UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q



(Mark One)
☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended		June 30, ~~2020~~2021
Or
☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from to .

Commission file number 001-10716

TRIMAS CORPORATION

(Exact name of registrant as specified in its charter)



Delaware						38-2687639
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

38505 Woodward Avenue,, Suite 200

Bloomfield Hills,, Michigan48304

(Address of principal executive offices, including zip code)

(~~248~~) (248) 631-5450

(Registrant's telephone number, including area code)



Title of each class	Trading symbol(s)	Name of exchange on which registered
Common stock, $0.01 par value	TRS	The NASDAQ ~~Global~~Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

~~Large accelerated~~Non-accelerated filer

☒☐

~~Accelerated filer~~Smaller reporting company

☐

~~Non-accelerated filer~~

☐

~~Smaller reporting company~~

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 22, ~~2020,~~2021, the number of outstanding shares of the Registrant's common stock, $0.01 par value, was ~~45,503,644~~42,917,209 shares.

Table of Contents

TriMas Corporation

Index

Part I.

Financial Information

~~Part I.~~

~~Financial Information~~

Forward-Looking Statements

Item 1.

Consolidated Financial Statements

Consolidated Balance Sheet as of June ~~30, 2020~~ 3 0 , 2021 and December 31, ~~2019~~2020

Consolidated Statement of Operations for the Three and Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~

Consolidated Statement of Comprehensive Income for the Three and Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~

Consolidated Statement of Cash Flows for the Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~

Consolidated Statement of Shareholders' Equity for the Three and Six Months Ended June 30 , 2021 and 2020 ~~and 2019~~

Notes to Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2524

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

4243

Item 4.

Controls and Procedures

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Forward-Looking Statements

This report may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 about our financial condition, results of operations and business. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to: the severity and duration of the ongoing ~~corona virus~~coronavirus (“COVID-19”) pandemic on our operations, customers and suppliers, as well as related actions taken by governmental authorities and other third parties in response, each of which is uncertain, rapidly changing and difficult to predict; general economic and currency conditions; material and energy costs; risks and uncertainties associated with intangible assets, including goodwill or other intangible asset impairment charges; competitive factors; future trends; our ability to realize our business strategies; our ability to identify attractive acquisition candidates, successfully integrate acquired operations or realize the intended benefits of such acquisitions; information technology and other cyber-related risks; the performance of our subcontractors and suppliers; supply constraints; market demand; intellectual property factors; litigation; government and regulatory actions, including, without limitation, climate change legislation and other environmental regulations, as well as the impact of tariffs, quotas and surcharges; our leverage; liabilities imposed by our debt instruments; labor disputes; changes to fiscal and tax policies; contingent liabilities relating to acquisition activities; the disruption of operations from catastrophic or extraordinary events, including natural disasters orand public health crises; the potential impact of Brexit; ~~tax considerations relating to the Cequent spin-off;~~ our future prospects; and other risks that are discussed in Part I, Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 and elsewhere in this report. The risks described in our Annual Report on Form 10-K and elsewhere in this report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows.

The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We caution readers not to place undue reliance on the statements, which speak only as of the date of this report. We do not undertake any obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by law.

We disclose important factors that could cause our actual results to differ materially from our expectations implied by our forward-looking statements under Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this report. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations, prospects and ability to service our debt.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

TriMas Corporation

Consolidated Balance Sheet

(Dollars in thousands)


	June 30, 2021		December 31, 2020
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	117,410	$	73,950
Receivables, net of reserves of approximately $1.5 million and $2.1 million as of June 30, 2021 and December 31, 2020, respectively	135,220		113,410
Inventories	149,920		149,380
Prepaid expenses and other current assets	19,910		15,090
Total current assets	422,460		351,830
Property and equipment, net	253,230		253,060
Operating lease right-of-use assets	38,970		37,820
Goodwill	301,430		303,970
Other intangibles, net	194,150		206,200
Deferred income taxes	12,300		19,580
Other assets	22,410		21,420
Total assets	$	1,244,950	$	1,193,880
Liabilities and Shareholders' Equity
Current liabilities:

Accounts payable	$	77,250	$	69,910
Accrued liabilities	56,320		60,540
Operating lease liabilities, current portion	6,530		6,740
Total current liabilities	140,100		137,190
Long-term debt, net	393,370		346,290
Operating lease liabilities	32,890		31,610
Deferred income taxes	19,560		24,850
Other long-term liabilities	61,430		69,690
Total liabilities	647,350		609,630
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None	0		0
Common stock, $0.01 par: Authorized 400,000,000 shares; Issued and outstanding: 42,966,074 shares at June 30, 2021 and 43,178,165 shares at December 31, 2020	430		430
Paid-in capital	735,880		749,050
Accumulated deficit	(134,710)		(159,610)
Accumulated other comprehensive loss	(4,000)		(5,620)
Total shareholders' equity	597,600		584,250
Total liabilities and shareholders' equity	$	1,244,950	$	1,193,880

June 30,
2020
December 31,
2019
Assets (unaudited)
Current assets:

Cash and cash equivalents $ 65,250

$ 172,470
Receivables, net of reserves of approximately $3.7 million and $2.1 million as of June 30, 2020 and December 31, 2019, respectively 123,320

108,860
Inventories 140,890

132,660
Prepaid expenses and other current assets 18,900

20,050
Total current assets 348,360
434,040
Property and equipment, net 210,960

214,330
Operating lease right-of-use assets 35,270
27,850
Goodwill 376,320

334,640
Other intangibles, net 188,170

161,390
Deferred income taxes 3,630
500
Other assets 22,190

19,950
Total assets $ 1,184,900
$ 1,192,700
Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable $ 60,180

$ 72,670
Accrued liabilities 46,680

42,020
Operating lease liabilities, current portion 6,480
5,100
Total current liabilities 113,340
119,790
Long-term debt, net 295,260

294,690
Operating lease liabilities 29,330
23,100
Deferred income taxes 27,960

16,830
Other long-term liabilities 57,910

40,810
Total liabilities 523,800
495,220
Preferred stock, $0.01 par: Authorized 100,000,000 shares;
Issued and outstanding: None —
—
Common stock, $0.01 par: Authorized 400,000,000 shares;
Issued and outstanding: 43,502,103 shares at June 30, 2020 and 44,562,679 shares at December 31, 2019 440
450
Paid-in capital 753,430
782,880
Accumulated deficit (82,430 ) (79,850 )
Accumulated other comprehensive loss (10,340 ) (6,000 )
Total shareholders' equity 661,100
697,480
Total liabilities and shareholders' equity $ 1,184,900
$ 1,192,700

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

Table of Contents

TriMas Corporation

Consolidated Statement of Operations

(Unaudited—dollars in thousands, except for per share amounts)


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Net sales	$	218,990	$	199,550	$	425,720	$	382,340
Cost of sales	(160,960)		(162,320)		(316,360)		(298,740)
Gross profit	58,030		37,230		109,360		83,600
Selling, general and administrative expenses	(32,460)		(55,380)		(62,680)		(81,920)


Operating profit (loss)	25,570		(18,150)		46,680		1,680
Other expense, net:
Interest expense	(4,120)		(4,230)		(7,670)		(7,810)
Debt financing and related expenses	(10,320)		0		(10,520)		0
Other income (expense), net	670		1,130		(260)		1,050
Other expense, net	(13,770)		(3,100)		(18,450)		(6,760)
Income (loss) before income tax expense	11,800		(21,250)		28,230		(5,080)
Income tax benefit (expense)	40		5,550		(3,330)		2,500




Net income (loss)	$	11,840	$	(15,700)	$	24,900	$	(2,580)
Basic earnings (loss) per share:


Net income (loss) per share	$	0.27	$	(0.36)	$	0.58	$	(0.06)
Weighted average common shares—basic	43,110,191		43,463,235		43,147,599		43,832,144
Diluted earnings (loss) per share:


Net income (loss) per share	$	0.27	$	(0.36)	$	0.57	$	(0.06)
Weighted average common shares—diluted	43,308,356		43,463,235		43,471,616		43,832,144

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
Net sales $ 199,550
$ 190,830
$ 382,340
$ 364,200
Cost of sales (162,320 ) (137,040 ) (298,740 ) (263,620 )
Gross profit 37,230
53,790
83,600
100,580
Selling, general and administrative expenses (55,380 ) (26,730 ) (81,920 ) (53,720 )
Operating profit (loss) (18,150 ) 27,060
1,680
46,860
Other expense, net:
Interest expense (4,230 ) (3,490 ) (7,810 ) (6,930 )
Other income, net 1,130
1,220
1,050
650
Other expense, net (3,100 ) (2,270 ) (6,760 ) (6,280 )
Income (loss) before income tax expense (21,250 ) 24,790
(5,080 ) 40,580
Income tax benefit (expense) 5,550
(6,070 ) 2,500
(7,310 )
Income (loss) from continuing operations (15,700 ) 18,720
(2,580 ) 33,270
Income from discontinued operations, net of tax —
3,300
—
7,840
Net income (loss) $ (15,700 ) $ 22,020
$ (2,580 ) $ 41,110
Basic earnings (loss) per share:
Continuing operations $ (0.36 ) $ 0.41
$ (0.06 ) $ 0.73
Discontinued operations —
0.07
—
0.17
Net income (loss) per share $ (0.36 ) $ 0.48
$ (0.06 ) $ 0.90
Weighted average common shares—basic 43,463,235
45,592,075
43,832,144
45,585,445
Diluted earnings (loss) per share:
Continuing operations $ (0.36 ) $ 0.41
$ (0.06 ) $ 0.72
Discontinued operations —
0.07
—
0.17
Net income (loss) per share $ (0.36 ) $ 0.48
$ (0.06 ) $ 0.89
Weighted average common shares—diluted 43,463,235
45,828,315
43,832,144
45,910,249

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

Table of Contents

TriMas Corporation

Consolidated Statement of Comprehensive Income

(Unaudited—dollars in thousands)


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	11,840	$	(15,700)	$	24,900	$	(2,580)
Other comprehensive income (loss):
Defined benefit plans (Note 17)	160		160		310		310
Foreign currency translation	1,400		1,310		(2,020)		(6,950)
Derivative instruments (Note 10)	(570)		(2,130)		3,330		2,300
Total other comprehensive income (loss)	990		(660)		1,620		(4,340)
Total comprehensive income (loss)	$	12,830	$	(16,360)	$	26,520	$	(6,920)

Three months ended
June 30, Six months ended
June 30,
2020 2019 2020 2019
Net income (loss) $ (15,700 ) $ 22,020
$ (2,580 ) $ 41,110
Other comprehensive income (loss):
Defined benefit plans (Note 18) 160
100
310
200
Foreign currency translation 1,310
(900 ) (6,950 ) (200 )
Derivative instruments (Note 11) (2,130 ) (730 ) 2,300
1,490
Total other comprehensive income (loss) (660 ) (1,530 ) (4,340 ) 1,490
Total comprehensive income (loss) $ (16,360 ) $ 20,490
$ (6,920 ) $ 42,600

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

Table of Contents

TriMas Corporation

Consolidated Statement of Cash Flows

(Unaudited—dollars in thousands)


	Six months ended June 30,							Six months ended June 30,
	2020			2019				2021		2020
Cash Flows from Operating Activities:							Cash Flows from Operating Activities:
Net income (loss)	$	(2,580	)	$	41,110		Net income (loss)	$	24,900	$	(2,580)
Income from discontinued operations	—			7,840
Income (loss) from continuing operations	(2,580		)	33,270
Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities, net of acquisition impact:

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

Loss on dispositions of assets	1,010			30			Loss on dispositions of assets	130		1,010
Depreciation	14,770			11,990			Depreciation	15,830		14,770
Amortization of intangible assets	10,150			9,380			Amortization of intangible assets	10,780		10,150
Amortization of debt issue costs	570			560			Amortization of debt issue costs	520		570
Deferred income taxes	(1,460		)	4,130			Deferred income taxes	1,790		(1,460)
Non-cash compensation expense	4,680			3,040			Non-cash compensation expense	5,660		4,680
Non-cash change in legacy liability estimate	23,400			—			Non-cash change in legacy liability estimate	0		23,400
Debt financing and related expenses							Debt financing and related expenses	10,520		0
Increase in receivables	(12,300		)	(5,720		)	Increase in receivables	(22,600)		(12,300)
Decrease in inventories	5,260			380
Decrease in prepaid expenses and other assets	290			1,430
Decrease in accounts payable and accrued liabilities	(14,530		)	(24,410		)
(Increase) decrease in inventories							(Increase) decrease in inventories	(900)		5,260
(Increase) decrease in prepaid expenses and other assets							(Increase) decrease in prepaid expenses and other assets	(7,430)		290
Increase (decrease) in accounts payable and accrued liabilities							Increase (decrease) in accounts payable and accrued liabilities	1,350		(14,530)
Other operating activities	1,580			(1,310		)	Other operating activities	2,120		1,580
Net cash provided by operating activities of continuing operations	30,840			32,770
Net cash used for operating activities of discontinued operations	—			(3,490		)

Net cash provided by operating activities, net of acquisition impact	30,840			29,280			Net cash provided by operating activities, net of acquisition impact	42,670		30,840
Cash Flows from Investing Activities:							Cash Flows from Investing Activities:
Capital expenditures	(9,250		)	(11,500		)	Capital expenditures	(18,330)		(9,250)
Acquisition of businesses, net of cash acquired	(95,160		)	(67,030		)	Acquisition of businesses, net of cash acquired	0		(95,160)
Net proceeds from disposition of business, property and equipment	2,110			—			Net proceeds from disposition of business, property and equipment	140		2,110
Net cash used for investing activities of continuing operations	(102,300		)	(78,530		)
Net cash used for investing activities of discontinued operations	—			(780		)

Net cash used for investing activities	(102,300		)	(79,310		)	Net cash used for investing activities	(18,190)		(102,300)
Cash Flows from Financing Activities:							Cash Flows from Financing Activities:
Retirement of senior notes							Retirement of senior notes	(300,000)		0
Proceeds from issuance of senior notes							Proceeds from issuance of senior notes	400,000		0

Proceeds from borrowings on revolving credit facilities	245,700			93,220			Proceeds from borrowings on revolving credit facilities	0		245,700
Repayments of borrowings on revolving credit facilities	(247,320		)	(92,410		)	Repayments of borrowings on revolving credit facilities	(48,620)		(247,320)

