TRIMAS CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - December 20, 2019

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EX-99.1 - EXHIBIT 99.1 - TRIMAS CORPtrs2019lamonssalepress.htm
EX-2.1 - EXHIBIT 2.1 - TRIMAS CORPtrs2019assetandstockpu.htm
8-K - 8-K - TRIMAS CORPtrs2019lamonssale8k.htm

Exhibit 99.2


TRIMAS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

Overview
On December 20, 2019, TriMas Corporation ("TriMas" or the "Company") completed the previously announced sale of its Lamons division (the “Lamons Division”) to two wholly-owned subsidiaries of an investment fund sponsored by First Reserve, pursuant to an Asset and Stock Purchase Agreement dated as of November 1, 2019 (the “Purchase Agreement”), for a purchase price of $135 million, subject to certain adjustments as set forth in the Purchase Agreement.
The following unaudited pro forma consolidated financial information is based on historical consolidated financial information of TriMas, which is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019, adjusted to reflect the sale of the Lamons Division. The unaudited pro forma consolidated income statements for the nine months ended September 30, 2019 and for the years ended December 31, 2018 and 2017 and the unaudited pro forma consolidated statement of operations of the Company for the year ended December 31, 2016 have been prepared to illustrate the effects of the sale as if it occurred on January 1, 2016. The unaudited pro forma consolidated balance sheet as of September 30, 2019 has been prepared to illustrate the effects of the sale as if it occurred on September 30, 2019.
The unaudited pro forma consolidated financial information is presented for informational purposes only and is not necessarily indicative of what the Company's consolidated financial position or results of operations actually would have been had the sale been completed at the dates presented. In addition, the information presented herein does not claim to project the future financial position or operating results of the Company. The unaudited pro forma consolidated financial statements should be read in conjunction with the Company's historical financial statements, including the notes thereto, as well as the accompanying notes to the unaudited pro forma financial statements.






1


TriMas Corporation
Pro Forma Consolidated Balance Sheet
As of September 30, 2019
(Unaudited - dollars in thousands)


 
 
As Reported (a)
 
Lamons Division Discontinued Operations (b)
 
Pro Forma Adjustments
 
Pro Forma TriMas Corporation Continuing Operations
Assets
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
57,940

 
$
(5,290
)
 
$
131,700

(c)
$
184,350

Receivables, net
 
152,220

 
(32,080
)
 
—

 
120,140

Inventories
 
176,300

 
(43,040
)
 
—

 
133,260

Prepaid expenses and other current assets
 
8,150

 
(1,090
)
 
—

 
7,060

Total current assets
 
394,610

 
(81,500
)
 
131,700

 
444,810

Property and equipment, net
 
226,640

 
(15,580
)
 
—

 
211,060

Operating lease right-of-use assets
 
36,750

 
(8,180
)
 
—

 
28,570

Goodwill
 
332,670

 
—

 
—

 
332,670

Other intangibles, net
 
171,380

 
(5,760
)
 
—

 
165,620

Deferred income taxes
 
1,100

 
—

 
—

 
1,100

Other assets
 
22,060

 
(200
)
 
—

 
21,860

Total assets
 
$
1,185,210

 
$
(111,220
)
 
$
131,700

 
$
1,205,690

Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
Current maturities, long-term debt
 
$
30

 
$
—

 
$
—

 
30

Accounts payable
 
80,180

 
(18,980
)
 
20,320

(d)
81,520

Accrued liabilities
 
46,560

 
(3,930
)
 
 
 
42,630

Operating lease liabilities, current portion
 
8,500

 
(3,320
)
 
—

 
5,180

Total current liabilities
 
135,270

 
(26,230
)
 
20,320

 
129,360

Long-term debt, net
 
294,410

 
—

 
—

 
294,410

Operating lease liabilities
 
28,640

 
(4,900
)
 
—

 
23,740

Deferred income taxes
 
21,700

 
(2,230
)
 
—

 
19,470

Other long-term liabilities
 
43,130

 
—

 
—

 
43,130

Total liabilities
 
523,150

 
(33,360
)
 
20,320

 
510,110

Preferred stock
 
—

 
—

 
—

 
—

Common stock
 
450

 
—

 
—

 
450

Paid-in capital
 
796,310

 
—

 
—

 
796,310

Accumulated deficit
 
(118,250
)
 
(76,160
)
 
111,380

(c) (d)
(83,030
)
Accumulated other comprehensive income
 
(16,450
)
 
(1,700
)
 
—

 
(18,150
)
Total shareholders' equity
 
662,060

 
(77,860
)
 
111,380

 
695,580

Total liabilities and shareholders' equity
 
$
1,185,210

 
$
(111,220
)
 
$
131,700

 
$
1,205,690



See accompanying notes to unaudited pro forma financial statements.



