Exhibit 99.1
 | Barnes Group Inc. 123 Main Street Bristol, CT 06010 |
NEWS RELEASE
BARNES GROUP INC. REPORTS
SECOND QUARTER 2010 FINANCIAL RESULTS
| § | Quarterly net sales rise 10.5% to $282 million |
| § | Net income increases 42% to $14.8 million |
| § | Second quarter 2010 diluted EPS increases 37% to $0.26 |
BRISTOL, Conn., August 2, 2010 — Barnes Group Inc. (NYSE: B), a diversified global manufacturer and logistical services company, today reported financial results for the second quarter 2010. The Company reported net income of $14.8 million, or $0.26 per diluted share, compared to $10.4 million, or $0.19 per diluted share in the second quarter of 2009. Barnes Group’s second quarter 2010 sales totaled $281.9 million, an increase of 10.5 percent from $255.2 million in the second quarter of 2009.
| ($ millions; except | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||||||||||
| per share data) | 2010 | 2009 | Change | 2010 | 2009 | Change | ||||||||||||||||||||||||||||
| Net Sales | $ | 281.9 | $ | 255.2 | $ | 26.7 | 10.5 | % | $ | 560.0 | $ | 517.4 | $ | 42.7 | 8.2 | % | ||||||||||||||||||
| Operating Income | $ | 23.7 | $ | 14.1 | $ | 9.5 | 67.4 | % | $ | 43.3 | $ | 34.6 | $ | 8.7 | 25.3 | % | ||||||||||||||||||
| % of Sales | 8.4 | % | 5.5 | % | - | 2.9 | pts. | 7.7 | % | 6.7 | % | - | 1.0 | pt. | ||||||||||||||||||||
| Net Income | $ | 14.8 | $ | 10.4 | $ | 4.4 | 41.9 | % | $ | 26.7 | $ | 21.9 | $ | 4.7 | 21.7 | % | ||||||||||||||||||
| % of Sales | 5.3 | % | 4.1 | % | - | 1.2 | pts. | 4.8 | % | 4.2 | % | - | 0.6 | pts. | ||||||||||||||||||||
Net Income Per Diluted Share | $ | 0.26 | $ | 0.19 | $ | 0.07 | 36.8 | % | $ | 0.47 | $ | 0.41 | $ | 0.06 | 14.6 | % | ||||||||||||||||||
“We continue to benefit from improved economic conditions, particularly within our industrial and automotive manufacturing businesses,” said Gregory F. Milzcik, President and Chief Executive Officer, Barnes Group Inc. “Double-digit sales growth coupled with a continued focus on an efficient cost structure through lean initiatives has provided a 67 percent improvement to our operating profit this quarter.
“Economic growth, along with a continuation of strong order rates, should allow us to build upon our success,” said Milzcik. “However, we continue to remain cautious. While the level of activity within our distribution and aerospace aftermarket businesses improves, the rate of growth is slow. As a result, our outlook for the full year 2010 remains the same with full year diluted earnings per share in the range of $0.90 to $1.10, based on current and anticipated market conditions.”
