Barnes Group Announces Fourth Quarter and Full-year 2001 Results.Business/Technology 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)--Feb. 8, 2002 -- Sales hit record level of $769 million in 2001; full-year earnings $1.01 per diluted share. -- Company generates $57 million in free cash flow in 2001. -- Aerospace sets records for sales, operating profit, orders and year-end order backlog. Barnes Group Inc. (NYSE NYSE See: New York Stock Exchange : B) today announced financial results for the fourth quarter and year ended December December: see month. 31, 2001. 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 for the fourth quarter of 2001 were $183.5 million, down two percent from $187.9 million in the fourth quarter of 2000. The Company reported a net loss of $0.8 million, or $0.04 per share, in the fourth quarter of 2001, compared to net income of $7.8 million, or $0.41 per 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. share, in the year-ago period. Net income in the fourth quarter of 2001 included a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of $4.8 million, equivalent on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. to $0.16 per diluted share, related to the closure of an Associated Spring plant in Dallas, Texas “Dallas” redirects here. For other uses, see Dallas (disambiguation). The City of Dallas (pronounced [ˈdæl.əs] or [ˈdæl. and the reorganization of the sales management Sales Management Role and Goal Importance of sales management is critical for any commercial organization. Expanding business in not possible without increasing sales volumes, and effective sales management goal is to organize sales team work in such a manner that ensures a function at Barnes Distribution. This charge was previously disclosed in a press release issued December 20, 2001. Net sales were a record $768.8 million for the full year 2001, up four percent from net sales of $740.0 million in 2000. Net sales growth in 2001 reflected $61 million in 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 Company's recent acquisitions and strong organic growth at Barnes Aerospace, substantially offset by the effects of a sluggish industrial economy on organic sales at Associated Spring and Barnes Distribution. Net income for 2001 was $19.1 million, or $1.01 per diluted share, compared with $35.7 million, or $1.90 per diluted share, in 2000. The earnings decline primarily reflected the fourth quarter charge noted above and the profit impact of the decline in organic sales at Associated Spring and Barnes Distribution, partially offset by the higher sales volume at Barnes Aerospace and efforts to reduce costs throughout Barnes Group. "Although 2001 presented some difficult challenges - some that we've we've Contraction of we have. we've have seen before in a cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. economy, some that were unprecedented - we remained focused on building lasting value for our stockholders by creating sustainable, profitable growth," 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 Chief Executive Officer. "We worked aggressively to cut costs and infrastructure Company-wide; completed two acquisitions that complemented our existing businesses; generated significant cash flow from our operations; and positioned our businesses to succeed as the economic climate becomes more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. ," Carpenter added. Sales at Barnes Aerospace were a record $52.9 million for the fourth quarter of 2001, up 30 percent from $40.7 million in the fourth quarter of 2000. Sales grew in all four of Barnes Aerospace's key markets - commercial aircraft, government and military, business jets, and industrial gas turbines - reflecting an intensive global sales effort. 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. doubled to $3.6 million for the quarter ended December 31, 2001, as a result of the higher sales volume, partially offset by investments in sales, engineering and R&D. Barnes Aerospace recorded orders of $43 million during the fourth quarter of 2001 and $216 million for the full year; 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. at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001 was $159 million, up from $145 million at year-end 2000. Full-year sales at Barnes Aerospace were a record $200.4 million in 2001, up 48 percent from 2000, which reflected both strong growth in sales to new and existing customers and sales from the September September: see month. 2000 acquisition of Kratz-Wilde Machine Company and Apex Manufacturing, Inc. Operating profit at Barnes Aerospace more than doubled to $16.4 million for the year ended December 31, 2001, compared with $8.0 million in the year-ago period. Operating profit grew largely as a function of the increased sales volume, and through efforts to reduce expenses and more widespread use of lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. methods. "Despite the turmoil caused in the commercial aircraft market by the events of September 11th, Barnes Aerospace turned in a stellar year in 2001. Although order backlog is strong, Barnes Aerospace management is carefully positioning the business for what will likely be a challenging upcoming year; this includes the elimination of approximately 80 positions that was carried out in January January: see month. 2002. At the same time, they are focusing on ramping up orders and sales of products for business and military jets and for industrial gas turbines. Collectively, orders for business and military jets and industrial gas turbines grew more than 50 percent in 2001, and now represent roughly 40 percent of Barnes Aerospace's 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 work," Carpenter stated. Sales at Associated Spring were $63.2 million for the quarter ended December 31, 2001, down from $74.9 million in the quarter ended December 31, 2000. A decline in sales of mechanical springs to customers in the transportation and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. markets eclipsed higher sales of nitrogen gas springs, particularly to customers in Asia. Associated Spring recorded an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.1 million for the fourth quarter of 2001, compared to operating profit of $7.7 million in the fourth quarter of 2000. For the full year, sales at Associated Spring were $279.2 million in 2001, down from $327.3 million in 2000. Operating profit was $19.4 million, compared with $44.0 million in 2000. Operating profit for both the fourth quarter and full-year periods of 2001 was negatively affected by the sales volume decline and the charge for the Dallas, Texas plant closure noted above. Carpenter commented, "Although a broad economic turn appears to be some time away, we are more optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op than we were 12 months ago about the outlook for