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TriMas' (TRS) Q4 Earnings In Line, Sales Beat Estimates

Zacks Equity Research

TriMas Corporation TRS delivered adjusted earnings of 38 cents per share in fourth-quarter 2018, up 23% from 31 cents reported in the prior-year period. Earnings came in line with the Zacks Consensus Estimate.

 

On a reported basis, TriMas reported earnings per share of 36 cents, favorably comparing with loss per share of 9 cents posted in fourth-quarter 2017.

 

TriMas generated revenues of $211.4 million in the fourth quarter, outpacing the Zacks Consensus Estimate of $206.8 million. The top-line figure also improved 8% year over year.

 

TriMas Corporation Price, Consensus and EPS Surprise

 

TriMas Corporation Price, Consensus and EPS Surprise

TriMas Corporation price-consensus-eps-surprise-chart | TriMas Corporation Quote

Cost and Margins

Cost of sales rose 6% year over year to $154 million in the reported quarter. Gross profit increased 16% year over year to $57.2 million. Gross margin expanded 190 basis points (bps) to 27.1%.

 

Selling, general and administrative expenses decreased 4% year over year to $31.6 million. Adjusted operating profit improved 9.4% to $25.7 million from the prior-year quarter. Higher volumes were partially offset by higher material costs. Adjusted operating margin contracted 40 bps year over year to 11.7% in the quarter.

 

Segment Performance

 

Packaging: Net sales increased 5% year over year to $90 million as a result of higher sales of health, beauty and home care, food and beverage and industrial products, related to product introductions and continued growth in Asia. Adjusted operating profit climbed 6% year over year to $20 million as higher sales volumes more than offset a less favorable product sales mix.

 

Aerospace: Net sales increased 6% year over year to $45 million from $43 million recorded in the year-earlier quarter, triggered by higher demand levels for more complex fasteners. The segment reported adjusted operating profit of $6.9 million, up 4.7% year over year.

 

Specialty Products: The segment reported revenues of $76 million, a 14% improvement from $67 million recorded in the prior-year quarter, primarily driven by higher sales levels of all brands due to refocused commercial efforts and increased end-market demand.  Adjusted operating profit climbed 52% year over year to $7.7 million on higher sales levels and continued realignment actions which negated the impact of raw-material cost inflation.

 

2018 Results

 

TriMas reported adjusted earnings per share of $1.78 in 2018, up 27% from $1.40 in the prior year. Earnings beat the Zacks Consensus Estimate of $1.74. Including one-time items, earnings for the year came in at $1.80 compared with 67 cents in the prior year.

 

Sales increased 7% year over year to $877 million. The top line surpassed the Zacks Consensus Estimate of $871.7 million.

 

Financial Performance

 

TriMas reported cash and cash equivalents of $108 million as of Dec 31, 2018, considerably up from $27.6 million as of Dec 31, 2017. The company generated $129 million of cash from operating activities during 2018 compared with $120 million reported in 2017. At the end of 2018, net debt was approximately $185 million, down from $276 million as of Dec 31, 2017.

 

During the quarter, TriMas purchased 318,494 shares of its outstanding common stock for approximately $8.6 million. Overall for 2018, the company bought 442,632 of its shares for $12.1 million. TriMas' board of directors has authorized an increase in the company's share repurchase program, enabling the company to purchase up to $75 million of its outstanding common stock.

 

Guidance

 

TriMas initiated full-year 2019 organic sales growth guidance at 3-5%. The company expects earnings per share to lie between $1.82 and $1.92. Free cash flow in 2019 is expected to be greater than 100% of net income.

 

Through 2019, TriMas will continue to focus on the TriMas Business Model, and also strive to pursue growth through innovation, and capitalize on market opportunities through manufacturing efficacy.

 

Share Price Performance

 

Over the past year, TriMas has outperformed the S&P500 with respect to price performance. The stock has gained around 26%, while the S&P500 recorded growth of 4%.

 

Zacks Rank & Stocks to Consider

 

TriMas currently carries a Zacks Rank #2 (Buy).

 

A few top-ranked stocks in the Industrial Products sector are Mueller Industries, Inc. MLI, Alarm.com Holdings, Inc. ALRM and Albany International Corp. AIN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Mueller Industries has an expected earnings growth rate of 2.2% for 2019.

 

Alarm.com has an expected earnings growth rate of 7.8% for the current year.

 

Albany International has an expected earnings growth rate of 44.7% for 2019.

 

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