Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Scott, I just wanted to clarify on the reaffirm guide for this year. It sounds like there are some minor changes to the segment sales and margin guide that you provided from last quarter. If I caught it all correctly, you're at or above the high end of the margin guide for aerospace this year, and now you're expecting specialty sales down 5% to 10%. Is there anything else within that segment guidance that we should be aware of?
A: Scott Mell, TriMas Corp - Chief Financial Officer: No. You picked up on the two key items there. Everything else is the same as we guided to in the last earnings call.
Q: Good morning. first off on the packaging side, could you just talk about the conversations you're having now with customers and how that differs with what you were seeing last year?
A: Thomas Amato, TriMas Corp - President, Chief Executive Officer, Director: If you could see me right now, I got a smile on my face because the conversations we had last year were very difficult, right? There was an overstock position, there wasn't a need. As we sort of look back and we plot against order intakes and other KPIs that we look at throughout the year, we can conclude that we were in a very strange trough last year, and we're certainly out of it today.
Q: Okay. My question on that is, if you're seeing that kind of activity, why are you hesitant as far as guidance and so forth? What's holding you back?
A: Thomas Amato, TriMas Corp - President, Chief Executive Officer, Director: Another great question. The industry still is in a short cycle business, short cycle nature. Unlike aerospace, where I mentioned with Ken's question that, today, if an order comes in, depending on the order, we could be quoting a 2025 delivery date. In packaging, that's not the case. We still are in a very short cycle nature in that business. And until I see the lead times elongate, then I don't have full confidence that, we're at a point where we could say, okay, we know the book is going to be strong through date X. So we'll know a little bit more at the end of this quarter, and then we'll update you further.
Q: Can you just give a little bit more color on what the softness in the beverage-related issues were? What were those driven by into the packaging segment, and is that just contained through a few specific customers?
A: Thomas Amato, TriMas Corp - President, Chief Executive Officer, Director: It really is contained to a few specific customers and in a region. And it is, on a relative basis, a pretty low change. But it's the only end market that was slightly down from the first quarter of last year, and it was not a big number. But our sales to our particular dairy customer was off. We expect those volumes to come back later in the year.
Q: What gives you confidence in aerospace that you don't have some hiccup that you had in specialty packaging or specialty products that all of a sudden you're seeing a sequential decline of 30%. What prevents that from happening in aerospace?
A: Thomas Amato, TriMas Corp - President, Chief Executive Officer, Director: Okay, well, first of all, we're sitting today with an order backlog that is historically strong, and that gives us confidence because we can look out more than through 2024 into revenue that will start to satisfy a foundation for 2025. That's one point. The second point is that, we do see, when we look at overall production build rates for commercial airliners and military equipment, we still see an increase versus where we are today.
Q: As I think about the eventual foldout of Norris and some of the weakness out of the steel cylinder business this quarter. Is there any way you can help us to think about the margin profile of Norris relative to specialty and how we think about that business going forward combined with packaging?
A: Thomas Amato, TriMas Corp - President, Chief Executive Officer, Director: Yeah. I mean, it's really a tough quarter to look at. And I would say that the margins comparably between Norris and Arrow are pretty close. But I think this quarter is not really a representative quarter given the low volume. I would look back over time to a roughly 15% operating profit, maybe 18% EBITDA, and that's more normalized for Norris overall.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
