Item 2.05. Costs Associated with Exit or Disposal Activities.
On November 21, 2012, TriMas Corporation (the "Corporation") determined that the
Corporation will permanently cease production at the Cequent Performance
Products, Inc. ("Cequent"), a wholly owned subsidiary of the Corporation, plant
in Goshen, Indiana and close the facility. The decision to close the plant and
move the work to Cequent's Mexico-based operations is the result of the
Corporation's effort to focus resources in a manner that will best serve its
customers and better position the company to remain competitive in the markets
that it serves. The anticipated closure is expected to result in the separation
of approximately 450 employees in Goshen, Indiana and be completed by December
31, 2013.
Charges associated with employee termination costs are estimated to range from
$5 million to $6 million and plant relocation charges are also estimated to
range from $5 million to $6 million, of which approximately $2.0 million to $2.5
million relate to the transfer of machinery and equipment to the new facility,
for total estimated costs in the range of $10 million to $12 million. Of this
total, cash charges are estimated to range from $8 million to $10 million. In
addition, Cequent is party to a lease agreement for the Goshen, Indiana
facility, for which it has future non-cancellable rent payments due of
approximately $11 million post the anticipated closure date. The Corporation may
incur a charge to the extent this obligation is greater than estimated future
sublease recoveries. All estimated amounts are subject to change until
finalized. Charges for the employee termination and plant relocation costs are
expected to be recognized during the period from November 21, 2012 through
December 31, 2013, while the future unrecoverable lease obligation charge, if
any, is expected to be recognized upon the cease-use date of the plant.
On November 21, 2012, the Corporation issued a press release announcing the
closing of the Goshen, Indiana facility, a copy of which is filed herewith as
Exhibit 99.1 and incorporated herein by reference.
This Current Report on Form 8-K contains statements that are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements give current expectations or forecasts of
future events and are not guarantees of future performance. They are based on
management's expectations that involve a number of business risks and
uncertainties, any of which could cause actual results to differ materially from
those expressed in or implied by the forward-looking statements. You can
identify these statements by the fact that they do not relate strictly to
historic or current facts. They use words such as "will," "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe," and other words
and terms of similar meaning. In particular, the estimated costs and charges
described in this Current Report on Form 8-K are forward-looking statements.
Factors that could cause actual results to differ materially include, but are
not limited to:
• the timing of the closing of the affected facility;
• separation and severance amounts that differ from original estimates
because of the timing of employee terminations;
• amounts for non-cash charges relating to property, plant and equipment
that differ from the original estimates because of the ultimate fair
market value of such property, plant and equipment; and
• the success of our cost savings and restructuring measures.
We cannot guarantee that any forward-looking statement will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and inaccurate
assumptions. Should known or unknown risks or uncertainties materialize, or
should underlying assumptions prove inaccurate, actual results could vary
materially from those anticipated, estimated or projected. Investors should bear
this in mind as they consider forward-looking statements.
We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by law. You are advised, however, to consult any further disclosures we
make on related subjects in our reports on Form 10-Q, 8-K and 10-K that we
provide to the Securities and Exchange Commission. You should understand that it
is not possible to predict or identify all risk factors. Consequently, you
should not consider any list to be a complete set of all potential risks or
uncertainties.
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