Barnes Group Inc. Reports First Quarter 2008 Financial Results

Business Wire, May 2, 2008

Improved profit levels in the first quarter and our continuing commitment to superior customer service warrant our confidence that we can realize improvement throughout the year. However, with slowing economic growth anticipated for the United States and disruption in our European business, the expectation for Barnes Distribution's full-year operating margin is now in the 6 percent to 8 percent range.

Barnes Industrial

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Barnes Industrial continues to provide improved, consistent and sustainable results. The strength of Barnes Industrial's global diversification strategy positively impacted results for the first quarter of 2008, including both strong sales and orders growth. Investments and activities throughout the quarter and the rest of the year are focused on profitable sales growth, productivity and process improvements, and positioning Barnes Industrial's diverse businesses for long-term success.

Sales at Barnes Industrial for the first quarter of 2008 were $135.6 million, an increase of approximately 4 percent over the first quarter of 2007. Sales, primarily in Europe, as reported in U.S. dollars, were favorably impacted by the strength of local currencies, increasing sales by approximately $8.8 million. The sale of Spectrum Plastics resulted in a reduction in sales of approximately $2.4 million as compared to the 2007 period.

The general global industrial end markets, including tool-and-die and energy, continued to perform well during the quarter. On a regional basis, European and Asian businesses generated strong revenue growth as the economies remained healthy during the first quarter. Conversely, North American-centric businesses continued to face organic growth challenges, particularly in the transportation and consumer home products end markets. As a result, based on current market conditions, the slowing U.S. economy could have an adverse impact on Barnes Industrial's global growth.

Barnes Industrial's first quarter 2008 operating profit of $20.6 million increased approximately 3 percent from the prior year quarter. First quarter 2008 operating profit was positively impacted by increased sales within the European and Asian businesses, as well as business-wide productivity improvements from lean enterprise activities. Results were partially offset by higher employee-related costs and a quarter-over-quarter decline in operating profits at Spectrum Plastics which was sold in the first quarter of 2008. Barnes Industrial continues to actively manage its exposure to raw material prices and potential supply constraints to help ensure future availability of raw materials at favorable prices.

Total Company

Revenues - The Company reported net sales of $388.6 million in the first quarter of 2008, an increase of $27.9 million or approximately 8 percent, over the first quarter of 2007. The sales increase reflected approximately $15.2 million of organic sales growth primarily at Barnes Aerospace. International sales were favorably impacted by the strength of local currencies, which translated into reported U.S. dollar sales of an additional $15.1 million in 2007. The sale of Spectrum Plastics resulted in a reduction in sales of $2.4 million as compared to the 2007 period.