SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 17, 2003
Barnes Group Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-04801 06-0247840
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
123 Main Street Bristol, CT 06010
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(Address of principal executive offices) (Zip Code)
(860) 583-7070
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Registrant's telephone number, including area code
N/A
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(Former name or former address, if changed since last report)
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Item 7. Exhibits.
99.1 Press Release issued April 17, 2003 announcing first
quarter 2003 results of operations.
Item 9. Regulation FD Disclosure.
The information furnished under this "Item 9. Regulation FD
Disclosure" is intended to be furnished under "Item 12. Results
of Operations and Financial Condition" in accordance with SEC
Release No. 33-8216.
On April 17, 2003, Barnes Group Inc. issued a press release
announcing its first quarter 2003 results of operations. A copy
is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
SIGNATURES
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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 hereunto duly authorized.
Dated: April 17, 2003 BARNES GROUP INC.
By:/s/ William C. Denninger
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William C. Denninger
Senior Vice President and
Chief Financial Officer
Exhibit Index
Exhibit No. Document Description
99.1 Press Release, dated April 17, 2003
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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 Phillip J. Penn
April 17, 2003 Investor Relations
(860) 973-2126
Stephen J. McKelvey
Corporate Communications
(860) 973-2132
BARNES GROUP FIRST QUARTER SALES SET NEW RECORD
o Operating income, operating margin, net income and diluted E.P.S. all
improve.
o Kar Products integration proceeding on schedule.
BRISTOL, CONNECTICUT, APRIL 17, 2003---Barnes Group Inc. (NYSE: B) today
announced financial results for the quarter ended March 31, 2003. Net sales
for the first quarter of 2003 were a record $218.7 million, up 13 percent
from $194.2 million in the first quarter of 2002. The Company reported a 14
percent increase in operating income to $13.2 million, as net income
increased to $7.4 million, or $0.37 per diluted share, in the first quarter
of 2003, from $6.8 million, or $0.36 per diluted share, in the comparable
year-ago period.
"We achieved a good quarter, as net sales, operating income and net
income all grew nicely. We've laid a stable foundation for our three
businesses for the rest of 2003, even as our end markets were somewhat
impacted by a number of external challenges," said Edmund M. Carpenter,
Barnes Group Inc.'s President and C.E.O.
Sales at Barnes Distribution were $93.8 million for the quarter ended
March 31, 2003, up 29 percent from $72.9 million in the quarter ended March
31, 2002. Of this $20.9 million increase, $19.2 million was contributed by
Kar Products, which was purchased by Barnes Group on February 6, 2003. Barnes
Distribution generated operating income of $3.2 million in the first quarter
of 2003, up 68 percent from operating income of $1.9 million in the first
quarter of 2002. The improvement in operating results was driven primarily by
higher profitability in Barnes Distribution's North American operations,
which included a higher gross profit margin, and incremental operating profit
contributed by Kar Products.
"We continue to enjoy success with the new growth programs we put into
place in 2002," Carpenter stated. "Two of these programs, our increased focus
on new national and regional customer development and our e-commerce
platforms, contributed roughly $2.4 million in sales to the most recent
quarter. We added 34 new national and regional customers this quarter,
bringing to 150 the total new customers gained since the beginning of 2002,"
Carpenter added.
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Carpenter continued, "The integration of Kar Products is running at or
slightly ahead of our original schedule. Customer and salesperson retention
has been extremely strong, and the first elements of the infrastructure
consolidation took place at the end of the first quarter. Clearly, the
successful integration of Kar will remain a primary focus for the team at
Barnes Distribution for the balance of the year."
Sales at Associated Spring were $85.1 million for the quarter ended
March 31, 2003, up 13 percent from $75.6 million in the quarter ended March
31, 2002. Top line growth in the 2003 period reflected approximately $10.1
million of incremental sales from recent acquisitions and continued growth in
the sales of nitrogen gas spring products. Partially offsetting these items
were a drop in sales related to a planned withdrawal from the heavy truck
brake spring market, as well as a decline in organic sales to the
telecommunications and electronics markets.
Associated Spring's operating profit was $7.6 million for the first
quarter of 2003, up from an operating profit of $7.0 million in the first
quarter of 2002. Operating profit growth reflected a higher sales volume and
the benefits of consolidation of the Dallas facility, which were partially
offset by higher personnel costs, primarily pension and other postretirement
expenses.
Carpenter commented, "We indicated, at the time we announced the Dallas
plant closure, that our actions would provide us with long-term expense
reduction benefits. These benefits started to manifest themselves in the most
recent quarter, as Associated Spring grew operating profit even as it began
to absorb a higher pension expense burden."
