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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)    
  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2021
Or
  Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from                  to                  .
Commission file number 001-10716
TRIMAS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-2687639
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer
Identification No.)
38505 Woodward Avenue, Suite 200
Bloomfield Hills, Michigan 48304
(Address of principal executive offices, including zip code)
(248) 631-5450
(Registrant's telephone number, including area code)
Title of each class Trading symbol(s) Name of exchange on which registered
Common stock, $0.01 par value TRS The NASDAQ Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes     No .
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No .
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes     No 
As of April 22, 2021, the number of outstanding shares of the Registrant's common stock, $0.01 par value, was 43,163,620 shares.


TriMas Corporation
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1

Forward-Looking Statements
This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 about our financial condition, results of operations and business. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to: the severity and duration of the ongoing coronavirus (“COVID-19”) pandemic on our operations, customers and suppliers, as well as related actions taken by governmental authorities and other third parties in response, each of which is uncertain, rapidly changing and difficult to predict; general economic and currency conditions; material and energy costs; risks and uncertainties associated with intangible assets, including goodwill or other intangible asset impairment charges; competitive factors; future trends; our ability to realize our business strategies; our ability to identify attractive acquisition candidates, successfully integrate acquired operations or realize the intended benefits of such acquisitions; information technology and other cyber-related risks; the performance of our subcontractors and suppliers; supply constraints; market demand; intellectual property factors; litigation; government and regulatory actions, including, without limitation, climate change legislation and other environmental regulations, as well as the impact of tariffs, quotas and surcharges; our leverage; liabilities imposed by our debt instruments; labor disputes; changes to fiscal and tax policies; contingent liabilities relating to acquisition activities; the disruption of operations from catastrophic or extraordinary events, including natural disasters and public health crises; the potential impact of Brexit; our future prospects; and other risks that are discussed in Part I, Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2020 and elsewhere in this report. The risks described in our Annual Report on Form 10-K and elsewhere in this report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows.
The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We caution readers not to place undue reliance on the statements, which speak only as of the date of this report. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by law.
We disclose important factors that could cause our actual results to differ materially from our expectations implied by our forward-looking statements under Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations, prospects and ability to service our debt.
2

PART I. FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements
TriMas Corporation
Consolidated Balance Sheet
(Dollars in thousands)
March 31,
2021
December 31,
2020
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 421,140  $ 73,950 
Receivables, net of reserves of approximately $2.4 million and $2.1 million as of March 31, 2021 and December 31, 2020, respectively 128,000  113,410 
Inventories 151,820  149,380 
Prepaid expenses and other current assets 17,960  15,090 
Total current assets 718,920  351,830 
Property and equipment, net 251,150  253,060 
Operating lease right-of-use assets 36,450  37,820 
Goodwill 300,610  303,970 
Other intangibles, net 199,010  206,200 
Deferred income taxes 15,700  19,580 
Other assets 21,460  21,420 
Total assets $ 1,543,300  $ 1,193,880 
Liabilities and Shareholders' Equity
Current liabilities:
Current portion, long-term debt $ 300,000  $ — 
Accounts payable 76,650  69,910 
Accrued liabilities 57,490  60,540 
Operating lease liabilities, current portion 6,350  6,740 
Total current liabilities 440,490  137,190 
Long-term debt, net 390,190  346,290 
Operating lease liabilities 30,520  31,610 
Deferred income taxes 24,840  24,850 
Other long-term liabilities 61,290  69,690 
Total liabilities 947,330  609,630 
Preferred stock, $0.01 par: Authorized 100,000,000 shares;
Issued and outstanding: None
—  — 
Common stock, $0.01 par: Authorized 400,000,000 shares;
Issued and outstanding: 43,199,240 shares at March 31, 2021 and 43,178,165 shares at December 31, 2020
430  430 
Paid-in capital 747,080  749,050 
Accumulated deficit (146,550) (159,610)
Accumulated other comprehensive loss (4,990) (5,620)
Total shareholders' equity 595,970  584,250 
Total liabilities and shareholders' equity $ 1,543,300  $ 1,193,880 


The accompanying notes are an integral part of these consolidated financial statements.
3

TriMas Corporation
Consolidated Statement of Income
(Unaudited—dollars in thousands, except for per share amounts)
  Three months ended
March 31,
  2021 2020
Net sales $ 206,730  $ 182,790 
Cost of sales (155,400) (136,420)
Gross profit 51,330  46,370 
Selling, general and administrative expenses (30,220) (26,540)
Operating profit 21,110  19,830 
Other expense, net:    
Interest expense (3,550) (3,580)
Debt financing and related expenses (200) — 
Other expense, net (930) (80)
Other expense, net (4,680) (3,660)
Income before income tax expense 16,430  16,170 
Income tax expense (3,370) (3,050)
Net income $ 13,060  $ 13,120 
Basic earnings per share:    
Net income per share $ 0.30  $ 0.30 
Weighted average common shares—basic 43,185,007  44,201,053 
Diluted earnings per share:    
Net income per share $ 0.30  $ 0.30 
Weighted average common shares—diluted 43,634,876  44,470,472 


The accompanying notes are an integral part of these consolidated financial statements.
4

TriMas Corporation
Consolidated Statement of Comprehensive Income
(Unaudited—dollars in thousands)
Three months ended
March 31,
2021 2020
Net income $ 13,060  $ 13,120 
Other comprehensive income (loss):
Defined benefit plans (Note 18) 150  150 
Foreign currency translation (3,420) (8,260)
Derivative instruments (Note 11) 3,900  4,430 
Total other comprehensive income (loss) 630  (3,680)
Total comprehensive income $ 13,690  $ 9,440 


The accompanying notes are an integral part of these consolidated financial statements.


5

TriMas Corporation
Consolidated Statement of Cash Flows
(Unaudited—dollars in thousands)
Three months ended March 31,
2021 2020
Cash Flows from Operating Activities:
Net income $ 13,060  $ 13,120 
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact:
Loss on dispositions of assets 20  50 
Depreciation 7,850  6,660 
Amortization of intangible assets 5,390  4,850 
Amortization of debt issue costs 300  290 
Deferred income taxes 2,200  2,570 
Non-cash compensation expense 2,440  1,940 
Debt financing and related expenses 200  — 
Increase in receivables (15,640) (10,610)
Increase in inventories (3,110) (110)
Increase in prepaid expenses and other assets (2,070) (110)
Increase (decrease) in accounts payable and accrued liabilities 1,950  (14,780)
Other operating activities 3,150  (470)
Net cash provided by operating activities, net of acquisition impact 15,740  3,400 
Cash Flows from Investing Activities:
Capital expenditures (9,370) (3,930)
Acquisition of businesses, net of cash acquired —  (84,270)
Net proceeds from disposition of business, property and equipment —  1,880 
Net cash used for investing activities (9,370) (86,320)
Cash Flows from Financing Activities:
Proceeds from issuance of senior notes 400,000  — 
Proceeds from borrowings on revolving credit facilities —  198,290 
Repayments of borrowings on revolving credit facilities (48,620) (48,330)
Debt financing fees (6,150) — 
Shares surrendered upon exercise and vesting of equity awards to cover taxes (1,770) (1,830)
Payments to purchase common stock (2,640) (31,570)
Net cash provided by financing activities 340,820  116,560 
Cash and Cash Equivalents:
Increase for the period 347,190  33,640 
At beginning of period 73,950  172,470 
At end of period $ 421,140  $ 206,110 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 520  $ 370 
Cash paid for taxes $ 1,160  $ 1,850 



The accompanying notes are an integral part of these consolidated financial statements.
6

TriMas Corporation
Consolidated Statement of Shareholders' Equity
Three Months Ended March 31, 2021 and 2020
(Unaudited—dollars in thousands)
Common
Stock
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Balances, December 31, 2020 $ 430  $ 749,050  $ (159,610) $ (5,620) $ 584,250 
Net income —  —  13,060  —  13,060 
Other comprehensive income —  —  —  630  630 
Purchase of common stock —  (2,640) —  —  (2,640)
Shares surrendered upon exercise and vesting of equity awards to cover taxes —  (1,770) —  —  (1,770)
Non-cash compensation expense —  2,440  —  —  2,440 
Balances, March 31, 2021 $ 430  $ 747,080  $ (146,550) $ (4,990) $ 595,970 


Common
Stock
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Loss
Total
Balances, December 31, 2019 $ 450  $ 782,880  $ (79,850) $ (6,000) $ 697,480 
Net income —  —  13,120  —  13,120 
Other comprehensive loss —  —  —  (3,680) (3,680)
Purchase of common stock (20) (31,550) —  —  (31,570)
Shares surrendered upon exercise and vesting of equity awards to cover taxes —  (1,830) —  —  (1,830)
Non-cash compensation expense —  1,940  —  —  1,940 
Balances, March 31, 2020 $ 430  $ 751,440  $ (66,730) $ (9,680) $ 675,460 


The accompanying notes are an integral part of these consolidated financial statements.
7


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Basis of Presentation
TriMas Corporation ("TriMas" or the "Company"), and its consolidated subsidiaries, designs, engineers and manufactures innovative products under leading brand names for customers primarily in the consumer products, aerospace & defense, and industrial markets.
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries and, in the opinion of management, contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of financial position and results of operations. The preparation of financial statements requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results may differ from such estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the ongoing outbreak of the coronavirus and related variants (“COVID-19”). While the full impact of COVID-19 is unknown and cannot be reasonably estimated at this time, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are differences between these estimates and actual results, the Company's consolidated financial statements may be materially affected.
Results of operations for interim periods are not necessarily indicative of results for the full year. The accompanying consolidated financial statements and notes thereto should be read in conjunction with the Company's 2020 Annual Report on Form 10-K.
2. New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12"), which removes specific exceptions to the general principles in Topic 740, simplifies the accounting for income taxes and provides clarification of certain aspects of current guidance. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements.
3. Revenue
The following table presents the Company’s disaggregated net sales by primary market served (dollars in thousands):
Three months ended March 31,
Customer Markets 2021 2020
Consumer Products $ 105,120  $ 76,270 
Aerospace & Defense 44,610  48,920 
Industrial 57,000  57,600 
Total net sales $ 206,730  $ 182,790 
The Company’s Packaging segment earns revenues from the consumer products (comprised of the beauty and personal care, home care, food and beverage, pharmaceutical and nutraceutical submarkets) and industrial markets. The Aerospace segment earns revenues from the aerospace & defense market (comprised of commercial, regional and business jet and military submarkets). The Specialty Products segment earns revenues from a variety of submarkets within the industrial market.
8


