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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Barnes Group Inc | NYSE:B | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 37.26 | 0 | 12:00:04 |
1-4801 | 06-0247840 | |
(Commission File Number) | (I.R.S. Employer Identification No.) | |
123 Main Street, Bristol, Connecticut | 06010 | |
(Address of principal executive offices) | (Zip Code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. On October 24, 2014, Barnes Group Inc. issued a press release announcing the financial results of operations for the third quarter and nine months ended September 30, 2014. 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. | |
Item 9.01 | Financial Statements and Exhibits. Exhibit 99.1: Press Release issued October 24, 2014, announcing the financial results of operations for the third quarter and nine months ended September 30, 2014. |
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: October 24, 2014 | BARNES GROUP INC. | |
(Registrant) | ||
By: | /s/ CHRISTOPHER J. STEPHENS, JR. | |
Christopher J. Stephens, Jr. Senior Vice President, Finance and Chief Financial Officer |
Exhibit No. | Document Description | |
99.1 | Press Release, dated October 24, 2014 |
Exhibit 99.1 Barnes Group Inc. 123 Main Street Bristol, CT 06010 |
▪ | Net Sales of $318 million, up 18%; Organic Sales up 8% |
▪ | Operating Margin of 16.0%; Adjusted Operating Margin of 16.5%, up 610 bps |
▪ | Diluted EPS from Continuing Operations of $0.62; |
▪ | 2014 EPS from Continuing Operations Guidance Increased to $2.10 to $2.15 per diluted share; |
• | Third quarter 2014 sales were $207.2 million, up 24% from $167.7 million in the same period last year. The Männer business, acquired in October 2013, provided $29.6 million of the sales increase while unfavorable foreign exchange negatively impacted sales by $1.8 million. Industrial’s organic sales grew 7% over the prior year period. |
• | Operating profit of $33.2 million in the third quarter was up 59% from $20.9 million in the prior year period. Operating profit benefited from the contribution of Männer and higher organic sales, and was partially offset by $0.9 million of pre-tax Männer short-term purchase accounting adjustments and $0.5 million of pre-tax restructuring charges related to the closure of production operations at the Saline, Michigan facility. Excluding the acquisition related expenses and Saline closure costs, adjusted operating profit was $34.6 million, up 66%. Adjusted operating margin was 16.7%, up 430 bps from last year’s operating margin of 12.4%. |
• | Third quarter 2014 sales were $110.4 million, up 9% from $101.7 million in the same period last year. Increased sales from original equipment manufacturing ("OEM") business were partially offset by lower sales in the aftermarket repair and overhaul ("MRO") business. Aerospace spare part sales were flat on a year-over-year basis. |
• | Operating profit was $17.7 million for the third quarter of 2014 as compared to $7.2 million for the prior year period. Operating profit benefited from the contributions of increased sales in the OEM business, higher profits in the MRO business and the absence of the $8.6 million inventory valuation charge taken in last year’s third quarter. These benefits were partially offset by increased employee related costs. Operating margin was 16.0% in the quarter, compared to 7.0% a year ago. |
• | Aerospace backlog was $511 million at the end of the third quarter, down 3% from the second quarter of 2014. |
