What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-29 compared with 2023-02-23 · 282 added, 254 removed, 918 unchanged (37% of the section changed)

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of TriMas Corporation and subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended December 31, 2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of TriMas Corporation and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill – Aerospace Fasteners Reporting Unit — Refer to Notes 3 and 8 to the financial statements

Goodwill Impairment Assessment — Refer to Notes 3 and 7 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill impairment involves a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

The qualitative assessment involves significant use of management's judgment and assumptions related to macroeconomic conditions, industry and market considerations, overall financial performance, entity and reporting unit specific events, capital markets pricing, as well as legal, regulatory, and contractual factors.

The Company also considers recent valuations of its reporting units, including the difference between the most recent fair value estimate and the carrying amount.

Changes in these assumptions could have a significant effect on management’s conclusion about whether a quantitative goodwill impairment test is necessary to estimate the fair value of its reporting units.

The Company’s goodwill balance was $340 million as of December 31, 2022, of which $70 million was allocated to the Aerospace Fasteners Reporting Unit (“Aerospace Fasteners”).

The Company concluded there were no indications that the fair value of any reporting unit was less than the carrying amount, therefore a quantitative assessment was not performed, and no impairment was recognized.

Given the nature of the Aerospace Fasteners operations, the assumptions used in the qualitative assessment, and the difference between the most recent fair value estimate and the carrying amount of Aerospace Fasteners, auditing management’s judgments related to the impact of macroeconomic conditions, overall financial performance for Aerospace Fasteners, and capital markets pricing involved especially subjective judgment.

The Company’s annual impairment assessment for goodwill is performed on October 1st, or more frequently if events or circumstances indicate possible impairment.

The Company’s evaluation of goodwill for impairment involved the comparison of the fair value of each reporting unit with goodwill to its carrying value.

The fair value is estimated using a weighting of the income and market approaches.

The goodwill balance allocated to the reporting unit within the Aerospace Segment was $70 million as of December 31, 2023.

The fair value of the reporting unit within the Aerospace Segment exceeded its carrying value as of the assessment date and, therefore, no impairment was recognized.

We identified the fair value estimate used in the goodwill impairment analyses as a critical audit matter because of the significant estimates and assumptions management makes related to forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital, valuation multiples, and the terminal growth rate.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s qualitative evaluation of goodwill impairment for Aerospace Fasteners included the following, among others:

• We tested the effectiveness of controls over goodwill, including those over management's judgments and assumptions related to macroeconomic conditions, industry and market considerations, overall financial performance, entity and reporting unit specific events, capital markets pricing, and recent fair value estimates and carrying amounts.

• We evaluated management’s ability to accurately forecast future revenues and EBITDA margins by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s qualitative assessment of factors affecting revenue and EBITDA margin forecasts by comparing the forecasts to:

Historical revenues and EBITDA.

Our audit procedures for the impairment analysis related to the forecasts of revenue growth rates, future EBITDA margins, weighted average cost of capital and the terminal growth rate included the following, among others:

• We tested the effectiveness of internal control activities over the goodwill fair value estimate, including those over the inputs, assumptions, and calculations.

• We evaluated the reasonableness of management’s forecasts of revenue growth rates and future EBITDA margins by comparing the forecasts to:

The Reporting Unit’s historical revenue and EBITDA margins.

Internal communications to management and the Board of Directors.

Forecasted information included in industry reports for the Company and certain of its peer companies.

• We evaluated the impact of changes in management’s forecasts from the October 1, 2022, annual measurement date to December 31, 2022.

• With the assistance of our fair value specialists, we evaluated the reasonableness of management’s qualitative assessment by performing the following:

(1) Researching GDP growth, inflation and/or other macroeconomic variables, as well as industry growth rates;

(2) Estimate industry discount rates;

(3) Research and analyze valuation multiple of guideline public companies to understand valuation trends, and research trends in growth and margins in guideline public companies;

and (4) Obtain information to analyze the trend of market capitalization of the entity and public peer companies.

Current industry, market and economic trends.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the weighted average cost of capital, valuation multiples, and the terminal growth rate by:

Developing a range of independent estimates and comparing those to the weighted average cost of capital and valuation multiples selected by management.

Testing the source information underlying the determination of the terminal growth rate and testing the mathematical accuracy of the calculations.

• We performed a sensitivity analysis of certain assumptions such as revenue growth rates, future EBITDA margins, weighted average cost of capital, valuation multiples, and the terminal growth rate to evaluate the potential change in the fair value resulting from changes in underlying assumptions.

/s/ Deloitte & Touche LLP

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Accrued liabilities 59,640 46,660

Operating lease liabilities, current portion 8,280 8,120

Lease liabilities, current portion 7,900 8,280

Total current liabilities 159,450 140,150

Long-term debt, net 395,660 394,730

Operating lease liabilities 41,010 43,780

Lease liabilities 39,690 41,010

Deferred income taxes 23,290 20,940

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Paid-in capital 677,660 696,160

Accumulated deficit ( 36,130 ) ( 102,300 )

Retained earnings (accumulated deficit) 4,230 ( 36,130 )

Accumulated other comprehensive income (loss) 650 ( 8,620 )

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TriMas Corporation

Consolidated Statement of Operations

Consolidated Statement of Income

(Dollars in thousands, except per share amounts)

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Net gain (loss) on dispositions of assets ( 180 ) 21,950 ( 130 )

Impairment of goodwill and indefinite-lived intangible assets — — ( 134,600 )

Operating profit (loss) 99,060 95,090 ( 88,290 )

Impairment of indefinite-lived intangible assets ( 1,120 ) — —

Operating profit 65,440 99,060 95,090

Other expense, net:

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Other expense, net ( 14,850 ) ( 11,390 ) ( 25,980 )

Income (loss) before income taxes 87,670 69,110 ( 102,710 )

Income tax benefit (expense) ( 21,500 ) ( 11,800 ) 22,950

Net income (loss) $ 66,170 $ 57,310 $ ( 79,760 )

Basic earnings (loss) per share:

Net income (loss) per share $ 1.57 $ 1.33 $ ( 1.83 )

Income before income taxes 50,590 87,670 69,110

Income tax expense ( 10,230 ) ( 21,500 ) ( 11,800 )

Net income $ 40,360 $ 66,170 $ 57,310

Basic earnings per share:

Net income per share $ 0.97 $ 1.57 $ 1.33

Weighted average common shares - basic 41,439,027 42,249,244 43,006,922

Diluted earnings (loss) per share:

Net income (loss) per share $ 1.56 $ 1.32 $ ( 1.83 )

Diluted earnings per share:

Net income per share $ 0.97 $ 1.56 $ 1.32

Weighted average common shares - diluted 41,685,348 42,478,015 43,281,076

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2023 2022 2021

Net income (loss) $ 66,170 $ 57,310 $ ( 79,760 )

Net income $ 40,360 $ 66,170 $ 57,310

Other comprehensive income (loss):

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Total other comprehensive income (loss) 9,270 ( 8,850 ) 5,850

Total comprehensive income (loss) $ 57,320 $ 63,160 $ ( 79,380 )

Total comprehensive income $ 49,630 $ 57,320 $ 63,160

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

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Cash Flows from Operating Activities:

Net income (loss) $ 66,170 $ 57,310 $ ( 79,760 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities, net of acquisition impact:

Impairment of goodwill and indefinite-lived intangible assets — — 134,600

Net income $ 40,360 $ 66,170 $ 57,310

Adjustments to reconcile net income to net cash provided by operating activities, net of acquisition impact:

Impairment of indefinite-lived intangible assets 1,120 — —

(Gain) loss on dispositions of assets 180 ( 21,950 ) 130

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Non-cash compensation expense 9,670 9,840 9,500

Provision for losses on accounts receivable 2,450 — —

Debt financing and related expenses — — 10,520

Change in legacy liability estimate — 5,590 1,450

(Increase) decrease in receivables ( 6,650 ) ( 11,180 ) 9,580

(Increase) decrease in inventories ( 6,970 ) ( 960 ) 3,980

Increase in receivables ( 5,520 ) ( 6,650 ) ( 11,180 )

