Barnes Group Announces First Quarter Financial Results.Business Editors BRISTOL Bristol, cities, United States Bristol. 1 Industrial city (1990 pop. 60,640), Hartford co., central Conn., on the Pequabuck River; settled 1727, inc. 1785. Its clock-making industry dates from 1790. , Conn.--(BUSINESS WIRE)--April 14, 2004 Barnes Group Inc. (NYSE NYSE See: New York Stock Exchange : B): -- Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight climb 13 percent to record $247.2 million -- Net income jumps 31 percent to $9.6 million, diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. E.P.S. rises to $0.40 -- Strong orders at Barnes Aerospace, third RSP RSP right sacroposterior (position of the fetus). 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 fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. 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 Edmund, 921–46, king of Wessex (939–46), half brother and successor of Athelstan. Immediately after his accession he had to face an invasion of Irish vikings led by Olaf Guthfrithson. 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 Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. sales from the February February: see month. 6, 2003 acquisition of Kar KAR Kentucky Administrative Regulations KAR King's African Rifles KAR Kainate Receptor (neuroscience) KAR Kirby Air Ride (game) KAR Key Account Representative KAR Alpha-Keto Acid Reductase Products and the positive effect of foreign currency translation, organic sales were essentially flat. Barnes Distribution generated operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. 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 synergistic /syn·er·gis·tic/ (sin?er-jis´tik) 1. acting together. 2. enhancing the effect of another force or agent. syn·er·gis·tic adj. 1. 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 Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. operations, we remain on schedule for the opening of a new distribution center in the Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. 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 e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. 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 North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. 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 See telecommunications. 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 (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and sales and approximately $1.6 million in sales from the Revenue Sharing revenue sharing Funding arrangement in which one government unit grants a portion of its tax income to another government unit. For example, provinces or states may share revenue with local governments, or national governments may share revenue with provinces or states. 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 Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. was $153.1 million at March 31, 2004, up solidly from $147.7 million at December December: see month. 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- pre- word element [L.], before (in time or space). pre- pref. 1. Earlier; before; prior to: prenatal. 2. 9/11 pace, reflecting the hard work of everyone on the team," Carpenter stated. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in 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 William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , and thus successfully reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. 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 Wednesday: see week. , 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 Investor relations The process by which the corporation communicates with its investors. website (http://ir.barnesgroupinc.com). Barnes Group Inc. (www.barnesgroupinc.com) is a diversified diversified (di·verˑ·s 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 Bristol is a city located in Hartford County, Connecticut, 20 miles (32 km) southwest of Hartford. According to 2006 Census Bureau estimates, the population of the city is 61,353. , 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 full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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
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