SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 13, 2004
Barnes Group Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-04801 06-0247840
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
123 Main Street Bristol, CT 06010
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(Address of principal executive offices) (Zip Code)
(860) 583-7070
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Registrant's telephone number, including area code
N/A
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements and Exhibits.
The following exhibit is furnished pursuant to Item 12:
Exhibit 99.1: Press Release issued February 13, 2004 announcing
the fourth quarter and full year financial results of operations
for the periods ending December 31, 2003.
Item 12. Results of Operations and Financial Conditions.
On February 13, 2004, Barnes Group Inc. issued a press release
announcing the fourth quarter and full year financial results of
operations for the periods ending December 31, 2003. A copy is
attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
The information in this Current Report on 8-K and the exhibit
attached hereto shall not be deemed to be "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended,
nor shall it be deemed incorporated by reference in any filing
under the Exchange Act or Securities Act of 1933, as amended,
except as expressly set forth by specific reference in such
filing.
SIGNATURES
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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 hereunto duly authorized.
Dated: February 13, 2004 BARNES GROUP INC.
(Registrant)
By:/s/ William C. Denninger
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William C. Denninger
Senior Vice President and
Chief Financial Officer
Exhibit Index
Exhibit No. Document Description
99.1 Press Release, dated February 13, 2004
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Barnes Group Inc. EXHIBIT 99.1
Executive Office ------------
Bristol, CT 06010
Tel: 860.583.7070
BARNES GROUP INC. [Logo] News Release
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Contact:
FOR IMMEDIATE RELEASE Investors:
February 13, 2004 Phillip J. Penn
(860) 973-2126
Media:
Stephen J. McKelvey
(860) 973-2132
BARNES GROUP ANNOUNCES FOURTH QUARTER
AND FULL YEAR FINANCIAL RESULTS
- Full-year net sales climb 14 percent to record $891 million
- 2003 net income up 22 percent to $33.0 million, diluted E.P.S. reaches
$1.49
- Barnes Aerospace executes second Revenue Sharing Program
BRISTOL, CONNECTICUT, FEBRUARY 13, 2004---Barnes Group Inc. (NYSE: B)
today announced financial results for the quarter and year ended December 31,
2003. Net sales for the fourth quarter of 2003 were $220.3 million, up 20
percent from $183.6 million in the fourth quarter of 2002. Net income
increased 45 percent to $7.0 million, or $0.29 per diluted share, in the
fourth quarter of 2003, from $4.8 million, or $0.25 per diluted share, in the
comparable year-ago period. Average diluted shares outstanding were 23.8
million in the quarter ended December 31, 2003, up 23 percent from 19.3
million in the year-ago period, primarily as a result of the follow-on equity
offering completed in May, 2003.
During the fourth quarter of 2003, favorable tax items reduced income
taxes by approximately $2.1 million. These items were partially offset by
higher incentive compensation expenses, as well as the write-off of
approximately $0.5 million after-tax of due diligence expenses related to an
abandoned acquisition.
For all of 2003, Barnes Group's net income was $33.0 million, an
increase of 22 percent from $27.2 million for the same period a year ago.
Diluted earnings per share were $1.49 for the year ended December 31, 2003,
compared with $1.42 in 2002. Net sales for 2003 were a record $890.8 million,
up 14 percent from net sales of $784.0 million last year. Average diluted
shares outstanding were 22.1 million for the full year 2003, up 15 percent
from 19.2 million in 2002.
"Our reported financial results were above our plan, while we achieved
a number of positive operational items in the fourth quarter. These included
significant progress integrating Kar Products into Barnes Distribution and
the execution of our second Revenue Sharing Program, or RSP, at Barnes
Aerospace," said Edmund M. Carpenter, Barnes Group Inc.'s President and
C.E.O. "Both of these items should have a continuing positive impact on our
financial results," Carpenter added.
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Sales at Barnes Distribution were $98.3 million for the quarter ended
December 31, 2003, up $30.8 million, or 46 percent, from $67.6 million in the
quarter ended December 31, 2002. Kar Products, which Barnes Group purchased
in February, 2003, contributed $27.3 million of sales in the most recent
quarter. Excluding a $2.3 million positive impact of foreign currency
translation in the 2003 period, organic sales grew slightly. Barnes
Distribution generated operating profit of $1.0 million in the fourth quarter
of 2003, compared to an operating loss of $0.3 million in the fourth quarter
of 2002.
