FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
Commission file number 1-10716
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-2687639
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
315 East Eisenhower Parkway, Ann Arbor, Michigan 48108
(Address of principal executive offices) (Zip Code)
(313) 747-7025
(Telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding at
Class October 31, 1996
Common Stock, $.01 Par Value 36,652,804
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TRIMAS CORPORATION
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
September 30, 1996 and December 31, 1995 1
Consolidated Condensed Statements of
Income for the Three Months and Nine
Months Ended September 30, 1996 and 1995 2
Consolidated Condensed Statements of
Cash Flows for the Nine Months
Ended September 30, 1996 and 1995 3
Notes to Consolidated Condensed
Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 5
Part II. Other Information and Signature 9
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, December 31,
1996 1995
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $109,330,000 $ 92,390,000
Receivables 81,460,000 71,200,000
Inventories 87,150,000 85,490,000
Other current assets 2,700,000 2,510,000
Total current assets 280,640,000 251,590,000
Property and equipment 179,680,000 173,700,000
Excess of cost over net assets
of acquired companies 166,160,000 144,860,000
Other assets 45,820,000 46,210,000
Total assets $672,300,000 $616,360,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 30,380,000 $ 24,390,000
Other current liabilities 40,260,000 29,740,000
Total current liabilities 70,640,000 54,130,000
Deferred income taxes and other 39,330,000 36,360,000
Long-term debt 183,550,000 187,200,000
Total liabilities 293,520,000 277,690,000
Shareholders' equity:
Common stock, $.01 par value,
authorized 100 million shares,
outstanding 36.6
million shares 370,000 370,000
Paid-in capital 154,930,000 155,430,000
Retained earnings 225,530,000 185,370,000
Cumulative translation adjustments (2,050,000) (2,500,000)
Total shareholders' equity 378,780,000 338,670,000
Total liabilities and
shareholders' equity $672,300,000 $616,360,000
The accompanying notes are an integral part of the
consolidated financial statements.
1
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TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
Nine Months Ended Three Months Ended
September 30, September 30,
1996 1995 1996 1995
Net sales $457,520,000 $431,400,000 $149,620,000 $131,880,000
Cost of sales (308,810,000) (290,750,000) (101,830,000) (89,360,000)
Selling, general and
administrative expenses (69,030,000) (63,720,000) (23,170,000) (19,490,000)
Operating profit 79,680,000 76,930,000 24,620,000 23,030,000
Interest expense (8,150,000) (10,800,000) (2,630,000) (3,360,000)
Other, net (principally
interest income) 4,520,000 5,070,000 1,680,000 1,940,000
(3,630,000) (5,730,000) (950,000) (1,420,000)
Income before income
taxes 76,050,000 71,200,000 23,670,000 21,610,000
Income taxes 29,660,000 27,980,000 9,230,000 8,390,000
Net income $ 46,390,000 $ 43,220,000 $ 14,440,000 $ 13,220,000
Earnings per common
share:
Primary $1.25 $1.17 $.39 $.36
Fully diluted $1.17 $1.09 $.37 $.34
Dividends declared per
common share $.17 $.14 $.06 $.05
Weighted average number
of common and common
equivalent shares
outstanding:
Primary 36,971,000 36,995,000 36,977,000 36,998,000
Fully diluted 42,072,000 42,078,000 42,072,000 42,080,000
The accompanying notes are an integral part of the
consolidated condensed financial statements.
2
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TRIMAS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
1996 1995
CASH FROM (USED FOR):
OPERATIONS:
Net income $46,390,000 $43,220,000
Adjustments to reconcile net
income to net cash from
operations:
Depreciation and amortization 17,390,000 16,280,000
Deferred income taxes 3,100,000 2,100,000
(Increase) decrease in receivables (5,580,000) (10,970,000)
(Increase) decrease in inventories (230,000) (2,880,000)
Increase (decrease) in accounts
payable and other current
liabilities 4,950,000 700,000
Other, net (1,290,000) (4,230,000)
Net cash from (used for)
operations 64,730,000 44,220,000
INVESTMENTS:
Capital expenditures (16,740,000) (14,780,000)
Acquisitions, net of cash acquired (21,470,000)
Net cash from (used for)
investments (38,210,000) (14,780,000)
FINANCING:
Long-term debt:
Issuance 18,480,000
Retirement (22,200,000) (51,480,000)
Common stock dividends paid (5,860,000) (4,760,000)
Net cash from (used for)
financing (9,580,000) (56,240,000)
CASH AND CASH EQUIVALENTS:
Increase (decrease) for the period 16,940,000 (26,800,000)
At beginning of period 92,390,000 107,670,000
At end of period $109,330,000 $80,870,000
The accompanying notes are an integral part of the
consolidated condensed financial statements.
