Mail Stop 7010
September 22, 2005
Mr. William C. Denninger
Senior Vice President, Finance and
Chief Financial Officer, Barnes Group Inc.
123 Main Street
Bristol, Connecticut 06011-0489
RE: Form 10-K for fiscal year ended December 31, 2004
Forms 10-Q for the periods ended March 31 and June 30,
2005
Form 8-K filed and dated July 25, 2005
File No. 1-4801
Dear Mr. Denninger:
We have reviewed your filing and have the following
comments. If you disagree with a comment, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the Year Ended December 31, 2004
General
1. Where a comment below requests additional disclosures or other
revisions, please show us in your response what the revisions will
look like. These revisions should be included in your future
filings, including your interim filings as appropriate.
Item 9A. Controls and Procedures, page 51
Disclosure Controls and Procedures, page 51
2. You indicate that your chief executive officer and chief
financial
officer concluded that your disclosure controls and procedures
were
effective to ensure that information required to be disclosed in
the
reports you file under the Exchange Act is recorded, processed,
summarized and reported as and when required. Please revise your
disclosure to state your conclusion while providing the complete
definition of disclosure controls and procedures, or
alternatively,
simply state that your disclosure controls and procedures are
effective, or not effective, without providing any part of the
definition of disclosure controls and procedures that is included
in
Exchange Act Rules 13a-15(e) and 15d-15(e). Please note this
comment
also applies to your quarterly filings on Form 10-Q.
Form 8-K filed and dated July 25, 2005
Exhibit 99.2
Contractual Cash Obligations and Commitments, page 10
3. Please revise your table of contractual cash obligations to
include the following:
* Estimated interest payments on your debt; and
* Estimated payments under interest rate swap agreements.
Because the table is aimed at increasing transparency of cash
flow,
we believe these payments should be included in the table. Please
also disclose any assumptions you made to derive these amounts.
Please refer to note 46 of SEC Release 33-8350.
4. It is unclear why the expected pension contributions in your
table
of contractual cash obligations differ from your disclosure on
page
38. It is also unclear why you have not included expected cash
obligations related to other post-retirement benefits. Please
revise
or advise.
Financial Statements and Supplementary Data, page 14
Consolidated Statements of Cash Flows, page 16
5. Please tell us the basis for your presentation of cash payments
related to revenue sharing programs as investing cash flows.
Please
also tell us how any other cash flows related to these revenue
sharing programs are characterized, including the related amounts
for
each period presented.
Note 1 -Summary of Significant Accounting Policies, page 18
6. Please disclose the types of expenses that you include in the
cost
of sales line item and the types of expenses that you include in
the
selling and administrative line item. Please tell us whether you
include inbound freight charges, purchasing and receiving costs,
inspection costs, warehousing costs, internal transfer costs, and
the
other costs of your distribution network in the cost of sales line
item. With the exception of warehousing costs, if you currently
exclude a portion of these costs from cost of sales, please
disclose:
* in a footnote the line items that these excluded costs are
included
in and the amounts included in each line item for each period
presented, and
* in MD&A that your gross margins may not be comparable to those
of
other entities, since some entities include all of the costs
related
to their distribution network in cost of sales and others like you
exclude a portion of them from gross profit, including them
instead
in a line item such as selling and administrative.
Property, Plant & Equipment, page 18
7. The range of useful lives for your machinery and equipment of 3
to
17 years is very broad. Please separately discuss and disclose
the
types of assets that fall in each part of the range.
Revenue Sharing Programs, page 18
8. Please tell us more regarding your accounting for the revenue
sharing programs, including how the amount of the amortization of
the
related intangible is determined.
Note 7 - Business Reorganization, page 23
9. Please provide separately for each restructuring program a
tabular
reconciliation of the beginning and ending restructuring liability
balances for each major type of cost showing separately the
changes
during each period. Please refer to paragraph 20(b)(2) of SFAS
146.
Note 9 - Pension and Other Postretirement Benefits, page 25
10. Please tell us what consideration you gave to the decline in
value of equity securities held by the pension trusts referred to
on
page 36 in determining that a 9.5% expected return is appropriate.
Note 10 - Income Taxes, page 29
11. Please revise to disclose the amounts and expiration dates of
your operating loss carryforwards. In this regard we note that
your
current disclosure that you have $82 million in tax loss
carryforwards with remaining carryforward periods between one year
and unlimited does not provide the level of detail required by
paragraph 48 of SFAS 109.
Note 17 - Commitments and Contingencies, page 35
Product Warranties, page 35
12. Based on your disclosure it appears that you consider it at
least
reasonably possible that a loss, beyond any amounts previously
accrued, has been incurred related to the OEM`s product recall.
Further, you state that the amount of such loss cannot be
estimated.
If this is the case, please provide us with additional information
to
help us understand why you cannot estimate a range of loss as
required by paragraph ten of SFAS 5. In this regard, it is
unclear
why you cannot estimate the replacement cost of parts you supplied
that are included in the recalled products.
* * * *
Please respond to these comments within 10 business days
or
tell us when you will provide us with a response. Please provide
us
with a response letter that keys your responses to our comments
and
provides any requested information. Detailed letters greatly
facilitate our review.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in our review of your filing
or
in response to our comments on your filing.
If you have any questions regarding these comments, please
direct them to Scott Watkinson, Staff Accountant, at (202) 551-
3741
or, in his absence, me, at (202) 551-3769.
Sincerely,
Rufus Decker
Accounting Branch Chief
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Mr. William C. Denninger
Barnes Group, Inc.
September 22, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE