Barnes Group Announces Third Quarter Results
16 October 2000
Barnes Group Announces Third Quarter Results; Company Achieves Record Sales and Orders
BRISTOL, Conn.--Oct. 13, 2000---Barnes Group Inc. today announced that diluted earnings per share were $0.49 for the third quarter of 2000, an increase of nine percent from $0.45 per diluted share for the third quarter of 1999. Net income for the quarter ended September 30, 2000 was $9.3 million, up five percent from $8.9 million for the same period a year ago.Net sales for the third quarter of 2000 were a record $190.6 million, up 24 percent from net sales of $154.0 million last year. This marked the third consecutive quarter in which Barnes Group set a new sales record, reflecting both organic sales growth and the company's three recent acquisitions. Foreign sales continue to be an important contributor to Barnes Group's growth, as foreign sales were $47.0 million during the most recent quarter, compared with $37.1 million in the same year-ago period. Total company-wide orders were $199.9 million in the third quarter of 2000, setting a new record for Barnes Group.
"This quarter's results slightly exceeded our expectations," said Edmund M. Carpenter, Barnes Group Inc.'s president and chief executive officer. "Our three recent acquisitions - one each in Associated Spring, Barnes Aerospace, and Barnes Distribution - have clearly had a positive impact on our top-line growth. More importantly, the early synergies from these acquisitions are beginning to have an impact on our bottom line," Carpenter commented.
Sales at Associated Spring were $79.9 million for the third quarter of 2000, up 13 percent from $70.9 million a year ago. Sales growth during the quarter reflected strong foreign demand for the company's products, especially in Asia, South America, and Europe. In addition, the Hyson(TM) and Kaller(R) nitrogen gas spring product lines, which Barnes Group acquired in August, 1999, contributed $10.7 million in sales in the third quarter of 2000.
Operating profit at Associated Spring rose 38 percent to $11.6 million in the third quarter of 2000, from $8.4 million for the same period a year ago, largely as a result of the higher sales volume.
Sales at Barnes Aerospace were $34.7 million in the quarter ended September 30, 2000, up 22 percent from $28.5 million in the same period a year ago. Orders at Barnes Aerospace were $44 million during the third quarter of 2000, while backlog rose to $101 million at September 30, 2000, compared with $82 million at September 30, 1999. The order and backlog data exclude Kratz-Wilde Machine Company and Apex Manufacturing Inc., the assets of which were acquired by Barnes Group on September 7, 2000. Operating income increased to $3.2 million for the third quarter of this year, up 74 percent compared with $1.8 million a year ago, largely as a function of the higher sales volume.
"The investment we have made in the sales and marketing organization at Barnes Aerospace over the past 18 months is clearly reflected in this quarter's order rate," Carpenter said. Orders were especially strong for wide-body engine components, reflecting increased customer penetration among the world's largest aircraft engine manufacturers.
Third quarter 2000 sales at Barnes Distribution were $79.2 million, up 37 percent from $57.7 million in the third quarter of 1999. Curtis Industries contributed $21.0 million in sales in the 2000 third quarter. Operating profit for the third quarter fell to $2.7 million from $3.9 million a year ago, largely as a result of one-time consolidation costs related to the Curtis Industries acquisition.
"While operating earnings at Barnes Distribution fell from year-ago levels, we were still encouraged by some sequential improvement from the second quarter of this year. The integration of Curtis into Barnes Distribution is proceeding at a pace well ahead of our original schedule, with synergies from the combined entity falling into place. As a result, we expect that operating earnings at Barnes Distribution will increase sharply in 2001 compared to both 1999 and 2000 levels," Carpenter commented.
For the first nine months of 2000, Barnes Group Inc.'s net income was $27.8 million, up three percent from $27.0 million for the same period a year ago. Diluted earnings per share were $1.48 for the nine months ended September 30, 2000, an increase of nine percent from $1.36 per diluted share in the same period of 1999. Net sales for the first nine months of 2000 were $552.0 million, up 17 percent from net sales of $472.6 million last year. Included in both the current quarter and nine-month results is a one-time gain of approximately $2.2 million related to the sale of a corporate asset, which was substantially offset by the Curtis consolidation costs.
"Looking ahead to the balance of 2000, I believe that we will continue to execute on our plan of delivering significant year-over-year growth in both sales and earnings. Based on what we currently see in our businesses and markets, we would expect that trend to continue into 2001," stated William C. Denninger, Barnes Group's chief financial officer.
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
2000 1999 2000 1999
Net sales $ 190,570 $ 154,043 $ 552,041 $ 472,574
Cost of sales 123,550 103,665 362,715 320,485
Selling and
admin. expenses 50,058 37,043 140,471 110,820
----------- ---------- ---------- ----------
173,608 140,708 503,186 431,305
Operating income 16,962 13,335 48,855 41,269
Other income 973 1,364 3,350 4,400
Interest expense 4,008 1,617 10,250 3,530
Other expenses 1,151 379 2,742 855
Income before
income taxes 12,776 12,703 39,213 41,284
Income taxes 3,441 3,811 11,372 14,243
Net income $ 9,335 $ 8,892 $ 27,841 $ 27,041
Per common share:
Net income
- basic $ .50 $ .46 $ 1.50 $ 1.38
- diluted .49 .45 1.48 1.36
Dividends .20 .19 .59 .56
Average common shares
outstanding
- basic 18,601,009 19,347,665 18,551,378 19,560,942
- diluted 18,870,208 19,583,293 18,759,413 19,796,883
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
September September
2000 1999
Assets
Current assets
Cash and short-term investments $ 44,808 $ 39,057
Accounts receivable 122,033 100,034
Inventories 94,340 64,039
Deferred income taxes and prepaid
expenses 19,546 18,056
Total current assets 280,727 221,186
Deferred income taxes 22,713 24,499
Property, plant and equipment 165,335 147,687
Goodwill 147,578 88,733
Other assets 56,280 35,821
-------- --------
$672,633 $517,926
Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ 41,262 $ 22,293
Accounts payable 57,312 45,433
Accrued liabilities 64,513 46,541
Total current liabilities 163,087 114,267
Long-term debt 230,000 140,000
Other liabilities 79,570 78,255
Stockholders' equity 199,976 185,404
-------- --------
$672,633 $517,926