3
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TRIMAS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
A. Basis of Presentation
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments considered necessary for a fair presentation have been
included, and such adjustments are of a normal recurring nature. The year-
end condensed balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1995.
Certain amounts in the 1995 financial statements have been reclassified to
conform with the current presentation.
B. Inventories by component are as follows:
September 30, December 31,
1996 1995
Finished goods $47,050,000 $47,490,000
Work in process 16,050,000 14,200,000
Raw material 24,050,000 23,800,000
$87,150,000 $85,490,000
C. Property and equipment reflects accumulated depreciation of $129.3 million
and $116.8 million as of September 30, 1996 and December 31, 1995,
respectively.
D. During the third quarter of 1996 the Company acquired two businesses for the
aggregate amount of $21,470,000 in cash (net of cash acquired), the
assumption of certain liabilities and the issuance of a short-term note.
The operating results of these two businesses did not have a material
effect on the Company's consolidated results for the third quarter or nine
months ended September 30, 1996.
4
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Consolidated net sales during the third quarter of 1996 were a record $149.6
million, an increase of 13.5 percent over the comparable period in 1995. All
four of the Company's reporting segments recorded increased sales during the
1996 third quarter compared with last year. Record sales for the first nine
months of 1996 were $457.5 million, compared to $431.4 million in 1995.
Operating results of Queensland Towbars Pty. Ltd. and The Englass Group Limited,
acquired during the third quarter of 1996, did not have a material effect on
consolidated results.
Sales by the Towing Systems segment increased 15.7 percent during the
current quarter to $48.0 million compared to $41.5 million during last year's
third quarter. The continuing strength of the specialty automotive retail
market and increased demand from independent hitch installers contributed to
this segment's improved sales. Ongoing new product introductions and delayed
seasonal demand created in previous quarters by unfavorable weather conditions
also aided third quarter sales performance. Segment sales for the current
year-to-date period were $153.6 million compared to $144.8 million in 1995.
Third quarter 1996 sales by the Specialty Fasteners segment increased 5.9
percent to $35.3 million compared to $33.3 million during the corresponding
period of a year ago. Segment sales during the first nine months of 1996
decreased modestly to $108.4 million compared to $109.5 million one year ago.
Increasing aircraft build rates at aerospace manufacturers continue to
translate into increased segment sales of aerospace fasteners. Third quarter
sales performance was also impacted by modest recoveries in demand for fasteners
from heavy-duty truck manufacturers and automotive related metallurgical
services, two markets whose softness had negatively affected both the first and
second quarters of 1996.
5
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Sales by the Specialty Container Products segment equaled $46.5 million
during the current quarter compared to $39.2 million during last year's third
quarter, an increase of 18.6 percent. Year-to-date sales increased 10.3 percent
to $136.3 million compared to $123.5 million in 1995. Third quarter and
year-to-date segment sales were aided by increased export sales of compressed
gas cylinders to both South America and the Far East. Nine month and third
quarter sales by the Corporate Companies segment increased 10.5 percent and
10.9 percent, respectively, over 1995. During the first nine months of 1996
sales were $59.3 million compared to $53.6 million during 1995's corresponding
period. Sales during the third quarters of 1996 and 1995 were $19.8 million and
$17.9 million. Sales of specialty insulation products increased during both the
third quarter and first nine months of 1996 as the commercial construction
market continued to improve.
