UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM l0-Q
(Mark One)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2002
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For transition period from
--------------------
to
--------------------
Commission File Number 1-4801
BARNES GROUP INC.
(a Delaware Corporation)
I.R.S. Employer Identification No. 06-0247840
123 Main Street, Bristol, Connecticut 06010
Telephone Number (860) 583-7070
Number of common shares outstanding at
May 7, 2002 - 18,785,235
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
-1-
BARNES GROUP INC.
FORM 10-Q INDEX
For the Quarterly period ended March 31, 2002
DESCRIPTION PAGES
- ----------- -----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statements
of Income for the three months ended
March 31, 2002 and 2001 3
Condensed Consolidated Balance Sheets as
of March 31, 2002 and December 31, 2001 4-5
Consolidated Statements of Cash Flows
for the three months ended March 31,
2002 and 2001 6
Notes to Condensed Consolidated Financial
Statements 7-11
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11-16
ITEM 3. Quantitative and Qualitative Disclosure
About Market Risk 16
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to Vote of
Security Holders 16
ITEM 6. Exhibits and Reports on Form 8-K 16
Signatures 17
Exhibit Index 17
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
Three months ended March 31, 2002 and 2001
(Dollars in thousands, except per share data)
(Unaudited)
2002 2001
-------- --------
Net sales $194,236 $199,250
Cost of sales 130,298 132,562
Selling and administrative expenses 52,381 52,935
-------- --------
182,679 185,497
-------- --------
Operating income 11,557 13,753
Other income 427 1,405
Interest expense 3,390 4,233
Other expenses 137 1,173
-------- --------
Income before income taxes 8,457 9,752
Income taxes 1,691 2,438
-------- --------
Net income $ 6,766 $ 7,314
======== ========
Per common share:
Net income:
Basic $ .37 $ .39
Diluted .36 .39
Dividend .20 .20
Average common shares outstanding:
Basic 18,497,371 18,620,760
Diluted 19,026,049 18,937,924
See accompanying notes.
-3-
BARNES GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS March 31, December 31,
2002 2001
--------- ------------
(Unaudited)
Current assets
Cash and cash equivalents $ 30,669 $ 48,868
Accounts receivable, less allowances
(2002-$3,583; 2001-$3,114) 112,969 94,124
Inventories
Finished goods 51,905 51,840
Work-in-process 18,587 15,506
Raw materials and supplies 18,920 18,375
-------- --------
89,412 85,721
Deferred income taxes and prepaid
expenses 28,618 27,822
-------- --------
Total current assets 261,668 256,535
Deferred income taxes 5,290 5,783
Property, plant and equipment 420,510 406,639
Less accumulated depreciation 258,337 253,696
-------- --------
162,173 152,943
Goodwill 160,162 159,836
Other assets 64,944 61,408
-------- --------
Total assets $654,237 $636,505
======== ========
See accompanying notes.
-4-
BARNES GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY March 31, December 31,
2002 2001
--------- ------------
(Unaudited)
Current liabilities
Notes payable $ 8,000 $ 5,500
Accounts payable 67,453 71,410
Accrued liabilities 61,279 59,118
Long-term debt - current 57,583 47,576
-------- --------
Total current liabilities 194,315 183,604
Long-term debt 177,890 178,365
Accrued retirement benefits 67,647 63,610
Other liabilities 12,691 12,089
Stockholders' equity
Common stock-par value $0.01 per share
Authorized: 60,000,000 shares
Issued: 22,037,769 shares
stated at par value 220 220
Additional paid-in capital 54,979 54,874
Treasury stock at cost,
2002-3,461,939 shares
2001-3,576,322 shares (74,939) (76,903)
Retained earnings 246,345 243,369
Accumulated other comprehensive income (24,911) (22,723)
-------- --------
Total stockholders' equity 201,694 198,837
-------- --------
Total liabilities and stockholders'
equity $654,237 $636,505
======== ========
See accompanying notes.
