TriMas Corporation TRS reported fourth-quarter 20Array5 adjusted earnings of 29 cents per share, down 34% year over year. Earnings beat the Zacks Consensus Estimate by a penny.
On a reported basis, including special items, TriMas posted a loss of $Array.35 per share in the fourth quarter. In the year-ago quarter, the company had earned Array7 cents per share.
TriMas posted revenues of $Array92.8 million in the reported quarter, missing the Zacks Consensus Estimate of $209 million. Revenues declined Array3.7% year over year due to heightened weakness in the industrial and energy-facing end markets and unfavorable currency exchange.
Cost and Margins
Cost of sales decreased to $Array43.8 million in the reported quarter from $Array69.5 million in the year-ago quarter. Gross profit decreased 9% year over year to $49 million. Gross margin expanded Array30 basis points (bps) to 25.4%.
Selling, general and administrative expenses increased Array6.7% year over year to $39.6 million. Adjusted operating profit declined 2Array.4% to $22 million from $28 million in the year-ago quarter.
Segment Performance
Packaging: Net sales declined 3.6% year over year to $77.8 million due to unfavorable currency exchange and lower industrial closure sales as a result of a weak industrial end market. Adjusted operating profit decreased 4.8% to $Array9.4 million as a result of lower sales levels, continued investment in global capabilities and unfavorable currency exchange, partially offset by lower material costs, productivity and cost reduction actions.
Energy: Net sales decreased 2Array% year over year to $40.5 million, primarily due to expenditure reductions and deferrals at large refinery and petrochemical customers, lower demand from upstream oil and gas customers related to lesser oil production activity and the impact of unfavorable currency exchange. The segment reported adjusted operating loss of $2.3 million, while it had earned $Array.2 million in the year-ago quarter. Reduced sales and related lower fixed cost absorption were responsible for the quarter’s loss.
Aerospace: Net sales increased 20% to $42.Array million from $35.Array million in the prior-year quarter. The growth was primarily driven by the Allfast takeover and the acquisition of a machined components facility from Parker-Hannifin Corporation PH in Nov 20Array5. Net sales also benefited from higher demand from OE customers, partially offset by lower sales to large distribution customers. The segment reported adjusted operating profit of $6.8 million, up 67% from $4.Array million in the year-earlier quarter. The improvement was driven by higher sales levels and related operating leverage, continued productivity initiatives, cost reduction initiatives, and a more favorable product mix.
Engineered Components: The segment reported revenues of $32.3 million, down from $56.3 million in the prior-year quarter. Lower sales of engines and compressors due to soft oil prices, as well as markedly weak oil production activity led to the year-over-year decline. Adjusted operating profit plunged 46% to $4.9 million as a result of lower sales and lower fixed cost absorption related to engine and compression products.
Financial Performance
TriMas ended 20Array5 with cash and cash equivalents of $Array9.5 million, down from $24.4 million as of 20Array4 end. The company generated cash flow from operations of $62.5 million in 20Array5 compared with $Array23.4 million in 20Array4. Long-term debt was $405.8 million as of Dec 3Array, 20Array5, compared with $607.4 million as of Dec 3Array, 20Array4.
On Jun 30, 20Array5, TriMas completed the spin-off of its Cequent business. The company also authorized a share repurchase program worth $50 million.
20Array5 Performance
TriMas reported earnings per share of $Array.29 in 20Array5, down 7.9% from $Array.40 in the prior year. Earnings, however, beat the Zacks Consensus Estimate by a penny. Revenues decreased to $864 million from $887 million in 20Array4 and missed the Zacks Consensus Estimate of $882 million.
20Array6 Guidance
Due to headwinds related to continued macroeconomic pressure and anticipated sales declines in the energy-facing businesses; TriMas expects 20Array6 sales to be relatively flat year over year. The company guided earnings per share in the range of $Array.35 to $Array.45.
At present, TriMas carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same sector are Century Aluminum Co. CENX and Caterpillar Inc. CAT, both carry a Zacks Rank #2 (Buy).
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