Trimas Corp: Form 10-Q for the period ended Sep 30, 2025
Filed with the SEC on Oct 28, 2025 and accepted by EDGAR at Oct 28, 2025, 16:35 ET.
Management's discussion and analysis
As filed, 70,243 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The following discussion and analysis of our financial condition contains forward-looking statements regarding industry outlook and our expectations regarding the performance of our business. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under the heading "Forward-Looking Statements," at the beginning of this report. Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion together with the Company's reports on file with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024.
Introduction
TriMas designs, develops and manufactures a diverse set of products primarily for the consumer products, aerospace & defense and industrial markets through its TriMas Packaging, TriMas Aerospace and Specialty Products groups. Our wide range of innovative products are designed and engineered to solve application-specific challenges that our customers face. We believe our businesses share important and distinguishing characteristics, including: well-recognized and leading brand names in the markets we serve; innovative product technologies and features; a high-degree of customer approved processes and qualifications; established distribution networks; modest capital investment requirements; strong cash flow conversion and long-term growth opportunities. While the majority of our revenue is in the United States, we manufacture and supply products globally to a wide range of companies. We report our business activity in three segments: Packaging, Aerospace and Specialty Products.
Key Factors Affecting Our Reported Results
Demand for the products our businesses produce and results of operations depend upon general economic conditions. We serve customers in industries that are highly competitive, and that may be significantly impacted by changes in economic or geopolitical conditions.
Our results of operations have been materially impacted over the past few years by macro-economic factors, most recently by cost inflation (raw materials, wage rates and freight) and a lack of material, and in certain regions, skilled labor availability. Additionally, during the first nine months of 2025, the U.S. government altered its approach to international trade policy and announced baseline tariffs on products from all countries and additional individualized reciprocal tariffs on the countries with which the United States has the largest trade deficits, including China. This change in international trade policy has also created uncertainty with respect to future tariffs, including any retaliatory tariffs imposed by other countries, or other potential governmental actions. These factors have affected each of our businesses and how we operate, albeit in different ways and magnitudes. The current tariffs, predominately those imposed on China-based imports, have increased the costs of certain products sourced from non-U.S. countries. Sales of certain of our products for industrial applications, for example steel cylinders for packaged gas applications, have experienced volatility in demand related to customers securing a high order rates in prior periods, only to enter a period of destocking in more recent periods. This significant level of volatility in demand levels, input and transportation costs, and material and labor availability, have pressured our ability to operate efficiently in recent periods. While some areas of demand volatility and softness remain, such as in our Specialty Products segment, and more specifically our Norris Cylinder business, we have experienced more steady and consistent demand in our Packaging and Aerospace segments.
Overall, our third quarter 2025 net sales increased $39.9 million, or 17.4%, compared to third quarter 2024. We experienced organic growth of 37.1% and 2.6% within our Aerospace and Packaging segments, respectively, compared to third quarter 2024. We also experienced growth from acquisitions of 8.7% in our Aerospace segment. Net sales increased 7.2% in our Specialty Products segment as compared to the prior year quarter, as higher sales of steel cylinders more than offset the lost sales due to the divestiture of our Arrow Engine business in January 2025. Our overall sales increase included $2.1 million of currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of a weakening U.S. dollar relative to foreign currencies.
The most significant drivers affecting our financial results in third quarter 2025 compared with third quarter 2024, other than as directly impacted by sales changes, were a charge to update our asbestos liability based on our recent actuarial valuation, the year-over-year impact of a prolonged labor union strike at one of our manufacturing facilities within our Aerospace segment beginning in third quarter 2024, and a decrease in our effective tax rate.
In third quarter 2025, we commissioned our actuary to update our asbestos study, and upon completion we recorded a pre-tax charge of $8.0 million. See Note 13, "Commitments and Contingencies," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q for more information.
On January 31, 2025, we completed the divestiture of our Arrow Engine business within our Specialty Products segment for net cash proceeds of $21.0 million. We recognized a pre-tax gain of $5.4 million on the sale of Arrow Engine. Arrow Engine contributed $5.2 million of sales in third quarter 2024.
In February 2025, we acquired the aerospace business of GMT Gummi-Metall-Technik GmbH (“GMT”) for a purchase price of $37.7 million. GMT’s aerospace division (“GMT Aerospace”), which is reported in our Aerospace segment, is located in Germany and contributed $6.2 million of acquisition-related sales growth during third quarter 2025.
In August 2024, our labor agreement with the United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") at our TriMas Aerospace facility in Commerce, California, expired. On August 4, 2024, the UAW initiated a strike, causing a work stoppage that resulted in lost production volumes, reduced sales, manufacturing inefficiencies and $2.3 million of increased costs through the end of third quarter 2024, with the Company and the UAW reaching a new labor agreement in mid-October 2024.
The effective income tax rate for third quarter 2025 was 23.3% as compared to 25.4% for third quarter 2024. The decrease in the effective tax rate for third quarter 2025 was primarily due to the distribution of income among jurisdictions with differing statutory tax rates.
Additional Key Risks that May Affect Our Reported Results
We have executed meaningful realignment actions over the past few years to address variable and structural costs where demand has fallen. We will continue to assess and take further actions if required. However, as a result of the current period of macroeconomic inflation and uncertainty, including uncertainty regarding the scope and duration of current and future tariffs and trade actions, and the potential impact of such factors to our future results of operations, as well as if there is an impact to TriMas' overall performance and market capitalization, we may record additional cash and non-cash charges related to further realignment actions, asset impairments, including impairments to our goodwill, intangible assets, fixed assets, inventory or customer receivable account balances.
Despite the potential for declines in future demand levels and results of operations, at present, we believe our capital structure is in a strong position. We have sufficient cash and available liquidity under our revolving credit facility to meet our debt service obligations, capital expenditure requirements and other short-term and long-term obligations for the foreseeable future.
Critical factors affecting our ability to succeed include: our ability to generate organic growth through product development, cross-selling and extending product-line offerings, and our ability to quickly and cost-effectively introduce and successfully launch new products; our ability to acquire and integrate companies or products that supplement existing product lines, add adjacent distribution channels and new customers, or expand our geographic coverage; our ability to manage our cost structure more efficiently via supply chain management, internal sourcing and/or purchasing of materials, selective outsourcing and/or purchasing of support functions, working capital management, and greater leverage of our administrative functions; and our ability to absorb, or recover via commercial actions, inflationary or other cost increases, including tariffs and duties.
Our overall business does not experience significant seasonal fluctuation, other than our fourth quarter, which has tended to be the lowest net sales quarter of the year due to holiday shutdowns at certain customers or other customers deferring capital spending to the following year. A growing amount of our sales is derived from international sources, which exposes us to certain risks, including currency risks.
We are sensitive to price movements and availability of our raw materials supply. Our largest raw material purchases are for polypropylene, polyethylene, steel, aluminum, superalloys (such as titanium, A286 stainless steel and Inconel) and other oil and metal-based purchased components, the costs for each of which are subject to volatility. There has also been volatility in certain of our input costs as a direct and indirect result of foreign trade policy, where tariffs on certain of our commodity-based products sourced from Asia have been instituted. In addition, the U.S. government recently announced baseline tariffs on products from all countries and additional individualized reciprocal tariffs on the countries with which the United States has the largest trade deficits, including China. We will continue to take actions to mitigate such increases, including implementing commercial pricing adjustments, holding extra inventories, resourcing to alternate suppliers and insourcing of previously sourced products. Although we believe we are generally able to mitigate the impact of higher commodity costs over time, we may experience additional material costs and disruptions in supply in the future and may not be able to pass along higher costs to our customers in the form of price increases or otherwise mitigate the impacts to our operating results.
