TriMas Corporation

Greetings and welcome to the TriMAS 3rd 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 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce our host, Sherry Lauterbach, Investor Relations and Communications. Thank you, ma'am. You may begin.

Thank you, and welcome to Trimath Corporation's third quarter 2023 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 third quarter 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 today's press release and presentation on our company website at Trimask.com under the Investors section. In addition, a replay of this call will be available later today by calling 877-660-6853 with a meeting ID of 137-41938. 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 and our third quarter, Form 10-Q, 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 or our presentations for the reconciliations between GAAP and non-GAAP financial measures used during this 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, TriMass' president and CEO. Tom?

Thank you, Sherry. Good morning, and welcome to our third quarter earnings call. Before we get into our business update, I would like to begin by expressing our sincere and heartfelt concern regarding the new conflict in the Middle East. Although TriMass does not have any direct sales or operations in the region, we have raw material suppliers and energy partners that rely on trading activity within the broader region generally. As of this call, we have had no economic effect from this new conflict. Now I would like to turn our attention to our Trimass Aerospace Group. As announced a few days ago, we are excited that Vitaly Rusakov has agreed to join Trimass as our new president of Trimass Aerospace. Vitaly comes to Trimass with years of successful operational excellence experience within the aerospace industry. He held positions of increasing responsibility at Homet Aerospace and its predecessor companies, Arconic and Alcoa. Most recently, he was the president of Homet's Aerospace Fastener Group, a premier large supplier to the aerospace and defense industries. We welcome Vitaly to the TriMAS team and we look forward to his future contributions. In connection with this announcement, Bill Dickey, who I personally asked to step in to lead the TriMath Aerospace Group on an interim basis, will begin to transition the group's lead to Vitaly. Bill has done an amazing job in a relatively short period of time, reigniting performance, driving a renewed commitment to operational excellence, and integrating the recent Wild Mac acquisition. Bill's deep operational excellence, experience, and passion to improve operations is the reason we have been enjoying meaningful sequential performance improvement within the group. So I thank Bill for taking on this important project. Also, Bill will continue to stay on with TriMAS and support Vitaly to ensure a smooth transition and help further increase our performance momentum as we move into 2024. Let's turn to slide three. I would like to note for our investors that in late September, we presented at the William Blair What's Next for Industrials virtual conference. While the full presentation is on our website under the Investors and Events and Presentations section, this slide was core to what we presented. On this slide, we presented several examples and case studies on the many levers for growth for TriMAS, ranging from the introduction of new and innovative products, to expanding into new geographies and new applications, to benefiting from market recoveries in some of our largest markets. While I won't go through each of these growth levers on this call, we are particularly excited about the tangible gains emerging for TriMass in our expansion into Mastige Beauty applications in Western Europe and in Brazil, which we have advanced since our acquisition of Arts Packaging. Additionally, We are excited about continuing to gain traction in our life sciences products, more specifically in surgical and orthopedic applications. While program wins in life sciences applications currently tend to be lower in volume, we are beginning to expand our breadth in programs with high qualification requirements and with key life sciences customers, which we believe will benefit us in the future. Let's turn to slide four. While Scott will cover each of our segments performance, I would like to now discuss the quarter overall. As a reminder, we believe the third quarter is the beginning of a better comparison quarter versus a prior year since the end of Q3 2022 was when we started to experience a demand fall off within the consumer product applications within our TriMAS Packaging Group. As such, Q3 was largely in line with our expectations. and we are pleased with our continuing performance improvement momentum in this quarter. Within our TriMath Aerospace Group, we are reporting significant improvement against the prior year quarter as we continue to bring supply and production constraints into better balance with high demand. Although we still have much more work to do, we expect to enjoy future gains in 2024. Within our Specialty Products Group, we continue to convert well on higher sales base compared to prior years. And importantly, we are still experiencing lower demand than our annual planning model within TriMass packaging. Our cost savings actions have translated into significantly improved margin performance compared to the prior year quarter. We also continue our consistent and disciplined cadence of returning capital to our shareholders through share buybacks and dividends, where combined we are on track to return over 1% for the year. I would also like to note that TriMass has $92 million remaining under our share repurchase authorization and continue to purchase shares given current valuations. If we turn to slide five, I will now highlight our third quarter results. We are reporting sales of $235 million, up 7.7% as compared to the prior year quarter, where increased sales from our TriMass Aerospace and Specialty Products Groups more than offset consumer and industrial and market demand weakness as compared to Q3 2022 within our TriMAS packaging group. We increased our operating profit by 6.3 million to 27.9 million or 11.8% of sales. While still below our long-term target level, we are gaining traction as we convert on higher sales and from prior period operational excellence and cost savings efforts. We're reporting 57 cents per share, EPS of 57 cents per share, up 42.5% as compared to the prior year quarter as we benefited from stronger earnings performance in each of our business groups and the successful completion of a tax project, which reduced our tax expense for the quarter. Finally, we're reporting EBITDA of 45.2 million, or 19.2% of sales, up 200 basis points from the prior year quarter. I would also like to note that in the prior year quarter, we enjoyed a property sale gain, which benefited Q3 2022 by 4.8 million. When normalizing for this benefit, our EBITDA for Q3 2023 was up by over 400 basis points. So while we believe we are operating below our full potential as compared to when in an improved TriMass packaging demand environment, We are encouraged by gains we are making across each of our businesses. At this point, I will now turn the call over to Scott, who will take us through TriMet's balance sheet and segment results.