Logistics and Manufacturing Services
| · | Second quarter 2010 sales at Logistics and Manufacturing Services were $138.5 million, an increase of 1 percent from $136.6 million in the same period last year. The increase in sales was driven primarily by revenue growth in the North American distribution businesses as macro-economic conditions, including industrial production, continued to improve. The European based distribution |
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| business experienced a decline in sales compared to the same period last year. In addition, the aerospace aftermarket business continued to experience the adverse effects of ongoing deferred maintenance and lower aircraft utilization, though sequential activity improved slightly. Foreign exchange negatively impacted second quarter 2010 sales by $1.2 million. |
| · | Operating profit was $10.2 million, compared with $12.5 million in the second quarter of 2009. Operating profit was driven lower primarily by reduced sales volumes in the higher margin aerospace aftermarket businesses and increased personnel costs, including the investments in additional sales personnel, in the distribution businesses. Partially offsetting these declines was the impact of the lower cost structures resulting from previous actions, primarily in the distribution businesses, and the beneficial impact of higher sales in the distribution businesses. Operating margin was 7.3 percent compared to 9.1 percent in the prior year. |
Precision Components
| · | Second quarter 2010 sales at Precision Components were $146.6 million, up 22 percent from $120.3 million in the same period last year. Year-over-year sales growth continued to be driven by improved market demand primarily from increases in the industrial manufacturing businesses in North America and Europe and from improvements in the transportation industry, including automotive. Sales in the aerospace original equipment manufacturing business declined compared to the second quarter of 2009 due to lower military sales. Foreign exchange negatively affected sales by $0.6 million in the second quarter. Order rates within Precision Components businesses experienced a significant increase over the prior year and outpaced sales for the third consecutive quarter, as increased activity levels within al l three key end markets, transportation, industrial, and aerospace original equipment manufacturing, improved. |
| · | Operating profit for the second quarter of 2010 increased significantly to $13.5 million, as compared with $1.7 million in the second quarter of 2009. The higher operating profit was due primarily to the higher sales levels in 2010, lower cost structures resulting from previous actions, and initiatives focused on cost savings and cost containment. Operating margin was 9.2 percent compared to 1.4 percent in the prior year. |
Conference Call
The Company will conduct a conference call with investors to discuss second quarter 2010 results at 8:30 a.m. ET today, August 2, 2010. A webcast of the live call and an archived replay will be available on the Barnes Group investor relations link at www.BGInc.com.
Barnes Group Inc. (NYSE:B) is a diversified global manufacturer and logistical services company focused on providing precision component manufacturing and operating service support. Founded in 1857, over 4,800 dedicated employees at locations on four continents worldwide are committed to achieving consistent and sustainable profitable growth. For more information, visit www.BGInc.com. Barnes Group, the Critical Components People.
This release may contain certain forward-looking statements as defined in the Private Securities Litigation and 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 are subject to risks and uncertainties that may cause actual results to differ materia lly from those expressed in the forward-looking statements. The risks and uncertainties, which are described in our periodic filings with the Securities and Exchange Commission, include, among others, uncertainties arising from the behavior of financial markets; future financial performance of the industries or
