TriMas Corporation (TRS) has declared its decision to shift a part of its gasket and fastener operations to a new site in Mexico from its Lamons Houston facility. This shift is expected to improve the Lamons global operating model and boost the competitive spirit of its business.
The transaction is likely to be completed over the next 12 to 18 months. This reflects TriMas’ continued commitment to enhance shareholder value through active management of business portfolio and organizational focus.
Recently, the company provided an update on the key growth and margin expansion initiatives of its Lamons energy business. TriMas’ Lamons business is one of the largest gasket and bolt suppliers to the global energy market. Over the past several years, Lamons has expanded its global footprint by adding branches in the U.S. and around the world to enhance its service to global customers.
Lamons has intensified its target on margin expansion through increased focus on cost reductions to achieve higher-standard product margins and increased sales of higher-margin, specialized products. Lamons will also be able to attain the objective through further opportunities comprising ongoing manufacturing, overhead and administrative productivity initiatives, global sourcing and selectively shifting manufacturing capabilities to countries with lower costs.
TriMas is focused on improving margins and has recently closed a less profitable branch in China and restructured its Brazilian energy business to better reflect the current market demand. Right-sizing the operations in Brazil through plant consolidation will aid the initiatives.
TriMas continues to grow and expand in geographies, and execute on cost savings and productivity initiatives through reducing cycle times. Growing revenues via new products and expanding its presence in non-U.S. markets will also drive growth. However, continued choppy demand in the energy end markets is currently the most significant challenge that will hurt the performance of its Lamons and Arrow Engine businesses.
TriMas currently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the metal processing and fabrication industry include The Timken Company (TKR), Century Aluminum Co. (CENX) and Horsehead Holding Corp. (ZINC). While Timken sports a Zacks Rank #1 (Strong Buy), both Century Aluminum and Horsehead Holding carry a Zacks Rank #2 (Buy).
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