Debt financing fees and senior notes redemption premium							Debt financing fees and senior notes redemption premium	(13,570)		0

Shares surrendered upon exercise and vesting of equity awards to cover taxes	(2,570		)	(3,230		)	Shares surrendered upon exercise and vesting of equity awards to cover taxes	(4,620)		(2,570)

Payments to purchase common stock	(31,570		)	(15,420		)	Payments to purchase common stock	(14,210)		(31,570)
Net cash used for financing activities of continuing operations	(35,760		)	(17,840		)
Net cash provided by financing activities of discontinued operations	—			—
Net cash used for financing activities	(35,760		)	(17,840		)

Net cash provided by (used for) financing activities							Net cash provided by (used for) financing activities	18,980		(35,760)
Cash and Cash Equivalents:							Cash and Cash Equivalents:
Decrease for the period	(107,220		)	(67,870		)
Increase (decrease) for the period							Increase (decrease) for the period	43,460		(107,220)
At beginning of period	172,470			108,150			At beginning of period	73,950		172,470
At end of period	$	65,250		$	40,280		At end of period	$	117,410	$	65,250
Supplemental disclosure of cash flow information:							Supplemental disclosure of cash flow information:
Cash paid for interest	$	7,150		$	6,190		Cash paid for interest	$	6,170	$	7,150
Cash paid for taxes	$	3,410		$	10,160		Cash paid for taxes	$	4,420	$	3,410

Table of Contents

The following table summarizes financial information for our reportable segments for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 (dollars in thousands):


	Six months ended June 30,
	2021		As a Percentage of Net Sales		2020		As a Percentage of Net Sales
Net Sales
Packaging	271,720		63.8	%	228,880		59.9	%
Aerospace	89,170		21.0	%	91,530		23.9	%
Specialty Products	64,830		15.2	%	61,930		16.2	%
Total	$	425,720	100.0	%	$	382,340	100.0	%
Gross Profit
Packaging	74,360		27.4	%	66,530		29.1	%
Aerospace	20,280		22.7	%	14,580		15.9	%
Specialty Products	14,720		22.7	%	2,490		4.0	%
Total	$	109,360	25.7	%	$	83,600	21.9	%
Selling, General and Administrative Expenses
Packaging	25,210		9.3	%	24,210		10.6	%
Aerospace	13,660		15.3	%	13,710		15.0	%
Specialty Products	4,190		6.5	%	5,000		8.1	%
Corporate	19,620		N/A		39,000		N/A
Total	$	62,680	14.7	%	$	81,920	21.4	%
Operating Profit (Loss)
Packaging	49,150		18.1	%	42,320		18.5	%
Aerospace	6,620		7.4	%	870		1.0	%
Specialty Products	10,530		16.2	%	(2,510)		(4.1)	%
Corporate	(19,620)		N/A		(39,000)		N/A
Total	$	46,680	11.0	%	$	1,680	0.4	%
Depreciation
Packaging	10,400		3.8	%	9,140		4.0	%
Aerospace	3,590		4.0	%	3,760		4.1	%
Specialty Products	1,780		2.7	%	1,800		2.9	%
Corporate	60		N/A		70		N/A
Total	$	15,830	3.7	%	$	14,770	3.9	%
Amortization
Packaging	4,800		1.8	%	4,650		2.0	%
Aerospace	5,760		6.5	%	5,260		5.7	%
Specialty Products	220		0.3	%	240		0.4	%
Corporate	—		N/A		—		N/A
Total	$	10,780	2.5	%	$	10,150	2.7	%

Six months ended June 30,
2020
As a Percentage
of Net Sales
2019
As a Percentage
of Net Sales
Net Sales
Packaging $ 228,880
59.9 % $ 192,830
52.9 %
Aerospace 91,530
23.9 % 95,090
26.1 %
Specialty Products 61,930
16.2 % 76,280
20.9 %
Total $ 382,340
100.0 % $ 364,200
100.0 %
Gross Profit (Loss)
Packaging $ 66,530
29.1 % $ 60,710
31.5 %
Aerospace 14,580
15.9 % 25,030
26.3 %
Specialty Products 2,490
4.0 % 14,840
19.5 %
Total $ 83,600
21.9 % $ 100,580
27.6 %
Selling, General and Administrative Expenses
Packaging $ 24,210
10.6 % $ 20,430
10.6 %
Aerospace 13,710
15.0 % 11,570
12.2 %
Specialty Products 5,000
8.1 % 4,730
6.2 %
Corporate 39,000
N/A
16,990
N/A
Total $ 81,920
21.4 % $ 53,720
14.8 %
Operating Profit (Loss)
Packaging $ 42,320
18.5 % $ 40,280
20.9 %
Aerospace 870
1.0 % 13,460
14.2 %
Specialty Products (2,510 ) (4.1 )% 10,110
13.3 %
Corporate (39,000 ) N/A
(16,990 ) N/A
Total $ 1,680
0.4 % $ 46,860
12.9 %
Depreciation
Packaging $ 9,140
4.0 % $ 7,060
3.7 %
Aerospace 3,760
4.1 % 3,340
3.5 %
Specialty Products 1,800
2.9 % 1,450
1.9 %
Corporate 70
N/A
140
N/A
Total $ 14,770
3.9 % $ 11,990
3.3 %
Amortization
Packaging $ 4,650
2.0 % $ 4,850
2.5 %
Aerospace 5,260
5.7 % 4,270
4.5 %
Specialty Products 240
0.4 % 260
0.3 %
Corporate —
N/A
—
N/A
Total $ 10,150
2.7 % $ 9,380
2.6 %

Results of Operations

The principal factors impacting us during the three months ended June 30, ~~2020,~~2021, compared with the three months ended June 30, ~~2019,~~2020, were:

•the impact on global business activity of the COVID-19 pandemic;

•a change in our accounting policy for asbestos-related defense costs in second quarter 2020;

~~realignment expenses, primarily in~~•the impact of our ~~Aerospace and Specialty Products segments, in response to reduced end market demand following the outbreak of COVID-19;~~debt refinancing activities;

~~increases in our Packaging segment's organic sales and related operating profit as a result of significantly higher demand, primarily for products used to help fight the spread of germs;~~

~~reduced sales and related profit within our Specialty Products and Aerospace reportable segments, primarily as a result of the COVID-19 pandemic; and~~

•the impact of our recent acquisitions, primarily ~~RSA~~Affaba & Ferrari in ~~February 2020, and Rapak in April 2020.~~

December 2020;

•the impact of material cost increases, primarily resin-related;

•the impact of our realignment actions; and

•a decrease in our effective tax rate from the recognition of certain discrete tax items in second quarter 2021.

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Three Months Ended June 30, ~~2020~~2021 Compared with Three Months Ended June 30, ~~2019~~2020

Overall, net sales increased approximately ~~$8.7~~$19.4 million, or ~~4.6%~~9.7%, to ~~$199.6~~$219.0 million for the three months ended June 30, ~~2020,~~2021, as compared with ~~$190.8~~$199.6 million in the three months ended June 30, ~~2019, driven by our recent~~2020. Our acquisitions ~~which contributed~~added approximately ~~$13.0~~$9.9 million of ~~inorganic~~ sales. Organic sales, excluding the impact of currency exchange ~~decreased~~and acquisitions, increased approximately ~~$1.9~~$4.9 million, as increases in our Aerospace and Specialty Products segments were partially offset by the expected decline in organic sales ~~increases~~ in our Packaging segment ~~primarily~~as the high demand levels for ~~dispenser~~ products ~~used in applications~~ that help fight the spread of germs ~~were offset by lower sales~~decreased compared with the record-high levels in ~~our Aerospace and Specialty Products segments.~~prior year. In addition, net sales ~~were lower~~increased by approximately ~~$2.4~~$4.6 million due to ~~unfavorable~~ currency exchange, as our reported results in U.S. dollars were ~~negatively~~favorably impacted as a result of ~~the stronger~~a weakening U.S. dollar relative to foreign currencies.

Gross profit margin (gross profit as a percentage of sales) approximated ~~18.7%~~26.5% and ~~28.2%~~18.7% for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Gross profit margin ~~decreased, as~~increased primarily due to the impact of higher ~~sales levels was more than offset by~~realignment costs of $15.1 million in the second quarter of 2020 as compared to 2021, the impact of approximately $16.0 million of realignment expenses, $14.3 million of which were non-cash and $1.7 million were cash expenses, primarily in our Aerospace and Specialty Products segments, of which where we executed actions to lower our cost structure in response to reduced end market demand following the outbreak of the COVID-19 pandemic. In addition, we recorded approximately $2.1 million greatera non-cash purchase accounting ~~charges~~charge in the ~~three months ended June 30, 2020 than the three months ended June 30, 2019 for the step-up of inventory to fair value and subsequent amortization related to our acquisitions. Our~~ second quarter of 2020 ~~gross profit margin was also impacted by a less favorable product sales mix,~~that did not repeat in 2021, as well as ~~lower fixed cost absorption and higher production inefficiencies, both~~favorable foreign currency exchange. These increases were partially offset by an increase in material costs in the second quarter of 2021, primarily for resin-based materials. We estimate that due ~~primarily~~ to the ~~COVID-19 pandemic.~~lag in timing between incurring the material cost increases and recovering via commercial actions, our gross profit was negatively impacted by approximately $4 million.

Operating profit (loss) margin (operating profit as a ~~percentage~~percentage of sales) approximated ~~9.1%~~11.7% and ~~14.2%~~(9.1)% for the three months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Operating profit (loss) ~~decreased~~increased approximately ~~$45.2~~$43.7 million to an operating ~~loss~~profit of approximately ~~$18.2~~$25.6 million in the three months ended June 30, ~~2020,~~2021, from an operating ~~profit~~loss of approximately ~~$27.1~~$18.2 million for the three months ended June 30, ~~2019. This decrease was~~2020. Operating profit margin and dollars increased primarily as a result of a non-cash, pre-tax charge for asbestos-related costs of approximately $23.4 million in the second quarter of 2020 due to a change in accounting policy that did not repeat in 2021, as well as due to ~~approximately $18.5~~higher realignment costs of $14.3 million ~~of realignment expenses recorded~~ in the second quarter of 2020 ~~of which $15.4 million were non-cash~~as compared to 2021 and $3.1 million were cash expenses, primarily in our Aerospace and Specialty Products segments, where we executed actions to lower our cost structure in response to reduced end market demand following the outbreak of COVID-19. While higher sales ~~contributed additional operating profit, this increase was more than~~levels. These increases were partially offset by ~~increased purchase accounting expenses, a less favorable product sales mix, and lower fixed cost absorption and higher production inefficiencies, both due~~an increase in ~~large part to the COVID-19 pandemic.~~material costs.

Interest expense ~~increased~~decreased approximately ~~$0.7~~$0.1 million, to $4.1 million, for the three months ended June 30, 2021, as compared to approximately $4.2 million for the three months ended June 30, 2020, respectively, as ~~compared~~lower weighted average borrowings more than offset an increase in our interest rates.

We incurred approximately $10.3 million of debt financing and related expense for the three months ended June 30, 2021 related to ~~$3.5~~expenses incurred associated with the redemption of our 2025 Senior Notes.

Other income decreased approximately $0.5 million to approximately $0.7 million for the three months ended June 30, ~~2019, primarily~~2021, as ~~a result of increased weighted average borrowings from approximately $338.3 million during the three months ended June 30, 2019~~compared to approximately $465.6 million during the three months ended June 30, 2020. We drew $150 million on our revolving credit facility in first quarter 2020 to ensure availability of cash on hand, but subsequently repaid this amount late in second quarter 2020.

~~Other income, net decreased approximately $0.1 million, to~~ $1.1 million for the three months ended June 30, 2020, ~~as compared to $1.2 million for the three months ended June 30, 2019,~~ primarily due to a decrease in foreign currency gains.

The effective income tax rate for the three months ended June 30, 2021 and 2020 was (0.3)% and ~~2019 was~~ 26.1% ~~and 24.5%~~, ~~respectively, as we~~respectively. We recorded anominal income tax benefit offor the three months ended June 30, 2021 as compared to approximately $5.6 million for the three months ended June 30, ~~2020~~2020. The rate for the three months ended June 30, 2021 is lower than in the prior year primarily as ~~compared to tax expense~~a result of the recognition of approximately ~~$6.1~~$3.0 million of deferred tax benefits in Italy, the majority of which related to a reduction in deferred tax liabilities in connection with certain tax incentives.

Net income (loss) increased approximately $27.5 million, to net income of $11.8 million for the three months ended June 30, 2019. The effective tax rate for the quarter ended June 30, 2020 was impacted by a decrease in profitability resulting from various one-time charges, including a change in the Company’s accounting policy for asbestos-related defense costs. This change was treated2021, as ~~a discrete item in determining tax expense for the quarter.~~

~~Income (loss) from continuing operations decreased approximately $34.4 million,~~compared to a net loss of $15.7 million for the three months ended June 30, ~~2020, as compared to net income of $18.7 million for the three months ended June 30, 2019.~~2020. The ~~decrease~~increase was primarily the result of ~~a decrease~~an increase in operating profit (loss) of approximately ~~$45.2~~$43.7 million, ~~an increase~~partially offset by debt financing and related expenses of approximately $10.3 million, a decrease in ~~interest expense,~~the income tax benefit of approximately $5.5 million and a decrease in other income ~~net, partially offset by an increase in income tax benefit (expense)~~ of approximately ~~$11.6~~$0.5 million.

See below for a discussion of operating results by segment.