Barnes Group Inc. / 3
customers that we serve; changes in market demand for our products and services; successful integration of acquired businesses; introduction of new products or transfer of work; changes in raw material prices and availability; foreign currency exposure; our dependence upon revenues and earnings from a small number of significant customers; uninsured claims; 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:
Brian D. Koppy – 860.973.2126
###
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| 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, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
| Net sales | $ | 281,892 | $ | 255,201 | 10.5 | $ | 560,029 | $ | 517,352 | 8.2 | ||||||||||||||
| Cost of sales | 177,821 | 165,712 | 7.3 | 355,844 | 332,878 | 6.9 | ||||||||||||||||||
| Selling and administrative expenses | 80,389 | 75,343 | 6.7 | 160,836 | 149,871 | 7.3 | ||||||||||||||||||
| 258,210 | 241,055 | 7.1 | 516,680 | 482,749 | 7.0 | |||||||||||||||||||
| Operating income | 23,682 | 14,146 | 67.4 | 43,349 | 34,603 | 25.3 | ||||||||||||||||||
| Operating margin | 8.4 | % | 5.5 | % | 7.7 | % | 6.7 | % | ||||||||||||||||
| Other income | 18 | 2,501 | (99.3 | ) | 235 | 2,659 | (91.2 | ) | ||||||||||||||||
| Interest expense | 4,978 | 6,004 | (17.1 | ) | 10,097 | 11,941 | (15.4 | ) | ||||||||||||||||
| Other expenses | 1,083 | 686 | 57.9 | 1,622 | 1,263 | 28.4 | ||||||||||||||||||
| Income before income taxes | 17,639 | 9,957 | 77.2 | 31,865 | 24,058 | 32.5 | ||||||||||||||||||
| Income taxes (benefit) | 2,815 | (490 | ) | NM | 5,213 | 2,152 | NM | |||||||||||||||||
| Net income | $ | 14,824 | $ | 10,447 | 41.9 | $ | 26,652 | $ | 21,906 | 21.7 | ||||||||||||||
| Common dividends | $ | 4,390 | $ | 8,493 | (48.3 | ) | $ | 8,787 | $ | 16,863 | (47.9 | ) | ||||||||||||
| Per common share: | ||||||||||||||||||||||||
| Net income: | ||||||||||||||||||||||||
| Basic | $ | 0.27 | $ | 0.20 | 35.0 | $ | 0.48 | $ | 0.41 | 17.1 | ||||||||||||||
| Diluted | 0.26 | 0.19 | 36.8 | 0.47 | 0.41 | 14.6 | ||||||||||||||||||
| Dividends | 0.08 | 0.16 | (50.0 | ) | 0.16 | 0.32 | (50.0 | ) | ||||||||||||||||
| Average common shares outstanding: | ||||||||||||||||||||||||
| Basic | 55,546,969 | 53,377,592 | 4.1 | 55,470,721 | 53,058,524 | 4.5 | ||||||||||||||||||
| Diluted | 56,339,770 | 53,642,123 | 5.0 | 56,152,953 | 53,277,490 | 5.4 | ||||||||||||||||||
| Note - 2009 second quarter and year-to-date Other income included a $2,288 gain on the purchase of certain convertible debt and income taxes included the related tax expense of $868. | ||||||||||||||||||||||||
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| BARNES GROUP INC. | ||||||||||||||||||||||||
| OPERATIONS BY REPORTABLE BUSINESS SEGMENT | ||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
| 2010 | 2009 | % Change | 2010 | 2009 | % Change | |||||||||||||||||||
| Net Sales | ||||||||||||||||||||||||
| Logistics and Manufacturing Services | $ | 138,460 | $ | 136,565 | 1.4 | $ | 273,742 | $ | 279,237 | (2.0 | ) | |||||||||||||
| Precision Components | 146,604 | 120,323 | 21.8 | 292,385 | 241,519 | 21.1 | ||||||||||||||||||
| Intersegment sales | (3,172 | ) | (1,687 | ) | (88.0 | ) | (6,098 | ) | (3,404 | ) | (79.1 | ) | ||||||||||||
| Total net sales | $ | 281,892 | $ | 255,201 | 10.5 | $ | 560,029 | $ | 517,352 | 8.2 | ||||||||||||||
| Operating profit | ||||||||||||||||||||||||
| Logistics and Manufacturing Services | $ | 10,173 | $ | 12,455 | (18.3 | ) | $ | 18,497 | $ | 26,906 | (31.3 | ) | ||||||||||||
| Precision Components | 13,509 | 1,691 | NM | 24,852 | 7,697 | NM | ||||||||||||||||||
| Total operating profit | 23,682 | 14,146 | 67.4 | 43,349 | 34,603 | 25.3 | ||||||||||||||||||
| Interest income | 58 | 159 | (63.4 | ) | 155 | 317 | (51.0 | ) | ||||||||||||||||
| Interest expense | (4,978 | ) | (6,004 | ) | (17.1 | ) | (10,097 | ) | (11,941 | ) | (15.4 | ) | ||||||||||||
| Other income (expense), net | (1,123 | ) | 1,656 | NM | (1,542 | ) | 1,079 | NM | ||||||||||||||||
| Income before income taxes | $ | 17,639 | $ | 9,957 | 77.2 | $ | 31,865 | $ | 24,058 | 32.5 | ||||||||||||||
