Barnes Group First Quarter Sales Set Record.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 17, 2003 -- Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , net income and 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. all improve. -- 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 integration proceeding on schedule. Barnes Group Inc. (NYSE NYSE See: New York Stock Exchange : B) today announced financial results for the quarter ended March 31, 2003. 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 first quarter of 2003 were a record $218.7 million, up 13 percent from $194.2 million in the first quarter of 2002. The Company reported a 14 percent increase in operating income to $13.2 million, as net income increased to $7.4 million, or $0.37 per diluted share, in the first quarter of 2003, from $6.8 million, or $0.36 per diluted share, in the comparable year-ago period. "We achieved a good quarter, as net sales, operating income and net income all grew nicely. We've we've Contraction of we have. we've have laid a stable foundation for our three businesses for the rest of 2003, even as our end markets were somewhat impacted by a number of external challenges," 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. Sales at Barnes Distribution were $93.8 million for the quarter ended March 31, 2003, up 29 percent from $72.9 million in the quarter ended March 31, 2002. Of this $20.9 million increase, $19.2 million was contributed by Kar Products, which was purchased by Barnes Group on February February: see month. 6, 2003. Barnes Distribution generated operating income of $3.2 million in the first quarter of 2003, up 68 percent from operating income of $1.9 million in the first quarter of 2002. The improvement in operating results was driven primarily by higher profitability in Barnes Distribution's North American operations North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. , which included a higher gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. , and 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. 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. contributed by Kar Products. "We continue to enjoy success with the new growth programs we put into place in 2002," Carpenter stated. "Two of these programs, our increased focus on new national and regional customer development and our 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, contributed roughly $2.4 million in sales to the most recent quarter. We added 34 new national and regional customers this quarter, bringing to 150 the total new customers gained since the beginning of 2002," Carpenter added. Carpenter continued, "The integration of Kar Products is running at or slightly ahead of our original schedule. Customer and salesperson retention has been extremely strong, and the first elements of the infrastructure consolidation took place at the end of the first quarter. Clearly, the successful integration of Kar will remain a primary focus for the team at Barnes Distribution for the balance of the year." Sales at Associated Spring were $85.1 million for the quarter ended March 31, 2003, up 13 percent from $75.6 million in the quarter ended March 31, 2002. Top line growth in the 2003 period reflected approximately $10.1 million of incremental sales from recent acquisitions and continued growth in the sales of nitrogen gas spring products. Partially offsetting these items were a drop in sales related to a planned withdrawal from the heavy truck brake spring market, as well as a decline in organic sales to the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and electronics markets. Associated Spring's operating profit was $7.6 million for the first quarter of 2003, up from an operating profit of $7.0 million in the first quarter of 2002. Operating profit growth reflected a higher sales volume and the benefits of consolidation of the Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. facility, which were partially offset by higher personnel costs, primarily pension and other postretirement expenses. Carpenter commented, "We indicated, at the time we announced the Dallas plant closure, that our actions would provide us with 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. expense reduction benefits. These benefits started to manifest manifest 1) adj., adv. completely obvious or evident. 2) n. a written list of goods in a shipment. MANIFEST, com. law. A written instrument containing a true account of the cargo of a ship or commercial vessel. 