-----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, YJJ9dR+dLefyFqr2Vn/KPQeT3gPePLY/AEHJ0FkV9yVxVCFzQpHkXlfMGarF+zG6 3GPLbpR4f6zZUEGfJV9vzA== 0000009984-95-000021.txt : 19950517 0000009984-95-000021.hdr.sgml : 19950516 ACCESSION NUMBER: 0000009984-95-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BARNES GROUP INC CENTRAL INDEX KEY: 0000009984 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED METAL PRODUCTS [3490] 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: 95537396 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, 1995 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM lO-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, 1995 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 8, 1995 - 6,551,239 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 --- --- -1- BARNES GROUP INC. FORM 10-Q INDEX For Quarterly period ended March 31, 1995
DESCRIPTION PAGES ----------- ----- PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Statements of Income for the three months ended March 31, 1995 and 1994 3 Consolidated Balance Sheets as of March 31, 1995 and December 31, 1994 4-5 Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994 6 Notes to the Consolidated Financial Statements 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to Vote of Security Holders 10 ITEM 5. Other Information 10-11 ITEM 6. Exhibits and Reports on Form 8-K 11 Signatures 11
-2- PART I. FINANCIAL INFORMATION Item 1. Financial Statements BARNES GROUP INC. CONSOLIDATED STATEMENTS OF INCOME Three months ended March 31, 1995 and 1994 (Dollars in thousands, except per share data) (Unaudited)
1995 1994 -------- -------- Net sales $158,618 $142,102 Cost of sales 100,891 90,702 Selling and administrative expenses 43,180 42,602 -------- -------- 144,071 133,304 -------- -------- Operating income 14,547 8,798 Other income 1,208 1,120 Interest expense 1,428 1,380 Other expenses 448 380 -------- -------- Income before income taxes 13,879 8,158 Income taxes 5,539 3,263 -------- -------- Net income $ 8,340 $ 4,895 ======== ======== Per common share: Net Income $ 1.29 $ .78 Dividends .40 .35 Average common shares outstanding 6,463,146 6,296,121 See accompanying notes.
-3- BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
ASSETS March 31, December 31, 1995 1994 -------- ----------- (Unaudited) Current assets Cash and cash equivalents $ 17,761 $ 22,023 Accounts receivable, less allowances (1995-$3,062; 1994-$3,222) 99,824 86,877 Inventories Finished goods 28,045 28,769 Work-in-process 17,234 13,697 Raw materials and supplies 9,597 8,379 -------- -------- 54,876 50,845 Deferred income taxes and prepaid expenses 15,750 15,792 -------- -------- Total current assets 188,211 175,537 Deferred income taxes 23,008 23,854 Property, plant and equipment 278,697 276,185 Less accumulated depreciation 165,575 163,616 -------- -------- 113,122 112,569 Goodwill 20,467 20,614 Other assets 19,752 19,382 -------- -------- Total assets $364,560 $351,956 ======== ======== See accompanying notes.
-4- BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY March 31, December 31, 1995 1994 -------- ----------- (Unaudited) Current liabilities Notes payable $ 12,425 $ 7,903 Accounts payable 34,835 31,424 Accrued liabilities 42,186 45,713 Guaranteed ESOP obligation-current 2,215 2,172 -------- -------- Total current liabilities 91,661 87,212 Long-term debt 70,000 70,000 Guaranteed ESOP obligation 9,269 9,839 Accrued retirement benefits 67,983 66,817 Other liabilities 9,514 10,949 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 27,595 27,772 Retained earnings 124,725 118,938 Foreign currency translation adjustments (9,063) (8,715) Treasury stock at cost, 1995-833,704 shares 1994-916,748 shares (31,377) (34,582) -------- -------- 127,617 119,150 Guaranteed ESOP obligation (11,484) (12,011) -------- -------- Total stockholders' equity 116,133 107,139 -------- -------- Total liabilities and stockholders' equity $364,560 $351,956 ======== ======== See accompanying notes.