-5-
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 2002 and 2001
(Dollars in thousands)
(Unaudited)
2002 2001
------- -------
Operating activities:
Net income $ 6,766 $ 7,314
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation and amortization 7,883 9,615
Gain on disposition of property,
plant and equipment (61) (82)
Changes in assets and liabilities:
Accounts receivable (14,742) (12,049)
Inventories 4,198 4,957
Accounts payable (6,288) 3,886
Accrued liabilities 1,078 (8,985)
Deferred income taxes 1,071 1,757
Other (550) (3,143)
------- -------
Net cash (used) provided by operating activities (645) 3,270
Investing activities:
Proceeds from disposition of property, plant
and equipment 306 66
Capital expenditures (4,066) (5,832)
Business acquisitions, net of cash acquired (23,011) (677)
Other (395) (1,069)
------- -------
Net cash used by investing activities (27,166) (7,512)
Financing activities:
Net increase in notes payable 3,947 1,964
Borrowings under revolving credit agreement 10,000 --
Proceeds from the issuance of common stock 999 606
Common stock repurchases (96) (1,014)
Dividends paid (3,703) (3,730)
Proceeds from sale of debt swap -- 13,766
------- -------
Net cash provided by financing activities 11,147 11,592
Effect of exchange rate changes on cash flows (1,535) 527
------- -------
(Decrease) increase in cash and cash equivalents (18,199) 7,877
Cash and cash equivalents at beginning of period 48,868 23,303
------- -------
Cash and cash equivalents at end of period $30,669 $31,180
======= =======
See accompanying notes.
-6-
Notes to Condensed Consolidated Financial Statements:
1. Summary of Significant Accounting Policies
------------------------------------------
The accompanying unaudited condensed consolidated balance sheet and
consolidated statements of income and cash flows have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. The December 31, 2001 balance sheet was derived
from audited financial statements. The financial statements do not
include all information and footnotes required by generally accepted
accounting principles for complete financial statements. For additional
information, please refer to the consolidated financial statements and
footnotes included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001. In the opinion of management, all
adjustments, including normal recurring accruals considered necessary
for a fair presentation, have been included. Operating results for the
three-month period ended March 31, 2002 are not necessarily indicative
of the results that may be expected for the year ending December 31,
2002.
2. Net Income Per Common Share
----------------------------
For the purposes of computing diluted earnings per share, the weighted
average number of shares outstanding was increased by 528,678 and
317,164 for the periods ended March 31, 2002 and 2001, respectively, for
the potential dilutive effects of stock-based incentive plans. There
were no adjustments to net income for the purposes of computing income
available to common stockholders for those periods.
3. New Accounting Standards
------------------------
The Company adopted Statement of Financial Accounting Standard (SFAS)
No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS 141 requires companies to account for
acquisitions entered into after June 30, 2001, using the purchase method
and establishes criteria to be used in determining whether acquired
intangible assets are to be recorded separately from goodwill. SFAS 142
sets forth the accounting for goodwill and other intangible assets.
Goodwill and other intangible assets with indefinite lives will no
longer be amortized and instead will be evaluated annually for
impairment by comparing the carrying value to the fair value at the
reporting unit level. Intangible assets with finite lives will be
amortized over their useful lives. SFAS 142 is effective for
acquisitions completed after June 30, 2001 and effective for all other
acquisitions on January 1, 2002.
SFAS 142 states that an entity has six months from the date it initially
applies SFAS 142 to complete the first step of the transitional goodwill
impairment test. The Company initially applied SFAS 142 as of January 1,
2002. Management is in the process of completing the first step. If
-7-
Notes to Condensed Consolidated Financial Statements, Continued:
management were to determine that impairment exists, a loss would be
recognized as the effect of a change in accounting principle. The effect
of this accounting change on the Company's consolidated results of
operations and financial position would be determined in the second step
of the impairment test in the second half of 2002.
In accordance with SFAS 142, the Company no longer amortizes goodwill.
The following table presents income adjusted to exclude goodwill
amortization expense recognized in the prior period:
(Dollars in thousands, except for per share data)
(Unaudited)
Three months ended
March 31,
------------------
2002 2001
------ ------
Net income, as reported $6,766 $7,314
Add back: goodwill amortization,
net of income taxes -- 841
------ ------
Adjusted net income $6,766 $8,155
====== ======
Basic earnings per common share,
as reported $ .37 $ .39
Add back: goodwill amortization,
net of income taxes -- .05
------ ------
Adjusted basic earnings per share $ .37 $ .44
====== ======
Diluted earnings per common share,
as reported $ .36 $ .39
Add back: goodwill amortization,
net of income taxes -- .04
------ ------
Adjusted diluted earnings per share $ .36 $ .43
====== ======
4. Acquisitions
------------
On February 21, 2002, the Company purchased substantially all of the
manufacturing assets of Seeger-Orbis GmbH & Co. OHG of Germany (Seeger-
Orbis) from TransTechnology Corporation. The results of operations of
Seeger-Orbis have been included in the consolidated financial statements
since the purchase date. The acquired business will expand both the
product offerings and geographic scope of the Associated Spring segment.
