Barnes Group Third Quarter Net Income up 21 Percent.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. 11, 2002 Barnes Group Inc. (NYSE NYSE See: New York Stock Exchange : B): -- Solid operating results drive earnings growth. -- Company continues to generate strong free cash flow. Barnes Group Inc. (NYSE: B) today announced financial results for the quarter ended September September: see month. 30, 2002. 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 2002 were $196.8 million, up six percent from $186.5 million in the third quarter of 2001. The Company reported net income of $6.9 million, or $0.36 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 third quarter of 2002, compared with net income of $5.7 million, or $0.30 per diluted share, in the year-ago period. "Our operating management teams have done an excellent job of positioning our three businesses to compete successfully in the current operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. , as our financial results this quarter attest To solemnly declare verbally or in writing that a particular document or testimony about an event is a true and accurate representation of the facts; to bear witness to. To formally certify by a signature that the signer has been present at the execution of a particular writing so as ," 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. "Our strong results are particularly satisfying given that the environment for industrial companies remains quite challenging," Carpenter added. Sales at Associated Spring were $80.9 million for the quarter ended September 30, 2002, up 24 percent from $65.2 million in the quarter ended September 30, 2001. Top line growth in the most recent period reflected approximately $12.3 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 recent acquisitions, solid demand for nitrogen gas springs, and strong growth in sales of products for the transportation sector. Sales to customers in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and electronics industries, however, were off significantly from the year-ago period. Associated Spring's 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. was $6.5 million for the third quarter of 2002, compared with operating profit of $5.2 million in the third quarter of 2001. Operating profit growth reflected the higher sales volume and productivity improvements versus the 2001 period. Carpenter commented, "The three acquisitions we have made since November, 2001 in Associated Spring -- Forward Industries, Seeger-Orbis and Spectrum Plastics -- are all meeting our expectations from both a top and bottom line standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the . We are also continuing to benefit from higher light vehicle production versus last year. Growth in our nitrogen gas spring product lines also remains solid, with total sales up 17 percent year-over-year and organic sales up about six percent." Sales at Barnes Aerospace were $45.8 million for the third quarter of 2002, down nine percent from $50.5 million in the third quarter of 2001. Operating profit fell to $1.3 million for the quarter ended September 30, 2002 from $5.0 million in the comparable year-ago period, reflecting the lower sales volume, approximately $0.7 million in 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 expense, and higher manufacturing costs aimed at improving productivity. Barnes Aerospace recorded orders of $39 million during the third quarter of 2002; 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 strong at $143 million at September 30, 2002, down approximately 10 percent from record year-end backlog of $159 million at December 31, 2001. "The growth and customer diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. programs initiated by Barnes Aerospace several years ago are helping to mitigate mit·i·gate v. To moderate in force or intensity. mit  i·ga tion n. some of the
impact of the current aerospace downturn DownturnThe transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. . Nevertheless, Barnes Aerospace management continued to lower the cost structure of the business during the third quarter through headcount reductions and other actions. All told, the steps that Barnes Aerospace management has taken this year, including a roughly 20 percent reduction in the workforce, should generate substantial cost savings going forward," Carpenter stated. Sales at Barnes Distribution were $72.0 million for the quarter ended September 30, 2002, down one percent from $73.0 million in the quarter ended September 30, 2001. Barnes Distribution generated operating profit of $2.5 million for the third quarter of 2002, up from operating profit of $1.5 million in the third quarter of 2001. Operating profit benefited from a slightly 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 significantly reduced administrative and warehouse expenses versus the year-ago period, offset in part by the sales volume decline. "Most of the value drivers behind our acquisition of Curtis Industries in 2000 are now being reflected in Barnes Distribution's operating results. Significantly lower infrastructure costs and an improved gross margin are driving higher profitability, even as top-line growth remains challenged by a general industrial environment that shows little sign of improvement," Carpenter stated. "Barnes Distribution management is continuing to find new ways to drive cost out of the system, and is at the same time aggressively pursuing new avenues for growth," Carpenter added. "Our free cash flow in the third quarter was very strong at $16 million, bringing the total for the first nine months of this year to approximately $28 million," commented William C. Denninger, Barnes Group Inc.'s Chief Financial Officer. Barnes Group defines free cash flow 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. "In addition to the strong operating performance we delivered this quarter, our net income also benefited from higher foreign currency gains, a lower effective tax rate and elimination of goodwill amortization. These factors were partially offset by higher post-retirement benefit costs," Denninger added. For the first nine months of 2002, Barnes Group's net income was $22.3 million, up 12 percent from $19.9 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 $1.17 for the nine months ended September 30, 2002, compared with $1.05 in the same period of 2001. Net sales for the first nine months of 2002 were $600.4 million, up three percent from net sales of $585.2 million last year. Carpenter concluded, "Against the backdrop Backdrop may refer to:
Barnes Group will conduct a conference call with investors to discuss third quarter results on Friday, October 11, 2002 at 10:15 AM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . A webcast of the live call and 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 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. Over 5,200 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; 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 Nine months ended
September 30 September 30
2002 2001 2002 2001
Net sales $ 196,799 $ 186,500 $ 600,420 $ 585,214
Cost of sales 134,524 125,178 407,028 391,630
Selling and admin.
expenses 52,256 49,702 158,054 154,771
186,780 174,880 565,082 546,401
Operating income 10,019 11,620 35,338 38,813
Other income 2,156 958 3,357 3,699
Interest expense 3,877 3,848 10,895 12,567
Other expenses 167 1,127 378 3,429
Income before income taxes 8,131 7,603 27,422 26,516
Income taxes 1,215 1,901 5,073 6,629
Net income $ 6,916 $ 5,702 $ 22,349 $ 19,887
Per common share:
Net income - basic $ .37 $ .31 $ 1.20 $ 1.07
Net income - diluted .36 .30 1.17 1.05
Dividends .20 .20 .60 .60
Average common shares
outstanding - basic 18,839,580 18,481,546 18,697,265 18,536,308
- diluted 19,150,751 18,998,071 19,156,896 18,949,447
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
September September
2002 2001
Assets
Current assets
Cash and short-term investments $ 38,923 $ 37,934
Accounts receivable 111,216 115,839
Inventories 85,413 81,447
Deferred income taxes and prepaid expenses 28,092 25,939
Total current assets 263,644 261,159
Deferred income taxes 7,342 7,635
Property, plant and equipment 160,950 155,520
Goodwill 169,529 161,877
Other assets 71,712 62,379
$ 673,177 $ 648,570
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ -- $ 4,500
Accounts payable 68,526 71,163
Accrued liabilities 63,494 61,313
Long-term debt - current 8,227 1,459
Total current liabilities 140,247 138,435
Long-term debt 234,345 232,021
Deferred income taxes 6,840 6,039
Other liabilities 74,300 71,543
Stockholders' equity 217,445 200,532
$ 673,177 $ 648,570
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