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|Barnes Group Inc. Announces First Quarter 2006 Financial Results|
BRISTOL, Conn., Apr 20, 2006 (BUSINESS WIRE) -- - Net sales rise 10 percent to a record $300 million
- Net income rises 61 percent; diluted EPS of $0.73, up 52 percent
- Full-year 2006 estimated net income per diluted share raised to $2.55 - $2.65
Barnes Group Inc. (NYSE: B) today announced financial results for the quarter ended March 31, 2006. Net sales for the first quarter were $299.9 million, up 10 percent from $273.7 million in the first quarter of 2005. Operating income grew 48 percent to $28.1 million in the first quarter of 2006, from $19.0 million in the first quarter in the prior year. Net income increased 61 percent to $18.5 million, or $0.73 per diluted share, in the first quarter of 2006 compared to $11.5 million, or $0.48 per diluted share, in the same period last year.
Periods prior to January 1, 2006 have been restated to reflect the change in accounting for stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123R (SFAS 123R). The impact to the first quarter 2005 was a reduction of pre-tax income by $2.1 million and diluted earnings per share by $0.06.
"Barnes Group had record first quarter sales with organic growth in all three businesses generating strong advances in operating income and net income," said Edmund M. Carpenter, President and Chief Executive Officer, Barnes Group Inc. "With 13 consecutive quarters of significant increases in sales over the comparable prior year quarter, and strong operating performance by each of the three businesses, we continue to demonstrate our ability to achieve our objective of balanced, sustainable, profitable growth."
"With the first quarter results exceeding our expectations, we are increasing our full-year estimate of diluted earnings per share to $2.55 to $2.65, from the previous estimate of $2.50 to $2.60. We continue to expect results to be seasonally impacted, in as much as the first half of the year is traditionally stronger than the second half of the year, and are cautiously optimistic for continued growth in key end markets and geographies," continued Carpenter.
William C. Denninger, Barnes Group Inc.'s Senior Vice President, Finance and Chief Financial Officer, commented, "We continue to make strides in improving the financial performance of the Company and our strong capital position provides the flexibility for continued growth investments."
Sales at Barnes Distribution were a record $124.4 million in the first quarter 2006, up 10 percent from $113.6 million in the same quarter a year ago. Driving the sales growth were strong increases in Barnes Distribution Europe and Barnes Distribution Raymond primarily as a result of the Toolcom and SPD acquisitions, respectively, which added $5.9 million in sales in the first quarter. In addition, Barnes Distribution North America's continued growth in Corporate Accounts, up 11 percent, and Tier II, up 37 percent, as well as higher selling prices added to top line growth.
In the first quarter of 2006, operating profit at Barnes Distribution increased 74 percent to $9.0 million, up from $5.2 million for the first quarter 2005. Continued operating profit improvements reflect higher sales volume and increased gross margins.
"Barnes Distribution made significant progress this quarter towards realizing the benefits of its strategic focus on profitable sales and operational improvements throughout the organization," said Idelle K. Wolf, President, Barnes Distribution. "Steady execution and continued reductions in operating costs are expected to further enhance profitability at Barnes Distribution."
Sales at Associated Spring were $111.0 million in the period ended March 31, 2006, up 1 percent from $109.5 million in the same quarter last year. Specialty operations sales were essentially flat from the prior period, while the traditional spring business realized a modest sales improvement. Associated Spring's operating profit for the first quarter 2006 increased 23 percent to $10.6 million, from $8.6 million in the first quarter of 2005. The increase in operating profit reflects a continued focus on profitable sales and actions focused on lowering overall operating costs.
"Associated Spring's first quarter results reflect the continued benefits of our sales and marketing strategy initiated last year. The organization remains committed to profitable growth and improvements in operational effectiveness of the business while providing high quality products and customer service," said Gregory F. Milzcik, Executive Vice President and Chief Operating Officer, Barnes Group Inc. and President, Associated Spring.
Sales at Barnes Aerospace were $66.9 million in the first quarter 2006, up 25% from $53.7 million in the year-ago period as both OEM and aftermarket sales grew. OEM sales increased by 21 percent and aftermarket sales grew by 37 percent.
Barnes Aerospace generated orders of $72.5 million, down from $88.9 million in the prior year which was favorably impacted by approximately $16 million due to a one-time increase in lead times for certain raw materials. Commercial OEM orders were $41.0 million, military orders were $8.8 million and industrial gas turbine orders were $2.1 million in the first quarter 2006. Order backlog was $274.6 million, up 2 percent since December 31, 2005.
In the first quarter 2006, operating profit increased 63 percent to $8.5 million from $5.2 million in the first quarter 2005. Driving the strong increase in operating profit were higher sales volume and an increased percentage of high margin aftermarket sales.