Increase in inventories ( 7,070 ) ( 6,970 ) ( 960 )

Decrease in prepaid expenses and other assets 4,760 6,120 5,030

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Dividends paid ( 6,700 ) ( 6,880 ) ( 1,740 )

Other financing activities ( 3,320 ) — —

Net cash provided by (used for) financing activities ( 30,940 ) ( 46,180 ) 11,750

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Stock Paid-In

Capital Accumulated

Capital Retained Earnings (Accumulated

Deficit) Accumulated

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Balances at December 31, 2020 $ 430 $ 749,050 $ ( 159,610 ) $ ( 5,620 ) $ 584,250

Net loss — — ( 79,760 ) — ( 79,760 )

Net income — — 57,310 — 57,310

Other comprehensive income — — — 5,850 5,850

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Non-cash compensation expense — 9,500 — — 9,500

Dividends declared — ( 1,740 ) — — ( 1,740 )

Balances at December 31, 2021 $ 430 $ 732,490 $ ( 102,300 ) $ 230 $ 630,850

Net income — — 66,170 — 66,170

Other comprehensive income — — — 5,850 5,850

Other comprehensive loss — — — ( 8,850 ) ( 8,850 )

Purchase of common stock ( 10 ) ( 36,910 ) — — ( 36,920 )

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Net income — — 40,360 — 40,360

Other comprehensive loss — — — ( 8,850 ) ( 8,850 )

Other comprehensive income — — — 9,270 9,270

Purchase of common stock ( 10 ) ( 18,770 ) — — ( 18,780 )

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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 and volatility in the current economic environment due to input cost inflation, supply chain disruptions, and shortages in global markets for commodities, logistics and labor, all of which have followed outbreak of the coronavirus and related variants (“COVID-19”) since early 2020.

Actual results may differ from such estimates and assumptions due to risks and uncertainties, including uncertainty and volatility in the current economic environment due to input cost inflation, supply chain disruptions, shortages in global markets for commodities, logistics and labor.

To the extent there are differences between these estimates and actual results, the Company's consolidated financial statements may be materially affected.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-10, "Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance" ("ASU 2021-10"), which requires annual disclosures to increase transparency around government assistance received by companies.

ASU 2021-10 is effective for fiscal years beginning after December 15, 2021.

The Company adopted ASU 2021-10 in the fourth quarter of 2022.

Certain country, state and local governments in which the Company operates offer or have offered various business incentives related to investment and/or job creation.

The Company's participation in these government incentive programs is accounted for by applying a grant or contribution model by analogy;

however, the Company determined that the adoption of ASU 2021-10 did not have a material impact on its consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU 2021-08"), which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, "Revenue from Contracts with Customers." ASU 2021-08 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2022, with early adoption permitted.

The Company adopted ASU 2021-08 in the fourth quarter of 2022, which did not have a significant impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" ("ASU 2023-09"), which requires enhanced jurisdictional disclosures for income taxes paid and requires the use of specific categories in the effective tax rate reconciliation as well as additional information for reconciling items that meet a quantitative threshold.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is in the process of assessing the impact of adoption on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures" ("ASU 2023-07"), which requires disclosure of significant segment expenses and other segment items by reportable segment on an annual and interim basis, the title and position of chief operating decision maker ("CODM") and how the CODM uses reported measures in assessing segment performance, and also extends the requirement of annual disclosures currently required by Topic 280 to interim periods.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is in the process of assessing the impact of adoption on its consolidated financial statements.

Summary of Significant Accounting Policies

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Cash and cash equivalents also includes restricted cash, if any, held on deposit with a financial institution as cash collateral for the Company's outstanding letters of credit.

See Note 7, " Cash and Cash Equivalents ," for further details regarding the Company's cash and cash equivalents.

Receivables are presented net of allowances for doubtful accounts of $ 4.2 million and $ 1.7 million at December 31, 2023 and 2022, respectively.

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Property and equipment additions, including significant improvements, are recorded at cost.

Upon retirement or disposal of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in the accompanying statement of operations.

Upon retirement or disposal of property and equipment, the cost and accumulated depreciation are removed from the accounts, and any gain or loss is included in the accompanying consolidated statement of income.

Repair and maintenance costs are charged to expense as incurred.

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For purposes of the Company's 2023 goodwill impairment test, the Company had six reporting units, four of which had goodwill, within its three reportable segments.

The Company begins its goodwill reviews by conducting a qualitative assessment, considering relevant events and circumstances that affect the fair value or carrying amount of a reporting unit.

The Company begins its goodwill reviews by conducting a qualitative assessment, considering relevant events and circumstances that affect the fair value or carrying value of a reporting unit.

Such events and circumstances can include macroeconomic conditions, industry and market considerations, overall financial performance, entity and reporting unit specific events, and capital markets pricing.

The Company considers the extent to which any identified adverse events and circumstances affect the comparison of a reporting unit's fair value with its carrying amount.

The Company places more weight on the events and circumstances that most affect a reporting unit's fair value or the carrying amount of its net assets.

The Company considers positive and mitigating events and circumstances that may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

The Company also considers its most recent valuations of its reporting units, including the difference between the most recent fair value estimate and the carrying amount.

The Company considers the extent to which any identified adverse events and circumstances affect the comparison of a reporting unit's fair value with its carrying value.

The Company places more weight on the events and circumstances that most affect a reporting unit's fair value or the carrying value of its net assets.

The Company also considers its most recent valuations of its reporting units, including the difference between the most recent fair value estimate and the carrying value.

Each of these factors is considered by management in reaching its conclusion about whether a quantitative goodwill impairment test is necessary to estimate the fair value of its reporting units.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

If the Company concludes that conducting a quantitative assessment is required, the Company determines the fair value of the reporting unit being evaluated utilizing a combination of three valuation techniques:

discounted cash flow (income approach), market comparable method (market approach) and market capitalization (direct market data method).

If the Company concludes that conducting a quantitative assessment is required or if the Company elects the option to bypass the qualitative assessment, the Company determines the fair value of the reporting unit being evaluated utilizing a combination of two valuation techniques:

discounted cash flow (income approach) and market comparable method (market approach).

The income approach is based on management's operating plan and internal five-year forecast and utilizes forward-looking assumptions and projections, on a discounted basis, but considers factors unique to each reporting unit and related long-range plans that may not be comparable to other companies and that are not yet public.

The market approach considers potentially comparable companies and transactions within the industries where the Company's reporting units participate, and applies their trading multiples to the financial projections of the Company's reporting units.

The market approach considers potentially comparable companies and transactions within the industries where the Company's reporting units participate, and applies their valuation multiples to the financial projections of the Company's reporting units.

This approach utilizes data from actual marketplace transactions, but reliance on its results is limited by difficulty in identifying companies that are specifically comparable to the Company's reporting units, considering the diversity of the Company's businesses, the relative sizes and levels of complexity.

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In conducting a qualitative assessment, the Company considers relevant events and circumstances to determine whether it is more likely than not that the fair values of the indefinite-lived intangible assets are less than the carrying values.

In addition to the events and circumstances that the Company considers above in its qualitative analysis for potential goodwill impairment, the Company also considers legal, regulatory and contractual factors that could affect the fair value or carrying amount of the Company's indefinite-lived intangible assets.

The Company also considers its most recent valuations of its indefinite-lived intangible assets, including the difference between the most recent fair value estimates and the carrying amounts.

In addition to the events and circumstances that the Company considers above in its qualitative analysis for potential goodwill impairment, the Company also considers legal, regulatory and contractual factors that could affect the fair value or carrying value of the Company's indefinite-lived intangible assets.

The Company also considers its most recent valuations of its indefinite-lived intangible assets, including the difference between the most recent fair value estimates and the carrying values.

These factors are all considered by management in reaching its conclusion about whether it is more likely than not that the fair values of the indefinite-lived intangible assets are less than the carrying values.

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See Note 7, " Goodwill and Other Intangible Assets ," for further details regarding the Company's indefinite-lived intangible asset impairment testing.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

High Deductible Insurance.

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Changes in assumptions for factors such as medical costs and actual experience could cause these estimates to change.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Pension Plans.

