BRISTOL, Conn.--(BUSINESS WIRE)--Feb. 13, 2004--
- Full-year net sales climb 14 percent to record $891 million
- 2003 net income up 22 percent to $33.0 million, diluted E.P.S.
reaches $1.49
- Barnes Aerospace executes second Revenue Sharing Program
Barnes Group Inc. (NYSE: B) today announced financial results for
the quarter and year ended December 31, 2003. Net sales for the fourth
quarter of 2003 were $220.3 million, up 20 percent from $183.6 million
in the fourth quarter of 2002. Net income increased 45 percent to $7.0
million, or $0.29 per diluted share, in the fourth quarter of 2003,
from $4.8 million, or $0.25 per diluted share, in the comparable
year-ago period. Average diluted shares outstanding were 23.8 million
in the quarter ended December 31, 2003, up 23 percent from 19.3
million in the year-ago period, primarily as a result of the follow-on
equity offering completed in May, 2003.
During the fourth quarter of 2003, favorable tax items reduced
income taxes by approximately $2.1 million. These items were partially
offset by higher incentive compensation expenses, as well as the
write-off of approximately $0.5 million after-tax of due diligence
expenses related to an abandoned acquisition.
For all of 2003, Barnes Group's net income was $33.0 million, an
increase of 22 percent from $27.2 million for the same period a year
ago. Diluted earnings per share were $1.49 for the year ended December
31, 2003, compared with $1.42 in 2002. Net sales for 2003 were a
record $890.8 million, up 14 percent from net sales of $784.0 million
last year. Average diluted shares outstanding were 22.1 million for
the full year 2003, up 15 percent from 19.2 million in 2002.
"Our reported financial results were above our plan, while we
achieved a number of positive operational items in the fourth quarter.
These included significant progress integrating Kar Products into
Barnes Distribution and the execution of our second Revenue Sharing
Program, or RSP, at Barnes Aerospace," said Edmund M. Carpenter,
Barnes Group Inc.'s President and C.E.O. "Both of these items should
have a continuing positive impact on our financial results," Carpenter
added.
Sales at Barnes Distribution were $98.3 million for the quarter
ended December 31, 2003, up $30.8 million, or 46 percent, from $67.6
million in the quarter ended December 31, 2002. Kar Products, which
Barnes Group purchased in February, 2003, contributed $27.3 million of
sales in the most recent quarter. Excluding a $2.3 million positive
impact of foreign currency translation in the 2003 period, organic
sales grew slightly. Barnes Distribution generated operating profit of
$1.0 million in the fourth quarter of 2003, compared to an operating
loss of $0.3 million in the fourth quarter of 2002.
The improvement in operating profit was driven primarily by the
operating profit contribution and synergistic savings from Kar
Products, as well as reduced selling expenses as a percentage of
sales. This was partially offset by expenses directly associated with
the Kar integration of approximately $1.3 million, as well as an
impact on sales caused by a reduced order fill rate during the
integration of distribution centers.
"During the fourth quarter, we accelerated the consolidation of
Kar Products into a new Barnes Distribution network, and as of today
have essentially completed our original consolidation plan in the
U.S., leaving most of the integration effort behind us," Carpenter
stated. "Sales from our other key sales initiatives, including
national and regional customer development efforts, e-commerce
platforms and Tier 2 relationships, more than doubled from a year ago,
to approximately $6 million," Carpenter added.
For all of 2003, sales at Barnes Distribution were $400.7 million,
up from $286.7 million in 2002; Kar Products contributed $108.3
million to the 2003 sales total. Operating profit was $16.5 million
for 2003, up from $7.5 million in 2002.
Sales at Associated Spring were $80.3 million for the quarter
ended December 31, 2003, up from $77.2 million in the quarter ended
December 31, 2002. Foreign currency translation positively impacted
sales in the fourth quarter of 2003 by approximately $2.8 million. The
slight increase in sales, net of the foreign currency translation
effect, reflected higher sales of products for industrial applications
and heavy trucks, and increased nitrogen gas spring volume, offset by
a decline in sales of products for the telecommunications and
electronics industries.
Associated Spring's operating profit was $5.1 million for the
fourth quarter of 2003, down from $6.9 million in the fourth quarter
of 2002. Operating profit was negatively impacted by incrementally
higher personnel costs, including medical, pension and other
post-retirement expenses of approximately $1.6 million. Operating
profit also fell as a result of less favorable product mix.
Carpenter commented, "Associated Spring continued to outperform
many of its key end-user markets during the fourth quarter; notably,
sales of products for light vehicles were up slightly during the
period, when production was essentially flat. With the outlook for
many of its markets stable or improving, Associated Spring should have
another solid year in 2004."
For all of 2003, sales at Associated Spring were $333.1 million,
up from $321.7 million in 2002; the 2003 sales total was positively
impacted by approximately $18.7 million of incremental revenue from
2002 acquisitions and foreign currency translation. Operating profit
was $26.8 million for 2003, compared with $28.1 million in 2002.
