Barnes Group Announces Results, Record Sales

Business Wire, April 12, 2000

Business Editors

BRISTOL, Conn.--(BUSINESS WIRE)--April 12, 2000

-Barnes Group Inc. (NYSE:B) today announced that net sales increased 7 percent for the first quarter of 2000, to $173.0 million, the highest quarterly sales in the company's history, up from net sales of $162.2 million last year. Barnes Group's foreign operations enjoyed particularly strong sales growth, accounting for 25 percent of total sales during the most recent quarter, versus 20 percent a year ago.

While net income for the quarter ended March 31, 2000 was $9.4 million, compared with $10.0 million for the same period a year ago, earnings per share was $0.50 per diluted share in the first quarter of 2000, unchanged from the first quarter of 1999, on lower average shares outstanding.

"We are making solid progress toward generating sustainable, profitable growth," said Edmund M. Carpenter, Barnes Group Inc.'s president and chief executive officer. "This quarter saw excellent increases at both the top and bottom line from our Associated Spring business, promising order trends at Barnes Aerospace, and sequential improvement in results at Bowman Distribution," Carpenter continued.

Sales at Associated Spring were a record $86.3 million for the first quarter of 2000, up 30 percent from $66.3 million a year ago. Sales increased from stronger customer demand in the telecommunications, transportation, and other electronic product markets. The Hyson(TM) and Kaller(R) nitrogen gas spring product lines, which Barnes Group acquired in late 1999, contributed $13 million in sales this quarter.

Operating profit at Associated Spring increased by 78 percent to $12.3 million in the first quarter of 2000, from $6.9 million for the same period a year ago, largely as a result of the higher sales volume. Orders in the first quarter of 2000 were up significantly versus a year ago, driving total backlog at Associated Spring to $62 million as of March 31, 2000, compared with $56 million at December 31, 1999.

Barnes Aerospace reported first quarter 2000 sales of $29.3 million, compared with $39.0 million for the same period in 1999. Operating income fell to $1.1 million for the first quarter of this year from $3.7 million a year ago, largely as a function of the decline in sales volume. "As expected, our current period sales at Barnes Aerospace continue to reflect a soft commercial jet engine market, while the impact to operating profitability was mitigated by effective cost control efforts," Carpenter said.

"More importantly, we are encouraged by recent order flow that suggests that our aggressive efforts to develop new customers and products are beginning to produce results," Carpenter added. First quarter orders at Barnes Aerospace, of $36 million, were at the highest level since mid-1998 and up from average quarterly orders of $20 million in 1999. As a result, backlog rose to $86 million at March 31, 2000 from $80 million at the end of 1999.

First quarter 2000 sales at Bowman Distribution were $61.1 million, up 2 percent from $60.0 million in the same period in 1999. Operating profit for the first quarter fell to $2.9 million from $4.9 million a year ago. "During the first quarter of this year, we continued to incur additional costs associated with the late fourth quarter 1999 installation of a new enterprise management system. Bowman continues to effectively address these implementation issues, and we believe that the new platform will have an increasingly significant, positive impact on results over the balance of the year," Carpenter said.

"During the quarter, we also continued to return capital to our shareholders, as we repurchased 453,000 shares at an average cost of $14.53 per share," Carpenter added. Since the beginning of 1999, Barnes Group Inc. has repurchased more than 1.5 million shares of its common stock.

"Building on the strength of Associated Spring's first quarter, encouraging order trends at Barnes Aerospace, and a recovery in results underway at Bowman Distribution, I believe we are poised to achieve the objectives we set for sales and earnings growth this year. We will continue to seek new strategic opportunities for building sustainable long-term shareholder value," Carpenter concluded.

Barnes Group Inc. (www.barnesgroupinc.com) is a diversified international manufacturer of precision metal parts and distributor of industrial supplies, serving a wide range of markets and customers. Founded in 1857, Barnes Group consists of three separate businesses with 1999 sales of $622 million. Barnes Group employs approximately 4,000 people at 42 locations worldwide.

This release 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, including the following: changes in market demand for the types of products and services produced and sold by Barnes Group, changes in worldwide economic and political conditions, interest and foreign exchange rate fluctuations, and regulatory changes.