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TriMas (TRS) Q2 Earnings Meet Estimates, 2019 Outlook Raised
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TriMas Corporation (TRS - Free Report) delivered adjusted earnings of 50 cents per share in second-quarter 2019 which came in line with the Zacks Consensus Estimate. The figure improved 4% from 48 cents reported in the prior-year quarter.
On a reported basis, the company’s earnings per share of 48 cents shows an improvement from the year-ago figure of 42 cents.
The company’s revenues of $239 million in the reported quarter missed the Zacks Consensus Estimate of $240 million. However, the top line improved 6.4% year over year as sales increased across all segments, both organic and acquisition-related sales growth. However, impact of unfavorable currency exchange somewhat negated these gains.
TriMas Corporation Price, Consensus and EPS Surprise
Cost of sales rose 8.7% year over year to $174 million in the reported quarter. Gross profit improved 0.9% year over year to $65.3 million. Gross margin contracted 150 bps to 27.3%.
Selling, general and administrative expenses escalated 3% year over year to $34 million. Adjusted operating profit remained flat at $32 million compared with the prior-year quarter as impact of higher sales were offset primarily by a less favorable sales mix, and increased input and freight costs.Adjusted operating margin contracted 90 bps year over year to 13.4% in the reported quarter.
Segment Performance
Packaging: Net sales rose 9% year over year to $104 million as a result of higher sales of health, beauty and home care products related to new product introductions and contributions from the acquisitions of Plastic Srl and Taplast. However, lower sales of food and beverage products, and the impact of unfavorable currency exchange somewhat dampened sales. Adjusted operating profit remained flat at $22.9 million from the prior-year quarter.
Aerospace: Net sales increased 8% year over year to $42.2 million from $39.1 million recorded in the year-earlier quarter, aided by steady demand levels for fasteners. The segment reported adjusted operating profit of $7 million, up 9% year over year on higher sales levels.
Specialty Products: The segment reported revenues of $93 million, an improvement of 3% from the prior-year quarter, primarily driven by higher sales levels in the sealing and fastener, and machined components product lines offset by lower sales of engines and compressors utilized in oil and gas upstream applications, as rig activity and spending remained weak in the United States and Canada, and lower cylinder sales. Adjusted operating profit declined 5% year over year to $10.2 million hurt by less favorable product sales mix, and higher input and freight costs.
Financial Performance
TriMas reported cash and cash equivalents of $40.3 million as of Jun 30, 2019, lower than $108 million as of Dec 31, 2018. The company generated $22 million of cash from operating activities during the second quarter of 2019 compared with $37 million reported in the prior-year quarter. At the end of the second quarter of 2019, net debt was approximately $254 million, up from $240 million as of June 30, 2018.
TriMas completed the acquisition of Taplast S.p.A., a designer and manufacturer of dispensers, closures and containers for the beauty and personal care, household, and food and beverage packaging end markets in Europe and North America. Taplast generated revenues of approximately $32 million in 2018.
This acquisition and the prior buyout of Plastic Srl, concluded in January 2019, will augment TriMas’ product breadth, geographic presence, and innovation and engineering capabilities.
Guidance
TriMas maintained full-year 2019 organic sales growth guidance at 3-5%. However, considering certain softer end markets during the first half of the year, the company anticipates sales growth to come in toward the lower end of the range.Nevertheless, the company raised earnings per share guidance to $1.85-$1.95 from the prior stated range of $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 strive to pursue growth through innovation, and capitalize on market opportunities.
Share Price Performance
Over the past year, shares of TriMas have gained around 1.4%, against the industry’s decline of 28.4%.
Albany International has an estimated earnings growth rate of 32.3% for the ongoing year. The company’s shares have soared 31% in the past year.
UFP Technologies has a projected earnings growth rate of 5.7% for the current year. The stock has appreciated 30% in a year’s time.
Cintas Corporation has an expected earnings growth rate of 11.15% for the current year. The stock has appreciated 23% in a year’s time.
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TriMas (TRS) Q2 Earnings Meet Estimates, 2019 Outlook Raised
TriMas Corporation (TRS - Free Report) delivered adjusted earnings of 50 cents per share in second-quarter 2019 which came in line with the Zacks Consensus Estimate. The figure improved 4% from 48 cents reported in the prior-year quarter.