The purchase price of approximately $21.0 million was financed primarily
with cash held by the Company outside the United States.
-8-
Notes to Condensed Consolidated Financial Statements, Continued:
5. Acquired Intangible Assets
--------------------------
Intangible assets consist of registered trademarks purchased in the
acquisition of the nitrogen gas spring business in 1999. These
trademarks are being amortized over their estimated useful lives of 30
years. At March 31, 2002, the gross carrying amount of trademarks was
$4.2 million and accumulated amortization was $0.4 million. Amortization
expense for the three-month period was immaterial. The estimated
aggregate amortization expense is approximately $0.1 million in each of
the years 2002 through 2006.
The Company is in the process of obtaining third-party valuations of
certain intangible assets for its acquisition of Seeger-Orbis. The
purchase price allocation is expected to be finalized in the second
quarter of 2002. Any amounts related to the intangible assets that were
acquired with the Seeger-Orbis acquisition are not included above.
6. Goodwill
--------
The following table sets forth the change in the carrying amount of
goodwill for the period ended March 31, 2002:
(Dollars in thousands)
Associated Barnes Barnes Total
Spring Aerospace Distribution BGI
---------- --------- ------------ --------
Balance as of
January 1, 2002 $ 68,505 $ 31,415 $ 59,916 $159,836
Goodwill acquired 326 -- -- 326
-------- -------- -------- -------
Balance as of
March 31, 2002 $ 68,831 $ 31,415 $ 59,916 $160,162
======== ======== ======== ========
The adjustment of $0.3 million of acquired goodwill relates to the
acquisition of the assets of Forward Industries in November 2001. This
was based on the determination of the final purchase price and the
purchase price allocation.
7. Comprehensive Income
--------------------
Comprehensive income includes all changes in equity during a period
except those resulting from the investment by and distributions to,
stockholders. For the Company, comprehensive income includes net income,
foreign currency translation adjustments and deferred gains and losses
related to certain derivative instruments.
-9-
Notes to Condensed Consolidated Financial Statements, Continued:
Statement of Comprehensive Income
(Dollars in thousands)
(Unaudited)
For the three months ended March 31, 2002 2001
-------- --------
Net income $ 6,766 $ 7,314
Unrealized (losses) gains on hedging
activities, net of income taxes (618) 176
Foreign currency
translation adjustments (1,570) (499)
-------- --------
Comprehensive income $ 4,578 $ 6,991
======== ========
8. Information on Business Segments
--------------------------------
The following tables set forth information about the Company's
operations by its three reportable business segments:
(Dollars in thousands)
For the three months ended March 31, 2002 2001
-------- --------
Revenues
Associated Spring $ 75,565 $ 75,993
Barnes Aerospace 47,410 46,890
Barnes Distribution 72,865 79,407
Intersegment sales (1,604) (3,040)
-------- --------
Total revenue $194,236 $199,250
======== ========
Operating profit
Associated Spring $ 7,077 $ 7,168
Barnes Aerospace 2,742 3,927
Barnes Distribution 1,996 2,951
-------- --------
Total operating profit 11,815 14,046
Interest income 124 160
Interest expense (3,390) (4,233)
Other expense (92) (221)
-------- --------
Income before income taxes $ 8,457 $ 9,752
======== ========
9. Contingency
-----------
The Company continues to guarantee a minimum rate of return on certain
pre-April, 2001, assets of its 401(k) Retirement Savings Plan (the
Plan).
