BRISTOL, Conn.--(BUSINESS WIRE)--April 14, 2004--Barnes Group Inc.
(NYSE: B):
-- Net sales climb 13 percent to record $247.2 million
-- Net income jumps 31 percent to $9.6 million, diluted E.P.S.
rises to $0.40
-- Strong orders at Barnes Aerospace, third RSP agreement
completed
Barnes Group Inc. (NYSE: B) today announced financial results for
the quarter ended March 31, 2004. Net sales for the first quarter of
2004 were a record $247.2 million, up 13 percent from $218.7 million
in the first quarter of 2003. Net income increased 31 percent to $9.6
million, or $0.40 per diluted share, in the first quarter of 2004,
from $7.4 million, or $0.37 per diluted share, in the comparable
year-ago period. Average diluted shares outstanding were 23.9 million
in the quarter ended March 31, 2004, up 20 percent from 19.9 million
in the year-ago period, primarily as a result of the follow-on equity
offering completed in May, 2003.
"With the financial results we generated in the first quarter,
2004 is off to a strong start, and the momentum improved as we
progressed through the quarter," said Edmund M. Carpenter, Barnes
Group Inc.'s President and C.E.O. "Profitability at Barnes
Distribution came in a bit ahead of our previous indications, even as
the distribution center integration continued to move along, while
sales growth at both Barnes Aerospace and Associated Spring
significantly exceeded that of their primary end markets," Carpenter
added.
Sales at Barnes Distribution were $106.5 million for the quarter
ended March 31, 2004, up $12.7 million, or 14 percent, from $93.8
million in the quarter ended March 31, 2003. Excluding $10.4 million
of incremental sales from the February 6, 2003 acquisition of Kar
Products and the positive effect of foreign currency translation,
organic sales were essentially flat. Barnes Distribution generated
operating profit of $4.3 million in the first quarter of 2004,
compared with operating profit of $3.2 million in the first quarter of
2003.
The improvement in operating profit was driven primarily by the
incremental contribution from Kar Products and synergistic savings
recognized from the Kar integration. Partially offsetting these
improvements were integration costs of approximately $1.2 million,
primarily for temporary labor, overtime and additional freight, as
well as a slight reduction in gross margin versus the 2003 period.
"With the distribution center integration now behind us in the
U.S., we are focused on driving our fill rates back to the
pre-integration level. Although we made significant progress in that
regard during the first quarter, more work remains to be done. In our
Canadian operations, we remain on schedule for the opening of a new
distribution center in the Ontario province during the month of May,"
Carpenter stated. "Our strategic growth initiatives continued to
generate solid gains, as sales from newly-opened national accounts,
e-commerce platforms and Tier 2 relationships with other industrial
distributors climbed to $6.4 million in the first quarter, up from
$3.6 million a year ago," Carpenter added.
Sales at Associated Spring were $93.5 million for the quarter
ended March 31, 2004, up 10 percent from $85.1 million in the quarter
ended March 31, 2003. Foreign currency translation positively impacted
sales in the first quarter of 2004 by approximately $3.0 million. The
increase in sales reflected growth in all market segments,
particularly in heavy truck, where sales grew 24 percent and nitrogen
gas products, where sales, net of foreign currency translation effect,
grew approximately 13 percent.
Associated Spring's operating profit was $7.4 million for the
first quarter of 2004, down from $7.6 million in the first quarter of
2003. Operating profit was negatively impacted in the 2004 period by
increased spending on lean initiatives, overtime and other measures to
address capacity issues in two North American plants, a slight
reduction in gross margin, and higher medical and pension expenses.
These negatives were partially offset by the profit contribution from
the increased organic sales volume.
Carpenter commented, "This marked the first quarter in recent
memory that we can report organic sales growth in all of Associated
Spring's market segments. In addition to heavy truck and nitrogen gas
springs, we also saw modest sales growth in products for light
vehicles, even as North American production was flat. And for the
first time since 2000, we saw growth in our telecomm and electronics
product segment, which we are hopeful is indicative of a potential
turn in those sectors."
Sales at Barnes Aerospace were $49.5 million for the first quarter
of 2004, up from $42.3 million in the first quarter of 2003,
reflecting solid growth in OEM sales and approximately $1.6 million in
sales from the Revenue Sharing Programs (RSPs). Operating profit was
$4.4 million for the quarter ended March 31, 2004, up from $2.7
million in the comparable year-ago period. Operating profit was
positively impacted by higher OEM volume and profit contribution from
the two RSPs completed in late 2003, which was partially offset by the
operating profit impact of a modest drop in historically higher-margin
repair and overhaul sales.