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
4. Realignment Actions
In the three months ended March 31, 2021, the Company executed certain realignment actions in response to reductions in current and expected future end market demand. First, the Company closed its Packaging segment's Union City, California manufacturing facility, consolidating the operation into its Indianapolis, Indiana and Woodridge, Illinois facilities. The Company also realigned its Aerospace segment footprint, consolidating certain activities previously in its Stanton, California facilities into its Tolleson, Arizona facility. In addition, the Company also reorganized its corporate office legal group. The Company recorded pre-tax realignment charges of $4.1 million during the three months ended March 31, 2021, including facility consolidation cost of approximately $1.5 million and employee separation costs of approximately $2.6 million. As of March 31, 2021, approximately $0.4 million of the severance costs had been paid. Approximately $1.8 million and $2.3 million of these charges were included in costs of sales and selling, general and administrative expenses, respectively, in the accompanying consolidated statement of income.
5. Acquisitions
2020 Acquisitions
On December 15, 2020, the Company acquired Affaba & Ferrari Srl ("Affaba & Ferrari"), which specializes in the design, development and manufacture of precision caps and closures for food & beverage and industrial product applications, for an aggregate amount of approximately $98.4 million, net of cash acquired, subject to normal course adjustments, which are expected to be completed by mid-2021. The fair value of assets acquired and liabilities assumed included approximately $49.1 million of goodwill, $35.1 million of intangible assets, $9.4 million of net working capital, $17.4 million of property and equipment, and $12.6 million of net deferred tax liabilities. Affaba & Ferrari, which is reported in the Company's Packaging segment, operates out of a highly automated manufacturing facility and support office located in Borgo San Giovanni, Italy and historically generated approximately $34 million in annual revenue.
On April 17, 2020, the Company acquired the Rapak® brand, including certain bag-in-box product lines and assets ("Rapak"), for an aggregate amount of approximately $11.4 million. Rapak, which is reported in the Company's Packaging segment, has manufacturing locations in Indiana and Illinois and historically generated approximately $30 million in annual revenue.
On February 27, 2020, the Company acquired RSA Engineered Products ("RSA"), a manufacturer of complex, highly-engineered and proprietary ducting, connectors and related products for air management systems used in aerospace and defense applications, for an aggregate amount of approximately $83.7 million, net of cash acquired. The fair value of assets acquired and liabilities assumed included approximately $43.3 million of goodwill, $36.9 million of intangible assets, $10.1 million of net working capital, $2.1 million of property and equipment, and $8.7 million of net deferred tax liabilities. RSA, which is reported in the Company's Aerospace segment, is located in Simi Valley, California and historically generated approximately $30 million in annual revenue.
6. Cash and Cash Equivalents
Cash and cash equivalents consists of the following components (dollars in thousands):
  March 31,
2021
December 31,
2020
Cash and cash equivalents - unrestricted $ 409,980  $ 62,790 
Cash - restricted (a)
11,160  11,160 
Total cash and cash equivalents $ 421,140  $ 73,950 
__________________________
(a)     Includes cash placed on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit.
9


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
7. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the three months ended March 31, 2021 are summarized as follows (dollars in thousands):
Packaging Aerospace Specialty Products Total
Balance, December 31, 2020 $ 234,560  $ 62,850  $ 6,560  $ 303,970 
Foreign currency translation and other (3,360) —  —  (3,360)
Balance, March 31, 2021 $ 231,200  $ 62,850  $ 6,560  $ 300,610 
The Company amortizes its other intangible assets over periods ranging from one to 30 years. The gross carrying amounts and accumulated amortization of the Company's other intangibles are summarized below (dollars in thousands):
As of March 31, 2021 As of December 31, 2020
Intangible Category by Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Finite-lived intangible assets:
   Customer relationships, 5 – 12 years $ 121,760  $ (62,380) $ 122,970  $ (59,470)
   Customer relationships, 15 – 25 years 122,280  (63,870) 122,280  (62,450)
Total customer relationships 244,040  (126,250) 245,250  (121,920)
   Technology and other, 1 – 15 years 57,100  (33,640) 57,180  (32,800)
   Technology and other, 17 – 30 years 43,300  (39,570) 43,300  (39,450)
Total technology and other 100,400  (73,210) 100,480  (72,250)
Indefinite-lived intangible assets:
 Trademark/Trade names 54,030  —  54,640  — 
Total other intangible assets $ 398,470  $ (199,460) $ 400,370  $ (194,170)
Amortization expense related to intangible assets as included in the accompanying consolidated statement of operations is summarized as follows (dollars in thousands):
Three months ended March 31,
2021 2020
Technology and other, included in cost of sales $ 950  $ 1,210 
Customer relationships, included in selling, general and administrative expenses 4,440  3,640 
Total amortization expense $ 5,390  $ 4,850 
8. Inventories
Inventories consist of the following components (dollars in thousands):
  March 31,
2021
December 31,
2020
Finished goods $ 78,390  $ 78,010 
Work in process 31,500  29,680 
Raw materials 41,930  41,690 
Total inventories $ 151,820  $ 149,380 
10


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
9. Property and Equipment, Net
Property and equipment consists of the following components (dollars in thousands):
  March 31,
2021
December 31,
2020
Land and land improvements $ 19,810  $ 20,040 
Buildings 91,080  91,970 
Machinery and equipment 389,390  384,010 
500,280  496,020 
Less: Accumulated depreciation 249,130  242,960 
Property and equipment, net $ 251,150  $ 253,060 
Depreciation expense as included in the accompanying consolidated statement of operations is as follows (dollars in thousands):
Three months ended March 31,
2021 2020
Depreciation expense, included in cost of sales $ 7,560  $ 6,360 
Depreciation expense, included in selling, general and administrative expenses 290  300 
Total depreciation expense $ 7,850  $ 6,660 
10. Long-term Debt
The Company's long-term debt consists of the following (dollars in thousands):
  March 31,
2021
December 31,
2020
4.125% Senior Notes due April 2029 $ 400,000  $ — 
4.875% Senior Notes due October 2025 300,000  300,000 
Credit Agreement —  50,450 
Debt issuance costs (9,810) (4,160)
690,190  346,290 
Less: Current portion, long-term debt 300,000  — 
Long-term debt, net $ 390,190  $ 346,290 
Senior Notes due 2029
In March 2021, the Company issued $400.0 million aggregate principal amount of 4.125% senior notes due April 15, 2029 ("2029 Senior Notes") at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended. The Company used the proceeds from the 2029 Senior Notes offering to pay fees and expenses of approximately $5.1 million related to the offering and pay fees and expenses of $1.0 million related to amending its existing credit agreement. In connection with the offering, the Company issued a redemption notice for all of its outstanding senior notes due October 2025, and redeemed the entire $300.0 million principal amount subsequent to quarter end (on April 15, 2021). The remaining cash proceeds from the 2029 Senior Notes were used for general corporate purposes, including repaying all outstanding revolving credit facility borrowings. The $5.1 million of fees and expenses related to the 2029 Senior Notes were capitalized as debt issuance costs.
11


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The 2029 Senior Notes accrue interest at a rate of 4.125% per annum, payable semi-annually in arrears on April 15 and October 15, commencing on October 15, 2021. The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company (each a "Guarantor" and collectively the "Guarantors"). The 2029 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.
Prior to April 15, 2024, the Company may redeem up to 40% of the principal amount of the 2029 Senior Notes at a redemption price of 104.125% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of one or more equity offerings provided that each such redemption occurs within 90 days of the date of closing of each such equity offering. In addition, prior to April 15, 2024, the Company may redeem all or part of the 2029 Senior Notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus a "make whole" premium. On or after April 15, 2024, the Company may redeem all or part of the 2029 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
2024 102.063  %
2025 101.031  %
2026 and thereafter 100.000  %
Senior Notes due 2025
In September 2017, the Company issued $300.0 million aggregate principal amount of 4.875% senior notes due October 15, 2025 ("2025 Senior Notes") at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended. The 2025 Senior Notes accrue interest at a rate of 4.875% 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 (each a Guarantor and collectively the Guarantors). The 2025 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.
In connection with the issuance of the 2029 Senior Notes, the Company issued a notice to redeem all of the outstanding 2025 Senior Notes, as permitted under the indenture, at a price of 102.438% of the principal amount. The redemption was completed subsequent to quarter end, on April 15, 2021. See Note 20, "Subsequent Events," for further information on the 2025 Senior Note redemption.
12


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Credit Agreement
In March 2021, the Company amended its existing credit agreement ("Credit Agreement") in connection with the issuance of the 2029 Senior Notes to extend the maturity date. The Company incurred fees and expenses of approximately $1.0 million related to the amendment, all of which was capitalized as debt issuance costs. The Company also recorded approximately $0.2 million of non-cash expense related to the write-off of previously capitalized deferred financing fees.
Below is a summary of key terms under the Credit Agreement as of March 31, 2021, compared to the key terms prior to the amendment (showing gross availability):
Instrument Amount
($ in millions)
Maturity
Date
Interest Rate
Credit Agreement (as amended)
Senior secured revolving credit facility $300.0 3/29/2026
LIBOR(a) plus 1.500%(b)
Credit Agreement (prior to amending)
Senior secured revolving credit facility $300.0 9/20/2022
LIBOR(a) plus 1.500%(b)
__________________________
(a)     London Interbank Offered Rate ("LIBOR")
(a)     The interest rate spread is based upon the leverage ratio, as defined, as of the most recent determination date.
The Credit Agreement also provides incremental revolving credit facility 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, 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.
The Company's revolving credit facility allows for the issuance of letters of credit, not to exceed $40.0 million in aggregate. The Company places cash on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit; therefore, as of March 31, 2021 and December 31, 2020, the Company had no letters of credit issued against its revolving credit facility. See Note 6, "Cash and Cash Equivalents," for further information on its cash deposit. At March 31, 2021, the Company had no amounts outstanding under its revolving credit facility and had $300.0 million potentially available after giving effect to letters of credit issued and outstanding. At December 31, 2020, the Company had $50.5 million outstanding under its revolving credit facility and had approximately $249.5 million potentially available. The Company's borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of March 31, 2021 and December 31, 2020.
The debt under the Credit Agreement is an obligation of the Company and certain of its domestic subsidiaries and is secured by substantially all of the assets of such parties. Borrowings under the $125.0 million (equivalent) foreign currency sub limit of the $300.0 million senior secured revolving credit facility are secured by a cross-guarantee amongst, and a pledge of the assets of, the foreign subsidiary borrowers that are a party to the agreement.  The Credit Agreement also contains various negative and affirmative covenants and other requirements affecting the Company and its subsidiaries, including the ability, subject to certain exceptions and limitations, to incur debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, assets 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 the Credit Agreement also require the Company and its restricted 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), a maximum senior secured net leverage ratio (total consolidated senior secured indebtedness, 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). At March 31, 2021, the Company was in compliance with its financial covenants contained in the Credit Agreement.
13