Although we have escalator/de-escalator clauses in commercial contracts with certain of our customers to address fluctuations in input costs, or can modify prices based on market conditions to recover higher costs, our price increases generally lag the underlying input cost increase, and we cannot be assured of full cost recovery in the open market. If input costs increase at rapid rates, our ability to recover cost increases on a timely basis is made more difficult by the lag nature of these contracts.
Oil-based commodity costs are a significant driver of raw materials and purchased components used within our Packaging segment. As such, an increase in crude oil often is a precursor to rising polymeric raw material costs, for which we may experience a contractual commercial recovery lag.
Each year, as a core tenet of the TriMas Business Model, our businesses target cost savings from Kaizen (continuous improvement) initiatives in an effort to reduce, or otherwise offset, the impact of increased input and conversion costs through increased throughput and yield rates, with a goal of at least covering inflationary and market cost increases. In addition, we continuously review our operating cost structures to ensure alignment with current market demand.
We continue to evaluate alternatives to redeploy the cash generated by our businesses, one of which includes returning capital to our shareholders. In 2020, our Board of Directors increased the authorization of share repurchases to a cumulative amount of $250 million. During third quarter 2025, no shares were purchased. As of September 30, 2025, we had $65.4 million remaining under the repurchase authorization.
In addition, in third quarter 2025, we declared dividends of $0.04 per share of common stock and paid dividends of $1.7 million. We will continue to evaluate opportunities to return capital to shareholders through the purchase of our common stock, as well as dividends, depending on market conditions and other factors.
Segment Information and Supplemental Analysis
The following table summarizes financial information for our reportable segments for the three months ended September 30, 2025 and September 30, 2024 (dollars in thousands):
| Net Sales | Three months ended September 30, 2025 | As a Percentage of Net Sales | 2024 | As a Percentage of Net Sales |
|---|---|---|---|---|
| Packaging | $135,700 | 50.4% | $130,240 | 56.8% |
| Aerospace | 103,240 | 38.3% | 70,830 | 30.9% |
| Specialty Products | 30,320 | 11.3% | 28,290 | 12.3% |
| Total | $269,260 | 100.0% | $229,360 | 100.0% |
| Gross Profit | ||||
| Packaging | $30,720 | 22.6% | $31,000 | 23.8% |
| Aerospace | 31,440 | 30.5% | 16,480 | 23.3% |
| Specialty Products | 3,750 | 12.4% | 4,220 | 14.9% |
| Total | $65,910 | 24.5% | $51,700 | 22.5% |
| Selling, General and Administrative Expenses | ||||
| Packaging | $14,440 | 10.6% | $14,190 | 10.9% |
| Aerospace | 11,070 | 10.7% | 10,180 | 14.4% |
| Specialty Products | 1,310 | 4.3% | 1,840 | 6.5% |
| Corporate | 14,320 | N/A | 12,740 | N/A |
| Total | $41,140 | 15.3% | $38,950 | 17.0% |
| Operating Profit (Loss) | ||||
| Packaging | $16,290 | 12.0% | $17,930 | 13.8% |
| Aerospace | 20,200 | 19.6% | 6,310 | 8.9% |
| Specialty Products | 2,370 | 7.8% | 2,290 | 8.1% |
| Corporate | (22,270) | N/A | (18,250) | N/A |
| Total | $16,590 | 6.2% | $8,280 | 3.6% |
| Depreciation | ||||
| Packaging | $7,350 | 5.4% | $7,000 | 5.4% |
| Aerospace | 1,980 | 1.9% | 1,890 | 2.7% |
| Specialty Products | 690 | 2.3% | 1,000 | 3.5% |
| Corporate | 100 | N/A | 50 | N/A |
| Total | $10,120 | 3.8% | $9,940 | 4.3% |
| Amortization | ||||
| Packaging | $1,710 | 1.3% | $1,640 | 1.3% |
| Aerospace | 2,690 | 2.6% | 2,570 | 3.6% |
| Specialty Products | — | —% | — | —% |
| Corporate | — | N/A | — | N/A |
| Total | $4,400 | 1.6% | $4,210 | 1.8% |
The following table summarizes detail on the year-over-year sales growth percentages for our reportable segments for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024:
| Third Quarter 2025 vs. Third Quarter 2024 Organic | Acquisitions | Divestitures | Foreign Exchange | Total | |
|---|---|---|---|---|---|
| Consolidated TriMas Corporation | 16.1% | 2.7% | (2.3)% | 0.9% | 17.4% |
| Packaging | 2.6% | —% | —% | 1.6% | 4.2% |
| Aerospace | 37.1% | 8.7% | —% | —% | 45.8% |
| Specialty Products | 25.6% | —% | (18.4)% | —% | 7.2% |
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The following table summarizes financial information for our reportable segments for the nine months ended September 30, 2025 and 2024 (dollars in thousands):
| Net Sales | Nine months ended September 30, 2025 | As a Percentage of Net Sales | 2024 | As a Percentage of Net Sales |
|---|---|---|---|---|
| Packaging | $406,280 | 51.7% | $389,190 | 55.8% |
| Aerospace | 295,460 | 37.6% | 215,890 | 31.0% |
| Specialty Products | 83,950 | 10.7% | 91,880 | 13.2% |
| Total | $785,690 | 100.0% | $696,960 | 100.0% |
| Gross Profit | ||||
| Packaging | $97,730 | 24.1% | $95,370 | 24.5% |
| Aerospace | 87,410 | 29.6% | 51,340 | 23.8% |
| Specialty Products | 7,520 | 9.0% | 11,710 | 12.7% |
| Total | $192,660 | 24.5% | $158,420 | 22.7% |
| Selling, General and Administrative Expenses | ||||
| Packaging | $44,190 | 10.9% | $43,430 | 11.2% |
| Aerospace | 31,830 | 10.8% | 27,480 | 12.7% |
| Specialty Products | 4,970 | 5.9% | 6,140 | 6.7% |
| Corporate | 43,260 | N/A | 38,330 | N/A |
| Total | $124,250 | 15.8% | $115,380 | 16.6% |
| Operating Profit (Loss) | ||||
| Packaging | $53,520 | 13.2% | $53,060 | 13.6% |
| Aerospace | 55,410 | 18.8% | 23,870 | 11.1% |
| Specialty Products | 2,480 | 3.0% | 5,480 | 6.0% |
| Corporate | (45,910) | N/A | (43,840) | N/A |
| Total | $65,500 | 8.3% | $38,570 | 5.5% |
| Depreciation | ||||
| Packaging | $21,120 | 5.2% | $20,820 | 5.3% |
| Aerospace | 6,040 | 2.0% | 5,900 | 2.7% |
| Specialty Products | 2,340 | 2.8% | 3,080 | 3.4% |
| Corporate | 270 | N/A | 140 | N/A |
| Total | $29,770 | 3.8% | $29,940 | 4.3% |
| Amortization | ||||
| Packaging | $4,980 | 1.2% | $4,930 | 1.3% |
| Aerospace | 7,960 | 2.7% | 7,710 | 3.6% |
| Specialty Products | — | —% | — | —% |
| Corporate | — | N/A | — | N/A |
| Total | $12,940 | 1.6% | $12,640 | 1.8% |
The following table summarizes detail on the year-over-year sales growth percentages for our reportable segments for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024:
| Year to Date Third Quarter 2025 vs. Year to Date Third Quarter 2024 Organic | Acquisitions | Divestitures | Foreign Exchange | Total | |
|---|---|---|---|---|---|
| Consolidated TriMas Corporation | 12.6% | 2.3% | (2.0)% | (0.2)% | 12.7% |
| Packaging | 4.6% | —% | —% | (0.2)% | 4.4% |
| Aerospace | 29.4% | 7.5% | —% | —% | 36.9% |
| Specialty Products | 6.8% | —% | (15.4)% | —% | (8.6)% |
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Results of Operations
The principal factors impacting us during the three months ended September 30, 2025, compared with the three months ended September 30, 2024, were:
- Increases in demand for products within our Aerospace and Packaging segments;
- Increase in demand for our cylinder products within our Specialty Products segment;
- Expenses associated with our asbestos exposure to update the liability to recent actuarial studies;
- The divestiture of our Arrow Engine business;
- The impact of our recent acquisition of GMT Aerospace;
- The third quarter 2024 labor union strike at one of our manufacturing facilities in our Aerospace segment; and
- A decrease in our effective tax rate in third quarter 2025 compared with third quarter 2024.
