EX-99.1 2 a6019136-ex991.htm EXHIBIT 99.1 a6019136-ex991.htm
Exhibit 99.1

 
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Barnes Group Inc.
123 Main Street
Bristol, CT 06010


NEWS RELEASE
 
BARNES GROUP INC. REPORTS
SECOND QUARTER 2009 FINANCIAL RESULTS

§  
Revenues of $255.2 million for the second quarter 2009
§  
Second quarter 2009 diluted EPS of $0.19
§  
First half 2009 cash from operations improved 19% from the prior year period

BRISTOL, Conn., August 3, 2009 — Barnes Group Inc. (NYSE: B), a diversified global manufacturer and logistical services company, today reported financial results for the second quarter 2009.  The Company reported income from continuing operations of $10.4 million, or $0.19 per diluted share, compared to $35.3 million, or $0.61 per diluted share in the prior year period.  Barnes Group’s second quarter 2009 sales totaled $255.2 million, down 33 percent from $378.9 million in the second quarter of 2008.  Barnes Group’s first half 2009 cash from operations of $47.9 million improved 19% over the prior year period level of $40.2 million.
 
($ millions; except
Three months ended June 30,
  
Six months ended June 30,
per share data)
2009
  
2008
  
Change
  
2009
  
2008
  
Change
Net Sales
$255.2
    
$378.9
    
($123.7)
  
(32.6)
 %
  
$517.4
    
$762.9
    
($245.6)
  
(32.2)
 %
Operating Income
$14.1
    
$51.0
    
($36.9)
  
(72.3)
 %
  
$34.6
    
$102.6
    
($68.0)
  
(66.3)
 %
% of Sales
5.5
 %
  
13.5
 %
  
-
  
(8.0)
 pts.
  
6.7
 %
  
13.4
 %
  
-
  
(6.7)
 pts.
Income from Continuing Operations
$10.4
    
$35.3
    
($24.8)
  
(70.4)
 %
  
$21.9
    
$69.0
    
($47.1)
  
(68.2)
 %
% of Sales
4.1
 %
  
9.3
 %
  
-
  
(5.2)
 pts.
  
4.2
 %
  
9.0
 %
  
-
  
4.8
 pts.
Net Income
$10.4
    
$33.5
    
($23.1)
  
(68.8)
 %
  
$21.9
    
$65.9
    
($44.0)
  
(66.8)
 %
% of Sales
4.1
 %
  
8.8
 %
  
-
  
(4.7)
 pts.
  
4.2
 %
  
8.6
 %
  
-
  
(4.4)
 pts.
                                           
Income from Continuing Operations Per Diluted Share
$0.19
    
$0.61
    
($0.42)
  
(68.9)
 %
  
$0.41
    
$1.21
    
($0.80)
  
(66.1)
 %
                                           
Net Income Per Diluted Share
$0.19
    
$0.58
    
($0.39)
  
(67.2)
 %
  
$0.41
    
$1.16
    
($0.75)
  
(64.7)
 %

“The continued economic weakness throughout the second quarter had a substantial impact on our businesses, particularly our transportation and industrial manufacturing businesses,” said Gregory F. Milzcik, President and Chief Executive Officer, Barnes Group Inc.  “As we have done since the beginning of the economic downturn, we continue to focus on managing our business prudently by adjusting our cost structure, driving increased productivity in our core processes, and maximizing cash flow generation.  While we have been adjusting to the economic realities we have also been investing in our processes and strategies to generate momentum and opportunities to succeed for the eventual improvement in customer demand for our products and services.  We remain confident that the strategic and proactive cost measures we have taken, combined with the Barnes Enterprise System principles, position us for long-term growth.
 
Barnes Group Inc. / 2
 
“In addition, we continue to make progress in strengthening our balance sheet through debt reductions driven by working capital improvements.  Our focus on working capital management led to the generation of cash from operating activities in the first half of 2009 of $47.9 million.  Our ability to generate cash, control and reduce costs, and streamline operations has proven invaluable as we navigate today’s economy while positioning our company to maximize its potential when the economy improves.” Milzcik added.