Packaging. Net sales increased approximately ~~$24.8~~$10.8 million,, or ~~23.9%~~8.4%, to ~~$128.8~~$139.6 million ~~in the~~ ~~three months ended June 30, 2020, as compared to~~ ~~$104.0 million~~ in the three months ended June 30, ~~2019. Acquisition-related growth was~~2021, as compared to $128.8 million in the three months ended June 30, 2020. Affaba & Ferrari, acquired in December 2020, contributed approximately ~~$7.1 million, comprised of approximately $4.5~~$9.9 million of sales ~~from our April 2020 acquisition~~in the second quarter of ~~Rapak as well as $2.6 million of April 2020 sales for Taplast, which was acquired in late April 2019.~~2021. Sales of dispensing products used in ~~beauty and personal care and home care~~ applications that help fight the spread of germs decreased by approximately $4.7 million, as demand in the second quarter of 2021, while still above historical levels, was lower than demand in second quarter 2020, which we believe was at peak levels following the onset of the COVID-19 pandemic. Net sales also increased by approximately ~~$8.6~~$4.6 million ~~primarily for personal hygiene applications, as demand rose, in part,~~ due to the COVID-19 pandemic. Sales of products used in food and beverage markets increased by approximately $5.7 million, primarily due to higher sales of beverage dispensers, including pumps and related products, in North America. Sales of products used in industrial markets increased by approximately $3.0 million, primarily due to higher demand within North America, some of which we believe is attributable to higher sales of products used in the transportation of bulk sanitizer and industrial cleaning solutions. These increases were partially offset by approximately $2.4 million of unfavorable currency exchange, as our reported results in U.S. dollars were ~~negatively~~favorably impacted as a result of the ~~stronger~~weakening U.S. dollar relative to foreign currencies.

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Gross profit increased approximately ~~$5.1~~$2.6 million to $40.5 million, or 29.0% of sales, in the three months ended June 30, 2021, as compared to $37.9 million, or 29.4% of sales, in the three months ended June 30, 2020, ~~as compared to $32.7 million, or 31.5% of sales, in the three months ended June 30, 2019,~~ primarily due to increased sales ~~levels. These increases~~levels and approximately $1.5 million of currency exchange, as our reported results in U.S. dollars were ~~partially offset by~~favorably impacted as a result of the weakening U.S. dollar relative to foreign currencies. During the second quarter of 2021, we recognized approximately $0.3 million of realignment costs primarily related to the closure of our Union City, California manufacturing facility and consolidation into our Indianapolis, Indiana and Woodridge, Illinois facilities as compared to $0.9 million ~~in non-cash~~of realignment costs ~~during~~in the second quarter of 2020, primarily related to the disposal of certain equipment removed from ~~service and approximately~~service. In addition, we recognized an approximate $0.8 million ~~for a~~ purchase accounting non-cash charge related to our 2020 acquisition of Rapak for the step-up of ~~Rapak's~~ inventory to fair value and subsequent ~~amortization. Gross profit margin was lower~~amortization during the three months ended June 30, 2020 that did not repeat in 2021. These increases were partially offset by approximately $4 million of higher material costs (primarily resin) than were recovered via sales price increases in the second quarter ~~2019 due to lower production efficiencies~~of 2021, and a less favorable product sales mix, including the impact of Rapak generating low gross profit, excluding the inventory step-up amortization, at current demand levels. Gross profit and margin were also impacted by approximately $0.7 million of unfavorable currency exchange, as our reported results in U.S. dollars were negatively impacted as a result of the stronger U.S. dollar relative to foreign currencies.mix.

Selling, general and administrative expenses ~~increased~~decreased approximately ~~$3.7~~$1.2 million to $12.6 million, or 9.1% of sales, in the three months ended June 30, 2021, as compared to $13.8 million, or 10.7% of sales, in the three months ended June 30, 2020, ~~as compared~~due to ~~$10.1 million, or 9.7% of sales, in the three months ended June 30, 2019, as we incurred~~ approximately $1.4 million in charges associated with second quarter 2020 realignment actions, primarily for severance. In addition, our acquisitions added approximately $0.9 million of higher ongoing selling, general and administrative costs. The remaining increase was primarily related to higher personnel-related expenses to support our sales growth initiatives.severance, that did not repeat in 2021.

Operating profit increased approximately ~~$1.4~~$3.8 million to $27.9 million, or 19.9% of sales, in the three months ended June 30, 2021, as compared to $24.0 million, or 18.7% of sales, in the three months ended June 30, 2020, primarily due to higher sales levels, favorable currency exchange, lower realignment costs, and the impact of purchase accounting adjustments in the second quarter of 2020 that did not repeat in 2021. These increases were partially offset by the impact of higher material costs and a less favorable product sales mix.

Aerospace. Net sales for the three months ended June 30, 2021 increased approximately $2.0 million, or 4.6%, to $44.6 million, as compared to ~~$22.6~~$42.6 million in the three months ended June 30, 2020. Sales of our engineered components increased by approximately $1.1 million primarily due to timing of end market demand. Sales of our fasteners products increased by approximately $0.9 million, as the impact of stocking orders for specialized fasteners of approximately $7.9 million was mostly offset by a decline in overall market-related demand resulting from current and expected future reduced air travel due to the COVID-19 pandemic.

Gross profit increased approximately $6.6 million to $9.3 million, or ~~21.8%~~20.9% of sales, in the three months ended June 30, 2019, as the impact of increased sales was mostly offset by realignment charges taken during the quarter, purchase accounting adjustments, a less favorable product sales mix, production inefficiencies as a result of the COVID-19 pandemic and higher selling, general and administrative expenses.

~~Aerospace.~~ ~~Net sales for the~~ ~~three months ended June 30, 2020decreased~~ ~~approximately $6.9 million, or~~ ~~13.9%, to~~ ~~$42.6 million, as compared to~~ ~~$49.5 million~~ in the three months ended June 30, 2019. RSA, acquired in February 2020, contributed approximately $5.9 million of sales. Sales of our fastener and machined components products declined by approximately $8.7 million and $4.1 million, respectively, both due to lower demand resulting2021, from ~~reduced aircraft production following the onset of the COVID-19 pandemic, with fastener sales also lower than second quarter 2019, as expected, due to the 737 Max grounding.~~

~~Gross profit decreased approximately $10.6 million to~~ $2.7 million, or 6.3% of sales, in the three months ended June 30, 2020, ~~from $13.2 million, or 26.7% of sales,~~due primarily to realignment actions taken in the three months ended June 30, 2019, due in part to the decrease in sales levels and related lower fixed cost absorption and production inefficiencies due to the impact of the COVID-19 pandemic. During the second quarter of 2020 ~~we executed certain realignment actions~~ to protect against uncertain end market demand and other adverse effects following the outbreak of the COVID-19 pandemic, resulting in charges of approximately $4.2 million related to inventory reductions, approximately $1.7 million related to severance ~~as we reduced our manufacturing employment levels~~ and approximately $0.3 million related to production equipment removed from service. ~~In addition, we recorded~~Gross profit also improved due to a more favorable product sales mix and the impact of an approximate $1.5 million purchase accounting non-cash charge related to our 2020 acquisition of RSA Engineered Products ("RSA") for the step-up of ~~RSA's~~ inventory to fair value and subsequent ~~amortization.~~amortization during the three months ended June 30, 2020 that did not repeat in 2021. Partially offsetting these year-over-year improvements was a decline in gross profit due to lower absorption of fixed costs and production inefficiencies driven by the COVID-19 pandemic, as well as approximately $0.6 million of realignment actions taken related to facility consolidations.

Selling, general and administrative expenses increased approximately ~~$1.3~~$0.3 million to approximately $7.2 million, or 16.1% of sales, in the three months ended June 30, 2021, as compared to $6.9 million, or 16.1% of sales, in the three months ended June 30, 2020, ~~as compared~~primarily due to ~~$5.6~~higher third party expenses.

Operating profit (loss) increased approximately $6.3 million to an operating profit of approximately $2.1 million, or ~~11.3%~~4.8% of sales, in the three months ended June 30, ~~2019, primarily due to ongoing costs of RSA~~2021, as ~~well as approximately $0.4 million of realignment expenses.~~

~~Operating profit (loss) decreased approximately $11.9 million~~compared to an operating loss of $4.2 million, or 9.9% of sales, in the three months ended June 30, 2020, ~~as compared to an operating profit of $7.7 million, or 15.5% of sales in the three months ended June 30, 2019,~~ primarily due to ~~the impact of~~lower year-over-year realignment charges, ~~taken~~a more favorable product sales mix and the recognition of a purchase accounting adjustment related to RSA's step-up to fair value and subsequent amortization during the second quarter of 2020 ~~as well as the impact~~that did not repeat in 2021, partially offset by lower absorption of ~~lower sales levels which resulted in lower~~ fixed ~~cost absorption~~costs, production inefficiencies and higher ~~production inefficiencies as a result of the COVID-19 pandemic,~~selling, general and ~~the recognition of the purchase accounting adjustment related to RSA's inventory step-up to fair value and subsequent amortization.~~administrative expenses.

Specialty Products. Net sales for the three months ended June 30, ~~2020~~ ~~decreased~~2021 increased approximately ~~$9.2~~$6.7 million, or ~~24.7%~~23.8%, to ~~$28.1~~$34.8 million, as compared to ~~$37.3~~$28.1 million in the three months ended June 30, ~~2019~~.2020. Sales of our cylinder products ~~decreased~~increased approximately ~~$8.2~~$5.0 million, ~~as lower~~due to higher demand for steel cylinders ~~used in construction and HVAC end markets~~ in North America ~~more than offset~~as industrial activity begins to increase following the previous lower levels a ~~modest increase in~~year ago as a result of the ~~sale of cylinders used for oxygen and other medical applications.~~COVID-19 pandemic. Sales of engines, compressors and related parts used in upstream oil and gas applications ~~decreased~~increased by approximately ~~$1.0~~$1.7 million, primarily as a result ~~low~~of higher oil-field activity in North ~~America given further reductions in rig counts, and~~America. The second quarter of 2020 included approximately $0.7 million of sales ~~in second quarter 2020~~ related to the liquidation of non-core inventory following our strategic decision to streamline Arrow Engine's product line offering.

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Gross profit ~~(loss) decreased~~increased approximately ~~$11.1~~$11.5 million to ~~a gross loss~~$8.2 million, or 23.6% of sales, in the three months ended June 30, 2021, as compared to $3.3 million, or 11.7% of sales, in the three months ended June 30, 2020, as compared to gross profit of $7.8 million, or 20.9% of sales, in the three months ended June 30, 2019, due in part to the decrease in sales levels and related lower fixed cost absorption and production inefficiencies, primarily from the impact of the COVID-19 pandemic.2020. During the second quarter of 2020, we executed certain realignment actions in response to reduced end market demand as a result of the COVID-19 pandemic, resulting in approximately $9.0 million of non-cash charges, ~~in the second quarter of 2020,~~ primarily related to Arrow Engine streamlining its product line offering and liquidating the non-core ~~inventory.~~inventory, which did not repeat in 2021. In addition, gross profit increased in the second quarter of 2021 due to higher sales levels, while margins further improved due to favorable product sales mix and leveraging the previous realignment actions.

Selling, general and administrative expenses ~~increased~~decreased approximately ~~$0.2~~$0.4 million to $2.2 million, or 6.4% of sales, in the three months ended June 30, 2021, as compared to $2.7 million, or 9.4% of sales, in the three months ended June 30, 2020, as ~~compared to $2.4 million, or 6.5% of sales, in the three months ended June 30, 2019. During second quarter 2020,~~ we incurred selling, general and administrative realignment expenses of approximately $0.7 million in the second quarter of 2020 related to severance as we reduced our employment ~~levels, which was partially offset by reduced spending levels as a result of lower activity~~ levels.

Operating profit (loss) ~~decreased~~increased approximately ~~$11.4~~$12.0 million to an operating profit of $6.0 million, or 17.3% of sales, in the three months ended June 30, 2021, as compared to an operating loss of $5.9 million, or 21.1% of sales, in the three months ended June 30, 2020, ~~as compared~~primarily due to ~~an operating profit of $5.4 million, or 14.5% of sales, in~~ the ~~three months ended June 30, 2019, primarily as a result~~impact of the second quarter 2020 realignment ~~actions,~~costs that did not repeat in 2021, as well as ~~due to the impact of lower~~higher sales and related ~~lower fixed cost absorption and production inefficiencies.~~profit conversion leveraging the 2020 realignment actions.

Corporate. Corporate expenses consist of the following (dollars in millions):


	Three months ended June 30,
	2021		2020
Corporate operating expenses	$	6.6	$	5.6
Non-cash stock compensation	3.3		2.8
Legacy expenses	0.5		23.6
Corporate expenses	$	10.4	$	32.0

Three months ended June 30,
2020 2019
Corporate operating expenses $ 5.6
$ 5.9
Non-cash stock compensation 2.8
1.6
Legacy expenses 23.6
1.1
Corporate expenses $ 32.0
$ 8.6

Corporate expenses ~~increased~~decreased approximately ~~$23.4~~$21.6 million to ~~$32.0~~approximately $10.4 million for the three months ended June 30, 2021, from approximately $32.0 million for the three months ended June 30, 2020,~~, from~~ ~~$8.6 million~~ ~~for the~~ ~~three months ended June 30, 2019~~, primarily as a result of the $23.4 million non-cash charge recorded in second quarter 2020 due to the change of our accounting policy for asbestos-related defense costs. ~~Non-cash stock compensation expense~~Corporate operating expenses increased ~~due~~primarily as a result of realignment charges recorded in the second quarter 2021 relating to the ~~timing and nature of equity awards in 2020 compared~~corporate office finance group reorganization.

Six Months Ended June 30, 2021 Compared with ~~2019, the impact of which was offset by lower corporate operating expenses and reduced non-asbestos-related legacy expenses.~~

Six Months Ended June 30, 2020 ~~Compared with~~ ~~Six Months Ended June 30, 2019~~

Overall, net sales increased approximately ~~$18.1~~$43.4 million, or ~~5.0%~~11.3%, to ~~$382.3~~$425.7 million for the six months ended June 30, ~~2020,~~2021, as compared with ~~$364.2~~$382.3 million in the six months ended June 30, ~~2019. Acquisitions contributed approximately $23.5~~2020, primarily as a result of acquisitions, which added approximately $27.6 million of ~~inorganic sales growth.~~sales. Organic sales, excluding the impact of currency exchange ~~decreased by~~and acquisitions, increased approximately ~~$2.0~~$8.4 million, as a sales ~~increases~~increase of $12.1 million in our Packaging segment, primarily for dispensing products used in applications that help fight the spread of germs, and an increase of $2.9 million in our Specialty Products segment, primarily for steel cylinders used in industrial applications in North America, were partially offset by $6.6 million lower sales in our Aerospace ~~and Specialty Products segments.~~segment, primarily due to lower demand as a result of the COVID-19 pandemic. In addition, net sales ~~were lower~~increased by approximately ~~$3.3~~$7.4 million due to ~~unfavorable~~ currency exchange, as our reported results in U.S. dollars were ~~negatively~~favorably impacted as a result of ~~the stronger~~a weakening U.S. dollar relative to foreign currencies.

