BLOOMFIELD HILLS—The effect of the coronavirus pandemic whacked earnings at the Bloomfield Hills-based diversified manufacturer TriMas Corp. (NASDAQ: TRS).
Company officials announced a loss of $100.9 million or $2.32 a share in the third quarter, compared to net income of $19.1 million or 42 cents a share a year earlier. The loss was driven by a $134.6 million writedown of goodwill, the amount a company pays for assets over their fair market value, and “indefinite-lived intangible assets.”
Revenue was a record $199.5 million, up from $188.4 million a year earlier.
In a statement, company officials said the writedown came in TriMas aerospace segment, “a result of a decline in its aerospace-related business’ financial results, a significant reduction in its financial projections for the remainder of 2020 compared with prior projections, and uncertainty around the duration and magnitude of the impact of the COVID-19 pandemic on future financial results given their dependence on future levels of air travel and new aircraft builds.” The company emphasized the non-cash charge does not affect liquidity or cash flow. In fact, the company’s cash flow from continuing operations hit $48.3 million in the quarter, up 73 percent from $27.8 million a year earlier.
For the nine months, the loss was $103.5 million or $2.37 a share, vs. net income of $60.2 million in the first nine months of 2019. Revenue was $581.8 million, up from $552.6 million a year earlier.
Company officials also announced an agreement to acquire Borgo San Giovanni, Italy-based Affaba & Ferrari, a designer and manufacturer of engineered caps and closures for industrial and food-and-beverage applications, further expanding TriMas’ packaging group. The company is expected to post revenue of €32 million ($37.4 million) in its current fiscal year.
“As we move through the fourth quarter of 2020, I would like to once again thank all of our employees for their commitment and dedication during this unprecedented time,” said Thomas Amato, TriMas president and CEO. “While 2020 has undoubtedly been challenging, it has also provided us with an opportunity to demonstrate the strength of our presence in a diverse set of end markets. Our businesses have solid, experienced management teams, dedicated employees, innovative products and exceptional customer focus. We will continue to leverage the TriMas Business Model to drive performance across all of our businesses to capture additional opportunities, while taking any necessary realignment steps to improve future performance when certain markets recover.”
The company’s packaging segment, which consists of the Rieke, Taplast and Rapak brands, saw sales rise 28.1 percent, primarily the result of higher demand for dispensing pumps and closure products sold into applications that help fight the spread of germs or are used in cleaning.
The aerospace segment, which includes the Monogram Aerospace Fasteners, Allfast Fastening Systems, Mac Fasteners, RSA Engineered Products, and Martinic Engineering brands, develops, saw sales plunge 22.6 percent.
The specialty products segment, which includes the Norris Cylinder and Arrow Engine brands used in the welding, HVAC, medical, military, industrial, and oil and gas markets, also saw a sharp drop in sales of 22.1 percent.
On Dec. 20, 2019, the company completed the sale of its Lamons business, a provider of sealing products for the oil and gas end markets, with annual revenues of approximately $180 million. Upon completion of the sale of Lamons, on a pro forma basis, TriMas reduced its sales exposure to the oil and gas end market from more than 20% of total sales to less than 3%.
To listen to a conference call discussing these results, visit the investors section of www.trimascorp.com or call (888) 203-1112, using pass code 3061032.