The improvement in operating profit was driven primarily by the
operating profit contribution and synergistic savings from Kar Products, as
well as reduced selling expenses as a percentage of sales. This was partially
offset by expenses directly associated with the Kar integration of
approximately $1.3 million, as well as an impact on sales caused by a reduced
order fill rate during the integration of distribution centers.
"During the fourth quarter, we accelerated the consolidation of Kar
Products into a new Barnes Distribution network, and as of today have
essentially completed our original consolidation plan in the U.S., leaving
most of the integration effort behind us," Carpenter stated. "Sales from our
other key sales initiatives, including national and regional customer
development efforts, e-commerce platforms and Tier 2 relationships, more than
doubled from a year ago, to approximately $6 million," Carpenter added.
For all of 2003, sales at Barnes Distribution were $400.7 million, up
from $286.7 million in 2002; Kar Products contributed $108.3 million to the
2003 sales total. Operating profit was $16.5 million for 2003, up from $7.5
million in 2002.
Sales at Associated Spring were $80.3 million for the quarter ended
December 31, 2003, up from $77.2 million in the quarter ended December 31,
2002. Foreign currency translation positively impacted sales in the fourth
quarter of 2003 by approximately $2.8 million. The slight increase in sales,
net of the foreign currency translation effect, reflected higher sales of
products for industrial applications and heavy trucks, and increased nitrogen
gas spring volume, offset by a decline in sales of products for the
telecommunications and electronics industries.
Associated Spring's operating profit was $5.1 million for the fourth
quarter of 2003, down from $6.9 million in the fourth quarter of 2002.
Operating profit was negatively impacted by incrementally higher personnel
costs, including medical, pension and other post-retirement expenses of
approximately $1.6 million. Operating profit also fell as a result of less
favorable product mix.
Carpenter commented, "Associated Spring continued to outperform many of
its key end-user markets during the fourth quarter; notably, sales of
products for light vehicles were up slightly during the period, when
production was essentially flat. With the outlook for many of its markets
stable or improving, Associated Spring should have another solid year in
2004."
For all of 2003, sales at Associated Spring were $333.1 million, up
from $321.7 million in 2002; the 2003 sales total was positively impacted by
approximately $18.7 million of incremental revenue from 2002 acquisitions and
foreign currency translation. Operating profit was $26.8 million for 2003,
compared with $28.1 million in 2002.
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Sales at Barnes Aerospace were $43.4 million for the fourth quarter of
2003, up from $40.5 million in the fourth quarter of 2002. Operating profit
was $3.4 million for the quarter ended December 31, 2003, essentially flat
versus the comparable year-ago period. Operating profit was positively
impacted by higher OEM sales and the initial profit contribution from the
first RSP, offset by a drop in historically higher-margin repair and overhaul
sales.
Barnes Aerospace recorded orders of $43.0 million during the quarter
ended December 31, 2003; for the full year 2003, orders totaled $161.9
million. Order backlog ended 2003 at $147.7 million, compared with $151.8
million at December 31, 2002. Military orders were approximately 27 percent
of the orders received in the fourth quarter of 2003, and approximately 29
percent of all the orders placed during 2003. During the quarter ended
December 31, 2003, Barnes Aerospace also received approximately $5.5 million
in orders related to a large commercial engine program that will enter
service in early 2004.
"The order rate at Barnes Aerospace accelerated nicely in the second
half of the year, setting the stage for a strong improvement in financial
results in 2004," Carpenter stated. "It's also significant that we executed
our second RSP at Barnes Aerospace in the fourth quarter. With terms very
similar to the RSP we completed in the third quarter, this new RSP is
expected to have a meaningful impact on Barnes Aerospace's profitability
beginning in 2004," Carpenter added.
For all of 2003, Barnes Aerospace generated sales of $165.7 million,
down from $183.0 million in 2002. Operating profit was $10.7 million for
2003, compared with $10.8 million in 2002.
William C. Denninger, Barnes Group Inc.'s Chief Financial Officer,
commented, "We had a strong financial performance in 2003, which helped us
generate over $60 million in cash from operations. We ended 2003 with nearly
$50 million in cash on our balance sheet, while reducing our debt-to-
capitalization ratio at year-end to less than 43 percent, comfortably within
our targeted leverage range. Thus, we are well positioned to support further
growth investments in our businesses in 2004."