| Note - 2009 second quarter and year-to-date Other income (expense), net included a $2,288 gain on the purchase of certain convertible debt. | ||||||||||||||||||||||||
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| BARNES GROUP INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (Dollars in thousands) | ||||||||
| Unaudited | ||||||||
| June 30, 2010 | December 31, 2009 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 14,345 | $ | 17,427 | ||||
| Accounts receivable | 176,543 | 160,269 | ||||||
| Inventories | 196,931 | 190,792 | ||||||
| Deferred income taxes | 8,173 | 23,630 | ||||||
| Prepaid expenses and other current assets | 11,478 | 10,562 | ||||||
| Total current assets | 407,470 | 402,680 | ||||||
| Deferred income taxes | 45,922 | 30,650 | ||||||
| Property, plant and equipment, net | 213,004 | 224,963 | ||||||
| Goodwill | 358,930 | 373,564 | ||||||
| Other intangible assets, net | 295,585 | 303,689 | ||||||
| Other assets | 19,061 | 16,444 | ||||||
| Total assets | $ | 1,339,972 | $ | 1,351,990 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Notes and overdrafts payable | $ | 1,855 | $ | 4,595 | ||||
| Accounts payable | 96,223 | 85,588 | ||||||
| Accrued liabilities | 75,540 | 73,538 | ||||||
| Long-term debt - current | 119,166 | 25,567 | ||||||
| Total current liabilities | 292,784 | 189,288 | ||||||
| Long-term debt | 224,038 | 321,306 | ||||||
| Accrued retirement benefits | 110,733 | 118,693 | ||||||
| Other liabilities | 34,107 | 37,990 | ||||||
| Stockholders' equity | 678,310 | 684,713 | ||||||
| Total liabilities and stockholders' equity | $ | 1,339,972 | $ | 1,351,990 | ||||
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| BARNES GROUP INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Dollars in thousands) | ||||||||
| Unaudited | ||||||||
| Six months ended June 30, | ||||||||
| 2010 | 2009 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 26,652 | $ | 21,906 | ||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||
| Depreciation and amortization | 26,082 | 25,783 | ||||||
| Amortization of convertible debt discount | 2,805 | 3,284 | ||||||
| (Gain) loss on disposition of property, plant and equipment | 422 | (170 | ) | |||||
| Gain on repurchase of convertible notes | -- | (2,288 | ) | |||||
| Stock compensation expense | 3,546 | 1,927 | ||||||
| Withholding taxes paid on stock issuances | (89 | ) | (167 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (21,868 | ) | (17,191 | ) | ||||
| Inventories | (8,674 | ) | 36,171 | |||||
| Prepaid expenses and other current assets | (2,680 | ) | 1,978 | |||||
| Accounts payable | 12,353 | (2,677 | ) | |||||
| Accrued liabilities | 5,351 | (3,952 | ) | |||||
| Deferred income taxes | (1,396 | ) | (270 | ) | ||||
| Long-term retirement benefits | (7,389 | ) | (14,868 | ) | ||||
| Other | (2,284 | ) | (1,573 | ) | ||||
| Net cash provided by operating activities | 32,831 | 47,893 | ||||||
| Investing activities: | ||||||||
| Proceeds from disposition of property, plant and equipment | 157 | 343 | ||||||
| Capital expenditures | (15,060 | ) | (19,627 | ) | ||||
| Other | (1,726 | ) | (1,216 | ) | ||||
| Net cash used by investing activities | (16,629 | ) | (20,500 | ) | ||||
| Financing activities: | ||||||||
| Net change in other borrowings | (2,565 | ) | (5,221 | ) | ||||
| Payments on long-term debt | (137,493 | ) | (83,876 | ) | ||||
| Proceeds from the issuance of long-term debt | 131,400 | 73,000 | ||||||
| Proceeds from the issuance of common stock | 3,522 | 905 | ||||||
| Common stock repurchases | (4,059 | ) | (314 | ) | ||||
| Dividends paid | (8,787 | ) | (16,863 | ) | ||||
| Other | (108 | ) | (432 | ) | ||||
| Net cash used by financing activities | (18,090 | ) | (32,801 | ) | ||||
| Effect of exchange rate changes on cash flows | (1,194 | ) | 572 | |||||
| Decrease in cash and cash equivalents | (3,082 | ) | (4,836 | ) | ||||
| Cash and cash equivalents at beginning of period | 17,427 | 20,958 | ||||||
| Cash and cash equivalents at end of period | $ | 14,345 | $ | 16,122 | ||||