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): July 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. Financial Statements and Exhibits.
The following exhibit is furnished pursuant to Item 12:
Exhibit 99.1: Press Release issued July 17, 2003 announcing the
financial results of operations for the second quarter and six
months ended June 30, 2003.
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 July 17, 2003, Barnes Group Inc. issued a press release
announcing the financial results of operations for the second
quarter and six months ended June 30, 2003. 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: July 17, 2003 BARNES GROUP INC.
(Registrant)
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 July 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
July 17, 2003 Investor Relations
(860) 973-2126
Stephen J. McKelvey
Corporate Communications
(860) 973-2132
BARNES GROUP SECOND QUARTER NET INCOME UP 12 PERCENT;
SALES INCREASE 10 PERCENT TO RECORD $230 MILLION
BRISTOL, CONNECTICUT, JULY 17, 2003---Barnes Group Inc. (NYSE: B) today
announced financial results for the quarter ended June 30, 2003. Net sales
for the second quarter of 2003 were a record $229.6 million, up 10 percent
from $209.4 million in the second quarter of 2002. The Company reported a 16
percent increase in operating income to $16.0 million, as net income
increased to $9.7 million, or $0.46 per diluted share, in the second quarter
of 2003, from $8.7 million, or $0.45 per diluted share, in the comparable
year-ago period.
"We continued to successfully execute on our business strategies this
past quarter, generating the highest quarterly sales in our Company's history
while achieving higher profitability than a year ago. We attained these
results despite the dampening effects of the war in Iraq, SARS and the weak
industrial economy in many of our end markets," said Edmund M. Carpenter,
Barnes Group Inc.'s President and C.E.O.
Sales at Barnes Distribution were $104.7 million for the quarter ended
June 30, 2003, up 41 percent from $74.3 million in the quarter ended June 30,
2002. Kar Products, which Barnes Group purchased on February 6, 2003,
contributed $31.0 million of sales in the most recent quarter. Barnes
Distribution generated operating profit of $4.9 million in the second quarter
of 2003, up 42 percent from operating profit of $3.5 million in the second
quarter of 2002. The improvement in operating profit was driven primarily by
incremental operating profit contributed by Kar Products.
"Excluding Kar, sales at Barnes Distribution were essentially flat
versus a year ago. While the industrial economy remains a hurdle to sales
expansion, several of our growth initiatives continued to accelerate,"
Carpenter stated. "Our increased focus on new national and regional customer
development and our e-commerce platforms together contributed $3.4 million in
sales to the most recent quarter. More than 40 new national and regional
customers were added this quarter, bringing to 191 the total new customers
gained since January, 2002. And, new Tier 2 relationships we've launched with
four strategic partners in the MRO marketplace are showing some very
promising early results," Carpenter added.
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Carpenter continued, "The integration of Kar Products continues to go
well, as a number of critical functions were consolidated this past quarter.
During the third quarter, a key integration of the order entry system is
scheduled to take place, paving the way to the initial phase of the
distribution center consolidation. Thus, we believe our original estimate of
having a fully-integrated operation within the first 12 months of our
ownership is right on schedule."
Sales at Associated Spring were $86.6 million for the quarter ended
June 30, 2003, down two percent from $88.0 million in the quarter ended June
30, 2002. The decline reflected lower sales into the light vehicle,
telecommunications and electronics markets, as well as a planned drop in
sales related to heavy trucks. Partially offsetting this were higher sales of
nitrogen gas springs and products used in industrial markets.
Associated Spring's operating profit was $9.1 million for the second
quarter of 2003, up from $7.7 million in the second quarter of 2002.
Operating profit growth reflected the benefits from the 2002 closure of
Associated Spring's Dallas facility and the absence of $0.8 million of
purchase price accounting adjustments related to Seeger-Orbis that were
incurred in the year-ago period. Partially offsetting this was the lower
profit contribution on the lower sales volume.
Carpenter commented, "Our sales of products destined for light vehicles
were down only four percent this quarter, even as light vehicle production in
North America fell by nearly nine percent. By positioning Associated Spring
over the past several years to be less dependent on a handful of customers,
we have been able to partially mitigate our exposure to this most recent turn
in the industry's cycle. Through steps taken in early 2002, Associated Spring
has also improved its current profitability, even on lower sales volume."
