Barnes Group Inc. EXHIBIT 99.1
Executive Office ------------
Bristol, CT 06010
Tel: 860.583.7070
BARNES GROUP INC. [Logo] News Release
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Contact:
FOR IMMEDIATE RELEASE Investors:
April 14, 2004 Phillip J. Penn
(860) 973-2126
Media:
Stephen J. McKelvey
(860) 973-2132
BARNES GROUP ANNOUNCES FIRST QUARTER
FINANCIAL RESULTS
- Net sales climb 13 percent to record $247.2 million
- Net income jumps 31 percent to $9.6 million, diluted E.P.S. rises to $0.40
- Strong orders at Barnes Aerospace, third RSP agreement completed
Bristol, Connecticut, April 14, 2004---Barnes Group Inc. (NYSE: B) today
announced financial results for the quarter ended March 31, 2004. Net sales
for the first quarter of 2004 were a record $247.2 million, up 13 percent
from $218.7 million in the first quarter of 2003. Net income increased 31
percent to $9.6 million, or $0.40 per diluted share, in the first quarter of
2004, from $7.4 million, or $0.37 per diluted share, in the comparable year-
ago period. Average diluted shares outstanding were 23.9 million in the
quarter ended March 31, 2004, up 20 percent from 19.9 million in the year-ago
period, primarily as a result of the follow-on equity offering completed in
May, 2003.
"With the financial results we generated in the first quarter, 2004 is
off to a strong start, and the momentum improved as we progressed through the
quarter," said Edmund M. Carpenter, Barnes Group Inc.'s President and C.E.O.
"Profitability at Barnes Distribution came in a bit ahead of our previous
indications, even as the distribution center integration continued to move
along, while sales growth at both Barnes Aerospace and Associated Spring
significantly exceeded that of their primary end markets," Carpenter added.
Sales at Barnes Distribution were $106.5 million for the quarter ended
March 31, 2004, up $12.7 million, or 14 percent, from $93.8 million in the
quarter ended March 31, 2003. Excluding $10.4 million of incremental sales
from the February 6, 2003 acquisition of Kar Products and the positive effect
of foreign currency translation, organic sales were essentially flat. Barnes
Distribution generated operating profit of $4.3 million in the first quarter
of 2004, compared with operating profit of $3.2 million in the first quarter
of 2003.
The improvement in operating profit was driven primarily by the
incremental contribution from Kar Products and synergistic savings recognized
from the Kar integration. Partially offsetting these improvements were
integration costs of approximately $1.2 million, primarily for temporary
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labor, overtime and additional freight, as well as a slight reduction in
gross margin versus the 2003 period.
"With the distribution center integration now behind us in the U.S., we
are focused on driving our fill rates back to the pre-integration level.
Although we made significant progress in that regard during the first
quarter, more work remains to be done. In our Canadian operations, we remain
on schedule for the opening of a new distribution center in the Ontario
province during the month of May," Carpenter stated. "Our strategic growth
initiatives continued to generate solid gains, as sales from newly-opened
national accounts, e-commerce platforms and Tier 2 relationships with other
industrial distributors climbed to $6.4 million in the first quarter, up from
$3.6 million a year ago," Carpenter added.
Sales at Associated Spring were $93.5 million for the quarter ended
March 31, 2004, up 10 percent from $85.1 million in the quarter ended March
31, 2003. Foreign currency translation positively impacted sales in the first
quarter of 2004 by approximately $3.0 million. The increase in sales
reflected growth in all market segments, particularly in heavy truck, where
sales grew 24 percent and nitrogen gas products, where sales, net of foreign
currency translation effect, grew approximately 13 percent.
Associated Spring's operating profit was $7.4 million for the first
quarter of 2004, down from $7.6 million in the first quarter of 2003.
Operating profit was negatively impacted in the 2004 period by increased
spending on lean initiatives, overtime and other measures to address capacity
issues in two North American plants, a slight reduction in gross margin, and
higher medical and pension expenses. These negatives were partially offset by
the profit contribution from the increased organic sales volume.
Carpenter commented, "This marked the first quarter in recent memory
that we can report organic sales growth in all of Associated Spring's market
segments. In addition to heavy truck and nitrogen gas springs, we also saw
modest sales growth in products for light vehicles, even as North American
production was flat. And for the first time since 2000, we saw growth in our
telecomm and electronics product segment, which we are hopeful is indicative
of a potential turn in those sectors."
Sales at Barnes Aerospace were $49.5 million for the first quarter of
2004, up from $42.3 million in the first quarter of 2003, reflecting solid
growth in OEM sales and approximately $1.6 million in sales from the Revenue
Sharing Programs (RSPs). Operating profit was $4.4 million for the quarter
ended March 31, 2004, up from $2.7 million in the comparable year-ago period.
Operating profit was positively impacted by higher OEM volume and profit
contribution from the two RSPs completed in late 2003, which was partially
offset by the operating profit impact of a modest drop in historically
higher-margin repair and overhaul sales.