Three Months Ended September 30, 2025 Compared with Three Months Ended September 30, 2024
Overall, net sales increased $39.9 million, or 17.4%, to $269.3 million for the three months ended September 30, 2025, as compared with $229.4 million in the three months ended September 30, 2024. Acquisition-related sales growth was $6.2 million from our February 2025 acquisition of GMT Aerospace. Organic sales, excluding the impact of currency exchange, increased $36.8 million, or 16.1%, as organic sales increased 37.1% and 2.6% within our Aerospace and Packaging segments, respectively, due to improved throughput and commercial actions with Aerospace and certain end market demand improvements within Packaging. Sales increased 7.2% in our Specialty Products segment as an organic sales increase of 31.3% for our steel cylinders was offset by the impact of the divestiture of our Arrow Engine business. In addition, net sales increased by $2.1 million due to currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of the weakening of the U.S. dollar relative to foreign currencies.
Gross profit margin (gross profit as a percentage of sales) approximated 24.5% and 22.5% for the three months ended September 30, 2025 and September 30, 2024, respectively. Gross profit margin increased primarily due to higher sales levels and related improved fixed cost absorption, a more favorable product sales mix, the impact of the labor union strike in 2024 that did not repeat, and favorable commercial actions within our Aerospace segment. These improvements were partially offset by lower margin within our Packaging segment primarily due to a $1.5 million write-off of certain inventory to the lower of cost or market, and increased input costs, as well as lower margin within our Specialty segment as the increase in gross profit related to increased steel cylinder sales was more than offset by the loss of sales related to the divestiture of our Arrow Engine business. Additionally, the increase in gross profit was partially offset by incremental maintenance and a $0.5 million purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value.
Operating profit margin (operating profit as a percentage of sales) approximated 6.2% and 3.6% for the three months ended September 30, 2025 and September 30, 2024, respectively. Operating profit increased $8.3 million to $16.6 million in the three months ended September 30, 2025, from $8.3 million for the three months ended September 30, 2024, primarily due to the impact of higher sales levels and related improved fixed cost absorption, a more favorable product sales mix, the impact of the labor union strike in 2024 that did not repeat, and favorable commercial actions within our Aerospace segment, as well as due to a $1.8 million pre-tax charge for environmental remediation obligations in third quarter 2024 that did not recur. These increases were partially offset by a decrease in operating profit within our Packaging segment due to the impact of $1.1 million of net gains on sales of non-core properties in the third quarter of 2024 that did not repeat, as well as the write-off of certain inventory to the lower of cost or market and increased input costs within the Packaging segment. Additionally, operating profit decreased due to a $8.0 million pre-tax charge related to updating our asbestos studies in the third quarter of 2025, as compared to a $5.5 million pre-tax charge taken in third quarter 2024. Operating profit further decreased due to incremental maintenance and a $0.5 million purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value within our Aerospace segment as well as higher employee-related costs.
Interest expense decreased $0.5 million, to $4.4 million for the three months ended September 30, 2025, compared to $4.9 million for the three months ended September 30, 2024, due to a decrease in our weighted average borrowings and a lower effective interest rate on our revolving credit facility as a result of decreased borrowings from our revolving credit facility.
Other income (expense) increased $0.1 million to $0.1 million of expense for the three months ended September 30, 2025, as compared to a nominal amount of expense for the three months ended September 30, 2024, primarily due to a decrease in other miscellaneous income, which was largely offset by a decrease in realized losses in foreign currency transactions.
The effective income tax rate for the three months ended September 30, 2025 and September 30, 2024 was 23.3% and 25.4%, respectively. We recorded income tax expense of $2.8 million and $0.9 million for the three months ended September 30, 2025 and September 30, 2024, respectively. The decrease in the effective tax rate for the three months ended September 30, 2025 was primarily due to the attribution of income among jurisdictions with differing statutory tax rates.
Net income increased $6.8 million, to $9.3 million for the three months ended September 30, 2025, as compared to $2.5 million for the three months ended September 30, 2024. The increase was primarily the result of an increase in operating profit of $8.3 million and a decrease in interest expense of $0.5 million, partially offset by an increase in income tax expense of $2.0 million and an increase in other expense of $0.1 million.
See below for a discussion of operating results by segment.
Packaging. Net sales increased $5.5 million, or 4.2% (of which 2.6% was organic and 1.6% was foreign currency exchange), to $135.7 million in the three months ended September 30, 2025, as compared to $130.2 million in the three months ended September 30, 2024. Sales of dispensing products used primarily for beauty, personal care and home care applications increased by $7.4 million and sales of other consumer goods products increased by $1.1 million. These increases were partially offset by the decrease in sales of products used in food and beverage applications of $5.2 million. Sales of products used for industrial applications remained flat. Net sales increased by $2.1 million due to currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of the weakening of the U.S. dollar relative to foreign currencies, as compared to third quarter 2024.
Gross profit decreased $0.3 million to $30.7 million, or 22.6% of sales, in the three months ended September 30, 2025, as compared to $31.0 million, or 23.8% of sales, in the three months ended September 30, 2024, as increases due to higher sales levels were more than offset by a $1.5 million write-off of certain inventory to the lower of cost or market, and increased input costs.
Selling, general and administrative expenses increased $0.3 million to $14.4 million, or 10.6% of sales, in the three months ended September 30, 2025, as compared to $14.2 million, or 10.9% of sales, in the three months ended September 30, 2024, primarily due to higher employee-related costs.
Operating profit decreased $1.6 million to $16.3 million, or 12.0% of sales, in the three months ended September 30, 2025, as compared to $17.9 million, or 13.8% of sales, in the three months ended September 30, 2024, primarily due to the impact of $1.1 million of net gains on the sale of non-core properties in third quarter 2024 that did not repeat, as well as the write-off of certain inventory to the lower of cost or market, increased input costs, and higher selling, general and administrative expenses.
Aerospace. Net sales for the three months ended September 30, 2025 increased $32.4 million, or 45.8% (of which 37.1% was organic and 8.7% related to acquisitions), to $103.2 million, as compared to $70.8 million in the three months ended September 30, 2024. Acquisition-related sales growth from our February 2025 acquisition of GMT Aerospace was $6.2 million. Sales of our fasteners products increased by $24.2 million due to increases in aircraft build rates, improved production yield and commercial actions. Sales of our engineered components products increased by $2.0 million due to improved production throughput.
Gross profit increased $15.0 million to $31.4 million, or 30.5% of sales, in the three months ended September 30, 2025, from $16.5 million, or 23.3% of sales, in the three months ended September 30, 2024. Gross profit increased primarily due to higher sales levels and resulting improved fixed cost absorption, a more favorable product sales mix and favorable commercial actions. Additionally, third quarter 2024 was impacted by increased costs and manufacturing inefficiencies resulting from a prolonged labor union strike that did not repeat. These increases in gross profit were partially offset by incremental maintenance and a $0.5 million purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value.
Selling, general and administrative expenses increased $0.9 million to $11.1 million, or 10.7% of sales, in the three months ended September 30, 2025, as compared to $10.2 million, or 14.4% of sales, in the three months ended September 30, 2024, primarily due to higher employee-related costs and higher ongoing selling, general and administrative costs associated with our acquisition of GMT Aerospace. These increases were partially offset by the impact of $1.3 million of costs related to the labor union strike in third quarter 2024 that did not repeat.