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Fair Value of Debt
The valuations of the Senior Notes and revolving credit facility were determined based on Level 2 inputs under the fair value hierarchy, as defined. The carrying amounts and fair values were as follows (dollars in thousands):
March 31, 2021 December 31, 2020
Carrying Amount Fair Value Carrying Amount Fair Value
4.125% Senior Notes due April 2029 $ 400,000  $ 400,000  $ —  $ — 
4.875% Senior Notes due October 2025 300,000  307,500  300,000  305,630 
Revolving credit facility —  —  50,450  50,450 
11. Derivative Instruments
Derivatives Designated as Hedging Instruments
The Company uses cross-currency swap contracts to hedge its net investment in Euro-denominated assets against future volatility in the exchange rate between the U.S. dollar and the Euro. By doing so, the Company synthetically converts a portion of its U.S. dollar-based long-term debt into Euro-denominated long-term debt. At inception, the Company designates its cross-currency swaps as net investment hedges.
As of March 31 2021, the Company had cross-currency swap agreements at notional amounts totaling $200.0 million, which declines to $25.0 million over various contract periods ending between October 15, 2023 and April 15, 2027. Under the terms of the agreements, the Company is to receive net interest payments at fixed rates ranging from approximately 0.8% to 2.9% of the notional amounts.
As of March 31, 2021 and December 31, 2020, the fair value carrying amount of the Company's derivatives designated as hedging instruments are recorded as follows (dollars in thousands):
    Asset / (Liability) Derivatives
Derivatives designated as hedging instruments Balance Sheet Caption March 31,
2021
December 31,
2020
Net Investment Hedges        
Cross-currency swaps Other assets $ 190  $ — 
Cross-currency swaps Other long-term liabilities —  (5,000)
The following table summarizes the income recognized in accumulated other comprehensive income (loss) ("AOCI") on derivative contracts designated as hedging instruments as of March 31, 2021 and December 31, 2020, and the amounts reclassified from AOCI into earnings for the three months ended March 31, 2021 and 2020 (dollars in thousands):
Amount of Income (Loss) Recognized
in AOCI on Derivative
(Effective Portion, net of tax)
Amount of Income (Loss) Reclassified
from AOCI into Earnings
Three months ended
March 31,
As of
March 31,
2021
As of December 31, 2020 Location of Income (Loss) Reclassified from AOCI into Earnings (Effective Portion) 2021 2020
Net Investment Hedges
Cross-currency swaps $ 320  $ (3,580) Other expense, net $ —  $ — 
Over the next 12 months, the Company does not expect to reclassify any pre-tax deferred amounts from AOCI into earnings.
14


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Derivatives Not Designated as Hedging Instruments
As of March 31, 2021, the Company was party to foreign currency exchange forward contracts to economically hedge changes in foreign currency rates with notional amounts of approximately $132.7 million. The Company uses foreign exchange contracts to mitigate the risk associated with fluctuations in currency rates impacting cash flows related to certain of its receivables, payables and intercompany transactions denominated in foreign currencies. The foreign exchange contracts primarily mitigate currency exposures between the U.S. dollar and the Euro, British pound, Mexican peso and the Chinese yuan, and have various settlement dates through December 2021. These contracts are not designated as hedge instruments; therefore, gains and losses on these contracts are recognized each period directly into the consolidated statement of income.
The following table summarizes the effects of derivatives not designated as hedging instruments on the Company's consolidated statement of income (dollars in thousands):
Amount of Income (Loss) Recognized in
Earnings on Derivatives
Three months ended
March 31,
Location of Income (Loss)
Recognized in
Earnings on Derivatives
2021 2020
Derivatives not designated as hedging instruments
Foreign exchange contracts Other expense, net $ 4,020  $ (70)
Fair Value of Derivatives
The fair value of the Company's derivatives are estimated using an income approach based on valuation techniques to convert future amounts to a single, discounted amount. Estimates of the fair value of the Company's cross-currency swaps and foreign exchange contracts use observable inputs such as interest rate yield curves and forward currency exchange rates. Fair value measurements and the fair value hierarchy level for the Company's assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 are shown below (dollars in thousands):  
Description Frequency Asset / (Liability) Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
March 31, 2021
Cross-currency swaps Recurring $ 190  $ —  $ 190  $ — 
Foreign exchange contracts Recurring $ 330  $ —  $ 330  $ — 
December 31, 2020
Cross-currency swaps Recurring $ (5,000) $ —  $ (5,000) $ — 
Foreign exchange contracts Recurring $ 140  $ —  $ 140  $ — 
12. Leases
The Company leases certain equipment and facilities under non-cancelable operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet; expense related to these leases is recognized on a straight-line basis over the lease term.
15


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The components of lease expense are as follows (dollars in thousands):
Three months ended March 31,
2021 2020
Operating lease cost $ 2,140  $ 1,650 
Short-term, variable and other lease costs 430  310 
Total lease cost $ 2,570  $ 1,960 
Maturities of lease liabilities are as follows (dollars in thousands):
Year ended December 31,
Operating Leases(a)
2021 (excluding the three months ended March 31, 2021) $ 5,710 
2022 7,300 
2023 6,450 
2024 5,560 
2025 4,390 
Thereafter 12,620 
Total lease payments 42,030 
Less: Imputed interest (5,160)
Present value of lease liabilities $ 36,870 
__________________________
(a)     The maturity table excludes cash flows associated with exited lease facilities. Liabilities for exited lease facilities are included in accrued liabilities and other long-term liabilities in the accompanying consolidated balance sheet.
The weighted-average remaining lease term of the Company's operating leases as of March 31, 2021 is approximately 6.6 years. The weighted-average discount rate as of March 31, 2021 is approximately 4.3%.
Cash paid for amounts included in the measurement of operating lease liabilities was approximately $2.2 million and $1.7 million during the three months ended March 31, 2021 and 2020, respectively, and is included in cash flows provided by operating activities in the consolidated statement of cash flows.
Right-of-use assets obtained in exchange for lease liabilities were approximately $1.9 million and $2.9 million during the three months ended March 31, 2021 and 2020, respectively.
13. Other long-term liabilities
Other long-term liabilities consist of the following components (dollars in thousands):
  March 31,
2021
December 31,
2020
Non-current asbestos-related liabilities $ 25,420  $ 26,170 
Other long-term liabilities 35,870  43,520 
Total other long-term liabilities $ 61,290  $ 69,690 
16


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
14. Commitments and Contingencies
Asbestos
As of March 31, 2021, the Company was a party to 347 pending cases involving an aggregate of 4,676 claimants primarily alleging personal injury from exposure to asbestos containing materials formerly used in gaskets (both encapsulated and otherwise) manufactured or distributed by its former Lamons division and certain other related subsidiaries for use primarily in the petrochemical, refining and exploration industries. The following chart summarizes the number of claims, number of claims filed, number of claims dismissed, number of claims settled, the average settlement amount per claim and the total defense costs, at the applicable date and for the applicable periods:
  Claims
pending at
beginning of
period
Claims filed
during
period
Claims
dismissed
during
period
Claims
settled
during
period
Claims
pending at
end of
period
Average
settlement
amount per
claim during
period
Total defense
costs during
period
Three Months Ended March 31, 2021 4,655  62  35  4,676  $ 37,917  $ 530,000 
Fiscal Year Ended December 31, 2020 4,759  219  287  36  4,655  $ 18,314  $ 2,130,000 
In addition, the Company acquired various companies to distribute its products that had distributed gaskets of other manufacturers prior to acquisition. The Company believes that many of its pending cases relate to locations at which none of its gaskets were distributed or used.
The Company may be subjected to significant additional asbestos-related claims in the future, and will aggressively defend or reasonably resolve, as appropriate. The cost of settling cases in which product identification can be made may increase, and the Company may be subjected to further claims in respect of the former activities of its acquired gasket distributors. The cost of claims varies as claims may be initially made in some jurisdictions without specifying the amount sought or by simply stating the requisite or maximum permissible monetary relief, and may be amended to alter the amount sought. The large majority of claims do not specify the amount sought. Of the 4,676 claims pending at March 31, 2021, 34 set forth specific amounts of damages (other than those stating the statutory minimum or maximum). At March 31, 2021, of the 34 claims that set forth specific amounts, there was one claim seeking more than $5 million for punitive damages. Below is a breakdown of the compensatory damages sought for those claims seeking specific amounts:
Compensatory
Range of damages sought (dollars in millions) $0.0 to $0.6 $0.6 to $5.0 $5.0+
Number of claims 7 27
Relatively few claims have reached the discovery stage and even fewer claims have gone past the discovery stage. Total settlement costs (exclusive of defense costs) for all such cases, some of which were filed over 25 years ago, have been approximately $10.3 million. All relief sought in the asbestos cases is monetary in nature. Based on the settlements made to date and the number of claims dismissed or withdrawn for lack of product identification, the Company believes that the relief sought (when specified) does not bear a reasonable relationship to its potential liability.
There has been significant volatility in the historical number of claim filings and costs to defend, with previous claim counts and spend levels much higher than current levels. Management believes this volatility was associated more with tort reform, plaintiff practices and state-specific legal dockets than the Company’s underlying asbestos-related exposures. From 2017 to 2019, however, the number of new claim filings, and costs to defend, had become much more consistent, ranging between 143 to 173 new claims per year and total defense costs ranging between $2.2 million and $2.3 million.
17