"Strong end markets in both OEM and aftermarket businesses led Barnes Aerospace to record results in the first quarter," said Patrick Dempsey, President, Barnes Aerospace. "We continue to improve operations and increase capacity through capital investments and increased efficiencies achieved through lean manufacturing and Six Sigma initiatives, positioning Barnes Aerospace for continued growth."
Barnes Group will conduct a conference call with investors to discuss first quarter results at 4:30 p.m. ET 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 2005 sales of $1.1 billion: 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 products and a global supplier of retaining rings, reed valves, shock discs, and injection-molded plastic components and assemblies; and Barnes Aerospace, a manufacturer and repairer of highly engineered assemblies and components of aircraft engines, airframes, and land-based industrial gas turbines. Over 6,000 dedicated employees at more than 60 locations worldwide contribute to Barnes Group Inc.'s success. The Company has paid cash dividends to stockholders on a continuous basis since 1934.
This release may contain forward-looking statements within the meaning of 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 expressed in the forward-looking statements. The risks and uncertainties, which are described in our periodic filings with the Securities and Exchange Commission, include, among others, uncertainties arising from the behavior of financial markets; future financial performance of the industries or customers that we serve; changes in market demand for our products and services; integration of acquired businesses; changes in raw material prices and availability; uninsured claims; and numerous other matters of global, regional or national scale, including those of a political, economic, business, competitive, regulatory and public health nature. We assume no obligation to update our forward-looking statements.
BARNES GROUP INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) Unaudited Three months ended March 31, 2006 2005 % Change As Restated (1) Net sales $299,851 $273,730 9.5 Cost of sales 190,633 175,748 8.5 Selling and administrative expenses 81,111 78,959 2.7 271,744 254,707 6.7 Operating income 28,107 19,023 47.8 Operating margin 9.4 % 6.9 % Other income 295 262 12.8 Interest expense 4,387 4,167 5.3 Other expenses 575 369 55.6 Income before income taxes 23,440 14,749 58.9 Income taxes 4,978 3,245 53.4 Net income $ 18,462 $ 11,504 60.5 Per common share: Net income: Basic $ .77 $ .49 57.1 Diluted .73 .48 52.1 Dividends .22 .20 10.0 Average common shares outstanding: Basic 24,127,600 23,300,210 3.6 Diluted 25,377,980 23,917,176 6.1 Footnote: (1) Periods prior to 1/1/06 restated to reflect the change in accounting for stock-based compensation in accordance with SFAS 123R. BARNES GROUP INC. OPERATIONS BY REPORTABLE BUSINESS SEGMENT (Dollars in thousands) Unaudited Three months ended March 31, 2006 2005 % Change As Restated (1) Net Sales Barnes Distribution $124,392 $113,618 9.5 Associated Spring 110,990 109,540 1.3 Barnes Aerospace 66,943 53,653 24.8 Intersegment sales (2,474) (3,081) 19.7 Total net sales $299,851 $273,730 9.5 Operating profit (1) Barnes Distribution $ 8,953 $ 5,160 73.5 Associated Spring 10,630 8,619 23.3 Barnes Aerospace 8,546 5,244 63.0 Total operating profit 28,129 19,023 47.9 Interest income 240 145 65.5 Interest expense (4,387) (4,167) 5.3 Other net income (expense) (542) (252) NM Income before income taxes $ 23,440 $ 14,749 58.9 NM- not meaningful Footnote: (1) Periods prior to 1/1/06 restated to reflect the change in accounting for stock-based compensation in accordance with SFAS 123R. BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) Unaudited March 31, March 31, 2006 2005 As Restated (1) Assets Current assets Cash and cash equivalents $ 36,541 $ 38,988 Accounts receivable 171,435 154,580 Inventories 167,095 148,100 Deferred income taxes and prepaid expenses 34,542 39,903 Total current assets 409,613 381,571 Deferred income taxes 24,051 24,912 Property, plant and equipment, net 161,144 161,083 Goodwill 236,559 223,299 Other intangible assets, net 184,849 124,358 Other assets 49,701 53,024 $1,065,917 $968,247 Liabilities and Stockholders' Equity Current liabilities Notes payable $ --- $ 5,500 Accounts payable 142,488 146,653 Accrued liabilities 80,974 72,125 Long-term debt-current 39,990 9,322 Total current liabilities 263,452 233,600 Long-term debt 278,713 267,395 Deferred income taxes 11,778 12,482 Other liabilities 93,523 89,995 Stockholders' equity 418,451 364,775 $1,065,917 $968,247 Footnote: (1) Periods prior to 1/1/06 restated to reflect the change in accounting for stock-based compensation in accordance with SFAS 123R.
SOURCE: Barnes Group Inc.
Barnes Group Inc.