-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, M8E3dgaATAe+B55D9GyQQU0mhPHhaTWdwBcOSX9+Y9mXT8nPwrXVvDs9eLVCHl6d O4ma1pHSKzdxKwq3rB+0Ng== 0000009984-94-000006.txt : 19940518 0000009984-94-000006.hdr.sgml : 19940518 ACCESSION NUMBER: 0000009984-94-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARNES GROUP INC CENTRAL INDEX KEY: 0000009984 STANDARD INDUSTRIAL CLASSIFICATION: 5072 IRS NUMBER: 060247840 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04801 FILM NUMBER: 94527732 BUSINESS ADDRESS: STREET 1: 123 MAIN ST CITY: BRISTOL STATE: CT ZIP: 06011 BUSINESS PHONE: 2035837070 FORMER COMPANY: FORMER CONFORMED NAME: ASSOCIATED SPRING CORP DATE OF NAME CHANGE: 19760518 10-Q 1 BARNES GROUP INC. FORM 10-Q MARCH 31, 1994 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM l0-Q (Mark One) (X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1994 or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For transition period from ____________________ to ____________________ Commission File Number 1-4801 BARNES GROUP INC. (a Delaware Corporation) I.R.S. Employer Identification No. 06-0247840 123 Main Street, Bristol, Connecticut 06010 Telephone Number (203) 583-7070 Number of common shares outstanding at May 9, 1994 - 6,321,702 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- -- PART I. FINANCIAL INFORMATION Item 1. Financial Statements BARNES GROUP INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME Three months ended March 31, 1994 and 1993 (Dollars in thousands, except per share data) (Unaudited)
1994 1993 -------- -------- Net sales $142,102 $126,996 Cost of sales 90,702 81,145 Selling and administrative expenses 42,602 40,989 Plant closings and restructurings -- 3,400 -------- -------- 133,304 125,534 -------- -------- Operating income 8,798 1,462 Other income 1,120 1,021 Interest expense 1,380 1,291 Other expenses 380 679 -------- -------- Income before income taxes 8,158 513 Income taxes 3,263 195 -------- -------- Net income $ 4,895 $ 318 ======== ======== Per common share: Net Income $ .78 $ .05 Dividends .35 .35 Average common shares outstanding 6,296,121 6,224,967 See accompanying notes.
BARNES GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited)
ASSETS March 31, December 31, 1994 1993 -------- ----------- Current assets Cash and cash equivalents $ 18,048 $ 24,129 Accounts receivable, less allowances (1994 - $2,430; 1993 - $2,217) 91,202 77,651 Inventories Finished goods 25,404 25,527 Work-in-process 14,273 17,117 Raw materials and supplies 7,539 7,847 -------- -------- 47,216 50,491 Deferred income taxes and prepaid expenses 17,028 16,469 -------- -------- Total current assets 173,494 168,740 Deferred income taxes 22,349 22,277 Property, plant and equipment 261,902 256,606 Less accumulated depreciation 157,474 153,563 -------- -------- 104,428 103,043 Goodwill, net 21,054 21,201 Other assets 17,645 18,035 -------- -------- $338,970 $333,296 ======== ======== See accompanying notes.
BARNES GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY March 31, December 31, 1994 1993 -------- ----------- Current liabilities Notes and overdrafts payable $ 15,837 $ 10,553 Accounts payable 27,853 27,165 Accrued liabilities 38,720 42,003 Guaranteed ESOP obligation - current 2,048 2,008 -------- -------- Total current liabilities 84,458 81,729 Long-term debt 70,000 70,000 Guaranteed ESOP obligation 11,520 12,011 Deferred income taxes and other liabilities 12,608 12,369 Accrued retirement benefits 66,095 65,338 Stockholders' equity Common stock - par value $1.00 per share Authorized: 20,000,000 shares Issued: 7,345,923 shares stated at 15,737 15,737 Additional paid-in capital 28,526 28,745 Retained earnings 110,405 107,668 Foreign currency translation adjustments (7,634) (6,464) Treasury stock at cost, 1994 - 1,035,830 shares 1993 - 1,052,440 shares (39,177) (39,818) -------- -------- 107,857 105,868 Guaranteed ESOP obligation (13,568) (14,019) -------- -------- 94,289 91,849 -------- -------- $338,970 $333,296 ======== ======== See accompanying notes.
BARNES GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months ended March 31, 1994 and 1993 (Dollars in thousands) (Unaudited)
1994 1993 ------ ------ Operating Activities Net income $ 4,895 $ 318 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 6,545 6,120 Gain on sale of property, plant and equipment (9) (33) Translation losses 316 309 Changes in operating assets and liabilities: Accounts receivable (13,256) (7,638) Inventories 2,999 (1,822) Accounts payable and accrued liabilities (3,217) 450 Deferred income taxes 13 (1,103) Other liabilities and assets 329 (929) ------- ------- Net Cash Used by Operating Activities (1,385) (4,328) Investing Activities Proceeds from sale of property, plant and equipment 933 325 Capital expenditures (7,322) (5,558) Other (931) (746) ------- ------- Net Cash Used by Investing Activities (7,320) (5,979) Financing Activities Net increase (decrease) in notes and overdrafts payable 5,284 (4,947) Proceeds from the issuance of common stock 393 381 Dividends paid (2,203) (2,179) ------- ------- Net Cash Provided (Used) by Financing Activities 3,474 (6,745) Effect of exchange rate changes on cash flows (850) (151) ------- ------- Decrease in cash and cash equivalents (6,081) (17,203) Cash and cash equivalents at beginning of period 24,129 39,068 ------- ------- Cash and cash equivalents at end of period $18,048 $21,865 ======= ======= See accompanying notes.
Notes to Condensed Consolidated Financial Statements: 1. Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. For additional information, please refer to the consolidated financial statements and footnotes included in the company's Annual Report on Form 10-K for the year ended December 31, 1993. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included. All material, non-recurring accruals and adjustments are disclosed below. Operating results for the three-month period ended March 31, 1994 are not necessarily indicative of the results that may be expected for the year ending December 31, 1994. 2. Plant closings and restructurings In the first quarter of 1993, the company took a pre-tax charge of $3.4 million, or 33 cents per share, related to a consolidation in its Aerospace business segment. The consolidation involved moving the Central Metals Products division from a leased facility in East Windsor, CT to owned space at the Windsor Manufacturing division in Windsor, CT and an associated reduction in the workforce. The charge also provided for a reduction in employment at its Jet Die fabrication unit. 3. Contingency In December, 1991, the company was notified by McDonnell Douglas Corporation that McDonnell Douglas was terminating for default an $8.2 million contract with the company's Flameco division. In the fourth quarter 1992, the company wrote off $4.0 million of net assets related to this contract. The company believes it has legitimate defenses to the default claim. While no reasonable estimate of possible loss or range of loss can be made at this time, management believes that it is unlikely that the ultimate resolution of this dispute will have a material effect on future results of operations of the company. In management's opinion, the ultimate resolution of this dispute, regardless of the outcome, will not have a material effect on the financial position of the company. Item 2. Management's Discussion and Analysis Sales ----- For the first quarter 1994 net sales were $142.1 million, a gain of 12% from the 1993 level of $127.0 million. The improvement was a result of sales increases reported by the Associated Spring and Bowman Distribution groups, partially offset by a sales decline at the Aerospace group. Associated Spring's sales in 1994 were up 18% to $67.6 million, over a strong 1993 first quarter of $57.5 million. Virtually every operating unit reported sales improvements. Sales gains were made in electronics and other industrial markets, but the strong sales performance was due primarily to increased sales of engine and transmission parts for cars and trucks. Bowman Distribution's sales for the first quarter of 1994 rose 13% to $54.3 million from a depressed sales level of $48.1 million reported in the same 1993 period. Both Bowman U.S. and Bowman Europe reported sales increases over the prior year, and while Bowman Canada's sales in local currency increased, a weakening in the Canadian dollar exchange rate caused a small decline in sales as reported in U.S. dollars. Barnes Aerospace reported $20.4 million of sales, a six percent decline from the first quarter of 1993 level of $21.7 million on mixed results from the group's operating units. While the machining business reported a significant sales erosion, the overhaul and repair as well as the advanced fabrications businesses, reported increased quarter over quarter sales. Operating Income ---------------- Consolidated operating income for the first three months of 1994 was $8.8 million, compared to $1.5 million for the first quarter of 1993. The 1993 operating income includes a $3.4 million provision to cover the costs of a plant consolidation and work force reduction at Barnes Aerospace. Excluding this charge, 1994 first quarter operating income improved 81% from the comparative 1993 period. The Associated Spring sales volume increase contributed significantly to this improvement. Additionally, the benefits of improved manufacturing efficiencies and plant consolidations favorably impacted operating costs. Bowman Distribution's operating income declined slightly in the first quarter of 1994 compared to the same 1993 period. The gain made in the North American market was offset by higher costs associated with the expansion