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Item 1. Business

2021-02-25 compared with 2020-02-27 · 140 added, 113 removed, 196 unchanged (56% of the section changed)

TriMas is a diversified global manufacturer and provider of products for customers primarily in the consumer products, aerospace and industrial end markets.

TriMas is a diversified manufacturer and provider of products for customers primarily in the consumer products, aerospace and industrial markets.

Our wide range of innovative product solutions are engineered and designed to solve application-specific challenges that our customers face.

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strong cash flow conversion and long-term growth opportunities.

With approximately 3,500 employees in eleven countries, we manufacture and supply products globally to a wide range of companies, with approximately 75% of our 2019 revenue generated from sales into North America.

In addition, we generated nearly 70% of our 2019 revenue from sales to the less cyclical consumer product and aerospace end markets.

During 2019 , our net sales were $723.5 million , operating profit was $91.2 million , and net cash provided by operating activities was $95.7 million .

With approximately 3,200 employees in eleven countries, we manufacture and supply products globally to a wide range of companies, with nearly 75% of our 2020 revenue generated from sales into North America.

During 2020, our net sales were $770.0 million, operating loss was $88.3 million, which included non-cash goodwill and indefinite-lived intangible asset impairment pre-tax charges of approximately $134.6 million in the Aerospace segment, and net cash provided by operating activities was $127.4 million.

On December 20, 2019, we completed the previously announced divestiture of our Lamons business ("Lamons"), a transaction entered into on November 1, 2019 with an investment fund sponsored by First Reserve.

Lamons was sold for approximately $135 million in cash, subject to customary post-closing adjustments.

The financial results of Lamons were previously reported within our Specialty Products reportable segment, and are presented as discontinued operations for all periods presented in the financial statements attached hereto.

Lamons was sold for approximately $137 million in cash.

The financial results of Lamons were previously reported within our Specialty Products segment, and are presented as discontinued operations for all periods presented in the financial statements attached hereto.

Our Competitive Strengths

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• Well-Recognized and Established Brands.

Our main brands include Rieke ® , Taplast™ and Stolz (reported in Packaging);

TriMas Aerospace™, Monogram Aerospace Fasteners™, Allfast Fastening Systems ® , and Mac Fasteners™ (reported in Aerospace);

and Norris Cylinder,™ Arrow ® Engine Company and Martinic Engineering,™ (reported in Specialty Products).

Our main brands include Rieke®, Affaba & Ferrari™, Taplast™ and Rapak ® (reported in Packaging);

TriMas Aerospace™, Monogram Aerospace Fasteners™, Allfast Fastening Systems ® , Mac Fasteners™, RSA Engineered Products and Martinic Engineering™ (reported in Aerospace);

and Norris Cylinder™ and Arrow ® Engine Company (reported in Specialty Products).

We believe each of our go-to-market brands are well-recognized and firmly established in the focused markets we serve.

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We implemented the TriMas Business Model ("TBM") in late 2016 to improve the management, performance and oversight of our businesses.

The TBM provides a platform to set near- and long-term performance objectives and goals, including safety, financial, and talent development, measure these against defined objectives, and utilize a reliable communication and escalation process that provides for flexibility and adjustments if market expectations change.

We believe the TBM connects our operations, and allows us to benefit from sharing best practices across each of our businesses.

The TBM is the framework that provides a platform of standards across TriMas, which allows the executive management team to communicate how we plan, budget, measure, review, incent and reward our employees.

It provides the foundation for determining our priorities, executing our growth and productivity initiatives, and allocating capital and resources.

Through the TMB, we set near- and long-term performance objectives and goals, including safety, financial, and talent development, measure these against defined objectives, and utilize a reliable communication and escalation process that provides for flexibility and adjustments if market expectations change.

We believe the TBM enhances connectivity between our operations, and allows us to benefit from sharing best practices across each of our businesses.

We believe that the TBM, through a culture of Kaizen and continuous improvement, helps drive long-term improvement in our performance.

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Our Growth Strategy

Guided by our experienced management team and our commitment to operational excellence, we are focused on the following components that form our core growth strategy:

Leverage Our TriMas Business Model to Drive Performance.

Guided by our experienced management team and our commitment to operational excellence, we are focused on the following components that comprise our core growth strategy:

• Leverage the TriMas Business Model to Drive Performance.

A key tenet of the TBM is our commitment to operational excellence and continuous improvement.

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• Accelerate Organic Growth through Innovation.

We will invest in organic growth in our most compelling market segments with the highest return potential.

We continue to invest in organic growth in our most compelling market segments with the highest long-term return potential.

We intend to leverage our brands, expand our product offerings to current and new customers, and introduce innovative products to meet our customers' needs and help solve their challenges.

We believe our disciplined approach will allow us to defend and expand our product offerings, and grow our business over the longer term.

In addition to product innovation, we also value process innovation and believe we can solidify our customer relationships as innovative new processes and manufacturing "know-how" allow us to improve our quality, speed to market and overall competitiveness, increasing customer satisfaction, as well as our performance.

