Barnes Group Announces Third Quarter 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)--Oct. 12, 2001 - Barnes Aerospace sets new records for sales and operating profit. - Company generates $9 million in free cash flow for quarter. Barnes Barnes, former municipal borough, SE England. See Richmond upon Thames. Group Inc. (NYSE NYSE See: New York Stock Exchange : B) today announced earnings for the third quarter of 2001 of $0.30 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, compared with $0.49 per diluted share for the third quarter of 2000. Net income for the quarter ended September September: see month. 30, 2001 was $5.7 million, down from $9.3 million for the same period a year ago. 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 third quarter of 2001 were $186.5 million, down two percent from net sales of $190.6 million in 2000. The decline in net sales in the most recent quarter reflected the impact of weak domestic economic conditions on Associated Spring and Barnes Distribution, which was largely offset by strong sales growth at Barnes Aerospace. "Despite the decidedly negative environment in the manufacturing and heavy industrial sectors, which has persisted for nearly a year, we turned in a satisfactory performance this 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 CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "I am encouraged by the fact that we delivered another profitable quarter in which we generated approximately $9 million of free cash flow. Since the fourth quarter of 2000, we have challenged each of our three business groups to aggressively cut operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . We are continuing to address costs throughout the organization, and will continue to do so going forward. Over the same timeframe, we have stepped up the activities of our sales, marketing, and R&D functions to more rapidly develop growth in customers and markets outside our traditional business lines," Carpenter added. During the third quarter of 2001, Barnes Aerospace set a number of new milestones, as sales, 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. , and 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. all reached record levels. Sales were $50.5 million in the quarter ended September 30, 2001, up 45 percent from $34.7 million in the same period a year ago. Organic sales grew approximately 21 percent, reflecting new customer development and increased sales to existing customers, while sales from Kratz/Apex totaled $12.1 million in the third quarter of 2001, up from $3.0 million a year ago, following the acquisition of Kratz/Apex in September, 2000. Orders at Barnes Aerospace were $53 million during the third quarter of 2001, while order backlog increased to $168 million, compared with $130 million at September 30, 2000. Operating profit at Barnes Aerospace increased to $5.0 million for the quarter ended September 30, 2001, compared with $3.2 million in the comparable year-ago period. Operating profit increased as a result of the higher sales volume and the Kratz/Apex acquisition, partially offset by higher engineering and R&D expenses related to an above-normal level of new products put into production during the third quarter. "Clearly, the performance of the team at Barnes Aerospace has been outstanding in the first nine months of this year. While we are concerned with the potential impact to Barnes Aerospace from the drop in air travel in 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. , I would point out that approximately 40 percent of Barnes Aerospace's backlog is tied to non-commercial A non-commercial enterprise is work that values other considerations above and beyond that of making a profit. It differs from a non-profit enterprise in that seeking a profit is a part of their business, just not the main part. facets of the aerospace industry. This includes products for use in business jets, direct and indirect sales to the U.S. government, and products used in land-based industrial gas turbines. Additionally, the product mix shift in our aerospace repair and overhaul business to newer, more efficient engines - which has been underway for the past year - leaves us well positioned," Carpenter continued. Sales at Associated Spring were $65.2 million for the third quarter of 2001, down 18 percent from $79.9 million a year ago. Sales at Associated Spring continue to be pressured by lower production rates in the domestic transportation market and slow sales of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and electronics products. Operating profit at Associated Spring fell to $5.2 million in the third quarter of 2001, from $11.6 million for the same period a year ago. Operating profit fell as a result of the sales volume decline, partly offset by solid cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. efforts. Carpenter commented, "Business conditions in some of Associated Spring's markets remain challenging. Nevertheless, the team at Associated Spring has taken the right steps in this environment to increase 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. Among other things, this includes reducing operating costs operating costs npl → gastos mpl operacionales at all levels of the organization, limiting capital expenditures, and fully funding the sales, marketing, and R&D functions to stimulate growth in customer segments both inside and outside our more traditional sectors." Third quarter 2001 sales at Barnes Distribution were $73.0 