Gross profit margin (gross profit as a percentage of sales) approximated ~~21.9%~~25.7% and ~~27.6%~~21.9% for the six months ended June 30, 2021 and 2020, ~~and 2019,~~ respectively. Gross profit margin ~~decreased, as~~increased primarily due to the impact of higher ~~sales levels was more than offset by~~realignment costs of $13.3 million in the first half of 2020 as compared to 2021, the impact of ~~approximately $16.0 million of realignment expenses, $14.3 million of which were~~ non-cash and $1.7 million were cash expenses, primarily in our Aerospace and Specialty Products segments, where we executed actions to lower our cost structure in response to reduced end market demand following the outbreak of COVID-19 pandemic. In addition, we recorded approximately $2.8 million of purchase accounting ~~non-cash~~ charges in the ~~six months ended June 30,~~first half of 2020 ~~for the step-up of inventory to fair value and subsequent amortization related to our RSA and Rapak acquisitions~~that did not repeat in 2021, as ~~compared to approximately $0.3 million of such charges for our 2019 acquisitions~~well as favorable foreign currency exchange. This increase was partially offset by an increase in ~~the six months ended June 30, 2019. Our gross profit margin~~material costs in the first ~~six months~~half of ~~2020~~2021, primarily for resin-based materials. We estimate that due to the lag in timing between incurring the material cost increases and recovering via commercial actions, our gross profit was ~~also~~negatively impacted by ~~a less favorable product sales mix, lower fixed cost absorption and higher production inefficiencies due primarily to the COVID-19 pandemic.~~approximately $6 million.

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Operating profit margin (operating profit as a percentage of sales) approximated ~~0.4%~~11.0% and ~~12.9%~~0.4% for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. Operating profit ~~decreased~~increased approximately ~~$45.2~~$45.0 million, ~~or 96.4%,~~to $46.7 million for the six months ended June 30, 2021, compared to $1.7 million for the six months ended June 30, ~~2020, compared to $46.9 million for the six months ended June 30, 2019. This decrease was~~2020. Operating profit margin and dollars increased primarily as a result of a non-cash, pre-tax charge for asbestos-related costs of approximately $23.4 million in the ~~first half~~second quarter of 2020 due to a change in accounting policy that did not repeat in 2021, as well as due to ~~approximately $18.5~~higher realignment costs of $10.3 million ~~of realignment expenses recorded~~ in the ~~first half~~second quarter of 2020 ~~of which $15.4 million were non-cash~~as compared to 2021 and $3.1 million were cash expenses, primarily in our Aerospace and Specialty Products segments, where we executed actions to lower our cost structure in response to reduced end market demand following the outbreak of COVID-19. While higher operating profit was generated from higher sales levels ~~this impact was more than~~. These increases were partially offset by ~~a less favorable product sales mix, lower fixed cost absorption and higher production inefficiencies due~~an increase in ~~large part to the COVID-19 pandemic. Operating profit (loss) also decreased as a result of increased purchase accounting expenses and as a result of unfavorable currency exchange.~~material costs.

Interest expense ~~increased~~decreased approximately ~~$0.9~~$0.1 million, to $7.7 million, for the six months ended June 30, 2021, as compared to $7.8 million for the six months ended June 30, 2020, as ~~compared to $6.9 million for the six months ended June 30, 2019, primarily as a result of increased~~lower weighted average borrowings ~~from approximately $329.5 million during the six months ended June 30, 2019 to approximately $413.6 million during the six months ended June 30, 2020.~~more than offset an increase in our interest rates. We drew $150 million on our revolving credit facility in first quarter 2020 to ensure availability of cash on hand, but subsequently repaid this amount late in second quarter 2020.

We incurred approximately $10.5 million of debt financing and related expense for the six months ended June 30, 2021, of which approximately $10.3 million was related to expenses incurred associated with the redemption of our 2025 Senior Notes and approximately $0.2 million related to the write-off of previously capitalized deferred financing fees associated with our Credit Agreement.

Other income (expense), net ~~increased~~decreased approximately ~~$0.4~~$1.3 million, to $0.3 million of other expense for the six months ended June 30, 2021, from $1.1 million of other income, net for the six months ended June 30, 2020, ~~from $0.7 million of other expense, net for the six months ended June 30, 2019,~~ primarily due to a ~~year over year decrease~~year-over-year increase in losses on transactions denominated in foreign currencies.

The effective income tax rate for the six months ended June 30, 2021 and 2020 was 11.8% and ~~2019 was~~ 49.2% ~~and 18.0%~~, ~~respectively,~~respectively. We recorded tax expense of approximately $3.3 million for the six months ended June 30, 2021 as ~~we recorded~~compared to a tax benefit of approximately $2.5 million for the six months ended June 30, ~~2020 as compared to tax expense of approximately $7.3 million~~2020. The rate for the six months ended June 30, ~~2019.~~2021 is lower than in the prior year primarily as a result of the recognition of approximately $3.0 million of deferred tax benefits in Italy, the majority of which related to a reduction in deferred tax liabilities in connection with certain tax incentives. The ~~effective tax~~ rate for the six months ended June 30, 2020 was impacted by a decrease in profitability resulting from various ~~one-time~~realignment charges ~~including~~as well as an expense for a change in the Company’s accounting policy for asbestos-related defense costs. ~~This change was treated as a discrete item in determining tax expense~~

Net income increased by approximately $27.5 million, to net income of $24.9 million for the six months ended June 30, ~~2020. In addition, we recognized discrete items that occurred during the first six months of 2019 as~~2021, compared to first six months of 2020, including the reversal of uncertain tax benefits for which the statute of limitations expired, excess tax benefits related to share based compensation that vested in 2019, and a ~~reduction in deferred tax liabilities resulting from the implementation of state tax planning initiatives.~~

~~Income (loss) from continuing operations decreased by approximately $35.9 million, to a~~net loss of $2.6 million for the six months ended June 30, ~~2020, compared to income of $33.3 million for the six months ended June 30, 2019.~~2020. The ~~decrease~~increase was primarily the result of ~~a decrease~~an increase in operating profit of approximately ~~$45.2~~$45.0 million, partially offset by debt financing and related expenses of approximately $10.5 million, an increase in ~~interest expense, partially offset by an increase in~~the income tax benefit (expense) of approximately ~~$9.8~~$5.8 million and ~~an increase~~a decrease in other income ~~net.~~(expense) of approximately $1.3 million.

See below for a discussion of operating results by segment.

Packaging. Net sales increased approximately ~~$36.1~~$42.8 million, or 18.7%, to $271.7 million in the six months ended June 30, 2021, as compared to $228.9 million in the six months ended June 30, ~~2020, as compared to $192.8 million in the six months ended June 30, 2019.~~2020. Acquisition-related sales growth was approximately ~~$14.6~~$23.3 million, comprised of ~~approximately $4.5~~$18.0 million of sales from our December 2020 acquisition of Affaba & Ferrari and $5.3 million resulting from the January through March 2021 sales of our April 2020 acquisition of ~~Rapak as well as $10.1 million of January through April 2020 sales for Taplast, which was acquired in late April 2019.~~Rapak. Sales of dispensing products used in beauty and personal care and home care applications that help fight the spread of germs increased by approximately ~~$12.1~~$4.1 million, primarily ~~as demand increased~~ for personal hygiene applications, as demand rose, in part, due to ~~heightened awareness of reducing the spread of germs following~~ the COVID-19 pandemic. Sales of products used in industrial markets increased by approximately $3.2 million, primarily as a result of higher demand from the drums and metal closure markets in North America. Sales of products used in food and beverage markets increased by approximately ~~$7.2~~$2.0 million, ~~primarily due~~as the sub-markets in which many of these products are used, such as vending machines in exercise facilities, began to ~~higher~~rebound from prior pandemic-related shutdowns. Net sales ~~of beverage dispensers, including pumps and related products, in North America. Sales of products used in industrial markets~~also increased by approximately ~~$3.4~~$7.4 million ~~primarily~~ due to higher demand within North America, some of which we believe is attributable to higher sales of products used in the transportation of bulk sanitizer and industrial cleaning solutions. These increases were partially offset by approximately $3.3 million of unfavorable currency exchange, as our reported results in U.S. dollars were ~~negatively~~favorably impacted as a result of the ~~stronger~~weakening U.S. dollar relative to foreign currencies.

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Packaging's gross profit increased approximately ~~$5.8~~$7.8 million to $74.4 million, or 27.4% of sales, in the six months ended June 30, 2021, as compared to $66.5 million, or 29.1% of sales, in the six months ended June 30, 2020, ~~as compared to $60.7 million, or 31.5% of sales, in the six months ended June 30, 2019,~~ primarily due to increased sales levels ~~which was partially offset by approximately $0.9 million in non-cash realignment costs during second quarter 2020 primarily related to the disposal of certain equipment which was taken out of service~~ and approximately $2.5 million of currency exchange, as our reported results in U.S. dollars were favorably impacted as a result of the weakening U.S. dollar relative to foreign currencies. In addition, we recognized an approximate $0.8 million ~~for a~~ purchase accounting non-cash charge related to the step-up of Rapak's inventory to fair value and subsequent ~~amortization. Gross profit margin was lower~~amortization during the three months ended June 30, 2020 that did not repeat in 2021. These increases were partially offset by approximately $6 million of higher material costs (primarily resin) than were recovered via sales price increases in the first half of 2021. During the first half of 2021, we recognized approximately $1.6 million of realignment costs primarily related to the closure of our Union City, California manufacturing facility and consolidation into our Indianapolis, Indiana and Woodridge, Illinois facilities as compared to $0.9 million of realignment costs in the second quarter ~~2019 due~~of 2020, primarily related to ~~a less favorable product sales mix.~~the disposal of certain equipment removed from service. In addition, ~~gross profit margin was further reduced due~~we recognized an approximate $0.8 million purchase accounting non-cash charge related to ~~generally lower production efficiencies, as well as Rapak currently generating low gross profit at current demand levels, both as a result~~the step-up of Affaba & Ferrari's inventory to fair value and subsequent amortization in the ~~impacts~~first half of the COVID-19 pandemic. Gross profit and margin were also impacted by approximately $1.0 million of unfavorable currency exchange, as our reported results in U.S. dollars were negatively impacted as a result of the stronger U.S. dollar relative to foreign currencies.2021.

Packaging's selling, general and administrative expenses increased approximately ~~$3.8~~$1.0 million to $25.2 million, or 9.3% of sales, in the six months ended June 30, 2021, as compared to $24.2 million, or 10.6% of sales, in the six months ended June 30, 2020, ~~as compared~~primarily due to $20.4 million, or 10.6% of sales, in the six months ended June 30, 2019, as we incurred approximately $1.4 million in charges associated with our realignment actions, primarily for severance. We also incurred approximately $1.6 million of higher ongoing selling, general and administrative costs associated with our acquisitions, ~~as well as recorded higher personnel-related expenses given higher demand for our products. This increase was~~ partially offset by ~~an approximate $0.8~~approximately $1.4 million ~~non-cash charge during the three months ended March 31, 2019 related to the write-off of the trade name acquired~~in charges associated with first half 2020 realignment actions, primarily for severance, that did not repeat in the ~~Plastic Srl acquisition that was not used.~~first half of 2021.

Packaging's operating profit increased approximately ~~$2.0~~$6.8 million to $49.2 million, or 18.1% of sales, in the six months ended June 30, 2021, as compared to $42.3 million, or 18.5% of sales, in the six months ended June 30, 2020, ~~as compared~~primarily due to ~~$40.3 million, or 20.9% of~~higher sales ~~in the six months ended June 30, 2019, as a result of increased sales, which was~~levels and favorable currency exchange. These increases were partially offset by the impact of higher material costs, incremental realignment charges taken during the second quarter of 2020, the recognition of the purchase accounting adjustment related to Rapak's inventory step-up to fair value and subsequent amortization, a less favorable product sales mix, production inefficiencies as a result of COVID-19 and higher selling, general and administrative expenses.

Aerospace. Net sales for the six months ended June 30, ~~2020~~2021 decreased approximately ~~$3.6~~$2.4 million, or ~~3.7%~~2.6%, to ~~$91.5~~$89.2 million, as compared to ~~$95.1~~$91.5 million in the six months ended June 30, ~~2019. The~~2020. RSA, acquired in February 2020, ~~acquisition of RSA contributed~~added approximately ~~$8.9~~$4.3 million of ~~sales. Sales~~sales for January and February 2021. While sales of our fastener products benefited from approximately $13.9 million of customers' stocking orders for specialized fasteners in the first six months of 2021, sales of our fastener and ~~machined~~engineered components products declined by approximately ~~$7.8~~$4.4 million and ~~$4.7~~$2.3 million, respectively, both due to the lower demand resulting from current and expected future reduced air travel due to the COVID-19 ~~pandemic, with fastener sales also lower than the first half of 2019, as expected, due to the 737 Max grounding.~~pandemic.

Gross profit within Aerospace ~~decreased~~increased approximately ~~$10.5~~$5.7 million to ~~$14.6~~$20.3 million, or ~~15.9% of sales, in the~~ ~~six~~ ~~months ended June 30, 2020, from $25.0 million, or 26.3%~~22.7% of sales, in the six months ended June 30, ~~2019,~~2021, from $14.6 million, or 15.9% of sales, in the six months ended June 30, 2020, due ~~in part~~primarily to ~~the decrease~~realignment actions taken in ~~sales levels and related lower fixed cost absorption and production inefficiencies due to the impact of the COVID-19 pandemic. During~~ the second quarter of 2020 ~~we undertook certain realignment actions~~ to protect against uncertain end market demand ~~related to~~and other adverse effects following the outbreak of the COVID-19 pandemic, resulting in charges of approximately $4.2 million related to inventory reductions, approximately $1.7 million related to severance ~~as we reduced our manufacturing employment levels~~ and approximately $0.3 million related to production equipment removed from ~~service given current demand levels. In addition, we recorded~~service. Gross profit also improved due to a more favorable product sales mix and the impact of an approximate $2.0 million purchase accounting non-cash charge related to the step-up of RSA's inventory to fair value and subsequent amortization during the ~~first half~~six months ended June 30, 2020 that did not repeat in 2021. Partially offsetting these improvements was a decline in gross profit due to lower absorption of ~~2020.~~fixed costs and production inefficiencies driven by the COVID-19 pandemic and by approximately $1.1 million due to realignment actions taken related to facility consolidations.