In addition to product innovation, we also value process innovation and believe we can solidify our customer relationships using new innovative processes and manufacturing "know-how" to improve our quality, speed to market and overall competitiveness, increasing customer satisfaction, as well as our performance.

• Expand our Core Platforms through Strategic Acquisitions.

We believe that TriMas has opportunities to grow through strategic acquisitions that enhance the strengths of our core businesses.

Our primary focus is on acquisition candidates to build out our Packaging and Aerospace platforms, as we believe the markets they serve offer the highest growth and performance profile.

Our primary focus is on acquisition candidates to build out our Packaging and Aerospace platforms, as we believe the markets they serve offer the highest long-term growth and performance profile.

We typically seek "bolt-on" acquisitions, in which we acquire another industry participant or adjacent product lines that expand our existing product offerings, gain access to new customers, end markets and distribution channels, expand our geographic footprint and/or capitalize on scale and cost efficiencies.

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We believe our commitment to having well-defined strategies in place, setting and executing against annual goals and long-range targets, operating in a data-driven environment, and awarding our team on annual cash flow achievement will allow us to grow our businesses and enhance our cash flow and related cash conversion.

We believe we have the ability to generate substantial free cash flow for reinvestment in our businesses, strategic acquisitions and other capital allocation actions consistent with our long-term financial goals.

We believe we have the ability to generate substantial cash flow for reinvestment in our businesses, strategic acquisitions and other capital allocation actions consistent with our long-term financial goals.

Our Reportable Segments

We report the results of our operations in three segments, which had net sales and operating profit for the year ended December 31, 2019 as follows:

We report the results of our operations in three segments, which had net sales and operating profit/loss for the year ended December 31, 2020 as follows:

Packaging (net sales:

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$167.7 million;

operating profit:

$28.4 million ) and Specialty Products (net sales:

operating loss:

$133.4 million, which includes non-cash goodwill and indefinite-lived intangible asset impairment charges) and Specialty Products (net sales:

$113.9 million;

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$4.4 million).

For information pertaining to the net sales and operating profit attributed to our reportable segments, refer to Note 19 , " Segment Information ," included in Item 8, " Financial Statements and Supplementary Data ," within this Form 10-K.

Effective with the first quarter of 2020, we will report our Martinic Engineering business, with operations in Stanton, California and Tolleson, Arizona, in the Aerospace segment.

Prior to this change, it has been reported in the Specialty Products segment.

In connection with the first quarter 2020 announcement of our acquisition of RSA Engineered Products ("RSA"), a manufacturer of complex, highly-engineered, metallic air ducting products for aerospace and defense environmental control system applications, we announced that RSA and Martinic Engineering would achieve enhanced long-term benefits under TriMas Aerospace's leadership.

This modification facilitates a more rapid approach to achieving anticipated synergies from the RSA acquisition, allows us to better leverage machining competencies and resources across the businesses, and facilitates insourcing products and processes that RSA historically has outsourced.

Each of our reportable segments is described in more detail on the following pages.

For information pertaining to the net sales and operating profit attributed to our segments, refer to Note 22, " Segment Information ," included in Item 8, " Financial Statements and Supplementary Data ," within this Form 10-K.

Effective with the first quarter of 2020, we reported our machined components operations in Stanton, California, and Tolleson, Arizona, as part of the Aerospace segment.

The operations were previously reported in the Specialty Products segment.

The move of these operations into our Aerospace segment facilitated a more rapid approach to achieving anticipated synergies from the February 2020 RSA Engineered Products acquisition, allowing the Company to better leverage the machining competencies and resources across its aerospace businesses.

Each of our segments is described in more detail on the following pages.

Packaging (63% of 2020 net sales)

Our Packaging segment consists primarily of the Rieke, Taplast and Stolz brands.

We believe Rieke is a leading designer and manufacturer of specialty, highly-engineered polymeric and steel closure and dispensing systems for a range of end markets, including consumer packaging and industrial markets.

Rieke manufactures high-performance, value-added products that are designed to enhance its customers’ ability to store, transport, process and dispense various products.

Rieke designs and manufacturers specialty dispensing systems that include products such as foamers, lotion pumps, fine mist sprayers, airless dispensers and other packaging solutions for the cosmetic, personal care, pharmaceutical and household product markets.

Rieke also provides specialty dispensers that serve the food and beverage and industrial markets.

The specialty closure portion of Rieke's business includes products made from steel or polymeric materials for a variety of end markets.

Rieke's specialty closure products include steel drum enclosures, plastic drum closures, plastic pail dispensers and plugs, and plastic enclosures for sub-20 liter-sized containers, commonly sold into the industrial end markets.

Rieke's closure products also include specialty plastic closures for bottles and jars for the food and beverage markets.

During 2019, we acquired Plastic Srl and Taplast S.p.A.

("Taplast") to expand our packaging platform.

TriMas' Packaging segment consists primarily of the Rieke, Affaba & Ferrari, Taplast and Rapak brands.

We believe our Packaging segment is a leading designer and manufacturer of specialty, highly-engineered polymeric and steel closure and dispensing systems for a range of end markets, including consumer packaging and industrial markets.