Logistics and Manufacturing Services
·  
Second quarter 2009 sales at Logistics and Manufacturing Services were $136.6 million, down 27 percent from $186.4 million in the same period last year.  The decline in sales was driven by declines across all end markets and throughout North America and Europe.  Foreign exchange negatively impacted sales by $6.3 million in the second quarter.

·  
Operating profit was $12.5 million, compared with $24.6 million in the second quarter of 2008.  Operating profit was driven lower primarily by the reduced sales volumes in each of the businesses as a result of the current macroeconomic conditions on our end-markets.  Profitability pressures were partially offset by the positive impact of operational and productivity actions implemented in 2008 and through the first half of 2009.

Precision Components
·  
Second quarter 2009 sales at Precision Components were $120.3 million, down 39 percent from $195.7 million in the same period last year.  The world-wide industrial manufacturing businesses reported significant sales declines primarily resulting from the overall global recession and were severely impacted by its effect on the transportation industry.  The aerospace original equipment manufacturing business experienced year-over-year sales declines due to reductions in customer inventory and production levels primarily due to lower activity for the GE90 engine related to the Boeing 777 aircraft.  Foreign exchange adversely affected sales by $4.0 million in the second quarter.

·  
Operating profit for the second quarter of 2009 was $1.7 million, compared with $26.4 million in the second quarter of 2008.  The profit impact of lower sales volumes was partially offset by the benefits of cost reduction actions, including personnel reductions and plant consolidations, taken in 2008 and through the first half of 2009.

Additional Information
·  
Other Income, net of other expenses, increased $2.0 million in the second quarter of 2009 compared to the same period of 2008 primarily as a result of a $2.3 million gain on the repurchase of certain convertible notes.
   
·  
The Company’s effective tax rate from continuing operations for the first half of 2009 was 8.9 percent, as compared to the first quarter 2009 rate of 18.7 percent.  The decrease in the effective tax rate resulted in a benefit of $0.5 million for the second quarter of 2009.  Changes in the Company’s tax rate are largely based on the projected mix of income between taxing jurisdictions.

Conference Call
The Company will conduct a conference call with investors to discuss second quarter 2009 results at 8:30 a.m. EDT today, August 3, 2009.  A webcast of the live call and an archived replay will be available on the Barnes Group investor relations link at www.BGInc.com.

Barnes Group Inc. (NYSE:B) is a diversified global manufacturer and logistical services company focused on providing precision component manufacturing and operating service support.  Founded in 1857, 5,000 dedicated employees at more than
 
Barnes Group Inc. / 3
 
60 locations worldwide are committed to achieving consistent and sustainable profitable growth.  For more information, visit www.BGInc.com.  Barnes Group, the Critical Components People.

This release may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. Forward-looking statements are made based upon management’s good faith expectations and beliefs concerning future developments and their potential effect upon the Company and can be identified by the use of words such as “anticipated,” “believe,” “expect,” “plans,” “strategy,” “estimate,” “project,” and other words of similar meaning in connection with a discussion of future operating or financial performance.  These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. The risks and uncertainties, which are described in our periodic filings with the Securities and Exchange Commission, include, among others, uncertainties arising from the behavior of financial markets; future financial performance of the industries or customers that we serve; changes in market demand for our products and services; integration of acquired businesses; changes in raw material prices and availability; our dependence upon revenues and earnings from a small number of significant customers; uninsured claims; and numerous other matters of global, regional or national scale, including those of a political, economic, business, competitive, regulatory and public health nature. The Company assumes no obligation to update our forward-looking statements.