• | The Company's effective tax rate from continuing operations for the third quarter of 2014 was 28.1% compared with 15.8% in the third quarter of 2013 and 32.8% for the full year 2013. Included in the full year 2013 income tax is a charge of approximately $16 million associated with the April 2013 U.S. Tax Court’s unfavorable decision. Excluding this charge, the full year 2013 adjusted effective tax rate was 17.5%. The effective tax rate increase in 2014 over the adjusted full year 2013 rate is due to a projected mix of earnings attributable to higher-taxing jurisdictions, the expiration of certain tax holidays, and the increase in planned repatriation of a portion of current foreign earnings to the U.S. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
2014 | 2013 | % Change | 2014 | 2013 | % Change | |||||||||||||||
Net sales | $ | 317,659 | $ | 269,491 | 17.9 | $ | 951,832 | $ | 800,430 | 18.9 | ||||||||||
Cost of sales | 206,410 | 189,488 | 8.9 | 632,671 | 544,615 | 16.2 | ||||||||||||||
Selling and administrative expenses | 60,364 | 51,972 | 16.1 | 187,770 | 166,679 | 12.7 | ||||||||||||||
266,774 | 241,460 | 10.5 | 820,441 | 711,294 | 15.3 | |||||||||||||||
Operating income | 50,885 | 28,031 | 81.5 | 131,391 | 89,136 | 47.4 | ||||||||||||||
Operating margin | 16.0 | % | 10.4 | % | 13.8 | % | 11.1 | % | ||||||||||||
Interest expense | 2,435 | 2,401 | 1.4 | 8,558 | 10,000 | (14.4 | ) | |||||||||||||
Other expense (income), net | 741 | 241 | NM | 1,768 | 1,702 | 3.9 | ||||||||||||||
Income from continuing operations before income taxes | 47,709 | 25,389 | 87.9 | 121,065 | 77,434 | 56.3 | ||||||||||||||
Income taxes | 13,407 | 4,008 | NM | 33,782 | 31,426 | 7.5 | ||||||||||||||
Income from continuing operations | 34,302 | 21,381 | 60.4 | 87,283 | 46,008 | 89.7 | ||||||||||||||
(Loss) income from discontinued operations, net of income taxes | (425 | ) | (476 | ) | 10.7 | (425 | ) | 197,696 | NM | |||||||||||
Net income | $ | 33,877 | $ | 20,905 | 62.1 | $ | 86,858 | $ | 243,704 | (64.4 | ) | |||||||||
Common dividends | $ | 5,988 | $ | 5,775 | 3.7 | $ | 17,925 | $ | 16,495 | 8.7 | ||||||||||
Per common share: | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Income from continuing operations | $ | 0.63 | $ | 0.40 | 57.5 | $ | 1.60 | $ | 0.86 | 86.0 | ||||||||||
(Loss) income from discontinued operations, net of income taxes | (0.01 | ) | (0.01 | ) | — | (0.01 | ) | 3.67 | NM | |||||||||||
Net income | $ | 0.62 | $ | 0.39 | 59.0 | $ | 1.59 | $ | 4.53 | (64.9 | ) | |||||||||
Diluted: | ||||||||||||||||||||
Income from continuing operations | $ | 0.62 | $ | 0.39 | 59.0 | $ | 1.57 | $ | 0.84 | 86.9 | ||||||||||
(Loss) income from discontinued operations, net of income taxes | (0.01 | ) | (0.01 | ) | — | (0.01 | ) | 3.60 | NM | |||||||||||
Net income | $ | 0.61 | $ | 0.38 | 60.5 | $ | 1.56 | $ | 4.44 | (64.9 | ) | |||||||||
Dividends | 0.11 | 0.11 | — | 0.33 | 0.31 | 6.5 | ||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 54,879,329 | 53,009,720 | 3.5 | 54,756,794 | 53,818,950 | 1.7 | ||||||||||||||
Diluted | 55,509,658 | 54,304,990 | 2.2 | 55,803,370 | 54,854,456 | 1.7 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
2014 | 2013 | % Change | 2014 | 2013 | % Change | |||||||||||||||
Net sales | ||||||||||||||||||||
Industrial | $ | 207,230 | $ | 167,747 | 23.5 | $ | 623,886 | $ | 503,809 | 23.8 | ||||||||||
Aerospace | 110,429 | 101,744 | 8.5 | 327,951 | 296,622 | 10.6 | ||||||||||||||
Intersegment sales | — | — | — | (5 | ) | (1 | ) | NM | ||||||||||||
Total net sales | $ | 317,659 | $ | 269,491 | 17.9 | $ | 951,832 | $ | 800,430 | 18.9 | ||||||||||
Operating profit | ||||||||||||||||||||
Industrial | $ | 33,205 | $ | 20,874 | 59.1 | $ | 81,344 | $ | 56,406 | 44.2 | ||||||||||
Aerospace | 17,680 | 7,157 | 147.0 | 50,047 | 32,730 | 52.9 | ||||||||||||||
Total operating profit | $ | 50,885 | $ | 28,031 | 81.5 | $ | 131,391 | $ | 89,136 | 47.4 | ||||||||||
Operating margin | Change | Change | ||||||||||||||||||
Industrial | 16.0 | % | 12.4 | % | 360 | bps. | 13.0 | % | 11.2 | % | 180 | bps. | ||||||||
Aerospace | 16.0 | % | 7.0 | % | 900 | bps. | 15.3 | % | 11.0 | % | 430 | bps. | ||||||||
