|
| | | | |
| | | | Exhibit 99.1
Barnes Group Inc. 123 Main Street Bristol, CT 06010 |
NEWS RELEASE
BARNES GROUP INC. REPORTS
SECOND QUARTER 2013 FINANCIAL RESULTS
| |
| ▪ | Quarterly Net Sales from Continuing Operations of $267 million, up 24% |
| |
| ▪ | Quarterly Operating Margin of 13.5%, up 150 bps |
| |
| ▪ | Quarterly Diluted EPS from Continuing Operations of $0.17, down 51%; |
Adjusted Quarterly Diluted EPS from Continuing Operations of $0.47, up 34%
| |
| ▪ | 2013 EPS from Continuing Operations Guidance Updated to $1.43 to $1.53 per diluted share; |
$1.85 to $1.95 on an Adjusted Basis, Up 22% to 28% from 2012
BRISTOL, Conn., July 26, 2013 - Barnes Group Inc. (NYSE: B), an international aerospace and industrial manufacturer and service provider, today reported financial results for the second quarter of 2013. Net sales from continuing operations increased 24% to $267.4 million from $215.3 million in the second quarter of 2012, driven largely by the sales contribution of the Synventive business. Income from continuing operations in the current quarter included a tax charge of $16.6 million, or $0.30 per diluted share, associated with the April 16, 2013 U.S. Tax Court's unfavorable decision arising out of an IRS audit for the tax years 2000 through 2002. Including this tax item, income from continuing operations for the second quarter was $9.2 million, or $0.17 per diluted share. Excluding the impact of the U.S. Tax Court's decision, adjusted diluted earnings per share from continuing operations for the second quarter of 2013 was $0.47, up 34% from $0.35 per diluted share a year ago. A table reconciling the non-GAAP adjusted results presented in this release to our GAAP results is included at the end of this press release.
On April 22, 2013, the Company completed the sale of its Barnes Distribution North America (BDNA) business to MSC Industrial Direct Co., Inc. for the purchase price of $550 million and received cash of $540 million, net of working capital adjustments and transaction costs. In the second quarter of 2013, the Company recorded a gain on sale of $194 million, net of tax, representing the sales price less the asset value of BDNA and net of transaction-related costs. For the second quarter of 2013, the Company's income from discontinued operations was $200 million, which includes both the gain on sale of BDNA, and net operating results for BDNA during the period.
“Sustained execution of our growth strategy allowed us to increase sales and expand operating margins during the quarter,” said Patrick J. Dempsey, President and Chief Executive Officer of Barnes Group Inc. “Despite some challenging end-markets, our Industrial segment delivered solid organic growth and improved margin performance.” Dempsey continued, “In our Aerospace segment, backlogs are strong, commercial end-markets remain favorable, and the aftermarket showed signs of improvement from the prior quarter.”
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ($ millions; except per share data) | Three months ended June 30, | Six months ended June 30, |
| Unaudited | 2013 | | 2012 | | Change | 2013 | | 2012 | | Change |
| Net Sales | $ | 267.4 |
| | $ | 215.3 |
| | $ | 52.1 |
| 24.2 |
| % | $ | 530.9 |
| | $ | 438.1 |
| | $ | 92.8 |
| 21.2 |
| % |
| Operating Income | $ | 36.1 |
| | $ | 25.8 |
| | $ | 10.4 |
| 40.3 |
| % | $ | 61.1 |
| | $ | 50.4 |
| | $ | 10.7 |
| 21.3 |
| % |
| % of Sales | 13.5 | % | | 12.0 | % | | | 1.5 |
| pts. | 11.5 | % | | 11.5 | % | | | — |
| pts. |
| Income from Continuing Operations | $ | 9.2 |
| | $ | 19.5 |
| | $ | (10.3 | ) | (52.8 | ) | % | $ | 24.6 |
| | $ | 37.1 |
| | $ | (12.4 | ) | (33.6 | ) | % |
| Net Income | $ | 209.3 |
| | $ | 24.8 |
| | $ | 184.5 |
| NM |
| | $ | 222.8 |
| | $ | 47.0 |
| | $ | 175.8 |
| NM |
| |
| Income from Continuing Operations Per Diluted Share | $ | 0.17 |
| | $ | 0.35 |
| | $ | (0.18 | ) | (51.4 | ) | % | $ | 0.45 |
| | $ | 0.67 |
| | $ | (0.22 | ) | (32.8 | ) | % |
| Income from Discontinued Operations Per Diluted Share | $ | 3.65 |
| | $ | 0.10 |
| | $ | 3.55 |
| NM |
| | $ | 3.59 |
| | $ | 0.18 |
| | $ | 3.41 |
| NM |
| |
| Net Income Per Diluted Share | $ | 3.82 |
| | $ | 0.45 |
| | $ | 3.37 |
| NM |
| | $ | 4.04 |
