B
BARNES GROUP Inc
61.7900
-2.05%
61.7900
-2.05%
45.4700 76.0400
52 weeks
52 weeks

Mkt Cap 3.32B

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Barnes Group Inc. /

The following excerpt is from the company's SEC filing.

Exhibit 99.1

Barnes Group Inc.

123 Main Street

Bristol, CT 06010

NEWS RELEASE

BARNES GROUP INC. REPORTS

THIRD QUARTER 2015 FINANCIAL RESULTS

Net Sales of $291 million, down 8%; Organic Sales down 5%

Operating Margin of 15.0%; Adjusted Operating Margin of 16.6%, up 10 bps

Diluted EPS from Continuing Operations of $0.61, down 2%;

Adjusted Diluted EPS from Continuing Operations of $0.61, down 5%

2015 EPS from Continuing Operations Guidance Updated to $2.40 to $2.45 per diluted share; On an Adjusted Basis, $2.42 to $2.47 per diluted share, up 3% to 5%

- Barnes Group Inc. (NYSE: B), an international industrial and aerospace manufacturer and service provider, today reported financial results for the third quarter of 2015. Net sales of $291 million were down 8% from $318 million in the third quarter of 2014. Negative organic growth of approximately 5%, coupled with unfavorable foreign exchange of 5%, was only partially offset by acquisition revenues of 1%. Income from continuing operations for the third quarter was $33.7 million, or $0.61 per diluted share, compared to $34.3 million, or $0.62 per diluted share in the prior year period. On an adjusted basis, income from continuing operations was $0.61 per diluted share, down 5% from $0.64 a year ago. Third quarter 2015 adjusted income from continuing operations excludes a $2.8 million pre-tax charge, or $0.03 per diluted share, related to a contract termination dispute in our Aerospace Segment, $1.9 million pre-tax, or $0.02 per diluted share, of Thermoplay short-term purchase accounting adjustments and transaction costs in our Industrial Segment, and a $3.0 million benefit, or $0.05 per diluted share, from a tax refund in the quarter. Last year’s third quarter adjusted income from continuing operations excludes $0.9 million pre-tax of Männer short-term purchase accounting adjustments and $0.5 million pre-tax costs related to the closure of production operations at Associated Spring’s Saline, Michigan facility, collectively worth $0.02 per diluted share.

A table reconciling third quarter 2015 and 2014 non-GAAP adjusted results presented in this release to our GAAP results is included at the end of this press release.

“Barnes Group experienced a challenging quarter as overall macro-economic conditions weighed on the industrial end markets we serve tempering our outlook for the remainder of the year,” said Patrick J. Dempsey, President and Chief Executive Officer of Barnes Group Inc. “In addition, lower than expected deliveries and a contract termination dispute in our Aerospace business impacted the quarter’s performance. Accordingly, we are taking deliberate and decisive actions to manage our business in this lower organic growth environment; leveraging the Barnes Enterprise System to further increase productivity while executing our strategy by adding intellectual property based businesses, like Thermoplay and Priamus, to strengthen our position and create superior value for our customers,” added Dempsey.

Barnes Group Inc. /

Third quarter 2015 sales were $189.1 million, down 9% from $207.2 million in the same period last year. Unfavorable foreign exchange reduced sales by approximately $16.4 million, or 8%. Organic sales decreased by 3% in the quarter, primarily driven by softer industrial end-markets in North America and transportation end-markets in China. For the quarter, the recently acquired Thermoplay business contributed $4.6 million in sales.

Operating profit in the third quarter was $27.3 million, compared to $33.2 million in the prior year period. The decline in operating profit was driven by lower sales volumes, unfavorable foreign exchange, lower productivity, and $1.9 million of short-term purchase accounting and acquisition costs related to the Thermoplay acquisition. These items were offset in part by lower employee related costs this year, and the absence of $0.9 million in Männer short-term purchase accounting adjustments and $0.5 million of Saline restructuring charges taken last year. Excluding the Thermoplay related charges this year, and the Männer and Saline charges last year, adjusted operating profit of $29.2 million was down 16% from $34.6 million a year ago. Adjusted operating margin was 15.4%, down 130 bps from last year’s adjusted operating margin of 16.7%.

Third quarter 2015 sales were $102.3 million, down 7% from $110.4 million in the same period last year. Growth in Aerospace Aftermarket sales, primarily driven by a significant increase in spare parts, was offset by lower Aerospace original equipment manufacturing (“OEM”) sales.

Operating profit was $16.4 million for the third quarter of 2015, down 7% from $17.7 million in the prior year period. The operating profit decrease was primarily due to a $2.8 million charge related to a contract termination dispute and the lower profit on reduced sales volume in the OEM business. Partially offsetting these items were higher profit contributions from increased sales in Aftermarket spare parts and Component Repair Programs, and lower employee related costs. Operating margin was 16.1% in the quarter, a 10 bps increase from last year. Excluding the contract termination charge, operating margin in the quarter would have been 18.8% or 280 basis points higher than a year ago driven by the favorable Aftermarket mix.

Aerospace backlog was $560 million at the end of the third quarter of 2015, up 10% year-over-year, and up 5% sequentially from the second quarter of 2015 primarily due to orders received in support of the Trent XWB engine program for the Airbus A350.

Additional Information

Interest expense increased $0.2 million to $2.6 million in the third quarter primarily as a result of a higher average interest rate, partially offset by lower average borrowings.

The Company's effective tax rate from continuing operations for the third quarter of 2015 was 19.2% compared with 28.1% in the third quarter of 2014 and 27.6% for the full year 2014. The effective tax rate decrease in the third quarter 2015 over the full year 2014 rate is primarily due to the recognition of a tax benefit...


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