The Company's consolidated operating profit for the first nine months of
1996 increased to $79.7 million, or 17.4 percent of net sales, compared to
$76.9 million in 1995, or a 17.8 percent operating margin. The current year
operating margin has been affected by sales promotions offered by the Towing
Systems companies and mix of products sold.
Interest expense decreased in the nine month period ended September 30, 1996
primarily because of the $51.5 million reduction of long-term debt in the third
quarter of 1995. Interest expense for the quarter and nine months in 1996 was
also affected by lower prevailing interest rates. Also, lower levels of cash
and cash equivalents and lower interest rates during 1996 reduced interest
income during the current periods.
Net income for the nine and three months ended September 30, 1996 was $46.4
million and $14.4 million, compared to $43.2 million and $13.2 million in last
year's comparable periods. Primary earnings per common share increased 6.8
percent to $1.25 for the first nine months of 1996 compared to
6
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1995's primary earnings per common share of $1.17, both based on 37.0 million
shares outstanding. Fully diluted earnings per common share increased 7.3
percent to $1.17 versus $1.09 last year, both based on 42.1 million shares
outstanding. Primary and fully diluted earnings per common share for the third
quarter of 1996 were $.39 and $.37, compared to $.36 and $.34 last year.
Liquidity, Working Capital and Cash Flows
The Company's financial strategies include maintaining a relatively high
level of liquidity. Historically, TriMas Corporation has generated sufficient
cash flows from operating activities to fund capital expenditures, debt service
and dividends, while maintaining its strategic level of liquidity. At
September 30, 1996 the current ratio was 4.0 to 1 and working capital equaled
$210.0 million, including $109.3 million of cash and cash equivalents. The
Company had available credit of approximately $314.0 million under its domestic
and international revolving credit facilities at September 30, 1996.
Cash flows from operations provided $64.7 million and $44.2 million during
the first nine months of 1996 and 1995. These operating cash flows were net
of increases in accounts receivable of $5.6 million in 1996 and $11.0 million in
1995. These increases in receivables during the first nine months of each year
were due mainly to the seasonality of the Towing Systems segment, and to the
increased sales volumes. Historically, the cash flow provided by the seasonal
increase in receivables is realized later in the year. Increases in accounts
payable and accrued liabilities provided $4.9 million and $.7 million in the
first nine months of 1996 and 1995. Capital expenditures during the first nine
months equaled $16.7 million in 1996 and $14.8 million in 1995. During the
third quarter of 1996 the Company used an aggregate of $21.5 million, net of
cash acquired, to purchase The Englass Group Limited in
7
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the United Kingdom and Queensland Towbars Pty. Ltd. in Australia. In connection
with the acquisition of Englass, the Company established a 20.0 million British
pounds revolving credit facility in the United Kingdom to fund a portion of the
purchase price and provide funds for ongoing working capital and capital
expenditure needs and other growth initiatives. During the third quarters of
1996 and 1995 the Company used excess cash to retire $22.2 million and $51.5
million of domestic long-term debt. The increase in the common dividend rate is
reflected in cash used for financing activities during the first nine months of
1996.
In late October, the Company acquired Heinrich Stolz GmbH & Co. KG, a
leading European manufacturer of a wide variety of specialty container closures
for industrial packaging markets, headquartered in Neunkirchen, Germany.
The Company believes its cash flows from operations, along with its
borrowing capacity and access to financial markets, are adequate to fund its
strategies for future growth, including working capital, expenditures for
manufacturing expansion and efficiencies, market share initiatives, and
corporate development activities.
8
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
4 Credit Agreement dated October 30, 1996 between Stolz
Verwaltungsgesellschaft mit beschrankter Haftung, a
German subsidiary of TriMas Corporation, and Bank of
America National Trust and Savings Association (the
"Bank"); and related Guaranty from TriMas Corporation in
favor of the Bank.
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
(b) Reports on Form 8-K:
None were filed during the quarter ended
September 30, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRIMAS CORPORATION
Date: November 12, 1996 By: /s/William E. Meyers
William E. Meyers
Vice President - Controller
(Chief accounting officer
and authorized signatory)
9
<PAGE>
Exhibit Index
Exhibit
Number Description of Document
4 Credit Agreement dated October 30, 1996 between Stolz
Verwaltungsgesellschaft mit beschrankter Haftung, a
German subsidiary of TriMas Corporation, and Bank of
America National Trust and Savings Association (the
"Bank"); and related Guaranty from TriMas Corporation in
favor of the Bank.