2. themselves in the most recent quarter, as Associated Spring grew operating profit even as it began to absorb a higher pension expense burden." Sales at Barnes Aerospace were $42.3 million for the first quarter of 2003, down 11 percent from $47.4 million in the first quarter of 2002. Operating profit was $2.7 million for the quarter ended March 31, 2003, down slightly from $2.9 million in the comparable year-ago period, reflecting the lower sales volume. Operating income was positively impacted by reduced employment levels and other actions taken throughout Barnes Aerospace in 2002 aimed at positioning the business for a period of lower commercial aerospace volume. Barnes Aerospace recorded orders of $38.3 million during the first quarter of 2003; 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. remained solid at $148.2 million at March 31, 2003, compared with $151.8 million 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. 2002. Impacting first-quarter 2003 orders and backlog was an order cancellation of approximately $7.1 million related to a single 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 customer. Direct and indirect orders for the U.S. military were approximately 26% of the orders booked during the first quarter of 2003. "This was an encouraging quarter for Barnes Aerospace, as we largely maintained our profitability as volume fell. Backlog declined only slightly during the period in a very challenging commercial aerospace environment, a continuing testament to the fact that the investments we have made over the past few years in sales, marketing and engineering within Barnes Aerospace are continuing to create new opportunities," Carpenter stated. 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, "As one can see from the balance sheet and the analysis of change in net debt, net debt increased by $59.4 million in the first quarter of 2003. Net debt before acquisitions, however, was reduced by $1.8 million. This was accomplished through good control of working capital and capital expenditures. This compares to an increase in net debt before acquisitions of $7.2 million in the first quarter of 2002." Barnes Group will conduct a conference call with investors to discuss first quarter results on Thursday Thursday: see week. , April 17, 2003 at 10:30 AM 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 (ir.barnesgroupinc.com). Barnes Group Inc. (www.barnesgroupinc.com) is a diversified diversified (di·verˑ·s international manufacturer of precision metal components 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 2002 sales of $784 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 commercial and military aircraft engines, airframes, and land-based industrial gas turbines; and Barnes Distribution, an international, full-service distributor of maintenance, repair and operating supplies. Over 6,200 dedicated employees at more than 60 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 including pricing, advertising and promotions that could adversely affect customer demand for the Company's products; 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 March 31
2003 2002
Net sales $ 218,734 $ 194,236
Cost of sales 142,230 130,298
Selling and admin. expenses 63,294 52,381
205,524 182,679
Operating income 13,210 11,557
Operating margin 6.0% 5.9%
Other income 613 427
Interest expense 4,110 3,390
Other expenses 278 137
Income before income taxes 9,435 8,457
Income taxes 2,076 1,691
Net income $ 7,359 $ 6,766
Per common share:
Net income - basic $ 0.38 $ 0.37
- diluted 0.37 0.36
Dividends 0.20 0.20
Average common shares
outstanding - basic 19,531,719 18,497,371
- diluted 19,894,312 19,026,049
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
March March
2003 2002
Assets
Current assets
Cash and short-term investments $ 32,061 $ 30,669
Accounts receivable 129,358 112,969
Inventories 103,504 89,412
Deferred income taxes and prepaid
expenses 27,052 28,618
Total current assets 291,975 261,668
Deferred income taxes 22,294 5,290
Property, plant and equipment 157,550 162,173
Goodwill 212,549 160,162
Other assets 89,331 64,944
$ 773,699 $654,237
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ - - $ 8,000
Accounts payable 78,405 67,453
Accrued liabilities 72,443 61,279
Long-term debt - current 6,849 57,583
Total current liabilities 157,697 194,315
Long-term debt 277,187 177,890
Deferred income taxes 7,166 6,073
Other liabilities 96,102 74,265
Stockholders' equity 235,547 201,694
$ 773,699 $654,237
BARNES GROUP INC.
ANALYSIS OF CHANGE IN NET DEBT
(Dollars in thousands)
Unaudited
March March
2003 2002
Notes payable $ - $ 8,000
Long-term debt-current 6,849 57,583
Long-term debt 277,187 177,890
Total debt 284,036 243,473
Cash and short-term investments 32,061 30,669
Net debt 251,975 212,804
Net debt beginning of year 192,607 182,573
(Increase) in net debt (59,368) (30,231)
Business acquisitions 61,167 23,011
Decrease (Increase) in net debt before
acquisitions $ 1,799 $ (7,220)
NOTE: Management believes that net debt before acquisitions is an
important measurement of liquidity and is indicative of underlying
cash generation from Barnes Group's operations, of which investors
should be aware.
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