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
The higher degree of consistency in census data and spend levels, as well as lower claim activity levels and an evolving defense strategy, has allowed the Company to more effectively and efficiently manage claims, making process or local counsel arrangement improvements where possible. Given the consistency of activity over a multi-year period, the Company believed a trend may have formed where it could be possible to reasonably estimate its future cash exposure for all asbestos-related activity with an adequate level of precision. As such, the Company commissioned an actuary to help evaluate the nature and predictability of its asbestos-related costs, and provide an actuarial range of estimates of future exposures. Based upon its review of the actuarial study, which was completed in June 2020 using data as of December 31, 2019 and which projected spend levels through a terminal year of 2064, the Company affirmed its belief that it now has the ability to reasonably estimate its future asbestos-related exposures for pending as well as unknown future claims.
During the second quarter 2020, the Company elected to change its method of accounting for asbestos-related defense costs from accruing for probable and reasonably estimable defense costs associated with known claims expected to settle to accrue for all future defense costs for both known and unknown claims, which the Company now believes are reasonably estimable. The Company believes this change is preferable, as asbestos-related defense costs represent expenditures related to legacy activities that do not contribute to current or future revenue generating activities, and recording an estimate of the full liability for asbestos-related costs, where estimable with reasonable precision, provides a more complete assessment of the liability associated with resolving asbestos-related claims. This accounting change was reflected as a change in accounting estimate effected by a change in accounting principle.
Following the change in accounting estimate, the Company’s liability for asbestos-related claims will be based on a study from the Company’s third-party actuary, the Company's review of the study, as well as the Company’s own review of asbestos claims and claim resolution activity. The study from the Company’s actuary, based on data as of December 31, 2019, provided for a range of possible future liability from $31.5 million to $43.3 million. The Company did not believe any amount within the range of potential outcomes represented a better estimate than another given the many factors and assumptions inherent in the projections, and therefore recorded a $23.4 million charge in second quarter 2020 to increase the liability estimate to $31.5 million, at the low-end of the range. As of March 31, 2021, the Company’s total asbestos-related liability is $27.9 million, and is included in accrued liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheet.
The Company’s primary insurance, which covered approximately 40% of historical costs related to settlement and defense of asbestos litigation, expired in November 2018, upon which the Company became solely responsible for defense costs and indemnity payments. The Company is party to a coverage-in-place agreement (entered into in 2006) with its first level excess carriers regarding the coverage to be provided to the Company for asbestos-related claims. The coverage-in-place agreement makes asbestos defense costs and indemnity insurance coverage available to the Company that might otherwise be disputed by the carriers and provides a methodology for the administration of such expenses. The Company will continue to be solely responsible for defense costs and indemnity payments prior to the commencement of coverage under this agreement, the duration of which would be subject to the scope of damage awards and settlements paid. Based upon the Company’s review of the actuarial study, the Company does not believe it is probable that it will reach the threshold of qualified future settlements required to commence excess carrier insurance coverage under the coverage-in-place agreement.
Based upon the Company's experience to date, including the trend in annual defense and settlement costs incurred to date, and other available information (including the availability of excess insurance), the Company does not believe these cases will have a material adverse effect on its financial position, results of operations, or cash flows.
Claims and Litigation
The Company is subject to other claims and litigation in the ordinary course of business, but does not believe that any such claim or litigation will have a material adverse effect on its financial position and results of operations or cash flows.
18


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
15. Segment Information
TriMas reports its operations in three segments: Packaging, Aerospace, and Specialty Products. Each of these segments has discrete financial information that is regularly evaluated by TriMas' president and chief executive officer (chief operating decision maker) in determining resource, personnel and capital allocation, as well as assessing strategy and performance. The Company utilizes its proprietary TriMas Business Model as its platform which is based upon a standardized set of processes to manage and drive results and strategy across its multi-industry businesses.
Within each of the Company's reportable segments, there are no individual products or product families for which reported net sales accounted for more than 10% of the Company's consolidated net sales. See below for more information regarding the types of products and services provided within each reportable segment:
Packaging – The Packaging segment, which consists primarily of the Rieke®, Taplast, Affaba & Ferrari, Stolz and Rapak® brands, develops and manufactures a broad array of dispensing products (such as foaming pumps, lotion and hand soap pumps, sanitizer pumps, beverage dispensers, perfume sprayers, nasal sprayers and trigger sprayers), polymeric and steel caps and closures (such as food lids, flip-top closures, child resistance caps, beverage closures, drum and pail closures, flexible spouts, and agricultural closures), polymeric jar products, and fully integrated dispensers for fill-ready bag-in-box applications, all for a variety of consumer products submarkets including, but not limited to, beauty and personal care, food and beverage, home care, and pharmaceutical and nutraceutical, as well as the industrial market.
Aerospace – The Aerospace segment, which includes the Monogram Aerospace Fasteners, Allfast Fastening Systems®, Mac Fasteners, RSA Engineered Products and Martinic Engineering brands, develops, qualifies and manufactures highly-engineered, precision fasteners, tubular products and assemblies for fluid conveyance, and machined products and assemblies to serve the aerospace and defense market.
Specialty Products – The Specialty Products segment, which includes the Norris Cylinder and Arrow® Engine brands, designs, manufactures and distributes highly-engineered steel cylinders, wellhead engines and compression systems for use within industrial markets.
Segment activity is as follows (dollars in thousands):
  Three months ended
March 31,
  2021 2020
Net Sales
Packaging $ 132,090  $ 100,050 
Aerospace 44,610  48,920 
Specialty Products 30,030  33,820 
Total $ 206,730  $ 182,790 
Operating Profit (Loss)
Packaging $ 21,300  $ 18,280 
Aerospace 4,500  5,080 
Specialty Products 4,520  3,430 
Corporate (9,210) (6,960)
Total $ 21,110  $ 19,830 
19


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
16. Equity Awards
Stock Options
The Company recognized no stock-based compensation expense related to stock options during the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021, there was no unrecognized compensation costs related to stock options remaining. Information related to stock options at March 31, 2021 is as follows:
Number of
Stock Options
Weighted Average Option Price Average  Remaining Contractual Life (Years) Aggregate Intrinsic Value
Outstanding at January 1, 2021 150,000  $ 17.87 
Granted —  — 
  Exercised (150,000) 17.87 
  Cancelled —  — 
  Expired —  — 
Outstanding at March 31, 2021 —  $ —  —  $ — 
Restricted Stock Units
The Company awarded the following restricted stock units ("RSUs") during the three months ended March 31, 2021:
granted 113,504 RSUs to certain employees, which are subject only to a service condition and vest ratably over three years so long as the employee remains with the Company;
granted 21,112 RSUs to its non-employee independent directors, which fully vest one year from date of grant so long as the director and/or Company does not terminate the director's service prior to the vesting date; and
issued 450 RSUs related to director fee deferrals during the three months ended March 31, 2021 as certain of the Company's directors elected to defer all or a portion of their directors fees and to receive the amount in Company common stock at a future date.
During 2021, the Company awarded 72,962 performance-based RSUs to certain Company key employees which vest three years from the grant date as long as the employee remains with the Company. These awards are earned 50% based upon the Company's achievement of an earnings per share compound annual growth rate ("EPS CAGR") metric over a period beginning January 1, 2021 and ending December 31, 2023. The remaining 50% of the awards are earned based on the Company's total shareholder return ("TSR") relative to the TSR of the common stock of a pre-defined industry peer-group, measured over the performance period. TSR is calculated as the Company's average closing stock price for the 20 trading days at the end of the performance period plus Company dividends, divided by the Company's average closing stock price for the 20 trading days prior to the start of the performance period. The Company estimates the grant-date fair value subject to a market condition using a Monte Carlo simulation model, using the following weighted average assumptions: risk-free rate of 0.28% and annualized volatility of 35.5%. Depending on the performance achieved for these two metrics, the amount of shares earned, if any, can vary for each metric from 0% of the target award to a maximum of 200% of the target award. For similar performance-based RSUs awarded in 2018, the Company attained 126.2% of the target on a weighted average basis, resulting in an increase of 25,993 shares during the three months ended March 31, 2021.
20


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
Information related to RSUs at March 31, 2021 is as follows:
Number of Unvested RSUs Weighted Average Grant Date Fair Value Average Remaining Contractual Life (Years) Aggregate Intrinsic Value
Outstanding at January 1, 2021 784,968  $ 26.46 
  Granted 234,021  34.63 
  Vested (86,763) 22.88 
  Cancelled (1,847) 25.93 
Outstanding at March 31, 2021 930,379  $ 28.85  1.3 $ 28,209,091 
As of March 31, 2021, there was approximately $12.5 million of unrecognized compensation cost related to unvested RSUs that is expected to be recorded over a weighted average period of 2.4 years.
The Company recognized stock-based compensation expense related to RSUs of approximately $2.4 million and $1.9 million during the three months ended March 31, 2021 and 2020, respectively. The stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statement of income.
17. Earnings per Share
Net income is divided by the weighted average number of common shares outstanding during the period to calculate basic earnings per share. Diluted earnings per share is calculated to give effect to stock options and RSUs. The following table summarizes the dilutive effect of RSUs and options to purchase common stock for the three months ended March 31, 2021 and 2020:
Three months ended
March 31,
2021 2020
Weighted average common shares—basic 43,185,007  44,201,053 
Dilutive effect of restricted stock units 400,685  217,074 
Dilutive effect of stock options 49,184  52,345 
Weighted average common shares—diluted 43,634,876  44,470,472 
In March 2020, the Company announced its Board of Directors had authorized the Company to increase the purchase of its common stock up to $250 million in the aggregate.  The initial authorization, approved in November 2015, authorized up to $50 million of purchases in the aggregate of its common stock. In the three months ended March 31, 2021, the Company purchased 82,171 shares of its outstanding common stock for approximately $2.6 million. During the three months ended March 31, 2020, the Company purchased 1,253,650 shares of its outstanding common stock for approximately $31.6 million. As of March 31, 2021, the Company has approximately $159.1 million remaining under the repurchase authorization.
21


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
18. Defined Benefit Plans
Net periodic pension benefit costs for the Company's defined benefit pension plans cover certain foreign employees, union hourly employees and salaried employees. The components of net periodic pension cost are as follows (dollars in thousands):
  Pension Plans
  Three months ended
March 31,
  2021 2020
Service costs $ 330  $ 320 
Interest costs 200  240 
Expected return on plan assets (390) (370)
Amortization of net loss 230  220 
Net periodic benefit cost $ 370  $ 410 
The service cost component of net periodic benefit cost is recorded in cost of goods sold and selling, general and administrative expenses, while non-service cost components are recorded in other income (expense), net in the accompanying consolidated statement of income.
The Company contributed approximately $1.5 million to its defined benefit pension plans during the three months ended March 31, 2021. The Company expects to contribute approximately $3.6 million to its defined benefit pension plans for the full year 2021.
22


