|10/25/13 at 8:30 a.m. ET|
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|Barnes Group Announces Fourth Quarter and Full-year 2001 Results|
BRISTOL, Conn.--(BUSINESS WIRE)--Feb. 8, 2002--
Barnes Group Inc. (NYSE: B) today announced financial results for the fourth quarter and year ended December 31, 2001. Net sales for the fourth quarter of 2001 were $183.5 million, down two percent from $187.9 million in the fourth quarter of 2000. The Company reported a net loss of $0.8 million, or $0.04 per share, in the fourth quarter of 2001, compared to net income of $7.8 million, or $0.41 per diluted share, in the year-ago period. Net income in the fourth quarter of 2001 included a pretax charge of $4.8 million, equivalent on an after-tax basis to $0.16 per diluted share, related to the closure of an Associated Spring plant in Dallas, Texas and the reorganization of the sales management function at Barnes Distribution. This charge was previously disclosed in a press release issued December 20, 2001.
Net sales were a record $768.8 million for the full year 2001, up four percent from net sales of $740.0 million in 2000. Net sales growth in 2001 reflected $61 million in incremental sales from the Company's recent acquisitions and strong organic growth at Barnes Aerospace, substantially offset by the effects of a sluggish industrial economy on organic sales at Associated Spring and Barnes Distribution.
Net income for 2001 was $19.1 million, or $1.01 per diluted share, compared with $35.7 million, or $1.90 per diluted share, in 2000. The earnings decline primarily reflected the fourth quarter charge noted above and the profit impact of the decline in organic sales at Associated Spring and Barnes Distribution, partially offset by the higher sales volume at Barnes Aerospace and efforts to reduce costs throughout Barnes Group.
"Although 2001 presented some difficult challenges - some that we've seen before in a cyclical economy, some that were unprecedented
Sales at Barnes Aerospace were a record $52.9 million for the fourth quarter of 2001, up 30 percent from $40.7 million in the fourth quarter of 2000. Sales grew in all four of Barnes Aerospace's key markets - commercial aircraft, government and military, business jets, and industrial gas turbines - reflecting an intensive global sales effort. Operating profit doubled to $3.6 million for the quarter ended December 31, 2001, as a result of the higher sales volume, partially offset by investments in sales, engineering and R&D. Barnes Aerospace recorded orders of $43 million during the fourth quarter of 2001 and $216 million for the full year; order backlog at year-end 2001 was $159 million, up from $145 million at year-end 2000.
Full-year sales at Barnes Aerospace were a record $200.4 million in 2001, up 48 percent from 2000, which reflected both strong growth in sales to new and existing customers and sales from the September 2000 acquisition of Kratz-Wilde Machine Company and Apex Manufacturing, Inc. Operating profit at Barnes Aerospace more than doubled to $16.4 million for the year ended December 31, 2001, compared with $8.0 million in the year-ago period. Operating profit grew largely as a function of the increased sales volume, and through efforts to reduce expenses and more widespread use of lean manufacturing methods.
"Despite the turmoil caused in the commercial aircraft market by the events of September 11th, Barnes Aerospace turned in a stellar year in 2001. Although order backlog is strong, Barnes Aerospace management is carefully positioning the business for what will likely be a challenging upcoming year; this includes the elimination of approximately 80 positions that was carried out in January 2002. At the same time, they are focusing on ramping up orders and sales of products for business and military jets and for industrial gas turbines. Collectively, orders for business and military jets and industrial gas turbines grew more than 50 percent in 2001, and now represent roughly 40 percent of Barnes Aerospace's OEM work," Carpenter stated.
Sales at Associated Spring were $63.2 million for the quarter ended December 31, 2001, down from $74.9 million in the quarter ended December 31, 2000. A decline in sales of mechanical springs to customers in the transportation and telecommunications markets eclipsed higher sales of nitrogen gas springs, particularly to customers in Asia. Associated Spring recorded an operating loss of $1.1 million for the fourth quarter of 2001, compared to operating profit of $7.7 million in the fourth quarter of 2000. For the full year, sales at Associated Spring were $279.2 million in 2001, down from $327.3 million in 2000. Operating profit was $19.4 million, compared with $44.0 million in 2000. Operating profit for both the fourth quarter and full-year periods of 2001 was negatively affected by the sales volume decline and the charge for the Dallas, Texas plant closure noted above.
Carpenter commented, "Although a broad economic turn appears to be some time away, we are more optimistic than we were 12 months ago about the outlook for Associated Spring's key end markets. At the same time, Associated Spring's management team remains focused on reducing costs in their operations and on developing sales with new customers and in new markets."
Sales at Barnes Distribution were $69.0 million for the quarter ended December 31, 2001, down from $75.4 million in the quarter ended December 31, 2000. The sales decline reflected persistent weak economic conditions in industrial markets throughout North America and Europe. Barnes Distribution incurred an operating loss of $0.8 million for the fourth quarter of 2001, compared to operating profit of $4.9 million in the fourth quarter of 2000. Operating profit was negatively impacted by both the sharp sales volume decline and by approximately $0.3 million in pre-tax severance costs related to the aforementioned sales management reorganization.
