-----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, TPdFI53KOUNOltg8u1wJMX1h2uQtBhwUNQmgn5I4qCkNvOOYHvcefNQGia22hKuG UDyvmX8S8fkw7iVCeHD2EQ== 0000009984-96-000028.txt : 19960515 0000009984-96-000028.hdr.sgml : 19960515 ACCESSION NUMBER: 0000009984-96-000028 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 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: 96562822 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, 1996 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, 1996 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 (860) 583-7070 Number of common shares outstanding at May 6, 1996 - 6,638,412 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 the Quarterly period ended March 31, 1996
DESCRIPTION PAGES ----------- ----- PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Statements of Income for the three months ended March 31, 1996 and 1995 3 Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995 4-5 Consolidated Statements of Cash Flows for the three months ended March 31, 1996 and 1995 6 Note to Consolidated Financial Statements 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-10 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to Vote of Security Holders 11 ITEM 6. Exhibits and Reports on Form 8-K 11 Signatures 12
-2- PART I. FINANCIAL INFORMATION Item 1. Financial Statements BARNES GROUP INC. CONSOLIDATED STATEMENTS OF INCOME Three months ended March 31, 1996 and 1995 (Dollars in thousands, except per share data) (Unaudited)
1996 1995 -------- -------- Net sales $150,091 $158,618 Cost of sales 97,173 100,891 Selling and administrative expenses 41,664 43,180 -------- -------- 138,837 144,071 -------- -------- Operating income 11,254 14,547 Other income 950 1,208 Interest expense 1,288 1,428 Other expenses 381 448 -------- -------- Income before income taxes 10,535 13,879 Income taxes 3,898 5,539 -------- -------- Net income $ 6,637 $ 8,340 ======== ======== Per common share: Net Income $ 1.01 $ 1.29 Dividends .45 .40 Average common shares outstanding 6,582,635 6,463,146 See accompanying note.
-3- BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
ASSETS March 31, December 31, 1996 1995 -------- ----------- (Unaudited) Current assets Cash and cash equivalents $ 15,780 $ 17,868 Accounts receivable, less allowances (1996-$3,381; 1995-$3,635) 92,929 86,086 Inventories Finished goods 30,694 28,541 Work-in-process 16,780 16,222 Raw materials and supplies 14,731 11,986 -------- -------- 62,205 56,749 Deferred income taxes and prepaid expenses 13,734 12,113 -------- -------- Total current assets 184,648 172,816 Deferred income taxes 23,607 24,308 Property, plant and equipment 303,671 297,832 Less accumulated depreciation 179,844 174,962 -------- -------- 123,827 122,870 Goodwill 19,881 20,028 Other assets 21,684 21,527 -------- -------- Total assets $373,647 $361,549 ======== ======== See accompanying note.
-4- BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY March 31, December 31, 1996 1995 --------- ----------- (Unaudited) Current liabilities Notes payable $ 4,232 $ 509 Accounts payable 34,138 31,839 Accrued liabilities 44,640 42,840 Guaranteed ESOP obligation-current 2,395 2,348 -------- -------- Total current liabilities 85,405 77,536 Long-term debt 70,000 70,000 Guaranteed ESOP obligation 6,874 7,491 Accrued retirement benefits 69,215 68,824 Other liabilities 7,176 8,857 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 27,338 27,360 Retained earnings 139,799 136,092 Foreign currency translation adjustments (11,433) (10,656) Treasury stock at cost, 1996-722,332 shares 1995-791,205 shares (27,195) (29,853) -------- -------- 144,246 138,680 Guaranteed ESOP obligation (9,269) (9,839) -------- -------- Total stockholders' equity 134,977 128,841 -------- -------- Total liabilities and stockholders' equity $373,647 $361,549 ======== ======== See accompanying note.
