TriMas is Trading at Multiple Discounts to its
Peers and the Company's Long-Term Averages
Believes the Board Must Address the
Deteriorating Margin Performance at its Packaging Segment and
Subscale Size at its Aerospace Segment
Recommends TriMas Focus its Operations on its
Core Packaging Segment and Divest Non-Core Businesses
NEW
YORK, Dec. 12, 2023 /PRNewswire/ -- Barington
Capital Group, L.P. and its affiliates, including The Eastern
Company (NasdaqGM: EML) ("Barington" or "we"), which
collectively own 1.0% of TriMas Corporation ("TriMas" or the
"Company"), announced today that it has sent a letter to the Chief
Executive Officer of TriMas, Thomas
Amato, recommending the Company implement a plan to improve
long-term shareholder value.
TriMas' shares have underperformed its peer groups1,
the S&P 600 Industrials Sector Index, the S&P 500 and the
Russell 2000 over the past 1-, 3-, 5-, 7- and 10-year
periods.2 TriMas' shares now trade at 7.5x NTM EBITDA
and 11.0x NTM EPS, which reflect sizable discounts to its peers in
the packaging and aerospace sectors and the Company's own long-term
historical averages.3
Barington believes TriMas must address the performance at its
Packaging segment, which has experienced an 800 basis point decline
in Adjusted EBITDA margin since 2016.4 In
addition, Barington believes TriMas' Aerospace segment, which
is recovering well from pandemic-related disruptions, remains
subscale in a consolidating sector with significantly larger
competitors. Lastly, Barington applauds the exceptional performance
at Norris Cylinder and Arrow Engine, the industrial units inside
the Company's Specialty Products segment, but cautions that these
units are small in size and can be highly cyclical.
James Mitarotonda, Chairman of
Barington, said, "We believe TriMas' poor share price performance
is a direct result of the challenges it is experiencing at its
Packaging segment and the subscale size of its Aerospace segment.
Furthermore, we believe TriMas' multi-segment structure is not
delivering long-term value for stockholders, as the sum of TriMas'
segments are worth well in excess of its current share price."
Mr. Mitarotonda continued, "We propose that TriMas focus its
operations on its packaging businesses – the Packaging segment and
Norris Cylinder – due to their healthy cash flow characteristics
and attractive long-term prospects. We believe our proposal can be
implemented by divesting Arrow Engine, as the business is
performing at peak levels, and the Aerospace segment, once its
margins normalize. We are confident that our proposal can maximize
shareholder value, unlocking $42-$54 per share
for stockholders over three years or approximately 65%-116% above
the Company's recent share price."5
The full text of Barington's letter to the Company is available
at https://barington.com/trimas
About Barington Capital Group, L.P.
Barington Capital Group, L.P. is a fundamental, value-oriented
activist investment firm established by James A. Mitarotonda in January 2000. Barington invests in undervalued
publicly traded companies that Barington believes can appreciate
significantly in value when substantive improvements are made to
their operations, corporate strategy, capital allocation and
corporate governance. Barington's investment team, advisors and
network of industry experts draw upon their extensive strategic,
operating and boardroom experience to assist companies in designing
and implementing initiatives to improve long-term shareholder
value.
Contact
Christopher J.
Pappano
Barington Capital Group,
L.P.
(212)
974-5737
cpappano@barington.com
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1 Peer
groups include publicly traded competitors listed in TriMas' FY
2022 Form 10-K ("10-K Peers") and peers listed in TriMas' 2023
Proxy Statement ("Proxy Peers"). The 10-K Peers include AptarGroup,
Inc., Berry Global Group, Inc., Caterpillar Inc., Cummins Inc.,
Greif, Inc., Howmet Aerospace Inc., Lisi S.A., Senior plc, Silgan
Holdings Inc. and Worthington Industries, Inc. The Proxy Peers
include Aerojet Rocketdyne Holdings Inc., AptarGroup, Inc.,
Astronics Corporation, Barnes Group Inc., Chart Industries, Inc.,
CIRCOR International, Inc., Ducommun Incorporated, Enerpac Tool
Group Corp., EnPro Industries, Inc., ESCO Technologies Inc., Myers
Industries, Inc., NN, Inc., SPX FLOW, Inc., Standex International
Corporation, Triumph Group, Inc. and Woodward, Inc. Peer group
indexes are market capitalization weighted.
2 Data based on S&P Capital IQ as of 12/6/23,
including the reinvestment of dividends.
3 Data and metrics based on S&P Capital IQ as of
12/6/23. NTM EBITDA and NTM EPS results reflect next twelve months
consensus mean estimates. Packaging peers based on selected
publicly traded competitors listed in TriMas' 2022 Form 10-K,
including AptarGroup, Inc., Berry Global Group, Inc., Greif, Inc.
and Silgan Holdings Inc, which trade at mean NTM EBITDA and NTM EPS
multiples of 9.0x and 14.4x, respectively. Aerospace peers based on
selected publicly traded competitors listed in TriMas' 2022 Form
10-K, including Howmet Aerospace Inc., Lisi S.A. and Senior plc,
which trade at mean NTM EBITDA and NTM EPS multiples of 10.4x and
20.6x, respectively. TriMas' 10-year mean NTM EBITDA and NTM EPS
multiples are 9.1x and 15.0x, respectively.
4 Based on TriMas' FY 2016 and FY 2022 Forms 10-K and Q3
2023 Form 10-Q. Adjusted EBITDA includes non-cash stock-based
compensation expense and excludes one-time gains and losses and
special items as detailed in the Company's Earnings
Presentations.
5 Based on TriMas' closing price of $25.21 per share as
of 12/6/23 from S&P Capital IQ.
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SOURCE Barington Capital Group, L.P.