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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-02-27 · 242 added, 172 removed, 284 unchanged (59% of the section changed)

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You should read the following discussion together with Item 8, "Financial Statements and Supplementary Data."

TriMas designs, develops and manufactures a diverse set of products primarily for the consumer products, aerospace & defense and industrial markets through its TriMas Packaging, TriMas Aerospace and Specialty Products groups.

TriMas designs, develops and manufactures a diverse set of products primarily for the consumer products and industrial markets through its TriMas Packaging and Specialty Products groups.

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

We believe our businesses share important and distinguishing characteristics, including:

well-recognized and leading brand names in the markets we serve;

We believe our businesses share important and distinguishing characteristic s, including:

innovative product technologies and features;

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While the majority of our revenue is in the United States, we manufacture and supply products globally to a wide range of companies.

We report our business activity in three segments:

Packaging, Aerospace and Specialty Products.

We are principally engaged in two reportable segments:

Packaging and Specialty Products.

On November 4, 2025, we entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Takeoff Buyer, Inc.

(the “Purchaser”), an affiliate of Tinicum L.P.

and funds managed by Blackstone, Inc., to sell TriMas Aerospace.

The purchase price for the sale of TriMas Aerospace consists of approximately $1.45 billion in cash, subject to customary adjustments.

The sale of TriMas Aerospace is expected to close in the first quarter of 2026, subject to the satisfaction or waiver of customary and other closing conditions.

The financial results of our Aerospace business were previously reported within our Aerospace reportable segment, and are presented as assets held for sale in our consolidated balance sheet and as discontinued operations in our consolidated statement of income for all periods presented in the financial statements.

Key Factors Affecting Our Reported Results

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We serve customers in industries that are highly competitive and that may be significantly impacted by changes in economic or geopolitical conditions.

Our results of operations have been materially impacted over the past few years by macro-economic factors, first by the onset and proliferation of the coronavirus pandemic ("pandemic"), then further from increased energy costs and supply chain disruptions from the Russia-Ukraine conflict, and more recently by cost inflation (raw materials, wage rates and freight) a lack of material and in certain regions skilled labor availability, as well as recent periods of destocking from prior periods of over-ordering by customers.

These factors s ignificantly affected each of our businesses and how we operate, albeit in different ways and magnitudes.

Sales in our Packaging segment for dispensing and closure products used in applications to help fight the spread of germs have experienced extreme volatility in demand, with demand spiking to record highs after the onset of the pandemic, demand abating as expected from those high levels beginning mid-2022 and continuing through most of 2023, as a result of some of our larger customers' choices to rebalance on-hand inventory levels and caution in purchasing behaviors given the current inflationary macro-economic environment.

Sales of certain of our aerospace-related products were significantly depressed from historical levels following the onset of the pandemic, but demand has significantly increased in recent quarters as air travel has picked-up and new aircraft build rates improve.

Certain of our products for industrial applications, for example steel cylinders for packaged gas applications, have experienced volatility in demand related to customers securing high order rates in prior periods, only to enter a period of destocking in more recent periods.

Altogether, this significant level of volatility in demand levels, input and transportation costs, and material and labor availability, have pressured our ability to operate efficiently in recent periods.

While some areas of demand volatility and softness remain, such as in our Specialty Products segment, and more specifically our Norris Cylinder business, we have experienced more steady and consistent demand in our Packaging and Aerospace segments.

Our results of operations have been materially impacted over the past few years by macro-economic factors, most recently by cost inflation (raw materials, wage rates and freight) and a lack of material, and in certain regions, skilled labor availability.

Additionally, during 2025, the U.S.

government altered its approach to international trade policy and announced baseline tariffs on products from all countries and additional individualized reciprocal tariffs on the countries with which the United States has the largest trade deficits, including China.

This change in international trade policy has also created uncertainty with respect to future tariffs, including any retaliatory tariffs imposed by other countries, or other potential governmental actions.

These factors have affected each of our businesses and how we operate, albeit in different ways and magnitudes.

The current tariffs, predominately those imposed on China-based imports, have increased the costs of certain products sourced from non-U.S.

Sales of certain of our products for industrial applications, for example steel cylinders for packaged gas applications, have experienced volatility in demand related to customers securing high order rates in prior periods, only to enter a period of destocking in more recent periods.

This significant level of volatility in demand levels, input and transportation costs, and material and labor availability, have pressured our ability to operate efficiently in recent periods.

While some areas of demand volatility and softness remain, such as in our our Norris Cylinder business within our Specialty Products segment, we have experienced more steady and consistent demand in our Packaging segment.

Overall, 2025 net sales increased $14.9 million, or 2.4%, compared to 2024.

We experienced growth from acquisitions, as well as organic growth of 16.6% and 10.3% within our Aerospace and Packaging segments, respectively, compared to 2023 .

These increases were partially offset by lower sales of 37.2% in our Specialty Products segment as compared to the prior year as we work through a cyclical demand trough and destocking.

The most significant drivers affecting our financial results in 2024 compared with 2023 , other than as directly impacted by sales change s, were the impact of our recent acquisitions, accelerated depreciation charges related to shortening the useful lives of certain machinery and equipment in our Specialty Products segment, increased costs and decreased sales resulting from a prolonged labor union strike at one of our manufacturing facilities within our Aerospace segment, a charge to update our asbestos liability based on our recent actuarial valuation, improved material availability within our Aerospace segment, charges associated with environmental remediation liabilities, increased input costs, including expedited freight within our Packaging segment, lower realignment charges, and a decrease in our effective tax rat e.

In April 2023, we acquired Weldmac Manufacturing Company ("Weldmac"), a designer and manufacturer of complex metal fabricated components and assemblies for the aerospace, defense and space launch end markets for a purchase price of $34.0 million, with additional contingent consideration of $5.5 million paid in July 2023 and $2.25 million paid in October 2024 based on achievement of earnings targets.

Weldmac, which is reported in our Aerospace segment, is located in El Cajon, California.

Weldmac contributed $12.9 million of acquisition-related net sales growth during 2024.

In February 2023, we 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.

Aarts, which is reported in our Packaging segment, is located in Waalwijk, the Netherlands, and contributed $2.8 million of acquisition-related sales growth during 2024 resulting from its January 2024 sales.

We experienced organic growth of 4.1% within our Packaging segment compared to 2024.

The increase was partially offset by lower sales of 7.0% in our Specialty Products segment as compared to the prior year, as higher sales of steel cylinders more than offset the lost sales due to the divestiture of our Arrow Engine business in January 2025.

Our overall sales increase included $2.2 million of currency exchange, as our reported results in U.S.

dollars were favorably impacted as a result of a weakening U.S.

dollar relative to foreign currencies.

The most significant drivers affecting our financial results in 2025 compared with 2024, other than as directly impacted by sales changes, were the impact of the divestiture of our Arrow Engine business, our recognition of a net benefit to recognize our asbestos insurance recovery asset and update our liability to our recent actuarial valuation, realignment costs related to actions to reorganize our corporate office, charges associated with environmental remediation liabilities, the refinancing of our existing Credit Agreement ("Credit Agreement"), the year-over-year impact of accelerated depreciation charges in 2024 related to shortening the useful lives of certain machinery and equipment in our Specialty Products segment, and a decrease in our effective tax rate.

On January 31, 2025, we completed the sale of our Arrow Engine business within the Specialty Products segment for net cash proceeds of $21.0 million.

As a result, we recorded a pre-tax gain of $5.4 million for the year ended December 31, 2025.

In third quarter 2025, we commissioned our actuary to update our asbestos study, and upon completion we recorded a pre-tax charge of $8.0 million.

In the fourth quarter 2025, we reassessed the facts and circumstances surrounding the CIP agreement with the consortium of insurance companies and deemed the realization of the claim for loss recovery probable.

We estimated the loss recovery of indemnity and defense costs under the CIP agreement, and recognized an insurance recovery asset of $35.8 million, which was commensurate with the assumptions used to calculate the asbestos liability.

See Note 16, " Commitments and Contingencies ," to our consolidated financial statements attached herein with this Form 10-K.

During 2025, we recorded $5.2 million of realignment costs related to actions to reorganize our corporate office, primarily for severance and consulting costs, including $1.5 million of non-cash compensation expense.

During 2025 we recorded pre-tax charges of $6.5 million for environmental remediation for waste sites in which we had been named a potential responsible party.

In 2024, we recorded pre-tax charges of $3.2 million for similar environmental matters.

In March 2025, we amended our Credit Agreement to extend the maturity date through March 31, 2030.

We incurred fees and expenses of $1.3 million related to the amendment, all of which was capitalized as debt issuance costs.

In 2024, following a strategic demand and profitability study of our cylinders products within our Specialty Products segment, we ceased use of our second hot forge, which primarily produced lower profitability products, resulting in pre-tax non-cash charges related to accelerated depreciation expense of $8.2 million due to the shortening of the assets expected useful lives.

In August 2024, our labor agreement with the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) at our TriMas Aerospace facility in Commerce, California, expired.