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Asbestos-related accruals are assessed at each balance sheet date to determine if the liability remains reasonably stated.

Accruals for asbestos-related matters are included in the consolidated balance sheet in “Accrued liabilities” and “Other long-term liabilities.” See Note 16, “ Commitments and Contingencies ,” for further information.

Accruals for asbestos-related matters are included in the consolidated balance sheet in "Accrued liabilities" and "Other long-term liabilities." Pre-tax asbestos-related charges are included in selling, general and administrative expenses in the accompanying consolidated statement of income.

See Note 15, " Commitments and Contingencies ," for further information.

Revenue Recognition.

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costs related to the advertising, sale, marketing and distribution of the Company's products, amortization of customer intangible assets, costs of finance, human resources, legal functions, executive management costs and other administrative expenses.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income Taxes.

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See Note 21, " Income Taxes ," for further information.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Foreign Currency Translation.

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dollars are deferred as a component of accumulated other comprehensive income (loss) ("AOCI") in the consolidated statement of shareholders' equity.

The impact of net foreign currency transactions was a gain of $ 0.7 million for the year ended December 31, 2022, a loss of $ 0.9 million for the year ended December 31, 2021 and a gain of $ 0.6 million for the year ended 2020, and are included in other expense, net in the accompanying consolidated statement of operations.

The impact of net foreign currency transactions was a gain of $ 0.3 million and $ 0.7 million for the years ended December 31, 2023 and 2022, respectively, and a loss of $ 0.9 million for the year ended December 31, 2021, and are included in other income (expense), net in the accompanying consolidated statement of income.

Derivative Financial Instruments.

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If a derivative is designated as a fair value hedge, then changes in the fair value of the derivative are offset against the changes in the fair value of the underlying hedged item.

If a derivative is designated as a cash flow hedge, then the effective portion of the changes in the fair value of the derivative is recognized as a component of other comprehensive income until the underlying hedged item is recognized in earnings or the forecasted transaction is no longer probable of occurring.

If a derivative is designated as a net investment hedge, then the effective portion of the changes in the fair value of the derivative is recognized in other comprehensive income and will be subsequently reclassified to earnings when the hedged net investment is either sold or substantially liquidated.

If a derivative is designated as a cash flow hedge, the changes in the fair value of the derivative is recognized as a component of other comprehensive income (loss) until the underlying hedged item is recognized in earnings or the forecasted transaction is no longer probable of occurring.

If a derivative is designated as a net investment hedge, then the changes in the fair value of the derivative is recognized in other comprehensive income (loss) and will be subsequently reclassified to earnings when the hedged net investment is either sold or substantially liquidated.

The Company formally documents hedging relationships for its derivative transactions and the underlying hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions.

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The carrying value of financial instruments reported in the balance sheet for current assets and current liabilities approximates fair value due to the short maturity of these instruments.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Business Combinations.

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The relief-from-royalty and excess earnings method are both income approaches that utilize key assumptions such as forecasts of revenue and expenses over an extended period of time, royalty rate percentages, tax rates, and estimated costs of debt and equity capital to discount the projected cash flows.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock-based Compensation.

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Other Comprehensive Income (Loss).

The Company refers to other comprehensive income (loss) as revenues, expenses, gains and losses that under accounting principles generally accepted in the United States of America are included in comprehensive income (loss) but are excluded from net earnings as these amounts are recorded directly as an adjustment to stockholders' equity.

Other comprehensive income (loss) is comprised of foreign currency translation adjustments, amortization of prior service costs and unrecognized gains and losses in actuarial assumptions for pension and postretirement plans and changes in unrealized gains and losses on derivative instruments.

2023 Acquisitions

On April 21, 2023, the Company acquired Weldmac Manufacturing Company ("Weldmac") for a purchase price of $ 34.0 million, with additional contingent consideration ranging from zero to $ 10 million based on achievement of earnings targets, as defined in the purchase agreement.

The fair value of assets acquired and liabilities assumed included $ 23.7 million of property and equipment, $ 20.3 million of net working capital and $ 10 million of contingent consideration liability, with such estimate representing the Company's best estimate of fair value of contingent consideration based on Level 3 inputs under the fair value hierarchy, as defined.

Located in El Cajon, California, and reported in the Company's Aerospace segment, Weldmac is a designer and manufacturer of complex metal fabricated components and assemblies for the aerospace, defense and space launch end markets and historically generated $ 33 million in annual revenue.

On July 10, 2023, the Company made a cash payment of $ 5.5 million as additional consideration for the purchase of Weldmac based on achievement of earnings targets, as defined in the purchase agreement.

The remaining possible contingent consideration ranges from zero to $ 4.5 million, based on achievement of 2023 earnings targets, as defined in the purchase agreement.

At December 31, 2023, the Company believes it is probable the maximum contingent consideration will be earned.

On February 1, 2023, the Company acquired Aarts Packaging B.V.

("Aarts"), a luxury packaging solutions provider for beauty and lifestyle brands, as well as for customers in the food and life sciences end markets, for a purchase price of $ 37.8 million, net of cash acquired.

The fair value of assets acquired and liabilities assumed included $ 20.4 million of goodwill, $ 10.9 million of intangible assets, $ 8.5 million of property and equipment, $ 7.4 million of net working capital, $ 3.9 million of net deferred tax liabilities and $ 5.5 million of other liabilities.

Aarts, which is reported in the Company's Packaging segment, is located in Waalwijk, the Netherlands, and historically generated € 23 million in annual revenue.

2022 Acquisitions

On February 28, 2022, the Company acquired Intertech Plastics LLC and related companies (collectively, "Intertech") for a purchase price of $ 64.1 million, net of cash acquired.

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The fair value of assets acquired and liabilities assumed included $ 32.4 million of goodwill, $ 13.5 million of intangible assets, $ 12.2 million of property and equipment and $ 6.0 million of net working capital.

Intertech, which is reported in the Company's Packaging segment, has two manufacturing facilities located in the Denver, Colorado, area and historically generated $ 32 million in annual revenue.

Intertech, which is reported in the Company's Packaging segment, has two manufacturing facilities located in the Denver, Colorado, area.

2021 Acquisitions

On December 17, 2021, the Company acquired Omega Plastics ("Omega"), which specializes in manufacturing custom components and devices for drug delivery, diagnostic and orthopedic medical applications, as well as components for industrial applications, for an aggregate amount of $ 22.5 million, net of cash acquired.

Omega, which is reported in the Company's Packaging segment, is located in Clinton Township, Michigan, and historically generated $ 18 million in annual revenue.

Omega, which is reported in the Company's Packaging segment, is located in Clinton Township, Michigan.

TRIMAS CORPORATION

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On the acquisition date, the Company recorded $ 3.7 million as its best estimate of fair value of the additional contingent consideration, with such estimate based on Level 3 inputs under the fair value hierarchy, as defined.

TFI, which is reported in the Company's Aerospace segment, is located near Toronto, Canada and historically generated $ 6 million in annual revenue.

Based on a detailed fourth quarter 2022 review of TFI's updated forecasted operating results, the Company determined the likelihood of the contingent consideration being paid was remote, and therefore reversed the liability, with such adjustment being included in other income (expense), net, in the accompanying consolidated statement of operations

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 $ 98.4 million, net of cash acquired.

The fair value of assets acquired and liabilities assumed included $ 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 $ 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 $ 11.4 million.

Rapak, which is reported in the Company's Packaging segment, has manufacturing locations in Indiana, California and Illinois, and historically generated $ 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 $ 83.7 million, net of cash acquired.

The fair value of assets acquired and liabilities assumed included $ 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 $ 30 million in annual revenue.

TFI, which is reported in the Company's Aerospace segment, is located near Toronto, Canada.

Realignment Actions

2023 Realignment Actions

During 2023, the Company incurred realignment charges in its Packaging segment, related to the closure and consolidation of two manufacturing facilities located in China into one new, larger facility in the Haining region, and for costs incurred to close and consolidate its Rohnert Park, California, manufacturing facility operations into other existing U.S.

production locations.