Sales at Barnes Aerospace were $43.4 million for the fourth
quarter of 2003, up from $40.5 million in the fourth quarter of 2002.
Operating profit was $3.4 million for the quarter ended December 31,
2003, essentially flat versus the comparable year-ago period.
Operating profit was positively impacted by higher OEM sales and the
initial profit contribution from the first RSP, offset by a drop in
historically higher-margin repair and overhaul sales.
Barnes Aerospace recorded orders of $43.0 million during the
quarter ended December 31, 2003; for the full year 2003, orders
totaled $161.9 million. Order backlog ended 2003 at $147.7 million,
compared with $151.8 million at December 31, 2002. Military orders
were approximately 27 percent of the orders received in the fourth
quarter of 2003, and approximately 29 percent of all the orders placed
during 2003. During the quarter ended December 31, 2003, Barnes
Aerospace also received approximately $5.5 million in orders related
to a large commercial engine program that will enter service in early
2004.
"The order rate at Barnes Aerospace accelerated nicely in the
second half of the year, setting the stage for a strong improvement in
financial results in 2004," Carpenter stated. "It's also significant
that we executed our second RSP at Barnes Aerospace in the fourth
quarter. With terms very similar to the RSP we completed in the third
quarter, this new RSP is expected to have a meaningful impact on
Barnes Aerospace's profitability beginning in 2004," Carpenter added.
For all of 2003, Barnes Aerospace generated sales of $165.7
million, down from $183.0 million in 2002. Operating profit was $10.7
million for 2003, compared with $10.8 million in 2002.
William C. Denninger, Barnes Group Inc.'s Chief Financial Officer,
commented, "We had a strong financial performance in 2003, which
helped us generate over $60 million in cash from operations. We ended
2003 with nearly $50 million in cash on our balance sheet, while
reducing our debt-to-capitalization ratio at year-end to less than 43
percent, comfortably within our targeted leverage range. Thus, we are
well positioned to support further growth investments in our
businesses in 2004."
Barnes Group will conduct a conference call with investors to
discuss fourth quarter 2003 results on Friday, February 13, 2004 at
10:00 AM ET. A webcast of the live call, supporting materials and an
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 components and
assemblies and a 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
2003 sales of $891 million: Associated Spring, one of the world's
largest manufacturers of precision mechanical and nitrogen gas springs
and a global supplier of retaining rings and injection-molded plastic
components; Barnes Aerospace, a manufacturer and repairer of
highly-engineered assemblies and components for commercial and
military aircraft engines, airframes, and land-based industrial gas
turbines; and Barnes Distribution, an international, full-service
distributor of maintenance, repair and operating supplies. Over 6,000
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; the effectiveness of the
Company's marketing and sales programs; increased competitive
activities that could adversely affect customer demand for the
Company's products; changes in economic, political and public health
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
2003 2002 2003 2002
Net sales $220,337 $183,616 $890,818 $784,036
Cost of sales 144,642 122,976 576,835 530,004
Selling and admin.
expenses 66,929 51,138 261,983 209,192
211,571 174,114 838,818 739,196
Operating income 8,766 9,502 52,000 44,840
Other income 1,044 294 3,337 3,651
Interest expense 3,634 3,928 15,840 14,823
Other expenses 139 179 1,129 557
Income before income taxes 6,037 5,689 38,368 33,111
Income taxes (benefit) (919) 887 5,353 5,960
Net income $6,956 $4,802 $33,015 $27,151
Per common share:
Net income
- basic $.31 $.25 $1.54 $1.45
- diluted .29 .25 1.49 1.42
Dividends .20 .20 .80 .80
Average common shares
outstanding
- basic 22,770,950 18,908,240 21,475,336 18,750,442
- diluted 23,796,154 19,275,407 22,101,560 19,185,332
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
December 31, December 31,
2003 2002
Assets
Current assets
Cash and cash equivalents $ 49,788 $ 28,355
Accounts receivable 119,130 97,533
Inventories 109,780 88,809
Deferred income taxes and prepaid
expenses 33,402 23,940
Total current assets 312,100 238,637
Deferred income taxes 22,790 22,610
Property, plant and equipment 154,088 159,440
Goodwill 220,118 164,594
Other intangible assets 61,923 16,702
Other assets 59,801 50,547
$830,820 $652,530
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ 10,000 $ - -
Accounts payable 97,155 63,389
Accrued liabilities 78,520 61,853
Long-term debt - current 6,804 6,837
Total current liabilities 192,479 132,079
Long-term debt 224,213 214,125
Accrued retirement benefits 77,455 87,162
Other liabilities 14,934 10,944
Stockholders' equity 321,739 208,220
$830,820 $652,530
CONTACT: Barnes Group Inc.
Investors:
Phillip J. Penn, 860-973-2126
or
Media:
Stephen J. McKelvey, 860-973-2132
SOURCE: Barnes Group