-10-
Notes to Condensed Consolidated Financial Statements, Continued:
This guarantee will become a liability for the Company only if, and to
the extent that, the value of the related Company stock does not cover
the guaranteed asset value when an employee withdraws from the Plan. The
following table compares the market value of the Company's stock at
various balance sheet dates and the related guarantee at those dates:
(Dollars in thousands, except for per share data)
Balance Stock price Plan
Sheet date per share Guarantee
---------- ----------- ---------
March 31, 2002 $24.50 $ 43
December 31, 2001 23.99 47
December 31, 2000 19.88 401
December 31, 1999 16.31 2,321
10. Subsequent Event
----------------
On April 29, 2002, the Company acquired Spectrum Plastics Molding
Resources, Inc., a fully integrated, precision injection molder of
plastic products, which will be included in the Associated Spring
segment. The acquisition adds a complementary product line that will
expand the current metal product offerings of this segment, enabling it
to become a single-source solution for customers needing plastic and
metal components and assemblies. The acquisition added plastic molding
capabilities that will use metal inserts and continuous stamped lead
frame to supply metal-in-plastic and plastic-on-metal assemblies for the
electronics, telecommunications, medical, and other rapidly growing,
technologically advanced markets. Under prior management, sales for the
fiscal year ended September 30, 2001 were $20.3 million.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Critical Accounting Policies
----------------------------
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Significant accounting policies are
disclosed in Note 1 of the Notes to Consolidated Financial Statements in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001. The
most significant areas involving management judgments and estimates are
described below. Actual results could differ from those estimates.
-11-
Management's Discussion and Analysis of Financial,
Condition and Results of Operations, Continued:
Business Acquisitions:
Assets and liabilities acquired in business combinations are recorded at their
estimated fair values at the acquisition date. At March 31, 2002, the Company
has $160.2 million of goodwill, representing the cost of acquisitions in
excess of fair values assigned to the underlying net assets of acquired
companies. In accordance with SFAS 142, goodwill and intangible assets deemed
to have indefinite lives are not amortized, but are subject to annual
impairment testing. The assessment of goodwill involves the estimation of the
fair value of "reporting units", as defined by the standard. Management will
complete this assessment by June 30, 2002 based on the best information
available as of the date of the assessment, which incorporates management
assumptions about expected future cash flows. Future cash flows can be
affected by changes in the global economy, industries and markets in which the
Company sells products and the execution of management's plans, particularly
to integrate acquired companies. There can be no assurance that future events
will not result in impairments of goodwill or other assets.
Income Taxes:
At March 31, 2002, the Company has recognized $21.4 million of deferred tax
assets, net of valuation reserves. The realization of a portion of these
benefits is dependent on future income. Management believes that sufficient
income will be earned in the future to realize deferred income tax assets, net
of valuation allowances recorded. For those jurisdictions where the expiration
date of tax carry-forwards or the projected operating results indicate that
realization is not likely, a valuation allowance is provided.
The recognized net deferred tax asset is based on the Company's estimates of
future taxable income and its tax planning strategies. The realization of
these deferred tax assets can be impacted by changes to tax codes, statutory
tax rates and future taxable income levels.
Results of Operations
---------------------
Net sales for the first quarter 2002 were $194.2 million compared with a
record $199.3 million in the first quarter last year. Net sales in the first
quarter of 2002 reflected the first signs of economic improvement over the
third and fourth quarters of 2001.
First quarter 2002 operating income was $11.6 million compared to $13.8
million in the first three months of 2001. These results reflect a significant
period-over-period sales decline in the Barnes Distribution segment and lower
earnings in the Barnes Aerospace and Barnes Distribution segments. Operating
income margin was 5.9% compared with 6.9%, a year ago, driven for the most
part by a lower gross margin, which declined to 32.9% from 33.5% a year ago.
This decline in gross margin resulted from the overall shift in the sales mix
to lower margin business, a direct impact of the decline in sales at Barnes
Distribution. Selling and administrative expenses, as a percentage of sales,
remained relatively flat compared to last year's first quarter. Impacting
operating expenses were higher personnel costs, specifically pension and other
-12-
Management's Discussion and Analysis of Financial,
Condition and Results of Operations, Continued:
compensation costs. Efforts were made in all three business segments to cut
costs and reduce infrastructure. These cost reductions are expected to have a
positive impact on profits as sales volumes increase in future periods.