11 Computation of Earnings Per Common Share
12 Computation of Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
Exhibit 4
Confidential
Stolz Verwaltungsgesellschaft mit beschrankter Haftung
In der Au 13
57290 Neunkirchen
Dear Sirs,
We are pleased to inform you that Bank of American National Trust and Savings
Association, Frankfurt Branch (the "Bank"), grants Stolz Verwaltungsgesellschaft
mit beschrankter Haftung (the "Borrower") a revolving credit facility in the
amount of DEM 30,000,000 (Deutschmarks thirty million).
This commitment and the payment of all outstandings hereunder shall be
guaranteed by the unconditional, irrevocable and continuing guaranty (the
"Guaranty") from TRIMAS CORPORATION, Ann Arbor, Michigan 48108, issued in favor
of the Bank on October 30, 1996. This commitment is subject to the condition
precedent that the borrower is a subsidiary of TRIMAS CORPORATION, Ann Arbor,
Michigan 48108. The purpose of the facility is to provide general corporate
finance for the Borrower. The facility is subject to the following terms and
conditions:
1. Disbursement
The facility can be drawn starting from October 31, 1996 in full or in
tranches. Drawings under the facility shall be made in Deutschmarks. Drawings
shall have a minimum size of at least DEM 1,000,000. The Bank shall be informed
at least two banking days prior to each drawdown.
2. Interest, Commissions
Interest: Interest on each individual loan tranche will be calculated at LIBOR
for such tranche plus the Applicable Margin (as defined below) per annum (360-
day basis) as in effect from time to time (provided that if any loan tranche is
not paid when due, such loan tranche shall thereafter bear interest at a rate
per annum equal to LIBOR for such period as the Bank shall elect from time to
time plus the Applicable Margin as in effect from
<PAGE>
Page 2 of commitment letter
for Stolz Verwaltungsgesellschaft mit beschrankter Haftung
as of October 30, 1996
time to time plus 2%). LIBOR rates depend on the tenor of each individual loan
tranche which will be drawn. Loan tranches can have tenors of 1, 2, 3, 6 or 12
months. Interest is payable on the termination of each LIBOR interest period
and, in the case of an interest period longer than 3 months, on the 3-month
(and in the case of an interest period of 12 months, the 6-month and 9-month)
anniversary of the first day of such interest period.
Commitment Fee: The Bank charges a commitment fee at the Applicable Commitment
Fee Rate (as defined below) per annum (360-day basis) on the unutilized portion
of the facility. The commitment fee will be charged quarterly in arrears and on
the final termination date.
Facility Fee: The Bank charges a facility fee at the Applicable Facility Fee
Rate (as defined below) per annum (360-day basis) on the total committed amount
of the facility. The facility fee will be charged quarterly in arrears and on
the final termination date.
3. Repayment
The loan principal is due for repayment in full on July 1, 2000.
Borrower may optionally prepay at any time. The Borrower shall indemnify the
Bank for any loss, cost or expense due to any repayment other than on the last
day of the applicable interest period. Subject to the terms and conditions
hereof, any amounts prepaid may be reborrowed.
4. Events of Default
The Bank may terminate the facility immediately and declare the loans and all
other amounts payable hereunder to be immediately due and payable in case of any
of the following events (and the Bank shall have no obligation to make any
loan at any time that any such event, or any event which if it continues uncured
or unwaived will (with the giving of notice or lapse of time or both) constitute
such an event, has occurred and is continuing).
(i) Failure of the Borrower to pay when due any principal of any loan here-
under; or failure of the Borrower to pay within five days of the due date
thereof any interest, fee or other amount payable hereunder.
(ii) A breach or termination or cancellation of, or default under, the
Guaranty.