-5- BARNES GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended March 31, 1996 and 1995 (Dollars in thousands) (Unaudited)
1996 1995 ------- ------- Operating Activities Net income $ 6,637 $ 8,340 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 6,867 7,233 Gain on sale of property, plant and equipment (108) (159) Translation losses 73 86 Changes in assets and liabilities: Accounts receivable (7,299) (13,067) Inventories (5,549) (3,755) Accounts payable 2,338 3,547 Accrued liabilities 1,759 (3,429) Deferred income taxes 152 1,503 Other liabilities and assets (2,369) (1,071) ------- ------- Net Cash Provided (Used) by Operating Activities 2,501 (772) Investing Activities Proceeds from sale of property, plant and equipment 710 235 Capital expenditures (7,443) (7,778) Other (449) (620) ------- ------- Net Cash Used by Investing Activities (7,182) (8,163) Financing Activities Net increase in notes payable 3,723 4,522 Proceeds from the issuance of common stock 2,517 2,914 Dividends paid (2,969) (2,597) ------- ------- Net Cash Provided by Financing Activities 3,271 4,839 Effect of exchange rate changes on cash flows (678) (166) ------- ------- Decrease in cash and cash equivalents (2,088) (4,262) Cash and cash equivalents at beginning of period 17,868 22,023 ------- ------- Cash and cash equivalents at end of period $15,780 $17,761 ======= ======= See accompanying note.
-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, 1995. 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, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations --------------------- Sales ----- The company's first quarter 1996 consolidated sales were $150.1 million, down five percent from last year's results of $158.6 million. Associated Spring's first quarter 1996 sales were four percent lower than last year's record total. The 1996 sales were $71.8 million compared to $74.9 million in 1995. Sales were down for most of the U.S. manufacturing operations, while gains were made in Singapore and Mexico. -7- Bowman Distribution's sales were down 10% to $55.0 million in the first three months of 1996 versus $61.0 million in 1995. The sales decline was primarily due to lower volume in its U.S. business. First quarter 1996 Barnes Aerospace sales improved two percent over 1995, increasing to $23.5 million from $23.0 million in the prior year. Good sales gains were reported by both the Precision Machining and the Repair and Overhaul units while the Advanced Fabrication's business reported lower sales. Operating Income ---------------- Consolidated operating income for 1996's first quarter was $11.3 million, down 23% from 1995's level of $14.5 million. All three business segments reported declines in operating income compared with last year's strong levels. In the first quarter of 1996, the company took a pre-tax provision of $1.3 million related to workforce reductions, primarily at Bowman Distribution. Eliminating the effect of this provision, operating income decreased 14% in 1996 compared to 1995. Associated Spring's operating income decline resulted primarily from lower sales volume coupled with an increase in selling and administrative expenses. Manufacturing costs kept pace with sales. While most U.S. manufacturing operations reported lower year-over- year operating income, improvements were made in Singapore and Mexico and Associated Spring's distribution business. Bowman Distribution's decrease in operating income was the result of lower sales volume and the cost of the workforce reduction. The group's European business improved over the prior year's first quarter results. Barnes Aerospace's operating income was adversely affected by higher than anticipated manufacturing costs in its Advanced Fabrication business and by start-up costs at the new Repair and Overhaul facility in Singapore. -8- Income Taxes ------------- The company's first quarter 1996 effective tax rate was three percentage points lower than the first quarter of 1995, primarily because foreign income, with tax rates lower than the U.S. statutory tax rate, comprised a larger percentage of consolidated income before income taxes in 1996 than in 1995. Net Income and Net Income Per Share ----------------------------------- The company reported net income of $6.6 million, or $1.01 per share, for the first quarter of 1996, compared to 1995's first quarter record net income of $8.3 million, or $1.29 per share. This is the company's second best first quarter in terms of earnings. The pretax workforce reduction charge of $1.3 million reduced 1996 first quarter earnings by 12 cents per share. Financial Condition ------------------- Cash Flows ---------- Net cash provided by operating activities was $2.5 million, an increase of $3.3 million over 1995. Strong earnings, after adjustments for the noncash charges for depreciation and amortization, more than offset the net change in operating assets