-5- BARNES GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months ended March 31, 1995 and 1994 (Dollars in thousands) (Unaudited)
1995 1994 ------- ------- Operating Activities Net income $ 8,340 $ 4,895 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 7,233 6,545 Gain on sale of property, plant and equipment (159) (9) Translation losses 86 316 Changes in assets and liabilities: Accounts receivable (13,067) (13,256) Inventories (3,755) 2,999 Accounts payable 3,547 537 Accrued liabilities (3,429) (3,754) Deferred income taxes 1,503 13 Other liabilities and assets (1,071) 329 ------- ------- Net Cash Used by Operating Activities (772) (1,385) Investing Activities Proceeds from sale of property, plant and equipment 235 933 Capital expenditures (7,778) (7,322) Other (620) (931) ------- ------- Net Cash Used by Investing Activities (8,163) (7,320) Financing Activities Net increase in notes payable 4,522 5,284 Proceeds from the issuance of common stock 2,914 393 Dividends paid (2,597) (2,203) ------- ------- Net Cash Provided by Financing Activities 4,839 3,474 Effect of exchange rate changes on cash flows (166) (850) ------- ------- Decrease in cash and cash equivalents (4,262) (6,081) Cash and cash equivalents at beginning of period 22,023 24,129 ------- ------- Cash and cash equivalents at end of period $17,761 $18,048 ======= ======= See accompanying notes.
-6- Notes to Consolidated Financial Statements: 1. Summary of Significant Accounting Policies ------------------------------------------ The accompanying unaudited 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, 1994. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three-month period ended March 31, 1995 are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. 2. Contingency ----------- In December, 1991, the company was notified by the McDonnell Douglas Corporation that McDonnell Douglas was terminating for default an $8.2 million contract with the company's Advanced Fabrication unit. In 1992, the company wrote off $4.0 million of net assets related to this contract previously included in its financial statements. 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. -7- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations --------------------- Sales ----- The company's first quarter 1995 consolidated sales were $158.6 million making it the best quarter in the company's history. Sales were up 12% from the $142.1 million reported in 1994. This increase reflected sales gains by all three operating groups. Associated Spring's first quarter 1995 sales improved 11% to $74.9 million from $67.6 million in 1994. Sales improved in all markets with the strongest gains reported in industrial markets, particularly electronics. Bowman Distribution's sales were up 12% to $61.0 million in the first three months of 1995 versus $54.3 million in 1994. All businesses reported sales increases with substantial improvement reported by Bowman U.S. First quarter 1995 Barnes Aerospace sales improved 13% over 1994, increasing to $23.0 million from $20.4 million in the prior year. Both the Advanced Fabrications and Precision Machining businesses reported year-over-year sales growth while the Repair and Overhaul business reported a small decline in sales. Operating Income ---------------- Consolidated operating income for 1995's first quarter was $14.5 million, up 65% over 1994's level of $8.8 million. All three business segments reported significant gains in operating income over last year. Associated Spring's operating income improvement resulted from the increase in sales volume coupled with gains in manufacturing productivity and excellent control of selling and administrative expenses. Bowman Distribution's operating income improvement was the result of higher sales volume in the U.S. combined with sharply lower selling and administrative expenses. Barnes Aerospace's operating income improvement was mainly driven by the higher sales volume. Non-operating Income/Expense ---------------------------- Other income in the first three months of 1995 increased slightly over the prior year due to the increase in interest income primarily on funds invested in Brazil. -8- Other expenses in the first quarter of 1995 were up due to an increase in foreign exchange losses. This increase was offset in part by a reduction of the losses recorded on the disposal of fixed assets. Net Income and Net Income Per Share ----------------------------------- The company reported a record net income of $8.3 million, or $1.29 per share, for the first quarter of 1995, compared to 1994's first quarter of $4.9 million, or 78 cents per share. Financial Condition ------------------- Cash Flows ---------- Net cash used by operating activities of $0.8 million in the first quarter of 1995 reflects the significant increase in business activity. Cash generated from strong earnings after adjustments for