Associated Spring's key end markets. At the same time, Associated Spring's management team remains focused on reducing costs in their operations and on developing sales with new customers and in new markets." Sales at Barnes Distribution were $69.0 million for the quarter ended December 31, 2001, down from $75.4 million in the quarter ended December 31, 2000. The sales decline reflected persistent weak economic conditions in industrial markets throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe. Barnes Distribution incurred an operating loss of $0.8 million for the fourth quarter of 2001, compared to operating profit of $4.9 million in the fourth quarter of 2000. Operating profit was negatively impacted by both the sharp sales volume decline and by approximately $0.3 million in pre-tax severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs related to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. sales management reorganization. Sales at Barnes Distribution were $298.4 million for the year ended December 31, 2001, up three percent from $291.1 million in the comparable period in 2000. Sales from Curtis contributed an incremental $25.6 million to the 2001 total. Operating profit for all of 2001 was $5.5 million, down from $12.9 million for the same period in 2000. Operating profit declined as a result of the impact weak economic conditions had on Barnes Distribution's organic sales, offset in part by incremental sales from the May 2000 acquisition of Curtis Industries. "Barnes Distribution's sales and profitability suffered in 2001 as a result of the persistently weak economy, especially in the heavy industrial sectors. Nevertheless, the management team at Barnes Distribution made a significant effort to reduce the infrastructure of their business, while at the same time preserving customer satisfaction and opening new accounts. This included the consolidation of headquarters locations, the customer service function, and over a half dozen distribution centers, to name but a few. Although Barnes Distribution's profitability is dependent on the direction of the overall economy, the financial benefit of these consolidations will be more fully realized in 2002 than they were in 2001," Carpenter stated. "One of the highlights of our performance in 2001 was our ability to generate free cash flow, which we define as cash available before dividends, business acquisitions, share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. , and net changes in debt. Free cash flow in 2001 was $57 million, compared with $24 million in 2000," said William C. Denninger, Barnes Group's Senior Vice President - Finance and Chief Financial Officer. "Even in a very difficult economic environment, our three businesses were able to generate cash through aggressive working capital management and careful control of capital expenditures," Denninger added. Among the other highlights for the year, Carpenter noted: -- The Company acquired Euro Stock Springs and Components Limited, a U.K.-based distributor of die and standard springs, and Forward Industries, a Michigan-based manufacturer of nitrogen gas springs. Euro Stock and Forward have been integrated into the operations of Barnes Distribution and Associated Spring, respectively. -- Barnes Group increased its dividend paid to $0.80 per share. This was the eighth consecutive year in which Barnes Group has increased its dividend, and marked the 67th consecutive year in which the company or its predecessors have paid a dividend. -- Over the course of the year, Barnes Group repurchased 436,502 shares at an average price of $20.16, returning nearly $8.8 million of capital to stockholders. Carpenter concluded, "Over the past three years, we have invested significantly to lay the foundation for our future growth. This has included investments to grow the business organically, and strategic acquisitions we have made in each of our three businesses, most recently with our agreement to acquire Seeger-Orbis of Germany. In 2001, we focused on achieving the synergies of our recent acquisitions, extending our products to new customers and markets, and, most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , delivering long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value to our stockholders; we will remain focused on these objectives in 2002 and beyond." Barnes Group Inc. (www.barnesgroupinc.com) is a diversified diversified (di·verˑ·s international manufacturer of precision metal parts and 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 2001 sales of $769 million: Associated Spring, one of the world's largest manufacturers of precision mechanical and nitrogen gas springs; Barnes Aerospace, a manufacturer and repairer of highly engineered assemblies and products for aircraft engines, airframes, and land-based industrial gas turbines; and Barnes Distribution, an international distributor of maintenance, repair and operating supplies. More than 5,100 dedicated employees at over 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 Public Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and 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; changes in economic and political 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
2001 2000 2001 2000
Net sales $ 183,607 $ 187,991 $ 768,821 $ 740,032
Cost of sales 127,906 125,919 519,536 488,634
Selling and admin.
expenses 54,194 47,978 208,965 188,449
182,100 173,897 728,501 677,083
Operating income 1,507 14,094 40,320 62,949
Other income 191 1,423 3,890 4,773
Interest expense 3,594 4,890 16,161 15,140
Other expenses 1,161 1,250 4,590 3,992
Income (loss) before
income taxes (3,057) 9,377 23,459 48,590
Income taxes(benefit) (2,291) 1,553 4,338 12,925
Net income (loss) $ (766) $ 7,824 $ 19,121 $ 35,665
Per common share:
Net income (loss)
- basic $ (.04) $ .42 $ 1.03 $ 1.92
- diluted (.04) .41 1.01 1.90
Dividends .20 .20 .80 .79
Average common shares
outstanding
- basic 18,417,046 18,618,932 18,506,247 18,568,359
- diluted 18,832,513 18,884,357 18,919,968 18,791,227
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
December December
2001 2000
Assets
Current assets
Cash and short-term investments $ 48,868 $ 23,303
Accounts receivable 94,124 107,434
Inventories 85,721 88,514
Deferred income taxes and prepaid expenses 27,822 22,097
Total current assets 256,535 241,348
Deferred income taxes 5,783 15,010
Property, plant and equipment 152,943 163,766
Goodwill 159,836 155,667
Other assets 61,408 61,150
------- -------
$636,505 $636,941
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ 5,500 $ 3,678
Accounts payable 71,410 62,985
Accrued liabilities 59,118 60,183
Long-term debt - current 47,576 --
Total current liabilities 183,604 126,846
Long-term debt 178,365 230,000
Other liabilities 75,699 78,762
Stockholders' equity 198,837 201,333
------- -------
$636,505 $636,941
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