2


TriMas Corporation
Pro Forma Consolidated Statement of Income
Nine Months Ended September 30, 2019
(Unaudited - dollars in thousands, except per share amounts)


 
 
As Reported (a)
 
Lamons Division Discontinued Operations (b)
 
Pro Forma TriMas Corporation Continuing Operations
Net sales
 
$
697,490

 
$
(144,880
)
 
$
552,610

Cost of sales
 
(511,080
)
 
108,040

 
(403,040
)
Gross profit
 
186,410

 
(36,840
)
 
149,570

Selling, general and administrative expenses
 
(100,760
)
 
21,620

 
(79,140
)
Operating profit
 
85,650

 
(15,220
)
 
70,430

Other expense, net:
 
 
 
 
 
 
Interest expense
 
(10,450
)
 
—

 
(10,450
)
Other income, net
 
1,280

 
(30
)
 
1,250

Other expense, net
 
(9,170
)
 
(30
)
 
(9,200
)
Income before income tax expense
 
76,480

 
(15,250
)
 
61,230

Income tax expense
 
(16,260
)
 
3,540

 
(12,720
)
Net income
 
$
60,220

 
$
(11,710
)
 
$
48,510

Basic earnings per share:
 
 
 
 
 
 
Net income per share
 
$
1.33

 
 
 
$
1.07

Weighted average common shares—basic
 
45,448,711

 
 
 
45,448,711

Diluted earnings per share:
 
 
 
 
 
 
Net income per share
 
$
1.32

 
 
 
$
1.06

Weighted average common shares—diluted
 
45,745,421

 
 
 
45,745,421



See accompanying notes to unaudited pro forma financial statements.

 

3


TriMas Corporation
Pro Forma Consolidated Statement of Income
Twelve Months Ended December 31, 2018
(Unaudited - dollars in thousands, except per share amounts)


 
 
As Reported (a)
 
Lamons Division Discontinued Operations (b)
 
Pro Forma TriMas Corporation Continuing Operations
Net sales
 
$
877,140

 
$
(172,110
)
 
$
705,030

Cost of sales
 
(633,020
)
 
128,110

 
(504,910
)
Gross profit
 
244,120

 
(44,000
)
 
200,120

Selling, general and administrative expenses
 
(121,800
)
 
30,920

 
(90,880
)
Net loss on dispositions of assets
 
(250
)
 
160

 
(90
)
Operating profit
 
122,070

 
(12,920
)
 
109,150

Other expense, net:
 
 
 
 
 
 
Interest expense
 
(13,910
)
 
—

 
(13,910
)
Other expense, net
 
(2,180
)
 
(360
)
 
(2,540
)
Other expense, net
 
(16,090
)
 
(360
)
 
(16,450
)
Income before income tax expense
 
105,980

 
(13,280
)
 
92,700

Income tax expense
 
(22,680
)
 
3,950

 
(18,730
)
Net income
 
$
83,300

 
$
(9,330
)
 
$
73,970

Basic earnings per share:
 
 
 
 
 
 
Net income per share
 
$
1.82

 
 
 
$
1.61

Weighted average common shares—basic
 
45,824,555

 
 
 
45,824,555

Diluted earnings per share:
 
 
 
 
 
 
Net income per share
 
$
1.80

 
 
 
$
1.60

Weighted average common shares—diluted
 
46,170,464

 
 
 
46,170,464



See accompanying notes to unaudited pro forma financial statements.



4


TriMas Corporation
Pro Forma Consolidated Statement of Income
Twelve Months Ended December 31, 2017
(Unaudited - dollars in thousands, except per share amounts)


 
 
As Reported (a)
 
Lamons Division Discontinued Operations (b)
 
Pro Forma TriMas Corporation Continuing Operations
Net sales
 
$
817,740

 
$
(161,580
)
 
$
656,160

Cost of sales
 
(598,350
)
 
131,470

 
(466,880
)
Gross profit
 
219,390

 
(30,110
)
 
189,280

Selling, general and administrative expenses
 
(129,140
)
 
33,310

 
(95,830
)
Net loss on dispositions of property and equipment
 
(1,080
)
 
880

 
(200
)
Operating profit
 
89,170

 
4,080

 
93,250

Other expense, net:
 
 
 
 
 
 
Interest expense
 
(14,400
)
 
10

 
(14,390
)
Debt financing and related expenses
 
(6,640
)
 
—

 
(6,640
)
Other expense, net
 
(1,920
)
 
110

 
(1,810
)
Other expense, net
 
(22,960
)
 
120

 
(22,840
)
Income before income tax expense
 
66,210

 
4,200

 
70,410

Income tax expense
 
(35,250
)
 
1,130

 
(34,120
)
Net income
 
$
30,960

 
$
5,330

 
$
36,290

Basic earnings per share:
 
 
 
 
 
 
Net income per share
 
$
0.68

 
 
 
$
0.79

Weighted average common shares—basic
 
45,682,627

 
 
 
45,682,627

Diluted earnings per share:
 
 
 
 
 
 
Net income per share
 
$
0.67

 
 
 
$
0.79

Weighted average common shares—diluted
 
45,990,252

 
 
 
45,990,252



See accompanying notes to unaudited pro forma financial statements.