Total operating margin | 16.0 | % | 10.4 | % | 560 | bps. | 13.8 | % | 11.1 | % | 270 | bps. |
September 30, 2014 | December 31, 2013 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 63,007 | $ | 70,856 | |||
Accounts receivable | 282,858 | 258,664 | |||||
Inventories | 214,291 | 211,246 | |||||
Deferred income taxes | 31,794 | 18,226 | |||||
Prepaid expenses and other current assets | 19,093 | 18,204 | |||||
Total current assets | 611,043 | 577,196 | |||||
Deferred income taxes | 783 | 2,314 | |||||
Property, plant and equipment, net | 302,882 | 302,558 | |||||
Goodwill | 613,298 | 649,697 | |||||
Other intangible assets, net | 570,368 | 534,293 | |||||
Other assets | 57,587 | 57,615 | |||||
Total assets | $ | 2,155,961 | $ | 2,123,673 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Notes and overdrafts payable | $ | 25,695 | $ | 1,074 | |||
Accounts payable | 95,122 | 88,721 | |||||
Accrued liabilities | 175,507 | 154,514 | |||||
Long-term debt - current | 885 | 56,009 | |||||
Total current liabilities | 297,209 | 300,318 | |||||
Long-term debt | 513,215 | 490,341 | |||||
Accrued retirement benefits | 86,768 | 80,884 | |||||
Deferred income taxes | 88,350 | 94,506 | |||||
Other liabilities | 14,748 | 16,210 | |||||
Total stockholders' equity | 1,155,671 | 1,141,414 | |||||
Total liabilities and stockholders' equity | $ | 2,155,961 | $ | 2,123,673 |
Nine months ended September 30, | |||||||
2014 | 2013 | ||||||
Operating activities: | |||||||
Net income | $ | 86,858 | $ | 243,704 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 62,556 | 44,957 | |||||
Amortization of convertible debt discount | 731 | 1,776 | |||||
Loss (gain) on disposition of property, plant and equipment | 103 | (632 | ) | ||||
Stock compensation expense | 5,453 | 16,092 | |||||
Withholding taxes paid on stock issuances | (4,357 | ) | (2,045 | ) | |||
Loss (gain) on the sale of businesses | 1,586 | (313,471 | ) | ||||
Changes in assets and liabilities, net of the effects of divestitures: | |||||||
Accounts receivable | (26,648 | ) | (11,694 | ) | |||
Inventories | (8,481 | ) | (405 | ) | |||
Prepaid expenses and other current assets | (3,074 | ) | (815 | ) | |||
Accounts payable | 8,237 | 8,988 | |||||
Accrued liabilities | 8,630 | 27,784 | |||||
Deferred income taxes | (6,942 | ) | (6,603 | ) | |||
Long-term retirement benefits | (6,400 | ) | 238 | ||||
Other | 3,519 | 4,700 | |||||
Net cash provided by operating activities | 121,771 | 12,574 | |||||
Investing activities: | |||||||
Proceeds from disposition of property, plant and equipment | 627 | 895 | |||||
(Payments for) proceeds from the sale of businesses | (1,181 | ) | 539,116 | ||||
Change in restricted cash | 4,886 | — | |||||
Capital expenditures | (43,594 | ) | (33,799 | ) | |||
Component Repair Program payments | (41,000 | ) | — | ||||
Other | (1,030 | ) | (1,901 | ) | |||
Net cash (used) provided by investing activities | (81,292 | ) | 504,311 | ||||
Financing activities: | |||||||
Net change in other borrowings | 24,663 | 3,887 | |||||
Payments on long-term debt | (183,673 | ) | (482,158 | ) | |||
Proceeds from the issuance of long-term debt | 158,883 | 178,000 | |||||
Payment of assumed liability to Otto Männer Holding AG | (19,796 | ) | — | ||||
Premium paid on convertible debt redemption | (14,868 | ) | — | ||||
Proceeds from the issuance of common stock | 10,323 | 10,873 | |||||
Common stock repurchases | (8,389 | ) | (68,608 | ) | |||
Dividends paid | (17,925 | ) | (16,495 | ) | |||
Excess tax benefit on stock awards | 4,625 | 3,312 | |||||
Other | (185 | ) | (1,320 | ) | |||
Net cash used by financing activities | (46,342 | ) | (372,509 | ) | |||
Effect of exchange rate changes on cash flows | (1,986 | ) | (447 | ) | |||
(Decrease) increase in cash and cash equivalents | (7,849 | ) | 143,929 | ||||
