BRISTOL, Conn., Apr 21, 2005 (BUSINESS WIRE) -- Barnes Group Inc. (NYSE: B):
-- Net sales rise 11 percent to a record $273.7 million
-- Net income rises 33 percent to a record $12.8 million; diluted
EPS of $0.54
-- Full-year 2005 estimated net income per diluted share raised
to $1.80 - $1.90
Barnes Group Inc. (NYSE: B) today announced financial results for
the quarter ended March 31, 2005. Net sales for the first quarter 2005
were $273.7 million, up 11 percent from $247.2 million in the first
quarter of 2004. Operating income grew 34 percent to $21.1 million for
the first quarter from $15.7 million in the first quarter of the prior
year. Net income increased 33 percent to $12.8 million or $0.54 per
diluted share in the first quarter of 2005, compared to $9.6 million,
or $0.40 per diluted share in the year-ago period.
"Barnes Group had a balanced, strong first quarter with each of
the business segments generating record sales, including organic
growth in each segment. On this sales growth, Barnes Group generated
solid improvement in both operating profit and net income," said
Edmund M. Carpenter, President and Chief Executive Officer, Barnes
Group Inc. "The earnings generated in the first quarter reflect an
overall strong performance in all three business segments. The actions
taken late in the fourth quarter by the Company to offset increased
costs enhanced the favorable operating results, and we continue to
focus on improving profitable growth going forward," continued
Carpenter.
Sales at Barnes Distribution were a record $113.6 million for the
quarter ended March 31, 2005, up $7.1 million or 7 percent, from
$106.5 million in the quarter ended March 31, 2004. Sales from two of
Barnes Distribution's strategic growth initiatives, Corporate Accounts
and Tier II, were up 13 percent and 48 percent respectively, for the
first quarter of 2005 as compared to the first quarter of 2004.
Barnes Distribution generated operating profit of $5.9 million, up
47 percent in the first quarter of 2005, compared with $4.0 million in
the year-ago quarter. The improvement in operating profit was
primarily driven by higher sales volume, higher pricing, and the
beneficial effects of the Kar acquisition integration, along with
higher customer service levels, partially offset by increased product
costs.
"Barnes Distribution's results reflect the positive effects of the
integration and the continuous progress we are making in improving
customer service and key performance levels," said A. Keith Drewett,
President, Barnes Distribution.
Sales at Associated Spring were a record $109.5 million for the
first quarter of 2005, up 17 percent, from $93.5 million in the first
quarter of 2004. The increase in sales was across most of Associated
Spring's key customer market segments and included continued organic
growth. DE-STA-CO Manufacturing, which was acquired on September 17,
2004, contributed approximately $8.4 million in sales to Associated
Spring's light vehicle and industrial products businesses this period.
Sales of nitrogen gas springs increased 17 percent and industrial
sales increased 29 percent. Sales into the heavy truck market
increased 16 percent. Transplant light vehicle sales continued to
outpace direct sales to U.S. automakers, as overall light vehicle
sales increased 12 percent.
Operating profit grew 24 percent to $9.4 million in the quarter
ended March 31, 2005, compared with $7.6 million in the comparable
quarter last year. The increase in operating profit was primarily
driven by additional sales volume partially offset by higher raw
material costs and start-up costs in the new Monterrey, Mexico
manufacturing facility, which began production in March.
"In the first quarter, Associated Spring continued to see
profitable growth in strategic areas, such as nitrogen gas and
industrial products, though our legacy domestic automotive business
underperformed," said Gregory F. Milzcik, President, Associated
Spring. "Operationally, productivity improvements are being
implemented throughout the organization to improve financial results
and establish a solid foundation for our continued competitiveness and
growth."
Sales at Barnes Aerospace were a record $53.7 million for the
quarter ended March 31, 2005, up 8 percent from $49.5 million in the
quarter ended March 31, 2004, driven by strong growth in aftermarket
sales. Aftermarket sales of $13.2 million grew 45 percent from a year
ago, primarily due to the additional volume in aftermarket Revenue
Sharing Programs (RSPs) and maintenance and repair activity in Asia.
OEM sales for the quarter ended March 31, 2005 were up modestly from a
year ago to $40.5 million.
Barnes Aerospace generated record orders of $88.9 million during
the first quarter of 2005, up 61 percent, from orders of $55.2 million
in the same period a year ago. Commercial orders were up 87% to $55.1
million, while military orders were up 19% to $18.0 million. Included
in first quarter orders were approximately $16 million due to early
customer orders related to increased raw material lead times. Order
backlog reached a record $229.1 million at March 31, 2005, up 50
percent from $153.1 million on March 31, 2004.
Operating profit grew 29 percent to $5.8 million in the first
quarter 2005, from $4.5 million in the first quarter 2004. The
increase in operating profit was driven by the higher sales volume and
the higher percentage of sales in the more profitable aftermarket
business.
"Barnes Aerospace continued its strong results in sales, orders,
backlog and operating profits, following record results in the fourth
quarter 2004," said Patrick Dempsey, President, Barnes Aerospace. "Our
focused efforts in leveraging our products and technologies within the
aftermarket business continue to provide the anticipated positive
financial results."
William C. Denninger, Barnes Group Inc.'s Chief Financial Officer,
commented, "This was a straightforward quarter from a reported
earnings perspective and the financial fundamentals of each of our
businesses remain sound - operationally all three businesses
contributed to our record results. Our balance sheet remains strong
and clearly supports our ongoing growth investments."