Barnes Group will conduct a conference call with investors to discuss
fourth quarter 2003 results on Friday, February 13, 2004 at 10:00 AM ET. A
webcast of the live call, supporting materials and an archived replay will be
available on the Barnes Group investor relations website
(ir.barnesgroupinc.com).
Barnes Group Inc. (www.barnesgroupinc.com) is a diversified
international manufacturer of precision metal components and assemblies and a
distributor of industrial supplies, serving a wide range of markets and
customers. Founded in 1857 and headquartered in Bristol, Connecticut, Barnes
Group consists of three businesses with 2003 sales of $891 million:
Associated Spring, one of the world's largest manufacturers of precision
mechanical and nitrogen gas springs and a global supplier of retaining rings
and injection-molded plastic components; Barnes Aerospace, a manufacturer and
repairer of highly-engineered assemblies and components for commercial and
military aircraft engines, airframes, and land-based industrial gas turbines;
and Barnes Distribution, an international, full-service distributor of
maintenance, repair and operating supplies. Over 6,000 dedicated employees at
more than 50 locations worldwide contribute to Barnes Group Inc.'s success.
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This release may contain certain forward-looking statements as defined
in the Private Securities Litigation Reform Act of 1995. These forward-
looking statements are subject to risks and uncertainties that may cause
actual results to differ materially from those contained in the statements.
Investors are encouraged to consider these risks and uncertainties as
described within the Company's periodic filings with the Securities and
Exchange Commission, including the following: the ability of the Company to
integrate newly acquired businesses and to realize acquisition synergies on
schedule; changes in market demand for the types of products and services
produced and sold by Barnes Group; the Company's success in identifying, and
attracting customers in, new markets; the Company's ability to develop new
and enhanced products to meet customers' needs timely; the effectiveness of
the Company's marketing and sales programs; increased competitive activities
that could adversely affect customer demand for the Company's products;
changes in economic, political and public health conditions, worldwide and in
the locations where the Company does business; interest and foreign exchange
rate fluctuations; and regulatory changes.
# # #
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BARNES GROUP INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
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2003 2002 2003 2002
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Net sales $220,337 $183,616 $890,818 $784,036
Cost of sales 144,642 122,976 576,835 530,004
Selling and admin-
istrative expenses 66,929 51,138 261,983 209,192
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211,571 174,114 838,818 739,196
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Operating income 8,766 9,502 52,000 44,840
Other income 1,044 294 3,337 3,651
Interest expense 3,634 3,928 15,840 14,823
Other expenses 139 179 1,129 557
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Income before income
taxes 6,037 5,689 38,368 33,111
Income taxes (benefit) (919) 887 5,353 5,960
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Net income $ 6,956 $ 4,802 $ 33,015 $ 27,151
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Per common share:
Net income
Basic $ .31 $ .25 $ 1.54 $ 1.45
Diluted .29 .25 1.49 1.42
Dividends .20 .20 .80 .80
Average common shares
outstanding
Basic 22,770,950 18,908,240 21,475,336 18,750,442
Diluted 23,796,154 19,275,407 22,101,560 19,185,332
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BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December December
2003 2002
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Assets
Current assets
Cash and cash equivalents $ 49,788 $ 28,355
Accounts receivable 119,130 97,533
Inventories 109,780 88,809
Deferred income taxes and prepaid expenses 33,402 23,940
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Total current assets 312,100 238,637
Deferred income taxes 22,790 22,610
Property, plant and equipment 154,088 159,440
Goodwill 220,118 164,594
Other intangible assets 61,923 16,702
Other assets 59,801 50,547
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$830,820 $652,530
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Liabilities and Stockholders' Equity
Current liabilities
Notes payable $ 10,000 $ --
Accounts payable 97,155 63,389
Accrued liabilities 78,520 61,853
Long-term debt - current 6,804 6,837
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Total current liabilities 192,479 132,079
Long-term debt 224,213 214,125
Accrued retirement benefits 77,455 87,162
Other liabilities 14,934 10,944
Stockholders' equity 321,739 208,220
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$830,820 $652,530
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