On August 4, 2024, the UAW initiated a strike, causing a work stoppage that resulted in lost production volumes, reduced sales, manufacturing inefficiencies and $3.4 million of strike-related costs in 2024, with the Company and the UAW reaching a new labor agreement in mid-October 2024.

In 2024, we commissioned our actuary to update our asbestos study, and upon completion we recorded a pre-tax charge of $5.5 million, which is included in selling, general and administrative expenses.

In 2024, we recorded a pre-tax charges of $3.6 million for environmental remediation for waste sites in which we had been named a potential responsible party.

During 2024, we experienced abrupt increases in orders for certain products within our Packaging segment, requiring us to incur incremental input costs, including expedited freight, in order to timely fulfill certain customer's orders.

Over the past few years, we have been executing certain realignment actions in response to current and expected future end market demand and rising input costs.

During 2024, we incurred pre-tax realignment charges of $0.9 million within our Packaging segment, related to the closure of our facility in Irwindale, California.

In 2023, we recorded pre-tax realignment charges of $10.3 million, primarily related to our actions to close and consolidate two production facilities in China into one new, larger facility in Haining, China, and to close and consolidate our Rohnert Park, California, manufacturing facility operations into other existing U.S.

production locations.

These charges consisted of $2.1 million employee-related costs, $0.8 million for the write down of inventory to fair value, $5.2 million related to other facility move and consolidation costs, and $2.2 million were related to charges to accelerate the depreciation of certain fixed assets.

Our effective tax rate for 2025 and 2024 was (198.1)%, and 53.3%, respectively.

The decrease in effective tax rate 2024 as compared to 2023 is primarily as a result of a change in the mix of domestic and foreign pre-tax results.

The decrease in effective tax rate for 2025 as compared to 2024 is primarily as a result of us recognizing a $53.9 million tax benefit in 2025 related to the tax-basis versus book-basis difference in our Aerospace business.

Otherwise, the remaining difference is due to a change in the mix of domestic and foreign pre-tax results.

Additional Key Risks that May Affect Our Reported Results

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We will continue to assess and take further actions if required.

However, as a result of the current period of macroeconomic inflation and uncertainty and the potential impact of such factors to our future results of operations, as well as if there is an impact to TriMas' overall performance and market capitalization, we may record additional cash and non-cash charges related to further realignment actions, asset impairments, including impairments to our goodwill, intangible assets, fixed assets, inventory or customer receivable account balances.

However, as a result of the current period of macroeconomic inflation and uncertainty, including uncertainty regarding the scope and duration of current and future tariffs and trade actions, and the potential impact of such factors to our future results of operations, as well as if there is an impact to TriMas' overall performance and market capitalization, we may record additional cash and non-cash charges related to further realignment actions, asset impairments, including impairments to our goodwill, intangible assets, fixed assets, inventory or customer receivable account balances.

Despite the potential for declines in future demand levels and results of operations, at present, we believe our capital structure is in a strong position.

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We are sensitive to price movements and availability of our raw materials supply.

Our largest raw material purchases are for polypropylene, polyethylene, steel, aluminum, superalloys (such as titanium, A286 stainless steel and Inconel) and other oil and metal-based purchased components, the costs for each of which are subject to volatility.

There has also been some volatility over the past two years as a direct and indirect result of foreign trade policy, where tariffs on certain of our commodity-based products sourced from Asia have been instituted, the conflict in Eastern Europe, creating certain input material shortages, and labor shortages at certain of our raw material suppliers.

Our largest raw material purchases are for polypropylene, polyethylene, steel, aluminum, and other oil and metal-based purchased components, the costs for each of which are subject to volatility.

There has also been volatility in certain of our input costs as a direct and indirect result of foreign trade policy, where tariffs on certain of our commodity-based products sourced from Asia have been instituted.

In addition, in 2025, the U.S.

government announced baseline tariffs on products from all countries and additional individualized reciprocal tariffs on the countries with which the United States has the largest trade deficits, including China.

We will continue to take actions to mitigate such increases, including implementing commercial pricing adjustments, holding extra inventories, resourcing to alternate suppliers and insourcing of previously sourced products.

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Oil-based commodity costs are a significant driver of raw materials and purchased components used within our Packaging segment.

As such, an increase in crude oil often is a precursor to rising polymeric raw material costs, for which we may experience a contractual commercial recover lag.

Separately, our Arrow Engine business in our Specialty Products segment is sensitive to the demand for natural gas and crude oil in North America.

For example, demand for engine, pump jack and compressor products are impacted by active oil and gas rig counts and wellhead investment activities.

Each year, as a core tenet of the TriMas Business Model, our businesses target cost savings from Kaizen (continuous improvement) initiatives in an effort to reduce, or otherwise offset, the impact of increased input and conversion costs through increased throughput and yield rates, with a goal of at least covering inflationary and market cost increases.

As such, an increase in crude oil often is a precursor to rising polymeric raw material costs, for which we may experience a contractual commercial recovery lag.

Each year our businesses target continuous improvement initiatives in an effort to reduce, or otherwise offset, the impact of increased input and conversion costs through increased throughput and yield rates, with a goal of at least covering inflationary and market cost increases.

In addition, we continuously review our operating cost structures to ensure alignment with current market demand.

We continue to evaluate alternatives to redeploy the cash generated by our businesses, one of which includes returning capital to our shareholders.

In 2020, our Board of Directors increased the authorization of share repurchases to a cumulative amount of $250 million.

During 2024, we purchased 771,067 shares of our outstanding common stock for an aggregate purchase price of $19.3 million.

In November 2025, our Board of Directors authorized us to increase the purchase of our common stock up to $150 million in the aggregate, adding to the $65.4 million remaining under the previous authorization.

During 2025, 2024 and 2023, we purchased 3,124,866, 771,067 and 680,594 shares of outstanding common stock for $103.3 million, $19.3 million and $18.8 million, respectively.

As of December 31, 2025, we had $48.9 million remaining under the repurchase authorization.

See Note 24, " Subsequent Events ," included in Item 8, " Financial Statements and Supplementary Data ," within this Form 10-K for an update on our authorization.

In addition, in 2025, we declared quarterly dividends of $0.04 per share of common stock, aggregating to dividends declared and paid on common shares during 2025 of $6.6 million.

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Segment Information and Supplemental Analysis

The following table summarizes financial information for our three reportable segments (dollars in thousands):

The following table summarizes financial information for our reportable segments (dollars in thousands):

Year ended December 31,

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Packaging $ 535,540 82.9 % $ 512,320 81.2 % $ 463,600 71.1 %

Aerospace 294,210 31.8 % 241,400 27.0 % 188,090 21.3 %

Specialty Products 110,180 17.1 % 118,480 18.8 % 188,550 28.9 %

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Packaging $ 127,430 23.8 % $ 123,650 24.1 % $ 109,040 23.5 %

Aerospace 69,920 23.8 % 48,010 19.9 % 32,240 17.1 %

Specialty Products 10,730 9.7 % 5,890 5.0 % 44,260 23.5 %

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Packaging $ 58,800 11.0 % $ 56,410 11.0 % $ 48,760 10.5 %

Aerospace 36,150 12.3 % 31,370 13.0 % 28,990 15.4 %

Specialty Products 6,330 5.7 % 7,790 6.6 % 7,830 4.2 %

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Packaging $ 68,140 12.7 % $ 68,120 13.3 % $ 60,130 13.0 %

Aerospace 33,750 11.5 % 15,520 6.4 % 8,060 4.3 %

Specialty Products 4,190 3.8 % (1,990) (1.7) % 36,400 19.3 %

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Packaging $ 28,830 5.4 % $ 30,860 6.0 % $ 29,060 6.3 %

Aerospace 9,960 3.4 % 14,620 6.1 % 6,900 3.7 %

Specialty Products 5,950 5.4 % 7,100 6.0 % 10,410 5.5 %

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Packaging $ 28,090 5.2 % $ 27,730 5.4 % $ 27,740 6.0 %

Aerospace 7,900 2.7 % 7,820 3.2 % 7,590 4.0 %

Specialty Products 3,010 2.7 % 12,270 10.4 % 3,720 2.0 %

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Packaging $ 6,680 1.2 % $ 6,520 1.3 % $ 6,430 1.4 %

Aerospace 10,280 3.5 % 11,340 4.7 % 12,030 6.4 %

Specialty Products — — % — — % 410 0.2 %

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Year to Date 2024

Organic Acquisitions Foreign Exchange Total

Organic Acquisitions Divestitures Foreign Exchange Total

Consolidated TriMas Corporation 4.8 % — % (2.8) % 0.4 % 2.4 %

Packaging 4.1 % — % — % 0.4 % 4.5 %

Aerospace 16.6 % 5.3 % — % 21.9 %

Specialty Products 8.0 % — % (15.0) % — % (7.0) %

The following "Results of Operations Year Ended December 31, 2025 Compared with Year Ended December 31, 2024" section presents an analysis of our consolidated operating results displayed in the Consolidated Statement of Income.

A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on February 29, 2024.

