(Source: Business Wire)
Barnes Group Inc. (NYSE: B), a diversified global manufacturer and
logistical services company, today reported financial results for the
third quarter 2009. The Company reported income from continuing
operations of $10.9 million, or $0.20 per diluted share, compared to
$29.2 million, or $0.52 per diluted share in the prior year period.
Included in the third quarter 2009 results are $3.4 million pre-tax
($1.7 million after-tax) of restructuring charges. Barnes Group's third
quarter 2009 sales totaled $260.3 million, down 22 percent from $333.8
million in the third quarter of 2008.
Barnes Group generated $125.7 million in cash from operations for the
first nine months of 2009, reflecting an improvement of 51 percent over
the prior year period level of $83.2 million. Cash flow generation
driven by working capital improvements helped reduce debt to $360.7
million, a decline of 23 percent from year-end 2008. As a result, the
Company's third quarter 2009 debt-to-capital ratio improved to 35%. The
Company's September 30, 2009 total debt covenant ratio of 3.26 times was
appreciably below the required level of 4.0 times. On December 31, 2009
the ratio requirement decreases to 3.75 times.
($ millions; except Three months ended September 30, Nine months ended September 30,
per share data) 2009 2008 Change 2009 2008 Change
Net Sales $ 260.3 $ 333.8 ($73.5 ) (22.0 ) % $ 777.7 $ 1,096.7 ($319.0 ) (29.1 ) %
Operating Income $ 14.6 $ 42.6 ($28.1 ) (65.8 ) % $ 49.2 $ 145.2 ($96.1 ) (66.1 ) %
% of Sales 5.6 % 12.8 % - (7.2 ) pts. 6.3 % 13.2 % - (6.9 ) pts.
Income from Continuing Operations $ 10.9 $ 29.2 ($18.3 ) (62.8 ) % $ 32.8 $ 98.2 ($65.4 ) (66.6 ) %
% of Sales 4.2 % 8.8 % - (4.6 ) pts. 4.2 % 9.0 % - (4.8 ) pts.
Net Income $ 10.9 $ 27.8 ($16.9 ) (60.8 ) % $ 32.8 $ 93.7 ($60.9 ) (65.0 ) %
% of Sales 4.2 % 8.3 % - (4.1 ) pts. 4.2 % 8.5 % - (4.3 ) pts.
Income from Continuing Operations Per Diluted Share $ 0.20 $ 0.52 ($0.32 ) (61.5 ) % $ 0.61 $ 1.73 ($1.12 ) (64.7 ) %
Net Income Per Diluted Share $ 0.20 $ 0.49 ($0.29 ) (59.2 ) % $ 0.61 $ 1.65 ($1.04 ) (63.0 ) %
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"We have not yet seen the sustained signs of a turnaround in the global
economy. The challenges posed in the third quarter were similar to what
we have seen for the preceding six months in many of our end markets.
However, we are optimistic about the prospects for economic improvement
in 2010, so we continue to pursue internal initiatives we feel are
essential to positioning Barnes Group for the future," said Gregory F.
Milzcik, President and Chief Executive Officer, Barnes Group Inc.
"During the quarter we strengthened our balance sheet through
substantial debt reductions driven by working capital improvements and
made strategic investments in people and processes to maximize our
competitive position for sustainable long-term growth.
"We are confident that we have positioned Barnes Group well to
participate fully in a market recovery as conditions normalize. We are
encouraged by the stabilizing trends we are seeing in our transportation
and industrial manufacturing businesses and optimistic for an
anticipated rebound in aerospace activity in the second half of 2010. We
are committed to strengthening our capital structure, pursuing strategic
revenue growth, and controlling costs as we navigate near-term economic
challenges to maximize the value we bring to our customers and
stockholders," Milzcik added.
Logistics and Manufacturing Services
Third quarter 2009 sales at Logistics and Manufacturing Services were
$131.3 million, down 22 percent from $168.7 million in the same period
last year. The decline in sales was driven by softness in the
transportation and industrial markets throughout North America and
Europe. Additionally, sales declines in the aftermarket aerospace
market were driven by lower aircraft utilization and deferred
maintenance activities. Foreign exchange negatively impacted sales by
$1.8 million in the third quarter.
Operating profit was $11.9 million, compared with $23.5 million in the
third quarter of 2008. Operating profit was driven lower primarily by
the reduced sales volumes in each of the businesses due to current
macroeconomic conditions on our end-markets. Operational and
productivity initiatives implemented in 2008 and throughout 2009 to
align the cost structure with sales volumes continued to provide
beneficial results that partially offset the adverse profit impact of
declining sales.
Precision Components
Third quarter 2009 sales at Precision Components were $130.0 million,
down 23 percent from $168.4 million in the same period last year. The
industrial manufacturing businesses in North America and Europe
reported significant sales declines primarily resulting from the
global recession and were most impacted by the recession's effect on
the transportation industry, most notably automotive. Additionally,
sales decreased in the aerospace original equipment manufacturing
business as customers reduced inventory and lowered production levels
across the commercial engine portfolio. Foreign exchange adversely
affected sales by $0.6 million in the third quarter.
Operating profit for the third quarter of 2009 was $2.7 million,
compared with $19.1 million in the third quarter of 2008. The profit
impact of lower sales volumes was partially offset by the benefits of
cost reduction actions, including personnel reductions and plant
consolidations, taken in 2008 and early in 2009.
Included in Precision Components third quarter 2009 results are $3.4
million (pre-tax) for restructuring charges taken during the third
quarter. These actions included the moving of operations of the
Burlington, Ontario, Canada facility and the previously idled
Monterrey, Mexico facility. The assets and related work of these
facilities will be transferred to other operations within the United
States to provide a more cost effective manufacturing footprint and
improved competitive advantage. The actions are expected to be
completed by March 2010.
Additional Information
Other income, net of other expenses, increased $1.1 million in the
third quarter of 2009 compared to the same period of 2008 primarily as
a result of a $1.5 million gain on the repurchase of certain
convertible notes. Year-to-date, other income, net of other expenses
increased $4.3 million, as a result of a $3.8 million gain on the
repurchase of certain convertible notes.
The Company's effective tax rate from continuing operations for the
first nine months of 2009 was 5.1 percent. Included in the
year-to-date tax expense is a $1.6 million tax benefit related to the
third quarter 2009 restructuring actions. Changes to the Company's tax
rate are largely based on changes in the projected mix of income
between taxing jurisdictions.
Conference Call
The Company will conduct a conference call with investors to discuss
third quarter 2009 results at 8:30 a.m. EDT today, October 30, 2009. 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, 4,900
dedicated employees at more than 60 locations 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 materially 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 customers that we serve; changes in market demand for our
products and services; integration of acquired businesses; changes in
raw material prices and availability; 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,
regulatory and public health nature. The Company assumes no obligation
to update our forward-looking statements.
BARNES GROUP INC.