Contact:
Brian D. Koppy – 860.973.2126
###
 
 
 
 
 
 
 
 
Barnes Group Inc. / 4
 
BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Unaudited

   
Three months ended June 30,
    
Six months ended June 30,
  
     
 
2009
      
 
2008
  
%
Change
      
 
2009
      
 
2008
  
%
Change
  
                                     
                                         
Net sales
  
$
255,201
    
$
378,910
  
(32.6
)
  
$
517,352
    
$
762,909
  
(32.2
)
                                         
Cost of sales
    
165,712
      
232,279
  
(28.7
)
    
332,878
      
469,550
  
(29.1
)
Selling and administrative expenses
    
75,343
      
95,621
  
(21.2
)
    
149,871
      
190,757
  
(21.4
)
                                         
                                         
     
241,055
      
327,900
  
(26.5
)
    
482,749
      
660,307
  
(26.9
)
                                         
Operating income
    
14,146
      
51,010
  
(72.3
)
    
34,603
      
102,602
  
(66.3
)
                                         
Operating margin
    
5.5
%
    
13.5
%
        
6.7
%
    
13.4
%
    
                                         
Other income
    
2,501
      
105
  
NM
      
2,659
      
302
  
NM
  
                                         
Interest expense
    
6,004
      
6,847
  
(12.3
)
    
11,941
      
13,850
  
(13.8
)
Other expenses
    
686
      
284
  
NM
      
1,263
      
2,186
  
(42.2
)
                                         
Income from continuing operations
                                        
    before income taxes
    
9,957
      
43,984
  
(77.4
)
    
24,058
      
86,868
  
(72.3
)
                                         
Income taxes (benefit)
    
(490
)
    
8,712
  
NM
      
2,152
      
17,883
  
(88.0
)
                                         
Income from continuing operations
    
10,447
      
35,272
  
(70.4
)
    
21,906
      
68,985
  
(68.2
)
                                         
Loss from discontinued operations, net of taxes
    
                - -
      
(1,747
)
NM
      
- -
      
(3,100
)
NM
  
                                         
Net income
  
$
10,447
    
$
33,525
  
(68.8
)
  
$
21,906
    
$
65,885
  
(66.8
)
                                         
Common Dividends
  
$
8,493
    
$
8,693
  
(2.3
)
  
$
16,863
    
$
16,273
  
3.6
  
                                         
Per common share:
                                        
  Basic:
                                        
    Income from continuing operations
  
$
0.20
    
$
0.65
  
(69.2
)
  
$
0.41
    
$
1.28
  
(68.0
)
    
                                        
    Loss from discontinued operations, net of taxes
    
    - -
      
(0.03
)
NM
      
- -
      
(0.06
)
NM
  
                                         
    Net income
  
$
0.20
    
$
0.62
  
(67.7
)
  
$
0.41
    
$
1.22
  
(66.4
)
                                         
                                         
  Diluted:
                                        
        Income from continuing operations
  
$
0.19
    
$
0.61
  
(68.9
)
  
$
0.41
    
$
1.21
  
(66.1
)
    
                                        
        Loss from discontinued operations, net of taxes
    
- -
      
(0.03
)
NM
      
- -
      
(0.05
)
NM
  
                                         
    Net income
  
$
0.19
    
$
0.58
  
(67.2
)
  
$
0.41
    
$
1.16
  
(64.7
)
                                         
   Dividends
  
$
0.16
    
$
0.16
  
- -
    
$
0.32
    
$
0.30
  
6.7
  
                                         
Average common shares outstanding:
                                        
    Basic
  
53,377,592
    
54,294,170
  
(1.7
)
  
53,058,524
    
54,210,884
  
(2.1
)
    Diluted
  
53,642,123
    
57,353,889
  
(6.5
)
  
53,277,490
    
56,720,508
  
(6.1
)

NM- not meaningful

Notes:
1) Results for 2008 have been adjusted to reflect discontinued operations and the change in the accounting for convertible debt.
2) 2009 second quarter Other Income included a pretax $2,288 gain on the purchase of certain convertible notes and income taxes included the related tax expense of $868.
3) 2008 year to date Other expenses included a pretax $1,237 transaction loss on the sale of Spectrum Plastics and income taxes included the related tax benefit of $394.
 