We manufacture high-performance, value-added products that are designed to enhance its customers’ ability to store, transport, process and dispense various products.

Our Packaging segment designs and manufactures dispensing products, (including foaming pumps, lotion and hand soap pumps, sanitizer pumps, beverage dispensers, perfume sprayers, nasal sprayers and trigger sprayers), polymeric and steel caps and closures (including food lids, flip-top closures, child resistance caps, drum and pail closures and flexible spouts), polymeric jar products, and fully integrated dispensers for fill-ready bag-in-box applications, all for a variety of consumer product markets including, but not limited to, beauty and personal care, home care, food and beverage, and pharmaceutical and nutraceutical, as well as the industrial market.

During 2020, we acquired the Rapak ® brand in April and Affaba & Ferrari Srl in December to continue to expand our packaging platform.

The acquisition of the Rapak brand included certain bag-in-box product lines and assets used in dairy, soda, smoothie and wine applications in the United States.

Affaba & Ferrari, with a highly-automated manufacturing operation in Italy, designs and manufactures aseptic closures for energetic, juice and dairy drinks, as well as industrial closures and flex spouts with tamper evident and child-proof features.

During 2019, we acquired Plastic Srl and Taplast.

Plastic Srl, with operations in Italy, is a manufacturer of single-bodied and assembled caps and closures for use in home care product applications.

Taplast, with operations in Italy and Slovakia, is a designer and manufacturer of dispensers, closures and containers for the beauty and personal care, household, and food and beverage packaging end markets.

Rieke has the capability of manufacturing the majority of its products in North America, Europe or Asia, which allows Rieke to evaluate manufacturing location decisions based on customer needs, timing, cost and capacity.

TriMas' Packaging segment has the capability of manufacturing the majority of its products in North America, Europe or Asia, which allows us to evaluate manufacturing location decisions based on customer needs, timing, cost and capacity.

Competitive Strengths

We believe Rieke benefits from the following competitive strengths in coordination with operating under TriMas' overarching strategy:

We believe TriMas' Packaging segment benefits from the following competitive strengths in coordination with operating under TriMas' overarching strategy:

• Strong Product Innovation .

Through its Global Innovation Centers located in India, the United Kingdom and the United States, Rieke is focused on driving innovation across a broad range of dispensing and closure solutions for its customers.

Rieke has focused product development capabilities on consumer applications requiring special packaging forms, stylized containers and dispensing systems requiring a high degree of functionality and engineering, as well as evolving its industrial applications to include child resistant closures and other applications.

Rieke has a consistent pipeline of new products ready for launch and continues to innovate to make products more environmentally friendly.

Rieke’s product development programs have provided innovative and proprietary product solutions, such as the all-plastic, environmentally safe, self-venting FlexSpout ® flexible pouring spout.

Rieke, partnering with Amazon, also developed a range of products designed to meet the requirements of the high-growth e-commerce retail channel, including a proprietary dispenser locking mechanism to protect the integrity of packages and prevent liquids from leaking during shipment, such as the E-Commerce Trigger Sprayer, that meets consumers' demands and meets ISTA 6 standards as required by Amazon.

Other developments include a measured-dose dispenser that provides exact doses of highly-concentrated liquids for the health and beauty market.

Rieke’s emphasis on highly-engineered solutions and product development has yielded numerous issued and enforceable patents, with many other patent applications pending.

Through its Global Innovation Centers located in India, the United Kingdom and the United States, our Packaging segment is focused on driving innovation across a broad range of dispensing and closure solutions for its customers.

We have focused product development capabilities on consumer applications requiring special packaging forms, stylized containers and dispensing systems requiring a high degree of functionality and engineering, as well as evolving its industrial applications to include child resistant closures and other applications.

Our Packaging segment has a consistent pipeline of new products ready for launch and continues to innovate to make products more environmentally friendly.

For example, Rieke’s product development programs have provided innovative and proprietary product solution s, such as the patented single-polymer Mono TM -2e pump, which features six parts, all made from one material making it 100% recyclable.

Taplast's AllPlastic TM pump, which contains 100% polyolefin materials, has a bellows technology that replaces the metal spring delivering an eco-friendly solution to our customers and consumers.

In addition, Rieke, partnering with Amazon, also developed a range of products designed to meet the requirements of the high-growth e-commerce retail channel, including a proprietary dispenser locking mechanism to protect the integrity of package s and prevent liquids from leaking during shipment, such as the LDS TM -2e, a lotion pump, which was developed to meet consumers' demands and ISTA 6 standards as required by Amazon.

TriMas' Packaging segment's emphasis on highly-engineered solutions and product development has yielded numerous issued and enforceable patents, with many other patent applications pending.

For example, 45 patents were filed and 84 patents were issued in 2020.

• Customized Solutions that Enhance Customer Loyalty and Relationships .

A significant portion of Rieke’s products are customized designs that are developed and engineered to address specific customer technical, marketing and sustainability needs, helping to distinguish our customers’ products from that of their competitors.

