BRISTOL, Conn.--(BUSINESS WIRE)--Oct. 12, 2001--
Barnes Group Inc. (NYSE: B) today announced earnings for the third
quarter of 2001 of $0.30 per diluted share, compared with $0.49 per
diluted share for the third quarter of 2000. Net income for the
quarter ended September 30, 2001 was $5.7 million, down from $9.3
million for the same period a year ago.
Net sales for the third quarter of 2001 were $186.5 million, down
two percent from net sales of $190.6 million in 2000. The decline in
net sales in the most recent quarter reflected the impact of weak
domestic economic conditions on Associated Spring and Barnes
Distribution, which was largely offset by strong sales growth at
"Despite the decidedly negative environment in the manufacturing
and heavy industrial sectors, which has persisted for nearly a year,
we turned in a satisfactory performance this quarter," said Edmund M.
Carpenter, Barnes Group Inc.'s President and CEO. "I am encouraged by
the fact that we delivered another profitable quarter in which we
generated approximately $9 million of free cash flow. Since the fourth
quarter of 2000, we have challenged each of our three business groups
to aggressively cut operating expenses. We are continuing to address
costs throughout the organization, and will continue to do so going
forward. Over the same timeframe, we have stepped up the activities of
our sales, marketing, and R&D functions to more rapidly develop growth
in customers and markets outside our traditional business lines,"
During the third quarter of 2001, Barnes Aerospace set a number of
new milestones, as sales, operating profit, and backlog all reached
record levels. Sales were $50.5 million in the quarter ended September
30, 2001, up 45 percent from $34.7 million in the same period a year
ago. Organic sales grew approximately 21 percent, reflecting new
customer development and increased sales to existing customers, while
sales from Kratz/Apex totaled $12.1 million in the third quarter of
2001, up from $3.0 million a year ago, following the acquisition of
Kratz/Apex in September, 2000.
Orders at Barnes Aerospace were $53 million during the third
quarter of 2001, while order backlog increased to $168 million,
compared with $130 million at September 30, 2000. Operating profit at
Barnes Aerospace increased to $5.0 million for the quarter ended
September 30, 2001, compared with $3.2 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 engineering and R&D expenses related to an above-normal level
of new products put into production during the third quarter.
"Clearly, the performance of the team at Barnes Aerospace has been
outstanding in the first nine months of this year. While we are
concerned with the potential impact to Barnes Aerospace from the drop
in air travel in the United States, I would point out that
approximately 40 percent of Barnes Aerospace's backlog is tied to
non-commercial facets of the aerospace industry. This includes
products for use in business jets, direct and indirect sales to the
U.S. government, and products used in land-based industrial gas
turbines. Additionally, the product mix shift in our aerospace repair
and overhaul business to newer, more efficient engines - which has
been underway for the past year - leaves us well positioned,"
Sales at Associated Spring were $65.2 million for the third
quarter of 2001, down 18 percent from $79.9 million a year ago. Sales
at Associated Spring continue to be pressured by lower production
rates in the domestic transportation market and slow sales of
telecommunications and electronics products. Operating profit at
Associated Spring fell to $5.2 million in the third quarter of 2001,
from $11.6 million for the same period a year ago. Operating profit
fell as a result of the sales volume decline, partly offset by solid
cost containment efforts.
Carpenter commented, "Business conditions in some of Associated
Spring's markets remain challenging. Nevertheless, the team at
Associated Spring has taken the right steps in this environment to
increase long-term value. Among other things, this includes reducing
operating costs at all levels of the organization, limiting capital
expenditures, and fully funding the sales, marketing, and R&D
functions to stimulate growth in customer segments both inside and
outside our more traditional sectors."
Third quarter 2001 sales at Barnes Distribution were $73.0
million, down eight percent from $79.2 million in the third quarter of
2000. Barnes Distribution's operating profit for the third quarter of
2001 was $1.5 million, down from $2.7 million in the same period a
year ago. Operating profit fell as a result of the sales volume
decline, offset in part by consolidation-driven cost synergies.
"While our distribution business continues to be negatively
impacted by the recession in the manufacturing and industrial sectors,
the aggressive efforts undertaken by Barnes Distribution to
consolidate infrastructure and reduce costs in the year following the
Curtis acquisition have allowed the business to remain profitable, but
have not been sufficient to offset the full impact of the top-line
erosion," Carpenter stated.
For the first nine months of 2001, Barnes Group's net income was
$19.9 million, down from $27.8 million for the same period a year ago.
Diluted earnings per share were $1.05 for the nine months ended
September 30, 2001, compared with $1.48 per share in the same period
of 2000. Net sales for the first nine months of 2001 were $585.2
million, up six percent from net sales of $552.0 million last year.
Commenting on Barnes Group's financial position, William C.
Denninger, the Company's Chief Financial Officer, noted, "We remain in
excellent financial condition. Free cash flow, as noted above, was
approximately $9 million for the third quarter; thus, we have
generated over $36 million in free cash flow in the first nine months
of this year. We utilized this strong cash flow, in part, by
repurchasing 157,327 shares of our common stock during the third
quarter, and will continue to return capital to investors going
forward as our cash flow permits."
Carpenter concluded, "While the tragic events of September 11 have
created a roadblock for the stalled domestic economy, I believe that
the steps that Associated Spring and Barnes Distribution have executed
in the past year will enable them to effectively manage through the
current economic conditions. And, I am similarly confident that Barnes
Aerospace will take the appropriate actions necessary to navigate
through any near-term disruptions in the commercial aircraft market.
At the same time, I believe the strength of our underlying businesses
remains quite sound, and our ability to generate long-term shareholder
value is intact."
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 identifying, and attracting customers in, new
markets, the Company's ability to develop new and enhanced products to
meet customers' needs timely, 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.
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three months ended Nine months ended
September 30 September 30
2001 2000 2001 2000
Net sales $ 186,500 $ 190,570 $ 585,214 $ 552,041
Cost of sales 125,178 123,550 391,630 362,715
admin. expenses 49,702 50,058 154,771 140,471
----------- ----------- ----------- -----------
174,880 173,608 546,401 503,186
Operating income 11,620 16,962 38,813 48,855
Other income 958 973 3,699 3,350
Interest expense 3,848 4,008 12,567 10,250
Other expenses 1,127 1,151 3,429 2,742
income taxes 7,603 12,776 26,516 39,213
Income taxes 1,901 3,441 6,629 11,372
Net income $ 5,702 $ 9,335 $ 19,887 $ 27,841
Per common share:
- basic $ .31 $ .50 $ 1.07 $ 1.50
- diluted .30 .49 1.05 1.48
Dividends .20 .20 .60 .59
- basic 18,481,546 18,601,009 18,536,308 18,551,378
- diluted 18,998,071 18,870,208 18,949,447 18,759,413
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Cash and short-term investments $ 37,934 $ 44,808
Accounts receivable 115,839 122,033
Inventories 81,447 94,340
Deferred income taxes and
prepaid expenses 25,939 19,546
Total current assets 261,159 280,727
Deferred income taxes 7,635 22,713
Property, plant and equipment 155,520 165,335
Goodwill 161,877 147,578
Other assets 62,379 56,280
Liabilities and Stockholders' Equity
Notes payable $ 5,082 $ 41,262
Accounts payable 70,581 57,312
Accrued liabilities 61,313 64,513
Long-term debt - current 1,459 --
Total current liabilities 138,435 163,087
Long-term debt 232,021 230,000
Other liabilities 77,582 79,570
Stockholders' equity 200,532 199,976
||Barnes Group Inc.
||Phillip J. Penn
||Stephen J. McKelvey