TRIMAS CORP Q3 FY2025 earnings call

• Launched a comprehensive global operational excellence program rooted in Lean Six Sigma principles to drive continuous improvement, etc., with implementation starting in packaging business at two locations.
• Begun a comprehensive strategic planning process to rigorously assess where to win, etc., and develop a Hoshin Kanri road map.
• Launched the One TriMas branding initiative in Packaging group to unify and elevate brand identity.
• Successfully rolled out new ERP system to a second location, and will continue to invest in automation and tools.
• Actively evaluating global manufacturing optimization strategy to support growth and enhance operational efficiency.

Packaging Segment

• Organic sales grew 2.6% after adjusting for currency, with continued strength in dispensers for beauty and personal care but softer demand for closures and flexibles. Operating profit was $18.2 million, a 4.3% decline, operating margin contracted by 120 basis points to 13.4%, and adjusted EBITDA margin was 20.1%. Full year 2025 is expected to have GDP plus sales growth and relatively stable margins compared to 2024.

Aerospace Segment

• Delivered a record-setting quarter with over $100 million in revenue, year-over-year sales increase of more than 45%. Operating profit more than doubled, margins expanded by 860 basis points, and trailing 12-month adjusted EBITDA margin is 23%. Confident in achieving full year 2025 organic sales growth of 20% plus and margin improvement of over 500 basis points versus 2024.

Specialty Products Segment

• Norris Cylinder had sales up 31% year-over-year, offsetting the sales reduction from the divestiture of Arrow Engine. Segment overall sales grew 7.2% compared to Q3 2024. Operating profit was relatively flat year-over-year, but Norris Cylinder grew operating profit nearly 40% with margins expanding 50 basis points. Full year 2025 expected to have Norris Cylinder with mid- to high single-digit sales growth and operating margins trending slightly higher.

• Raised full year 2025 outlook, expecting full year sales growth of approximately 10% compared to 2024 and adjusted earnings per share in the range of $2.02 to $2.12.
• Note that Q4 typically reflects seasonal softness due to fewer production days and customer holiday shutdowns.
• Evolving tariff environment introduces uncertainty in customer ordering patterns and consumer demand, which is actively monitored.

• Tariff environment continues to introduce uncertainty in customer ordering patterns and consumer demand.
• Packaging industry is significantly affected by the evolving global tariff environment.

Q: Katie Fleischer asked about packaging margins expecting to be relatively stable in full year '25 versus 2024, cost out benefited margins within Packaging this quarter, and dry powder left for improvement within that segment.

A: Teresa Finley said margins expected to be about flat year-over-year, Tom Snyder mentioned early in the process of continuous improvement initiatives with opportunities ahead, and Teresa Finley added about managing tariff pressures with 30 - 40 basis points headwind in a given quarter.

Q: Hamed Khorsand asked about why there are a lot of moving parts in packaging every quarter, if ahead of the curve or right at the market, thoughts on clarity in packaging business in 2026, and order book and capacity on aerospace side.

A: Thomas Snyder said moving parts are due to different market performances in dispensing, closures, etc., was optimistic about 2026 with plans like brand consolidation and operational alignment, and Thomas Snyder said aerospace order book is strong for 2026, constrained by skilled resources but grow capacity roughly 10% a year