Operating profit increased $13.9 million to $20.2 million, or 19.6% of sales, in the three months ended September 30, 2025, as compared to $6.3 million, or 8.9% of sales, in the three months ended September 30, 2024, primarily due to the impact of higher sales levels, improved fixed cost absorption, a more favorable product sales mix, the impact of the labor union strike in 2024 that did not repeat, and commercial actions. These increases were partially offset by higher selling, general and administrative expenses, costs related to incremental maintenance and the recognition of the purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value.
Specialty Products. Net sales for the three months ended September 30, 2025 increased $2.0 million, or 7.2% (of which 25.6% was organic and (18.4)% was due to the divestiture of Arrow Engine), to $30.3 million, as compared to $28.3 million in the three months ended September 30, 2024. Sales of steel cylinders increased $7.2 million, or 31.3%, to $30.3 million, as compared to $23.1 million, due to improved order intake and overall market conditions. Arrow Engine contributed $5.2 million of sales in third quarter 2024. See Note 5, "Acquisitions and Sale of Business," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q for more information.
Gross profit decreased $0.5 million to $3.8 million, or 12.4% of sales, in the three months ended September 30, 2025, as compared to $4.2 million, or 14.9% of sales, in the three months ended September 30, 2024, as the increase in gross profit related to increased steel cylinder sales was more than offset by the impact of the divestiture of Arrow Engine, which yielded a higher contribution margin in third quarter 2024.
Selling, general and administrative expenses decreased $0.5 million to $1.3 million, or 4.3% of sales, in the three months ended September 30, 2025, as compared to $1.8 million, or 6.5% of sales, in the three months ended September 30, 2024, primarily due to the year-over-year impact from the divestiture of our Arrow Engine business.
Operating profit increased $0.1 million to $2.4 million, or 7.8% of sales, in the three months ended September 30, 2025, as compared to $2.3 million, or 8.1% of sales, in the three months ended September 30, 2024, primarily due to increased sales of steel cylinders, which was largely offset by the year-over-year impact from the divestiture of our Arrow Engine business.
Corporate. Corporate expenses consist of the following (dollars in millions):
| Three months ended September 30, 2025 | 2024 | |
|---|---|---|
| Corporate operating expenses | $10.8 | $8.6 |
| Non-cash stock compensation | 3.3 | 1.6 |
| Legacy expenses | 8.3 | 8.1 |
| Gain on disposition of assets | (0.1) | — |
| Corporate expenses | $22.3 | $18.3 |
Corporate expenses increased $4.0 million to $22.3 million for the three months ended September 30, 2025, from $18.3 million for the three months ended September 30, 2024, primarily due to a $8.0 million pre-tax charge related to updating our asbestos studies in the third quarter of 2025, as compared to a $5.5 million pre-tax charge taken in third quarter 2024. Additionally, corporate expenses were favorably impacted by a $1.8 million pre-tax charge for environmental remediation obligations in third quarter 2024 that did not recur, which was partially offset by a $1.7 million increase in non-cash stock compensation expense due to timing and estimated attainment of existing awards and higher employee-related costs.
Nine Months Ended September 30, 2025 Compared with Nine Months Ended September 30, 2024
Overall, net sales increased $88.7 million, or 12.7%, to $785.7 million for the nine months ended September 30, 2025, as compared with $697.0 million in the nine months ended September 30, 2024. Acquisition-related sales growth was $16.2 million from our February 2025 acquisition of GMT Aerospace. Organic sales, excluding the impact of currency exchange and acquisitions, increased $87.8 million, or 12.6%, as organic sales increases of 29.4% and 4.6% within our Aerospace and Packaging segments, respectively, driven by end market demand improvements, were partially offset by a 8.6% sales decrease in our Specialty Products segment as the organic sales increase of 8.2% for our steel cylinders was more than offset by the impact of the divestiture of our Arrow Engine business. In addition, net sales decreased by $1.1 million due to currency exchange, as our reported results in U.S. dollars were unfavorably impacted as a result of a strengthening U.S. dollar relative to foreign currencies.
Gross profit margin (gross profit as a percentage of sales) approximated 24.5% for the nine months ended September 30, 2025 and 22.7% for the nine months ended September 30, 2024. Gross profit margin increased primarily due to higher sales levels and related improved fixed cost absorption within our Aerospace and Packaging segments, a more favorable product sales mix, the impact of the labor union strike in 2024 that did not repeat, and favorable commercial actions within our Aerospace segment. The increase in gross profit was partially offset by lower sales within our Specialty segment driven by the loss of sales related to the divestiture of our Arrow Engine business. Additionally, gross profit decreased due to a $1.2 million purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value and incremental maintenance within our Aerospace segment as well as increased input costs and a $1.5 million write-off of certain inventory to the lower of cost or market in our Packaging segment.
Operating profit margin (operating profit as a percentage of sales) approximated 8.3% and 5.5% for the nine months ended September 30, 2025 and September 30, 2024, respectively. Operating profit increased $26.9 million, to $65.5 million, for the nine months ended September 30, 2025, compared to $38.6 million for the nine months ended September 30, 2024, primarily due to higher sales levels and related improved fixed cost absorption within our Aerospace and Packaging segments, a more favorable product sales mix, the impact of the labor union strike in 2024 that did not repeat, and favorable commercial actions within our Aerospace segment. Operating profit further increased due to a $5.4 million gain on the sale of Arrow Engine, $2.6 million of lower professional costs associated with business acquisition, diligence and transaction-related activity, and the impact of $2.5 millions of pre-tax charges for environmental remediation obligations in the nine months ended 2024 that did not recur. The increase in operating profit was partially offset by reduced sales within our Specialty segment driven by the loss of sales related to the divestiture of our Arrow Engine business and due to increased tariff and related input costs and a $1.5 million write-off of certain inventory to the lower of cost or market in our Packaging segment. In addition, operating profit decreased by $4.5 million primarily related to consulting services and costs associated with actions to reorganize the corporate office and due to a $8.0 million pre-tax charge related to updating our asbestos studies in 2025, as compared to a $5.5 million pre-tax charge taken in 2024. Operating profit further decreased due to a $1.2 million purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value and incremental maintenance within our Aerospace segment, and higher employee-related costs.
Interest expense decreased $1.6 million, to $13.4 million, for the nine months ended September 30, 2025, as compared to $15.0 million for the nine months ended September 30, 2024, due to a decrease in our weighted average borrowings and a lower effective interest rate as a result of decreased borrowings from our revolving credit facility.
Other income (expense) increased $0.1 million to $0.4 million of expense, for the nine months ended September 30, 2025, from $0.3 million of expense for the nine months ended September 30, 2024, as decreased losses on foreign currency transactions were largely offset by lower miscellaneous income.
The effective income tax rate for the nine months ended September 30, 2025 and September 30, 2024 was 25.5% and 20.0%, respectively. We recorded tax expense of $13.2 million for the nine months ended September 30, 2025, as compared to $4.6 million for the nine months ended September 30, 2024. The effective tax rate for the nine months ended September 30, 2025 was higher than in the prior year primarily due to the recognition of approximately $1.7 million of tax benefit related to foreign tax loss carryforwards in the nine months ended September 30, 2024. Additionally, the sale of the Arrow Engine business resulted in a taxable capital gain and related income tax expense of approximately $1.4 million in the first nine months of 2025.
Net income increased by $19.8 million, to $38.4 million, for the nine months ended September 30, 2025, compared to $18.6 million for the nine months ended September 30, 2024. The increase was primarily the result of an increase in operating profit of $26.9 million and a decrease in interest expense of $1.6 million, partially offset by an increase in income tax expense of $8.6 million and an increase in other expense of $0.1 million.