| | $ | 0.85 |
| | $ | 3.19 |
| NM |
| |
NM = Not Meaningful
Aerospace
| |
| • | Second quarter 2013 sales were $96.8 million, up 3% from $93.8 million in the same period last year. A sales increase in original equipment manufacturing (“OEM”) was partially offset by lower sales in the aftermarket business. Within the aftermarket business, repair and overhaul sales were down while spare part sales were essentially flat to last year. |
| |
| • | Operating profit of $15.2 million for the second quarter of 2013 was up 17% from the prior year period of $13.0 million. Operating profit benefited from the impact of higher OEM sales and better productivity, partially offset by a lower profit contribution from the aftermarket business given lower sales. |
Industrial
| |
| • | Second quarter 2013 sales were $170.6 million, up 40% from $121.5 million in the same period last year. The increase was driven by the Synventive acquisition's sales contribution and organic sales growth of 5%, inclusive of favorable pricing, offset by unfavorable foreign exchange of $0.5 million. |
| |
| • | Operating profit of $20.9 million for the second quarter of 2013 was up 64% from the prior year period of $12.7 million driven by the profit contribution of Synventive and the profit impact of higher organic sales. |
Additional Information
| |
| • | Interest expense increased to $3.2 million, up from $2.4 million last year primarily as a result of a higher average borrowing rate in the current quarter. During the second quarter of 2013, borrowings were substantially reduced as proceeds from the BDNA sale were used to reduce debt. |
| |
| • | The Company's effective tax rate from continuing operations for the second quarter of 2013 is 71.6% and was adversely impacted by a tax charge of $16.6 million associated with the April 16, 2013 U.S. Tax Court Decision. Absent that item, the Company's effective tax rate from continuing operations for the second quarter of 2013 was 20.5% compared to 16.3% in the second quarter of 2012 and 13.5% for the full year 2012. The remaining effective tax rate increase in the second quarter 2013 versus the full year 2012 rate was mainly due to several discrete foreign tax related items in 2012, an increase in the Company's effective tax rate in Sweden, and a projected mix of earnings attributable to higher-taxing jurisdictions. |
| |
• | On July 23, 2013, the Company's Board of Directors increased the quarterly cash dividend 10 percent to $0.11 per share of common stock. The dividend increase will raise the annualized dividend payout to $0.44 per share of common stock. |
Updated 2013 Outlook
Barnes Group now expects 2013 revenue from continuing operations to grow 17% to 19% from 2012. Excluding $10.5 million pre-tax of non-recurring costs associated with the Company's CEO transition recorded in the first quarter, adjusted operating margins are expected to be in the range of 13.5% to 14% for 2013. GAAP earnings per diluted share from continuing operations are anticipated to be in the range of $1.43 to $1.53.
Full-Year 2013 adjusted earnings per diluted share from continuing operations are anticipated to be in the range of $1.85 to $1.95, up 22% to 28% from 2012's adjusted diluted earnings per share from continuing operations of $1.52. Adjusted earnings per share from continuing operations exclude the non-recurring CEO transition costs ($0.12 per share) and the tax charge as a result of the U.S. Tax Court's unfavorable ruling ($0.30 per share).
As a result of the Tax Court decision, the Company expects cash flows to be negatively impacted by approximately $13 million by the end of 2013. Excluding this item and the impact from the sale of BDNA, 2013 cash conversion is anticipated to be approximately 100% of net income.
Conference Call
Barnes Group Inc. will conduct a conference call with investors to discuss second quarter 2013 results at 8:30 a.m. EDT today, July 26, 2013. A webcast of the live call and an archived replay will be available on the Barnes Group investor relations link at www.BGInc.com. The conference is also available by direct dial at (888) 713-4215 in the U.S. or (617) 213-4867 outside of the U.S. (request the Barnes Group Earnings Call), Participant Code: 78035580.
