-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KwH/CT2zIGyglAhd/vUu58VIcn2ZnonhmPtHRdl5/xXcuJ4UXJxoBejs4ZLYr74K hPZPBJNxZvVxsTht2FoWwQ== 0000009984-95-000027.txt : 19951119 0000009984-95-000027.hdr.sgml : 19951119 ACCESSION NUMBER: 0000009984-95-000027 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 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: 95592528 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 SEPTEMBER 30, 1995 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-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 September 30, 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 November 10, 1995 - 6,590,822 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 September 30, 1995
DESCRIPTION PAGES ----------- ----- PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Statements of Income for the nine months and third quarter ended September 30, 1995 and 1994 3 Consolidated Balance Sheets as of September 30, 1995 and December 31, 1994 4-5 Consolidated Statements of Cash Flows for the nine months ended September 30, 1995 and 1994 6 Notes to 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 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 (Dollars in thousands, except per share data) (Unaudited)
Three months ended Nine months ended September 30, September 30, ------------------ ----------------- 1995 1994 1995 1994 -------- -------- --------- ------- Net sales $141,679 $140,261 $451,290 $425,520 Cost of sales 91,856 89,688 288,974 272,160 Selling and admin- istrative expenses 38,694 40,401 123,230 124,766 -------- -------- -------- -------- 130,550 130,089 412,204 396,926 -------- -------- -------- -------- Operating income 11,129 10,172 39,086 28,594 Other income 992 1,056 3,344 3,319 Interest expense 1,367 1,320 4,259 3,996 Other expenses 422 865 1,952 1,989 -------- -------- -------- -------- Income before income taxes 10,332 9,043 36,219 25,928 Income taxes 4,071 3,671 14,270 10,138 -------- -------- -------- -------- Net income $ 6,261 $ 5,372 $ 21,949 $ 15,790 ======== ======== ======== ======== Per common share: Net income $ .95 $ .84 $ 3.36 $ 2.49 Dividends .40 .35 1.20 1.05 Average common shares outstanding 6,581,479 6,371,543 6,532,708 6,331,867 See accompanying notes.
-3- BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
ASSETS September 30, December 31, 1995 1994 ----------- ----------- (Unaudited) Current assets Cash and cash equivalents $ 16,665 $ 22,023 Accounts receivable, less allowances (1995-$3,127; 1994-$3,222) 94,571 86,877 Inventories Finished goods 28,857 28,769 Work-in-process 15,508 13,697 Raw materials and supplies 10,809 8,379 -------- -------- 55,174 50,845 Deferred income taxes and prepaid expenses 14,928 15,792 -------- -------- Total current assets 181,338 175,537 Deferred income taxes 22,288 23,854 Property, plant and equipment 293,106 276,185 Less accumulated depreciation 172,327 163,616 -------- -------- 120,779 112,569 Goodwill 20,174 20,614 Other assets 19,433 19,382 -------- -------- Total assets $364,012 $351,956 ======== ======== See accompanying notes.
-4- BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
LIABILITIES AND STOCKHOLDERS' September 30, December 31, EQUITY 1995 1994 ----------- ----------- (Unaudited) Current liabilities Notes payable $ 980 $ 7,903 Accounts payable 31,653 31,424 Accrued liabilities 43,414 45,713 Guaranteed ESOP obligation-current 2,303 2,172 -------- -------- Total current liabilities 78,350 87,212 Long-term debt 70,000 70,000 Guaranteed ESOP obligation 8,095 9,839 Accrued retirement benefits 68,433 66,817 Other liabilities 10,273 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 27,408 27,772 Retained earnings 133,157 118,938 Foreign currency translation adjustments (8,682) (8,715) Treasury stock at cost, 1995-755,539 shares 1994-916,748 shares (28,361) (34,582) -------- -------- 139,259 119,150 Guaranteed ESOP obligation (10,398) (12,011) -------- -------- Total stockholders' equity 128,861 107,139 -------- -------- Total liabilities and stockholders' equity $364,012 $351,956 ======== ======== See accompanying notes.