See below for a discussion of operating results by segment.
Packaging. Net sales increased $17.1 million, or 4.4% (of which 4.6% was organic and (0.2)% was foreign currency exchange), to $406.3 million in the nine months ended September 30, 2025, as compared to $389.2 million in the nine months ended September 30, 2024. Sales of dispensing products used primarily for beauty, personal care and home care applications increased by $27.6 million. Sales of products used for industrial applications increased by $2.0 million and sales of other consumer goods products increased by $6.7 million. These increases were partially offset by the decrease in sales of products used in food and beverage applications of $18.2 million. Net sales decreased by $1.0 million due to currency exchange, as our reported results in U.S. dollars were unfavorably impacted as a result of the strengthening U.S. dollar relative to foreign currencies, as compared to 2024.
Gross profit increased $2.4 million to $97.7 million, or 24.1% of sales, in the nine months ended September 30, 2025, as compared to $95.4 million, or 24.5% of sales, in the nine months ended September 30, 2024, due to higher sales levels and resulting improved fixed cost absorption, as well as the favorable impact of prior year operational improvement actions. Although gross profit increased, gross profit margin decreased primarily due to increased input costs and a $1.5 million write-off of certain inventory to the lower of cost or market.
Selling, general and administrative expenses increased $0.8 million to $44.2 million, or 10.9% of sales, in the nine months ended September 30, 2025, as compared to $43.4 million, or 11.2% of sales, in the nine months ended September 30, 2024, primarily due to higher employee-related costs and higher information technology costs.
Operating profit increased $0.5 million to $53.5 million, or 13.2% of sales, in the nine months ended September 30, 2025, as compared to $53.1 million, or 13.6% of sales, in the nine months ended September 30, 2024, primarily due to higher sales volume, improved fixed cost absorption and the favorable impact of cost reduction efforts, partially offset by increased input costs, the write-off of certain inventory to the lower of cost or market, higher selling, general and administrative expenses, and the impact of $1.2 million of net gains on sale of non-core properties in the first nine months of 2024 that did not repeat.
Aerospace. Net sales for the nine months ended September 30, 2025 increased $79.6 million, or 36.9% (of which 29.4% was organic and 7.5% related to acquisitions), to $295.5 million, as compared to $215.9 million in the nine months ended September 30, 2024. Acquisition-related sales growth from our February 2025 acquisition of GMT Aerospace was $16.2 million. Sales of our fasteners products increased by $50.3 million due to increases in aircraft build rates, improved production yield and commercial actions. Sales of our engineered components products increased by $13.1 million due to improved production throughput.
Gross profit increased $36.1 million to $87.4 million, or 29.6% of sales, in the nine months ended September 30, 2025, from $51.3 million, or 23.8% of sales, in the nine months ended September 30, 2024. Gross profit increased primarily due to higher sales levels and resulting improved fixed cost absorption, a more favorable product sales mix and favorable commercial actions. Additionally, 2024 was impacted by increased costs and manufacturing inefficiencies resulting from a prolonged labor union strike that did not repeat. These increases in gross profit were partially offset by a $1.2 million purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value and incremental maintenance.
Selling, general and administrative expenses increased $4.4 million to $31.8 million, or 10.8% of sales, in the nine months ended September 30, 2025, as compared to $27.5 million, or 12.7% of sales, in the nine months ended September 30, 2024, primarily due to higher employee-related costs, higher ongoing selling, general and administrative costs associated with our acquisition of GMT Aerospace, and higher information technology costs. These increases were partially offset by the impact of $1.3 million of costs related to the labor union strike in 2024 that did not repeat as well as lower charges for the provision for losses on accounts receivable and lower professional fees.
Operating profit increased $31.5 million to $55.4 million, or 18.8% of sales, in the nine months ended September 30, 2025, as compared to $23.9 million, or 11.1% of sales, in the nine months ended September 30, 2024, primarily due to the impact of higher sales levels, improved fixed cost absorption, a more favorable product sales mix, the impact of the labor union strike in 2024 that did not repeat, and commercial actions. These increases were partially offset by higher selling, general and administrative expenses, the recognition of the purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value and costs related to incremental maintenance.
Specialty Products. Net sales for the nine months ended September 30, 2025 decreased $7.9 million, or 8.6% (of which 6.8% was organic and (15.4)% was due to the divestiture of Arrow Engine), to $84.0 million, as compared to $91.9 million in the nine months ended September 30, 2024. Sales of steel cylinders increased $6.3 million, or 8.2%, to $82.5 million, as compared to $76.3 million, due predominantly to improved demand for industrial applications as customers continued to work through high prior period inventory balances. Arrow Engine contributed $1.4 million of sales in first nine months of 2025, as compared to $15.6 million in first nine months of 2024. See Note 5, "Acquisitions and Sale of Business," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q for more information.
Gross profit decreased $4.2 million to $7.5 million, or 9.0% of sales, in the nine months ended September 30, 2025, as compared to $11.7 million, or 12.7% of sales, in the nine months ended September 30, 2024, primarily due to the year-over-year impact from the divestiture of our Arrow Engine business, which more than offset higher sales of steel cylinders and improved fixed costs absorption.
Selling, general and administrative expenses decreased $1.2 million to $5.0 million, or 5.9% of sales, in the nine months ended September 30, 2025, as compared to $6.1 million, or 6.7% of sales, in the nine months ended September 30, 2024, due to the year-over-year impact from the divestiture of our Arrow Engine business and reduced spending levels, partially offset by $0.9 million of transaction-related costs associated with the divestiture of our Arrow Engine business.
Operating profit decreased $3.0 million to $2.5 million, or 3.0% of sales, in the nine months ended September 30, 2025, as compared to $5.5 million, or 6.0% of sales, in the nine months ended September 30, 2024, primarily due to the year-over-year impact from the divestiture of our Arrow Engine business, which more than offset higher steel cylinder sales levels.
Corporate. Corporate expenses, net consist of the following (dollars in millions):
| Nine months ended September 30, 2025 | 2024 | |
|---|---|---|
| Corporate operating expenses | $34.5 | $27.3 |
| Non-cash stock compensation | 8.3 | 8.1 |
| Legacy expenses | 8.5 | 8.4 |
| Gain on disposition of assets | (5.4) | — |
| Corporate expenses | $45.9 | $43.8 |
Corporate expenses increased $2.1 million to $45.9 million for the nine months ended September 30, 2025, from $43.8 million for the nine months ended September 30, 2024, primarily due to an increase of $4.5 million, primarily related to consulting and other costs associated with actions to reorganize the corporate office and a $8.0 million pre-tax charge related to updating our asbestos studies in the third quarter of 2025, as compared to a $5.5 million pre-tax charge taken in third quarter 2024. Additionally, corporate expenses increased due to $0.7 million of higher costs associated with the upgrade of certain key information technology applications and higher employee-related costs. The increase in corporate expenses was partially offset by a $5.4 million pre-tax gain on the sale of the Arrow Engine business, $2.6 million of lower professional costs associated with business acquisition, diligence and transaction-related activity, and the impact of $2.5 million of pre-tax charges for environmental remediation obligations in the nine months ended 2024 that did not recur.
Liquidity and Capital Resources
Cash Flows
Cash flows provided by operating activities were $75.9 million for the nine months ended September 30, 2025, as compared to $36.7 million for the nine months ended September 30, 2024. Significant changes in cash flows provided by operating activities and the reasons for such changes were as follows:
- For the nine months ended September 30, 2025, we generated $91.0 million in cash flows, based on net income of $38.4 million and after considering the effects of non-cash items related to depreciation, amortization, and gain on dispositions of assets, amortization of debt issuance costs, changes in deferred income taxes, stock-based compensation, provision for losses on accounts receivable, asbestos-related costs, and other operating activities. For the nine months ended September 30, 2024, we generated $87.3 million in cash flows based on net income of $18.6 million and after considering the effects of similar non-cash items and change in environmental liability estimate.