A significant portion of our Packaging segment's products are customized designs that are developed and engineered to address specific customer technical, marketing and sustainability needs, helping to distinguish our customers’ products from those of their competitors.

For example, the customization of specialty plastic caps, closures and dispensers including branding, unique colors, collar sizes, lining and venting results in substantial customer loyalty.

The substantial investment in flexible manufacturing cells allows Rieke to offer both short lead-times for high volume products and customization for more moderate volume orders, which provides significant advantages to our consumer packaged goods customer base.

In addition, Rieke provides customized dispensing solutions including unique pump designs, precision metering, unique colors and special collar sizes to fit the customer’s bottles.

Rieke has also been successful in promoting the sale of complementary products in an effort to achieve preferred supplier status with several customers.

The substantial investment in flexible manufacturing cells allows us to offer both short lead-times for high volume products and customization for more moderate volume orders, which provides significant advantages to our consumer packaged goods customer base.

In addition, we provide customized dispensing solutions including unique pump designs, precision metering, unique colors and special collar sizes to fit the customer’s bottles.

TriMas' Packaging segment is collaborating with customers to develop innovative products that are more eco-friendly and easier to recycle.

We have also been successful in promoting the sale of complementary products in an effort to achieve preferred supplier status with several customers.

• Global Sales and Manufacturing Footprint.

Rieke maintains a global network of sales, manufacturing and distribution sites, to serve our global customer base.

Rieke’s global customers often desire supply chain capability and a flexible manufacturing footprint close to their end markets which result in shorter supply chains, reduced carbon footprint and better sustainability.

TriMas' Packaging segment maintains a global network of sales, manufacturing and distribution sites, to serve our global customer base.

Our global customers often desire supply chain capability and a flexible manufacturing footprint close to their end markets which result in shorter supply chains, reduced carbon footprint and better sustainability.

To serve our customers in Asia, we have design and manufacturing capacity and offer highly engineered dispensing solutions through locations in China, India and Vietnam, and increased our Asian market sales coverage.

Additionally, Rieke opened a facility in San Miguel de Allende, Mexico, during 2017, to replace an older, smaller facility in Mexico City, and provide additional manufacturing capacity to support growth.

We have also increased our sales coverage in Europe and Asia, and in 2019, closed on the acquisitions of Plastic Srl and Taplast which provide us with additional sales, design and manufacturing capacity in Europe.

We believe this flexible footprint provides Rieke with multiple alternatives for production to best meet customer requirements and helps mitigate the impacts of potential trade disruption.

The majority of Rieke’s manufacturing facilities around the world have advanced injection molding machines required to manufacture precision engineered dispensing and closure components, as well as automated, high-speed assembly equipment for multi-component products.

We have also increased our sales coverage in Europe and Asia.

Our acquisitions of Affaba & Ferrari in 2020, and Plastic Srl and Taplast in 2019, provide us with additional sales, design and manufacturing capacity in Europe, with additional manufacturing facilities in Italy and Slovakia.

We believe this flexible footprint provides us with multiple alternatives for production to best meet customer requirements and helps mitigate the impacts of potential trade disruption.

The majority of our Packaging segment's manufacturing facilities around the world have advanced injection molding machines required to manufacture precision engineered dispensing and closure components, as well as automated, high-speed assembly equipment for multi-component products.

Marketing, Customers and Distribution

Rieke accesses its markets through direct sales to end-use customers, as well as through leading distributors, where it has enjoyed favorable, long-standing relationships.

TriMas' Packaging segment accesses its markets through direct sales to end-use customers, as well as through leading distributors, where it has enjoyed favorable, long-standing relationships.

Rieke employs an internal sales force in North America, Europe and Asia, and has recently established a Global Strategic Account sales team.

Rieke also uses third-party agents and distributors in key geographic markets, including Europe, South America and Asia.

Rieke’s agents and distributors primarily sell to container manufacturers and to users or fillers of containers.

Rieke’s end customers include, but are not limited to, consumer packaged goods, cosmetic, personal care, pharmaceutical, food, beverage, warehouse clubs, retailers, e-retailers, fast food retailers, industrial chemical, paint, petroleum, agricultural chemical, and sanitary supply chemical companies.

Rieke may provide its products directly to the end customer, but the end customers may also specify that our products be provided to fillers or packagers.

We also supply major container manufacturers around the world.

Rieke maintains a customer service center that provides technical support, as well as other technical assistance to customers.

Rieke has manufacturing and distribution facilities in the United States, Mexico, the United Kingdom, Germany, Italy, China, India and Vietnam.

Rieke has a broad range of products in both closures and dispensing systems, and therefore has various competitors in each of our product offerings.

We also use third-party agents and distributors in key geographic markets, including Europe, South America and Asia, as well as agents and distributors primarily to sell to container manufacturers and to users or fillers of containers.

TriMas' Packaging segment's end customers include, but are not limited to, consumer packaged goods, cosmetic, personal care, pharmaceutical, nutraceutical, food, beverage, warehouse clubs, retailers, e-retailers, fast food retailers, industrial chemical, paint, petroleum, agricultural chemical and sanitary supply chemical companies.