(iii) Failure by Trimas Corporation to comply with or to perform any provision
of Section 5.1 or 5.3 through 5.10 of the Credit Agreement (as defined
below) as incorporated into the Guaranty by reference; or failure by
Trimas Corporation to comply with or to perform any
<PAGE>
Page 3 of commitment letter
for Stolz Verwaltungsgesellschaft mit beschrankter Haftung
as of October 30, 1996
other provision of the Guaranty (including any other provision of the
Credit Agreement incorporated therein by reference) and continuation of
such failure for 30 days after written notice thereof has been given to
Trimas Corporation by the Bank.
(iv) The occurrence of any event of the type described in Section 6.1(e) of the
Credit Agreement (including any such event with respect to the Credit
Agreement).
(v) The occurrence of any other "Event of Default" under and as defined in the
Credit Agreement.
5. Certain Definitions.
As used herein, the following terms have the following meanings:
Applicable Commitment Fee Rate means the rate per annum for the
"commitment fee" as calculated pursuant to Section 2.8(a) of the Credit
Agreement.
Applicable Facility Fee Rate means the rate per annum for the
"facility fee" as calculated pursuant to Section 2.8(b) of the Credit
Agreement.
Applicable Margin means the "Applicable Margin" for a "Syndicated
Eurodollar Rate Loan" as calculated pursuant to (and as each such term is
defined in) the Credit Agreement.
Credit Agreement means the Credit Agreement dated as of February 1,
1993 by and among Trimas Corporation, the banks named therein and
NationsBank, N.A. (Carolinas) as Agent, as amended through the First
Amendment thereto dated as of June 30, 1995, but without giving effect to
any subsequent amendment thereto or waiver thereunder, unless consented to
in writing by the Bank, or any expiration or termination thereof.
6. Other Conditions.
6.1 Additionally, the German General Business Conditions of the German Branch
of Bank of America National Trust and Savings Association apply in the
form prevailing from time to time; provided that notwithstanding the
provisions of Section 13, 16 and 17 (or any successor sections) of such
Conditions, unless the Borrower otherwise agrees the facility shall be
unsecured and the Borrower shall have no obligation to provide any
security therefor. The Borrower acknowledges receipt of such German
General Business Conditions and an English translation thereof.
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Page 4 of commitment letter
for Stolz Verwaltungsgesellschaft mit beschrankter Haftung
as of October 30, 1996
6.2 The Borrower may not assign and/or pledge its claims for disbursement
under this commitment.
6.3 All reserves, fees, or taxes other than Bank's net income taxes, as
applicable to this facility, shall be for account of the Borrower.
6.4 The Borrower will provide the Bank with its audited annual financial
reports within six months after fiscal year end. In addition, the
Borrower will provide the Bank on request with all other customary
additional information which the Bank deems necessary for a prudent
evaluation of its commitment.
6.5 This contract is subject to German law.
6.6 Non-exclusive place of jurisdiction and venue is Frankfurt am Main.
If you are in agreement with the above, please add your legally binding
signature to the attached copy and return it to us.
Best regards,
BANK OF AMERICA NT & SA
FRANKFURT BRANCH
By: /S/ Rudi Perkowsky
Title: Vice President and Country Manger
We confirm our agreement with the above contract.
Stolz Verwaltungsgesellschaft mit beschrankter Haftung
By: /S/ Matthias Seipel
Title: Geschafts Funker
Neunkirchen 30 Oktober
_____________________________ _________________________________
<PAGE>
GUARANTY
THIS GUARANTY dated as of October 30, 1996 is executed in favor of BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (the "Bank").
W I T N E S S E T H:
WHEREAS, the Bank (acting through its Frankfurt, Germany branch or any
other branch) may from time to time make loans or other financial accommodations
to Stolz Verwaltungsgesellschaft mit beschrankter Haftung (the "Company"); and
WHEREAS, the undersigned has agreed to guaranty payment of all such loans
and financial accommodations;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees as follows:
Section 1 Guaranty. The undersigned hereby absolutely, irrevocably and
unconditionally guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, of all obligations of
the Company to the Bank, howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due
or to become due (including, without limitation, any and all interest accruing
on any such obligations after the commencement of any bankruptcy, insolvency or
similar proceeding involving the Company, notwithstanding any provision or rule
of law which might restrict the rights of the Bank, as against the Company or
anyone else, to collect such interest). All of such obligations of the Company
herein collectively called the "Liabilities".