depreciation and amortization was offset by the cash required to fund increases in accounts receivable and inventories. In 1994, operating activities used $1.4 million of cash, as earnings were not sufficient to offset the increase in accounts receivable. Net cash used by investing activities in the first quarter of 1995 was $0.8 million higher than the prior year due to increased capital expenditures as well as lower proceeds from the sale of property, plant and equipment. Net cash provided by financing activities was $4.8 million in the first quarter of 1995 and $3.5 million the first quarter of 1994. The increase in notes payable partially funded the cash requirements for both operating and investing activities. The 1995 increase in the proceeds from the issuance of common stock was a result of the exercise of stock options. Liquidity and Capital Resources ------------------------------- The company's liquidity, measured in terms of working capital, increased $8.2 million to $96.6 million at March 31, 1995 from the December 31, 1994 level. The current ratio approximated 2.0 at March 31, 1995 and December 31, 1994. The ratio of interest bearing debt to total capitalization approximated 29% at March 31, 1995 compared to 28% at year-end 1994. For this purpose, total capitalization is defined as total interest-bearing debt, plus accrued long-term retirement benefits, other long-term liabilities and stockholders' equity, excluding the guaranteed ESOP obligation. -9- The company maintains substantial bank borrowing facilities to supplement internal cash generation. At March 31, 1995, the company had $100.0 million of borrowing capacity available under its revolving credit agreement. In addition, the company had approximately $155.0 million in uncommitted short-term bank credit lines, of which $31.5 million was in use at March 31, 1995. During 1995 and 1994, the company maintained long-term debt of $70 million, comprised in part, of borrowings under its short-term bank credit lines backed by its long-term revolving credit agreement. The company has found this to be a cost effective approach to long-term financing and intends to continue this approach. 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 5, 1995. Proxies for the meeting were solicited pursuant to Regulation 14(a). (c) The stockholders approved the selection of Price Waterhouse LLP as the company's independent accountants for 1995. The proposal was adopted as 5,617,070 shares voted for, 56,746 shares voted against, 17,206 shares abstained and there were no not voted shares. Item 5. Other Information ----------------- By-Laws Amendments In November, 1994, the Board of Directors amended the company's By-Laws to include advance notice provisions regarding stockholder proposals and nominations for directors. Stockholders wishing to present proposals for a formal vote (other than proposals included in the company's proxy statement) or to nominate candidates for election as directors at a meeting of the company's stockholders, must do so in accordance with the company's By-Laws. The By-Laws provide, in general, that in order to be presented at the stockholder's meeting, such stockholder proposals or nominations may be made only by a stockholder of record who shall have given notice of the proposed business or nomination to the company: -10- (a) in the case of an Annual Meeting, not less than sixty (60) nor more than ninety (90) days prior to the anniversary date of the immediately preceding Annual Meeting of Stockholders; and (b) in the case of a special meeting of stockholders, not later than the tenth (10th) day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever occurs first. The notice must contain, among other things, background information concerning the stockholder making the proposal or nomination, the stockholder's ownership of the company's stock, and in the case of nominations, background and stock ownership information with respect to each nominee. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits Exhibit 27. Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended March 31, 1995. 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, 1995 By John E. Besser ------------ ------------------------------------ John E. Besser Senior Vice President-Finance and Law Date May 12, 1995 By Francis C. Boyle, Jr. ------------ -------------------------------------- Francis C. Boyle, Jr. Assistant Controller -11- EX-27 2 EXHIBIT 27, ARTICLE 5 FDS FOR 1ST QTR 10-Q, 1995
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET OF BARNES GROUP INC AT MARCH 31, 1995 AND THE RELATED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 17,761 0 102,886 3,062 54,876 188,211 278,697 165,575 364,560 91,661 79,269 15,737 0 0 100,396 364,560 158,618 158,618 100,891 100,891 0 63 1,428 13,879 5,539 8,340 0 0 0 8,340 1.29 1.29
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