Segment Review - Sales and Operating Profit
-------------------------------------------
Associated Spring's sales for first quarter 2002 were $75.6 million, compared
to $76.0 million a year ago. Sales during the quarter were impacted by the
weakness in the telecommunications and electronics sectors of Associated
Spring's business. However, the sales decline in these sectors was partially
offset by continued strong growth in the nitrogen gas spring business, $4.4
million of incremental sales from recent acquisitions and improved sales to
the light vehicle transportation market. While the positive trend in light
vehicle production is forecasted to continue through the second quarter of
2002, the telecommunications and electronics markets are expected to remain
weak in the near term. Operating profit for the segment was $7.1 million in
the first quarter of 2002 compared with $7.2 million for the same period a
year ago, reflecting the lower sales volume. This was offset, in large part,
by solid cost controls.
Barnes Aerospace's first quarter 2002 sales were $47.4 million, compared with
$46.9 million in 2001. Operating profit fell to $2.7 million for the current
quarter, from $3.9 million during last year's first quarter. The decline in
operating profit reflects severance and other personnel costs as well as
additional expenses tied to new product introductions. Orders recorded during
the first quarter of 2002 were $45.1 million and order backlog at March 31,
2002 was $155.8 million, essentially unchanged from the December 31, 2001
level.
Barnes Distribution's sales in the first three months of 2002 were $72.9
million, down 8.2% from $79.4 million in 2001. The sales decline reflects the
continued weak economic conditions in the North American and European
industrial markets. Although sales were down year over year, the current
quarter's sales trend, when compared to the third and fourth quarters of 2001,
is positive. Operating profit for the first quarter 2002 was $2.0 million,
down from $3.0 million a year ago. Operating profit was negatively impacted by
the sales volume decline offset in part by lower purchased material costs and
by the impact of cost reduction efforts initiated in 2001 related to the
consolidation of several distribution centers and the reorganization of the
sales management function.
Other Income/Expense
---------------------
Significantly lower other income for the first quarter 2002 compared to 2001
was due to a small foreign exchange transaction loss in the current period,
compared to a gain of $0.9 million last year. Lower interest expense in 2002
was a result of lower interest rates. Other expenses declined because of the
-13-
Management's Discussion and Analysis of Financial,
Condition and Results of Operations, Continued:
absence of $1.0 million of goodwill amortization, due to an accounting change.
Please refer to Note 3, "New Accounting Standards", for further explanation.
Income Taxes
------------
The Company's effective tax rate for first quarter 2002 was 20.0%, compared
with 25.0% in 2001's first quarter. The lower rate in 2002 is primarily due to
a higher percentage of income in foreign jurisdictions with tax rates lower
than the U.S. statutory tax rate.
Net Income and Net Income Per Share
-----------------------------------
Consolidated net income for the first quarter of 2002 and 2001 was $6.8
million and $7.3 million, respectively. Basic and diluted earnings per share
for the first quarter of 2002 were $.37 and $.36 compared to 2001's basic and
diluted earnings per share of $.39.
Financial Condition
-------------------
Cash Flows
----------
The Company's ability to generate cash from operations in excess of its
internal operating needs is one of its financial strengths. Management
continues to focus on cash flow and anticipates operating activities in 2002,
combined with aggressive asset management, will provide sufficient cash to
take advantage of opportunities for organic business expansion and to meet the
Company's current financial commitments.
Management assesses the Company's liquidity in terms of its overall ability to
generate cash to fund its operating and investing activities. Of particular
importance in the management of liquidity are cash flows generated from
operating activities, capital expenditure levels, dividends, capital stock
transactions, effective utilization of surplus cash positions overseas and
adequate bank lines of credit.
Net cash used by operating activities in the first three months of 2002 was
$0.6 million, compared to net cash provided of $3.3 million in 2001's first
quarter. In the first quarter of 2002 operating cash flow was negatively
impacted by lower operating results and by a higher use of working capital
compared to 2001's first quarter. The reduction in depreciation and
amortization was due to the absence of $1.0 million of goodwill amortization
in the 2002 period, as previously discussed. In addition, depreciation
declined $0.7 million quarter over quarter due to lower capital spending over
the past three years and the retirement of older assets.
Net cash used by investing activities in the first quarter of 2002 was $27.2
million compared with $7.5 million in 2001. The significant increase in this
-14-
Management's Discussion and Analysis of Financial,
Condition and Results of Operations, Continued:
year's investing activities was due, in large part, to the acquisition of
Seeger-Orbis in February 2002. The acquisition was funded primarily from cash
held by the Company outside the United States. As expected, capital spending
is below the 2001 level.