Section 2 Payment Prior to Maturity of Liabilities. The undersigned
agrees that, in the event of the dissolution of the Company or the undersigned,
or the inability or failure of the Company or the undersigned to pay debts
generally as they become due, or an assignment by the Company or the undersigned
for the benefit of creditors, or the occurrence of any bankruptcy, insolvency or
similar proceeding with respect to the Company or the undersigned, and if
such event shall occur at a time when any of the Liabilities may not then be due
and payable, the undersigned will pay to the Bank forthwith the full amount
which would be payable hereunder by the undersigned if all Liabilities were then
due and payable.
Section 3 Continuing Guaranty. This Guaranty shall in all respects be a
continuing, absolute and unconditional guaranty, and shall remain in full force
and effect (notwithstanding, without limitation, the dissolution of the
undersigned or that any time or from time to time no Liabilities are
outstanding)
<PAGE>
until all Liabilities have been paid in full and all commitments (if any) to
create Liabilities have terminated.
Section 4 Returned Payments. The undersigned agrees that if at any time
all or any part of any payment theretofore applied by the Bank to any of the
Liabilities is or must be rescinded or returned by the Bank for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of the Company or the undersigned), such Liabilities shall, for
the purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by the Bank, and this Guaranty shall continue to be effective
or be reinstated, as the case may be, as to such Liabilities, all as though
such application by the Bank had not been made.
Section 5 Rights of the Bank. (a) The Bank may, from time to time, at
its sole discretion and without notice to the undersigned, take any or all of
the following actions without affecting the obligations of the undersigned
hereunder; (i) retain or obtain a security interest in any property to secure
any of the Liabilities or any obligation hereunder, (ii) retain or obtain the
primary or secondary obligation of any obligor or obligors, in addition to the
undersigned, with respect to any of the Liabilities, (iii) extend or renew any
of the Liabilities for one or more periods (whether or not longer than the
original period), alter or exchange any of the Liabilities, or release or
compromise any obligation of the undersigned hereunder or any obligation of any
nature of any other obligor with respect to any of the Liabilities, (iv)
release its security interest in, or surrender, release or permit any
substitution or exchange for, all or any part of any property securing any of
the Liabilities or any obligation hereunder, or extend or renew for one or more
periods (whether or not longer than the original period) or release, compromise,
alter or exchange any obligations of any nature of any obligor with respect to
any such property and (v) resort to the undersigned for payment of any of the
Liabilities when due, whether or not the Bank shall have resorted to any
property securing any of the Liabilities or any obligation hereunder or shall
have proceeded against any other obligor primarily or secondarily obligated
with respect to any of the Liabilities.
(b) The undersigned hereby expressly waives: (i) notice of the
acceptance by the Bank of this Guaranty, (ii) notice of the existence or
creation or non-payment of all or any of the Liabilities, (iii) presentment,
demand, notice of dishonor and protest, and the failure by the Bank to give any
other notice which might under any circumstance constitute release of a
guarantor and (iv) all diligence in collection or protection of or realization
upon any Liabilities or any security for or guaranty of any Liabilities.
<PAGE>
(c) The creation or existence from time to time of additional
Liabilities is hereby authorized, without notice to the undersigned, and shall
in no way affect or impair the rights of the Bank or the obligations of the
undersigned under this Guaranty.
(d) The Bank may from time to time assign or transfer any or all of the
Liabilities or any interest therein; and, notwithstanding any such assignment or
transfer or any subsequent assignment or transfer thereof, such Liabilities
shall be and remain Liabilities for the purposes of this Guaranty, and each and
every immediate and successive assignee or transferee of any of the Liabilities
or of any interest therein shall, to the extent of the interest of such assignee
or transferee in the Liabilities, be entitled to the benefits of this Guaranty
to the same extent as if such assignee or transferee were the Bank.
Section 6 Expenses. The undersigned agrees to pay all expenses
(including the reasonable fees and charges of outside counsel and the allocable
costs of internal legal services and all disbursements of internal counsel)
paid or incurred by the Bank in endeavoring to collect the Liabilities, or any
part thereof, and in enforcing this Guaranty against the undersigned.