TRIMAS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
19. Other Comprehensive Income (Loss)
Changes in AOCI by component for the three months ended March 31, 2021 are summarized as follows, net of tax (dollars in thousands):
Defined Benefit Plans  Derivative Instruments Foreign Currency Translation Total
Balance, December 31, 2020 $ (8,620) $ (3,580) $ 6,580  $ (5,620)
Net unrealized gains (losses) arising during the period (a)
—  3,900  (3,420) 480 
Less: Net realized losses reclassified to net income (150) —  —  (150)
Net current-period other comprehensive income (loss) 150  3,900  (3,420) 630 
Balance, March 31, 2021 $ (8,470) $ 320  $ 3,160  $ (4,990)
__________________________
(a)     Derivative instruments, net of income tax of approximately $1.3 million. See Note 11, "Derivative Instruments," for further details.
Changes in AOCI by component for the three months ended March 31, 2020 are summarized as follows, net of tax (dollars in thousands):
Defined Benefit Plans  Derivative Instruments Foreign Currency Translation Total
Balance, December 31, 2019 $ (9,930) $ 4,230  $ (300) $ (6,000)
Net unrealized gains (losses) arising during the period (a)
—  4,430  (8,260) (3,830)
Less: Net realized losses reclassified to net income (150) —  —  (150)
Net current-period other comprehensive income (loss) 150  4,430  (8,260) (3,680)
Balance, March 31, 2020 $ (9,780) $ 8,660  $ (8,560) $ (9,680)
__________________________
(a)     Derivative instruments, net of income tax of approximately $1.5 million. See Note 11, "Derivative Instruments," for further details.
20. Subsequent Events
On April 15, 2021, the Company completed the redemption of all of its outstanding 2025 Senior Notes, paying cash of $314.6 million to redeem the $300.0 million outstanding principal amount, plus a $7.3 million redemption premium and $7.3 million of accrued interest through the date of the redemption.
23

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations
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, 2020.
Introduction
We are a diversified manufacturer and provider of products for customers primarily in the consumer products, aerospace & defense and industrial markets. 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 focused markets we serve; innovative product technologies and features; a high-degree of customer approved processes and qualifications; established distribution networks; relatively low ongoing 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  
Our businesses and results of operations depend upon general economic conditions. We serve customers in industries that are highly competitive, cyclical and that may be significantly impacted by changes in economic or geopolitical conditions.
In March 2020, the President of the United States declared the coronavirus ("COVID-19") outbreak a national emergency, as the World Health Organization determined it was a pandemic. In response to the COVID-19 pandemic, federal, provincial, state, county and local governments and public health organizations or authorities around the world have implemented a variety of measures intended to control the spread of the virus, including quarantines, "shelter-in-place" or "stay-at-home" and similar orders, travel restrictions, business curtailments and closures, social distancing, personal hygiene requirements, and other measures.
We have been, and continue to be, focused on making sure the working environments for our employees are safe so our operations have the ability to deliver the products needed to support efforts to mitigate the COVID-19 pandemic. Nearly all of our manufacturing sites have been deemed essential operations and remained open during the pandemic, at varying levels of capacity and efficiency, experiencing only temporary shutdowns due to country-specific government mandates or for thorough cleaning as a result of suspected COVID-19 cases. The health of our employees, and the ability of our facilities to remain operational in the current regulated environment, will be critical to our future results of operations.
Our divisions were impacted in first quarter 2020 at differing levels and times, beginning with our Asian facilities and strategic supply network, both primarily in China, in late January, followed by our European (primarily Italy) and North American facilities in February and March. We implemented new work rules and processes, which promote social distancing and increased hygiene to ensure the safety of our employees, particularly at our production facilities. These measures, while not easily quantifiable, have increased the level of manufacturing inefficiencies due to elevated levels of absenteeism, resulting in less efficient production scheduling and, in certain cases, short-term idling of production. We expect that we will continue to operate with these protocols in place, which have impacted our results since early 2020.
Overall, our first quarter 2021 net sales increased approximately $23.9 million, or 13.1%, compared to first quarter 2020, primarily as a result of robust organic sales growth as well as acquisitions in our Packaging segment, particularly for dispensing and closure products we supply that are used in applications to fight the spread of germs. These increases were partially offset by declines in sales in our Aerospace and Specialty Products segments, primarily related to the effects of the COVID-19 pandemic.
The most significant drivers affecting our results of operations and our financial position in first quarter 2021 compared with first quarter 2020, other than as directly impacted by demand level changes as a result of the COVID-19 pandemic, were the refinancing of our long-term debt agreements, the impact of our recent acquisitions, increases in the cost of certain raw materials and our first quarter 2021 realignment actions.
24

In March 2021, we refinanced our long-term debt, issuing $400 million principal amount of 4.125% senior unsecured notes due April 15, 2029 ("2029 Senior Notes") at par value in a private placement offering, and amending our existing credit agreement ("Credit Agreement"), extending the maturity to March 2026. We used the proceeds from the 2029 Senior Notes offering to pay fees and expenses of approximately $5.1 million related to the offering and approximately $1.0 million related to amending the Credit Agreement. In connection with this offering, we issued a redemption notice for all of our outstanding senior notes due October 2025, and redeemed the entire $300.0 million principal amount subsequent to quarter end (on April 15, 2021). The remaining cash proceeds from the 2029 Senior Notes were used for general corporate purposes, including repaying all outstanding revolving credit facility borrowings. The fees and expenses of approximately $6.1 million paid in connection with our refinancing-related activities were capitalized as deferred financing fees, and we recorded non-cash charges of approximately $0.2 million related to the write-off of previously capitalized deferred financing fees.
In December 2020, we completed the acquisition of Affaba & Ferrari Srl ("Affaba & Ferrari"), which specializes in the design, development and manufacture of precision caps and closures for food & beverage and industrial product applications, for an aggregate amount of approximately $98.4 million, net of cash acquired, subject to normal course adjustments, which are expected to be completed by mid-2021. Affaba & Ferrari, which is reported in the Company's Packaging segment, operates out of a highly automated manufacturing facility and support office located in Borgo San Giovanni, Italy. Affaba & Ferrari contributed approximately $8.1 million of net sales during first quarter 2021.
In April 2020, we acquired the Rapak brand, including certain bag-in-box product lines and assets ("Rapak"), for an aggregate amount of approximately $11.4 million. Rapak, which is reported in our Packaging segment, has two manufacturing locations in the United States. Rapak contributed approximately $5.3 million of net sales during first quarter 2021, although it is performing below break-even operating profit, resulting in lower overall operating profit margin for the Packaging segment of more than 140 basis points even after considering its first quarter 2021 realignment expenses, as demand for its products, particularly those used in quick service restaurant applications, has significantly declined from pre-acquisition levels in 2019 due to the impact of the COVID-19 pandemic.
In February 2020, we completed the acquisition of RSA Engineered Products ("RSA"), a provider of highly-engineered and proprietary components for air management systems used in critical flight applications, for an aggregate amount of approximately $83.7 million, net of cash acquired. RSA, which is reported in our Aerospace segment, is located in Simi Valley, California, and designs, engineers and manufactures highly-engineered components, including air ducting products, connectors and flexible joints, predominantly used in aerospace and defense engine bleed air, anti-icing and environmental control system applications. RSA contributed approximately $4.3 million of net sales during first two months of 2021, and March and future sales will be considered as organic sales changes as we have now owned RSA for more than one year.
During first quarter 2021, we experienced an increase in material costs compared with first quarter 2020, primarily for resin-based raw materials and components, as well as for certain types of steel. We have escalator/de-escalator clauses in our commercial contracts with certain of our customers, or can modify prices based on market conditions, and we have been taking actions to recover the increased cost of raw materials. We estimate that due to the lag in timing between incurring the cost increases and recovering via commercial actions, our operating profit was negatively impacted by approximately $2.0 million in first quarter 2021, primarily in our Packaging segment.
Since second quarter 2020, we have been executing certain realignment actions in response to reductions in current and expected future end market demand following the onset of the COVID-19 pandemic. In first quarter 2021, we closed our Packaging segment's Union City, California manufacturing facility, consolidating the operation into the Indianapolis, Indiana and Woodridge, Illinois facilities. We also realigned our Aerospace segment footprint, consolidating certain activities previously in the Stanton, California facilities into the Tolleson, Arizona facility. In addition, we also reorganized our corporate office legal group. As a result of these realignment efforts, we recorded pre-tax facility consolidation and employee separation costs of approximately $1.5 million and $2.6 million, respectively, during the three months ended March 31, 2021, of which approximately $0.4 million was paid by March 31, 2021.