Sales at Barnes Distribution were $298.4 million for the year ended December 31, 2001, up three percent from $291.1 million in the comparable period in 2000. Sales from Curtis contributed an incremental $25.6 million to the 2001 total. Operating profit for all of 2001 was $5.5 million, down from $12.9 million for the same period in 2000. Operating profit declined as a result of the impact weak economic conditions had on Barnes Distribution's organic sales, offset in part by incremental sales from the May 2000 acquisition of Curtis Industries.
"Barnes Distribution's sales and profitability suffered in 2001 as a result of the persistently weak economy, especially in the heavy industrial sectors. Nevertheless, the management team at Barnes Distribution made a significant effort to reduce the infrastructure of their business, while at the same time preserving customer satisfaction and opening new accounts. This included the consolidation of headquarters locations, the customer service function, and over a half dozen distribution centers, to name but a few. Although Barnes Distribution's profitability is dependent on the direction of the overall economy, the financial benefit of these consolidations will be more fully realized in 2002 than they were in 2001," Carpenter stated.
"One of the highlights of our performance in 2001 was our ability to generate free cash flow, which we define as cash available before dividends, business acquisitions, share repurchases, and net changes in debt. Free cash flow in 2001 was $57 million, compared with $24 million in 2000," said William C. Denninger, Barnes Group's Senior Vice President - Finance and Chief Financial Officer. "Even in a very difficult economic environment, our three businesses were able to generate cash through aggressive working capital management and careful control of capital expenditures," Denninger added.
Among the other highlights for the year, Carpenter noted:
Carpenter concluded, "Over the past three years, we have invested significantly to lay the foundation for our future growth. This has included investments to grow the business organically, and strategic acquisitions we have made in each of our three businesses, most recently with our agreement to acquire Seeger-Orbis of Germany. In 2001, we focused on achieving the synergies of our recent acquisitions, extending our products to new customers and markets, and, most importantly, delivering long-term value to our stockholders; we will remain focused on these objectives in 2002 and beyond."
Barnes Group Inc. (www.barnesgroupinc.com) is a diversified international manufacturer of precision metal parts and distributor of industrial supplies, serving a wide range of markets and customers. Founded in 1857 and headquartered in Bristol, Connecticut, Barnes Group consists of three businesses with 2001 sales of $769 million: Associated Spring, one of the world's largest manufacturers of precision mechanical and nitrogen gas springs; Barnes Aerospace, a manufacturer and repairer of highly engineered assemblies and products for aircraft engines, airframes, and land-based industrial gas turbines; and Barnes Distribution, an international distributor of maintenance, repair and operating supplies. More than 5,100 dedicated employees at over 50 locations worldwide contribute to Barnes Group Inc.'s success.
This release may contain certain forward-looking statements as defined in the Public Securities Litigation and Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in the statements. Investors are encouraged to consider these risks and uncertainties as described within the Company's periodic filings with the Securities and Exchange Commission, including the following: the ability of the Company to integrate newly acquired businesses and to realize acquisition synergies on schedule; changes in market demand for the types of products and services produced and sold by Barnes Group; the Company's success in identifying, and attracting customers in, new markets; the Company's ability to develop new and enhanced products to meet customers' needs timely; changes in economic and political conditions, worldwide and in the locations where the Company does business; interest and foreign exchange rate fluctuations; and regulatory changes.
BARNES GROUP INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) Three months ended Twelve months ended December 31 December 31 2001 2000 2001 2000 Net sales $ 183,607 $ 187,991 $ 768,821 $ 740,032 Cost of sales 127,906 125,919 519,536 488,634 Selling and admin. expenses 54,194 47,978 208,965 188,449 182,100 173,897 728,501 677,083 Operating income 1,507 14,094 40,320 62,949 Other income 191 1,423 3,890 4,773 Interest expense 3,594 4,890 16,161 15,140 Other expenses 1,161 1,250 4,590 3,992 Income (loss) before income taxes (3,057) 9,377 23,459 48,590 Income taxes(benefit) (2,291) 1,553 4,338 12,925 Net income (loss) $ (766) $ 7,824 $ 19,121 $ 35,665 Per common share: Net income (loss) - basic $ (.04) $ .42 $ 1.03 $ 1.92 - diluted (.04) .41 1.01 1.90 Dividends .20 .20 .80 .79 Average common shares outstanding - basic 18,417,046 18,618,932 18,506,247 18,568,359 - diluted 18,832,513 18,884,357 18,919,968 18,791,227 BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) Unaudited December December 2001 2000 Assets Current assets Cash and short-term investments $ 48,868 $ 23,303 Accounts receivable 94,124 107,434 Inventories 85,721 88,514 Deferred income taxes and prepaid expenses 27,822 22,097 Total current assets 256,535 241,348 Deferred income taxes 5,783 15,010 Property, plant and equipment 152,943 163,766 Goodwill 159,836 155,667 Other assets 61,408 61,150 ------- ------- $636,505 $636,941 Liabilities and Stockholders' Equity Current liabilities Notes payable $ 5,500 $ 3,678 Accounts payable 71,410 62,985 Accrued liabilities 59,118 60,183 Long-term debt - current 47,576 -- Total current liabilities 183,604 126,846 Long-term debt 178,365 230,000 Other liabilities 75,699 78,762 Stockholders' equity 198,837 201,333 ------- ------- $636,505 $636,941