Section 7 Warranties. The undersigned warrants to the Bank that:
(a) Organization, etc. The undersigned is a corporation duly existing
and in good standing under the laws of the State of Delaware; and the
undersigned is duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction where, because of the nature of
its activities or properties, such qualification is required and the failure to
so qualify would materially and adversely affect the undersigned's financial
condition, operations, or business prospects.
(b) Authorization; No Conflict. The execution, delivery and performance
of this Guaranty are within the undersigned's corporate powers, have been duly
authorized by all necessary corporate action, have received all necessary
governmental approval (if any shall be required), and do not and will not
contravene or conflict with any provision of law applicable to the undersigned
or of the charter or by-laws of the undersigned or of any agreement binding upon
the undersigned.
(c) Validity and Binding Nature. This Guaranty is the legal, valid and
binding obligations of the undersigned, enforceable against the undersigned in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
right of creditors and the availability of equitable remedies.
Section 8 Covenants. The undersigned agrees that it will:
<PAGE>
(a) Notice of Default. Furnish to the Bank forthwith upon learning of
the occurrence of an Event of Default (as defined in the letter agreement
between the Company and the Bank dated the date hereof), or an event which if it
continues uncured or unwaived will (with the giving of notice or lapse of time
or both) constitute an Event of Default, written notice thereof describing the
same and the steps being taken by the undersigned with respect thereto.
(b) Credit Agreement Covenants. Observe and perform each covenant of
the undersigned set forth in Article V of the Credit Agreement dated as of
February 1, 1993 among the undersigned, the banks named therein and Nationsbank,
N.A. (Carolinas), as amended through the First Amendment thereto date as of June
30, 1995 (but without giving effect to any subsequent amendment thereto or
waiver thereunder, unless consented to by the Bank, or any expiration or
termination thereof), as if such covenants (and all related definitions) mutatis
mutandis were set forth in full herein.
(c) Other Agreements. Not enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
Section 9 General. (a) No delay on the part of the Bank in the
exercise of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise by the Bank of any right or remedy shall preclude other or
further exercise thereof or the exercise of any other right or remedy; nor shall
any modification or waiver of any provision of this Guaranty be binding upon the
Bank except as expressly set forth in a writing duly signed and delivered on
behalf of the Bank. No action of the Bank permitted hereunder shall in any way
affect or impair the rights of the Bank or the obligations of the undersigned
under this Guaranty. For purposes of this Guaranty, Liabilities shall include
all obligations of the Company to the Bank, notwithstanding any right or power
of the Company or anyone else to assert any claim or defense (other than the
defense that such obligations have been paid in full) as to the invalidity or
unenforceability of any such obligation, and no such claim or defense shall
affect or impair the obligations of the undersigned hereunder.
(b) This Guaranty shall be binding upon the undersigned and the
successors and assigns of the undersigned. All references herein to the Company
and to the undersigned, respectively, shall be deemed to include any successor
or successors, whether immediate or remote, to such entity.
(c) This Guaranty has been delivered at Chicago, Illinois, and shall be
construed in accordance with and governed by the
<PAGE>
laws of the State of Illinois applicable to contracts made and to be performed
entirely within such State. Wherever possible each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
(d) This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original but all such counterparts shall together
constitute one and the same Guaranty.
(e) Notwithstanding any payment made by or for the account of the
undersigned pursuant to this Guaranty, the undersigned shall not be subrogated
to any rights of the Bank until such time as the Bank shall have received
payment of the full amount of all Liabilities and all liabilities of the
undersigned hereunder.
(f) The undersigned hereby agrees that all payments made by the
undersigned hereunder in respect of the Liabilities shall be made in immediately
available funds and in the currency in which such Liabilities are denominated
(the "Designated Currency"). The undersigned Partner agrees that:
(i) If, for the purposes of obtaining a judgment in any court, it
is necessary to convert a sum due hereunder in the Designated Currency
into another currency, the rate of exchange used shall be that at which in
accordance with normal banking procedures the Bank could purchase the
Designated Currency with such other currency on the business day preceding
that on which final judgment is given.
