TriMas Corp.

The outlook is stable. TriMas' good market position, steady operating margin, and cash flow generation should enable the company to pursue bolt-on acquisitions and modest share repurchases while maintaining adjusted debt to EBITDA below 3x. We also expect adjusted EBITDA margins will remain steady, primarily supported by growth in its high-margin packaging business, product rationalization within its aerospace segment, past acquisition synergies, and cost-containment initiatives. We could lower the rating over the next 12 months if there were larger-than-expected, debt-financed acquisitions or an economic slowdown meaningfully deteriorated TriMas' credit measures. This could happen if, for instance, weakness in its end markets reduced EBITDA margins by more than three or four percentage points while the company pursued acquisitions, resulting in adjusted

...The company's TriMas Business Model (TBM) program is in its intermediate stages and should drive modest operating efficiencies over the next 12-24 months. TriMas Corp. launched the multiyear TBM in late 2016 as a response to internal performance issues and evolving inventory management at distributors. The updated business model reflects an operational shift to single-platform, cost-oriented management of the multisegment company. While the initial efficiencies were realized over the past few years, we expect continued modest EBITDA margin gains from cross-selling opportunities between the segments, improved strategies to refocus on higher-margin products, and lower cost sourcing. We expect the company to pursue debt-financed acquisitions and share repurchases as credit measures have recently improved. Our forecast of TriMas' adjusted-total-debt-to-EBITDA ratio of under 3x provides sufficient debt capacity to undertake moderate acquisitions in the near term without affecting the rating....

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