5


TriMas Corporation
Pro Forma Consolidated Statement of Operations
Twelve Months Ended December 31, 2016
(Unaudited - dollars in thousands, except per share amounts)


 
 
As Reported (a)
 
Lamons Division Discontinued Operations (b)
 
Pro Forma TriMas Corporation Continuing Operations
Net sales
 
$
794,020

 
$
(158,990
)
 
$
635,030

Cost of sales
 
(583,220
)
 
129,300

 
(453,920
)
Gross profit
 
210,800

 
(29,690
)
 
181,110

Selling, general and administrative expenses
 
(151,960
)
 
41,390

 
(110,570
)
Net loss on dispositions of property and equipment
 
(1,870
)
 
1,110

 
(760
)
Impairment of goodwill and indefinite-lived intangible assets
 
(98,900
)
 
—

 
(98,900
)
Operating loss
 
(41,930
)
 
12,810

 
(29,120
)
Other expense, net:
 
 
 
 
 
 
Interest expense
 
(13,720
)
 
50

 
(13,670
)
Other expense, net
 
(2,580
)
 
440

 
(2,140
)
Other expense, net
 
(16,300
)
 
490

 
(15,810
)
Loss before income tax expense
 
(58,230
)
 
13,300

 
(44,930
)
Income tax benefit
 
18,430

 
(910
)
 
17,520

Net loss
 
$
(39,800
)
 
$
12,390

 
$
(27,410
)
Basic loss per share:
 
 
 
 
 
 
Net loss per share
 
$
(0.88
)
 
 
 
$
(0.60
)
Weighted average common shares—basic
 
45,407,316

 
 
 
45,407,316

Diluted loss per share:
 
 
 
 
 
 
Net loss per share
 
$
(0.88
)
 
 
 
$
(0.60
)
Weighted average common shares—diluted
 
45,407,316

 
 
 
45,407,316



See accompanying notes to unaudited pro forma financial statements.



6


TRIMAS CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

1. Basis of Presentation
On December 20, 2019, TriMas completed the previously announced sale of its Lamons Division to two wholly-owned subsidiaries of an investment fund sponsored by First Reserve, pursuant to an Asset and Stock Purchase Agreement dated as of November 1, 2019 (the “Purchase Agreement”), for a purchase price of $135 million, subject to certain adjustments as set forth in the Purchase Agreement.
The unaudited pro forma consolidated financial information is based on historical consolidated financial information of TriMas, which is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019, adjusted to reflect the sale of the Lamons Division. The unaudited pro forma consolidated income statements for the nine months ended September 30, 2019 and for the years ended December 31, 2018 and 2017 and the unaudited pro forma consolidated statement of operations of the Company for the year ended December 31, 2016 have been prepared to illustrate the effects of the sale as if it occurred on January 1, 2016. The unaudited pro forma consolidated balance sheet as of September 30, 2019 has been prepared to illustrate the effects of the sale as if it occurred on September 30, 2019.
The unaudited pro forma consolidated financial information is presented for informational purposes only and is not necessarily indicative of what the Company's consolidated financial position or results of operations actually would have been had the sale been completed at the dates presented. In addition, the information presented herein does not claim to project the future financial position or operating results of the Company. The unaudited pro forma consolidated financial statements should be read in conjunction with the Company's historical financial statements, including the notes thereto, as well as the accompanying notes to the unaudited pro forma financial statements.
2. Pro Forma Adjustments
The following pro forma adjustments are included in the unaudited Pro Forma Financial Statements:
(a)
The as reported column in the unaudited pro forma consolidated financial information reflects TriMas' historical financial statements from continuing operations for the periods presented and do not reflect any adjustments related to the sale of the Lamons Division.
(b)
The information in the Lamons Division Discontinued Operations column in the unaudited pro forma consolidated financial information was derived from the Company's accounting records.
(c)
Reflects the estimated cash proceeds at closing in connection with the sale of the Lamons Division at an adjusted purchase price of $135.0 million, less estimated transaction costs of $3.3 million related primarily to investment banking, legal and other professional fees, which were unpaid as of December 20, 2019. Such proceeds have been shown as an addition to the recorded cash balance given the Company's intent to reinvest in its businesses in the future.
The final purchase price is subject to finalization of net working capital to be settled within 60 days of the closing date.
The pro forma cash proceeds is calculated as follows (in thousands):
Base purchase price
 
$
135,000

Plus: cash sold
 
5,900

Less: net working capital adjustment
 
(5,900
)
Adjusted purchase price
 
135,000

Less: transaction expenses
 
(3,300
)
Pro forma cash proceeds
 
$
131,700

(d)
The unaudited pro forma consolidated balance sheet contains tax adjustments associated with TriMas' income tax effects from the estimated taxable gain on divestiture of the Lamons Division, based on the applicable federal U.S. statutory rate of 21% and blended state tax rate of 3.4%, net of federal benefit, resulting in an increase to current liabilities for income taxes payable of $20.3 million.
    

7

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