Results of Operations

Year Ended December 31, 2025 Compared with Year Ended December 31, 2024

The principal factors impacting us during the year ended December 31, 2025, compared with the year ended December 31, 2024 were:

• Increases in demand for products within our Packaging and Aerospace segments;

• Increases in demand for products within our Packaging and Specialty Products segments;

• The divestiture of our Arrow Engine business;

• The recognition of a net benefit to recognize our asbestos insurance recovery asset and update our liability;

• Increased costs, primarily related to consulting costs and costs associated with actions to reorganize the corporate office;

• Environmental remediation expenses related to waste sites in which we had been named a potential responsible party;

• The impact of our debt refinancing activities;

• The year-over-year impact of accelerated depreciation charges in 2024 related to shortening the useful lives of certain machinery and equipment in our Specialty Products segment;

• The decrease in our effective tax rate in 2025 as compared with 2024.

Overall, net sales increased $14.9 million, or 2.4%, to $645.7 million in 2025, as compared to $630.8 million in 2024.

Organic sales, excluding the impact of currency exchange and acquisitions, increased $30.5 million, or 4.8%, driven by organic sales increases of 4.1% and 8.0% within our Packaging and Specialty Products segments, respectively, due to end market demand improvements and growth initiatives.

These increases were partially offset by the impact of the divestiture of our Arrow Engine business in our Specialty Products segment.

In addition, net sales increased by $2.2 million due to currency exchange, as our reported results in U.S.

dollars were favorably impacted as a result of the weakening of the U.S.

dollar relative to foreign currencies.

Gross profit margin (gross profit as a percentage of sales) approximated 21.4% and 20.5% in 2025 and 2024, respectively.

Gross profit margin increased primarily due to higher sales levels in our Packaging segment, and the year-over-year impact of $8.2 million of accelerated depreciation charges for certain machinery and equipment within our Specialty Products segment.

These improvements were partially offset by a $1.5 million write-off of certain inventory to the lower of cost or net realizable value and an increase of certain input costs in our Packaging segment and by the loss of sales related to the divestiture of our Arrow Engine business.

Operating profit margin (operating profit as a percentage of sales) approximated 6.4% and 2.4% in 2025 and 2024, respectively.

Operating profit increased $26.1 million, to $41.3 million in 2025, as compared to $15.2 million in 2024, due to a $20 million decrease in net Corporate expenses, higher sales levels in our Packaging segment, and the year-over-year impact of $8.2 million of accelerated depreciation charges for certain machinery and equipment within our Specialty Products segment.

These improvements were partially offset by a $1.5 million write-off of certain inventory to the lower of cost or net realizable value, an increase of certain input costs, and the impact of $1.2 million of net gains on sale of non-core properties in 2024 that did not repeat in our Packaging segment.

Operating profit also decreased due to the loss of sales related to the divestiture of our Arrow Engine business in our Specialty Products segment and as a result of higher employee-related costs.

Interest expense decreased $1.5 million, to $18.0 million in 2025, as compared to $19.6 million in 2024, primarily due to a decrease in our interest rates on our revolving credit facility.

Other income increased $0.8 million to $1.0 million in 2025, from $0.2 million in 2024, as the impact of foreign currency translation was partially offset by increased pension expense.

The effective income tax rate for 2025 was (198.1)%, compared to 53.3% for 2024.

We recorded an income tax benefit of $48.1 million in 2025, as compared to an income tax benefit of $2.2 million in 2024.

During 2025, we reported domestic and foreign pre-tax income (loss) of $(7.6) million and $31.9 million, respectively, as compared to domestic and foreign pre-tax income (loss) of $(31.2) million and $27.0 million, respectively, in 2024.

Our 2025 tax benefit is higher as a result of recognizing a $53.9 million tax benefit related to the tax-basis versus book-basis difference in our Aerospace business.

Otherwise, the remaining difference is due to a change in the mix of domestic and foreign pre-tax results.

Income (loss) from continuing operations increased $74.3 million to income of $72.3 million in 2025, compared to a loss of $2.0 million in 2024.

This increase was primarily a result of an increase in operating profit of $26.1 million, an increase in income tax benefit of $45.8 million, a $1.5 million decrease in interest expense, and a $0.8 million increase in other income.

See below for a discussion of operating results by segment.

Net sales increased $23.2 million, or 4.5% (of which 4.1% was organic and 0.4% was foreign currency exchange), to $535.5 million in 2025, as compared to $512.3 million in 2024.

Sales of dispensing products used primarily for beauty, personal care and home care applications increased by $25.4 million.

Sales of products used in life sciences markets increased by $7.7 million, sales of products used for industrial applications increased by $3.0 million, and sales of other consumer goods products increased by $7.2 million.

These increases were partially offset by the decrease in sales of products used in food and beverage applications of $22.2 million.

Net sales increased by $2.2 million due to currency exchange, as our reported results in U.S.

dollars were favorably impacted as a result of the weakening U.S.

dollar relative to foreign currencies, as compared to 2024.

Packaging's gross profit increased $3.8 million to $127.4 million, or 23.8% of sales, in 2025, as compared to $123.7 million, or 24.1% of sales, in 2024, due to higher sales levels as well as the favorable impact of prior year operational improvement actions.

Although gross profit increased, gross profit margin decreased primarily due to increased input costs including higher tariffs and a $1.5 million write-off of certain inventory to the lower of cost or net realizable value.

Packaging's selling, general and administrative expenses increased $2.4 million to $58.8 million, or 11.0% of sales, in 2025, as compared to $56.4 million, or 11.0% of sales, in 2024, primarily due to higher employee-related costs.

Packaging's operating profit of $68.1 million, or 12.7% of sales, in 2025 remained relatively flat compared to $68.1 million, or 13.3% of sales, in 2024, as higher sales volume and the favorable impact of cost reduction efforts were offset by increased input costs, the write-off of certain inventory to the lower of cost or net realizable value, higher selling, general and administrative expenses, and the impact of $1.2 million of net gains on sale of non-core properties in 2024 that did not repeat.

Specialty Products.

Net sales decreased $8.3 million, or 7.0% (of which 8.0% was organic and (15.0)% was due to the divestiture of Arrow Engine), to $110.2 million in 2025, as compared to $118.5 million in 2024.

Sales of steel cylinders increased $9.5 million, or 9.5%, to $108.8 million, as compared to $99.3 million, due predominantly to improved demand for industrial applications as customers continued to work through high prior period inventory balances.

Arrow Engine contributed $1.4 million of sales in 2025, as compared to $19.2 million in 2024.

See Note 4, " Acquisitions and Sale of Business," to our consolidated financial statements attached within this Form 10-K.

Gross profit within Specialty Products increased $4.8 million to $10.7 million, or 9.7% of sales, in 2025, as compared to $5.9 million, or 5.0% of sales, in 2024, primarily due to the year-over-year impact from $8.2 million of accelerated depreciation charges in 2024 for certain machinery and equipment in our cylinder business that did not repeat in 2025.

In addition, gross profit increased due to increased sales of steel cylinders and as a result of structural cost reductions made within our cylinder business.

These increases were partially offset by the $4.4 million of 2024 gross profit generated by the Arrow Engine business, which was sold in January 2025.

Selling, general and administrative expenses within Specialty Products decreased $1.5 million to $6.3 million, or 5.7% of sales, in 2025, as compared to $7.8 million, or 6.6% of net sales, in 2024, primarily due to $0.9 million of lower expenses resulting from the January 2025 sale of the Arrow Engine business.

The remainder of the decrease was primarily due to reduced spending levels related to structural cost reduction efforts within our cylinder business.

Operating profit (loss) within Specialty Products increased $6.2 million to an operating profit of $4.2 million, or 3.8% of sales, in 2025, as compared to an operating loss of $2.0 million, or 1.7% of sales, in 2024, primarily due to the year-over-year impact from $8.2 million of accelerated depreciation charges in 2024 for certain machinery and equipment in our cylinder business that did not repeat in 2025.

In addition, operating profit increased due to increased sales of steel cylinders and as a result of structural cost reductions made within our cylinder business.

These increases were partially offset by the $3.4 million of 2024 operating profit generated by the Arrow Engine business, which was sold in January 2025.

Corporate expenses, net included in operating profit consist of the following (dollars in millions):

Year ended December 31,

Corporate operating expenses $ 46.9 $ 36.0

Non-cash stock compensation 9.9 5.6

Legacy-related expenses (benefit) (20.4) 9.4

Gain on disposition of assets (5.4) —

Corporate expenses $ 31.0 $ 51.0

Corporate expenses decreased $20.0 million to $31.0 million in 2025, from $51.0 million in 2024 due to:

• Corporate operating expenses increased $10.9 million to $46.9 million in 2025 from $36.0 million in 2024, as we incurred $3.7 million of corporate operating expenses (exclusive of non-cash stock compensation) associated with actions to reorganize the corporate office, $4.4 million in higher information technology costs including costs associated with the upgrade of certain key information technology applications, and higher employee-related costs.

• Non-cash stock compensation increased $4.3 million to $9.9 million in 2025 from $5.6 million in 2024, primarily due to $1.5 million related to actions to reorganize the corporate office, additional expense associated with inducement awards granted in 2025, and a change in the expected attainment of existing awards in 2024.

• Our legacy-related expenses (benefit) increased $29.8 million to a net benefit of $20.4 million in 2025 from expense of $9.4 million in 2024.