In connection with these actions, the Company recorded pre-tax realignment charges of $ 10.3 million, of which $ 2.1 million were for employee-related costs, $ 0.8 million were for inventory write-downs, $ 5.2 million were for other facility move and consolidation costs, and $ 2.2 million were related to charges to accelerate the depreciation of certain fixed assets.

During 2023, $ 9.4 million and $ 0.9 million of these charges were included in cost of sales and selling, general and administrative expenses, respectively, in the accompanying consolidated statement of income.

2022 Realignment Actions

During 2022, the Company incurred realignment charges in its Packaging segment, related to adjusting its labor force in facilities with lower demand, finalizing its Indianapolis, Indiana, facility consolidation, costs incurred to reorganize its benefit plans in the United Kingdom, and for costs incurred as part of the Company's start-up and relocation to a new, larger facility in New Albany, Ohio.

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As of December 31, 2021, $ 2.4 million of the employee separation costs had been paid.

During 2021, $ 4.1 million of these charges were included in cost of sales and $ 5.6 million were included in selling, general and administrative expenses, respectively, in the accompanying consolidated statement of operations.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2020 Realignment Actions

During 2020, the Company executed certain realignment actions, primarily in its Aerospace and Specialty Products segments, in response to reductions in current and expected future end-market demand.

The Company recorded non-cash charges of $ 13.8 million related to inventory reductions, primarily as a result of a strategic decision in its Arrow Engine division to narrow its product line focus.

The Company also recorded non-cash charges of $ 2.3 million related to certain production equipment removed from service given reduced demand levels.

In addition, the Company reduced its employment levels given lower customer demand, incurring $ 3.8 million in severance charges, of which $ 3.7 million was paid by December 31, 2020.

During 2020, $ 17.1 million of these charges were included in cost of sales and $ 2.8 million were included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

The following table presents the Company’s disaggregated net sales by primary market served (dollars in thousands):

8 unchanged sentences

The Specialty Products segment earns revenues from a variety of submarkets within the industrial market.

Cash and Cash Equivalents

Cash and cash equivalents consists of the following components (dollars in thousands):

2022 December 31,

Cash and cash equivalents - unrestricted $ 112,090 $ 129,790

Cash - restricted (a)

Total cash and cash equivalents $ 112,090 $ 140,740

__________________________

(a) Includes cash placed on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit.

Goodwill and Other Intangible Assets

The Company performed a quantitative assessment as part of its 2023 annual impairment test (October 1 annual test date) for all reporting units with goodwill after electing the option to bypass the qualitative assessment.

In preparing the quantitative analysis, the Company utilized both income and market-based approaches.

The income-based approach was conducted using the discounted cash flow method, for which management updated its internal five-year forecast.

Assumptions in estimating the future cash flows were based on Level 3 inputs under the fair value hierarchy.

The Company also selected appropriate terminal growth rates as well as weighted average cost of capital rates, which considered various factors including the level of inherent risk in achieving the forecast based on prior history and current market conditions.

The market-based approach considered comparable publicly traded companies and transactions within the industries where the Company's reporting units participate, and applied their valuation multiples to management's forecast estimates.

Based on results of the quantitative assessment for the 2023 annual impairment test, the Company determined there were no indications that the fair value of a reporting unit was less than its carrying value.

The Company performed a qualitative assessment as part of its 2022 and 2021 annual impairment tests (October 1 annual test date) for all reporting units, which included a review of the Company’s market capitalization.

Based on results of the qualitative assessments for the 2022, 2021 and 2020 annual impairment tests, the Company determined there were no indications that the fair value of a reporting unit was less than its carrying amount;

Based on results of the qualitative assessments for the 2022 and 2021 annual impairment tests, the Company determined there were no indications that the fair value of a reporting unit was less than its carrying value;

therefore, the Company determined that quantitative goodwill impairment tests were not required.

During the third quarter of 2020, as a result of a decline in its aerospace-related business' financial results, a significant reduction in its financial projections for the remainder of 2020 compared with prior projections, and uncertainty around the duration and magnitude of the impact of the COVID-19 pandemic on future financial results given their dependence on future levels of air travel and new aircraft builds, the Company determined there was a triggering event requiring an interim quantitative goodwill impairment assessment of each of its two aerospace-related reporting units:

Aerospace Fasteners and Aerospace Engineered Products.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Upon completion of the quantitative goodwill impairment tests, the Company determined that the carrying values of the Aerospace Fasteners and Aerospace Engineered Products reporting units exceeded their fair values, resulting in goodwill impairment charges of $ 70.8 million in its Aerospace Fasteners reporting unit and $ 56.0 million in its Aerospace Engineered Products reporting unit.

Changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 are as follows (dollars in thousands):

7 unchanged sentences

Balance, December 31, 2023 $ 287,350 $ 69,860 $ 6,560 $ 363,770

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Intangible Assets

For the purpose of the Company's 2023 annual indefinite-lived intangible asset impairment test (as of October 1), the Company elected the option to bypass the qualitative assessment and performed a quantitative assessment for all of its indefinite-lived intangible assets except for the Aarts trade name, using the relief-from-royalty method.

The Company performed a qualitative assessment for the Aarts trade name as it was acquired less than one year prior and has long-term sales projections consistent with those expected in the purchase price valuation.

Significant management assumptions used under the relief-from-royalty method reflected the Company's current assessment of the risks and uncertainties associated with the cash flows of the respective underlying indefinite-lived intangible assets and represent Level 3 inputs under the fair value hierarchy.

Upon completion of the quantitative impairment test, the Company determined that one of the Company's aerospace-related trade names had a carrying value that exceeded its fair value, and therefore recorded an impairment charge of $ 1.1 million.

For the purposes of the Company's 2022 and 2021 annual indefinite-lived intangible asset impairment tests (as of October 1), the Company performed a qualitative assessment to determine whether it was more likely than not that the fair values of the indefinite-lived intangible assets were less than the carrying values.

1 unchanged sentence

therefore, a fair value calculation of the indefinite-lived intangible assets was not required for the 2022 and 2021 annual indefinite-lived intangible asset impairment tests.

During the third quarter of 2020, as a result of the significant forecast reduction in the Company's aerospace-related businesses, the Company also performed an interim quantitative assessment for the indefinite-lived intangible assets within the Aerospace segment, using the relief-from-royalty method.

Significant management assumptions used under the relief-from-royalty method reflected the Company's current assessment of the risks and uncertainties associated with the aerospace industry.

Upon completion of the quantitative impairment test, the Company determined that certain of its aerospace-related trade names had carrying values that exceeded their fair values, and therefore recorded impairment charges of $ 7.8 million.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The gross carrying amounts and accumulated amortization of the Company's other intangibles as of December 31, 2023 and 2022 are summarized below (dollars in thousands):

14 unchanged sentences

Total other intangible assets $ 433,220 $ ( 252,200 ) $ 421,810 $ ( 233,700 )

Amortization expense related to intangible assets as included in the accompanying consolidated statement of operations is summarized as follows (dollars in thousands):

Amortization expense related to intangible assets as included in the accompanying consolidated statement of income is summarized as follows (dollars in thousands):

Year ended December 31,

3 unchanged sentences

Total amortization expense $ 18,180 $ 19,100 $ 21,560

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Estimated amortization expense for the next five fiscal years beginning after December 31, 2023 is as follows (dollars in thousands):

1 unchanged sentence

2024 $ 17,220

2024 $ 16,490

2025 $ 16,140

2026 $ 14,420

2027 $ 14,360

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inventories consist of the following components (dollars in thousands):

13 unchanged sentences

Property and equipment, net $ 329,990 $ 277,750

Depreciation expense as included in the accompanying consolidated statement of operations is as follows (dollars in thousands):

Depreciation expense as included in the accompanying consolidated statement of income is as follows (dollars in thousands):

Year ended December 31,

3 unchanged sentences

Total depreciation expense $ 39,410 $ 34,120 $ 31,890

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accrued Liabilities

3 unchanged sentences

High deductible insurance 6,250 5,530

Derivatives liability 6,510 —

Other 30,890 23,080

Total accrued liabilities $ 59,640 $ 46,660

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Long-term Debt

9 unchanged sentences

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, while the $ 7.3 million redemption premium, as well as $ 3.0 million of unamortized debt issuance costs associated with the 2025 Senior Notes, were included in debt financing and related expenses in the accompanying consolidated statement of operations.