Barnes Group Inc. / 5
 
BARNES GROUP INC.
OPERATIONS BY REPORTABLE BUSINESS SEGMENT
(Dollars in thousands)
Unaudited
 
   
Three months ended June 30,
  
Six months ended June 30,
     
2009
        
2008
  
%
Change
        
2009
        
2008
  
%
Change
  
                                         
Net Sales
                                        
                                         
    Logistics and Manufacturing Services
  
$
136,565
    
$
186,448
  
(26.8
)
  
$
279,237
    
$
377,036
  
(25.9
)
                                         
    Precision Components
    
120,323
      
195,666
  
(38.5
)
    
241,519
      
392,787
  
(38.5
)
                                         
    Intersegment sales
    
(1,687
)
    
(3,204
)
47.3
      
(3,404
)
    
(6,914
)
50.8
  
                                         
Total net sales
  
$
255,201
    
$
378,910
  
(32.6
)
  
$
517,352
    
$
762,909
  
(32.2
)
                                         
Operating profit
                                        
                                         
    Logistics and Manufacturing Services
  
$
12,455
    
$
24,639
  
(49.5
)
  
$
26,906
    
$
50,235
  
(46.4
)
                                         
    Precision Components
    
1,691
      
26,367
  
(93.6
)
    
7,697
      
52,336
  
(85.3
)
                                         
Total operating profit
    
14,146
      
51,006
  
(72.3
)
    
34,603
      
102,571
  
(66.3
)
                                         
    Interest income
    
159
      
89
  
77.5
      
317
      
278
  
14.1
  
                                         
    Interest expense
    
(6,004
)
    
(6,847
)
(12.3
)
    
(11,941
)
    
(13,850
)
(13.8
)
                                         
    Other income (expense), net
    
1,656
      
(264
)
NM
      
1,079
      
(2,131
)
NM
  
                                         
Income from continuing
                                        
   operations before income taxes
  
$
9,957
    
$
43,984
  
(77.4
)
  
$
24,058
    
$
86,868
  
(72.3
)
                                         
                                         

NM- not meaningful

Notes:
1) Results for 2008 have been adjusted to reflect discontinued operations and the change in the accounting for convertible debt.
2) 2009 second quarter Other income (expense), net included a $2,288 gain on the purchase of certain convertible debt.
3) 2008 year-to-date Other income (expense), net included a $1,237 transaction loss on the sale of Spectrum Plastics.
 

Barnes Group Inc. / 6
 
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Unaudited
 
     
June 30,
    
December 31,
  
     
2009
    
2008
  
               
Assets
                
Current assets
                
  Cash and cash equivalents
  
$
16,122
    
$
20,958
  
  Accounts receivable
    
193,434
      
173,215
  
  Inventories
    
206,025
      
240,805
  
  Deferred income taxes
    
26,081
      
27,650
  
  Prepaid expenses and other current assets
    
15,223
      
14,881
  
                 
    Total current assets
    
456,885
      
477,509
  
                 
Deferred income taxes
    
31,033
      
 
31,133
  
Property, plant and equipment, net
    
236,159
      
235,035
  
Goodwill
    
364,791
      
361,930
  
Other intangible assets, net
    
310,083
      
316,817
  
Other assets
    
13,970
      
12,931
  
                 
Total assets
  
$
1,412,921
    
$
1,435,355
  
                 
Liabilities and Stockholders' Equity
                
Current liabilities
                
  Notes and overdrafts payable
  
 $
3,791
    
$
8,905
  
  Accounts payable
    
78,121
      
80,495
  
  Accrued liabilities
    
77,888
      
84,372
  
  Long-term debt-current
    
15,394
      
15,386
  
                 
    Total current liabilities
    
175,194
      
189,158
  
                 
Long-term debt
    
431,690
      
441,670
  
Accrued retirement benefits
    
141,875
      
164,796
  
Other liabilities
    
40,938
      
41,156
  
                 
Stockholders' equity
    
623,224
      
598,575
  
                 
Total liabilities and stockholders' equity
  
$
1,412,921
    
$
1,435,355
  
                 
                 

Note:
1) Results for 2008 have been adjusted to reflect discontinued operations and the change in the accounting for convertible debt.