This change was primarily due to a $33.3 million change in asbestos-related benefit (costs), net as we recognized a $27.8 million net benefit related to updating our asbestos studies in 2025, which consisted of a $35.8 million pre-tax benefit to recognize an insurance recovery asset, offset by a $8.0 million pre-tax charge to update our asbestos liability.

This compares to a $5.5 million pre-tax charge in 2024 to update our asbestos liability.

Also within our legacy expenses, our pre-tax charges for environmental matters increased $3.3 million as we recorded a pre-tax charge of $6.5 million in 2025 for environmental remediation for waste sites in which we had been named a potential responsible party, as compared to pre-tax charges of $3.2 million in 2024 for similar environmental matters.

• We recognized a $5.4 million pre-tax gain on the 2025 sale of our former Arrow Engine business.

Discontinued Operations.

The results of discontinued operations consist of our Aerospace segment for which we entered into a definitive agreement to sell on November 4, 2025.

Income from discontinued operations, net of income tax expense, was $47.8 million for the year ended December 31, 2025, as compared to $26.2 million for the year ended December 31, 2024.

See Note 5, " Discontinued Operations ," to our consolidated financial statements within this Form 10-K.

Aerospace net sales increased $102.2 million, or 34.7% (of which 26.6% was organic and 8.1% related to acquisitions), to $396.4 million in 2025, as compared to $294.2 million in 2024.

Acquisition-related sales growth from our February 2025 acquisition of GMT Aerospace was $23.9 million.

Sales of our fasteners products increased by $64.4 million due to increases in aircraft build rates, improved production yield and commercial actions.

Sales of our engineered components products increased by $14.0 million due to improved production throughput.

Net sales decreased by $0.1 million due to currency exchange.

Gross profit within Aerospace increased $45.3 million to $115.2 million, or 29.1% of sales, in 2025, as compared to $69.9 million, or 23.8% of sales, in 2024.

Gross profit increased primarily due to higher sales levels and resulting improved fixed cost absorption, a more favorable product sales mix and favorable commercial actions.

Additionally, 2024 was impacted by increased costs and manufacturing inefficiencies resulting from a prolonged labor union strike that did not repeat.

These increases in gross profit were partially offset by a $1.9 million purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value.

Selling, general and administrative expenses within Aerospace increased $10.2 million to $48.0 million, or 12.1% of sales, in 2025, as compared to $37.9 million, or 12.9% of sales, in 2024, primarily due to higher employee-related costs and higher ongoing selling, general and administrative costs associated with our acquisition of GMT Aerospace.

Costs directly attributable to Aerospace and allocated to discontinued operations increased $3.0 million to $4.7 million in 2025, as compared to $1.7 million in 2024, primarily due to $3.1 million third-party transaction costs incurred in 2025 associated with the sale of Aerospace.

These increases were partially offset by the impact of $1.8 million of costs related to the labor union strike in 2024 that did not repeat.

Operating profit within Aerospace increased $35.0 million to $67.0 million, or 16.9% of sales, in 2025, as compared to $32.0 million, or 10.9% of sales, in 2024, primarily due to the impact of higher sales levels, improved fixed cost absorption, a more favorable product sales mix, the impact of the labor union strike in 2024 that did not repeat, and commercial actions.

These increases were partially offset by higher selling, general and administrative expenses and the recognition of the purchase accounting charge related to the step-up of GMT Aerospace's inventory to fair value.

The following "Results of Operations Year Ended December 31, 2024 Compared with Year Ended December 31, 2023" section presents an analysis of our consolidated operating results displayed in the Consolidated Statement of Income for those areas that have changed as a result of accounting for our Aerospace segment as a discontinued operation.

A discussion regarding our results of operations for our Packaging and Specialty Products segments for the year ended December 31, 2024 compared to the year ended December 31, 2023, which did not change, can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission on February 27, 2025.

Year Ended December 31, 2024 Compared with Year Ended December 31, 2023

The principal factors impacting us during the year ended December 31, 2024 compared with the year ended December 31, 2023 were:

• Increases in demand for products within our Packaging segment;

• Significant demand decrease in our Specialty Products segment;

• The impact of recent acquisitions, primarily Aarts in February 2023 and Weldmac in April 2023;

• The impact of our recent acquisition of Aarts in February 2023;

• Expedited freight costs within our Packaging segment related to the abrupt increase in demand for certain products;

• Accelerated depreciation charges related to shortening the useful lives of certain machinery and equipment in our Specialty Products segment;

• Inc reased costs, decreased sales levels and manufacturing inefficiencies resulting from a prolonged labor union strike at one of our manufacturing facilities in our Aerospace segment that ended in mid-October 2024;

• Expenses associated with our asbestos exposure to update the liability to recent actuarial studies;

• Improved material availability and resulting production efficiencies in our Aerospace segment;

• Environmental remediation expenses related to waste sites in which we had been named a potential responsible party;

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• A decrease in our effective tax rate in 2024 compared with 2023.

Overall, net sales increased $31.5 million, or 3.5%, to $925.0 million in 2024, as compared to $893.6 million in 2023.

Acquisition-related sales growth was $15.7 million, comprised of $2.8 million from our February 2023 acquisition of Aarts and $12.9 million from our April 2023 acquisition of Weldmac.

Organic sales, excluding the impact of currency exchange and acquisitions, increased $17.9 million, or 2.0%, driven by organic sales increases of 10.3% and 16.6% within our Packaging and Aerospace segments, respectively, due to end market demand improvements and growth initiatives.

These increases were partially offset by a 37.2% sales decrease in our Specialty Products segment due to lower market demand.

Overall, net sales decreased $21.4 million, or 3.3%, to $630.8 million in 2024, as compared to $652.2 million in 2023.

Acquisition-related sales growth was $2.8 million, from our February 2023 acquisition of Aarts.

Organic sales, excluding the impact of currency exchange and aquisition, decreased $22.1 million, or 3.4%, driven by an organic sales decrease of 37.2% within our Specialty segment, due to lower market demand, partially offset by an organic sales increase of 10.3% within our Packaging segment due to end market demand improvements and growth initiatives.

The increase in net sales was also offset by $2.0 million due to currency exchange, as our reported results in U.S.

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Gross profit margin decreased due to reduced sales, significantly less favorable absorption of fixed costs, and $8.2 million of accelerated depreciation charges for certain machinery and equipment within our Specialty Products segment as well as increased input costs, the impact of a $2.6 million commercial settlement in 2023 that did not repeat in 2024, and higher production costs, which started to abate in fourth quarter 2024, related to demand reversion above peak capacity for certain product lines in our Packaging segment.

Also contributing to the decrease in gross profit were increased costs and manufacturing inefficiencies resulting from labor union strikes within our Aerospace segment.

The decrease in gross profit was partially offset by higher sales levels and related improved fixed cost absorption and the impact of a charge related to purchase accounting in 2023 that did not repeat within our Packaging and Aerospace segments.

Additionally, gross margin was favorably impacted by reduced material availability constraints, a more favorable product sales mix, and commercial recoveries within our Aerospace segment, and the lower year-over-year impact of realignment costs within our Packaging segment.

The decrease in gross profit was partially offset by higher sales levels and related improved fixed cost absorption, the impact of a charge related to purchase accounting in 2023 that did not repeat in 2024, and the favorable impact of lower year-over-year realignment costs all within our Packaging segment.

Operating profit margin (operating profit as a percentage of sales) approximated 2.4% and 7.8% in 2024 and 2023, respectively.

Operating profit decreased $18.3 million, to $47.2 million in 2024, as compared to $65.4 million in 2023, primarily due to decreased sales, significantly less favorable absorption of fixed costs and accelerated depreciation charges for certain machinery and equipment within our Specialty Products segment, a $5.5 million pre-tax charge related to updating our asbestos studies, and $3.6 million of pre-tax charges related to our environmental remediation obligations.

Additionally, operating profit decreased due to increased input costs and higher production costs, which started to abate in fourth quarter 2024, related to high demand for certain dispensing products within our Packaging segment, as well as increased costs and manufacturing inefficiencies resulting from the labor union strike within our Aerospace segment.

These decreases were partially offset by higher sales levels and related improved fixed cost absorption and the impact of a charge related to purchase accounting in 2023 that did not repeat within our Packaging and Aerospace segments.

Operating profit was favorably impacted by lower realignment costs and the impact of $1.0 million higher net gains on sales of non-core properties within the Packaging segment, as well as reduced material availability constraints, a more favorable product sales mix, and commercial recoveries within the Aerospace segment.

Operating profit decreased $35.5 million, to $15.2 million in 2024, as compared to an operating profit of $50.7 million in 2023, primarily due to decreased sales, significantly less favorable absorption of fixed costs and accelerated depreciation charges for certain machinery and equipment within our Specialty Products segment, a $5.5 million pre-tax charge related to updating our asbestos studies, and $3.2 million of pre-tax charges related to our environmental remediation obligations.

These decreases were partially offset by higher sales levels and related improved fixed cost absorption, the impact of a charge related to purchase accounting in 2023 that did not repeat, lower realignment costs, and the impact of $1.0 million of higher net gains on sales of non-core properties all within the Packaging segment.