We may provide products directly to the end customer, but the end customers may also specify that our products be provided to fillers or packagers.

We also supply major container manufacturers around the world, and maintain a customer service center that provides technical support, as well as other technical assistance to customers.

Our Packaging segment has manufacturing and distribution facilities in the United States, Mexico, the United Kingdom, Germany, Italy, Slovakia, China, India and Vietnam.

TriMas' Packaging segment has a broad range of products in both closures and dispensing systems, and therefore has various competitors in each of our product offerings.

We do not believe that there is a single competitor that matches our entire product offering.

Depending on the product and customers served, Rieke’s competitors include Albea (pending acquisition by Silgan), Aptar, Bericap, Berry Global, Greif, Phoenix Closures, Silgan, Technocraft and TKPC.

Depending on the product and customers served, our competitors include Aptar, Bericap, Berry Global, CLC Packaging, Greif, Phoenix Closures, Silgan (including the acquisition of Albea in 2020), Technocraft and TKPC.

Aerospace (22% of 2020 net sales)

Our Aerospace segment is comprised of TriMas Aerospace, which includes the Monogram Aerospace Fasteners, Allfast Fastening Systems, and Mac Fasteners brands.

We believe TriMas Aerospace is a leading designer and manufacturer of a diverse range of products, including highly-engineered fasteners, collars, blind bolts, and rivets, for use in focused markets within the aerospace industry.

Our Aerospace segment is comprised of TriMas Aerospace, which includes the Monogram Aerospace Fasteners, Allfast Fastening Systems, Mac Fasteners, RSA Engineered Products and Martinic Engineering brands.

We believe TriMas Aerospace is a leading designer and manufacturer of a diverse range of products, including, but not limited to, highly-engineered fasteners, collars, blind bolts, rivets, ducting and connectors for air management systems, and other highly-engineered machined parts and components, for use in focused markets within the aerospace industry.

In general, these products are customer-specific and are manufactured utilizing customer-qualified and proprietary processes.

The products also satisfy rigorous customer approvals or meet unique aerospace industry standards, and as such, we believe there are a limited set of competitors.

We provide products to commercial, maintenance, repair and operations ("MRO"), and military aerospace applications and platforms with sales to original equipment manufacturers ("OEMs"), supply chain distributors, MRO/aftermarket providers and tier one suppliers.

We provide products to commercial, maintenance, repair and operations ("MRO"), and military and defense aerospace applications and platforms with sales to original equipment manufacturers ("OEMs"), supply chain distributors, MRO/aftermarket providers and tier one suppliers.

Our customer-specified and/or qualified products are used in production of significant long-term aircraft programs, including several Boeing and Airbus commercial jetliner programs.

Based on Boeing and Airbus' future aircraft delivery projections, it is estimated that commercial production will remain at stable levels through the next several years.

Based on Boeing and Airbus' future aircraft delivery projections, we believe that commercial production will remain at stable levels through the next several years.

We believe our brands are well established and recognized in their markets.

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• Mac Fasteners.

The product offering consists of high-volume, standard aerospace screws and bolts, including NAS, MS, AN and AS standards.

The product offering consists of high-volume, standard aerospace screws and bolts, manufactured to meet NAS, MS, AN and AS standards.

• RSA Engineered Products (“RSA”).

In February of 2020, we acquired RSA, a manufacturer of complex, highly-engineered and proprietary ducting, connectors and related products for air management systems used in aerospace and defense applications.

• Martinic Engineering (“Martinic”).

The product offering includes highly-engineered, precision machined, complex machine-to-print parts for aerospace applications, including auxiliary power units, as well as electrical, hydraulic and pneumatic systems.

Competitive Strengths

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The combined product sets of the Monogram, Allfast and Mac Fasteners brands uniquely position us to benefit from platform-wide supply opportunities.

In addition, RSA has extensive experience in providing air ducting, connectors and flexible joints used in hot engine bleed air, anti-icing and environmental control system applications.

Martinic has a reputation, with more than 40 years of experience, of specializing in the high complexity machining of castings, forgings and bar stock for leading tier-one commercial and defense aerospace original equipment manufacturers.

• Product Innovation.

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We believe that TriMas Aerospace is a leading manufacturer of precision engineered components for the aerospace industry.

Given industry regulatory requirements, as well as customer requirements, it is required that these products need to be manufactured within tight tolerances and specifications, often out of hard-to-work-with and exotic materials including titanium, inconel and specialty steels.

Given industry regulatory requirements, as well as customer requirements, these products are required to be manufactured within tight tolerances and specifications, often out of hard-to-work-with and exotic materials including titanium, inconel and specialty steels.

TriMas Aerospace is also capable of advanced precision CNC milling, high performance CNC turning and assembly, working in a variety of metals including super alloys, stainless steel, aircraft steel alloys, carbon steel alloys and aluminum alloys.

Many of TriMas Aerospace’s products, facilities and manufacturing processes are required to be qualified and/or certified.

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Given the focused nature of many of our products, TriMas Aerospace relies upon a global sales and technical team that is knowledgeable of both OEM customers and the established network of independent distributors.