Sales at Barnes Aerospace were $42.3 million for the first quarter of
2003, down 11 percent from $47.4 million in the first quarter of 2002.
Operating profit was $2.7 million for the quarter ended March 31, 2003, down
slightly from $2.9 million in the comparable year-ago period, reflecting the
lower sales volume. Operating income was positively impacted by reduced
employment levels and other actions taken throughout Barnes Aerospace in 2002
aimed at positioning the business for a period of lower commercial aerospace
volume.
Barnes Aerospace recorded orders of $38.3 million during the first
quarter of 2003; order backlog remained solid at $148.2 million at March 31,
2003, compared with $151.8 million at year-end 2002. Impacting first-quarter
2003 orders and backlog was an order cancellation of approximately $7.1
million related to a single OEM customer. Direct and indirect orders for the
U.S. military were approximately 26% of the orders booked during the first
quarter of 2003.
"This was an encouraging quarter for Barnes Aerospace, as we largely
maintained our profitability as volume fell. Backlog declined only slightly
during the period in a very challenging commercial aerospace environment, a
continuing testament to the fact that the investments we have made over the
past few years in sales, marketing and engineering within Barnes Aerospace
are continuing to create new opportunities," Carpenter stated.
William C. Denninger, Barnes Group Inc.'s Chief Financial Officer,
commented, "As one can see from the balance sheet and the analysis of change
in net debt, net debt increased by $59.4 million in the first quarter of
2003. Net debt before acquisitions, however, was reduced by $1.8 million.
This was accomplished through good control of working capital and capital
expenditures. This compares to an increase in net debt before acquisitions of
$7.2 million in the first quarter of 2002."
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Barnes Group will conduct a conference call with investors to discuss
first quarter results on Thursday, April 17, 2003 at 10:30 AM ET. A webcast
of the live call, supporting materials and an archived replay will be
available on the Barnes Group investor relations website
(ir.barnesgroupinc.com).
Barnes Group Inc. (www.barnesgroupinc.com) is a diversified
international manufacturer of precision metal components and 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 2002 sales of $784 million: Associated Spring, one of
the world's largest manufacturers of precision mechanical and nitrogen gas
springs; Barnes Aerospace, a manufacturer and repairer of highly engineered
assemblies and products 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 6,200 dedicated employees at more than 60 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
including pricing, advertising and promotions that could adversely affect
customer demand for the Company's products; changes in economic and political
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
2003 2002
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Net sales $ 218,734 $ 194,236
Cost of sales 142,230 130,298
Selling and admin. expenses 63,294 52,381
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205,524 182,679
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Operating income 13,210 11,557
Operating margin 6.0% 5.9%
Other income 613 427
Interest expense 4,110 3,390
Other expenses 278 137
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Income before income taxes 9,435 8,457
Income taxes 2,076 1,691
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Net income $ 7,359 $ 6,766
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Per common share:
Net income - basic $ 0.38 $ 0.37
- diluted 0.37 0.36
Dividends 0.20 0.20
Average common shares
Outstanding - basic 19,531,719 18,497,371
- diluted 19,894,312 19,026,049
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BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
March March
2003 2002
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Assets
Current assets
Cash and short-term investments $ 32,061 $ 30,669
Accounts receivable 129,358 112,969
Inventories 103,504 89,412
Deferred income taxes and prepaid expenses 27,052 28,618
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Total current assets 291,975 261,668
Deferred income taxes 22,294 5,290
Property, plant and equipment 157,550 162,173
Goodwill 212,549 160,162
Other assets 89,331 64,944
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$ 773,699 $ 654,237
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Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ -- $ 8,000
Accounts payable 78,405 67,453
Accrued liabilities 72,443 61,279
Long-term debt - current 6,849 57,583
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Total current liabilities 157,697 194,315
Long-term debt 277,187 177,890
Deferred income taxes 7,166 6,073
Other liabilities 96,102 74,265
Stockholders' equity 235,547 201,694
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$ 773,699 $ 654,237
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BARNES GROUP INC.
ANALYSIS OF CHANGE IN NET DEBT
(Dollars in thousands)
Unaudited
March March
2003 2002
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Notes payable $ -- $ 8,000
Long-term debt-current 6,849 57,583
Long-term debt 277,187 177,890
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Total debt 284,036 243,473
Cash and short-term investments 32,061 30,669
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Net debt 251,975 212,804
Net debt beginning of year 192,607 182,573
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(Increase) in net debt (59,368) (30,231)
Business acquisitions 61,167 23,011
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Decrease (Increase) in net debt
before acquisitions $ 1,799 $ (7,220)
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NOTE: Management believes that net debt before acquisitions is an important
measurement of liquidity and is indicative of underlying cash generation from
Barnes Group's operations, of which investors should be aware.
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