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.

1 unchanged sentence

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.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

8 unchanged sentences

During the second quarter of 2021, and in connection with the issuance of the 2029 Senior Notes, the Company redeemed all of the outstanding 2025 Senior Notes, as permitted under the indenture, at a price of 102.438 % of the principal amount.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Credit Agreement

3 unchanged sentences

The Credit Agreement consists of a $ 300.0 million senior secured revolving credit facility, which permits borrowings denominated in specific foreign currencies, subject to a $ 125.0 million sub limit, maturing on March 29, 2026 .

In November 2021, the Company amended the Credit Agreement to replace LIBOR with a benchmark interest rate determined based on the currency denomination of borrowings.

Effective January 1, 2022, the amendment replaced the reference rate terms for U.S.

dollar LIBOR borrowings to the Secured Overnight Financing Rate ("SOFR"), British pound sterling LIBOR borrowings to the Sterling Overnight Index Average ("SONIA") and Euro LIBOR borrowings to the Euro Short Term Rate ("ESTR"), all plus a spread of 1.50 %.

In November 2021 and April 2023, the Company amended the Credit Agreement to replace LIBOR.

As of December 31, 2023, the Credit Agreement is subject to benchmark interest rates that are based on the currency denomination of borrowings, with British pound sterling borrowings subject to the Sterling Overnight Index Average and Euro borrowings subject to the Euro InterBank Offered Rate, both plus a spread of 1.625 %, and U.S.

dollar borrowings subject to the Secured Overnight Financing Rate plus a spread of 1.725 %.

The interest rate spread is based upon the leverage ratio, as defined, as of the most recent determination date.

2 unchanged sentences

The Company's revolving credit facility allows for the issuance of letters of credit, not to exceed $ 40.0 million in aggregate.

As of December 31, 2021 the Company placed cash on deposit with a financial institution to be held as cash collateral for the Company's outstanding letters of credit;

effectively, as of December 31, 2021, the Company had no letters of credit issued against its revolving credit facility.

See Note 7, " Cash and Cash Equivalents ," for further information on its cash deposits.

At December 31, 2023, the Company had no amounts outstanding under its revolving credit facility and had $ 294.0 million potentially available after giving effect to $ 6.0 million of letters of credit issued and outstanding.

At December 31, 2021, the Company had no amounts outstanding under its revolving credit facility and had $ 300.0 million potentially available.

The Company's borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of December 31, 2022 and December 31, 2021.

At December 31, 2022, the Company had no amounts outstanding under its revolving credit facility and had $ 293.9 million potentially available after giving effect to $ 6.1 million of letters of credit issued and outstanding.

After consideration of leverage restrictions contained in the Credit Agreement, as of December 31, 2023, the Company had $ 256.9 million of borrowing capacity available for general corporate purposes.

The Company's borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of December 31, 2022.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

8 unchanged sentences

There were no borrowings outstanding on this loan facility as of December 31, 2023 or 2022.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Long-term Debt Maturities

13 unchanged sentences

These amounts consisted primarily of legal, accounting and other transaction advisory fees as well as facility fees paid to the lenders.

Amortization expense for these items was $ 0.9 million, $ 1.0 million and $ 1.2 million in 2022, 2021 and 2020, respectively, and is included in interest expense in the accompanying consolidated statement of operations.

Amortization expense for these items was $ 0.9 million, $ 0.9 million and $ 1.0 million in 2023, 2022 and 2021, respectively, and is included in interest expense in the accompanying consolidated statement of income.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Derivative Instruments

Derivatives Designated as Hedging Instruments

In July 2022, the Company entered into cross-currency swap agreements to hedge its net investment in Euro-denominated assets against future volatility in the exchange rate between the U.S.

The Company uses cross-currency swap agreements to hedge its net investment in Euro-denominated assets against future volatility in the exchange rate between the U.S.

dollar and the Euro.

1 unchanged sentence

dollar-based long-term debt into Euro-denominated long-term debt.

The agreements have notional amounts totaling $ 150.0 million, which decline to $ 75.0 million over contract periods ending on October 15, 2023 and April 15, 2024.

At inception, the Company designates its cross-currency swaps as net investment hedges.

In July 2022, the Company entered into cross-currency swap agreements at notional amounts declining from $ 150.0 million to $ 75.0 million over contract periods ending on October 15, 2023, and April 15, 2024.

Under the terms of the agreements, the Company is to receive net interest payments at fixed rates of approximately 2.4 % to 2.6 % of the notional amounts.

At inception, the cross-currency swaps were designated as net investment hedges.

In July 2022, immediately prior to entering into the new cross-currency swap agreements, the Company terminated its existing cross-currency swap agreements, de-designating the swaps as net investment hedges and receiving $ 26.2 million of cash.

As of December 31, 2023, the notional amount of these cross-currency swaps was $ 75.0 million.

In July 2022, immediately prior to entering into the new cross-currency swap agreements, the Company terminated its existing cross-currency swap agreements, de-designated the swaps as net investment hedges and received $ 26.2 million of cash, which was classified as an investing activity in the accompanying consolidated statement of cash flows.

The cross-currency swap agreements had notional amounts totaling $ 250.0 million, which declined to $ 25.0 million over various contract periods ending between October 15, 2023 and October 15, 2027.

Under the terms of the agreements, the Company was to receive net interest payments at fixed rates ranging from approximately 0.8 % to 2.9 % of the notional amounts.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2023 and 2022, the fair value carrying amount of the Company's derivatives designated as hedging instruments are recorded as follows (dollars in thousands):

2 unchanged sentences

Net Investment Hedges

Cross-currency swaps Other assets $ — $ 7,590

Cross-currency swaps Accrued liabilities $ ( 6,510 ) $ —

Cross-currency swaps Other long-term liabilities — ( 7,090 )

The following table summarizes the income recognized in AOCI on derivative contracts designated as hedging instruments as of December 31, 2023 and 2022, and the amounts reclassified from AOCI into earnings for the years ended December 31, 2023, 2022 and 2021 (dollars in thousands):

Amount of Income (Loss) Recognized

Amount of Income Recognized

in AOCI on Derivative

(Effective Portion, net of tax) Location of Loss Reclassified from AOCI into Earnings

(Effective Portion) Amount of Loss Reclassified from

(net of tax) Location of Loss Reclassified from AOCI into Earnings Amount of Loss Reclassified from

AOCI into Earnings

2 unchanged sentences

Net Investment Hedges

Cross-currency swaps $ 15,320 $ 5,910 Other expense, net $ — $ — $ —

Cross-currency swaps $ 13,260 $ 15,320 Other income (expense), net $ — $ — $ —

Over the next 12 months, the Company does no t expect to reclassify any pre-tax deferred amounts from AOCI into earnings.

3 unchanged sentences

The foreign exchange contracts primarily mitigate currency exposures between the U.S.

dollar and the Euro, Canadian dollar, Chinese yuan, and the Mexican peso, as well as between the Euro and British pound, and have various settlement dates through June 2023.

dollar and the Euro, Canadian dollar, Chinese yuan, and the Mexican peso, as well as between the Euro and British pound, and have various settlement dates through March 2024.

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 operations.

The following table summarizes the effects of derivatives not designated as hedging instruments on the Company's consolidated statement of operations (dollars in thousands):

therefore, gains and losses on these contracts are recognized each period directly into the consolidated statement of income.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

5 unchanged sentences

Foreign exchange contracts Other income (expense), net $ ( 1,880 ) $ 1,540 $ 7,130

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value of Derivatives

11 unchanged sentences

Foreign exchange contracts Recurring $ ( 1,790 ) $ — $ ( 1,790 ) $ —

The Company leases certain equipment and facilities under non-cancelable operating leases.

The majority of the Company's lease obligations are non-cancelable operating leases for certain equipment and facilities.

The Company's finance leases are for certain equipment as part of the Company's acquisition of Aarts.