Although the markets for fasteners are highly competitive, we provide products and services primarily for specialized markets, and compete principally on technology, quality and service.

Although the markets for fasteners are highly competitive, we provide products and services primarily for specialized applications, and compete principally on technology, quality and service.

TriMas Aerospace works directly with aircraft manufacturers to develop and test new products and improve existing products.

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TriMas Aerospace's manufacturing facilities are located in the United States, and it exports products to Europe, South America and Asia.

Depending on the product and customers served, our primary competitors include Ateliers de la Haute Garonne, Arconic, Inc., Cherry Aerospace - Precision Castparts Corp.

and LISI Aerospace.

Depending on the product and customers served, our primary competitors include Ateliers de la Haute Garonne, Cherry Aerospace - Precision Castparts Corp., Howmet Aerospace and LISI Aerospace, as well as a variety of aerospace and general industrial machined component manufacturers.

We believe that we are a leader in the blind bolt market with significant market share in all blind fastener product categories in which we compete.

Specialty Products (15% of 2020 net sales)

Our Specialty Products segment is comprised of Norris Cylinder, Arrow Engine Company and Martinic Engineering.

Our Specialty Products segment is comprised of Norris Cylinder and Arrow Engine Company.

We believe these businesses are well established and recognized in their respective markets.

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As Arrow's engines can operate from the natural gas produced at the wellhead, we believe Arrow is uniquely positioned to provide its products for remote pump jack installations.

Arrow Engine distributes its products through a worldwide distribution network with a particularly strong presence in the United States and Canada.

Arrow Engine manufactures its own engine line and also offers a wide variety of spare parts for various industrial engines not manufactured by Arrow Engine, including selected engines manufactured and sold under the Caterpillar ® , Waukesha ® and Ajax ® brands.

Arrow Engine has expanded its product line to include compressors and compressor packaging, as well as certain gas production equipment.

Martinic Engineering.

Martinic Engineering offers highly-engineered, precision machined, complex machine-to-print parts for aerospace applications, including auxiliary power units, as well as electrical, hydraulic and pneumatic systems.

Martinic is capable of advanced precision CNC milling, high performance CNC turning and assembly.

Martinic Engineering can work with a variety of metals including super alloys, stainless steel, aircraft steel alloys, carbon steel alloys and aluminum alloys.

Arrow Engine distributes its products through a worldwide distribution network, primarily focused in the United States and Canada.

Arrow Engine manufactures its own engine line and also offers a wide variety of spare parts for various industrial engines not manufactured by Arrow Engine.

Competitive Strengths

We believe Norris Cylinder, Arrow Engine and Martinic Engineering benefit from the following competitive strengths in coordination with operating under TriMas' overarching strategy:

We believe our Specialty Products segment benefits from the following competitive strengths in coordination with operating under TriMas' overarching strategy:

• Leading Market Positions and Strong Brand Names .

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We believe that Arrow Engine has also built a reputation for quality equipment, parts and accessories used in oil and natural gas production, and has a leading market position in the niche it serves.

Martinic Engineering has a reputation, with more than 40 years of experience, of specializing in the high complexity machining of castings, forgings and bar stock for leading tier-one commercial and defense aerospace original equipment manufacturers.

• Comprehensive Product Offering .

We believe that both Norris Cylinder and Arrow Engine offer a comprehensive product offering that meets its customers' needs.

Norris Cylinder offers a complete line of large, intermediate and small size, high and low-pressure steel cylinders to its customers across a variety of end markets.

Arrow Engine also provides a comprehensive product offering, including engines, compressors, chemical pumps, generator sets, electronics and replacement parts to a variety of oilfield and industrial markets.

Martinic Engineering has the capability of manufacturing and assembling a broad number of components as a result of state-of-the-art machinery that provides a high level of operational precision during the machining and assembly processes.

As a result, Martinic Engineering can manufacture a wide range of products, including air inlets, auxiliary power units, cabin pressure control systems, fuel controls, manifolds, pneumatic systems, valve bodies and a variety of other components.

• Established and Extensive Distribution Channels .

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Arrow Engine sells through a combination of a direct sales team and an established network of independent distributors.

Martinic Engineering has long-standing customer relationships with tier one aerospace suppliers.

Over the past several years, we realigned these businesses to better align with lower demand levels.

Over the past several years, we realigned the cost structures of these businesses to better match recent demand levels.

We are now focused on continuous improvement opportunities that will positively impact these businesses.

We believe there are additional opportunities to improve margins, while maintaining market leadership.

We believe we are positioned well to leverage additional volume related to improvements in end market demand.

Marketing, Customers and Distribution

The primary customers of our Specialty Products businesses operate in the industrial, aerospace, commercial and upstream oil and gas end markets.

The primary customers of our Specialty Products segment operate in the industrial and upstream oil and gas end markets.

Given the focused nature of many of our products, we rely upon a combination of a direct sales force and an established network of distributors with familiarity of the end-users.

Norris Cylinder, for example, sells directly to customers and through distributors.