Interest expense increased $3.6 million, to $19.6 million in 2024, as compared to $15.9 million in 2023, due to a higher effective interest rate and an increase in our weighted average borrowings as a result of increased borrowings from our revolving credit facility.

Other income increased $1.3 million to $2.4 million in 2024, from $1.1 million in 2023, primary due to the $2.2 million reversal of the Weldmac contingent consideration liability in 2024 and by a non-cash settlement charge for our Canadian defined benefit obligations during 2023, partially offset by increased foreign translation losses.

Other income, net decreased $0.9 million to $0.2 million in 2024, from $1.1 million in 2023, primarily due to increased foreign translation losses, which was partially offset by a non-cash settlement charge for our Canadian defined benefit obligations during 2023.

Income tax (benefit) expense decreased $8.5 million, to $2.2 million of income tax benefit for 2024, as compared to $6.3 million of income tax expense in 2023.

The effective income tax rate for 2024 was 53.3%, compared to 17.6% for 2023.

We recorded income tax expense of $5.8 million in 2024, as compared to $10.2 million in 2023.

During 2024, we reported domestic and foreign pre-tax income of $3.3 million and $26.7 million, respectively, as compared to domestic and foreign pre-tax income of $20.7 million and $29.9 million, respectively, in 2023.

The rate for 2024 is lower primarily as a result of a change in the mix of domestic and foreign pre-tax results.

Net income decreased $16.1 million to $24.3 million in 2024, compared to $40.4 million in 2023.

This decrease was primarily a result of a decrease in operating profit of $18.3 million and a $3.6 million increase in interest expense, partially offset by a decrease in income tax expense of $4.4 million and a $1.3 million increase in other income.

See below for a discussion of operating results by segment.

Net sales increased $48.7 million, or 10.5% (of which 10.3% was organic, 0.6% related to acquisitions, and (0.4)% was foreign currency exchange), to $512.3 million in 2024, as compared to $463.6 million in 2023.

Acquisition-related sales growth was $2.8 million from the January 2024 sales of our February 2023 acquisition of Aarts.

Sales of dispensing products used primarily for beauty, personal care and home care applications increased organically by $38.2 million.

Sales of products used for industrial applications increased by $13.0 million.

These increases were partially offset by the decrease in sales of products used in food and beverage applications of $3.1 million, primarily due to reduced demand for certain flexible packaging applications in North America and beverage closure applications in Europe as certain customers prepare for cutting over to a new product design.

The increase in net sales was also offset by $2.0 million due to currency exchange, as our reported results in U.S.

dollars were unfavorably impacted as a result of the strengthening U.S.

dollar relative to foreign currencies, as compared to 2023.

Packaging's gross profit increased $14.6 million to $123.7 million, or 24.1% of sales, in 2024, as compared to $109.1 million, or 23.5% of sales, in 2023, primarily due to higher sales levels and resulting improved fixed cost absorption, the favorable impact of prior year cost reduction efforts, the impact of $8.9 million lower realignment costs and a $0.8 million purchase accounting charge related to the step-up of inventory to fair value in 2023 that did not repeat in 2024.

The increase in gross profit was partially offset by a $2.6 million commercial settlement in 2023 that did not repeat, and increased input costs, including expedited freight and labor required to timely fulfill an abrupt increase in customer orders in the first half of 2024, as well as higher production costs through third quarter 2024 associated with capacity restraints and high demand for certain product lines.

Packaging's selling, general and administrative expenses increased $7.7 million to $56.4 million, or 11.0% of sales, in 2024, as compared to $48.8 million, or 10.5% of sales, in 2023, primarily due to $4.7 million higher information technology costs allocated from Corporate, higher employee-related costs and higher professional fees.

Packaging's operating profit increased $8.0 million to $68.1 million, or 13.3% of sales, in 2024, as compared to $60.1 million, or 13.0% of sales, in 2023, primarily due to higher sales levels, improved fixed cost absorption, and the favorable impact of prior realignment actions, and the impact of $1.0 million higher net gains on sales of non-core properties.

These increases were partially offset by higher selling, general and administrative expenses, the impact of a commercial settlement in 2023 that did not repeat, and increased input costs, including expedited freight to timely fulfill an abrupt increase in customer orders.

Net sales increased $52.8 million, or 21.9% (of which 16.6% was organic and 5.3% related to acquisitions), to $294.2 million in 2024, as compared to $241.4 million in 2023.

Acquisition-related sales growth from our April 2023 acquisition of Weldmac was $12.9 million.

Sales of our fasteners products increased by $22.3 million due to increases in aircraft build rates, improved production yield and commercial recoveries, partially offset by a decrease in sales due to the labor union strike at our Aerospace facility in Commerce, California.

Sales of our engineered components products increased by $17.6 million due to improved throughput, commercial recoveries and new business wins.

Gross profit within Aerospace increased $21.9 million to $69.9 million, or 23.8% of sales, in 2024, from $48.0 million, or 19.9% of sales, in 2023.

Gross profit increased primarily due to higher sales levels and resulting improved fixed cost absorption, reduced material availability constraints, a more favorable product sales mix, favorable commercial recoveries, and a $2.4 million purchase accounting charge related to the step-up of inventory to fair value in 2023 that did not repeat.

These increases were partially offset by increased costs and manufacturing inefficiencies resulting from the labor union strike.

Selling, general and administrative expenses increased $4.8 million to $36.2 million, or 12.3% of sales, in 2024, as compared to $31.4 million, or 13.0% of sales, in 2023, primarily due to higher employee-related costs, higher information technology costs,$1.8 million of increased costs related to the labor union strike, and higher ongoing selling, general and administrative costs associated with our acquisition of Weldmac.

These increases were partially offset by lower legal costs and lower intangible asset amortization expense due to certain assets becoming fully amortized.

Operating profit within Aerospace increased $18.2 million to $33.8 million, or 11.5% of sales, in 2024, as compared to $15.5 million, or 6.4% of sales, in 2023, primarily due to the impact of higher sales levels, improved fixed cost absorption, reduced material availability production constraints, a more favorable product sales mix, commercial recoveries, a purchase accounting adjustment related to Weldmac's inventory step-up to fair value in 2023 that did not repeat, and a $1.1 million indefinite-lived intangible asset impairment charge in 2023 that did not repeat.

These increases were partially offset by higher selling, general and administrative expenses and increased costs and manufacturing inefficiencies related to the strike.

Specialty Products.

Net sales decreased $70.1 million, or 37.2%, to $118.5 million in 2024, as compared to $188.6 million in 2023.

Sales of forged steel cylinders decreased $45.2 million, or 31.3%, due to lower demand resulting primarily from certain large distributor customers closely managing overstocked positions given high order rates in previous years which were in reaction to disruptions in the global supply chain.

Sales of natural gas fired engines, compressors and related parts used in remote power generation and assistance applications for natural gas and crude oil extraction decreased by $24.9 million, or 56.4%, primarily as a result of lower compression package sales from a customer that has reduced their ordering rate significantly as compared to the prior year.

Gross profit within Specialty Products decreased $38.4 million to $5.9 million, or 5.0% of sales, in 2024, as compared to $44.3 million, or 23.5% of sales, in 2023.

Gross profit decreased due to lower sales levels, which resulted in significantly lower fixed cost absorption, and from $8.2 million of accelerated depreciation charges for certain machinery and equipment.

Selling, general and administrative expenses within Specialty Products was $7.8 million, or 6.6% of sales, in 2024, as compared to $7.8 million, or 4.2% of net sales, in 2023, as $1.8 million of higher information technology costs allocated from Corporate was offset by cost reduction actions in 2024, in response to lower market demand levels.

Operating profit (loss) within Specialty Products decreased $38.4 million to an operating loss of $2.0 million, or 1.7% of sales, in 2024, as compared to an operating profit of $36.4 million, or 19.3% of sales, in 2023, primarily due to lower sales levels, which resulted in significantly less favorable absorption of fixed costs, and accelerated depreciation charges for certain machinery and equipment.

During 2024, we reported domestic and foreign pre-tax (loss) income of $(31.2) million and $27.0 million, respectively, as compared to domestic and foreign pre-tax income of $3.9 million and $32.0 million, respectively, in 2023.

The rate for 2024 is higher primarily as a result of the overall pre-tax loss in 2024 and a change in the mix of domestic and foreign pre-tax results.

Income from continuing operations decreased $31.5 million to $2.0 million of net loss in 2024, from $29.5 million of net income in 2023.

The decrease was primarily the result of a decrease in operating profit of $35.5 million, a $3.6 million increase in interest expense, as well as a $0.9 million decrease in other income, partially offset by a decrease in income tax expense of $8.5 million.

Corporate Expenses.

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Corporate expenses $ 51.0 $ 45.9

Corporate expenses increased $6.1 million to $52.7 million in 2024, from $46.6 million in 2023, primarily due to a $5.5 million pre-tax charge related to updating our asbestos studies in 2024, $3.6 million of pre-tax charges related to our environment remediation obligations and $1.3 million of higher professional costs associated with business acquisition, diligence and transaction related activity.