Selling, general and administrative expenses ~~increased approximately $2.1~~was flat at $13.7 million, or 15.3% of sales, in the six months ended June 30, 2021, as compared to $13.7 million, or 15.0% of sales, in the six months ended June 30, 2020, as ~~compared~~the impact of higher ongoing selling, general and administrative costs associated with our acquisition of RSA was offset by cost reduction efforts to ~~$11.6~~mitigate the impact of lower sales levels

Operating profit (loss) within Aerospace increased approximately $5.8 million to an operating profit of $6.6 million, or ~~12.2%~~7.4% of sales, in the six months ended June 30, ~~2019, primarily due~~2021, as compared to ~~ongoing costs~~an operating loss of ~~RSA, as well as approximately $0.4 million of realignment expenses incurred in the first half of 2020.~~

~~Operating profit within Aerospace decreased approximately $12.6 million to~~ $0.9 million, or 1.0% of sales, in the six months ended June 30, 2020, ~~as compared to $13.5 million, or 14.2% of sales, in the six months ended June 30, 2019,~~ primarily due to ~~the impact of~~lower realignment charges, ~~in second quarter 2020, as well as the impact of lower~~a more favorable product sales ~~levels which resulted in lower fixed cost absorption~~mix and ~~higher production inefficiencies as a result of the COVID-19 pandemic,~~ the recognition of ~~the~~a purchase accounting adjustment related to RSA's ~~inventory~~ step-up to fair value and subsequent amortization during the first half of 2020 that did not repeat in 2021, partially offset by lower fixed cost absorption and ~~higher selling, general and administrative expenses.~~production inefficiencies.

Specialty Products. Net sales for the six months ended June 30, ~~2020 decreased~~2021 increased approximately ~~$14.4~~$2.9 million, or ~~18.8%~~4.7%, to ~~$61.9~~$64.8 million, as compared to ~~$76.3~~$61.9 million in the six months ended June 30, ~~2019.~~2020. Sales of our cylinder products ~~decreased by~~increased approximately ~~$11.9~~$1.9 million, ~~as lower~~due to higher demand for steel cylinders ~~used in construction and HVAC activity~~ in North America ~~more than offset a modest~~as industrial activity began to increase in second quarter 2021 following the ~~sale~~previous lower levels in 2020 as a result of ~~cylinders used for oxygen and other medical applications.~~the pandemic. Sales of engines, compressors and related parts used in upstream oil and gas applications ~~decreased~~increased by approximately ~~$2.5~~$1.0 million, primarily as a result of ~~low~~higher oil-field activity in North ~~America given~~America. Our sales in the ~~low price~~first six months of ~~oil and~~2020 included approximately $0.7 million ~~of sales~~ related to the liquidation of non-core inventory following our strategic decision to streamline Arrow Engine's product line offering.

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Gross profit within Specialty Products ~~decreased~~increased approximately ~~$12.4~~$12.2 million to $14.7 million, or 22.7% of sales, in the six months ended June 30, 2021, as compared to $2.5 million, or 4.0% of sales, in the six months ended June 30, ~~2020, as compared to $14.8 million, or 19.5% of sales, in~~2020. During the six months ended June 30, 2019, due in part to the decrease in sales levels and related lower fixed cost absorption and production inefficiencies due primarily to the impact of the COVID-19 pandemic. During the second quarter of 2020, we ~~undertook~~executed certain realignment actions in response to reduced end market demand as a result of the COVID-19 pandemic, resulting in approximately $9.0 million of non-cash charges, ~~in the second quarter of 2020,~~ primarily related to Arrow Engine streamlining its product line offering and liquidating ~~its~~the non-core ~~inventory.~~inventory, which did not repeat in 2021. In addition, gross profit increased in the six months ended June 30, 2021 due to higher sales levels, while margins further improved due to favorable product sales mix and leveraging the previous realignment actions.

Selling, general and administrative expenses within Specialty Products ~~increased~~decreased approximately ~~$0.3~~$0.8 million to $4.2 million, or 6.5% of sales, in the six months ended June 30, 2021, as compared to $5.0 million, or 8.1% of sales, in the six months ended June 30, 2020, as ~~compared to $4.7 million, or 6.2% of sales, in the six months ended June 30, 2019. During the first half of 2020,~~ we incurred selling, general and administrative realignment expenses of approximately $0.7 million in the six months ended June 30, 2020 related to severance as we reduced our employment ~~levels, which was partially offset by reduced spending levels as a result of lower activity~~ levels.

Operating profit (loss) within Specialty Products ~~decreased~~increased approximately ~~$12.6~~$13.0 million to an operating profit of $10.5 million, or 16.2% of sales, in the six months ended June 30, 2021, as compared to an operating loss of $2.5 million of operating profit, or 4.1% of sales, in the six months ended June 30, 2020, ~~as compared to $10.1 million of operating profit, or 13.3% of sales, in the six months ended June 30, 2019,~~ primarily ~~as a result of the second quarter 2020 realignment actions, as well as~~ due to the impact of ~~lower~~the first half 2020 realignment costs that did not repeat in 2021, as well as higher sales and related ~~lower~~profit conversion leveraging the 2020 realignment actions without the need to add incremental fixed ~~cost absorption and production inefficiencies.~~costs.

Corporate. Corporate expenses, net consist of the following (dollars in millions):


	Six months ended June 30,
	2021		2020
Corporate operating expenses	$	13.0	$	10.9
Non-cash stock compensation	5.7		4.7
Legacy expenses	0.9		23.4
Corporate expenses	$	19.6	$	39.0

Six months ended June 30,
2020 2019
Corporate operating expenses $ 10.9
$ 11.8
Non-cash stock compensation 4.7
2.9
Legacy expenses 23.4
2.3
Corporate expenses $ 39.0
$ 17.0

Corporate expenses ~~increased~~decreased approximately ~~$22.0~~$19.4 million to ~~$39.0~~$19.6 million for the six months ended June 30, 2021, from $39.0 million for the six months ended June 30, 2020,~~, from~~ ~~$17.0 million~~ ~~for the~~ ~~six months ended June 30, 2019~~, primarily as a result of the $23.4 million non-cash charge recorded in second quarter 2020 due to the change of our accounting policy for asbestos-related defense costs from accruing for probable and reasonably estimable defense costs associated with known claims expected to settle to accrue for all future defense costs for both known and unknown claims, which we now believe can be reasonably estimated. Non-cash stock compensation expensecosts. Corporate operating expenses increased ~~due~~primarily as a result of realignment charges related to the ~~timing~~corporate office legal and ~~nature of equity awards in 2020 compared with 2019, the impact of which was more than offset by lower corporate operating expenses and the favorable resolution of a legacy matter~~finance groups during the first half of ~~2020.~~2021.

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Liquidity and Capital Resources

Cash Flows

Cash flows provided by operating activities were approximately $42.7 million for the six months ended June 30, 2021, as compared to approximately $30.8 million for the six months ended June 30, ~~2020, as compared to approximately $32.8 million for the six months ended June 30, 2019.~~2020. Significant changes in cash flows provided by operating activities and the reasons for such changes were as follows:

•For the six months ended June 30, ~~2020,~~2021, the Company generated approximately ~~$52.1~~$72.3 million of cash, based on the reported net ~~loss~~income of approximately ~~$2.6~~$24.9 million and after considering the effects of non-cash items related to depreciation, amortization, loss on dispositions of assets, changes in deferred income taxes, debt financing and related expenses, stock-based compensation ~~asbestos-related change in liability estimate~~ and other operating activities. For the six months ended June 30, ~~2019,~~2020, the Company generated approximately ~~$61.1~~$52.1 million in cash flows based on the reported net ~~income from continuing operations~~loss of approximately ~~$33.3~~$2.6 million and after considering the effects of similar non-cash ~~items.~~items and the asbestos-related change in liability estimate.

•Increases in accounts receivable resulted in a use of cash of approximately ~~$12.3~~$22.6 million and ~~$5.7~~$12.3 million for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively. The increased use of cash for each of the six month periods is due primarily to the timing of sales and collection of cash related thereto within the periods. Days sales outstanding of receivables remained relatively ~~flat compared to~~consistent during these periods.

•We increased our investment in inventory by approximately $0.9 million for the ~~comparable 2019 period.~~

Wesix months ended June 30, 2021 and decreased our investment in inventory by approximately $5.3 million for the six months ended June 30, ~~2020, and by approximately $0.4 million for the six months ended June 30, 2019.~~2020. Our days sales in inventory decreased by approximately ten days in 2021 through solid inventory management even as our 2021 net sales increased above 2020 levels. Our days sales in inventory also decreased by approximately ten days in 2020 compared with ~~the comparable~~ 2019 ~~period~~ as a result of second quarter 2020 realignment actions to reduce inventory, primarily related to our strategic decision in our Arrow Engine division to streamline its product line offering. ~~We continue to moderate inventory levels~~

•Increases in ~~line with sales levels.~~

prepaid expenses and other assets resulted in a use of cash of approximately $7.4 million for the six months ended June 30, 2021. Decreases in prepaid expenses and other assets resulted in a source of cash of approximately $0.3 million for the six months ended June 30, ~~2020 and of approximately $1.4 million for the six months ended June 30, 2019.~~2020. These changes were primarily a result of the timing of payments made for income taxes and certain operating expenses.

~~Decreases~~•An increase in accounts payable and accrued liabilities resulted in a source of cash of approximately $1.4 million for the six months ended June 30, 2021, while a decrease in accounts payable and accrued liabilities resulted in a use of cash of approximately $14.5 million ~~and $24.4 million~~ for the six months ended June 30, ~~2020 and 2019, respectively, primarily as a result of the timing of payments made to suppliers and the mix of vendors and related terms. Days~~2020. Days accounts payable on hand decreased by approximately two days in 2021 compared with a decrease of approximately nine days in 2020, ~~compared with the comparable 2019 period,~~ primarily as we paid certain key Packaging vendors more quickly in 2020 to ensure our orders remained a top priority for them given our robust demand levels and minimal available capacity in the ~~marketplace.~~marketplace in 2020.

Net cash used for investing activities ~~of continuing operations~~ for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 was approximately ~~$102.3~~$18.2 million and ~~$78.5~~$102.3 million, respectively. During the first six months of ~~2020,~~2021, we ~~paid~~invested approximately ~~$95.2 million, net of cash acquired, to acquire RSA and Rapak. We incurred approximately $9.3~~$18.3 million in capital expenditures, as we continued our investment in growth, capacity and productivity-related capital projects. During the first six months of 2020, we invested approximately $9.3 million in capital expenditures and paid approximately $95.2 million, net of cash acquired, to acquire RSA and Rapak. We also received proceeds from disposition of business, property and equipment of approximately $2.1 million. ~~During the first six months of 2019, we incurred approximately $11.5 million in capital expenditures and paid approximately $67.0 million, net of cash acquired, to acquire Plastic Srl and Taplast.~~

Net cash ~~used for~~provided by financing activities for the six months ended June 30, ~~2020~~2021 was approximately ~~$35.8~~$19.0 million, while net cash used for financing activities was ~~$17.8~~approximately $35.8 million for the six months ended June 30, ~~2019.~~2020. During the first six months of 2021, we issued $400.0 million principal amount of senior notes, made net repayments of approximately $48.6 million on our revolving credit facilities, and redeemed $300.0 million principal amount of senior notes. In connection with refinancing our long-term debt, we paid approximately $13.6 million of debt financing fees and redemption premium. We also purchased approximately $14.2 million of outstanding common stock and used a net cash amount of approximately $4.6 million related to our stock compensation arrangements. During the first six months of 2020, we ~~made net repayments of~~borrowed approximately $1.6 million, net of repayments, on our revolving credit facilities. We also purchased approximately $31.6 million of outstanding common stock and used a net cash amount of approximately $2.6 million related to our stock compensation arrangements. ~~During the first six months~~

Table of 2019, we borrowed approximately $0.8 million, net of repayments, on our revolving credit facilities. We also purchased approximately $15.4 million of outstanding common stock and used a net cash amount of approximately $3.2 million related to our stock compensation arrangements.Contents

Our Debt and Other Commitments

~~The~~In March 2021, we issued the 2029 Senior Notes in a private placement under Rule 144A of the Securities Act of 1933, as amended. We used the proceeds from the 2029 Senior Notes offering to pay fees and expenses of approximately $5.1 million related to the offering and pay fees and expenses of $1.1 million related to amending our Credit Agreement. In connection with the issuance, during the second quarter of 2021, we completed the redemption of our 2025 Senior Notes, paying $300.0 million ~~aggregate~~to retire the outstanding principal amount plus $7.3 million as a redemption premium. The remaining cash proceeds from the 2029 Senior Notes were used for general corporate purposes, including repaying all outstanding revolving credit facility borrowings. The $5.1 million of ~~senior notes~~fees and expenses related to the 2029 Senior Notes were capitalized as debt issuance costs, while the $7.3 million redemption premium as well as approximately $3.0 million of unamortized debt issuance costs associated with the 2025 Senior Notes were recorded as expense within debt financing and related expenses in the accompanying statement of operations in the six months ended June 30, 2021.

The 2029 Senior Notes accrue interest at a rate of ~~4.875%~~4.125% per annum, payable semi-annually in arrears on April 15 and October 15, commencing ~~on April~~October 15, ~~2018 ("Senior Notes").~~2021. The payment of principal and interest is jointly and severally guaranteed, on a senior unsecured basis, by certain ~~named~~ subsidiaries of the Company (each a "Guarantor" and collectively the "Guarantors"). The 2029 Senior Notes are pari passu in right of payment with all existing and future senior indebtedness and effectively subordinated to all existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. For the six months ended June 30, 2020, our consolidated subsidiaries that do not guarantee the Senior Notes represented approximately 21% of the total of guarantor and non-guarantor net sales, treating each as a consolidated group and excluding intercompany transactions between guarantor and non-guarantor subsidiaries. In addition, our non-guarantor subsidiaries represented approximately 31% and 15% of the total guarantor and non-guarantor assets and liabilities, respectively, as of June 30, 2020, treating the guarantor and non-guarantor subsidiaries each as a consolidated group and excluding intercompany transactions between such groups.