Our primary customers include industrial gas producers and distributors, welding equipment distributors, equipment manufacturers, and tier one aerospace suppliers.

The Norris Cylinder, Arrow Engine and Martinic Engineering manufacturing facilities are located are in the United States.

Our primary customers include industrial gas producers and distributors, welding equipment distributors, and equipment manufacturers.

The Norris Cylinder and Arrow Engine manufacturing facilities are located are in the United States.

Norris Cylinder competes against Worthington, Beijing Tianhai Industry Co., Faber and Vitkovice Cylinders, but is the only remaining steel cylinder manufacturer in the United States.

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Arrow Engine tends to compete against natural gas powered, lower horsepower, multi-cylinder engines from manufacturers such as Caterpillar, Chevy, Cummins and Ford industrial engines and electric motors.

Martinic Engineering competes with a variety of aerospace and general industrial machined component manufacturers.

TriMas' Acquisition Strategy

TriMas' capital allocation priorities include reinvesting in organic growth initiatives, including production capability and capacity of our businesses, executing treasury actions, such as share buybacks, and accelerating product and geographic expansion through mergers and acquisitions, all while maintaining a disciplined approach to managing net leverage.

We believe that TriMas has opportunities to grow through strategic acquisitions that enhance the strengths of our core businesses.

Our primary focus is on acquisition candidates to build out our Packaging and Aerospace platforms, as we believe the markets they serve offer the highest growth and performance profile.

TriMas views accelerating its growth through acquisitions as core to achieving its overarching corporate growth strategy.

Maintaining a relentless commitment to generating exceptional cash flow, along with a strong balance sheet, allows TriMas to execute against its acquisition strategy.

Our primary focus is on acquisition candidates to build out our Packaging and Aerospace platforms, as we believe the markets they serve offer the highest long-term growth and performance profiles.

While we would also consider opportunistic bolt-on acquisitions in our other segments, or even a new segment, such transactions are of secondary focus.

While we would also consider opportunistic product line or bolt-on acquisitions in our Specialty Products segment, such transactions are of secondary focus.

Materials and Supply Arrangements

Our largest raw material purchases are for steel, polypropylene, polyethylene and other resins, aluminum, titanium and copper.

Our largest raw material purchases are for resins (such as polypropylene and polyethylene), steel, aluminum and other oil and metal-based purchased components.

Raw materials and other supplies used in our operations are normally available from a variety of competing suppliers.

In addition to raw materials, we purchase a variety of components and finished products from low-cost sources in China, India, Mexico, South Korea and Vietnam.

Steel is purchased primarily from steel mills and service centers with pricing contracts principally in the three-to-six month time frame.

Changing global dynamics for steel production and supply will continue to present a challenge to our business.

Polypropylene and polyethylene are generally commodity resins with multiple suppliers capable of providing product globally.

Steel is purchased primarily from steel mills and service centers.

Changing global dynamics for steel production and supply will continue to present a challenge to our business.

Historically, we have experienced volatility in costs of our raw material purchases and have worked with our suppliers to manage costs and disruptions in supply.

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Although we may experience delays in our ability to implement price increases, we have been generally able to recover such increased costs.

Employees and Labor Relations

As of December 31, 2019 , we employed approximately 3,500 people, of which approximately 50% were located outside the United States and 22% were unionized.

We currently have collective bargaining agreements covering five facilities worldwide, one of which is in the United States.

The four facilities outside the United States with collective bargaining agreements are associated with state-controlled or trade unions.

Human Capital Resources

As of December 31, 2020, we employed approximately 3,200 people, of which approximately 50% were located outside the United States.

We have one facility, located in Commerce, California (USA) where our hourly employees operate under a collective bargaining agreement, and which represents approximately 14% of our U.S.

We have four facilities outside of the United States where our employees are affiliated with state-controlled or trade unions, which covers approximately 41% of our non-U.S.

We believe employee relations are good and are not aware of any present active union organizing activities at any of our facilities.

We cannot predict the impact of any further unionization of our workplace.

Seasonality and Backlog

TriMas does not experience significant seasonal fluctuation, other than our fourth quarter, which has tended to be the lowest net sales quarter of the year given holiday shutdowns by certain of our customers and other customers deferring capital spending to the new year.

We do not consider sales order backlog to be a material factor in our businesses.

Our TriMas Aerospace customers often provide a forward view of build rates and need for products, but firm orders do not extend for more than a few months, and are not guaranteed and subject to change.

Our labor agreement with the United Automobile, Aerospace and Agricultural Implement Workers of America at our TriMas Aerospace facility in Commerce, California expires in August 2021 and we expect to enter into timely negotiations regarding the extension of our agreement.

TriMas focuses on a number of human capital resources objectives in managing its business, including our commitment to safety, employee engagement, diversity and inclusion, and talent development.

These human capital resources objectives, taken together, may be material to understanding our business under certain circumstances.

These objectives are reinforced by our Code of Conduct, our global policies, including our Global Human Rights Policy, and our commitment to sustainability as evidenced in our inaugural 2020 Sustainability Report.These objectives are reinforced by our Code of Conduct, our global policies, including our Global Human Rights Policy, and our commitment to sustainability as evidenced in our inaugural 2020 Sustainability Report .