Corporate expenses included in operating profit increased $5.1 million to $51.0 million in 2024, from $45.9 million in 2023, primarily due to a $5.5 million pre-tax charge related to updating our asbestos studies in 2024, $3.2 million of pre-tax charges related to our environment remediation obligations and $1.3 million of higher professional costs associated with business acquisition, diligence and transaction related activity.

These increases were partially offset by a $3.3 million decrease in non-cash stock compensation due to expected attainment of existing awards and a $1.3 million decrease in technology costs, as $5.3 million of higher costs associated with upgrades of certain of our information technology applications were more than offset by $6.6 million of technology costs allocated to our segments that was not allocated in 2023.

Discontinued Operations.

The results of discontinued operations consists of our Aerospace segment for which we entered into a definitive agreement to sell on November 4, 2025.

Income from discontinued operations, net of income tax expense, was $26.2 million for the year ended December 31, 2024, as compared to $10.8 million for the year ended December 31, 2023.

See Note 5, " Discontinued Operations ," to our consolidated financial statements attached herein.

Aerospace net sales increased $52.8 million, or 21.9% (of which 16.6% was organic and 5.3% related to acquisitions), to $294.2 million in 2024, as compared to $241.4 million in 2023.

Acquisition-related sales growth from our April 2023 acquisition of Weldmac was $12.9 million.

Sales of our engineered components products increased by $17.6 million due to improved throughput, commercial recoveries and new business wins.

Gross profit within Aerospace increased $21.9 million to $69.9 million, or 23.8% of sales, in 2024, as compared to $48.0 million, or 19.9% of sales, in 2023.

These increases were partially offset by increased costs and manufacturing inefficiencies resulting from the labor union strike.

Selling, general and administrative expenses within Aerospace increased $5.8 million to $37.9 million, or 12.9% of sales, in 2024, as compared to $32.1 million, or 13.3% of sales, in 2023, primarily due to higher employee-related costs, higher information technology costs, $1.8 million of increased costs related to the labor union strike, and higher ongoing selling, general and administrative costs associated with our acquisition of Weldmac.

These increases were partially offset by lower legal costs and lower intangible asset amortization expense due to certain assets becoming fully amortized.

Additionally, costs directly attributable to Aerospace and allocated to discontinued operations increased $1.0 million to $1.7 million in 2024, as compared to $0.7 million in 2023 primarily due to additional non-cash stock compensation expense in 2024.

Operating profit within Aerospace increased $17.2 million to $32.0 million, or 10.9% of sales, in 2024, as compared to $14.8 million, or 6.1% of sales, in 2023, primarily due to the impact of higher sales levels, improved fixed cost absorption, reduced material availability production constraints, a more favorable product sales mix, commercial recoveries, a purchase accounting adjustment related to Weldmac's inventory step-up to fair value in 2023 that did not repeat, and a $1.1 million indefinite-lived intangible asset impairment charge in 2023 that did not repeat.

These increases were partially offset by higher selling, general and administrative expenses and increased costs and manufacturing inefficiencies related to the strike.

Liquidity and Capital Resources

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Significant changes in cash flows provided by operating activities and the reasons for such changes are as follows:

• In 2024, the Company generated $107.3 million in cash flows, based on the reported net income of $24.3 million and after considering the effects of non-cash items related to impairment of indefinite-lived intangible assets, depreciation, amortization of intangible assets and debt issuance costs, (gain) loss on dispositions of assets, changes in deferred income taxes, stock-based compensation, provision for losses on accounts receivable, change in asbestos and environmental liability estimates and other operating activities.

In 2023, the Company generated $110.5 million in cash flows based on the reported net income of $40.4 million and after considering the effects of similar non-cash items.

• Increases in accounts receivable resulted in a use of cash of $20.5 million and $5.5 million in 2024 and 2023, respectively.

The increased use of cash for 2024 and 2023 is due primarily to the timing of sales and related collection of cash during the periods.

Days sales outstanding of receivables increased by two days in 2024 and six days in 2023.

• In 2025, the Company generated $118.3 million in cash flows, based on the reported net income of $120.1 million, which includes $72.3 million income from continuing operations and $47.8 million income from discontinued operations, and after considering the effects of non-cash items related to depreciation, amortization of intangible assets and debt issuance costs, (gain) loss on dispositions of assets, changes in deferred income taxes, stock-based compensation, provision for losses on accounts receivable, change in asbestos and environmental liability estimates and other operating activities.

In 2024, the Company generated $107.3 million in cash flows based on the reported net income of $24.3 million, which includes a $2.0 million loss from continuing operations and $26.2 million income from discontinued operations, and after considering the effects of similar non-cash items and impairment of indefinite-lived intangible assets.

• Decreases in accounts receivable resulted in a source of cash of $1.8 million in 2025, while an increase in accounts receivable resulted in a use of cash of $20.5 million in 2024.

Changes in our accounts receivable in 2025 and 2024 are due primarily to the timing of sales and related collection of cash during the periods.

Days sales outstanding of receivables decreased by five days in 2025 and increased by two days in 2024.

• We increased our investment in inventory by $4.3 million and $21.2 million in 2025 and 2024, respectively.

Our days sales in inventory increased by two days in 2025, primarily as a result of investing in certain inventories as a result of increased customer demand.

Our days sales in inventory decreased by four days in 2024, primarily as a result of moderating inventory levels with higher sales levels within our Packaging and Aerospace segments.

Our days sales in inventory increased by eleven days in 2023, primarily as a result of investing in certain inventories in our Aerospace segment as a result of increased customer demand.

• Increases in prepaid expenses and other assets resulted in a use of cash of $2.3 million in 2024, while decreases in prepaid expenses and other assets resulted in a source of cash of $4.8 million in 2023.

• Decreases in prepaid expenses and other assets resulted in a source of cash of $4.1 million in 2025, while increases in prepaid expenses and other assets resulted in a use of cash of $2.3 million in 2024.

The changes in 2025 and 2024 are primarily as a result of the timing of payments made for income taxes and certain operating expenses.

• Increases in accounts payable and accrued liabilities resulted in a source of cash of $0.6 million in 2024, as compared to a use of cash of $14.5 million in 2023.

Our days accounts payable on hand decreased by six day through 2024 and increased by one day through 2023.

• Decreases in accounts payable and accrued liabilities resulted in a use of cash of $2.4 million in 2025, as compared to a source of cash of $0.6 million in 2024.

Our days accounts payable on hand decreased by three days through 2025 and decreased by six days through 2024.

Our days accounts payable on hand fluctuate primarily as a result of the timing of payments made to suppliers and the mix of vendors and related terms.

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During 2025, we invested $48.4 million in capital expenditures as we continued our investment in growth, capacity and productivity-related capital projects.

We also received proceeds of $4.0 million from the disposition of property and equipment.

During 2023, we paid $77.3 million, net of cash acquired, to acquire Aarts and Weldmac, invested $54.2 million in capital expenditures, made a payment of $3.4 million related to the expiration of one of our cross-currency swap agreements, and received proceeds of $0.5 million from the disposition of property and equipment.

During 2025, we paid $37.7 million, net of cash acquired, to acquire the aerospace business of GMT Gummi-Metall-Technik GmbH.

We also received proceeds of $22.0 million from the sale of our Arrow Engine business and disposition of property and equipment.

During 2024, we invested $51.0 million in capital expenditures and received proceeds of $4.0 million from the disposition of property and equipment.

Net cash used for financing activities was $46.5 million and $28.6 million in 2025 and 2024, respectively.

During 2024, we received net proceeds of $1.4 million from borrowings on our revolving credit facilities, purchased $19.3 million of outstanding common stock, used a net cash amount of $1.8 million related to our stock compensation arrangements, paid dividends of $6.6 million, and paid $2.3 million related to other financing activities, which includes $2.25 million of cash paid as final contingent consideration for the Weldmac acquisition.

During 2025, we received net proceeds of $66.5 million from borrowings on our revolving credit facilities, paid $1.3 million for debt financing fees, purchased $103.3 million of outstanding common stock, used a net cash amount of $2.0 million related to our stock compensation arrangements, paid dividends of $6.6 million, and received $0.3 million related to other financing activities.

Our reported net proceeds from borrowings on our revolving credit facilities considers the impact of foreign currency translation.

During 2023, we received net proceeds of $0.6 million from borrowings on our revolving credit facilities, purchased $18.8 million of outstanding common stock, used a net cash amount of $2.7 million related to our stock compensation arrangements, paid dividends of $6.7 million, and paid $3.3 million related to liabilities assumed in our acquisition of Aarts.

During 2024, we received net proceeds of $1.4 million from borrowings on our revolving credit facilities, purchased $19.3 million of outstanding common stock, used a net cash amount of $1.8 million related to our stock compensation arrangements, paid dividends of $6.6 million, and paid $2.3 million related to other financing activities, which included $2.25 million of cash paid as final contingent consideration for our acquisition of the Weldmac Manufacturing Company.

Our Debt and Other Commitments

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2025 101.031 %

2026 and thereafter 100.000 %

We are party to a credit agreement ("Credit Agreement"), consisting of a $250.0 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 31, 2030.

