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|Barnes Group Third Quarter Net Income up 21 Percent|
|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 percent."
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 stated.
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) (Unaudited) 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) Unaudited September September 2002 2001 Assets Current assets 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 Current liabilities 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 Investor Relations 860/973-2126 or Stephen J. McKelvey Corporate Communications 860/973-2132 URL: http://www.businesswire.com Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page.
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