Prior to ~~October~~April 15, ~~2020,~~2024, we may redeem up to ~~35%~~40% of the principal amount of the 2029 Senior Notes at a redemption price of ~~104.875%~~104.125% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, with the net cash proceeds of one or more equity offerings provided that each such redemption occurs within 90 days of the date of closing of each such equity offering. In addition, prior to April 15, 2024, we may redeem all or part of the 2029 Senior Notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus a "make whole" premium.

For the six months ended June 30, 2021, our consolidated subsidiaries that do not guarantee the 2029 Senior Notes represented approximately 28% of the total of guarantor and non-guarantor net sales, treating each as a consolidated group and excluding intercompany transactions between guarantor and non-guarantor subsidiaries. In addition, our non-guarantor subsidiaries represented approximately 37% and 49% of the total guarantor and non-guarantor assets and liabilities, respectively, as of June 30, 2021, treating the guarantor and non-guarantor subsidiaries each as a consolidated group.

In March 2021, we amended our Credit Agreement in connection with the issuance of the 2029 Senior Notes to extend the maturity date. We ~~are party~~incurred fees and expenses of approximately $1.1 million related to ~~a credit agreement ("~~the amendment, all of which were capitalized as debt issuance costs. We also recorded approximately $0.2 million of non-cash expense related to the write-off of previously capitalized deferred financing fees. The Credit ~~Agreement") consisting~~Agreement consists of a $300.0 million senior secured revolving credit facility, which permits borrowings denominated in specific foreign currencies, subject to a $125.0 million sub ~~limit. The Credit Agreement matures~~limit, maturing on ~~September 20, 2022~~March 29, 2026 and is subject to interest at London Interbank Offered Rate ("LIBOR") plus 1.50%. The interest rate spread is based upon the leverage ratio, as defined, as of the most recent determination date. ~~The Credit Agreement allows issuance of letters of credit, not to exceed $40.0 million in aggregate, against revolving credit facility commitments.~~

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

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Amounts drawn under our revolving credit facility fluctuate daily based upon our working capital and other ordinary course needs. Availability under our revolving credit facility depends upon, among other things, compliance with our Credit Agreement's financial covenants. Our Credit Agreement contains various negative and affirmative covenants and other requirements affecting us and our subsidiaries, including the ability to, subject to certain exceptions and limitations, incur debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, asset dispositions, sale-leaseback transactions, hedging agreements, dividends and other restricted payments, transactions with affiliates, restrictive agreements and amendments to charters, bylaws, and other material documents. The terms of our Credit Agreement require us and our subsidiaries to meet certain restrictive financial covenants and ratios computed quarterly, including a maximum total net leverage ratio (total consolidated indebtedness plus outstanding amounts under the accounts receivable securitization facility, less the aggregate amount of certain unrestricted cash and unrestricted permitted investments, as defined, over consolidated EBITDA, as defined), a maximum senior secured net leverage ratio (total consolidated senior secured indebtedness, less the aggregate amount of certain unrestricted cash and unrestricted permitted investments, as defined, over consolidated EBITDA, as defined) and a minimum interest expense coverage ratio (consolidated EBITDA, as defined, over the sum of consolidated cash interest expense, as defined, and preferred dividends, as defined). Our permitted total net leverage ratio under the Credit Agreement is 4.00 to 1.00 as of June 30, ~~2020.~~2021. If we were to complete an acquisition which qualifies for a Covenant Holiday Period, as defined in our Credit Agreement, then our permitted total net leverage ratio cannot exceed 4.50 to 1.00 during that period. Our actual total net leverage ratio was ~~1.60~~1.79 to 1.00 at June 30, 2020. Our permitted senior secured net leverage ratio under the Credit Agreement is 3.50 to 1.00 as of June 30, 2020. If we were to complete an acquisition which qualifies for a Covenant Holiday Period, as defined in our Credit Agreement, then our permitted senior secured net leverage ratio cannot exceed 4.00 to 1.00 during that period. Our actual senior secured net leverage ratio was not meaningful at June 30, 2020.2021. Our permitted interest expense coverage ratio under the Credit Agreement is 3.00 to 1.00 as of June 30, ~~2020.~~2021. Our actual interest expense coverage ratio was ~~12.71~~12.83 to 1.00 at June 30, ~~2020.~~2021. At June 30, ~~2020,~~2021, we were in compliance with our financial covenants.

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The following is a reconciliation of net income, as reported, which is a GAAP measure of our operating results, to Consolidated Bank EBITDA, as defined in our Credit Agreement, for the twelve months ended June 30, ~~2020~~2021 (dollars in thousands). We present Consolidated Bank EBITDA to show our performance under our financial covenants.

Twelve Months Ended June 30, 2020
Net income $ 54,930
Bank stipulated adjustments:
Interest expense 14,830
Income tax expense 26,250
Depreciation and amortization 48,770
Non-cash compensation expense⁽¹⁾
8,090
Other non-cash expenses or losses 16,920
Non-recurring expenses or costs⁽²⁾
7,310
Extraordinary, non-recurring or unusual gains or losses 20,990
Effects of purchase accounting adjustments 2,110
Business and asset dispositions 870
Permitted acquisitions 5,030
Permitted dispositions⁽³⁾
(46,430 )
Consolidated Bank EBITDA, as defined $ 159,670

June 30, 2020
Total Indebtedness, as defined $ 254,890

Consolidated Bank EBITDA, as defined 159,670

Total net leverage ratio 1.60
x
Covenant requirement 4.00
x

June 30, 2020
Total Senior Secured Indebtedness⁽⁴⁾
$ (45,110 )
Consolidated Bank EBITDA, as defined 159,670

Senior secured net leverage ratio n/m
x
Covenant requirement 3.50
x

Twelve Months Ended June 30, 2020
Interest expense $ 14,830
Bank stipulated adjustments:
Interest income (900 )
Non-cash amounts attributable to amortization of financing costs (1,370 )
Total Consolidated Cash Interest Expense, as defined $ 12,560

June 30, 2020
Consolidated Bank EBITDA, as defined $ 159,670

Total Consolidated Cash Interest Expense, as defined 12,560

Actual interest expense coverage ratio 12.71
x
Covenant requirement 3.00
x

~~_____________________________~~



	Twelve Months Ended June 30, 2021
Net loss	$	(52,280)
Bank stipulated adjustments:
Interest expense	14,520
Income tax expense	(17,370)
Depreciation and amortization	51,460
Impairment charges and asset write-offs	134,600
^{Non-cash compensation expense}(1)	9,150
Non-cash ~~compensation~~charges for deferred tax asset valuation allowances	250
Other non-cash expenses ~~resulting from the grant of equity awards.~~or losses

		1,880
^{Non-recurring expenses or costs}(2)	~~Non-recurring costs and expenses relating to diligence and transaction costs,~~		14,780
Extraordinary, non-recurring or unusual gains or losses			4,150
Effects of purchase accounting ~~costs, severance, relocation, restructuring~~adjustments			830
Business and ~~curtailment expenses.~~asset dispositions			540

Net losses on early extinguishment of debt		3,000
Permitted acquisitions		3,500

⁽³⁾Currency gains and losses	~~EBITDA from permitted dispositions, as defined.~~	980


⁽⁴⁾	~~Senior secured indebtedness is negative at~~
Consolidated Bank EBITDA, as defined		$	169,990


	June 30, ~~2020 due~~2021


Total Indebtedness, as defined	$	303,750
Consolidated Bank EBITDA, as defined	169,990
Total net leverage ratio	1.79		x
Covenant requirement	4.00		x



	Twelve Months Ended June 30, 2021
Interest expense	$	14,520
Bank stipulated adjustments:
Interest income	(180)
Non-cash amounts attributable to ~~the deduction~~amortization of ~~certain unrestricted cash and unrestricted permitted investments~~financing costs	(1,090)

Total Consolidated Cash Interest Expense, as ~~allowed under the Credit Agreement.~~defined	$	13,250

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	June 30, 2021
Consolidated Bank EBITDA, as defined	$	169,990
Total Consolidated Cash Interest Expense, as defined	13,250
Actual interest expense coverage ratio	12.83		x
Covenant requirement	3.00		x

_____________________________

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

(2) Non-recurring costs and expenses relating to diligence and transaction costs, purchase accounting costs, severance, relocation, restructuring and curtailment expenses.

Our revolving credit facility allows for the issuance of letters of credit, not to exceed $40.0 million in aggregate. We placed restricted cash on deposit with a financial institution to be held as cash collateral for our outstanding letters of credit; therefore, as of June 30, 2021 and December 31, 2020, we had no letters of credit issued against our revolving credit facility. At June 30, ~~2020,~~2021, we had no amounts outstanding under our revolving credit facility and had approximately ~~$284.1~~$300.0 million ~~potentially~~ available after giving effect to ~~approximately $15.9 million of~~ letters of credit issued and outstanding. At December 31, ~~2019,~~2020, we had no$50.5 million amounts outstanding under our revolving credit facility and had approximately ~~$283.9~~$249.5 million ~~potentially~~ available after giving effect to ~~approximately $16.1 million of~~ letters of credit issued and outstanding. ~~The~~Our letters of credit, or corresponding restricted cash deposits, are used for a variety of purposes, including support of certain operating lease agreements, vendor payment terms and other subsidiary operating activities, and to meet various states' requirements to self-insure workers' compensation claims, including incurred but not reported claims. Our borrowing capacity was not reduced by leverage restrictions contained in the Credit Agreement as of June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

We rely upon our cash flow from operations and available liquidity under our revolving credit facility to fund our debt service obligations and other contractual commitments, working capital and capital expenditure requirements. At the end of each quarter, we ~~typically use~~have historically used cash on hand from our domestic and foreign subsidiaries to pay down amounts outstanding under our revolving credit facility, as applicable.

Our weighted average borrowings during the first six months of ~~2020~~2021 approximated ~~$413.6~~$403.7 million, compared to approximately ~~$329.5~~$413.6 million during the first six months of ~~2019, due to our~~2020. In March 2020, ~~proactive~~we proactively drew $150 million ~~draw~~ on our revolving credit facility to ensure availability of cash on hand given the potential uncertainty surrounding the financial markets as a result of the COVID-19 pandemic. We repaid the $150 million during second quarter 2020.

In May 2021, we, through one of our non-U.S. subsidiaries, entered into a revolving loan facility with a borrowing capacity of $4 million. The facility is guaranteed by TriMas Corporation. There were no borrowings on this loan facility during the three months ended June 30, 2021.

Cash management related to our revolving credit facility is centralized. We monitor our cash position and available liquidity on a daily basis and forecast our cash needs on a weekly basis within the current quarter and on a monthly basis outside the current quarter over the remainder of the year. Our business and related cash forecasts are updated monthly.

In considering the economic uncertainty surrounding the potential business impacts from the COVID-19 pandemic with respect to our operations, supply chains, distribution channels, and end-market customers, we have taken certain defensive actions as we monitor our cash position and available liquidity. These actions have included suspending our repurchase of our common stock, ~~during second quarter 2020,~~ borrowing on our revolving credit facility, tightening our capital expenditures, advanced monitoring of our accounts receivable balances and flexing cost structures of operations expected to be most impacted by COVID-19. Given strong cash generation and our current liquidity position, we have subsequently relaxed certain of these actions, choosing to further invest in capital expenditures for our businesses and resume purchasing shares of our common stock.

~~While more than half~~The majority of our cash on hand as of June 30, ~~2020~~2021 is located ~~outside of~~within the U.S., and given available funding under our revolving credit facility of ~~$284.1~~$300.0 million at June 30, ~~2020~~2021 (after consideration of the aforementioned leverage restrictions) and based on forecasted cash sources and requirements inherent in our business plans, we believe that our liquidity and capital resources, including anticipated cash flows from operations, will be sufficient to meet our debt service, capital expenditure and other short-term and long-term obligations for the foreseeable future.

We are subject to variable interest rates on our revolving credit facility. At June 30, ~~2020,~~2021, 1-Month LIBOR approximated ~~0.16%~~0.10%. At June 30, ~~2020,~~2021, we had no amounts outstanding on our revolving credit facility and, therefore, no variable rate-based borrowings outstanding.

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In addition to our long-term debt, we have other cash commitments related to leases. We account for these lease transactions as operating leases, and annual rent expense for continuing operations related thereto approximated ~~$7.5~~$9.4 million in ~~2019.~~2020. 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 prior authorization. In ~~addition in March 2020, given the uncertainty surrounding the COVID-19 pandemic, we temporarily suspended our share repurchase program; therefore, we did not purchase any common stock during~~ the three ~~months ended June 30, 2020. In the~~and six months ended June 30, ~~2020,~~2021, we purchased ~~1,253,650~~358,047 and 440,218 shares of our outstanding common stock for an aggregate purchase price of approximately ~~$31.6 million.~~$11.6 million and $14.2 million, respectively. Since the initial authorization through June 30, ~~2020~~2021 we have purchased ~~2,926,332~~3,694,949 shares of our outstanding common stock for an aggregate purchase price of approximately ~~$80.5~~$102.5 million. We will continue to evaluate opportunities to return capital to shareholders through the purchase of our common stock, depending on market conditions, including the potential impact of the COVID-19 pandemic, and other factors.

Market Risk

We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies. The functional currencies of our foreign subsidiaries are primarily the local currency in the country of domicile. We manage these operating activities at the local level and revenues and costs are generally denominated in local currencies; however, results of operations and assets and liabilities reported in U.S. dollars will fluctuate with changes in exchange rates between such local currencies and the U.S. dollar.

We use derivative financial instruments to manage currency risks associated with our procurement activities denominated in currencies other than the functional currency of our subsidiaries and the impact of currency rate volatility on our earnings. As of June 30, ~~2020,~~2021, we were party to foreign exchange forward and swap contracts to hedge changes in foreign currency exchange rates with notional amounts of approximately ~~$48.8~~$126.5 million. We also use cross-currency swap agreements to mitigate currency risks associated with the net investment in certain of our foreign subsidiaries. See Note ~~11,~~10, "Derivative Instruments," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q for additional information.

We are also subject to interest risk as it relates to our long-term debt. ~~We have historically used interest rate swap agreements to fix the variable portion of our debt to manage this risk.~~ See Note ~~10,~~9, "Long-term Debt," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q for additional information.