In addition, the call will be recorded and available for playback beginning at 12:00 p.m. (EDT) on Friday, July 26, 2013 by dialing (617) 801-6888, Passcode: 31040519.
About Barnes Group
Founded in 1857, Barnes Group Inc. (NYSE: B) is an international aerospace and industrial manufacturer and service provider, serving a wide range of end markets and customers. The products and services provided by Barnes Group are used in far-reaching applications that provide transportation, communication, manufacturing and technology to the world. Barnes Group's approximately 3,800 dedicated employees, at more than 60 locations worldwide, are committed to achieving consistent and sustainable profitable growth. For more information, visit www.BGInc.com.
Forward-Looking Statements
This press release contains certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based upon management's good faith expectations and beliefs concerning future developments and their potential effect upon the Company and can be identified by the use of words such as "anticipated," "believe," "expect," "plans," "strategy," "estimate," "project," and other words of similar meaning in connection with a discussion of future operating or financial performance. These forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. These include, but are not limited to: difficulty maintaining relationships with employees, customers, distributors, suppliers, business partners or governmental entities; the success of integration strategy implementation; the ability to recruit and retain key personnel and execute effective executive transitions; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; rapid technological and market change; the ability to protect intellectual property rights; higher risks in international operations and markets; the impact of increased competition; currency fluctuations; litigation; and other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission by the Company, including the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections of the Company's filings with the Securities and Exchange Commission. The risks and uncertainties described in our periodic filings with the Securities and Exchange Commission include, among others, uncertainties arising from the current or worsening conditions in financial markets; future financial performance of the industries or customers that we serve; changes in market demand for our products and services; inability to realize expected sales or profits from existing backlog due to a range of factors, including insourcing decisions, material changes as well as production schedules and volumes of specific programs; integration of acquired businesses; restructuring costs or savings; the impact of the divestiture in 2013 of the Barnes Distribution North America business to MSC Industrial Direct Co., Inc.; the impact of the acquisition in 2012 of the Synventive Molding Solutions business; the impact of the divestiture in 2011 of our Barnes Distribution Europe businesses; and any other future strategic actions, including acquisitions, joint ventures, divestitures, restructurings, or strategic business realignments, and our ability to achieve the financial and operational targets set in connection with any such actions; introduction or development of new products or transfer of work; changes in raw material or product prices and availability; foreign currency exposure; our dependence upon revenues and earnings from a small number of significant customers; a major loss of customers; the impacts of the U.S. Tax Court's April 16, 2013 decision and any related appeal; the outcome of pending and future claims or litigation or governmental, regulatory proceedings, investigations, inquiries, and audits; uninsured claims and litigation; outcome of contingencies; future repurchases of common stock; future levels of indebtedness; and numerous other matters of global, regional or national scale, including those of a political, economic, business, competitive, environmental, regulatory and public health nature. The Company assumes no obligation to update our forward-looking statements.