of Bowman's industrial maintenance business in Europe. Barnes Aerospace, despite the decrease in sales volume, reported first quarter 1994 operating income compared to a loss in last year's first quarter. The turnaround is partially a result of consolidating manufacturing facilities, reducing workforce levels and productivity improvements. Non-operating Income/Expense ---------------------------- Interest expense in 1994 increased slightly due to increased borrowings and higher interest rates. The decrease in other expenses in 1994 compared to 1993 was due primarily to a foreign exchange loss of $0.4 million reported in 1993 compared to a small gain in 1994 reported in other income. Cash Flows ---------- In the first quarter of 1994, operating activities used $1.4 million of cash. Strong earnings after adjustments for depreciation and amortization were not sufficient to offset the cash required to fund an increase in accounts receivable. Increased sales at Associated Spring and Bowman Distribution were the primary reason for the growth in accounts receivable. Net cash used by operating activities decreased substantially in 1994's first quarter when compared to 1993's. The improvement primarily reflects higher 1994 earnings. Net cash used by investing activities increased $1.3 million in 1994 over 1993 reflecting higher levels of capital expenditures. The major driver of the capital expenditure increase is Associated Spring, which continues its strategy of investing in state-of-the-art equipment and technology to increase its productivity and product quality. Net cash provided by financing activities in the first quarter of 1994 was $3.5 million compared to a net use of cash of $6.7 million for the same period last year. In 1994, the increase in notes and overdrafts payable funded the cash requirements of both operating and investing activities. In the first quarter of 1993, notes and overdrafts payable declined as the company utilized part of the proceeds from the sale of its Pioneer Distribution business at the end of 1992 to reduce short-term financing. Liquidity and Capital Resources ------------------------------- The company's liquidity, measured in terms of working capital, increased $2.0 million to $89.0 million at March 31, 1994 from the December 31, 1993 level. The current ratio approximated 2.0 at March 31, 1994 and December 31, 1993. The ratio of interest bearing debt to total capitalization was up slightly to 31.5% at March 31, 1994 from 30.5% at December 31, 1993. For this purpose, total capitalization is defined as total interest-bearing debt, plus deferred income taxes and other long-term liabilities, accrued retirement benefits and stockholders' equity excluding the guaranteed ESOP obligation. The company maintains substantial bank borrowing facilities to supplement internal cash generation. At March 31, 1994, the Company had $100.0 million of borrowing capacity available under its Revolving Credit Agreement. In addition, the company maintains approximately $194.0 million in uncommitted short-term bank credit lines, of which $36.5 million was borrowed at March 31, 1994. The company believes these credit facilities coupled with cash generated from operations are adequate for its anticipated future requirements. PART II. OTHER INFORMATION Item 4. Submission of matters to Vote of Security Holders ------------------------------------------------- (a) The Annual Meeting of the registrant's stockholders was held on April 6, 1994. Proxies for the meeting were solicited pursuant to Regulation 14(a). (c) (1) The stockholders approved the selection of Price Waterhouse as the company's independent auditors for 1994. The proposal was adopted as 5,438,534 shares voted for, 57,679 shares voted against, 41,005 shares abstained and there were no not voted shares. (2) The stockholders acted upon the proposal to amend the company's 1991 Stock Incentive Plan to increase from one year to five years the termination of an optionee's options after termination of employment if termination is a result of death or disability, or if the optionee is age 55 or older upon termination; provided, however, that (a) if the optionee's employment is terminated upon the request of the company, the option may be terminated by the Compensation Committee of the Board of Directors, effective 90 days after the termination of employment, and (b) the Committee may elect a shorter termination for any specific option grant. The proposal was adopted as 4,931,912 shares voted for, 524,792 shares voted against, 80,514 shares abstained and there were no not voted shares. (3) The stockholders defeated a proposal to limit bonus compensation to 25% of annual base salary for executive officers. The number of shares voted for the proposal was 688,532, 4,558,763 shares voted against, 139,984 shares abstained and 149,939 shares were not voted. Item 6. Exhibits and Reports on Form 8-K -------------------------------- One report on Form 8-K, Item 4, Change in Certifying Accountants, was filed during the quarter ended March 31, 1994. The report was dated March 4, 1994 and addressed the proposal to stockholders to approve the selection of Price Waterhouse as the new certifying accountants at the April 6, 1994 Annual Meeting. SIGNATURES 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 thereunto duly authorized. Barnes Group Inc. (Registrant) Date May 12, 1994 By ------------ -------------------------------------- John E. Besser Senior Vice President-Finance and Law Date May 12, 1994 By ------------ -------------------------------------- George J. Crowley Vice President, Controller -----END PRIVACY-ENHANCED MESSAGE-----