(ii) The obligation of the undersigned in respect of any sum due
from it to the Bank shall, notwithstanding any judgment in a currency
other than the Designated Currency, be discharged only to the extent that
on the business day following receipt by the Bank of any sum adjudged to
be so due in such other currency the Bank may, in accordance with normal
banking procedures, purchase the Designated Currency with such other
currency; in the event that the Designated Currency so purchased is less
than the sum originally due to the Bank in the Designated Currency, the
undersigned, as a separate obligation and notwithstanding any such
judgment, hereby indemnifies and holds harmless the Bank against such
loss, and if the Designated Currency so purchased exceeds the sum
originally due to the Bank in the Designated Currency, the Bank shall
remit to the undersigned such excess.
<PAGE>
(g) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS GUARANTY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS. THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE UNDERSIGNED FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADDRESS SET FORTH OPPOSITE ITS SIGNATURE HERETO (OR SUCH OTHER
ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE BANK AS ITS ADDRESS FOR
NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS. THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(h) EACH OF THE UNDERSIGNED AND (BY ACCEPTING THE BENEFITS HEREOF) THE
BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY, ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered as
of the day and year first above written.
TRIMAS CORPORATION
By: /S/ Peter C. DeChants
Title: Vice President and Treasurer
Address:
Exhibit 11
TRIMAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(In Thousands, Except Per Share Amounts)
Nine Months Ended Three Months Ended
September 30, September 30,
1996 1995 1996 1995
Primary:
Net income $46,390 $43,220 $14,440 $13,220
Weighted average common
shares outstanding 36,644 36,644 36,644 36,644
Dilution of stock options 327 351 333 354
Weighted average common
and common equivalent
shares outstanding
after assumed exercise
of options 36,971 36,995 36,977 36,998
Primary earnings per
common share $1.25 $1.17 $.39 $.36
Fully diluted:
Net income $46,390 $43,220 $14,440 $13,220
Add after tax convertible
debenture related
expenses 2,760 2,760 920 920
Net income as adjusted $49,150 $45,980 $15,360 $14,140
Weighted average common
shares outstanding 36,644 36,644 36,644 36,644
Dilution of stock options 345 351 345 353
Addition from assumed
conversion of convertible
debentures 5,083 5,083 5,083 5,083
Weighted average common
and common equivalent
shares outstanding on
a fully diluted basis 42,072 42,078 42,072 42,080
Fully diluted earnings
per common share $1.17 $1.09 $.37 $.34
Exhibit 12
TRIMAS CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
Nine Months Ended Three Months Ended
September 30, September 30,
1996 1995 1996 1995
Earnings:
Income before income taxes $76,050 $71,200 $23,670 $21,610
Fixed charges 8,970 11,570 2,900 3,620
Earnings before fixed
charges $85,020 $82,770 $26,570 $25,230
Fixed Charges:
Interest $8,360 $10,950 $2,690 $3,410
Portion of rental expense 700 680 230 230
Fixed charges $9,060 $11,630 $2,920 $3,640
Ratios of earnings to fixed charges 9.4 7.1 9.1 6.9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TRIMAS
CORPORATION'S FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 109,330,000
<SECURITIES> 0
<RECEIVABLES> 83,270,000
<ALLOWANCES> 1,810,000
<INVENTORY> 87,150,000
<CURRENT-ASSETS> 280,640,000
<PP&E> 308,940,000
<DEPRECIATION> 129,260,000
<TOTAL-ASSETS> 672,300,000
<CURRENT-LIABILITIES> 70,640,000
<BONDS> 183,550,000
0
0
<COMMON> 370,000
<OTHER-SE> 378,410,000
<TOTAL-LIABILITY-AND-EQUITY> 672,300,000
<SALES> 457,520,000
<TOTAL-REVENUES> 457,520,000
<CGS> 308,810,000
<TOTAL-COSTS> 308,810,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,150,000
<INCOME-PRETAX> 76,050,000
<INCOME-TAX> 29,660,000
<INCOME-CONTINUING> 46,390,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,390,000
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.17
</TABLE>
