Diversified manufacturer TriMas Corp., Bloomfield Hills, Mich., today (Aug. 4) reportered quarter net sales from continuing operations of $208.6 million, a decrease of 26.2% from the same quarter last year.from the prior year second quarter. The company reported operating profit of $15.6 million for the second quarter, a decrease of 48.5% in comparison to operating profit of $30.3 million in the second quarter 2008.
TriMas services the RV industry through its Cequent Group, comprised of several towing product brands that include Draw-Tite, Reese, Fulton, Wesbar, Bull Dog, Hidden Hitch and Tekonsha.
Sales in all five of TriMas’ business segments declined in comparison to the prior year second quarter, primarily due to reductions in volume as a result of continued weak global economic activity and reduced consumer discretionary spending. Net sales were also negatively impacted by approximately $6.7 million due to currency exchange, as reported results in U.S. dollars were impacted by weaker foreign currencies.
The company reduced total indebtedness, including amounts outstanding under its receivables securitization facility, by $37.8 million compared to March 31, and by $102.0 million compared to June 30, 2008.
Sales decreased 19.7% for the second quarter in TriMas’ Cequent division compared to the year ago period. The company continued to experience weak consumer demand for heavy-duty towing, trailer and electrical products, as a result of the uncertain economic conditions and reductions in consumer discretionary spending, and the unfavorable effects of currency exchange, partially offset by a slight increase in sales to the retail channel.
The segment was also negatively impacted by $2.1 million in costs associated with the closure of its Mosinee, Wisc., manufacturing facility and other business restructuring costs. The company continues to aggressively reduce fixed costs, decrease working capital and leverage strong brand positions for increased market share.
During the second quarter TriMas:
- Generated positive cash flow and reduced inventory levels compared to the prior quarter end in all business segments.
- Grew specialty dispensing product sales at Rieke Packaging and titanium screw sales at Monogram Aerospace, increasing content on certain aircraft.
- Opened new Lamons Sales and Service Centers in Rotterdam, The Netherlands, and Salt Lake City, Utah, to enhance service to key global customers.
- Completed integration of Cequent’s towing, trailer and electrical products businesses, including a consolidated ERP system, cross-trained customer service team and centralized distribution center.
“Despite the challenging market conditions across the majority of our end markets, I am pleased with the execution of our key initiatives during the second quarter,” said David Wathen, TriMas president and CEO. “Our free cash flow to income from continuing operations conversion rate was over 200%, driven by considerable reductions in working capital. All of our business segments were cash flow positive during the quarter and we reduced total debt by over $100 million during the past year.
“While we aggressively implement our cost reduction and productivity improvement initiatives across the company, we are also allocating some resources to key growth initiatives aimed at expanding end markets and geographies. We remain focused on using our strong brands, talented teams and broad product portfolio to gain market share during this down market. These initiatives will enhance our position for the balance of 2009 and beyond.”
“As we move forward over the remainder of 2009, we have not planned for any improvements in the end markets we serve, although we have seen some stabilization at these weak levels. We believe our 2009 sales levels will be down 20% to 25% in comparison to 2008, although we are expanding our efforts to drive new sales opportunities for the future. We remain focused on cash flow and available liquidity during these uncertain times, and are pleased to have again exceeded our forecast on both during the quarter. We are committed to maintaining adequate cushion on our bank covenants, delevering TriMas and ensuring adequate liquidity for our future endeavors.”