TriMas Corp. today (Nov. 9) announced financial results for the quarter ended Sept. 30.
The Bloomfield Hills, Mich.-based company reported quarterly net sales from continuing operations of $203.7 million, a decrease of 21.9% from third quarter of 2008. Third quarter 2009 income from continuing operations decreased 19.2% from third quarter 2008 to $6.5 million from $8.1 million a year ago, according to a news release.
For its Cequent towing products segment, sales decreased 6.5% for the third quarter compared to the year ago period. The company continued to experience weak, but improving, consumer demand for heavy-duty towing, trailer and electrical products, as a result of uncertain economic conditions and reductions in consumer discretionary spending, and the unfavorable effects of currency exchange, partially offset by a slight increase in sales in the Australia/Asia Pacific business.
Operating profit for the quarter improved as a result of cost reductions implemented as part of the company’s Profit Improvement Plan, partially offset by lower sales volumes, unfavorable foreign currency exchange and lower absorption of fixed costs. Due to the cost reduction actions, operating profit as a percentage of sales also improved approximately 560 basis points compared to the third quarter of 2008. The segment was negatively impacted by $2.1 million in charges associated with the closure of its Mosinee, Wis., 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.
“We are executing on our productivity, working capital and growth initiatives,” said David Wathen, TriMas president and CEO. “Compared to last quarter, we improved operating profit margin by 280 basis points on slightly lower revenues, decreased operating working capital by almost $23 million and generated over $43 million of free cash flow. Sales and end market demand are still down, but we are using this environment to make TriMas a permanently better business.
“As we move forward, we will continue our focus on reducing costs and working capital in each business segment. We remain focused on debt reduction and the protection of our liquidity. During the quarter, we reduced total indebtedness by $22 million and ended the quarter with almost $25 million in cash. While we are pleased with the progress we are making across these initiatives, there is more work to be done.
“For the full year of 2009, we continue to anticipate revenue to be down 20% to 25% compared to 2008, consistent with our comments last quarter. We are allocating some resources to key growth initiatives aimed at expanding end markets and geographies. We are also beginning to see positive signs in some of our businesses, as our Packaging and Cequent segments project fourth quarter 2009 revenues close to fourth quarter 2008 levels. These developments lead us to expect at least modest revenue gains for next year. We are, however, continuing to operate our company with the realization we are still in a time of economic uncertainty. We are committed to maintaining cushion on our bank covenants, delevering TriMas and ensuring liquidity for our future endeavors.”