- Increases in accounts receivable resulted in a use of cash of $18.3 million and $15.9 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. The increased use of cash for each of the nine month periods is due primarily to the timing of sales and collection of cash related thereto within the periods. Days sales outstanding of receivables decreased one day through the nine months ended September 30, 2025, and increased one day through the nine months ended September 30, 2024.
- We increased our investment in inventory by $8.4 million and $23.1 million for the nine months ended September 30, 2025 and the nine months ended September 30, 2024, respectively. Our days sales in inventory remained flat through the nine months ended September 30, 2025, and increased by four days through the nine months ended September 30, 2024, as we continued to manage inventory levels, considering our supply needs, and balanced with sales growth within our Packaging and Aerospace segments in both periods.
- A decrease in prepaid expenses and other assets resulted in a source of cash of $8.3 million for the nine months ended September 30, 2025, while an increase in prepaid expenses and other assets resulted in a use of cash of $4.6 million for the nine months ended September 30, 2024. These changes were primarily a result of the timing of payments made for income taxes and certain operating expenses.
- An increase in accounts payable and accrued liabilities resulted in a source of cash of $3.3 million for the nine months ended September 30, 2025, while a decrease in accounts payable and accrued liabilities resulted in a use of cash of $7.0 million for the nine months ended September 30, 2024. Days accounts payable on hand decreased by four days through the nine months ended September 30, 2025, and decreased by nine days for the nine months ended September 30, 2024. Our days accounts payable on hand fluctuate primarily as a result of the timing of payments made to suppliers and the mix of vendors and related terms.
Net cash used for investing activities for the nine months ended September 30, 2025 and September 30, 2024 was $59.6 million and $31.9 million, respectively. During the first nine months of September 30, 2025, we invested $43.7 million in capital expenditures, as we continued our investment in growth, capacity and productivity-related capital projects. We paid $37.7 million, net of cash acquired, to acquire GMT Aerospace. We also received net proceeds of $21.8 million from the sale of our Arrow Engine business and disposition of property and equipment. During the first nine months of September 30, 2024, we invested $36.0 million in capital expenditures and received net proceeds of $4.1 million from disposition of property and equipment.
Net cash used by financing activities was $5.8 million and $12.8 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. During the nine months ended September 30, 2025, we received net proceeds of $4.5 million from borrowings on our revolving credit facilities, paid $1.3 million for debt financing fees, purchased $2.3 million of our outstanding common stock, used a net cash amount of $1.9 million related to our stock compensation arrangements, and paid dividends of $5.0 million. Our reported net proceeds from borrowings on our revolving credit facilities considers the impact of foreign currency translation. During the nine months ended September 30, 2024, we received net proceeds of $13.4 million from borrowings on our revolving credit facilities, purchased $19.3 million of outstanding common stock, used a net cash amount of $1.6 million related to our stock compensation arrangements, paid dividends of $5.0 million, and paid $0.3 million related to other financing liabilities.
Our Debt and Other Commitments
In March 2021, we issued $400.0 million aggregate principal amount of 4.125% senior notes due April 15, 2029 ("Senior Notes") at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended ("Securities Act"). The Senior Notes accrue interest at a rate of 4.125% per annum, payable semi-annually in arrears on April 15 and October 15. The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company. The Senior Notes are pari passu in right of payment with all existing and future senior indebtedness and effectively subordinated to all existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness.
We may redeem all or part of the Senior Notes at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, to the redemption date, if redeemed during the twelve-month period beginning on April 15 of the years indicated below:
| Year | Percentage |
|---|---|
| 2025 | 101.031% |
| 2026 and thereafter | 100.000% |
For the nine months ended September 30, 2025, our consolidated subsidiaries that do not guarantee the Senior Notes represented 30% of the total of guarantor and non-guarantor net sales, treating each as a consolidated group and excluding intercompany transactions between guarantor and non-guarantor subsidiaries. In addition, our non-guarantor subsidiaries represented 40% and 15% of the total guarantor and non-guarantor assets and liabilities, respectively, as of September 30, 2025, treating the guarantor and non-guarantor subsidiaries each as a consolidated group.
In March 2025, we amended our Credit Agreement to extend the maturity date. We incurred fees and expenses of $1.3 million related to the amendment, all of which was capitalized as debt issuance costs. We also recorded $0.1 million of non-cash expense related to the write-off of previously capitalized deferred financing fees.
Below is a summary of key terms under the Credit Agreement as of September 30, 2025, compared to the key terms prior to the amendment (showing gross availability):
| Instrument Credit Agreement (as amended) | Amount ($ in millions) | Maturity Date |
|---|---|---|
| Senior secured revolving credit facility | $250.0 | 3/31/2030 |
| Credit Agreement (prior to amending) | ||
| Senior secured revolving credit facility | $300.0 | 3/29/2026 |
The Credit Agreement is subject to benchmark interest rates determined based on the currency denomination of borrowings, with British pound sterling borrowings subject to the Sterling Overnight Index Average, Euro borrowings to the Euro InterBank Offered Rate and U.S. dollar borrowings subject to the Secured Overnight Financing Rate, each plus a spread that ranges from 1.375% to 2.00% based upon the leverage ratio, as defined, as of the most recent determination date. Our revolving credit facility allows for the issuance of letters of credit, not to exceed $40.0 million in aggregate.
The Credit Agreement permits borrowings denominated in specific foreign currencies, subject to a $125.0 million sub limit. The Credit Agreement also provides for incremental revolving credit commitments in an amount not to exceed the greater of $200.0 million and an amount such that, after giving effect to such incremental commitments and the incurrence of any other indebtedness substantially simultaneously with the making of such commitments, the senior secured net leverage ratio, as defined in the Credit Agreement, is no greater than 3.00 to 1.00. The terms and conditions of any incremental revolving credit facility commitments must be no more favorable than the existing credit facility.
Amounts drawn under our revolving credit facility fluctuate daily based upon our working capital and other ordinary course needs. Availability under our revolving credit facility depends upon, among other things, compliance with our Credit Agreement's financial covenants. Our Credit Agreement contains various negative and affirmative covenants and other requirements affecting us and our subsidiaries, including the ability to, subject to certain exceptions and limitations, incur debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, asset dispositions, sale-leaseback transactions, hedging agreements, dividends and other restricted payments, transactions with affiliates, restrictive agreements and amendments to charters, bylaws, and other material documents. The terms of our Credit Agreement require us and our subsidiaries to meet certain restrictive financial covenants and ratios computed quarterly, including a maximum total net leverage ratio (total consolidated indebtedness plus outstanding amounts under the accounts receivable securitization facility, less the aggregate amount of certain unrestricted cash and unrestricted permitted investments, as defined, over consolidated EBITDA, as defined) and a minimum interest expense coverage ratio (consolidated EBITDA, as defined, over the sum of consolidated cash interest expense, as defined, and preferred dividends, as defined). Our permitted total net leverage ratio under the Credit Agreement is 4.00 to 1.00 as of September 30, 2025. If we were to complete an acquisition which qualifies for a Covenant Holiday Period, as defined in our Credit Agreement, then our permitted total net leverage ratio cannot exceed 4.50 to 1.00 during that period. Our actual total net leverage ratio was 2.29 to 1.00 at September 30, 2025. Our permitted interest expense coverage ratio under the Credit Agreement is 3.00 to 1.00 as of September 30, 2025. Our actual interest expense coverage ratio was 10.46 to 1.00 at September 30, 2025. At September 30, 2025, we were in compliance with our financial covenants.