Contact:
Barnes Group Inc.
William Pitts
Director, Investor Relations
860.583.7070
# # #
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, | | Six months ended June 30, |
| | 2013 | | 2012 (1) | | % Change | | 2013 | | 2012 (1) | | % Change |
| Net sales | $ | 267,394 |
| | $ | 215,310 |
| | 24.2 |
| | $ | 530,940 |
| | $ | 438,104 |
| | 21.2 |
|
| | | | | | | | | | | | |
| Cost of sales | 177,411 |
| | 152,367 |
| | 16.4 |
| | 355,127 |
| | 312,788 |
| | 13.5 |
|
| Selling and administrative expenses | 53,834 |
| | 37,183 |
| | 44.8 |
| | 114,708 |
| | 74,938 |
| | 53.1 |
|
| | 231,245 |
| | 189,550 |
| | 22.0 |
| | 469,835 |
| | 387,726 |
| | 21.2 |
|
| Operating income | 36,149 |
| | 25,760 |
| | 40.3 |
| | 61,105 |
| | 50,378 |
| | 21.3 |
|
| | | | | | | | | | | | |
| Operating margin | 13.5 | % | | 12.0 | % | | | | 11.5 | % | | 11.5 | % | | |
| | | | | | | | | | | | |
| Interest expense | 3,241 |
| | 2,435 |
| | 33.1 |
| | 7,598 |
| | 4,803 |
| | 58.2 |
|
| Other expense (income), net | 495 |
| | 55 |
| | NM |
| | 1,462 |
| | 914 |
| | 60.0 |
|
| Income from continuing operations before income taxes | 32,413 |
| | 23,270 |
| | 39.3 |
| | 52,045 |
| | 44,661 |
| | 16.5 |
|
| Income taxes | 23,218 |
| | 3,783 |
| | NM |
| | 27,417 |
| | 7,584 |
| | NM |
|
| Income from continuing operations | 9,195 |
| | 19,487 |
| | (52.8 | ) | | 24,628 |
| | 37,077 |
| | (33.6 | ) |
| | | | | | | | | | | | |
| Income from discontinued operations, net of income taxes | 200,132 |
| | 5,344 |
| | NM |
| | 198,171 |
| | 9,961 |
| | NM |
|
| Net income | $ | 209,327 |
| | $ | 24,831 |
| | NM |
| | $ | 222,799 |
| | $ | 47,038 |
| | NM |
|
| Common dividends | $ | 5,277 |
| | $ | 5,383 |
| | (2.0 | ) | | $ | 10,720 |
| | $ | 10,842 |
| | (1.1 | ) |
| | | | | | | | | | | | |
| Per common share: | | | | | | | | | | | |
| | | | | | | | | | | | |
| Basic: | | | | | | | | | | | |
| Income from continuing operations | $ | 0.18 |
| | $ | 0.36 |
| | (50.0 | ) | | $ | 0.46 |
| | $ | 0.68 |
| | (32.4 | ) |
| Income from discontinued operations, net of income taxes | 3.72 |
| | 0.10 |
| | NM |
| | 3.65 |
| | 0.18 |
| | NM |
|
| Net income | $ | 3.90 |
| | $ | 0.46 |
| | NM |
| | $ | 4.11 |
| | $ | 0.86 |
| | NM |
|
| | | | | | | | | | | | |
| Diluted: | | | | | | | | | | | |
| Income from continuing operations | $ | 0.17 |
| | $ | 0.35 |
| | (51.4 | ) | | $ | 0.45 |
| | $ | 0.67 |
| | (32.8 | ) |
| Income from discontinued operations, net of income taxes | 3.65 |
| | 0.10 |
| | NM |
| | 3.59 |
| | 0.18 |
| | NM |
|
| Net income | $ | 3.82 |
| | $ | 0.45 |
| | NM |
| | $ | 4.04 |
| | $ | 0.85 |
| | NM |
|
| | | | | | | | | | | | |
| Dividends | 0.10 |
| | 0.10 |
| | — |
| | 0.20 |
| | 0.20 |
| | — |
|
| | | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | | |
| Basic | 53,738,051 |
| | 54,543,098 |
| | (1.5 | ) | | 54,230,272 |
| | 54,674,366 |
| | (0.8 | ) |
| Diluted | 54,809,896 |
| | 55,150,806 |
| | (0.6 | ) | | 55,135,892 |
| | 55,303,192 |
| | (0.3 | ) |
NM - Not Meaningful
Notes:
(1) Results for 2012 have been adjusted on a retrospective basis to reflect the BDNA discontinued operations.
BARNES GROUP INC.
