sales. While this is significantly below our longer-term consolidated target percent EBITDA level, We do expect to improve through the year, particularly in the second half, and anticipate converting well as demand levels return and trimass packaging and supply constraints ease in trimass aerospace. Earnings per share for the quarter was 30 cents, which was slightly better than our expectations for the quarter. And now at this point, I'll turn the call over to Scott, who will take us through the balance sheet and the segment results. Scott?