"Our continued success in the marketplace, combined with focus on
specific initiatives have positioned the three businesses for enhanced
sales and operating profit growth in 2005. Considering the strong
first quarter and current market conditions, we are increasing our
full-year estimate of diluted earnings per share to $1.80 to $1.90
from our previous estimate of $1.70 to $1.80," stated Carpenter.
The Company changed the method of determining the cost of
inventory for certain U.S. locations from LIFO (Last-In, First-Out) to
FIFO (First-In, First-Out), effective January 1, 2005. As a result,
all inventories are now valued on a FIFO basis. Prior year results
have been restated for comparability purposes. There was no effect on
first quarter 2004 earnings per share.
Barnes Group will conduct a conference call with investors to
discuss first quarter results at 3:30 p.m. EDT today. A web cast of
the live call, supporting materials and an archived replay will be
available on the Barnes Group investor relations link at
www.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
2004 sales of $994.7 million: Barnes Distribution, an international,
full-service distributor of maintenance, repair, operating, and
production supplies; Associated Spring, one of the world's largest
manufacturers of precision mechanical and nitrogen gas springs and a
global supplier of retaining rings, reed valves, shock discs, and
injection-molded plastic components; and 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. Over 5,900 dedicated employees
at 60 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 the
Company; 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; uninsured claims; increased
competitive activities that could adversely affect customer demand for
the Company's products; the availability of raw materials at prices
that allow the Company to make and sell competitive 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. The Company
assumes no obligation to update any forward-looking statements
contained in this release.
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Unaudited
Three months ended March 31,
%
2005 2004 Change
-------- --------- -------
As Re-
stated(1)
Net sales $273,730 $247,228 10.7
Cost of sales 175,748 162,111 8.4
Selling and administrative expenses 76,888 69,411 10.8
-------- --------- -------
252,636 231,522 9.1
-------- --------- -------
Operating income 21,094 15,706 34.3
Operating margin 7.7% 6.4%
Other income 262 698 (62.6)
Interest expense 4,167 3,802 9.6
Other expenses 369 130 NM
-------- --------- -------
Income before income taxes 16,820 12,472 34.9
Income taxes 4,037 2,861 41.1
-------- --------- -------
Net income $ 12,783 $ 9,611 33.0
======== ========= =======
Per common share:
Net income:
Basic $ .55 $ .42 31.0
Diluted .54 .40 35.0
Dividends .20 .20 ---
Average common shares outstanding:
Basic 23,300,210 22,975,586 1.4
Diluted 23,848,115 23,877,153 (0.1)
NM- not meaningful
Footnote:
(1) Restated to reflect the retroactive adjustment of changing the
method of valuing certain U.S. inventories from LIFO to FIFO.
BARNES GROUP INC.
OPERATIONS BY REPORTABLE BUSINESS SEGMENT
(Dollars in thousands)
Unaudited
Three months ended March 31,
%
2005 2004 Change
-------- --------- -------
As Re-
stated(1)
Net Sales
Barnes Distribution $113,618 106,524 6.7
Associated Spring 109,540 93,536 17.1
Barnes Aerospace 53,653 49,494 8.4
Intersegment sales (3,081) (2,326) (32.5)
-------- --------- -------
Total net sales $273,730 $247,228 10.7
======== ========= =======
Operating profit (1)
Barnes Distribution $ 5,935 $ 4,045 46.7
Associated Spring 9,366 7,562 23.9
Barnes Aerospace 5,793 4,492 29.0
-------- --------- -------
Total operating profit 21,094 16,099 31.0
Interest income 145 287 (49.5)
Interest expense (4,167) (3,802) 9.6
Other net income (expense) (252) (112) NM
Income before income taxes $ 16,820 $ 12,472 34.9
NM- not meaningful
Footnote:
(1) Restated to reflect the retroactive adjustment of changing the
method of valuing certain U.S. inventories from LIFO to FIFO.
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
March 31, March 31,
2005 2004
-------- --------
As Re-
stated(1)
Assets
Current assets
Cash and cash equivalents $ 38,988 $ 32,274
Accounts receivable 154,580 138,476
Inventories 148,100 125,326
Deferred income taxes and prepaid expenses 39,903 36,672
-------- --------
Total current assets 381,571 332,748
Deferred income taxes 19,155 17,514
Property, plant and equipment 161,083 153,933
Goodwill 223,299 220,297
Other intangible assets, net 124,358 85,727
Other assets 53,025 57,957
-------- --------
$962,491 $868,176
======== ========
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ 5,500 $ - -
Accounts payable 146,653 98,473
Accrued liabilities 72,125 71,716
Long-term debt-current 9,322 6,815
-------- --------
Total current liabilities 233,600 177,004
Long-term debt 267,395 251,528
Accrued retirement benefits 84,443 78,502
Other liabilities 18,035 27,567
Stockholders' equity 359,018 333,575
-------- --------
$962,491 $868,176
======== ========
Footnote:
(1) Restated to reflect the retroactive adjustment of changing the
method of valuing certain U.S. inventories from LIFO to FIFO.
SOURCE: Barnes Group Inc.
Barnes Group Inc.
Brian D. Koppy
Investor Relations
(860) 973-2126
or
Stephen J. McKelvey
Corporate Communications
(860) 973-2132