Barnes Aerospace generated orders of $55.2 million during the quarter
ended March 31, 2004, the highest order level since the second quarter of
2001. Order backlog was $153.1 million at March 31, 2004, up solidly from
$147.7 million at December 31, 2003. Military orders were approximately 27
percent of the orders received in the first quarter of 2004, and Barnes
Aerospace also received approximately $9.2 million in orders related to a
large commercial engine program that is about to enter customer service.
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"The order rate at Barnes Aerospace is once again at a pre-9/11 pace,
reflecting the hard work of everyone on the team," Carpenter stated. "I'm
also pleased to announce that we executed a third RSP in March that, like the
RSPs we completed in 2003, will have a positive impact on Barnes Aerospace's
2004, and future, financial results. To date, we have committed nearly $60
million in RSP investments, and remain actively engaged in developing
additional strategic relationships with our partners," Carpenter added.
William C. Denninger, Barnes Group Inc.'s Chief Financial Officer,
commented, "We ended the quarter with approximately $32 million in cash, even
after a $15 million cash payment related to our RSP agreements, bringing the
total RSP payments to date to $32.5 million. We were able to fund these
payments with cash held outside the United States, and thus successfully
reinvest a significant portion of our foreign cash into strategic growth
investments with attractive financial returns."
Barnes Group will conduct a conference call with investors to discuss
first quarter 2004 results on Wednesday, April 14, 2004 at 2:00 PM ET. A
webcast of the live call, supporting materials and an archived replay will be
available on the Barnes Group investor relations website
(http://ir.barnesgroupinc.com).
Barnes Group Inc. (www.barnesgroupinc.com) is a diversified
international manufacturer of precision metal components and assemblies and a
distributor of industrial supplies, serving a wide range of markets and
customers. Founded in 1857 and headquartered in Bristol, Connecticut, Barnes
Group consists of three businesses with 2003 sales of $891 million:
Associated Spring, one of the world's largest manufacturers of precision
mechanical and nitrogen gas springs and a global supplier of retaining rings
and injection-molded plastic components; Barnes Aerospace, a manufacturer and
repairer of highly engineered assemblies and components for commercial and
military aircraft engines, airframes, and land-based industrial gas turbines;
and Barnes Distribution, an international, full-service distributor of
maintenance, repair and operating supplies. Over 5,900 dedicated employees at
more than 50 locations worldwide contribute to Barnes Group Inc.'s success.
This release may contain certain forward-looking statements as defined
in the Private Securities Litigation 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, including 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 Barnes Group; 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 timely; the effectiveness of
the Company's marketing and sales programs; increased competitive activities
that could adversely affect customer demand for the Company's products;
changes in economic, political and public health conditions, worldwide and in
the locations where the Company does business; interest and foreign exchange
rate fluctuations; and regulatory changes.
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BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Unaudited
Three months ended March 31
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2004 2003
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Net sales $247,228 $218,734
Cost of sales 162,060 142,230
Selling and admin. expenses 69,411 63,294
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231,471 205,524
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Operating income 15,757 13,210
Operating margin 6.4% 6.0%
Other income 698 613
Interest expense 3,802 4,110
Other expenses 130 278
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Income before income taxes 12,523 9,435
Income taxes 2,880 2,076
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Net income $ 9,643 $ 7,359
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Per common share:
Net income - basic $ 0.42 $ 0.38
- diluted 0.40 0.37
Dividends 0.20 0.20
Average common shares
Outstanding - basic 22,975,586 19,531,719
- diluted 23,877,153 19,894,312
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BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
March March
2004 2003
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Assets
Current assets
Cash and cash equivalents $ 32,274 $ 32,061
Accounts receivable 138,476 129,358
Inventories 112,979 103,504
Deferred income taxes and prepaid expenses 35,743 27,052
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Total current assets 319,472 291,975
Deferred income taxes 23,207 22,294
Property, plant and equipment 153,933 157,550
Goodwill 220,297 212,549
Other intangible assets 85,727 33,836
Other assets 57,957 55,495
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$860,593 $773,699
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Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 98,473 $ 78,405
Accrued liabilities 71,716 72,443
Long-term debt - current 6,815 6,849
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Total current liabilities 177,004 157,697
Long-term debt 251,528 277,187
Accrued retirement benefits 78,502 90,898
Other liabilities 27,567 12,370
Stockholders' equity 325,992 235,547
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$860,593 $773,699
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BARNES GROUP INC.
OPERATIONS BY REPORTABLE BUSINESS SEGMENT
(Dollars in thousands)
Unaudited
Three Months Ended March 31
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2004 2003 % Change
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Revenues
Associated Spring $ 93,536 $ 85,065 10.0
Barnes Aerospace 49,494 42,329 16.9
Barnes Distribution 106,524 93,847 13.5
Intersegment sales (2,326) (2,507) 7.2
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Total revenues $247,228 $218,734 13.0
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Operating profits
Associated Spring $ 7,410 $ 7,624 (2.8)
Barnes Aerospace 4,443 2,706 64.2
Barnes Distribution 4,297 3,197 34.4
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Total operating profit 16,150 13,527 19.4
Interest income 287 295 (2.7)
Interest expense (3,802) (4,110) (7.4)
Other income (expense) (112) (277) (59.5)
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Income before income taxes $ 12,523 $ 9,435 32.7
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