Barnes Group Announces First Quarter Results

Business Wire, April 12, 2001

Business Editors

BRISTOL, Conn.--(BUSINESS WIRE)--April 12, 2001

Barnes Group Inc. (NYSE: B)--

-- Highest quarterly sales in the Company's history at $199 million.

--Barnes Aerospace achieves record orders, order backlog up 83 percent.

Barnes Group Inc. (NYSE: B) today announced that diluted earnings per share were $0.39 for the first quarter of 2001, compared with $0.50 per diluted share for the first quarter of 2000. Net income for the quarter ended March 31, 2001 was $7.3 million, down from $9.4 million for the same period a year ago.

Net sales for the first quarter of 2001 were the highest in the Company's history at $199.3 million, up 15 percent from net sales of $173.0 million in 2000. Net sales growth in the first quarter reflected Barnes Group's recent acquisitions and a sharp increase in sales at Barnes Aerospace, which more than offset a decline in transportation-related sales at Associated Spring.

"The significant efforts we have undertaken to re-focus our sales, both by industry and geographically, were apparent in our most recent quarterly results," said Edmund M. Carpenter, Barnes Group Inc.'s President and CEO. "The integration of our two most recently acquired businesses remains at or ahead of schedule, and both of these businesses were important contributors to our top and bottom line this past quarter. It was also a very strong period for Barnes Aerospace, with record-setting sales, orders, and backlog," Carpenter added.

Sales at Associated Spring were $76.0 million for the first quarter of 2001, down 12 percent from $86.3 million a year ago. Sales during the quarter were negatively impacted by the industry-wide slowdown in the domestic transportation sector. This was partially offset by continued strong growth of the company's nitrogen gas spring products. Operating profit at Associated Spring fell to $7.2 million in the first quarter of 2001, from $12.3 million for the same period a year ago, reflecting the sales volume decline and severance costs incurred during the most recent quarter.

Carpenter commented, "While sales and operating earnings at Associated Spring were impacted by the recent rapid contraction of production in the domestic transportation market, Associated Spring's efforts to diversify its customer base mitigated that impact. Moreover, they have been rapidly reducing headcount and other expenses, while investing in the sales and marketing functions, to maximize long-term operating profitability at Associated Spring as transportation build levels improve."

First quarter 2001 sales at Barnes Distribution were $79.4 million, up 30 percent from $61.1 million in the first quarter of 2000. This included sales of $21.0 million from Curtis Industries, which Barnes Group acquired in May, 2000. Barnes Distribution's operating profit for the first quarter of 2001 was $3.0 million, up from $2.9 million in the same period a year ago. Operating profit improved on the higher sales volume and aggressive expense controls, partially offset by lower sales and operating profit contribution from Barnes Distribution's Raymond division.

"We continue to see improvement in Barnes Distribution's operating profitability, a trend that should be sustainable throughout the remainder of 2001," Carpenter stated. "The team's integration of Curtis Industries and Bowman Distribution is running ahead of schedule, with three facilities already consolidated. We expect to realize other post-acquisition expense reductions in warehousing, inventory and purchasing costs through the remainder of this year," Carpenter continued.

Sales at Barnes Aerospace were $46.9 million in the quarter ended March 31, 2001, up 60 percent from $29.3 million in the same period a year ago. Organic sales grew approximately 21 percent, reflecting penetration of new accounts and sales of new products to existing customers, while sales from the recently acquired Kratz/Apex business totaled approximately $11.4 million in the first quarter of 2001.

Orders at Barnes Aerospace were approximately $60 million during the first quarter of 2001, while order backlog increased to $157 million, compared with $86 million at March 31, 2000. Operating profit at Barnes Aerospace increased to $3.9 million for the quarter ended March 31, 2001, compared with $1.1 million in the comparable year-ago period. Operating profit increased primarily as a result of the higher sales volume, as well as a solid contribution from the Kratz/Apex acquisition.

Commenting on Barnes Group's financial position, William C. Denninger, the Company's Chief Financial Officer, noted, "While Barnes Group has historically been a significant consumer of cash in the first quarter, by aggressively managing our operating assets and working capital, we were free cash flow positive this year."

Among the other highlights of the quarter, Carpenter noted:

-- Barnes Aerospace's West Chester, Ohio maintenance and repair facility received its first customer orders. West Chester is now Barnes Aerospace's third operational FAA-approved repair station, complementing existing facilities in East Granby, Connecticut and Singapore.