Common Stock

TriMas is listed in the NASDAQ Global Select ~~Market~~^SM.Market. Our stock trades under the symbol "TRS."

Credit Rating

We and certain of our outstanding debt obligations are rated by Standard & Poor's and Moody's. On ~~June 12, 2020,~~March 24, 2021, Moody's ~~affirmed~~assigned a Ba3 rating to our 2029 Senior ~~Notes, as presented in~~Notes. See Note 10,9, "Long-term Debt" included in Part I, Item 1, "Notes to Unaudited Consolidated Financial Statements" within this quarterly report on Form 10-Q. Moody's also affirmed a Ba2 Corporate Family Rating and maintained its outlook as stable. On ~~February 12, 2020,~~March 15, 2021, Standard & Poor's ~~affirmed~~assigned a BB- rating to our ~~senior unsecured debt,~~2029 Senior Notes. On February 26, 2021, Standard & Poor's affirmed a BB corporate credit rating and maintained its outlook as stable. If our credit ratings were to decline, our ability to access certain financial markets may become limited, our cost of borrowings may increase, the perception of us in the view of our customers, suppliers and security holders may worsen and as a result, we may be adversely affected.

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Outlook

~~Through~~It has now been more than one year since the ~~first half~~onset of ~~2020,~~the COVID-19 pandemic. The pandemic has significantly affected each of our businesses and how we ~~experienced year-over-year overall growth~~operate, albeit in ~~sales, driven by robust organic growth~~different ways and magnitudes. Sales in our Packaging segment and from acquisitions, which were partially offset by organic sales decreases in our Aerospace and Specialty Products segments. We expect these general segment trends for sales to continue in the back half of 2020 compared with back half 2019, with Packaging likely to continue to experience robust demand, particularly for dispensing and closure products we supply that ~~help~~are used in applications to fight the spread of germs ~~while~~continue to be much stronger than before the pandemic, although, as expected, have declined from peak levels in second quarter 2020 at the onset of the pandemic. Sales in our Specialty Products ~~sales~~segment have been depressed by low levels of industrial activity in the U.S., but began to rebound in second quarter 2021. Sales in our Aerospace segment are expected to be lower than ~~back half 2019 unless industrial activity begins to recover. However, we expect our Aerospace segment to experience~~historical levels for an indefinite period as a ~~further sales decline in~~result of low new commercial aircraft builds, but have been boosted by a customer's stocking orders during the ~~second~~first half of ~~2020,~~2021.

We believe our financial results demonstrate our ability to effectively leverage our TriMas Business Model, working across our businesses with a high degree of connectivity to respond to changing market conditions, including the ongoing challenges presented by the COVID-19 pandemic. We have capitalized on opportunities where market demand was high, while also taking swift actions where market demand was sharply reduced. We have continued to take proactive realignment actions to mitigate the effects of lower demand from the pandemic as much as practical.

While we experienced increased sales levels during second quarter 2021, as compared to the ~~second half~~same period in 2020, we believe there will be a continued period of ~~2019, as customer orders have reduced significantly as aircraft manufacturers slow or halt production in response~~uncertainty related to ~~low demand for new planes following the onset of the COVID-19 pandemic. Although we have taken realignment actions to somewhat mitigate the impact of the lower~~ demand levels ~~a clear picture~~ for our ~~business has yet to emerge, and we are unable to predict the full extent~~other products, whether it be when new aircraft builds will ramp-up that require our fasteners or ~~duration of these impacts at this time.~~

~~We are managing production capacity to prevailing~~engineered products or whether industrial demand ~~conditions where practical and have taken steps to reduce controllable costs. As we~~will continue to ~~navigate through this uncertain period, our goal will be~~improve toward pre-pandemic levels. We expect to continue to mitigate, as much as practical, the impact of ~~lower~~low volumes ~~and execute strategic manufacturing footprint~~in the most challenged end markets, executing realignment actions ~~for our businesses experiencing decreased end-market demand,~~as necessary so we are positioned to gain operating leverage when ~~certain~~these end markets ~~begin~~recover. We believe we remain well positioned to ~~recover. For those end~~capitalize on the recovery of the aerospace and industrial markets, ~~where demand may increase, such~~ as ~~for our Packaging segment's dispensers and closures used in applications that help fight~~well as available market growth opportunities. We believe the continued effectiveness of vaccines, as well as continued measures intended to control the spread of ~~germs, improve personal hygiene,~~the virus and ~~advance home and industrial cleaning, we will continue to collaborate with~~future variants thereof, are among the most significant factors that could impact demand for our ~~customers and strategic supply partners to ensure availability of capacity to fulfill requisite orders, while also investing in localizing supply where necessary.~~products.

As a result of continued uncertainties resulting from the COVID-19 pandemic, and their potential impact to our future results of operations, as well as to TriMas' market capitalization, we may record additional cash and non-cash charges related to further realignment actions, as well for uncollectible customer account balances, excess inventory and idle production equipment. Further, we may be required to conduct an evaluation of triggering events as to whether there is a reduction in the fair value of our goodwill and intangible assets, particularly in our Aerospace divisions where the impact of COVID-19 has resulted in decreased end-market demand for our fastener and machined component product, which we believe could result in an impairment charge if the significant decline in sales that began in June 2020 continues. At this time, we are not able to ~~practically~~ estimate the extent or amount of any such potential cash and non-cash charges.

~~Despite~~Following the ~~expected pressure to future demand levels~~issuance of our 2029 Senior Notes and ~~results of operations, at present,~~amending our Credit Agreement, we believe our capital structure ~~is in solid position. We believe~~remains strong and that we have sufficient headroom under our financial covenants, and ample cash and available liquidity under our revolving credit facility, to meet our debt service, capital expenditure and other short-term and long-term obligations for the foreseeable future.

We expect to continue to leverage the tenets of ~~the~~our TriMas Business Model to manage our multi-industry businesses and address the ongoing challenges presented by the COVID-19 pandemic, and on a longer-term basis, achieve our growth plans, execute continuous improvement initiatives to offset inflationary pressures, and seek lower-cost sources for input costs, all while continuously assessing the appropriateness of our manufacturing footprint and fixed-cost structure.

Impact of New Accounting Standards

See Note 2,, "New Accounting Pronouncements," included in Part 1, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q.

Critical Accounting Policies

Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions used in calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, our evaluation of business and macroeconomic trends, and information from other outside sources, as appropriate.

During the quarter ended June 30, ~~2020, the Company changed its accounting policy for asbestos-related matters, for which the new policy is described below.~~

~~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.”

~~Other than for the accounting policy for asbestos-related matters,~~2021, there were no material changes to the items that we disclosed as our critical accounting policies in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Annual Report on Form 10-K for the year ended December 31, ~~2019~~.2020.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to market risk associated with fluctuations in foreign currency exchange rates. We are also subject to interest risk as it relates to long-term debt. See Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," for details about our primary market risks, and the objectives and strategies used to manage these risks. Also see Note 10,9, "Long-term Debt," and Note 11,10, "Derivative Instruments," in Part I, Item 1, "Notes to Unaudited Consolidated Financial Statements," included within this quarterly report on Form 10-Q for additional information.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Evaluation of disclosure controls and procedures

As of June 30, ~~2020~~,2021, an evaluation was carried out by management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) pursuant to Rule 13a-15 of the Exchange Act. The Company's disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of June 30, ~~2020~~,2021, the Company's disclosure controls and procedures are effective to provide reasonable assurance that they would meet their objectives.

Changes in internal control over financial reporting

In response to the COVID-19 pandemic, we have required certain employees, some of whom are involved in the operation of our internal controls over financial reporting, to work from home. Despite this change, there have been no changes in the Company's internal control over financial reporting during the quarter ended June 30, ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. We are continually monitoring and assessing the COVID-19 pandemic on our internal controls to minimize any impact it may have on their design and operating effectiveness.

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PART II. OTHER INFORMATION

TRIMAS CORPORATION

Item 1. Legal Proceedings

See Note 14,13, "Commitments and Contingencies," included in Part I, Item 1, "Notes to Unaudited Consolidated Financial Statements," within this quarterly report on Form 10-Q.

Item 1A. Risk Factors

~~The~~In addition to the other information set forth in this report, ~~including without limitation,~~you should carefully consider the ~~risk factor presented below, updates and should be read in conjunction with, the risk~~ factors ~~and information disclosed~~discussed in Part 1, Item 1A., "Risk Factors," in our 2020 Annual Report on Form 10-K, ~~for the year ended December 31, 2019.~~

~~The novel coronavirus (COVID-19) pandemic has had, and is expected to continue to have, a significant impact on the Company's operations and~~which could materially affect our business, financial condition or future results.

~~Since late January 2020, we~~ There have been managing matters related to the global COVID-19 pandemic, including impacts to our operations and strategic supplier-partners in Asia, and, more recently, our manufacturing operations in Europe and North America. As a result of COVID-19, we have experienced temporary disruptions in the operation and workforce staffing of certain of our manufacturing facilities, as we were early adopters of many of the workplace guidelines recently published by the U.S. Centers for Disease Control and Prevention ("CDC") and took precautionary measures when necessary. COVID-19 has also affected our customers and suppliers, and we are collaborating with them to minimize supply chain disruptions. In response to the pandemic and related mitigation measures, we also implemented pandemic and business continuity plans, as well as other precautionary measures on behalf of our customers and employees, including supporting remote work opportunities for certain of our employees. While we believe that all these measures have been necessary or appropriate, they have resulted in additional costs and may adversely impact our business and financial performance in the future or expose us to additional unknown risks.

The COVID-19 pandemic has impacted our results of operations, and we expect it will continue to impact us in the future at varying levels. For example, due in part to the impact of the COVID-19 pandemic, sales for our dispensing and closure products increased, while salesno significant changes in our Aerospace and Specialty Products segments decreased, in the second quarter of 2020. Although it is not possible to predict the ultimate impact of COVID-19, including on our business, results of operations, financial position or cash flows, such impacts that may be material include, but are not limited to: (i) shifting customer demand for many of our products, including those used in cosmetic, personal care, pharmaceutical, household product, food and beverage, and industrial markets,risk factors as well as aerospace markets; (ii) increased credit risk, including increased failure by customers experiencing business disruptions to make timely payments; (iii) reduced availability and productivity of employees, as well as increased costs associated with our high-deductible medical insurance plan if our employees become ill; (iv) increased operational risks as a result of manufacturing facility disruptions or remote work arrangements, including the potential effects on internal controls and procedures, as well as cybersecurity risks and increased vulnerability to security breaches, information technology disruptions and other similar events; (v) delays and disruptions in the availability of and timely delivery of materials and components useddisclosed in our operations, as well as increased costs for such materials and components; (vi) customer requirements to accelerate the relocation of certain of our production lines to North America, which may increase our capital investment needs and launch costs; (vii) a negative impact on liquidity position; (viii) any impairment in value of tangible or intangible assets which could be recorded as a result of weaker economic conditions; and (ix) increased costs and less ability to access funds under our existing credit facility and the capital markets.

The extent of the COVID-19 pandemic's effect on our operational and financial performance will depend in large part on future developments, which cannot be predicted with confidence at this time. Future developments include the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, and the resumption of widespread economic activity. In addition, because we cannot predict the impact that COVID-19 will ultimately have, the actual impact may also exacerbate other risks discussed in Item 1A. “Risk Factors” in our2020 Annual Report on Form ~~10-K for the fiscal year ended December 31, 2019, any of which could have a material effect on us.~~10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about purchases made by the Company, or on behalf of the Company by an affiliated purchaser, of shares of the Company's common stock during the three months ended June 30, ~~2020.~~2021.

Period Total Number of Shares Purchased Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program ⁽¹⁾
April 1, 2020 to April 30, 2020 —
$ —
—
$ 169,543,834
May 1, 2020 to May 31, 2020 —
$ —
—
$ 169,543,834
June 1, 2020 to June 30, 2020 —
$ —
—
$ 169,543,834
Total —
$ —
—
$ 169,543,834


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1)
April 1, 2021 to April 30, 2021	52,204	$	30.92	52,204	$	157,453,974
May 1, 2021 to May 31, 2021	228,475	$	32.78	228,475	$	149,964,638
June 1, 2021 to June 30, 2021	77,368	$	31.96	77,368	$	147,492,131
Total	358,047	$	32.33	358,047	$	147,492,131

__________________________

(1) In March 2020, the Company announced its Board of Directors had authorized the Company to increase the purchase of its common stock up to $250 million in the aggregate from its previous authorization of $150 million. The increased authorization includes the value of shares already purchased under the previous authorization. Pursuant to this share repurchase program, during the three months ended June 30, 2021, the Company repurchased 358,047 shares of its common stock at a cost of approximately $11.6 million. The share repurchase program is effective and has no expiration date.