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.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Supplemental balance sheet information related to the Company's leases are shown below (dollars in thousands):

Balance Sheet Location December 31, 2023 December 31, 2022

Operating leases Operating lease right-of-use assets $ 43,220 $ 47,280

Finance leases Property and equipment, net (a)

Total lease assets $ 45,690 $ 47,280

Operating leases Lease liabilities, current portion $ 7,410 $ 8,280

Finance leases Lease liabilities, current portion 490 —

Operating leases Lease liabilities 37,980 41,010

Finance leases Lease liabilities 1,710 —

Total lease liabilities $ 47,590 $ 49,290

__________________________

(a) Finance leases were recorded net of accumulated depreciation of $ 0.2 million as of December 31, 2023.

The components of lease expense are as follows (dollars in thousands):

Year ended December 31,

2022 2021 2020

Operating lease cost $ 10,560 8,510 7,870

Short-term, variable and other lease costs 3,350 2,460 1,540

Statement of Income Location 2023 2022 2021

Operating lease cost Cost of sales and Selling, general and administrative expenses $ 11,180 $ 10,560 $ 8,510

Finance lease cost:

Depreciation of lease assets Cost of sales 220 — —

Interest on lease liabilities Interest expense 60 — —

Short-term, variable and other lease costs Cost of sales and Selling, general and administrative expenses 3,430 3,350 2,460

Total lease cost $ 14,890 $ 13,910 $ 10,970

1 unchanged sentence

Year ended December 31, Operating Leases (a)

Finance Leases (a)

2024 $ 9,560 $ 540

2025 8,150 530

2026 8,620 600

2027 7,540 700

Thereafter 12,950 —

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted-average remaining term of the Company's operating leases as of December 31, 2022 is 6.7 years.

The weighted-average discount rate as of December 31, 2022 is 3.7 %.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 9.9 million, $ 7.9 million and $ 7.9 million during 2022, 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 $ 5.8 million and $ 19.6 million during 2022 and 2021, respectively.

Other information related to the Company's leases are as follows (dollars in thousands):

Year ended December 31,

2023 2022 2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ 10,250 $ 9,900 $ 7,880

Operating cash flows from finance leases 60 — —

Financing cash flows from finance leases 450 — —

Lease assets obtained in exchange for new lease liabilities:

Operating leases 8,340 5,790 19,600

Finance leases 2,620 — —

The weighted-average remaining term of the Company's operating leases and finance leases as of December 31, 2023, is 6.5 and 3.5 years, respectively.

The weighted-average discount rate for operating and finance leases as of December 31, 2023, is 4.0 % and 2.6 %, respectively.

Other Long-term Liabilities

13 unchanged sentences

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

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2023, the Company was a party to 459 pending cases involving an aggregate of 4,863 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.

9 unchanged sentences

Fiscal year ended December 31, 2021 4,655 265 134 32 4,754 $ 16,819 $ 1,950,000

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In addition, the Company acquired various companies to distribute its products that had distributed gaskets of other manufacturers prior to acquisition.

5 unchanged sentences

Of the 4,863 claims pending at December 31, 2023, 33 set forth specific amounts of damages (other than those stating the statutory minimum or maximum).

At December 31, 2022, of the 45 claims that set forth specific amounts, there was no claim seeking more than $5 million for punitive damages.

At December 31, 2023, of the 33 claims that set forth specific amounts, there were no claims seeking more than $5 million for punitive damages.

Below is a breakdown of the compensatory damages sought for those claims seeking specific amounts:

5 unchanged sentences

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.

During the second quarter of 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.

After completing its study in the second quarter of 2020, the Company recorded a non-cash, pre-tax charge of $ 23.4 million.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company accrues for all asbestos-related future defense costs for both known and unknown claims, which the Company believes are reasonably estimable.

The Company’s liability for asbestos-related claims is 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.

In 2021, the Company commissioned its actuary to update the asbestos study based on data as of September 30, 2021.

The Company recorded a non-cash, pre-tax charge of $ 1.5 million to increase the liability estimate to $ 28.2 million, at the low-end of the range of the 2021 study.

These pre-tax charges for 2020 and 2021 are included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

In 2022, the Company commissioned its actuary to update the asbestos study based on data as of September 30, 2022, which yielded a range of possible future liability of $ 29.6 million to $ 39.5 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 non-cash, pre-tax charge of $ 5.6 million to increase the liability estimate to $ 29.6 million, at the low-end of the range.

This charge is included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

As of December 31, 2022, the Company’s total asbestos-related liability is $ 29.1 million, and is included in accrued liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheet.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2023, the Company’s total asbestos-related liability was $ 26.6 million.

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.

10 unchanged sentences

The plan contains both contributory and noncontributory profit sharing arrangements, as defined.

Aggregate charges included in the accompanying consolidated statement of operations under this plan were $ 3.7 million in 2022 and $ 3.4 million in each of 2021 and 2020, respectively.

Aggregate charges included in the accompanying consolidated statement of income under this plan were $ 4.6 million, $ 3.7 million and $ 3.4 million in 2023, 2022 and 2021, respectively.

Certain of the Company's non-U.S.

and union hourly employees participate in defined benefit pension plans.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Plan Assets, Expenses and Obligations

Net periodic pension benefit expense recorded in the Company's consolidated statement of operations for defined benefit pension plans include the following components (dollars in thousands):

Net periodic pension benefit expense recorded in the Company's consolidated statement of income for defined benefit pension plans include the following components (dollars in thousands):

Pension Benefit

5 unchanged sentences

Amortization of net loss 120 570 910

Net periodic benefit expense $ 710 $ 1,460 $ 1,600

The service cost component of net periodic benefit expense 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 operations.

During the 2022, the Company recorded a non-cash curtailment expense of $ 0.2 million, as it transitioned certain active employees previously participating in a defined benefit plan in the United Kingdom to a defined contribution plan, thereby eliminating future service cost accruals for all employees under this defined benefit plan.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net periodic benefit expense (a)

$ 780 $ 710 $ 1,460

__________________________

(a) The net periodic benefit expense for the U.S.

defined benefit pension plans was $ 0.5 million, $ 0.9 million and $ 1.0 million for 2023, 2022 and 2021, respectively.

The net periodic benefit expense (income) for the non-U.S.

defined benefit pension plans was $ 0.3 million, $( 0.2 ) million and $ 0.4 million for 2023, 2022 and 2021, respectively .

During 2023, the Company recognized a one-time, pre-tax settlement charge of $ 1.0 million related to the purchase of an annuity contract to transfer the Company's Canadian defined benefit obligations to an insurance company.

During 2022, the Company recorded a non-cash curtailment expense of $ 0.2 million, as it transitioned certain active employees previously participating in a defined benefit plan in the United Kingdom to a defined contribution plan, thereby eliminating future service cost accruals for all employees under this defined benefit plan.

Actuarial valuations of the Company's defined benefit pension plans were prepared as of December 31, 2023, 2022 and 2021.

9 unchanged sentences

Management believes this yield curve removes the impact of including additional required corporate bond yields (potentially considered in the above-median curve) resulting from the uncertain economic climate that does not necessarily reflect the general trend in high-quality interest rates.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Weighted average assumptions used in accounting for the non-U.S.

6 unchanged sentences

Expected long-term rate of return on plan assets 6.60 % 4.20 % 3.90 %

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following provides a reconciliation of the changes in the Company's defined benefit pension plans' projected benefit obligations and fair value of assets for each of the years ended December 31, 2023 and 2022 and the funded status as of December 31, 2023 and 2022 (dollars in thousands):

5 unchanged sentences

Participant contributions — ( 10 )

Actuarial gain (a)

Actuarial (loss) gain (a)

( 780 ) 10,260

Benefit payments 1,300 1,310

Settlements 90 —

Change in foreign currency ( 740 ) 2,020

Projected benefit obligations at December 31 $ ( 25,560 ) $ ( 37,560 )

Projected benefit obligations at December 31 (b)

$ ( 27,470 ) $ ( 25,560 )

Changes in Plan Assets

4 unchanged sentences

Benefit payments ( 1,300 ) ( 1,310 )

Settlements ( 90 ) —

Change in foreign currency 920 ( 2,810 )

Fair value of plan assets at December 31 $ 25,470 $ 38,130

Fair value of plan assets at December 31 (c)

$ 27,800 $ 25,470

Funded status at December 31 $ 330 $ ( 90 )

__________________________

(a) The actuarial gain for the year ended December 31, 2022 was primarily due to an increase in the discount rate utilized in measuring the projected benefit obligations, partially offset by experience losses.