The following is a reconciliation of net income, as reported, which is a GAAP measure of our operating results, to Consolidated Bank EBITDA, as defined in our Credit Agreement, for the twelve months ended September 30, 2025 (dollars in thousands). We present Consolidated Bank EBITDA to show our performance under our financial covenants.
| Twelve Months Ended September 30, 2025 | |
|---|---|
| Net income | $44,080 |
| Bank stipulated adjustments: | |
| Interest expense | 17,990 |
| Income tax expense | 14,340 |
| Depreciation and amortization | 65,050 |
| Impairment charges and asset write-offs | 1,750 |
| Non-cash compensation expense(1) | 7,210 |
| Other non-cash expenses or losses | 230 |
| Non-recurring expenses or costs(2) | 19,250 |
| Extraordinary, non-recurring or unusual gains or losses | 8,030 |
| Effects of purchase accounting adjustments | 1,200 |
| Business and asset dispositions | (5,080) |
| Permitted acquisitions | 1,810 |
| Permitted dispositions | (530) |
| Currency gains and losses | 390 |
| Consolidated Bank EBITDA, as defined | $175,720 |
| September 30, 2025 | ||
|---|---|---|
| Total Indebtedness, as defined(3) | $402,730 | |
| Consolidated Bank EBITDA, as defined | 175,720 | |
| Total net leverage ratio | 2.29 | x |
| Covenant requirement | 4.00 | x |
41
| Twelve Months Ended September 30, 2025 | |
|---|---|
| Interest expense | $17,990 |
| Bank stipulated adjustments: | |
| Interest income | (240) |
| Non-cash amounts attributable to amortization of financing costs | (960) |
| Total Consolidated Cash Interest Expense, as defined | $16,790 |
| September 30, 2025 | ||
|---|---|---|
| Consolidated Bank EBITDA, as defined | $175,720 | |
| Total Consolidated Cash Interest Expense, as defined | 16,790 | |
| Actual interest expense coverage ratio | 10.46 | x |
| Covenant requirement | 3.00 | x |
(1) Non-cash compensation expenses resulting from the grant of equity awards.
(2) Non-recurring costs and expenses relating to diligence and transaction costs, strike related costs, severance, relocation, and realignment expenses.
(3) Includes $14.0 million of derivative liabilities and $1.5 million of finance leases as of September 30, 2025.
At September 30, 2025, we had $10.9 million outstanding under our revolving credit facility and had $233.1 million available after giving effect to $6.0 million of letters of credit issued and outstanding. At December 31, 2024, we had $1.5 million outstanding under our revolving credit facility and had $292.2 million available after giving effect to $6.3 million of letters of credit issued and outstanding. Our letters of credit are used for a variety of purposes, including support of certain operating lease agreements, vendor payment terms and other subsidiary operating activities, and to meet various states' requirements to self-insure workers' compensation claims, including incurred but not reported claims. Our borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of September 30, 2025. After consideration of leverage restrictions contained in the Credit Agreement, as of December 31, 2024, we had $216.7 million of borrowing capacity available for general corporate purposes.
We rely upon our cash flow from operations and available liquidity under our revolving credit facility to fund our debt service obligations and other contractual commitments, working capital and capital expenditure requirements. At the end of each quarter, we have historically used cash on hand from our domestic and foreign subsidiaries to pay down amounts outstanding under our revolving credit facility, as applicable.
Our weighted average borrowings during the first nine months of 2025 approximated $433.7 million, compared to $437.5 million during the first nine months of 2024, primarily due to borrowings made on our revolving credit facility.
In May 2021, we, through one of our non-U.S. subsidiaries, entered into a revolving loan facility with a borrowing capacity of $4.0 million. The facility is guaranteed by TriMas Corporation. At September 30, 2025, we had no amounts outstanding on this loan facility.
Cash management related to our revolving credit facility is centralized. We monitor our cash position and available liquidity on a daily basis and forecast our cash needs on a weekly basis within the current quarter and on a monthly basis outside the current quarter over the remainder of the year. Our business and related cash forecasts are updated monthly.
While the majority of our cash on hand as of September 30, 2025 is located outside of the U.S., given available funding under our revolving credit facility of $233.1 million at September 30, 2025, and based on forecasted cash sources and requirements inherent in our business plans, we believe that our liquidity and capital resources, including anticipated cash flows from operations, will be sufficient to meet our debt service, capital expenditure and other short-term and long-term obligations for the foreseeable future, as well as dividends and share repurchases.
We are subject to variable interest rates on our revolving credit facility, which is subject to a benchmark interest rate determined based on the currency denomination of borrowings. Based on our variable rate-based borrowings outstanding at September 30, 2025, a 1% increase in the per annum interest rate would increase our interest expense by $0.1 million annually.
In addition to our long-term debt, we have other cash commitments related to leases. The majority of our lease transactions are accounted for as operating leases, and annual rent expense related thereto approximated $13.9 million in 2024. We expect leasing will continue to be an available financing option to fund future capital expenditure requirements.
In March 2020, we announced our Board of Directors had authorized us to increase the purchase of our common stock up to $250 million in the aggregate. In the nine months ended September 30, 2025, we purchased 106,220 shares of our outstanding common stock for an aggregate purchase price of $2.3 million. Since the initial authorization through September 30, 2025, we have purchased 6,672,784 shares of our outstanding common stock for an aggregate purchase price of $184.6 million. We will continue to evaluate opportunities to return capital to shareholders through the purchase of our common stock and the payment of dividends, depending on market conditions, and other factors.
Market Risk
We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies. The functional currencies of our foreign subsidiaries are primarily the local currency in the country of domicile. We manage these operating activities at the local level and revenues and costs are generally denominated in local currencies; however, results of operations and assets and liabilities reported in U.S. dollars will fluctuate with changes in exchange rates between such local currencies and the U.S. dollar.
We use derivative financial instruments to manage currency risks associated with our procurement activities denominated in currencies other than the functional currency of our subsidiaries and the impact of currency rate volatility on our earnings. As of September 30, 2025, we were party to foreign exchange forward and swap contracts to hedge changes in foreign currency exchange rates with notional amounts of $150.6 million. We also use cross-currency swap agreements to mitigate currency risks associated with the net investment in certain of our foreign subsidiaries. See Note 10, "Derivative Instruments," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q for additional information.
We are also subject to interest risk as it relates to our long-term debt. We have historically used interest rate swap agreements to fix the variable portion of our debt to manage this risk.
Common Stock
TriMas is listed in the NASDAQ Global Select Market. Our stock trades under the symbol "TRS."
Credit Rating
We and certain of our outstanding debt obligations are rated by Standard & Poor's and Moody's. On January 7, 2025, Moody's affirmed a Ba3 rating to our Senior Notes. See Note 9, "Long-term Debt" included in Part I, Item 1, "Notes to Unaudited Consolidated Financial Statements" within this quarterly report on Form 10-Q. Moody's also affirmed a Ba2 Corporate Family Rating, and changed its outlook from stable to negative. On August 6, 2025, Standard & Poor's affirmed a BB- rating to our Senior Notes. Standard & Poor's also affirmed a BB corporate credit rating and maintained its outlook as stable. If our credit ratings were to decline, our ability to access certain financial markets may become limited, our cost of borrowings may increase, the perception of us in the view of our customers, suppliers and security holders may worsen and as a result, we may be adversely affected.
Outlook
We delivered strong financial results through the first nine months of 2025, driven by increased demand and successful growth initiatives within our Aerospace and Packaging segments, combined with manufacturing enhancements and commercial actions. During first quarter 2025, we successfully completed our acquisition of GMT Aerospace in our Aerospace segment and divested of our Arrow Engine business, which reflect our continued steps to optimize our portfolio of businesses. Looking forward, we remain optimistic about the long-term growth within our two largest segments, Packaging and Aerospace, and an accelerated recovery of our cylinder business within our Specialty Products segment, which had increased sales and operating profit in third quarter 2025 as compared to the prior year period.