Sales at Barnes Aerospace were $40.6 million for the second quarter of
2003, down from $49.4 million in the second quarter of 2002. Operating profit
was $2.6 million for the quarter ended June 30, 2003, down from $3.0 million
in the comparable year-ago period, reflecting the lower sales volume. The
sales volume impact on operating profit was partially offset by the benefits
from reduced employment levels and other productivity actions taken
throughout Barnes Aerospace in 2002.
Barnes Aerospace recorded orders of $29.0 million during the second
quarter of 2003; order backlog was $136.2 million at June 30, 2003, compared
with $151.8 million at year-end 2002. Impacting orders in the second quarter
of 2003 were commercial OEM delivery deferrals and lower repair and overhaul
volume stemming from SARS and the Iraqi conflict; a military order deferral
triggered by a delay in program funding; and a modest reduction in orders due
to a cancellation of a particular component. Direct and indirect orders for
the U.S. military were approximately 30 percent of the net orders booked
during the second quarter of 2003.
"Operating profit margin at Barnes Aerospace increased even as sales
declined, confirming the success of the actions taken last year to properly
position the business. Orders in the second quarter were clearly impacted by
the strain on the commercial aerospace sector caused by SARS and the war.
Orders were further affected by our decision not to manufacture a particular
component, as the pricing was inconsistent with generating sustainable,
profitable growth," Carpenter stated.
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William C. Denninger, Barnes Group Inc.'s Chief Financial Officer,
commented, "We completed a successful common stock offering this past
quarter, raising $42 million in net proceeds that were used to pay down our
existing debt, significantly strengthening our balance sheet. Through the
offering, we have also greatly increased the trading volume in our stock,
providing a higher degree of liquidity for our investors."
For the first six months of 2003, Barnes Group's net sales were $448.3
million, up 11 percent from $403.6 million in the same period a year ago. Net
income was $17.1 million, or $0.82 per diluted share, for the six months
ended June 30, 2003, up 11 percent from $15.4 million, or $0.81 per diluted
share, in the same period of 2002.
Barnes Group will conduct a conference call with investors to discuss
second quarter 2003 results on Thursday, July 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 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 2002 sales of $784 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 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, 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 Six months ended
June 30, June 30,
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2003 2002 2003 2002
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Net sales $229,587 $209,385 $448,321 $403,621
Cost of sales 146,312 142,206 288,542 272,504
Selling and admin-
istrative expenses 67,290 53,417 130,584 105,798
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213,602 195,623 419,126 378,302
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Operating income 15,985 13,762 29,195 25,319
Other income 1,067 774 1,680 1,201
Interest expense 4,135 3,628 8,245 7,018
Other expenses 699 74 977 211
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Income before income
taxes 12,218 10,834 21,653 19,291
Income taxes 2,471 2,167 4,547 3,858
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Net income $ 9,747 $ 8,667 $ 17,106 $ 15,433
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Per common share:
Net income
Basic $ .46 $ .46 $ .84 $ .83
Diluted .46 .45 .82 .81
Dividends .20 .20 .40 .40
Average common shares
outstanding
Basic 20,989,236 18,751,084 20,484,491 18,624,929
Diluted 21,387,610 19,290,127 20,864,974 19,158,789
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BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
June June
2003 2002
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Assets
Current assets
Cash and short-term investments $ 51,071 $ 38,025
Accounts receivable 128,569 119,939
Inventories 104,407 88,440
Deferred income taxes and prepaid expenses 27,710 30,822
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Total current assets 311,757 277,226
Deferred income taxes 20,014 3,607
Property, plant and equipment 156,577 164,741
Goodwill 222,795 168,969
Other assets 84,836 74,814
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$795,979 $689,357
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Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 72,921 $ 69,693
Accrued liabilities 75,069 69,495
Long-term debt - current 6,762 8,279
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Total current liabilities 154,752 147,467
Long-term debt 245,513 242,011
Deferred income taxes 6,366 6,999
Other liabilities 94,244 73,993
Stockholders' equity 295,104 218,887
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$795,979 $689,357
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