In April 2023, we amended the Credit Agreement to replace LIBOR.

As of December 31, 2024, monthly borrowings under the Credit Agreement are 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 1.75%, and U.S.

dollar borrowings subject to the Secured Overnight Financing Rate plus a spread of 1.85%.

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

As of December 31, 2025, monthly borrowings under the Credit Agreement are subject to benchmark interest rates determined based on the currency denomination of borrowings, with British pound sterling borrowings subject to the Sterling Overnight Index Average, Euro borrowings subject to the Euro InterBank Offered Rate and U.S.

dollar borrowings subject to the Secured Overnight Financing Rate, each plus a spread that ranges from 1.375% to 2.00% based upon the leverage ratio, as defined, as of the most recent determination date.

The Credit Agreement provides for incremental revolving credit commitments in an amount not to exceed the greater of $200.0 million and an amount such that, after giving effect to such incremental commitments and the incurrence of any other indebtedness substantially simultaneously with the making of such commitments, the senior secured net leverage ratio, as defined in the Credit Agreement, is no greater than 3.00 to 1.00.

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Our permitted interest expense coverage ratio under the Credit Agreement is 3.00 to 1.00, and our actual interest expense coverage ratio was 10.35 to 1.00 as of December 31, 2025.

In December 2025, we amended the Credit Agreement to clarify the inclusion of Aerospace discontinued operations in the definition of consolidated net income used in ratio calculations.

At December 31, 2025, we were in compliance with our financial covenants.

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Interest expense, net (as defined) 18,030

Income tax expense 5,790

Income tax benefit (31,050)

Depreciation and amortization 57,030

Impairment charges (1)

Impairment charges and asset write-offs 1,520

Non-cash compensation expense (1)

2 unchanged sentences

Extraordinary, non-recurring or unusual gains or losses (3)

Effects of purchase accounting adjustments 1,550

Business and asset dispositions (4,510)

Permitted acquisitions 910

Currency gains and losses 820

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________________________________________

(1) Non-cash charges related to indefinite-lived intangible asset impairment.

(1) Non-cash compensation expenses resulting from the grant of equity awards.

(3) Non-recurring costs and expenses relating to diligence and transaction costs, strike related costs, severance, relocation and realignment.

(4) Includes $1.6 million of finance leases as of December 31, 2024.

(2) Non-recurring costs and expenses relating to diligence and transaction costs, severance, relocation and realignment.

(3) Includes asbestos-related (benefit) costs, net and change in environmental liability estimate.

(4) Includes $12.8 million of derivative liabilities and $1.3 million of finance leases as of December 31, 2025.

The Credit Agreement allows issuance of letters of credit, not to exceed $40.0 million in aggregate, against revolving credit facility commitments.

At December 31, 2025, we had $72.8 million outstanding under our revolving credit facility and had $171.2 million potentially available after giving effect to $6.0 million of letters of credit issued and outstanding.

At December 31, 2023, we had no amounts outstanding under our 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, 2024, we had $1.5 million outstanding under our revolving credit facility and had $292.2 million potentially available after giving effect to $6.3 million of letters of credit issued and outstanding.

Our letters of credit are used for a variety of purposes, including support of certain operating lease agreements, vendor payment terms and other subsidiary operating activities, and to meet various states' requirements to self-insure workers' compensation claims, including incurred but not reported claims.

After consideration of leverage restrictions contained in the Credit Agreement, as of December 31, 2024 and 2023, we had $216.7 million and $256.9 million, respectively, of borrowing capacity available for general corporate purposes.

Our borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of December 31, 2025.

After consideration of leverage restrictions contained in the Credit Agreement, as of December 31, 2024 we had $216.7 million of borrowing capacity available for general corporate purposes.

We rely upon our cash flow from operations and available liquidity under our revolving credit facility to fund our debt service obligations and other contractual commitments, working capital and capital expenditure requirements.

At the end of each quarter, we have historically used cash on hand from our domestic and certain foreign subsidiaries to pay down amounts outstanding under our revolving credit facility, as applicable.

Our weighted average borrowings were $433.9 million during 2024, compared to $417.4 million during 2023, primarily due to the aggregate principal balance on our senior notes as well as higher borrowings on revolving credit facilities during 2024.

Our weighted average borrowings were $434.4 million during 2025, compared to $433.9 million during 2024, primarily due to the aggregate principal balance on our senior notes as well as borrowings on revolving credit facilities.

In May 2021, we, through one of our non-U.S.

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The majority of our cash on hand as of December 31, 2025, is located in jurisdictions outside the United States.

We have available funding under our revolving credit facility of $216.7 million at December 31, 2024, (after consideration of the aforementioned leverage restrictions).

We have available funding under our revolving credit facility of $171.2 million at December 31, 2025.

Based on forecasted cash sources and requirements inherent in our business plans, we believe that our liquidity and capital resources, including anticipated cash flows from operations, will be sufficient to meet our debt service, capital expenditure and other short-term and long-term obligation needs for the next 12 months and for the foreseeable future, as well as dividends and share repurchases.

We are subject to variable interest rates on our revolving credit facility, which is subject to a benchmark interest rate determined based on the currency denomination of borrowings.

At December 31, 2025, the Prime rate approximated 6.8%, the 1-Month SOFR approximated 3.9% and the 1-Month EURIBOR approximated 1.9%.

Based on our variable rate-based borrowings outstanding at December 31, 2025, a 1% increase in the per annum interest rate would increase our interest expense by $0.7 million annually.

In addition to our long-term debt, we have other cash commitments related to leases.

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We expect leasing will continue to be an available financing option to fund future capital expenditure requirements.

In March 2020, we announced our Board of Directors had authorized us to increase the purchase of our common stock up to $250 million in the aggregate, an increase of $100 million from the previous authorization.

In November 2025, we announced our Board of Directors had authorized us to increase the purchase of our common stock up to $150 million in the aggregate, adding to the $65.4 million remaining under the previous authorization.

During 2025, 2024 and 2023, we purchased 3,124,866, 771,067 and 680,594 shares of our outstanding common stock for $103.3 million, $19.3 million and $18.8 million, respectively.

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Finance lease obligations 1,400 650 750 — —

Benefit obligations 16,880 1,380 2,890 3,220 9,390

Interest obligations (a)

Benefit obligations (a)

20,880 1,760 3,730 4,090 11,300

Interest obligations (b)

57,750 16,500 33,000 8,250 —

Total contractual and other cash obligations $ 592,510 $ 27,810 $ 51,920 $ 495,030 $ 17,750

__________________________

(a) Our Senior Notes bear interest at 4.125%.

(a) Benefit obligations for both continuing and discontinued operations.

(b) Our Senior Notes bear interest at 4.125%.

The future interest obligations calculation excludes the impact of our cross-currency swap agreements.

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We and certain of our outstanding debt obligations are rated by Standard & Poor's and Moody's.

On March 19, 2024, Moody's affirmed a Ba3 rating to our Senior Notes, as presented in Note 11, " Long-term Debt " included in Item 8, "Financial Statements and Supplementary Data" within this Form 10-K.

Moody's also affirmed a Ba2 Corporate Family Rating and maintained its outlook as stable.

On January 7, 2025, Moody's affirmed a Ba3 rating to our Senior Notes and a Ba2 Corporate Family Rating, and changed its outlook from stable to negative.

On June 28, 2024, Standard & Poor's affirmed a BB- rating to our Senior Notes.

On December 18, 2025, Moody's affirmed a Ba3 rating to our Senior Notes, as presented in Note 12, " Long-term Debt " included in Item 8, "Financial Statements and Supplementary Data" within this Form 10-K.

Moody's placed the Ba2 Corporate Family Rating under review for possible downgrade on November 6, 2025 and updated its outlook to under review following the announcement of the Aerospace sale.

On August 6, 2025, Standard & Poor's affirmed a BB- rating to our Senior Notes.

Standard & Poor's also affirmed a BB corporate credit rating and maintained its outlook as stable.

If our credit ratings were to decline, our ability to access certain financial markets may become limited, our cost of borrowings may increase, the perception of us in the view of our customers, suppliers and security holders may worsen and as a result, we may be adversely affected.

Through 2024, we proactively managed through a significant destocking period and resulting demand trough as compared to the prior year period within our cylinder business.

We also managed through a labor union strike at one of our Aerospace production facilities, and we navigated increased input costs as a result of abruptly increased orders for certain dispensing applications within our Packaging segment.

We recently completed the divestiture of our Arrow Engine business, exiting our direct presence in the oil and gas market sector.

As we look to 2025, we anticipate continued strength and operating leverage from our Aerospace business.

We expect modest organic sales growth within our Packaging segment, while having the opportunity to improve our production throughput and reduce certain input costs.

Within the cylinder business in Specialty Products, we believe we will see marginal improvement in demand as inventory positions are further depleted, and therefore, we anticipate sequential improvement in operating profit as we move forward given these anticipated incremental sales and structural costs saving actions we have already implemented.

We will continue to monitor trends in demand changes and adjust costs and investments accordingly.