⁽¹⁾

In March 2020, the Company announced its Board of Directors had authorized the Company to increase the purchase of its common stock up to $250 million in the aggregate from its previous authorization of $150 million. The increased authorization includes the value of shares already purchased under the previous authorization. Pursuant to this share repurchase program, during the three months ended June 30, 2020, the Company did not repurchase any shares of its common stock. The share repurchase program is effective and has no expiration date.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

Exhibits Index:



3.1			Fourth Amended and Restated Certificate of Incorporation of TriMas Corporation (Incorporated by reference to the Exhibits filed with TriMas Corporation's Quarterly Report on Form 10-Q filed on August 3, 2007 (File No. 001-10716)).
3.2			Third Amended and Restated By-laws of TriMas Corporation (Incorporated by reference to the Exhibits filed with TriMas Corporation's Current Report on Form 8-K filed on December 18, 2015 (File No. 001-10716)).
~~31.1~~10.1			Separation Agreement between TriMas Corporation and Robert J. Zalupski dated May 1, 2021.*
10.2			Offer Letter between TriMas Corporation and Scott Mell dated March 15, 2021.*
31.1			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
31.2			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002.
32.1			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
32.2			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002.
101			The following materials from TriMas Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, ~~2020,~~2021, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheet, (ii) the Consolidated Statement of Operations, (iii) the Consolidated Statement of Comprehensive Income, (iv) the Consolidated Statement of Cash Flows, (v) the Consolidated Statement of Shareholders' Equity, (vi) Notes to Consolidated Financial Statements, and (vii) document and entity information.
~~104~~





104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Management contracts and compensatory plans or arrangements.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

TRIMAS CORPORATION (Registrant)

~~TRIMAS CORPORATION (Registrant)~~

/s/ SCOTT A. MELL

Date:

July 29, 2021

By:

~~/s/ ROBERT J. ZALUPSKI~~

~~Date:~~

~~July 30, 2020~~

~~By:~~

~~Robert J. Zalupski~~Scott A. Mell

Chief Financial Officer



	Three months ended June 30,				Six months ended June 30,
Customer Markets	2020		2019		2020		2019
Consumer Products	$	104,530	$	82,060	$	183,590	$	149,980
Aerospace & Defense	42,610		49,510		91,530		95,090
Industrial	52,410		59,260		107,220		119,130
Total net sales	$	199,550	$	190,830	$	382,340	$	364,200


	Three months ended June 30,				Six months ended June 30,
Customer Markets	2021		2020		2021		2020
Consumer Products	$	112,900	$	104,530	$	218,020	$	183,590
Aerospace & Defense	44,560		42,610		89,170		91,530
Industrial	61,530		52,410		118,530		107,220
Total net sales	$	218,990	$	199,550	$	425,720	$	382,340


	June 30, 2021		December 31, 2020
Cash and cash equivalents - unrestricted	$	106,250	$	62,790
Cash - restricted (a)	11,160		11,160
Total cash and cash equivalents	$	117,410	$	73,950



	Packaging			Aerospace		Specialty Products			Total
Balance, December 31, 2019	$	181,650		$	133,690	$	19,300		$	334,640
Goodwill from acquisitions	—			43,260		—			43,260
Goodwill reassigned in segment realignment	—			12,740		(12,740		)	—
Foreign currency translation and other	(1,580		)	—		—			(1,580		)
Balance, June 30, 2020	$	180,070		$	189,690	$	6,560		$	376,320



	Packaging		Aerospace		Specialty Products		Total
Balance, December 31, 2020	$	234,560	$	62,850	$	6,560	$	303,970




Foreign currency translation and other	(2,540)		0		0		(2,540)
Balance, June 30, 2021	$	232,020	$	62,850	$	6,560	$	301,430



	June 30, 2020			December 31, 2019
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	65,250		$	172,470
Receivables, net of reserves of approximately $3.7 million and $2.1 million as of June 30, 2020 and December 31, 2019, respectively	123,320			108,860
Inventories	140,890			132,660
Prepaid expenses and other current assets	18,900			20,050
Total current assets	348,360			434,040
Property and equipment, net	210,960			214,330
Operating lease right-of-use assets	35,270			27,850
Goodwill	376,320			334,640
Other intangibles, net	188,170			161,390
Deferred income taxes	3,630			500
Other assets	22,190			19,950
Total assets	$	1,184,900		$	1,192,700
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	60,180		$	72,670
Accrued liabilities	46,680			42,020
Operating lease liabilities, current portion	6,480			5,100
Total current liabilities	113,340			119,790
Long-term debt, net	295,260			294,690
Operating lease liabilities	29,330			23,100
Deferred income taxes	27,960			16,830
Other long-term liabilities	57,910			40,810
Total liabilities	523,800			495,220
Preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: None	—			—
Common stock, $0.01 par: Authorized 400,000,000 shares; Issued and outstanding: 43,502,103 shares at June 30, 2020 and 44,562,679 shares at December 31, 2019	440			450
Paid-in capital	753,430			782,880
Accumulated deficit	(82,430		)	(79,850		)
Accumulated other comprehensive loss	(10,340		)	(6,000		)
Total shareholders' equity	661,100			697,480
Total liabilities and shareholders' equity	$	1,184,900		$	1,192,700


	Common Stock		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
Balances, December 31, 2020	$	430	$	749,050	$	(159,610)	$	(5,620)	$	584,250
Net income	—		—		13,060		—		13,060
Other comprehensive income	—		—		—		630		630

Purchase of common stock	0		(2,640)		—		—		(2,640)
Shares surrendered upon exercise and vesting of equity awards to cover taxes	—		(1,770)		—		—		(1,770)


Non-cash compensation expense	—		2,440		—		—		2,440

Balances, March 31, 2021	$	430	$	747,080	$	(146,550)	$	(4,990)	$	595,970
Net income	—		—		11,840		—		11,840
Other comprehensive income	—		—		—		990		990
Purchase of common stock	—		(11,570)		—		—		(11,570)
Shares surrendered upon exercise and vesting of equity awards to cover taxes	—		(2,850)		—		—		(2,850)


Non-cash compensation expense	0		3,220		—		—		3,220
Balances, June 30, 2021	$	430	$	735,880	$	(134,710)	$	(4,000)	$	597,600



	As of June 30, 2020					As of December 31, 2019
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets:
Customer relationships, 5 – 12 years	$	100,160	$	(54,200	)	$	73,860	$	(49,910	)
Customer relationships, 15 – 25 years	122,280		(59,230		)	122,280		(56,010		)
Total customer relationships	222,440		(113,430		)	196,140		(105,920		)
Technology and other, 1 – 15 years	54,100		(31,240		)	52,430		(29,790		)
Technology and other, 17 – 30 years	43,300		(38,620		)	43,300		(37,620		)
Total technology and other	97,400		(69,860		)	95,730		(67,410		)
Indefinite-lived intangible assets:
Trademark/Trade names	51,620		—			42,850		—
Total other intangible assets	$	371,460	$	(183,290	)	$	334,720	$	(173,330	)


	As of June 30, 2021				As of December 31, 2020
Intangible Category by Useful Life	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Finite-lived intangible assets:
Customer relationships, 5 – 12 years	$	122,010	$	(65,350)	$	122,970	$	(59,470)
Customer relationships, 15 – 25 years	122,280		(65,300)		122,280		(62,450)
Total customer relationships	244,290		(130,650)		245,250		(121,920)
Technology and other, 1 – 15 years	57,180		(34,480)		57,180		(32,800)
Technology and other, 17 – 30 years	43,300		(39,680)		43,300		(39,450)
Total technology and other	100,480		(74,160)		100,480		(72,250)
Indefinite-lived intangible assets:
Trademark/Trade names	54,190		—		54,640		—
Total other intangible assets	$	398,960	$	(204,810)	$	400,370	$	(194,170)


	June 30, 2021		December 31, 2020
Finished goods	$	77,850	$	78,010
Work in process	31,040		29,680
Raw materials	41,030		41,690
Total inventories	$	149,920	$	149,380



	June 30, 2020		December 31, 2019
Land and land improvements	$	19,560	$	19,110
Buildings	85,820		84,880
Machinery and equipment	329,120		326,990
	434,500		430,980
Less: Accumulated depreciation	223,540		216,650
Property and equipment, net	$	210,960	$	214,330



	June 30, 2020			December 31, 2019
4.875% Senior Notes due October 2025	$	300,000		$	300,000
Debt issuance costs	(4,740		)	(5,310		)
Long-term debt, net	$	295,260		$	294,690


	June 30, 2021		December 31, 2020
4.125% Senior Notes due April 2029	$	400,000	$	0
4.875% Senior Notes due October 2025	0		300,000
Credit Agreement	0		50,450

Debt issuance costs	(6,630)		(4,160)


Long-term debt, net	$	393,370	$	346,290


Year	Percentage
2024	102.063	%
2025	101.031	%
2026 and thereafter	100.000	%


	June 30, 2021				December 31, 2020
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
4.125% Senior Notes due April 2029	$	400,000	$	404,500	$	0	$	0
4.875% Senior Notes due October 2025	0		0		300,000		305,630
Revolving credit facility	0		0		50,450		50,450



	June 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	300,000	$	300,000	$	300,000	$	309,000



		Asset / (Liability) Derivatives
Derivatives designated as hedging instruments	Balance Sheet Caption	June 30, 2020		December 31, 2019
Net Investment Hedges
Cross-currency swaps	Other assets	$	7,580	$	4,460



	Amount of Income Recognized in AOCI on Derivative (Effective Portion, net of tax)					Amount of Income (Loss) Reclassified from AOCI into Earnings
						Three months ended June 30,				Six months ended June 30,
	As of June 30, 2020		As of December 31, 2019		Location of Income (Loss) Reclassified from AOCI into Earnings (Effective Portion)	2020		2019		2020		2019
Net Investment Hedges
Cross-currency swaps	$	6,530	$	4,230	Other income, net	$	—	$	—	$	—	$	—


	Amount of Loss Recognized in AOCI on Derivatives (Effective Portion, net of tax)					Amount of Income (Loss) Reclassified from AOCI into Earnings
						Three months ended June 30,				Six months ended June 30,
	As of June 30, 2021		As of December 31, 2020		Location of Income (Loss) Reclassified from AOCI into Earnings (Effective Portion)	2021		2020		2021		2020
Net Investment Hedges
Cross-currency swaps	$	(250)	$	(3,580)	Other income (expense), net	$	0	$	0	$	0	$	0



		Amount of Income Recognized in Earnings on Derivatives
		Three months ended June 30,				Six months ended June 30,
	Location of Income Recognized in Earnings on Derivatives	2020		2019		2020		2019
Derivatives not designated as hedging instruments
Foreign exchange contracts	Other income, net	$	550	$	220	$	480	$	220


		Amount of Income (Loss) Recognized in Earnings on Derivatives
		Three months ended June 30,				Six months ended June 30,
	Location of Income (Loss) Recognized in Earnings on Derivatives	2021		2020		2021		2020
Derivatives not designated as hedging instruments
Foreign exchange contracts	Other income (expense), net	$	(1,160)	$	550	$	2,860	$	480



Description	Frequency	Asset / (Liability)			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
June 30, 2020
Cross-currency swaps	Recurring	$	7,580		$	—	$	7,580		$	—
Foreign exchange contracts	Recurring	$	180		$	—	$	180		$	—
December 31, 2019
Cross-currency swaps	Recurring	$	4,460		$	—	$	4,460		$	—
Foreign exchange contracts	Recurring	$	(770	)	$	—	$	(770	)	$	—


Year ended December 31,	Operating Leases^(a)			Year ended December 31,	Operating Leases(a)
2020 (excluding the six months ended June 30, 2020)	$	3,880
2021	7,370
2021 (excluding the six months ended June 30, 2021)				2021 (excluding the six months ended June 30, 2021)	$	3,940
2022	6,590			2022	7,720
2023	5,630			2023	6,880
2024	4,320			2024	6,000
2025				2025	4,850
Thereafter	13,560			Thereafter	15,800
Total lease payments	41,350			Total lease payments	45,190
Less: Imputed interest	(5,540		)	Less: Imputed interest	(5,770)
Present value of lease liabilities	$	35,810		Present value of lease liabilities	$	39,420


^(a) (a) The maturity table excludes cash flows associated with exited lease facilities. Liabilities for exited lease facilities are included in accrued liabilities and other long-term liabilities in the accompanying consolidated balance sheet.	The maturity table excludes cash flows associated with exited lease facilities. Liabilities for exited lease facilities are included in accrued liabilities and other long-term liabilities in the accompanying consolidated balance sheet.


	June 30, 2021		December 31, 2020
Non-current asbestos-related liabilities	$	24,810	$	26,170
Other long-term liabilities	36,620		43,520
Total other long-term liabilities	$	61,430	$	69,690



	Claims pending at beginning of period	Claims filed during period	Claims dismissed during period	Claims settled during period	Claims pending at end of period	Average settlement amount per claim during period		Total defense costs during period
Six Months Ended June 30, 2020	4,759	110	129	8	4,732	$	54,375	$	1,090,000
Fiscal Year Ended December 31, 2019	4,820	143	172	32	4,759	$	16,616	$	2,250,000



	Number of Stock Options	Weighted Average Option Price		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2020	150,000	$	17.87
Granted	—	—
Exercised	—	—
Cancelled	—	—
Expired	—	—
Outstanding at June 30, 2020	150,000	$	17.87	6.1	$	912,000



	Number of Unvested RSUs		Weighted Average Grant Date Fair Value		Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2020	622,528		$	30.77
Granted	473,771		21.37
Vested	(297,203	)	27.91
Cancelled	(9,583	)	29.59
Outstanding at June 30, 2020	789,513		$	26.51	1.7	$	18,908,836



	Pension Plans
	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Service costs	$	310		$	260		$	630		$	520
Interest costs	230			270			470			540
Expected return on plan assets	(360		)	(350		)	(730		)	(700		)
Amortization of net loss	230			150			450			290
Net periodic benefit cost	$	410		$	330		$	820		$	650



	Defined Benefit Plans			Derivative Instruments		Foreign Currency Translation			Total
Balance, December 31, 2019	$	(9,930	)	$	4,230	$	(300	)	$	(6,000	)
Net unrealized gains (losses) arising during the period ^(a)	—			2,300		(6,950		)	(4,650		)
Less: Net realized losses reclassified to net income ^(b)	(310		)	—		—			(310		)
Net current-period other comprehensive income (loss)	310			2,300		(6,950		)	(4,340		)
Balance, June 30, 2020	$	(9,620	)	$	6,530	$	(7,250	)	$	(10,340	)


^(a)	~~Derivative instruments, net of income tax of approximately $0.8 million. See Note 11, "Derivative Instruments," for further details.~~


^(b)	~~Defined benefit plans, net of income tax of approximately $0.1 million. See Note 18, "Defined Benefit Plans," for further details.~~



	Twelve Months Ended June 30, 2020
Net income	$	54,930
Bank stipulated adjustments:
Interest expense	14,830
Income tax expense	26,250
Depreciation and amortization	48,770
Non-cash compensation expense⁽¹⁾	8,090
Other non-cash expenses or losses	16,920
Non-recurring expenses or costs⁽²⁾	7,310
Extraordinary, non-recurring or unusual gains or losses	20,990
Effects of purchase accounting adjustments	2,110
Business and asset dispositions	870
Permitted acquisitions	5,030
Permitted dispositions⁽³⁾	(46,430		)
Consolidated Bank EBITDA, as defined	$	159,670



	June 30, 2020
Total Indebtedness, as defined	$	254,890
Consolidated Bank EBITDA, as defined	159,670
Total net leverage ratio	1.60		x
Covenant requirement	4.00		x

Compensatory

Range of damages sought (dollars in millions)

$0.0 to $0.6

$0.6 to $5.0

Number of claims