and liabilities. In 1995, operating activities used $0.8 million of cash reflecting 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. Net cash used by investing activities in the first quarter of 1996 was $1.0 million lower than the prior year due to an increase in the proceeds from the sale of property, plant and equipment and a small decrease in capital expenditures. Net cash provided by financing activities was $3.3 million in the first quarter of 1996 and $4.8 million in the first quarter of 1995. The increase in notes payable partially funded the cash requirements for investing activities. Dividends per share in 1996 increased to 45 cents per share versus 40 cents per share in the -9- first quarter of 1995, resulting in an increase in the amount of dividends paid period-over-period. The high levels of proceeds from the issuance of common stock in 1996 and 1995 were primarily a result of the exercise of stock options. Liquidity and Capital Resources ------------------------------- The company's liquidity, measured in terms of working capital, increased $4.0 million to $99.2 million at March 31, 1996 from the December 31, 1995 level. The current ratio approximated 2.2 at March 31, 1996 and December 31, 1995. The ratio of interest-bearing debt (including the guaranteed ESOP obligation) to total capitalization approximated 38% at March 31, 1996, and December 31, 1995. For this purpose, total capitalization is defined as interest-bearing debt including the guaranteed ESOP obligation, and total stockholders' equity. During 1996 and 1995, the company maintained long-term debt of $70.0 million, which includes borrowings under its short-term bank credit lines and the current portion of its long-term notes. At March 31, 1996, the company classified as long-term debt $4.2 million of borrowing under its lines of credit and $6.2 million of the current portion of its 9.47% long-term Notes. The company has both the intent and the ability, through its revolving credit agreement, to refinance these amounts on a long-term basis. The company intends to continue this cost effective approach of long- term financing. The company maintains substantial bank borrowing facilities to supplement internal cash generation. At March 31, 1996, the company had $100.0 million of borrowing capacity under its revolving credit agreement of which none was borrowed. In addition, the company had approximately $135.0 million in uncommitted short-term bank credit lines, of which $6.5 million was in use at March 31, 1996. The interest rate on this borrowing was 5.6%. 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 4. Submission of Matters to Vote of Security Holders ------------------------------------------------- (a) The Annual Meeting of the registrant's stockholders was held on April 3, 1996. Proxies for the meeting were solicited pursuant to Regulation 14 A. (c) (1) The stockholders approved the selection of Price Waterhouse LLP as the company's independent accountants for 1996. The proposal was adopted as 5,445,151 shares voted for, 52,252 shares voted against, 56,890 shares abstained and there were 128,935 non-votes. (2) The stockholders acted upon a proposal to amend the company's 1991 Stock Incentive Plan (amended by stockholders in 1994) to increase by 500,000 the number of shares available for incentives, extend the term of the Plan by five years, impose a 50,000 share per year limit on the aggregate number of grants of options, stock appreciation rights, and incentive stock rights that an individual can receive, establish performance criteria in connection with payment of certain incentive stock rights, and to include terms and provisions that enable most incentives granted to qualify as performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. The proposal was adopted as 4,329,582 shares voted for, 908,940 shares voted against, 137,574 shares abstained and there were 307,132 non-votes. 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, 1996. -11- 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 14, 1996 By /s/ Douglas P. Hamilton ------------ ------------------------------------- Douglas P. Hamilton Senior Vice President-Finance Date May 14, 1996 By /s/ Francis C. Boyle, Jr. ------------ ------------------------------------- Francis C. Boyle, Jr. Assistant Controller -12- EX-27 2 EXHIBIT 27, ARTICLE 5 FDS FOR 1ST QTR 10-Q, 1996
5 This schedule contains summary financial information extracted from the consolidated balance sheet of Barnes Group Inc. at March 31, 1996, and the related consolidated statement of income for the three months ended March 31, 1996 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 15,780 0 96,310 3,381 62,205 184,648 303,671 179,844 373,647 85,405 76,874 15,737 0 0 119,240 373,647 150,091 150,091 97,173 97,173 0 82 1,288 10,535 3,898 6,637 0 0 0 6,637 1.01 1.01
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