Commitment to Safety

One of our primary objectives is the health and safety of our employees and anyone who conducts business on our behalf.

The commitment to safety starts at the top levels of our organization.

We believe a safe and secure workplace is fundamental and important to our success.

TriMas is committed to providing a safe and healthy workplace, and complying with applicable safety and health laws, regulations and internal requirements.

We are also committed to engaging our employees to continually improve health and safety by acting upon opportunities to reduce risk and improve our safety and health performance.

TriMas maintains comprehensive safety programs focused on identifying hazards and eliminating risks that can lead to severe injuries.

Employee Engagement

At TriMas, a commitment to continuous improvement is one of our core values and imperative to our long-term success.

We embrace the tools of Kaizen and work to foster a culture of employee engagement to drive performance improvements and operational excellence.

Diversity and Inclusion

We believe we are at our best when we bring together unique perspectives, experiences and ideas, and actively build diverse teams and inclusive work environments across our global locations.

We believe that tapping into our employees’ diverse backgrounds and experiences ensures we make better decisions and supports stronger operating performance.

Our goal is to foster working environments that are fair and safe, where rights are respected and everyone can achieve their full potential.

Our policies and practices strive to assure equal employment and advancement opportunities for all qualified people.

We also work to maintain appropriate standards of conduct in the workplace and to be sensitive to the concerns of our diverse group of employees.

We strive to maintain workplaces that are free from discrimination or harassment on the basis of race, religion, color, national origin, sex, age, genetic information, sexual orientation, gender identity, protected veteran status, disability or any other characteristic protected by applicable law.

Talent Development

We believe that a talented, engaged and dynamic workforce is vital to our success.

We seek to hire, develop and retain individuals who embrace and thrive in our culture.

Our culture is grounded in our values:

Integrity, Customer-focused, Teamwork, Results-driven and Continuous Improvement.

Our businesses strive to build robust talent pipelines through targeted recruitment initiatives across our global footprint.

Our programs are intended to ensure seamless onboarding for our new employees.

We identify and nurture talent through a culture that is designed to enable employees to succeed and grow into leadership positions.

We believe that our diverse businesses and structure provide many opportunities for employees to follow their own path and advance their careers.

We support a culture of continuous development, and we provide employees with the opportunity to receive frequent performance feedback.

On a regular basis throughout the year, employees have goal alignment, performance and career development discussions with their managers (via annual goal setting, mid-year and year-end performance and talent reviews).

At these times, employees receive candid feedback on their performance against set objectives.

These reviews evaluate each employee’s strengths, skills and areas for opportunity, which are important for career development.

Environmental Matters

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Some of these environmental laws hold owners or operators of land or businesses liable for their own and for previous owners' or operators' releases of hazardous or toxic substances or wastes.

Other environmental laws and regulations require the obtainment and compliance with environmental permits.

Other environmental laws and regulations require obtaining and complying with environmental permits.

To date, costs of complying with environmental, health and safety requirements have not been material.

However, the nature of our operations and our long history of industrial activities at certain of our current or former facilities, as well as those acquired, could potentially result in material environmental liabilities.

Current laws and regulations have not had a material impact on our business, capital expenditures or financial position.

Current environmental laws and regulations have not had a material impact on our business, capital expenditures or financial position.

However, we must comply with existing and pending climate change legislation, regulation and international treaties or accords.

Future events, including those relating to climate change or greenhouse gas regulation could require us to incur expenses related to the modification or curtailment of operations, installation of pollution control equipment or investigation and cleanup of contaminated sites.

In addition to environmental laws and regulations, our operations are governed by variety of laws and regulations, including those relating to workplace safety and worker health, principally the Occupational Safety and Health Act and regulations thereunder.

We believe that we are in material compliance with these laws and regulations and do not believe that future compliance with such laws and regulations will have a material adverse effect on our business, financial condition, results of operations and cash flows.

Intangible Assets

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In addition to the net sales derived from sales by our businesses located outside of the United States, we also generated approximately $70.0 million of export sales from the United States.

For information pertaining to the net sales and long-lived assets attributed to our international operations, refer to Note 19 , " Segment Information ," included in Item 8, " Financial Statements and Supplementary Data ," within this Form 10-K.

Website Access to Company Reports

We use our corporate website, www.trimascorp.com, as a channel for routine distribution of important information, including news releases, company presentation, links to our businesses' websites and financial information.

We post filings as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"), including our annual, quarterly, and current reports on Forms 10-K, 10-Q and 8-K, our proxy statements and any amendments to those reports or statements.

We use our corporate website, www.trimascorp.com, as a channel for routine distribution of important information, including news releases, company presentations and links to our businesses' websites, as well as our inaugural Sustainability Report, which we launched in December 2020.

We also provide financial information on our website and post filings as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"), including our annual, quarterly, and current reports on Forms 10-K, 10-Q and 8-K, our proxy statements and any amendments to those reports or statements.

All such postings and filings are available under our Investors section of the website free of charge.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business