Barnes Aerospace generated orders of $55.2 million during the
quarter ended March 31, 2004, the highest order level since the second
quarter of 2001. Order backlog was $153.1 million at March 31, 2004,
up solidly from $147.7 million at December 31, 2003. Military orders
were approximately 27 percent of the orders received in the first
quarter of 2004, and Barnes Aerospace also received approximately $9.2
million in orders related to a large commercial engine program that is
about to enter customer service.
"The order rate at Barnes Aerospace is once again at a pre-9/11
pace, reflecting the hard work of everyone on the team," Carpenter
stated. "I'm also pleased to announce that we executed a third RSP in
March that, like the RSPs we completed in 2003, will have a positive
impact on Barnes Aerospace's 2004, and future, financial results. To
date, we have committed nearly $60 million in RSP investments, and
remain actively engaged in developing additional strategic
relationships with our partners," Carpenter added.
William C. Denninger, Barnes Group Inc.'s Chief Financial Officer,
commented, "We ended the quarter with approximately $32 million in
cash, even after a $15 million cash payment related to our RSP
agreements, bringing the total RSP payments to date to $32.5 million.
We were able to fund these payments with cash held outside the United
States, and thus successfully reinvest a significant portion of our
foreign cash into strategic growth investments with attractive
financial returns."
Barnes Group will conduct a conference call with investors to
discuss first quarter 2004 results on Wednesday, April 14, 2004 at
2:00 PM ET. A webcast of the live call, supporting materials and an
archived replay will be available on the Barnes Group investor
relations website (http://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 5,900 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 March 31
---------------------------------
2004 2003
------------- ------------------
Net sales $ 247,228 $ 218,734
Cost of sales 162,060 142,230
Selling and admin. expenses 69,411 63,294
------------ ------------------
231,471 205,524
------------ ------------------
Operating income 15,757 13,210
Operating margin 6.4% 6.0%
Other income 698 613
Interest expense 3,802 4,110
Other expenses 130 278
------------ ------------------
Income before income taxes 12,523 9,435
Income taxes 2,880 2,076
------------ ------------------
Net income $ 9,643 $ 7,359
============ ==================
Per common share:
Net income - basic $ 0.42 $ 0.38
- diluted 0.40 0.37
Dividends 0.20 0.20
Average common shares
outstanding - basic 22,975,586 19,531,719
- diluted 23,877,153 19,894,312
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
March March
2004 2003
---------- ----------
Assets
Current assets
Cash and cash equivalents $ 32,274 $ 32,061
Accounts receivable 138,476 129,358
Inventories 112,979 103,504
Deferred income taxes and prepaid
expenses 35,743 27,052
--------- ---------
Total current assets 319,472 291,975
Deferred income taxes 23,207 22,294
Property, plant and equipment 153,933 157,550
Goodwill 220,297 212,549
Other intangible assets 85,727 33,836
Other assets 57,957 55,495
--------- ---------
$860,593 $773,699
========= =========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 98,473 $ 78,405
Accrued liabilities 71,716 72,443
Long-term debt - current 6,815 6,849
--------- ---------
Total current liabilities 177,004 157,697
Long-term debt 251,528 277,187
Accrued retirement benefits 78,502 90,898
Other liabilities 27,567 12,370
Stockholders' equity 325,992 235,547
--------- ---------
$860,593 $773,699
========= =========
BARNES GROUP INC.
OPERATIONS BY REPORTABLE BUSINESS SEGMENT
(Dollars in thousands)
Unaudited
Three Months Ended March 31
-----------------------------
2004 2003 % Change
--------- --------- ---------
Revenues
Associated Spring $93,536 $85,065 10.0
Barnes Aerospace 49,494 42,329 16.9
Barnes Distribution 106,524 93,847 13.5
Intersegment sales (2,326) (2,507) 7.2
--------- ---------
Total revenues $247,228 $218,734 13.0
========= =========
Operating profits
Associated Spring $7,410 $7,624 (2.8)
Barnes Aerospace 4,443 2,706 64.2
Barnes Distribution 4,297 3,197 34.4
--------- ---------
Total operating profit 16,150 13,527 19.4
Interest income 287 295 (2.7)
Interest expense (3,802) (4,110) (7.4)
Other income (expense) (112) (277) (59.5)
--------- ---------
Income before income taxes $12,523 $9,435 32.7
========= =========
CONTACT: Barnes Group Inc.
Investors:
Phillip J. Penn, 860-973-2126
or
Media:
Stephen J. McKelvey, 860-973-2132
SOURCE: Barnes Group Inc.