The actuarial gain for the year ended December 31, 2021 was primarily due to an increase in the discount rate utilized in measuring the projected benefit obligations as well as other assumptions and experience gains.

(a) The actuarial loss for the year ended December 31, 2023 was primarily due to changes in demographic assumptions as well as a decrease in the discount rate utilized in measuring the projected benefit obligations, partially offset by experience gains.

The actuarial gain for the year ended December 31, 2022 was primarily due to an increase in the discount rate utilized in measuring the projected benefit obligations, partially offset by experience losses.

projected benefit obligations were $ 13.2 million and $ 12.6 million at December 31, 2023 and 2022, respectively.

projected benefit obligations were $ 14.3 million and $ 13.0 million at December 31, 2023 and 2022, respectively.

plan assets was $ 9.5 million and $ 8.2 million at December 31, 2023 and 2022, respectively.

The fair value of non-U.S.

plan assets was $ 18.3 million and $ 17.3 million at December 31, 2023 and 2022, respectively .

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Pension Benefit

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Total accumulated other comprehensive loss recognized at December 31 $ 7,760 $ 7,530

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accumulated Benefit Obligations Projected Benefit Obligations

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The Company expects to make contributions of $ 1.2 million to fund its pension plans during 2024.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company's overall investment goal is to provide for capital growth with a moderate level of volatility by investing assets in targeted allocation ranges.

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(a) Diversified growth funds invest in a broad range of asset classes including equities, investment grade and high yield bonds, commodities, property, private equity, infrastructure and currencies.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Actual allocations to each asset vary from target allocations due to periodic investment strategy changes, market value fluctuations and the timing of benefit payments and contributions.

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Investment policies reflect the unique circumstances of the respective plans and include requirements designed to mitigate these risks by including quality and diversification standards.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the level under the fair value hierarchy (see Note 3, " Summary of Significant Accounting Policies ") that the Company's pension plan assets are measured, on a recurring basis as of December 31, 2023 (dollars in thousands):

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Equity securities $ 5,720 $ 5,720 $ — $ —

Fixed income 3,030 3,030 — —

Cash and cash equivalents 200 200 — —

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Investment funds

Equity securities 2,350

Fixed income 21,710

Diversified growth 3,330

Cash and cash equivalents 170

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The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years (dollars in thousands):

Year ended December 31, Pension

Years 2029-2033 9,270

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Equity Awards

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TriMas Corporation Director Retainer Share Election Program

The Company previously maintained the TriMas Corporation 2017 Equity and Incentive Compensation Plan, which was replaced by the TriMas Corporation 2023 Equity and Incentive Compensation Plan in 2023 such that, while existing grants remain outstanding until exercised, vested or canceled, no new shares may be issued under this plan.

The Company awarded the following restricted stock units ("RSUs") during 2023, 2022, and 2021:

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• Granted 27,560 , 22,554 and 21,112 RSUs, respectively, to its non-employee independent directors, which vest one year from date of grant so long as the director and/or Company does not terminate their service prior to the vesting date;

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

• Issued 3,317 , 337 and 1,792 RSUs, respectively, related to director fee deferrals 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;

The Company awarded the following RSUs during 2022 and 2021:

• Issued 174 , 260 and 49 RSUs, respectively, to certain employees related to dividend equivalent rights on existing equity awards.

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• Granted 8,912 RSUs to certain employees, which are subject only to a service condition and fully vest at the end of three years so long as the employee remains with the Company.

• granted 2,558 RSUs to certain employees, which are subject only to a service condition and vest one year from the date of grant so long as the employee remains with the Company.

During 2023, the Company also awarded 95,017 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 initially earned 50 % based upon the Company's achievement of an earnings per share compound annual growth rate ("EPS CAGR") metric and 50 % based upon the Company's cash return on net assets ("Cash RONA") metric over a period beginning January 1, 2023, and ending December 31, 2025.

The total EPS CAGR and Cash RONA performance-based RSUs initially earned shall be subject to modification 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 4.36 % and annualized volatility of 33.9 %.

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 250 % of the target.

During 2022, the Company awarded 85,156 performance-based RSUs to certain 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, 2022 and ending December 31, 2024.

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.

These awards are earned 50 % based upon the Company's achievement of an EPS CAGR metric over a period beginning January 1, 2022, and ending December 31, 2024.

The remaining 50 % of the awards are earned based on the Company's TSR relative to the TSR of the common stock of a pre-defined industry peer-group, measured over the performance period.

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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.

The Company awarded 72,962 and 113,146 of similar performance-based RSUs in 2021 and 2020, respectively.

For similar performance-based RSUs awarded in 2019, the Company attained 65.4 % of the target on a weighted average basis, resulting in a decrease of 24,975 shares during 2022.

The Company awarded 72,962 of similar performance-based RSUs in 2021.

For similar performance-based RSUs awarded in 2019 and 2020, the Company attained 65.4 % and 62.7 %, respectively, of the target on a weighted average basis, resulting in a decrease of 24,975 and 32,430 shares during 2022 and 2023, respectively.

During 2020, the Company awarded performance-based RSUs to certain Company key employees which were earned based upon the Company's stock price performance over the period beginning January 1, 2020, and ending December 31, 2022.

The stock price achievement was calculated based on the Company's average closing stock price for each quarter end for the 20 trading days up to and including March 31, June 30, September 30 and December 31, 2022, respectively.

The Company did not meet the minimum performance threshold resulting in a decrease of 86,275 shares during 2023.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During 2020, the Company awarded 87,034 performance-based RSUs to certain key divisional employees which vest three years from the grant date as long as the employee remains with the Company.

These awards are earned based upon the Company's stock price performance over the period from January 1, 2020 and ending December 31, 2022.

The stock price achievement is calculated based on the Company's average closing stock price for each quarter end for the 20 trading days up to and including March 31, June 30, September 30, and December 31, 2022, respectively.

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 0.85 % and annualized volatility of 25.2 %.

Depending on the performance achieved for this metric, the amount of shares earned, if any, can vary from 0 % of the target award to a maximum of 160 % of the target award, although it automatically is earned at the target award level if the Company's stock price is equal to or greater than a specified stock price for either five consecutive trading days or 20 total trading days during the performance period.

Information related to restricted shares as of and for the year ended December 31, 2023 is as follows:

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The Company recognized stock-based compensation expense related to restricted shares of $ 9.7 million, $ 9.8 million and $ 9.5 million in 2023, 2022 and 2021, respectively.

The stock-based compensation expense is included in selling, general and administrative expenses in the accompanying statement of operations.

The stock-based compensation expense is included in selling, general and administrative expenses in the accompanying consolidated statement of income.

Earnings per Share

Net income is divided by the weighted average number of common shares outstanding during the year to calculate basic earnings per share.

For the year ended December 31, 2020, no restricted shares or stock options were included in the computation of net income (loss) per share because to do so would be anti-dilutive.

The following table summarizes the dilutive effect of RSUs and options to purchase common stock:

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In 2021, the Company's Board of Directors declared the first dividend since the Company's initial public offering in 2007.

Since the fourth quarter of 2021, we have declared dividends of $ 0.04 per share of common stock in each quarter, and total dividends declared and paid on common shares during 2022 and 2021 were $ 6.9 million and $ 1.7 million, respectively.

Since the fourth quarter of 2021, we have declared dividends of $ 0.04 per share of common stock in each quarter, and total dividends declared and paid on common shares during 2023, 2022 and 2021 were $ 6.7 million, $ 6.9 million and $ 1.7 million, respectively.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other Comprehensive Income

Other Comprehensive Income (Loss)

Changes in AOCI by component for the year ended December 31, 2023 are summarized as follows, net of tax (dollars in thousands):

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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:

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Packaging – TriMas' Packaging segment consists primarily of the Rieke ® brand, as well as more recently acquired brands which include the Affaba & Ferrari ™ , Taplast ™ , Rapak ® , Plastic Srl, Intertech and Omega brands.