-5- BARNES GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months ended September 30, 1995 and 1994 (Dollars in thousands) (Unaudited)
1995 1994 ------- ------- Operating Activities Net income $21,949 $15,790 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 20,483 18,456 Gain on sale of property, plant and equipment (297) (176) Translation losses 243 490 Changes in assets and liabilities: Accounts receivable (7,613) (15,247) Inventories (3,962) (3,028) Accounts payable 333 4,870 Accrued liabilities (1,736) 3,825 Deferred income taxes 3,121 81 Other liabilities and assets (185) (921) ------- ------- Net Cash Provided by Operating Activities 32,336 24,140 Investing Activities Proceeds from sale of property, plant and equipment 1,079 2,647 Capital expenditures (27,461) (21,913) Other (1,368) (1,754) ------- ------- Net Cash Used by Investing Activities (27,750) (21,020) Financing Activities Net decrease in notes payable (6,923) (3,548) Proceeds from the issuance of common stock 5,659 3,058 Dividends paid (7,854) (6,654) ------- ------- Net Cash Used by Financing Activities (9,118) (7,144) Effect of exchange rate changes on cash flows (826) (1,087) ------- ------- Decrease in cash and cash equivalents (5,358) (5,111) Cash and cash equivalents at beginning of period 22,023 24,129 ------- ------- Cash and cash equivalents at end of period $16,665 $19,018 ======= ======= 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 nine-month period ended September 30, 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 that were previously included in its financial statements. The company believed from the onset that it had legitimate defenses to the default claim. In June, 1995, this dispute was settled to the satisfaction of both parties with no further financial impact on the results of operations or 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 1995 nine months' sales were $451.3 million, up 6% from $425.5 million in 1994 as all three operating groups reported sales gains. Third quarter 1995 sales were up 1% to $141.7 million from the 1994 level of $140.3 million on the strength of sales increases at Barnes Aerospace offset in large part by sales declines at Bowman and Associated Spring. Both the nine month and third quarter sales levels for 1995 set new company records for their respective period. Associated Spring's 1995 first nine months' sales increased 4% to $213.5 million from $205.6 million in 1994. Third quarter sales were $66.2 million, down 3% from a year ago. The North American manufacturing business was affected by a softening of the U.S. durable goods market and continuing labor problems at the Bristol, Connecticut plant. Work slowdowns since March have resulted in decreased shipments as there has been little progress towards completing a new labor contract. Overseas the group's manufacturing operation in Singapore reported strong nine month and third quarter 1995 sales increases over 1994. The Raymond Distribution division reported a 1995 year-to-date improvement and a third quarter 1995 decline from the comparable 1994 periods. Bowman Distribution's sales were up 3% for the first nine months of 1995 to $167.2 million from 1994's level of $162.7 million. Third quarter 1995 sales declined 6% to $50.7 million from $53.7 million in 1994. All business units reported sales improvement for the first nine months of 1995. Bowman U.S., the group's largest business unit, reported a sales decline in the third quarter of 1995 when compared with 1994's third quarter. The sales decline resulted in part from lower manpower in the field sales organization. Barnes Aerospace's 1995 first nine months' sales increased 23% to $71.2 million from 1994's sales of $57.7 million. Third quarter 1995 sales of $25.0 million increased 35% over 1994's third quarter sales of $18.4 million. All business units reported period-over-period sales gains with the exception of the repair and overhaul business whose 1995 third quarter sales did not keep pace with the third quarter of 1994. -8- Operating Income ---------------- Operating income in 1995 improved substantially over strong 1994 results. Consolidated operating income for the first nine months of 1995 was up 37% to $39.1 million from the $28.6 million reported in 1994. Third quarter 1995 operating income of $11.1 million was 9% higher than the $10.2 million reported in 1994's third quarter. Associated Spring's operating income in the first nine months of 1995 nearly kept pace with its sales growth as a small improvement in the gross margin percentage was offset by an increase in selling and administrative expenses