We have seen a number of global market uncertainties stemming from the macro-economic environment in the past few years, including significant challenges in inflationary pressures, supply chain disruptions and labor availability, as well as significant volatility in our customers' sentiment and order patterns. While we expect continued strong performance in our two largest segments and recovery in Specialty Products, we remain cautious of both primary and secondary effects from the impact of tariffs on input costs and global market conditions. However, we remain committed to mitigate the impact of the tariff environment, as much as practical, by executing on commercial, procurement, production, and streamlining actions and taking other steps as necessary, to maintain our strong balance sheet and generate cash in support of our capital allocation strategy.
We believe our capital structure remains strong and that we have sufficient headroom under our financial covenants, and ample cash and available liquidity under our revolving credit facility, to meet our debt service, capital expenditure and other short-term and long-term obligations for the next 12 months and for the foreseeable future, as well as fund dividends, share repurchases and bolt-on acquisitions consistent with our capital allocation strategy.
We expect to continue to leverage the tenets of our TriMas Business Model to manage our multi-industry businesses on a longer-term basis, achieve our growth plans, execute continuous improvement initiatives to offset inflationary pressures, and seek lower-cost sources for input costs, all while continuously assessing the appropriateness of our manufacturing footprint and fixed-cost structure.
On July 4, 2025, President Donald J. Trump signed into law the legislation formally titled “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14” —and commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The legislation took effect in the third quarter of 2025. Based on an initial analysis of the OBBBA, we do not anticipate a material impact on the effective tax rate and expect a favorable impact on U.S. federal cash taxes for the remainder of 2025.
Impact of New Accounting Standards
See Note 2, "New Accounting Pronouncements," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q.
Critical Accounting Policies
Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions used in calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, our evaluation of business and macroeconomic trends, and information from other outside sources, as appropriate.
During the quarter ended September 30, 2025, there were no material changes to the items that we disclosed as our critical accounting policies in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Annual Report on Form 10-K for the year ended December 31, 2024.
Market risk
As filed, 649 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
In the normal course of business, we are exposed to market risk associated with fluctuations in foreign currency exchange rates. We are also subject to interest risk as it relates to long-term debt. See Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," for details about our primary market risks, and the objectives and strategies used to manage these risks. Also see Note 9, "Long-term Debt," and Note 10, "Derivative Instruments," in Part I, Item 1, "Notes to Unaudited Consolidated Financial Statements," included within this quarterly report on Form 10-Q for additional information.
Controls and procedures
As filed, 1,749 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Evaluation of disclosure controls and procedures
As of September 30, 2025, an evaluation was carried out by management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) pursuant to Rule 13a-15 of the Exchange Act. The Company's disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of September 30, 2025, the Company's disclosure controls and procedures are effective to provide reasonable assurance that they would meet their objectives.
Changes in internal control over financial reporting
There have been no changes in the Company's internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
Risk factors
As filed, 2,673 characters, with its headings, lists and tables. Extracted from the main document; charts and exhibits are in the original on sec.gov.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part 1, Item 1A., "Risk Factors," in our 2024 Annual Report on Form 10-K and Part 2, Item 1A., "Risk Factors," in our Quarterly Report on Form 10-Q for the period ended March 31, 2025, which could materially affect our business, financial condition or future results. Except as set forth below, there are no material changes to our risk factors as disclosed in our 2024 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the period ended March 31, 2025. The risk factor presented below supersedes the corresponding risk factor in our 2024 Annual Report on Form 10-K and should otherwise be read in conjunction with all of the risk factors disclosed in our 2024 Annual Report on 10-K and our Quarterly Report on Form 10-Q for the period ended March 31, 2025.
Our acquisition and disposition agreements by which we have acquired or sold companies include indemnification provisions that may not fully protect us and may result in unexpected liabilities.
Certain of the agreements related to the acquisition and disposition of businesses require indemnification against certain liabilities related to the operations of the company for the previous owner. We cannot be assured that any of these indemnification provisions will fully protect us. In some instances, third parties may have an obligation to indemnify us for liabilities related to a disposed business, and such third parties may be unable to, or fail to, fulfill such obligations. If such third parties fail to indemnify us, or if indemnification provisions otherwise fail to fully protect us, we may be financially responsible and may incur unexpected liabilities that adversely affect our profitability and financial position.
For example, we completed the spin-off of our legacy Cequent businesses in 2015, creating a new independent publicly traded company, Horizon Global Corporation (“Horizon”). In connection with the spin-off, we entered into an agreement pursuant to which Horizon agreed to fully indemnify us from, among other things, any and all future damages incurred by us in connection with certain litigation and environmental liabilities relating to our legacy Cequent businesses. In 2023, First Brands Group, LLC (“First Brands”) acquired Horizon, and subsequently assumed Horizon’s indemnification obligations to us. First Brands filed for Chapter 11 bankruptcy protection in September 2025. If First Brands is unable to satisfy its indemnification obligations to us, we may incur unexpected liabilities relating to our legacy Cequent businesses.
Figures reported in this filing
Standardized line items from the XBRL in this filing, for the period ended 2025-09-30. Comparative periods it repeats are left out.
| Line item | Period | Value | XBRL concept |
|---|---|---|---|
| Revenue | 3 months2025-07-01 to 2025-09-30 | $269.3m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months2025-01-01 to 2025-09-30 | $785.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months2025-07-01 to 2025-09-30 | $203.3m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months2025-01-01 to 2025-09-30 | $593.0m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months2025-07-01 to 2025-09-30 | $65.9m | us-gaap:GrossProfit |
| Gross profit | 9 months2025-01-01 to 2025-09-30 | $192.7m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months2025-07-01 to 2025-09-30 | $41.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months2025-01-01 to 2025-09-30 | $124.3m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months2025-07-01 to 2025-09-30 | $16.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months2025-01-01 to 2025-09-30 | $65.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months2025-07-01 to 2025-09-30 | $4.4m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months2025-01-01 to 2025-09-30 | $13.4m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months2025-07-01 to 2025-09-30 | $2.8m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months2025-01-01 to 2025-09-30 | $13.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months2025-07-01 to 2025-09-30 | $9.3m | us-gaap:NetIncomeLoss |
| Net income | 9 months2025-01-01 to 2025-09-30 | $38.4m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months2025-07-01 to 2025-09-30 | $0.23 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months2025-01-01 to 2025-09-30 | $0.94 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months2025-07-01 to 2025-09-30 | $0.23 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months2025-01-01 to 2025-09-30 | $0.95 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months2025-07-01 to 2025-09-30 | 41,113,322 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months2025-01-01 to 2025-09-30 | 41,004,160 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months2025-01-01 to 2025-09-30 | $75.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months2025-07-01 to 2025-09-30 | $13.7m | us-gaap:PaymentsToAcquireProductiveAssets |
| Capital expenditure | 9 months2025-01-01 to 2025-09-30 | $43.6m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 9 months2025-01-01 to 2025-09-30 | $5.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months2025-01-01 to 2025-09-30 | $2.3m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | At period end2025-09-30 | $33.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | At period end2025-09-30 | $483.2m | us-gaap:AssetsCurrent |
| Total assets | At period end2025-09-30 | $1.43bn | us-gaap:Assets |
| Current liabilities | At period end2025-09-30 | $180.1m | us-gaap:LiabilitiesCurrent |
| Total liabilities | At period end2025-09-30 | $708.8m | us-gaap:Liabilities |
| Shareholders' equity | At period end2025-09-30 | $725.0m | us-gaap:StockholdersEquity |
Source: SEC EDGAR, the filing index for accession 0000842633-25-000125. Last ingested by Listed: Nov 6, 2026, 15:06 ET. Listed shows no prices and gives no investment advice.