25

Additional Key Risks that May Affect Our Reported Results
We expect the COVID-19 pandemic will continue to impact us in the future at varying degrees. We expect the robust customer demand for our Packaging segment's dispensing pumps and closure products used in personal care and home care applications that fight the spread of germs will continue, as we believe there is a new secular trend for higher levels of health and cleanliness. We are actively collaborating with our customers and strategic supply partners to manage production capacity and supply chain availability as efficiently as possible. Industrial demand in North America was lower in 2020 compared to previous levels, and we are uncertain how and when demand will be impacted as many of the shelter-in-place orders are adjusted or lifted in 2021, particularly in North America, where orders for our industrial cylinders, for example, are heavily influenced by the levels of construction and HVAC activity. We expect the aerospace market to continue to experience the most severe dislocation going forward. With the current travel restrictions and significant drop in passenger miles, aircraft manufacturers have now significantly slowed production, and since second quarter 2020 we have experienced a significant drop in aerospace-related sales compared to prior levels. We expect the current lower levels of sales and related production to continue for the foreseeable future.
We have executed significant realignment actions since the onset of the COVID-19 pandemic, primarily in our Aerospace and Specialty Products segments, and also in certain Packaging product areas where demand has fallen, such as in the quick service and restaurant applications, to protect against the uncertain end market demand. We will continue to assess further actions if required. However, as a result of the COVID-19 pandemic's impact on global economic activity, and the continued potential impact to our future results of operations, as well if there is an impact to TriMas' market capitalization, we may record additional cash and non-cash charges related to incremental realignment actions, as well as for uncollectible customer account balances, excess inventory and idle production equipment.
Despite the potential decline in future demand levels and results of operations as a result of the COVID-19 pandemic, at present, we believe our capital structure is in a solid position, even more so following our first quarter 2021 debt refinancing, and we have ample 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.
The extent of the COVID-19 pandemic's effect on our operational and financial performance will depend in large part on future
developments, which cannot be predicted with confidence at this time. Future developments include the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, timing of widespread vaccine availability, and the resumption of widespread economic activity. Due to the inherent uncertainty of the unprecedented and rapidly evolving situation, we are unable to predict with any confidence the likely impact of the COVID-19 pandemic on our future operations.
Beyond the unique risks presented by the COVID-19 pandemic, other critical factors affecting our ability to succeed include: our ability to create 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 new distribution channels or customers, expand our geographic coverage or enable better absorption of overhead costs; our ability to manage our cost structure more efficiently via supply base 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.
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. Given the short-cycle nature of most of our businesses, we do not consider sales order backlog to be a material factor. 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 resins (such as polypropylene and polyethylene), steel, aluminum and other oil and metal-based purchased components. In addition to the factors affecting our first quarter 2021 results, there has been some volatility over the past two years 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, and certain North American suppliers have opportunistically increased their prices. We will continue to take actions, to mitigate such increases, including implementing commercial pricing adjustments, resourcing to alternate suppliers and insourcing of previously sourced products to better leverage our global manufacturing footprint. 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.
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Although we have escalator/de-escalator clauses in commercial contracts with certain of our customers, or can modify prices based on market conditions to recover higher costs, our price increases generally lags the underlying material cost increase, and we cannot be assured of full cost recovery in the open market.
Our Arrow Engine business in our Specialty Products segment is sensitive to the demand for natural gas and crude oil in North America. For example, demand for engine, pump jack and compressor products are impacted by active oil and gas rig counts and wellhead investment activities. Separately, oil-based commodity costs are a significant driver of raw materials and purchased components used within our Packaging segment.
Each year, as a core tenet of the TriMas Business Model, our businesses target cost savings from Kaizen and 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 first quarter 2021, we purchased 82,171 shares of our outstanding common stock for approximately $2.6 million. As of March 31, 2021, we had approximately $159.1 million remaining under the repurchase authorization. We will continue to evaluate opportunities to return capital to shareholders through the purchase of our common stock, depending on market conditions and other factors.

27

Segment Information and Supplemental Analysis
The following table summarizes financial information for our reportable segments for the three months ended March 31, 2021 and 2020 (dollars in thousands):
Three months ended March 31,
  2021 As a Percentage
of Net Sales
2020 As a Percentage
of Net Sales
Net Sales
Packaging $ 132,090  63.9  % $ 100,050  54.7  %
Aerospace 44,610  21.6  % 48,920  26.8  %
Specialty Products 30,030  14.5  % 33,820  18.5  %
Total $ 206,730  100.0  % $ 182,790  100.0  %
Gross Profit
Packaging $ 33,870  25.6  % $ 28,680  28.7  %
Aerospace 10,970  24.6  % 11,910  24.3  %
Specialty Products 6,490  21.6  % 5,780  17.1  %
Total $ 51,330  24.8  % $ 46,370  25.4  %
Selling, General and Administrative Expenses
Packaging $ 12,570  9.5  % $ 10,400  10.4  %
Aerospace 6,470  14.5  % 6,830  14.0  %
Specialty Products 1,970  6.6  % 2,350  6.9  %
Corporate 9,210  N/A 6,960  N/A
Total $ 30,220  14.6  % $ 26,540  14.5  %
Operating Profit (Loss)
Packaging $ 21,300  16.1  % $ 18,280  18.3  %
Aerospace 4,500  10.1  % 5,080  10.4  %
Specialty Products 4,520  15.1  % 3,430  10.1  %
Corporate (9,210) N/A (6,960) N/A
Total $ 21,110  10.2  % $ 19,830  10.8  %
Depreciation
Packaging $ 5,170  3.9  % $ 4,090  4.1  %
Aerospace 1,780  4.0  % 1,690  3.5  %
Specialty Products 870  2.9  % 840  2.5  %
Corporate 30  N/A 40  N/A
Total $ 7,850  3.8  % $ 6,660  3.6  %
Amortization
Packaging $ 2,400  1.8  % $ 2,330  2.3  %
Aerospace 2,880  6.5  % 2,400  4.9  %
Specialty Products 110  0.4  % 120  0.4  %
Corporate —  N/A —  N/A
Total $ 5,390  2.6  % $ 4,850  2.7  %









28

Results of Operations
The principal factors impacting us during the three months ended March 31, 2021, compared with the three months ended March 31, 2020, were:
the impact of our recent acquisitions, primarily RSA in February 2020, Rapak in April 2020, and Affaba & Ferrari in December 2020;
increases in our Packaging segment's organic sales and related operating profit as a result of significantly higher demand, primarily for our products used in applications to help fight the spread of germs;
the impact on global business activity of the COVID-19 pandemic;
the impact of material cost increases, primarily resin-related;
the impact of our realignment actions; and
the impact of our debt refinancing activities.

Three Months Ended March 31, 2021 Compared with Three Months Ended March 31, 2020
Overall, net sales increased approximately $23.9 million, or 13.1%, to $206.7 million for the three months ended March 31, 2021, as compared with $182.8 million in the three months ended March 31, 2020, primarily as a result of acquisitions, which added approximately $17.7 million of sales. Organic sales, excluding the impact of currency exchange and acquisitions, increased approximately $3.5 million, as sales increases of $15.9 million in our Packaging segment, primarily for dispenser products used in applications that help fight the spread of germs, were partially offset by $8.6 million lower sales in our Aerospace segment and $3.8 million in our Specialty Products segment, both primarily due to lower demand as a result of the COVID-19 pandemic. In addition, net sales increased by approximately $2.7 million due to 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.
Gross profit margin (gross profit as a percentage of sales) approximated 24.8% and 25.4% for the three months ended March 31, 2021 and 2020, respectively. While the increase in net sales contributed incremental gross profit dollars, gross profit margin decreased as a result of an increase in material costs in first quarter 2021, primarily for resin-based materials. We estimate that due to the lag in timing between incurring the material cost increases and recovering via commercial actions our gross profit was negatively impacted by approximately $2.0 million. In addition, we incurred approximately $1.8 million of realignment costs in first quarter 2021.
Operating profit margin (operating profit as a percentage of sales) approximated 10.2% and 10.8% for the three months ended March 31, 2021 and 2020, respectively. Operating profit increased approximately $1.3 million to approximately $21.1 million in the three months ended March 31, 2021, from approximately $19.8 million for the three months ended March 31, 2020. This increase was primarily a result of higher sales levels within our Packaging segment, partially offset by the impact of realignment charges of $4.1 million and the impact of increased material costs compared with first quarter 2020.
Interest expense remained flat at approximately $3.6 million for each of the three month periods ended March 31, 2021 and March 31, 2020, respectively, as our weighted average borrowings and weighted average interest rate for first quarter 2021 were consistent with those for first quarter 2020.
We incurred approximately $0.2 million of non-cash debt financing and related expense for the three months ended March 31, 2021 related to the write-off of previously capitalized deferred financing fees associated with our Credit Agreement.
Other expense increased approximately $0.9 million to approximately $0.9 million for the three months ended March 31, 2021, as compared to approximately $0.1 million for the three months ended March 31, 2020, primarily due to an increase in losses on transactions denominated in foreign currencies.
The effective income tax rate for the three months ended March 31, 2021 and 2020 was 20.5% and 18.9%, respectively. We recorded tax expense of approximately $3.4 million for the three months ended March 31, 2021 as compared to approximately $3.1 million for the three months ended March 31, 2020. The first quarter 2021 effective tax rate was primarily driven by higher non-deductible expenses in comparison with first quarter 2020.
Net income remained relatively flat at $13.1 million for each of the three months ended March 31, 2021 and March 31, 2020 as the impact of increased operating profit was offset by higher other expense and income tax expense.
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See below for a discussion of operating results by segment.
Packaging. Net sales increased approximately $32.0 million, or 32.0%, to $132.1 million in the three months ended March 31, 2021, as compared to $100.1 million in the three months ended March 31, 2020. Acquisition-related sales growth was approximately $13.4 million, comprised of $8.1 million of sales from our December 2020 acquisition of Affaba & Ferrari and $5.3 million resulting from our April 2020 acquisition of Rapak. Sales of dispensing products used in beauty and personal care and home care applications that help fight the spread of germs increased by approximately $8.8 million, primarily for personal hygiene applications, as demand rose, in part, due to the COVID-19 pandemic. Sales of products used in industrial markets increased by approximately $3.3 million, primarily as a result of higher demand from the drums and metal closure markets in North America. Sales of products used in food and beverage markets increased by approximately $1.9 million, as the sub-markets in which many of these products are used (e.g. quick service restaurant and gyms) begin to rebound from prior pandemic-related shutdowns. Net sales also increased by approximately $2.7 million due to currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of the weakening U.S. dollar relative to foreign currencies.
Gross profit increased approximately $5.2 million to $33.9 million, or 25.6% of sales, in the three months ended March 31, 2021, as compared to $28.7 million, or 28.7% of sales, in the three months ended March 31, 2020, primarily due to increased sales levels and approximately $0.9 million of currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of the weakening U.S. dollar relative to foreign currencies. These increases were partially offset by approximately $2.0 million of higher material costs (primarily resin) than were recovered via sales price increases in first quarter 2021, and approximately $1.4 million of first quarter 2021 realignment costs primarily related to the closure of our Union City, California manufacturing facility and consolidation into our Indianapolis, Indiana and Woodridge, Illinois facilities. In addition, we recognized an approximate $0.8 million purchase accounting non-cash charge related to the step-up of Affaba & Ferrari's inventory to fair value and subsequent amortization in the first quarter of 2021. Gross profit margin also declined due to a less favorable product sales mix, primarily as a result of Rapak operating at a low gross profit level, as demand for its products, particularly those used in quick service restaurant applications, has significantly declined from pre-acquisition levels in 2019 due to the impact of the COVID-19 pandemic.
Selling, general and administrative expenses increased approximately $2.2 million to $12.6 million, or 9.5% of sales, in the three months ended March 31, 2021, as compared to $10.4 million, or 10.4% of sales, in the three months ended March 31, 2020, primarily due to higher ongoing selling, general and administrative costs associated with our acquisitions.
Operating profit increased approximately $3.0 million to $21.3 million, or 16.1% of sales, in the three months ended March 31, 2021, as compared to $18.3 million, or 18.3% of sales, in the three months ended March 31, 2020, primarily due to higher sales levels and favorable currency exchange. These increases were partially offset by the impact of realignment charges, higher material costs, the recognition of the purchase accounting adjustment related to Affaba & Ferrari's inventory step-up to fair value and subsequent amortization and higher selling, general and administrative expenses.
Aerospace.    Net sales for the three months ended March 31, 2021 decreased approximately $4.3 million, or 8.8%, to $44.6 million, as compared to $48.9 million in the three months ended March 31, 2020. RSA, acquired in February 2020, added approximately $4.3 million of sales for January and February 2021. Sales of our fastener and engineered components products declined by approximately $5.2 million and $3.4 million, respectively, both due to the lower demand resulting from current and expected future reduced air travel due to the COVID-19 pandemic.
Gross profit decreased approximately $0.9 million to $11.0 million, or 24.6% of sales, in the three months ended March 31, 2021, from $11.9 million, or 24.3% of sales, in the three months ended March 31, 2020, due primarily to the decrease in sales levels. In addition, gross profit declined by approximately $0.4 million due to realignment actions executed in response to the pandemic, primarily related to consolidating certain activities from our Stanton, California facilities into our Tolleson, Arizona facility. Although gross profit decreased, gross profit margin improved, primarily as a result of a more favorable product sales mix and the impact of a $0.5 million purchase accounting non-cash charge related to the step-up of RSA's inventory to fair value and subsequent amortization during the three months ended March 31, 2020 that did not repeat in 2021.
Selling, general and administrative expenses decreased approximately $0.4 million to approximately $6.5 million, or 14.5% of sales, in the three months ended March 31, 2021, as compared to $6.8 million, or 14.0% of sales, in the three months ended March 31, 2020, primarily due to cost reduction efforts to mitigate the impact of lower sales levels, partially offset by higher ongoing selling, general and administrative costs associated with our acquisition of RSA.
Operating profit decreased approximately $0.6 million to approximately $4.5 million, or 10.1% of sales, in the three months ended March 31, 2021, as compared to $5.1 million, or 10.4% of sales, in the three months ended March 31, 2020, primarily due to decreased sales levels and the impact of realignment charges. These decreases were partially offset by a favorable product sales mix, the recognition of a purchase accounting adjustment related to RSA's step-up to fair value and subsequent amortization during the first quarter of 2020 that did not repeat in 2021 and lower selling, general and administrative expenses.
30