Net cash provided by financing activities was $11.1 million in the first three
months of 2002 compared to $11.6 million in the comparable period of 2001. In
2002, the proceeds from additional borrowings under the revolving credit
agreement and short-term credit lines were used to finance operating
activities, primarily working capital requirements, as well as to fund capital
expenditures and pay dividends. In 2001, proceeds from the sale of a cross-
currency debt swap, combined with cash generated by operating activities, were
used in part to fund capital expenditures, pay dividends and repurchase the
Company's stock.
Liquidity and Capital Resources
-------------------------------
The Company maintains substantial bank borrowing facilities to supplement
internal cash generation. At March 31, 2002, the Company had $150.0 million of
borrowing capacity under its revolving credit agreement of which $50.0 million
was borrowed at an interest rate of 3.12%. The Company's revolving credit
agreement will expire in December 2002. Accordingly, borrowings under the
revolving credit agreement are classified in the current portion of long-term
debt. The Company intends to enter into a new three-year revolving credit
agreement during the second quarter of 2002. The Company also has available
approximately $15.0 million in uncommitted short-term bank credit lines of
which $8.0 million was in use at March 31, 2002. The interest rate on this
borrowing was 2.74%. The Company believes its credit facilities coupled with
cash generated from operations are adequate to finance its anticipated future
requirements.
Forward-Looking Statements
--------------------------
This quarterly report may contain certain forward-looking statements as
defined in the Public Securities Litigation and Reform Act 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. These risks and uncertainties include,
but are not limited to, 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 the Company; 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 on time; changes in economic
and political conditions worldwide and in the locations where the Company
-15-
Management's Discussion and Analysis of Financial,
Condition and Results of Operations, Continued:
does business; interest and foreign exchange rate fluctuations; and changes
in laws and regulations.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
At March 31, 2002, the result of a hypothetical 1% increase in the average
cost of the Company's variable-rate debt would reduce pretax profit of the
Company by $1.3 million on an annual basis. For additional information,
please refer to the consolidated financial statements and footnotes
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders
-------------------------------------------------
(a) The Annual Meeting of the Company's stockholders was held on April 10,
2002. Proxies for the meeting were solicited pursuant to Regulation 14 A.
(c) (1) The following directors were elected:
Votes in Vote For Terms
Director Favor Withheld Expiring
-------- -------- -------- --------
William S. Bristow, Jr. 14,869,154 805,733 2005
Edmund M. Carpenter 14,858,829 816,058 2005
G. Jackson Ratcliffe, Jr. 14,848,398 826,489 2005
Donald W. Griffin 14,860,780 814,107 2003
(2) The stockholders approved the Barnes Group Inc. Employee Stock And
Ownership Program, as amended effective February 1, 2002. The proposal was
adopted as 9,961,948 shares voted for, 3,831,402 shares voted against, 272,650
shares abstained and 1,608,887 shares were unvoted.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit 10.1 Barnes Group Inc. Employee Stock and Ownership Program
(b) Form 8-K
No reports on Form 8-K, Item 5, Other Events, were filed during the
quarter ended March 31, 2002.
-16-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Barnes Group Inc.
(Registrant)
Date May 14, 2002 By /S/ William C. Denninger
------------ -------------------------------------
William C. Denninger
Senior Vice President, Finance
and Chief Financial Officer
(the principal financial officer)
Date May 14, 2002 By /s/ Francis C. Boyle, Jr.
------------ -------------------------------------
Francis C. Boyle, Jr.
Vice President, Controller
(the principal accounting officer)
EXHIBIT INDEX
BARNES GROUP INC.
Quarterly Report on Form 10-Q
For Quarter ended March 31, 2002
--------------------------------
Exhibit No. Description Reference
---------- ----------- ---------
10.1 Barnes Group Inc. Employee Incorporated by reference to
Stock And Ownership Program, Annex I to the Registrant's
as amended effective Proxy Statement dated March
February 1, 2002 13, 2002 for the Annual Meeting
of Stockholders held April 10,
2002 that was filed with the
Commission on March 12, 2002.
-17-