OPERATIONS BY REPORTABLE BUSINESS SEGMENT
(Dollars in thousands)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, | | Six months ended June 30, | |
| | 2013 | | 2012 (1) | | % Change | | 2013 | | 2012 (1) | | % Change | |
| Net sales | | | | | | | | | | | | |
| Aerospace | $ | 96,834 |
| | $ | 93,770 |
| | 3.3 | | $ | 194,878 |
| | $ | 191,020 |
| | 2.0 |
| |
| Industrial | 170,560 |
| | 121,540 |
| | 40.3 | | 336,062 |
| | 247,085 |
| | 36.0 |
| |
| Intersegment sales | — |
| | — |
| | — | | — |
| | (1 | ) | | NM |
| |
| Total net sales | $ | 267,394 |
| | $ | 215,310 |
| | 24.2 | | $ | 530,940 |
| | $ | 438,104 |
| | 21.2 |
| |
| | | | | | | | | | | | | |
| Operating profit | | | | | | | | | | | | |
| Aerospace | $ | 15,226 |
| | $ | 13,023 |
| | 16.9 | | $ | 25,573 |
| | $ | 25,677 |
| | (0.4 | ) | |
| Industrial | 20,923 |
| | 12,737 |
| | 64.3 | | 35,532 |
| | 24,701 |
| | 43.8 |
| |
| Total operating profit | $ | 36,149 |
| | $ | 25,760 |
| | 40.3 | | $ | 61,105 |
| | $ | 50,378 |
| | 21.3 |
| |
| | | | | | | | | | | | | |
| Operating margin | | | | | Change | | | | | | Change |
| |
| Aerospace | 15.7 | % | | 13.9 | % | | 180 | bps. | 13.1 | % | | 13.4 | % | | (30 | ) | bps. |
| Industrial | 12.3 | % | | 10.5 | % | | 180 | bps. | 10.6 | % | | 10.0 | % | | 60 |
| bps. |
| Total operating margin | 13.5 | % | | 12.0 | % | | 150 | bps. | 11.5 | % | | 11.5 | % | | — |
| bps. |
NM - Not Meaningful
Notes:
(1) Results for 2012 have been adjusted on a retrospective basis to reflect the impact of the BDNA discontinued operations, including a reallocation of corporate overhead expenses, and the segment realignment.
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
|
| | | | | | | |
| | June 30, 2013 | | December 31, 2012 |
| Assets | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 197,398 |
| | $ | 86,356 |
|
| Accounts receivable | 229,934 |
| | 253,202 |
|
| Inventories | 186,224 |
| | 226,220 |
|
| Deferred income taxes | 23,331 |
| | 33,906 |
|
| Prepaid expenses and other current assets | 15,756 |
| | 18,856 |
|
| Total current assets | 652,643 |
| | 618,540 |
|
| | | | |
| Deferred income taxes | 37,318 |
| | 29,961 |
|
| Property, plant and equipment, net | 214,735 |
| | 233,097 |
|
| Goodwill | 439,447 |
| | 579,905 |
|
| Other intangible assets, net | 370,645 |
| | 383,972 |
|
| Other assets | 20,182 |
| | 23,121 |
|
| Total assets | $ | 1,734,970 |
| | $ | 1,868,596 |
|
| | | | |
| Liabilities and Stockholders' Equity | | | |
| Current liabilities | | | |
| Notes and overdrafts payable | $ | 12,899 |
| | $ | 3,795 |
|
| Accounts payable | 92,469 |
| | 99,037 |
|
| Accrued liabilities | 227,191 |
| | 96,364 |
|
| Long-term debt - current | 54,241 |
| | 699 |
|
| Total current liabilities | 386,800 |
| | 199,895 |
|
| | | | |
| Long-term debt | 177,242 |
| | 642,119 |
|
| Accrued retirement benefits | 133,562 |
| | 159,103 |
|
| Deferred income taxes | 47,222 |
| | 48,707 |
|
| Other liabilities | 15,154 |
| | 18,654 |
|
| | | | |
| Total stockholders' equity | 974,990 |
| | 800,118 |
|
| Total liabilities and stockholders' equity | $ | 1,734,970 |
| | $ | 1,868,596 |
|
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
|
| | | | | | | |
| | Six months ended June 30, |
| | 2013 | | 2012 |
| Operating activities: | | | |
| Net income | $ | 222,799 |
| | $ | 47,038 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation and amortization | 31,110 |
| | 25,912 |
|
| Amortization of convertible debt discount | 1,173 |
| | 1,083 |
|
| Loss (gain) on disposition of property, plant and equipment | 56 |
| | (62 | ) |
| Stock compensation expense | 14,348 |
| | 4,286 |
|
| Withholding taxes paid on stock issuances | (753 | ) | | (727 | ) |
| (Gain) loss on the sale of businesses | (194,438 | ) | | 734 |
|
| Changes in assets and liabilities, net of the effects of divestitures: | | | |
| Accounts receivable | (17,951 | ) | | (8,893 | ) |
| Inventories | (8,026 | ) | | (852 | ) |
| Prepaid expenses and other current assets | 250 |
| | (1,290 | ) |
| Accounts payable | 7,620 |
| | (621 | ) |
| Accrued liabilities | 14,066 |
| | (15,830 | ) |
| Deferred income taxes | (10,066 | ) | | 789 |
|
| Long-term retirement benefits | (166 | ) | | (18,770 | ) |
| Other | 6,061 |
| | 837 |
|
| Net cash provided by operating activities | 66,083 |
| | 33,634 |
|
| | | | |
| Investing activities: | | | |
| Proceeds from disposition of property, plant and equipment | 160 |
| | 222 |
|
| Proceeds from (payments for) the sale of businesses, net | 540,435 |
| | (318 | ) |
| Capital expenditures | (20,419 | ) | | (15,658 | ) |
| Other | (1,748 | ) | | (2,476 | ) |
| Net cash provided (used) by investing activities | 518,428 |
| | (18,230 | ) |
| | | | |
| Financing activities: | | | |
| Net change in other borrowings | 9,092 |
| | (10,535 | ) |
| Payments on long-term debt | (478,005 | ) | | (17,770 | ) |
| Proceeds from the issuance of long-term debt | 65,500 |
| | 67,000 |
|
| Proceeds from the issuance of common stock | 3,763 |
| | 4,080 |
|
| Common stock repurchases | (61,432 | ) | | (19,037 | ) |
| Dividends paid | (10,720 | ) | | (10,842 | ) |
| Excess tax benefit on stock awards | 632 |
| | 1,331 |
|
| Other | (111 | ) | | (120 | ) |
| Net cash (used) provided by financing activities | (471,281 | ) | | 14,107 |
|
| | | | |
| Effect of exchange rate changes on cash flows | (2,188 | ) | | (1,038 | ) |
| Increase in cash and cash equivalents | 111,042 |
| | 28,473 |
|
| | | | |
| Cash and cash equivalents at beginning of period | 86,356 |
| | 62,505 |
|
| Cash and cash equivalents at end of period | $ | 197,398 |
| | $ | 90,978 |
|
BARNES GROUP INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(Dollars in thousands)
(Unaudited)
|
| | | | | | | |
| | Six months ended June 30, |
| | 2013 | | 2012 |
| Free cash flow: | | | |
| Net cash provided by operating activities | $ | 66,083 |
| | $ | 33,634 |
|
| Capital expenditures | (20,419 | ) | | (15,658 | ) |
Free cash flow (1) | $ | 45,664 |
| | $ | 17,976 |
|
Notes:
(1) The Company defines free cash flow as net cash provided by operating activities less capital expenditures. The Company believes that the free cash flow metric is useful to investors and management as a measure of cash generated by business operations that can be used to invest in future growth, pay dividends, repurchase stock and reduce debt. This metric can also be used to evaluate the Company's ability to generate cash flow from business operations and the impact that this cash flow has on the Company's liquidity.
BARNES GROUP INC.
NON-GAAP FINANCIAL MEASURE RECONCILIATION
(Dollars in thousands, except per share data)
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended June 30, | | Six months ended June 30, | |
| | 2013 | | 2012 (1) | | % Change | | 2013 | | 2012 (1) | | % Change | |
| SEGMENT RESULTS | | | | | | | | | | | | |
| Operating Profit - Aerospace Segment (GAAP) | $ | 15,226 |
| | $ | 13,023 |
| | 16.9 |
| | $ | 25,573 |
| | $ | 25,677 |
| | (0.4 | ) | |
| CEO transition costs | — |
| | — |
| | | | 3,903 |
| | — |
| | | |
Operating Profit - Aerospace Segment as adjusted (Non-GAAP) (2) | $ | 15,226 |
| | $ | 13,023 |
| | 16.9 |
| | $ | 29,476 |
| | $ | 25,677 |
| | 14.8 |
| |
| | | | | | | | | | | | | |
| Operating Margin - Aerospace Segment (GAAP) | 15.7 | % | | 13.9 | % | | 180 |
| bps. | 13.1 | % | | 13.4 | % | | (30 | ) | bps. |
Operating Margin - Aerospace Segment as adjusted (Non-GAAP) (2) | 15.7 | % | | 13.9 | % | | 180 |