Specialty Products.   Net sales for the three months ended March 31, 2021 decreased approximately $3.8 million, or 11.2%, to $30.0 million, as compared to $33.8 million in the three months ended March 31, 2020. Sales of our cylinder products decreased approximately $3.2 million, due to lower demand for steel cylinders used in construction and industrial packaged gases in North America following the onset of the COVID-19 pandemic. Sales of engines, compressors and related parts used in upstream oil and gas applications decreased by approximately $0.7 million, primarily as a result of lower oil-field activity in North America.
Gross profit increased approximately $0.7 million to $6.5 million, or 21.6% of sales, in the three months ended March 31, 2021, as compared to $5.8 million, or 17.1% of sales, in the three months ended March 31, 2020, due to favorable product sales mix and higher profit conversion as a result of previous realignment actions to reduce the fixed costs in this segment.
Selling, general and administrative expenses decreased approximately $0.4 million to $2.0 million, or 6.6% of sales, in the three months ended March 31, 2021, as compared to $2.4 million, or 6.9% of sales, in the three months ended March 31, 2020, primarily due to reducing spending levels in line with the reduced sales activity.
Operating profit increased approximately $1.1 million to $4.5 million, or 15.1% of sales, in the three months ended March 31, 2021, as compared to $3.4 million, or 10.1% of sales, in the three months ended March 31, 2020, primarily as a result of a favorable product sales mix, higher profit conversion leveraging prior fixed cost reductions and lower selling, general and administrative expenses.
Corporate.    Corporate expenses consist of the following (dollars in millions):
  Three months ended March 31,
  2021 2020
Corporate operating expenses $ 6.4  $ 5.4 
Non-cash stock compensation 2.4  1.9 
Legacy expenses 0.4  (0.3)
Corporate expenses $ 9.2  $ 7.0 
Corporate expenses increased approximately $2.3 million to approximately $9.2 million for the three months ended March 31, 2021, from approximately $7.0 million for the three months ended March 31, 2020, primarily as a result of realignment charges recorded in the first quarter 2021 relating to the corporate office legal group reorganization.
31

Liquidity and Capital Resources
Cash Flows
Cash flows provided by operating activities were approximately $15.7 million for the three months ended March 31, 2021, as compared to approximately $3.4 million for the three months ended March 31, 2020. Significant changes in cash flows provided by operating activities and the reasons for such changes were as follows:
For the three months ended March 31, 2021, the Company generated approximately $34.6 million of cash, based on the reported net income of approximately $13.1 million and after considering the effects of non-cash items related to depreciation, amortization, loss on dispositions of assets, changes in deferred income taxes, debt financing and related expenses, stock-based compensation and other operating activities. For the three months ended March 31, 2020, the Company generated approximately $29.0 million in cash flows based on the reported net income from continuing operations of approximately $13.1 million and after considering the effects of similar non-cash items.
Increases in accounts receivable resulted in a use of cash of approximately $15.6 million and $10.6 million for the three months ended March 31, 2021 and 2020, respectively. The increased use of cash for each of the three month periods is due primarily to the timing of sales and collection of cash related thereto within the periods. Days sales outstanding of receivables remained relatively consistent during these periods.
We increased our investment in inventory by approximately $3.1 million for the three months ended March 31, 2021 and by approximately $0.1 million for the three months ended March 31, 2020. Our days sales in inventory decreased by approximately six days through first quarter of 2021 and decreased approximately three days during first quarter of 2020, as we continue to moderate inventory levels in line with sales levels.
Increases in prepaid expenses and other assets resulted in a use of cash of approximately $2.1 million for the three months ended March 31, 2021 and of approximately $0.1 million for the three months ended March 31, 2020. These changes were primarily a result of the timing of payments made for income taxes and certain operating expenses.
Increases in accounts payable and accrued liabilities resulted in a source of cash of approximately $2.0 million for the three months ended March 31, 2021, while decreases in accounts payable and accrued liabilities resulted in a use of cash of $14.8 million for the three months ended March 31, 2020. Days accounts payable on hand decreased by approximately one day in the first quarter of 2021 compared with a decrease of approximately 14 days in first quarter of 2020. 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 of continuing operations for the three months ended March 31, 2021 and 2020 was approximately $9.4 million and $86.3 million, respectively. During the first three months of 2021, we invested approximately $9.4 million in capital expenditures, as we continued our investment in growth, capacity and productivity-related capital projects. During the first three months of 2020, we invested approximately $3.9 million in capital expenditures and paid approximately $84.3 million, net of cash acquired, to acquire RSA. We also received proceeds from disposition of business, property and equipment of approximately $1.9 million.
Net cash provided by financing activities for the three months ended March 31, 2021 and 2020 was approximately $340.8 million and $116.6 million, respectively. During the first quarter of 2021, we issued $400.0 million principal amount of senior notes and made net repayments of approximately $48.6 million on our revolving credit facilities. In connection with refinancing our long-term debt, we paid approximately $6.2 million of debt financing fees. We also purchased approximately $2.6 million of outstanding common stock and used a net cash amount of approximately $1.8 million related to our stock compensation arrangements. During the first three months of 2020, we borrowed approximately $150.0 million, net of repayments, on our revolving credit facilities. We also purchased approximately $31.6 million of outstanding common stock and used a net cash amount of approximately $1.8 million related to our stock compensation arrangements.
32

Our Debt and Other Commitments
In March 2021, we issued the 2029 Senior Notes of $400.0 million aggregate principal amount due April 15, 2029 at par value in a private placement under Rule 144A of the Securities Act of 1933, as amended. We used the proceeds from the 2029 Senior Notes offering to pay fees and expenses of approximately $5.1 million related to the offering and pay fees and expenses of $1.0 million related to amending our Credit Agreement. In connection with this offering, we issued a redemption notice for our senior notes due October 2025, and redeemed the entire $300.0 million principal amount subsequent to quarter end (on April 15, 2021). The remaining cash proceeds from the 2029 Senior Notes were used for general corporate purposes, including repaying all outstanding revolving credit facility borrowings. The $5.1 million of fees and expenses related to the 2029 Senior Notes were capitalized as debt issuance costs.
The 2029 Senior Notes accrue interest at a rate of 4.125% per annum, payable semi-annually in arrears on April 15 and October 15, commencing October 15, 2021. The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain subsidiaries of the Company (each a "Guarantor" and collectively the "Guarantors"). The 2029 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.
Prior to April 15, 2024, we may redeem up to 40% of the principal amount of the 2029 Senior Notes at a redemption price of 104.125% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of one or more equity offerings provided that each such redemption occurs within 90 days of the date of closing of each such equity offering. In addition, prior to April 15, 2024, we may redeem all or part of the 2029 Senior Notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus a "make whole" premium.
For the three months ended March 31, 2021, our consolidated subsidiaries that do not guarantee the 2029 Senior Notes represented approximately 27% 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 approximately 33% and 39% of the total guarantor and non-guarantor assets and liabilities, respectively, as of March 31, 2021, treating the guarantor and non-guarantor subsidiaries each as a consolidated group.
In March 2021, we amended our Credit Agreement in connection with the issuance of the 2029 Senior Notes to extend the maturity date. We incurred fees and expenses of approximately $1.0 million related to the amendment, all of which were capitalized as debt issuance costs. We also recorded approximately $0.2 million of non-cash expense related to the write-off of previously capitalized deferred financing fees.
Below is a summary of key terms under the Credit Agreement as of March 31, 2021, compared to the key terms prior to the amendment (showing gross availability):
Instrument Amount
($ in millions)
Maturity
Date
Interest Rate
Credit Agreement (as amended)
Senior secured revolving credit facility $300.0 3/29/2026
LIBOR(a) plus 1.500%(b)
Credit Agreement (prior to amending)
Senior secured revolving credit facility $300.0 9/20/2022
LIBOR(a) plus 1.500%(b)
__________________________
(a)     London Interbank Offered Rate ("LIBOR")
(a)     The interest rate spread is based upon the leverage ratio, as defined, as of the most recent determination date.
The Credit Agreement 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.
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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), a maximum senior secured net leverage ratio (total consolidated senior secured indebtedness, 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 March 31, 2021. 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 1.77 to 1.00 at March 31, 2021. Our permitted interest expense coverage ratio under the Credit Agreement is 3.00 to 1.00 as of March 31, 2021. Our actual interest expense coverage ratio was 12.78 to 1.00 at March 31, 2021. At March 31, 2021, we were in compliance with our financial covenants.
34

