BRISTOL, Conn., Oct 11, 2002 (BUSINESS WIRE) -- Barnes Group Inc. (NYSE: B):
-- Solid operating results drive earnings growth.
-- Company continues to generate strong free cash flow.
Barnes Group Inc. (NYSE: B) today announced financial results for the quarter
ended September 30, 2002. Net sales for the third quarter of 2002 were $196.8
million, up six percent from $186.5 million in the third quarter of 2001. The
Company reported net income of $6.9 million, or $0.36 per diluted share, in the
third quarter of 2002, compared with net income of $5.7 million, or $0.30 per
diluted share, in the year-ago period.
"Our operating management teams have done an excellent job of positioning our
three businesses to compete successfully in the current operating environment,
as our financial results this quarter attest," said Edmund M. Carpenter, Barnes
Group Inc.'s President and C.E.O. "Our strong results are particularly
satisfying given that the environment for industrial companies remains quite
challenging," Carpenter added.
Sales at Associated Spring were $80.9 million for the quarter ended September
30, 2002, up 24 percent from $65.2 million in the quarter ended September 30,
2001. Top line growth in the most recent period reflected approximately $12.3
million of incremental sales from recent acquisitions, solid demand for nitrogen
gas springs, and strong growth in sales of products for the transportation
sector. Sales to customers in the telecommunications and electronics industries,
however, were off significantly from the year-ago period.
Associated Spring's operating profit was $6.5 million for the third quarter of
2002, compared with operating profit of $5.2 million in the third quarter of
2001. Operating profit growth reflected the higher sales volume and productivity
improvements versus the 2001 period.
Carpenter commented, "The three acquisitions we have made since November, 2001
in Associated Spring -- Forward Industries, Seeger-Orbis and Spectrum Plastics
-- are all meeting our expectations from both a top and bottom line standpoint.
We are also continuing to benefit from higher light vehicle production versus
last year. Growth in our nitrogen gas spring product lines also remains solid,
with total sales up 17 percent year-over-year and organic sales up about six
Sales at Barnes Aerospace were $45.8 million for the third quarter of 2002, down
nine percent from $50.5 million in the third quarter of 2001. Operating profit
fell to $1.3 million for the quarter ended September 30, 2002 from $5.0 million
in the comparable year-ago period, reflecting the lower sales volume,
approximately $0.7 million in severance expense, and higher manufacturing costs
aimed at improving productivity. Barnes Aerospace recorded orders of $39 million
during the third quarter of 2002; order backlog remained strong at $143 million
at September 30, 2002, down approximately 10 percent from record year-end
backlog of $159 million at December 31, 2001.
"The growth and customer diversification programs initiated by Barnes Aerospace
several years ago are helping to mitigate some of the impact of the current
aerospace downturn. Nevertheless, Barnes Aerospace management continued to lower
the cost structure of the business during the third quarter through headcount
reductions and other actions. All told, the steps that Barnes Aerospace
management has taken this year, including a roughly 20 percent reduction in the
workforce, should generate substantial cost savings going forward," Carpenter
Sales at Barnes Distribution were $72.0 million for the quarter ended September
30, 2002, down one percent from $73.0 million in the quarter ended September 30,
2001. Barnes Distribution generated operating profit of $2.5 million for the
third quarter of 2002, up from operating profit of $1.5 million in the third
quarter of 2001. Operating profit benefited from a slightly higher gross profit
margin and significantly reduced administrative and warehouse expenses versus
the year-ago period, offset in part by the sales volume decline.
"Most of the value drivers behind our acquisition of Curtis Industries in 2000
are now being reflected in Barnes Distribution's operating results.
Significantly lower infrastructure costs and an improved gross margin are
driving higher profitability, even as top-line growth remains challenged by a
general industrial environment that shows little sign of improvement," Carpenter
stated. "Barnes Distribution management is continuing to find new ways to drive
cost out of the system, and is at the same time aggressively pursuing new
avenues for growth," Carpenter added.
"Our free cash flow in the third quarter was very strong at $16 million,
bringing the total for the first nine months of this year to approximately $28
million," commented William C. Denninger, Barnes Group Inc.'s Chief Financial
Officer. Barnes Group defines free cash flow as cash available before dividends,
business acquisitions, share repurchases, and net changes in debt. "In addition
to the strong operating performance we delivered this quarter, our net income
also benefited from higher foreign currency gains, a lower effective tax rate
and elimination of goodwill amortization. These factors were partially offset by
higher post-retirement benefit costs," Denninger added.
For the first nine months of 2002, Barnes Group's net income was $22.3 million,
up 12 percent from $19.9 million for the same period a year ago. Diluted
earnings per share were $1.17 for the nine months ended September 30, 2002,
compared with $1.05 in the same period of 2001. Net sales for the first nine
months of 2002 were $600.4 million, up three percent from net sales of $585.2
million last year.
Carpenter concluded, "Against the backdrop of a tough economic environment, the
managements of our three businesses are executing extremely well this year,
driving the strong financial performance we have delivered to date. Looking out
to the balance of 2002 and early 2003, our strategy will remain largely the
same, as we will continue to run our businesses with the objective of generating
sustainable, profitable growth and building lasting value for our shareholders."
Barnes Group will conduct a conference call with investors to discuss third
quarter results on Friday, October 11, 2002 at 10:15 AM EDT. A webcast of the
live call and archived replay will be available on the Barnes Group investor
relations website (ir.barnesgroupinc.com).
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. Over 5,200 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
Private Securities Litigation 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)
Three months ended Nine months ended
September 30 September 30
2002 2001 2002 2001
Net sales $ 196,799 $ 186,500 $ 600,420 $ 585,214
Cost of sales 134,524 125,178 407,028 391,630
Selling and admin.
expenses 52,256 49,702 158,054 154,771
186,780 174,880 565,082 546,401
Operating income 10,019 11,620 35,338 38,813
Other income 2,156 958 3,357 3,699
Interest expense 3,877 3,848 10,895 12,567
Other expenses 167 1,127 378 3,429
Income before income taxes 8,131 7,603 27,422 26,516
Income taxes 1,215 1,901 5,073 6,629
Net income $ 6,916 $ 5,702 $ 22,349 $ 19,887
Per common share:
Net income - basic $ .37 $ .31 $ 1.20 $ 1.07
Net income - diluted .36 .30 1.17 1.05
Dividends .20 .20 .60 .60
Average common shares
outstanding - basic 18,839,580 18,481,546 18,697,265 18,536,308
- diluted 19,150,751 18,998,071 19,156,896 18,949,447
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Cash and short-term investments $ 38,923 $ 37,934
Accounts receivable 111,216 115,839
Inventories 85,413 81,447
Deferred income taxes and prepaid expenses 28,092 25,939
Total current assets 263,644 261,159
Deferred income taxes 7,342 7,635
Property, plant and equipment 160,950 155,520
Goodwill 169,529 161,877
Other assets 71,712 62,379
$ 673,177 $ 648,570
Liabilities and Stockholders' Equity
Notes payable $ -- $ 4,500
Accounts payable 68,526 71,163
Accrued liabilities 63,494 61,313
Long-term debt - current 8,227 1,459
Total current liabilities 140,247 138,435
Long-term debt 234,345 232,021
Deferred income taxes 6,840 6,039
Other liabilities 74,300 71,543
Stockholders' equity 217,445 200,532
$ 673,177 $ 648,570
CONTACT: Barnes Group Inc.
Phillip J. Penn
Stephen J. McKelvey
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