On a reported basis, the company’s earnings per share of 48 cents shows an improvement from the year-ago figure of 42 cents.
The company’s revenues of $239 million in the reported quarter missed the Zacks Consensus Estimate of $240 million. However, the top line improved 6.4% year over year as sales increased across all segments, both organic and acquisition-related sales growth. However, impact of unfavorable currency exchange somewhat negated these gains.
TriMas Corporation Price, Consensus and EPS Surprise
TriMas Corporation price-consensus-eps-surprise-chart | TriMas Corporation Quote
Cost and Margins
Cost of sales rose 8.7% year over year to $174 million in the reported quarter. Gross profit improved 0.9% year over year to $65.3 million. Gross margin contracted 150 bps to 27.3%.
Selling, general and administrative expenses escalated 3% year over year to $34 million. Adjusted operating profit remained flat at $32 million compared with the prior-year quarter as impact of higher sales were offset primarily by a less favorable sales mix, and increased input and freight costs.Adjusted operating margin contracted 90 bps year over year to 13.4% in the reported quarter.
Segment Performance
Packaging: Net sales rose 9% year over year to $104 million as a result of higher sales of health, beauty and home care products related to new product introductions and contributions from the acquisitions of Plastic Srl and Taplast. However, lower sales of food and beverage products, and the impact of unfavorable currency exchange somewhat dampened sales. Adjusted operating profit remained flat at $22.9 million from the prior-year quarter.
Aerospace: Net sales increased 8% year over year to $42.2 million from $39.1 million recorded in the year-earlier quarter, aided by steady demand levels for fasteners. The segment reported adjusted operating profit of $7 million, up 9% year over year on higher sales levels.
Specialty Products: The segment reported revenues of $93 million, an improvement of 3% from the prior-year quarter, primarily driven by higher sales levels in the sealing and fastener, and machined components product lines offset by lower sales of engines and compressors utilized in oil and gas upstream applications, as rig activity and spending remained weak in the United States and Canada, and lower cylinder sales. Adjusted operating profit declined 5% year over year to $10.2 million hurt by less favorable product sales mix, and higher input and freight costs.
Financial Performance
TriMas reported cash and cash equivalents of $40.3 million as of Jun 30, 2019, lower than $108 million as of Dec 31, 2018. The company generated $22 million of cash from operating activities during the second quarter of 2019 compared with $37 million reported in the prior-year quarter. At the end of the second quarter of 2019, net debt was approximately $254 million, up from $240 million as of June 30, 2018.
TriMas completed the acquisition of Taplast S.p.A., a designer and manufacturer of dispensers, closures and containers for the beauty and personal care, household, and food and beverage packaging end markets in Europe and North America. Taplast generated revenues of approximately $32 million in 2018.
This acquisition and the prior buyout of Plastic Srl, concluded in January 2019, will augment TriMas’ product breadth, geographic presence, and innovation and engineering capabilities.
Guidance
TriMas maintained full-year 2019 organic sales growth guidance at 3-5%. However, considering certain softer end markets during the first half of the year, the company anticipates sales growth to come in toward the lower end of the range.Nevertheless, the company raised earnings per share guidance to $1.85-$1.95 from the prior stated range of $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 strive to pursue growth through innovation, and capitalize on market opportunities.
Share Price Performance
Over the past year, shares of TriMas have gained around 1.4%, against the industry’s decline of 28.4%.
Zacks Rank & Stocks to Consider
TriMas currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the Industrial Products sector are Albany International Corporation (AIN - Free Report) , UFP Technologies, Inc. (UFPT - Free Report) , and Cintas Corporation (CTAS - Free Report) . While Albany International and UFP Technologies sport a Zacks Rank #1 (Strong Buy), Cintas carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albany International has an estimated earnings growth rate of 32.3% for the ongoing year. The company’s shares have soared 31% in the past year.
UFP Technologies has a projected earnings growth rate of 5.7% for the current year. The stock has appreciated 30% in a year’s time.
Cintas Corporation has an expected earnings growth rate of 11.15% for the current year. The stock has appreciated 23% in a year’s time.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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