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 March 31, 2021 (dollars in thousands). We present Consolidated Bank EBITDA to show our performance under our financial covenants.
Twelve Months
 Ended
 March 31, 2021
Net loss $ (79,820)
Bank stipulated adjustments:
Interest expense 14,630 
Income tax expense (22,880)
Depreciation and amortization 51,500 
Impairment charges and asset write-offs 134,600 
Non-cash compensation expense(1)
8,670 
Non-cash charges for deferred tax asset valuation allowances 250 
Other non-cash expenses or losses 14,400 
Non-recurring expenses or costs(2)
9,020 
Extraordinary, non-recurring or unusual gains or losses 28,460 
Effects of purchase accounting adjustments 3,110 
Business and asset dispositions 1,300 
Permitted acquisitions 6,230 
Currency gains and losses 170 
Consolidated Bank EBITDA, as defined $ 169,640 
  March 31, 2021  
Total Indebtedness, as defined $ 300,020   
Consolidated Bank EBITDA, as defined 169,640   
Total net leverage ratio 1.77  x
Covenant requirement 4.00  x
  Twelve Months
 Ended
 March 31, 2021
Interest expense $ 14,630 
Bank stipulated adjustments:  
Interest income (200)
Non-cash amounts attributable to amortization of financing costs (1,160)
Total Consolidated Cash Interest Expense, as defined $ 13,270 
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  March 31, 2021  
Consolidated Bank EBITDA, as defined $ 169,640   
Total Consolidated Cash Interest Expense, as defined 13,270   
Actual interest expense coverage ratio 12.78  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, purchase accounting costs, severance, relocation, restructuring and curtailment expenses.
Our revolving credit facility allows for the issuance of letters of credit, not to exceed $40.0 million in aggregate. We placed restricted cash on deposit with a financial institution to be held as cash collateral for our outstanding letters of credit; therefore, as of March 31, 2021 and December 31, 2020, we had no letters of credit issued against our revolving credit facility. At March 31, 2021, we had no amounts outstanding under our revolving credit facility and had approximately $300.0 million potentially available after giving effect to letters of credit issued and outstanding. At December 31, 2020, we had $50.5 million amounts outstanding under our revolving credit facility and had approximately $249.5 million potentially available after giving effect to letters of credit issued and outstanding. Our letters of credit, or corresponding restricted cash deposits, 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 March 31, 2021 and December 31, 2020.
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 three months of 2021 approximated $357.5 million, compared to approximately $361.6 million during the first three months of 2020. In March 2020 we proactively drew $150 million on our revolving credit facility to ensure availability of cash on hand given the potential uncertainty surrounding the financial markets as a result of the COVID-19 pandemic. We repaid the $150 million during second quarter 2020.
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.
In considering the economic uncertainty surrounding the potential business impacts from the COVID-19 pandemic with respect to our operations, supply chains, distribution channels, and end-market customers, we have taken certain defensive actions as we monitor our cash position and available liquidity. These actions have included suspending our repurchase of our common stock, borrowing on our revolving credit facility, tightening our capital expenditures, advanced monitoring of our accounts receivable balances and flexing cost structures of operations expected to be most impacted by COVID-19. Given strong cash generation and our current liquidity position, we have subsequently relaxed certain of these actions, choosing to further invest in capital expenditures for our businesses and resume purchasing shares of our common stock.
The majority of our cash on hand as of March 31, 2021 is located within the U.S., and given available funding under our revolving credit facility of $300.0 million at March 31, 2021 (after consideration of the aforementioned leverage restrictions) 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.
We are subject to variable interest rates on our revolving credit facility. At March 31, 2021, 1-Month LIBOR approximated 0.11%. At March 31, 2021, we had no amounts outstanding on our revolving credit facility and, therefore, no variable rate-based borrowings outstanding.
In addition to our long-term debt, we have other cash commitments related to leases. We account for these lease transactions as operating leases, and annual rent expense for continuing operations related thereto approximated $9.4 million in 2020. We expect leasing will continue to be an available financing option to fund future capital expenditure requirements.
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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, an increase of $100 million from the prior authorization.  In the three months ended March 31, 2021, we purchased 82,171 shares of our outstanding common stock for an aggregate purchase price of approximately $2.6 million, respectively. Since the initial authorization through March 31, 2021 we have purchased 3,336,902 shares of our outstanding common stock for an aggregate purchase price of approximately $90.9 million. We will continue to evaluate opportunities to return capital to shareholders through the purchase of our common stock, depending on market conditions, including the potential impact of the COVID-19 pandemic, 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 March 31, 2021, we were party to foreign exchange forward and swap contracts to hedge changes in foreign currency exchange rates with notional amounts of approximately $132.7 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 11, "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. See Note 10, "Long-term Debt," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q for additional information.
Common Stock
TriMas is listed in the NASDAQ Global Select MarketSM. 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 March 24, 2021, Moody's assigned a Ba3 rating to our 2029 Senior Notes. See Note 10, "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 maintained its outlook as stable. On March 15, 2021, Standard & Poor's assigned a BB- rating to our 2029 Senior Notes. On February 26, 2021, Standard & Poor's 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
It has now been approximately one year since the onset of the COVID-19 pandemic. The pandemic has significantly affected each of our businesses and how we operate, albeit in different ways and magnitudes. We believe our financial results demonstrate our ability to effectively leverage our TriMas Business Model, working across our businesses with a high degree of connectivity to respond to changing market conditions, including the ongoing challenges presented by the COVID-19 pandemic. We have capitalized on opportunities where market demand was high, while also taking swift actions where market demand was sharply reduced. We have continued to take proactive realignment actions to mitigate the effects of lower demand from the pandemic as much as practical.
We believe there will be a continued period of uncertainty related to demand levels for our products, whether it be when new aircraft builds will ramp-up that require our fasteners or engineered products, if industrial production will increase over the lower 2020 levels that may require our cylinder or closure products, and how long and at what rate the recent high demand will continue for our dispenser and closure product applications that help fight the spread of germs. We expect to continue to mitigate, as much as practical, the impact of lower volumes in the most challenged end markets, executing realignment actions as necessary so we are positioned to gain operating leverage when these end markets begin to recover. We believe we remain well positioned to capitalize on the recovery of the aerospace and industrial markets, as well as available market growth opportunities. We believe the availability and effectiveness of vaccines, as well as continued measures intended to control the spread of the virus, are among the most significant factors that could impact demand for our products.
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As a result of continued uncertainties resulting from the COVID-19 pandemic, and their potential impact to our future results of operations, as well as to TriMas' market capitalization, we may record additional cash and non-cash charges related to further realignment actions, as well for uncollectible customer account balances, excess inventory and idle production equipment. At this time, we are not able to estimate the extent or amount of any such potential cash and non-cash charges.
Following the issuance of our 2029 Senior Notes and amending our Credit Agreement, 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 foreseeable future.
We expect to continue to leverage the tenets of our TriMas Business Model to manage our multi-industry businesses and address the ongoing challenges presented by the COVID-19 pandemic, and 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.
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 March 31, 2021, 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, 2020.

38

Item 3.    Quantitative and Qualitative Disclosures About Market Risk
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 10, "Long-term Debt," and Note 11, "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.
Item 4.    Controls and Procedures
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 SEC'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 March 31, 2021, 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 March 31, 2021, 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
In response to the COVID-19 pandemic, we have required certain employees, some of whom are involved in the operation of our internal controls over financial reporting, to work from home. Despite this change, there have been no changes in the Company's internal control over financial reporting during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize any impact it may have on their design and operating effectiveness.

39

PART II. OTHER INFORMATION
TRIMAS CORPORATION
Item 1.    Legal Proceedings
See Note 14, "Commitments and Contingencies," included in Part I, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q.
Item 1A.    Risk Factors
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 2020 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. There have been no significant changes in our risk factors as disclosed in our 2020 Annual Report on Form 10-K.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information about purchases made by the Company, or on behalf of the Company by an affiliated purchaser, of shares of the Company's common stock during the three months ended March 31, 2021.
Period Total Number of Shares Purchased Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
January 1, 2021 to January 31, 2021 —  $ —  —  $ 161,705,818 
February 1, 2021 to February 28, 2021 —  $ —  —  $ 161,705,818 
March 1, 2021 to March 31, 2021 82,171  $ 32.10  82,171  $ 159,068,327 
Total 82,171  $ 32.10  82,171  $ 159,068,327 
__________________________
(1)     In March 2020, the Company announced its Board of Directors had authorized the Company to increase the purchase of its common stock up to $250 million in the aggregate from its previous authorization of $150 million. The increased authorization includes the value of shares already purchased under the previous authorization. Pursuant to this share repurchase program, during the three months ended March 31, 2021, the Company repurchased 82,171 shares of its common stock at a cost of approximately $2.6 million. The share repurchase program is effective and has no expiration date.
Item 3.    Defaults Upon Senior Securities
Not applicable.
Item 4.    Mine Safety Disclosures
Not applicable.
Item 5.    Other Information
Not applicable.
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Item 6.    Exhibits
Exhibits Index:
3.1
3.2
4.1
10.1
10.2
10.3
10.4
10.5
31.1
31.2
32.1
32.2
101 The following materials from TriMas Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheet, (ii) the Consolidated Statement of Operations, (iii) the Consolidated Statement of Comprehensive Income, (iv) the Consolidated Statement of Cash Flows, (v) the Consolidated Statement of Shareholders' Equity, (vi) Notes to Consolidated Financial Statements, and (vii) document and entity information.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Management contracts and compensatory plans or arrangements.
** Certain exhibits and schedules have been omitted and the Company agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits and schedules upon request.
41

Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
  TRIMAS CORPORATION (Registrant)
/s/ ROBERT J. ZALUPSKI
Date: April 29, 2021
By:
Robert J. Zalupski
Chief Financial Officer

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