million, down eight percent from $79.2 million in the third quarter of 2000. Barnes Distribution's operating profit for the third quarter of 2001 was $1.5 million, down from $2.7 million in the same period a year ago. Operating profit fell as a result of the sales volume decline, offset in part by consolidation-driven cost synergies Cost Synergy In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join. Notes: The savings in operating costs usually come in the form of laying off employees. . "While our distribution business continues to be negatively impacted by the recession in the manufacturing and industrial sectors, the aggressive efforts undertaken by Barnes Distribution to consolidate infrastructure and reduce costs in the year following the Curtis acquisition have allowed the business to remain profitable, but have not been sufficient to offset the full impact of the top-line erosion," Carpenter stated. For the first nine months of 2001, Barnes Group's net income was $19.9 million, down from $27.8 million for the same period a year ago. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $1.05 for the nine months ended September 30, 2001, compared with $1.48 per share in the same period of 2000. Net sales for the first nine months of 2001 were $585.2 million, up six percent from net sales of $552.0 million last year. Commenting on Barnes Group's financial position, 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, the Company's Chief Financial Officer, noted, "We remain in excellent financial condition. Free cash flow, as noted above, was approximately $9 million for the third quarter; thus, we have generated over $36 million in free cash flow in the first nine months of this year. We utilized this strong cash flow, in part, by repurchasing 157,327 shares of our common stock during the third quarter, and will continue to return capital to investors going forward as our cash flow permits." Carpenter concluded, "While the tragic events of September 11 have created a roadblock for the stalled stall 1 n. 1. A compartment for one domestic animal in a barn or shed. 2. a. A booth, cubicle, or stand used by a vendor, as at a market. b. domestic economy, I believe that the steps that Associated Spring and Barnes Distribution have executed in the past year will enable them to effectively manage through the current economic conditions. And, I am similarly confident that Barnes Aerospace will take the appropriate actions necessary to navigate (1) "Surfing the Web." To move from page to page on the Web. (2) To move through the menu structure in a software application. through any near-term near-term adj. Of, for, or involving a short period of time in the near future. disruptions in the commercial aircraft market. At the same time, I believe the strength of our underlying businesses remains quite sound, and our ability to generate long-term shareholder value is intact." 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 2000 sales of $740 million: Associated Spring, North America's largest manufacturer of precision mechanical and nitrogen gas springs; Barnes Aerospace, a manufacturer and repairer of highly engineered aircraft engine and airframe components and assemblies; and Barnes Distribution, an international distributor of maintenance, repair and operating supplies. Nearly 5,400 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 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: 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 worldwide economic and political conditions, interest and foreign exchange rate fluctuations, 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, and the ability of the Company to integrate newly acquired businesses and to realize acquisition synergies on schedule.
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
September 30 September 30
2001 2000 2001 2000
Net sales $ 186,500 $ 190,570 $ 585,214 $ 552,041
Cost of sales 125,178 123,550 391,630 362,715
Selling and
admin. expenses 49,702 50,058 154,771 140,471
----------- ----------- ----------- -----------
174,880 173,608 546,401 503,186
Operating income 11,620 16,962 38,813 48,855
Other income 958 973 3,699 3,350
Interest expense 3,848 4,008 12,567 10,250
Other expenses 1,127 1,151 3,429 2,742
Income before
income taxes 7,603 12,776 26,516 39,213
Income taxes 1,901 3,441 6,629 11,372
Net income $ 5,702 $ 9,335 $ 19,887 $ 27,841
Per common share:
Net income
- basic $ .31 $ .50 $ 1.07 $ 1.50
- diluted .30 .49 1.05 1.48
Dividends .20 .20 .60 .59
Average common
shares outstanding
- basic 18,481,546 18,601,009 18,536,308 18,551,378
- diluted 18,998,071 18,870,208 18,949,447 18,759,413
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
September September
2001 2000
Assets
Current assets
Cash and short-term investments $ 37,934 $ 44,808
Accounts receivable 115,839 122,033
Inventories 81,447 94,340
Deferred income taxes and
prepaid expenses 25,939 19,546
Total current assets 261,159 280,727
Deferred income taxes 7,635 22,713
Property, plant and equipment 155,520 165,335
Goodwill 161,877 147,578
Other assets 62,379 56,280
-------- --------
$648,570 $672,633
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ 5,082 $ 41,262
Accounts payable 70,581 57,312
Accrued liabilities 61,313 64,513
Long-term debt - current 1,459 --
Total current liabilities 138,435 163,087
Long-term debt 232,021 230,000
Other liabilities 77,582 79,570
Stockholders' equity 200,532 199,976
-------- --------
$648,570 $672,633
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