Trimas Corporation 2026 Q3 Earnings Call

Thank you, and welcome to TriMas Corporation's third quarter 2026 earnings call. Joining me today are Thomas Snyder, President and CEO, and Paul Swart, our Chief Financial Officer. We will begin with prepared remarks discussing our third quarter results, followed by our outlook for the remainder of 2026, after which we will open the call for questions from our analysts. To help you follow along with today's discussion, both the press release and our presentation are available on our website at trimas.com under the Investors section. A replay of this call will also be available later today by dialing 877-660-6853 and using meeting ID number 13763096. Before we begin, I would like to remind everyone that today's comments may include forward-looking statements, which are inherently subject to various risks and uncertainties.

Please refer to our most recent Forms 10-K and 10-Q for a discussion of the factors that could cause our results to differ from those anticipated in any forward-looking statements. We undertake no obligation to publicly update or revise such statements except as required by law. We also encourage you to visit our website for more information. In addition, please refer to the appendix of our press release or presentation for reconciliations of GAAP to non-GAAP financial measures. Throughout today's call, our discussion of financial results will be on an adjusted basis, excluding the impact of special items. Unless otherwise noted, the financial results discussed will reflect continuing operations. At this point, I will turn the call over to Tom.

Tom? Thank you, Sherry, and good morning, everyone.

We appreciate you joining us today. Before we review our third quarter results, I would like to take a few moments to update you on the steps we are taking to strengthen TriMas and the progress we are making against our 2026 priorities. As we approach the end of the year, we remain focused on advancing our key initiatives and positioning TriMas for sustainable growth and long-term value creation. While our third quarter results do not yet fully reflect the benefits of all the actions underway, we are encouraged by the progress we have made and the foundation we continue to build for the future. As a reminder, our strategy continues to be centered around three core pillars: customer success, our people, and operational excellence.

These priorities guide our decisions across the organization and continue to shape how we deliver products and services that empower customer success and drive long-term value for our stakeholders. A significant focus throughout 2026 has been driving improved execution and organizational effectiveness across the company. The cost reduction and organizational realignment actions announced earlier this year remain on track and are contributing to year-over-year profit improvement. Our previously announced cost reduction actions totaling $10.5 million in expected 2026 savings and $16 million on an annualized basis continue to proceed as planned. From an operational perspective, our focus remains on driving continuous improvement in safety, quality, cost, and on-time delivery through operational excellence initiatives across the portfolio. Performance across TriMas Packaging is generally progressing as planned. As we continue to advance operational excellence initiatives, we are beginning to see improvements in our key KPIs as those efforts gain traction.

Within our Specialty Products segment, we continue to address the operational and equipment throughput challenges that began impacting performance in the second quarter. While improvement has taken longer than anticipated, we have implemented targeted actions to increase equipment reliability and reduce operational costs. We remain focused on restoring performance quickly and are encouraged by the recent progress we are beginning to see. Paul will provide additional details on the performance of our businesses and the trends we are seeing across the portfolio later in the call. We also remain closely engaged with our customers and suppliers to support execution of our plan while strengthening relationships and responding effectively to evolving market conditions. These collaborations remain critical as we navigate changing demand patterns, manage supply chain dynamics, and strengthen our ability to capitalize on future growth opportunities.

A key component of all these improvement efforts is ensuring we have the right talent and leadership in place across the organization. In Packaging, our previously discussed leadership changes are already making significant contributions to our commercial and operational initiatives, helping to strengthen customer execution and overall operating performance. More recently, we made changes to strengthen operational leadership at Norris Cylinder to accelerate execution and advance performance improvement efforts. Together, these leadership changes strengthen our bench, improve operational effectiveness, and position TriMas to achieve its next phase of growth and performance improvement. Turning to our portfolio initiatives, we recently signed an agreement to divest Rapak, our flexible bag-in-box business, to Ringmetall, a global packaging solutions company.

Expected to close in early November, the transaction represents another important step in streamlining our portfolio and increasing our focus on businesses and end markets where we believe we have the greatest opportunity to drive profitable growth and attractive returns. We are also pleased to have found a strong strategic owner for Rapak, and one that is well-positioned to support the business' continued growth and success going forward. Beyond optimizing our portfolio, we continue to focus on disciplined capital allocation to ensure we are deploying resources in a manner that supports our strategic objectives and maximizes returns. We remain focused on deploying capital in a balanced and smart manner, supporting investments in the business, pursuing strategic growth opportunities, and returning capital to shareholders. We continue to prioritize investments that support organic growth, productivity improvements, and innovation while evaluating targeted acquisition opportunities that will strengthen our platforms.

We also remain committed to returning capital to shareholders. During the third quarter, we continued to repurchase shares, bringing total repurchases since announcing the Aerospace divestiture to more than 5.4 million shares. Year-to-date, our repurchase activity has contributed to a reduction in shares outstanding of more than 5%, demonstrating our confidence in the long-term value of the business. As of the quarter end, we still had approximately $67 million remaining under our existing share repurchase authorization. Our balance sheet remains a significant competitive advantage and provides us with substantial strategic flexibility. While we do not have an acquisition announcement to share today, our strategic investment committee and management team remain actively engaged in evaluating the pipeline of opportunities. We continue to assess these opportunities through a rigorous strategic and financial lens, focusing on opportunities that strengthen our portfolio, support our growth objectives, and meet our return expectations.

We recognize investors are eager to see the deployment of remaining Aerospace proceeds. However, we remain convinced that patience and discipline will ultimately deliver the greatest opportunity to create sustainable shareholder value. In the meantime, the proceeds continue to generate attractive investment income while preserving the flexibility to act decisively when the right opportunities emerge. Looking ahead, we remain patient and disciplined in our approach and believe the acquisition environment will continue to evolve, creating opportunities to deploy the capital at attractive returns over time. Overall, we are encouraged by the progress we have made throughout 2026. While there's more work ahead, we believe we have built the right team and have the right strategy in place to drive stronger performance and create long-term shareholder value. Let's now turn to our third quarter and year-to-date results on slide four.

Our third quarter performance included strong year-over-year growth in sales, profitability, and earnings, reflecting continued demand across our major end markets and the benefits of our cost reduction initiatives. Third quarter net sales increased 7.7% to $178.7 million, including organic growth of 7.2%, supported by growth across all major end markets served by our Packaging and Specialty Products businesses. Operating profit increased 47.9% to $13.6 million while operating profit margin expanded 200 basis points to 7.6%. These results reflect the benefit of our cost reduction actions and organizational realignment initiatives, along with continued focus on operational execution across the platform. Adjusted earnings per share increased to $0.50 compared with $0.17 in the prior year period. The increase was driven by stronger profitability, higher interest income on invested proceeds, and the benefit of a lower share count resulting from our ongoing share repurchase activity.

While performance and Specialty Products continue to be impacted by the throughput challenges at Norris Cylinder, the broader portfolio delivered solid results demonstrating the benefits of the actions we have taken throughout the year. The year-to-date results tell a similar story. Through the first nine months of 2026, net sales increased 6.4% to $521.6 million. Operating profit increased 35.8% to $41.2 million, and earnings per share more than doubled to $1.25. These results reflect the combination of organic growth, disciplined execution of our cost actions, and the benefit of higher interest income on the Aerospace proceeds. As we look at our performance throughout the first nine months of the year, we are pleased with the progress we have made. While work remains, particularly with Specialty Products, the actions we have taken through 2026 are improving our business and positioning TriMas for continued progress moving forward.

With that, I'll now turn the call over to Paul to review the financial results and business performance in more detail.