as a percentage of sales. The third quarter 1995 operating income declined sharply due in part to the decrease in sales volume and an increase in selling and administrative expenses as a percentage of sales. This was caused in part by excess costs at its Bristol, Connecticut plant and operating inefficiencies at its Dallas, Texas plant related to the transfer of equipment and product from a former west coast facility. Bowman Distribution's 1995 first nine months' and third quarter operating income improved substantially over 1994 due to higher year-to-date sales volume and significantly lower operating costs expressed in both absolute terms and as a percentage of sales. Barnes Aerospace's operating results improved significantly for both the first nine months and third quarter of 1995 over the comparable 1994 periods. The 1995 increase in sales volume and decrease in operating costs expressed as a percentage of sales resulted in the group reporting operating income for the third consecutive quarter. Non-operating Income/Expense ---------------------------- Interest expense in the first nine months of 1995 was higher than in 1994 because of higher interest rates offset in part by lower debt levels. Other expenses decreased in the third quarter of 1995 from 1994's third quarter primarily due to lower foreign exchange losses. Financial Condition ------------------- Cash Flows ---------- For the first nine months of 1995, net cash flows provided by operating activities were $32.3 million, an increase of $8.2 million over 1994. The sharp increase in operating cash flow is -9- directly attributable to the increased level of earnings after adjustment for the noncash charge for depreciation and amortization. Net cash used by investing activities for the first nine months of 1995 was $27.8 million compared to $21.0 million in 1994. Expenditures for property, plant and equipment were up $5.5 million over 1994's expenditures, an increase of 25%. All three operating groups continued to invest in new equipment to improve productivity, quality and customer service. In 1995, net cash used by financing activities was $9.1 million compared to $7.1 million in 1994. This year-over-year increase was primarily due to the $6.9 million pay down of debt in 1995 versus $3.5 million in 1994. In addition, proceeds from the issuance of common stock increased to $5.7 million in 1995 from $3.1 million in 1994, a result of an increase in the exercise of stock options. The 1995 increase in dividends paid over the 1994 amount was due to both an increase in the dividend per share and number of shares outstanding. Liquidity and Capital Resources ------------------------------- The company's liquidity, measured in terms of working capital, was $103.0 million at September 30, 1995, an increase of $14.7 million from the December 31, 1994, level. The current ratio was a very strong 2.3 at September 30, 1995, compared with 2.0 at December 31, 1994. The ratio of interest-bearing debt to total capitalization approximated 25% at September 30, 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. The company maintains substantial bank borrowing facilities to supplement internal cash generation. At September 30, 1995, the company had $100.0 million of borrowing capacity available under its revolving credit agreement. In addition, the company had approximately $150.0 million in uncommitted short-term bank credit lines, of which $26.5 million was in use at September 30, 1995. During 1995 and 1994, the company maintained long-term debt of $70.0 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. -10- PART II. OTHER INFORMATION 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 September 30, 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 November 14, 1995 By /s/ John E. Besser ----------------- -------------------------------------- John E. Besser Senior Vice President-Finance and Law Date November 14, 1995 By /s/ Francis C. Boyle, Jr. ----------------- -------------------------------------- Francis C. Boyle, Jr. Assistant Controller -11- EX-27 2 EXHIBIT 27, ARTICLE 5 FDS FOR 3RD QTR 10-Q, 1995
5 This schedule contains summary financial information extracted from the consolidated balance sheet of Barnes Group Inc. at September 30, 1995 and the related consolidated statement of income for the nine months ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 16,665 0 97,698 3,127 55,174 181,338 293,106 172,327 364,012 78,350 78,095 15,737 0 0 113,124 364,012 451,290 451,290 288,974 288,974 0 665 4,259 36,219 14,270 21,949 0 0 0 21,949 3.36 3.36
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