| bps. | 15.1 | % | | 13.4 | % | | 170 |
| bps. |
| | | | | | | | | | | | | |
| Operating Profit - Industrial Segment (GAAP) | $ | 20,923 |
| | $ | 12,737 |
| | 64.3 |
| | $ | 35,532 |
| | $ | 24,701 |
| | 43.8 |
| |
| CEO transition costs | — |
| | — |
| | | | 6,589 |
| | — |
| | | |
Operating Profit - Industrial Segment as adjusted (Non-GAAP) (2) | $ | 20,923 |
| | $ | 12,737 |
| | 64.3 |
| | $ | 42,121 |
| | $ | 24,701 |
| | 70.5 |
| |
| | | | | | | | | | | | | |
| Operating Margin - Industrial Segment (GAAP) | 12.3 | % | | 10.5 | % | | 180 |
| bps. | 10.6 | % | | 10.0 | % | | 60 |
| bps. |
Operating Margin - Industrial Segment as adjusted (Non-GAAP) (2) | 12.3 | % | | 10.5 | % | | 180 |
| bps. | 12.5 | % | | 10.0 | % | | 250 |
| bps. |
| | | | | | | | | | | | | |
| CONSOLIDATED RESULTS | | | | | | | | | | | | |
| Operating Income (GAAP) | $ | 36,149 |
| | $ | 25,760 |
| | 40.3 |
| | $ | 61,105 |
| | $ | 50,378 |
| | 21.3 |
| |
| CEO transition costs | — |
| | — |
| | | | 10,492 |
| | — |
| | | |
Operating Income as adjusted (Non-GAAP) (2) | $ | 36,149 |
| | $ | 25,760 |
| | 40.3 |
| | $ | 71,597 |
| | $ | 50,378 |
| | 42.1 |
| |
| | | | | | | | | | | | | |
| Operating Margin (GAAP) | 13.5 | % | | 12.0 | % | | 150 |
| bps. | 11.5 | % | | 11.5 | % | | — |
| bps. |
Operating Margin as adjusted (Non-GAAP) (2) | 13.5 | % | | 12.0 | % | | 150 |
| bps. | 13.5 | % | | 11.5 | % | | 200 |
| bps. |
| | | | | | | | | | | | | |
| Diluted Income from Continuing Operations per Share (GAAP) | $ | 0.17 |
| | $ | 0.35 |
| | (51.4 | ) | | $ | 0.45 |
| | $ | 0.67 |
| | (32.8 | ) | |
| CEO transition costs | — |
| | — |
| | | | 0.12 |
| | — |
| | | |
| April 2013 tax court decision | 0.30 |
| | — |
| | | | 0.30 |
| | — |
| | | |
Diluted Income from Continuing Operations per Share as adjusted (Non-GAAP) (2) | $ | 0.47 |
| | $ | 0.35 |
| | 34.3 |
| | $ | 0.87 |
| | $ | 0.67 |
| | 29.9 |
| |
| | | | | | | | | | | | | |
| | Full-Year 2012 (1) | | | | Full-Year 2013 Outlook | | | | | |
| Diluted Income from Continuing Operations per Share (GAAP) | $ | 1.44 |
| | | | $ | 1.43 |
| to | $ | 1.53 |
| | | | | |
| Synventive short-term purchase accounting adjustments | 0.07 |
| | | | | — |
| | | | | | |
| Synventive acquisition transaction costs | 0.01 |
| | | | | — |
| | | | | | |
| CEO transition costs | — |
| | | | | 0.12 |
| | | | | | |
| April 2013 tax court decision | — |
| | | | | 0.30 |
| | | | | | |
Diluted Income from Continuing Operations per Share as adjusted (Non-GAAP) (2) | $ | 1.52 |
| |
| | $ | 1.85 |
| | $ | 1.95 |
| | | | | |
| | | | | | | | | | | | | |
Notes:
(1) Results for 2012 have been adjusted on a retrospective basis to reflect the impact of the BDNA discontinued operations, including a reallocation of corporate overhead expenses, and the segment realignment.
(2) The Company has excluded short-term purchase accounting adjustments and transaction costs related to its Synventive acquisition in 2012 and CEO transition costs associated with the modification of outstanding equity awards and the tax charge associated with the April 2013 tax court decision in 2013 from its "as adjusted" financial measurements. Management believes that these adjustments provide the Company and its investors with an indication of our baseline performance excluding items that are not considered to be reflective of our ongoing results. Management does not intend results excluding the adjustments to represent results as defined by GAAP, and the reader should not consider it as an alternative measurement calculated in accordance with GAAP, or as an indicator of the Company's performance. Accordingly, the measurements have limitations depending on their use.