TriMas Packaging develops and manufactures a broad array of dispensing products (such as foaming pumps, lotion and hand soaps and 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, and flexible spouts), polymeric jar products, fully integrated dispensers for fill-ready bag-in-box applications, and consumable vascular delivery and diagnostic test components, all for a variety of consumer products submarkets including, but not limited to, beauty and personal care, food and beverage, home care, and life sciences, including, but not limited to, pharmaceutical, nutraceutical and medical, as well as industrial markets (including agricultural).

Aerospace – TriMas' Aerospace segment, which includes the Monogram Aerospace Fasteners ™ , Allfast Fastening Systems ® , Mac Fasteners ™ , TFI Aerospace, 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 – TriMas' 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.

See below for more information regarding the types of products and services provided within each reportable segment:

Packaging – TriMas' Packaging segment consists primarily of the Rieke, Affaba & Ferrari, Taplast, Rapak, Plastic Srl, Aarts Packaging, Intertech and Omega brands.

TriMas Packaging develops and manufactures a broad array of dispensing products (such as foaming pumps, lotion, hand soap and 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 resistant caps, beverage closures, fragrance and cosmetic caps, drum and pail closures, and flexible spouts), polymeric jar products, fully integrated dispensers for fill-ready bag-in-box applications, and consumable vascular delivery and diagnostic test components, all for a variety of consumer products submarkets including, but not limited to, beauty and personal care, food and beverage, home care, and life sciences, including, but not limited to, pharmaceutical, nutraceutical, and medical, as well as industrial markets (including agricultural).

Aerospace – TriMas' Aerospace segment, which includes the Monogram Aerospace Fasteners, Allfast Fastening Systems, Mac Fasteners, TFI Aerospace, RSA Engineered Products, Martinic Engineering, and Weldmac Manufacturing Company 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 – TriMas' Specialty Products segment, which includes the Norris Cylinder and Arrow Engine brands, designs, manufactures and distributes highly-engineered steel cylinders for use within industrial and aerospace markets, natural gas-fired engines for remote power generation applications and compression systems for use within the North American industrial oil and gas markets.

TRIMAS CORPORATION

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Specialty Products 36,400 30,250 22,550

Corporate (b)

Corporate (b) (c)

( 46,620 ) ( 20,250 ) ( 37,220 )

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Specialty Products 10,410 5,860 5,500

Corporate 30 90 90

Corporate (c)

Total $ 54,190 $ 45,960 $ 45,060

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Specialty Products 4,130 4,130 4,120

Corporate 130 130 130

Corporate (c)

Total $ 57,590 $ 53,220 $ 53,450

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Specialty Products 92,770 86,290 73,260

Corporate 94,440 136,660 58,730

Corporate (c)

27,360 94,440 136,660

Total $ 1,341,660 $ 1,305,000 $ 1,303,640

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(a) In 2022, the Company completed the sale of vacant land adjacent to the Company's Tolleson, Arizona, manufacturing facility for net proceeds of $ 5.0 million, and recognized a $ 4.8 million gain on the sale, which is included within the Aerospace segment.

(b) In 2022, the Company sold a non-core facility in City of Industry, California, for net proceeds of $ 23.3 million, and recognized a $ 17.6 million gain on the sale, which is included in Corporate operating loss for 2022 and included within net gain (loss) on disposition of assets in the accompanying consolidated statement of operations.

Corporate expenses primarily include compensation, benefits, professional services, information technology and other administrative costs.

Corporate assets consist primarily of cash and cash equivalents, unallocated deferred tax assets and prepaid assets.

Corporate expenses and assets reconcile reportable segment information to the consolidated totals.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents the Company's net sales for each of the years ended December 31 and long-lived assets at each year ended December 31, attributed to each subsidiary's continent of domicile (dollars in thousands).

The following table presents the Company's net sales for each of the years ended December 31 and long-lived assets at each year ended December 31, by geographical area (dollars in thousands).

As of December 31,

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approximated $ 72.2 million, $ 74.5 million and $ 80.6 million in 2023, 2022 and 2021, respectively.

The Company's income (loss) before income taxes and income tax expense (benefit), each by tax jurisdiction, consists of the following (dollars in thousands):

The Company's income before income taxes and income tax expense (benefit), each by tax jurisdiction, consists of the following (dollars in thousands):

Year ended December 31,

2023 2022 2021

Income (loss) before income taxes:

Income before income taxes:

Domestic $ 20,660 $ 56,750 $ 28,380

Foreign 29,930 30,920 40,730

Total income (loss) before income taxes $ 87,670 $ 69,110 $ ( 102,710 )

Total income before income taxes $ 50,590 $ 87,670 $ 69,110

Current income tax expense:

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Total deferred income tax expense (benefit) ( 1,870 ) ( 1,440 ) 1,490

Income tax expense (benefit) $ 21,500 $ 11,800 $ ( 22,950 )

Income tax expense $ 10,230 $ 21,500 $ 11,800

TRIMAS CORPORATION

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Operating lease liability 10,690 12,670

Research and experimentation costs (a)

Research and experimentation costs 6,530 4,130

Tax loss and credit carryforwards 28,880 27,310

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Net deferred tax liability $ ( 13,060 ) $ ( 11,540 )

__________________________

(a) Effective for tax years beginning after December 31, 2021, research and experimentation expenditures are to be capitalized and amortized for tax-purposes as part of the Tax Cuts and Jobs Act of 2017.

The following is a reconciliation of income tax expense (benefit) computed at the U.S.

federal statutory rate to income tax expense (benefit) allocated to income (loss) before income taxes (dollars in thousands):

The following is a reconciliation of income tax expense computed at the U.S.

federal statutory rate to income tax expense allocated to income before income taxes (dollars in thousands):

Year ended December 31,

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Change in recognized tax benefits ( 130 ) ( 600 ) ( 550 )

Goodwill and other intangible assets impairment — — 13,430

Tax credits and incentives ( 1,570 ) ( 1,260 ) ( 5,060 )

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Other, net ( 230 ) ( 290 ) ( 790 )

Income tax expense (benefit) $ 21,500 $ 11,800 $ ( 22,950 )

During 2020, the Company undertook certain tax-planning actions with respect to intercompany debt restructuring within the group.

These actions resulted in the recognition of a $ 6.4 million deferred tax benefit related to an interest limitation carryforward.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income tax expense $ 10,230 $ 21,500 $ 11,800

The Company has recorded deferred tax assets on $ 25.4 million of various state operating loss carryforwards and $ 60.5 million of various foreign operating loss carryforwards.

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or additional foreign withholding taxes related to investments in foreign subsidiaries that are indefinitely reinvested since any excess of the amount for financial reporting over the tax basis in these investments is not significant as of December 31, 2023.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unrecognized Tax Benefits

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Tax positions related to prior years:

Reductions ( 50 )

Settlements —

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Management monitors changes in tax statutes and regulations and the issuance of judicial decisions to determine the potential impact to UTBs and is not aware of, nor does it anticipate, any subsequent events that could have a significant impact on the Company's financial position during the next twelve months.

TRIMAS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Subsequent Events

On February 1, 2023 , the Company acquired Aarts Packaging B.V.

("Aarts") for a purchase price of approximately € 35 million, subject to customary closing conditions.

Aarts is a luxury packaging solutions provider for beauty and lifestyle brands, as well as for customers in the food and life sciences end markets, and has annual net sales of approximately € 23 million.

Aarts will become part of the Packaging reportable segment.

On February 20, 2024 , the Company announced that its Board of Directors had declared a cash dividend of $ 0.04 per share of TriMas Corporation common stock, which will be payable on March 8, 2024 , to shareholders of record as of the close of business on March 1, 2024 .

On February 23, 2023 , the Company announced it has signed an agreement to acquire the operating net assets of Weldmac Manufacturing Company (“Weldmac”), a leading designer and manufacturer of high-performance, complex metal fabricated components and assemblies for the aerospace, defense and space launch end markets with annual net sales of approximately $ 33 million.

Weldmac will become part of the Aerospace reportable segment upon closing, which the Company expects to be during second quarter 2022.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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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 8. Financial Statements and Supplementary Data