We have seen a number of global market uncertainties stemming from the macro-economic environment in the past few years, including significant challenges in inflationary pressures, supply chain disruptions and labor availability, as well as significant volatility in our customers' sentiment and order patterns.

While we expect a continued modest demand recovery in certain of our consumer products and industrial markets and continued strength in our aerospace & defense market, we remain cautious of the impact of global market uncertainty, particularly the potential impact of tariffs on our customer demand and our input costs.

However, no matter the outcome of these factors, we expect to continue to mitigate, as much as practical, the impact of these challenges, executing on streamlining actions and taking other steps as necessary, to maintain our strong balance sheet and generate cash in support of our capital allocation strategy.

We believe our capital structure remains strong and that we have sufficient headroom under our financial covenants, and ample cash and available liquidity under our revolving credit facility, to meet our debt service, capital expenditure and other short-term and long-term obligations for the next 12 months and for the foreseeable future, as well as fund dividends, share repurchases and bolt-on acquisitions consistent with our capital allocation strategy.

We are taking continued actions toward streamlining and optimizing our business portfolio.

We have been actively exploring a range of potential options, particularly over the past year, to accelerate the focus of our business portfolio.

As we focus our portfolio of businesses, we expect to continue to leverage the tenets of our TriMas Business Model to manage our businesses on a longer-term basis, achieve our growth plans, execute continuous improvement initiatives to offset inflationary pressures and seek lower-cost sources for input costs, all while continuously assessing the appropriateness of our manufacturing footprint and fixed-cost structure.

We delivered strong financial results for 2025, as well as continued to streamline our portfolio, driven by increased demand for our products within our Packaging segment and our cylinder business in our Specialty Products segment.

During 2025, we successfully divested of our Arrow Engine business.

Additionally, we entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Takeoff Buyer, Inc.

(the “Purchaser”), an affiliate of Tinicum L.P.

and funds managed by Blackstone, Inc., to sell TriMas Aerospace (the "Transaction").

The Transaction allows us to right-size the portfolio and intensify our attention on our Packaging and Specialty Products businesses, both of which are well-positioned for continued growth and operational improvement.

Early in 2026, we executed a comprehensive organizational realignment to streamline operations, strengthen customer responsiveness and drive sustainable cost savings.

The realignment integrates select corporate and business functions to simplify the structure, eliminates duplication and improves operational efficiency.

These initiatives are expected to generate more than $10 million in savings in 2026 and approximately $15 million on an annualized basis.

As part of this effort, TriMas Packaging is restructuring its commercial and operational model to eliminate silos, accelerate decision-making, and deliver more integrated customer solutions.

The changes include unifying sales teams, standardizing operations across facilities and reducing management layers to improve speed, accountability and innovation.

Key initiatives include brand unification, expanded operational excellence programs, technology implementations and manufacturing footprint optimization.

Collectively, these actions are expected to strengthen TriMas’ operating model, enhance customer satisfaction and support sustainable long-term value creation.

We also plan to redeploy the proceeds from the Transaction in ways that enhance long-term value to our shareholders, employees and customers through prioritizing organic growth investments, pursuing strategically aligned acquisition opportunities and repurchasing shares.

Impact of New Accounting Standards

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These judgments are based on our historical experience, our evaluation of business and macroeconomic trends, and information from other outside sources, as appropriate.

Receivables are presented net of allowances for doubtful accounts of $3.2 million and $4.2 million at December 31, 2024 and 2023, respectively.

We monitor our exposure for credit losses and maintain adequate allowances for doubtful accounts.

We determine these allowances based on our historical write-off experience and/or specific customer circumstances and provide such allowances when amounts are reasonably estimable and it is probable a loss has been incurred.

Although we have been growing business with certain of our larger customers, and there has been some industry consolidation where certain of our customers are merging, we do not believe that significant credit risk exists or that we have a significant concentration of accounts receivable with a single customer or group of customers due to our diverse customer base.

See Item 1A, "Risk Factors," for additional information regarding risks associated with a concentrated customer base.

Impairment of Long-Lived Assets and Definite-Lived Intangible Assets.

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We determine our reporting units at the individual operating segment level, or one level below, when there is discrete financial information available that is regularly reviewed by segment management for evaluating operating results.

For purposes of our 2024 goodwill impairment test, we had six reporting units, four of which had goodwill, within our three reportable segments.

For purposes of our 2025 goodwill impairment test as of October 1, 2025, which preceded the announced sale of our Aerospace business, we had five reporting units, all of which had goodwill, within our three reportable segments.

We first perform a qualitative assessment for our annual goodwill impairment test and for our indefinite-lived intangible asset impairment test, which involves significant use of management's judgment and assumptions to determine whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying amount.

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If we conclude that further testing is required, we would perform a quantitative valuation to estimate the fair value of our intangible assets.

For purposes of the 2024 annual impairment tests, we performed qualitative assessments for all reporting units except the Life Sciences reporting unit within our Packaging segment, for which we elected to perform quantitative assessments.

For purposes of the 2025 annual impairment tests, we performed qualitative assessments for all reporting units except the reporting units specified below for which we elected to perform a quantitative assessment.

Based on results of the qualitative assessments, we determined there were no indications that the fair value of a reporting unit or indefinite-lived intangible asset was less than its carrying value;

therefore, we determined that quantitative goodwill impairment tests were not required for all reporting units included in the qualitative assessment.

In conducting the quantitative analysis for the Life Sciences reporting unit, we determined the estimated fair value utilizing both income and market-based approaches.

We performed a quantitative assessment for the Life Sciences reporting unit within the Packaging segment and the Norris Cylinder reporting unit within the Specialty segment.

In conducting the quantitative analysis, we determined the estimated fair value utilizing both income and market-based approaches.

The income approach relies on the present value of estimated future cash flows of the business, discounted using a rate appropriately reflecting the risks inherent in the cash flows.

The market approach relies on market data of other public companies that we deem comparable in operations to our reporting units.

Based on results of the 2024 quantitative assessment, we determined there were no indications that the fair value of the Life Sciences reporting unit was less than its carrying value.

Based on results of the 2025 quantitative assessment, we determined there were no indications that the fair value of the Life Sciences and Norris Cylinder reporting units were less than their carrying values.

Upon completion of the goodwill impairment test, we determined that the fair values of the Life Sciences and Norris Cylinder reporting units exceeded their carrying values by approximately 9%, and 64%, respectively, and thus there was no goodwill impairment.

The techniques used in our quantitative impairment test incorporated a number of assumptions that we believe to be reasonable and to reflect the current market conditions.

Assumptions in estimating future cash flows and earnings were based on Level 3 inputs under the fair value hierarchy and were primarily related to customer demand and revenue growth, and associated profitability and cash flows.

To provide a level of sensitivity analysis, a 1% increase in the weighted average cost of capital would have resulted in a goodwill impairment charge of approximately $7 million, while a 0.5% decrease in the terminal growth rate would have resulted in a goodwill impairment charge of approximately $2 million.

To provide a level of sensitivity analysis, for the Life Sciences reporting unit a 1% increase in the weighted average cost of capital would have resulted in a goodwill impairment charge of approximately $0.9 million, while a 0.5% decrease in the terminal growth rate would have resulted in no impairment to goodwill.

For the Norris Cylinder reporting unit a 1% increase in the weighted average cost of capital or a 0.5% decrease in the terminal growth rate would have resulted in no impairment to goodwill.

Changes in future results, assumptions, and estimates from those used in the quantitative impairment test may lead to an outcome where impairment charges would be required in future periods.

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The resulting cash flows are then discounted to present value, using a rate appropriately reflecting the risks inherent in the cash flows, which is compared to the carrying value of the assets.

Upon completion of the quantitative impairment test, we determined that one of the Life Sciences trade names had a carrying value that exceeded its fair value, and therefore recorded an impairment charge of $0.2 million.

Upon completion of the quantitative impairment test, we determined there were no indications that the fair value of the Life Sciences indefinite-lived intangible asset was less than its carrying value.

Future declines in sales and/or operating profit, declines in our stock price, or other changes in our business or the markets for our products could result in further impairments of our goodwill and indefinite-lived intangible assets.

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Asbestos-related Matters.

We accrue loss reserves for asbestos-related matters based upon an estimate of the ultimate liability for claims incurred, whether reported or not, including an estimate of future settlement costs and costs to defend.

We utilize known facts and historical trends for Company-specific and general market asbestos-related activity, as well as an actuarial valuation in determining estimated required reserves which we believe are probable and reasonably estimable.

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."

We utilize known facts and historical trends for Company-specific and general market asbestos-related activity, as well as an actuarial valuation in determining estimated required reserves and related insurance recoveries, which we believe are probable and reasonably estimable.

We accrue loss reserves and record the related insurance recovery asset for asbestos-related matters based upon an estimate of the ultimate liability and recovery for claims incurred, whether reported or not, including an estimate of future settlement costs and costs to defend.

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

Accruals for asbestos-related matters are included in "Accrued liabilities" and "Other long-term liabilities" and asbestos-related insurance recoveries are included in "Prepaid expenses and other current assets" and "Other assets" in the consolidated balance sheet.

Other Loss Reserves.

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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 7. Management’s Discussion and Analysis