Barnes Aerospace sets new quarterly milestones for sales and orders.
Company repurchases 200,000 shares during the quarter.
Bristol, Connecticut, July 12, 2001---Barnes Group Inc. (NYSE: B) today announced that diluted earnings per share were $0.36 for the second quarter of 2001, compared with $0.49 per diluted share for the second quarter of 2000. Net income for the quarter ended June 30, 2001 was $6.9 million, down from $9.1 million for the same period a year ago.
Net sales for the second quarter of 2001 were the highest ever in Barnes Group's history at $199.5 million, up six percent from net sales of $188.5 million in 2000. Net sales growth in the most recent period reflected a sharp rise in sales at Barnes Aerospace and sales from the Company's recent acquisitions, which was partially offset by a decline in transportation and telecommunications-related sales at Associated Spring, and the adverse impact on Barnes Distribution of economic conditions in the manufacturing and heavy industrial sectors.
"In the current economic environment, the Company performed well," said Edmund M. Carpenter, Barnes Group Inc.'s President and CEO. "The earnings diversity of our Company, and in particular the successes at Barnes Aerospace, enabled us to generate positive earnings and cash flow during the most recent quarter. At the same time, we have continued to invest in our sales, marketing, and research and development organizations to foster growth in new business and to sustain our competitive advantage," Carpenter added.
During the second quarter of 2001, Barnes Aerospace set new records for sales, orders and order backlog. Sales were $50.2 million in the quarter ended June 30, 2001, up 65 percent from $30.4 million in the same period a year ago. Organic sales grew approximately 27 percent, reflecting new customer growth and sales of new products to existing customers, while sales from Kratz/Apex, which was acquired in September, 2000, totaled $11.7 million in the second quarter of 2001.
Orders at Barnes Aerospace were $60 million during the second quarter of 2001, while order backlog increased to $167 million, compared with $90 million at June 30, 2000. Operating profit at Barnes Aerospace increased to $3.9 million for the quarter ended June 30, 2001, compared with $1.9 million in the comparable year-ago period. Operating profit increased as a result of the higher sales volume and the Kratz/Apex acquisition, partially offset by higher expenses related to a large number of new product introductions.
"We are very pleased with the results the team at Barnes Aerospace is generating, raising the bar in several performance measures for that business. For the remainder of the year, I believe the outlook for Barnes Aerospace remains strong," Carpenter said.
Sales at Associated Spring were $74.8 million for the second quarter of 2001, down 13 percent from $86.2 million a year ago. Sales during the quarter were negatively impacted by the slowdown in the domestic transportation sector, as well as the global decline in sales of telecommunications products. Operating profit at Associated Spring fell to $8.2 million in the second quarter of 2001, from $12.5 million for the same period a year ago. The decrease in operating profit reflected the sales volume decline, partly offset by cost reductions.
Carpenter commented, "As everyone knows, transportation production levels in the second quarter were off significantly from year-ago levels. This, combined with the sharp drop in demand for wireless telecommunication devices in 2001, has significantly impacted Associated Spring's sales. With the near-term outlook for both of these sectors not improving, Associated Spring's team has continued to vigorously pursue new customers outside of these businesses. They have aggressively cut expenses and headcount, and closely managed capital expenditures and asset utilization. At the same time, they have continued to invest in sales and marketing, while expanding their research and development capabilities."
Second quarter 2001 sales at Barnes Distribution were $77.0 million, up two percent from $75.4 million in the second quarter of 2000. This included sales of $21.2 million from Curtis Industries, which Barnes Group acquired in May, 2000, up from $14.8 million in Curtis sales in the year-ago period. Barnes Distribution's operating profit for the second quarter of 2001 was $1.9 million, down from $2.3 million in the same period a year ago. Operating profit fell on lower sales from Barnes Distribution's organic businesses, particularly the Raymond division, partially offset by higher sales volume and cost synergies achieved through the Curtis acquisition.
"Barnes Distribution has seen some impact to sales from the domestic economic downturn, particularly in the Raymond division, which sells primarily to heavy industrial customers. But, Barnes Distribution is achieving significant cost savings through the post-acquisition consolidation, which is mitigating some of the effects of the sales decline. In addition to ongoing procurement savings, during the quarter the nationwide customer service function and a third distribution facility were consolidated," Carpenter stated.
For the first six months of 2001, Barnes Group's net income was $14.2 million, down from $18.5 million for the same period a year ago. Diluted earnings per share were $0.75 for the six months ended June 30, 2001, compared with $0.99 per share in the same period of 2000. Net sales for the first six months of 2001 were $398.7 million, up 10 percent from net sales of $361.5 million last year.
Commenting on Barnes Group's financial position, William C. Denninger, the Company's Chief Financial Officer, noted, "We continued to actively reduce working capital to generate cash during the second quarter, a trend we intend to sustain. At the same time, our debt levels remained quite manageable. Finally, we continued to return capital to shareholders through our newly-authorized stock repurchase program, repurchasing 199,536 shares of our common stock during the second quarter."
Carpenter concluded, "I expect that Barnes Aerospace will enjoy a strong second half of 2001, producing excellent year-over-year growth in sales and operating profit. And, while the health of the domestic economy will have a significant influence on Associated Spring and Barnes Distribution, the management teams of those operations are continuing to aggressively pursue both new business and cost reductions to counteract the effects of the downturn. Thus, I believe we are taking the necessary actions to generate shareholder value for 2001 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 2000 sales of $740 million: Associated Spring, North America's largest manufacturer of precision mechanical and nitrogen gas springs; Barnes Aerospace, a manufacturer and repairer of highly engineered aircraft engine and airframe components and assemblies; and Barnes Distribution, an international distributor of maintenance, repair and operating supplies. Nearly 5,400 dedicated employees at more than 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: changes in market demand for the types of products and services produced and sold by Barnes Group, the company's success in attracting customers in new markets, changes in worldwide economic and political conditions, interest and foreign exchange rate fluctuations, regulatory changes, and the ability of the Company to integrate newly acquired businesses and to realize acquisition synergies on schedule.