Cash and cash equivalents at beginning of period | 70,856 | 86,356 | |||||
Cash and cash equivalents at end of period | $ | 63,007 | $ | 230,285 |
Nine months ended September 30, | |||||||
2014 | 2013 | ||||||
Free cash flow: | |||||||
Net cash provided by operating activities | $ | 121,771 | $ | 12,574 | |||
Capital expenditures | (43,594 | ) | (33,799 | ) | |||
Free cash flow (1) | $ | 78,177 | $ | (21,225 | ) | ||
Free cash flow to net income cash conversion ratio (as adjusted): | |||||||
Free cash flow (from above) | $ | 78,177 | $ | (21,225 | ) | ||
Income tax payments related to the gain on the sale of BDNA | — | 95,714 | |||||
Free cash flow (as adjusted)(2) | 78,177 | 74,489 | |||||
Net income | 86,858 | 243,704 | |||||
Gain on the sale of BDNA, net of income taxes | — | (194,417 | ) | ||||
April 2013 tax court decision | — | 16,388 | |||||
Net income (as adjusted)(2) | $ | 86,858 | $ | 65,675 | |||
Free cash flow to net income cash conversion ratio (as adjusted)(2) | 90 | % | 113 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||
2014 | 2013 | % Change | 2014 | 2013 | % Change | |||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
Operating Profit - Industrial Segment (GAAP) | $ | 33,205 | $ | 20,874 | 59.1 | $ | 81,344 | $ | 56,406 | 44.2 | ||||||||||||||
Männer short-term purchase accounting adjustments | 930 | — | 7,712 | — | ||||||||||||||||||||
Restructuring charges | 501 | — | 5,553 | — | ||||||||||||||||||||
CEO transition costs | — | — | — | 6,589 | ||||||||||||||||||||
Operating Profit - Industrial Segment as adjusted (Non-GAAP) (1) | $ | 34,636 | $ | 20,874 | 65.9 | $ | 94,609 | $ | 62,995 | 50.2 | ||||||||||||||
Operating Margin - Industrial Segment (GAAP) | 16.0 | % | 12.4 | % | 360 | bps. | 13.0 | % | 11.2 | % | 180 | bps. | ||||||||||||
Operating Margin - Industrial Segment as adjusted (Non-GAAP) (1) | 16.7 | % | 12.4 | % | 430 | bps. | 15.2 | % | 12.5 | % | 270 | bps. | ||||||||||||
Operating Profit - Aerospace Segment (GAAP) | $ | 17,680 | $ | 7,157 | 147.0 | $ | 50,047 | $ | 32,730 | 52.9 | ||||||||||||||
CEO transition costs | — | — | — | 3,903 | ||||||||||||||||||||
Operating Profit - Aerospace Segment as adjusted (Non-GAAP) (1) | $ | 17,680 | $ | 7,157 | 147.0 | $ | 50,047 | $ | 36,633 | 36.6 | ||||||||||||||
Operating Margin - Aerospace Segment (GAAP) | 16.0 | % | 7.0 | % | 900 | bps. | 15.3 | % | 11.0 | % | 430 | bps. | ||||||||||||
Operating Margin - Aerospace Segment as adjusted (Non-GAAP) (1) | 16.0 | % | 7.0 | % | 900 | bps. | 15.3 | % | 12.4 | % | 290 | bps. | ||||||||||||
CONSOLIDATED RESULTS | ||||||||||||||||||||||||
Operating Income (GAAP) | $ | 50,885 | $ | 28,031 | 81.5 | $ | 131,391 | $ | 89,136 | 47.4 | ||||||||||||||
Männer short-term purchase accounting adjustments | 930 | — | 7,712 | — | ||||||||||||||||||||
Restructuring charges | 501 | — | 5,553 | — | ||||||||||||||||||||
CEO transition costs | — | — | — | 10,492 | ||||||||||||||||||||
Operating Income as adjusted (Non-GAAP) (1) | $ | 52,316 | $ | 28,031 | 86.6 | $ | 144,656 | $ | 99,628 | 45.2 | ||||||||||||||
Operating Margin (GAAP) | 16.0 | % | 10.4 | % | 560 | bps. | 13.8 | % | 11.1 | % | 270 | bps. | ||||||||||||
Operating Margin as adjusted (Non-GAAP) (1) | 16.5 | % | 10.4 | % | 610 | bps. | 15.2 | % | 12.4 | % | 280 | bps. | ||||||||||||
Diluted Income from Continuing Operations per Share (GAAP) | $ | 0.62 | $ | 0.39 | 59.0 | $ | 1.57 | $ | 0.84 | 86.9 | ||||||||||||||
Männer short-term purchase accounting adjustments | 0.01 | — | 0.10 | — | ||||||||||||||||||||
Restructuring charges | 0.01 | — | 0.06 | — | ||||||||||||||||||||
CEO transition costs | — | — | — | 0.12 | ||||||||||||||||||||
April 2013 tax court decision | — | — | — | 0.30 | ||||||||||||||||||||
Diluted Income from Continuing Operations per Share as adjusted (Non-GAAP) (1) | $ | 0.64 | $ | 0.39 | 64.1 | $ | 1.73 | $ | 1.26 | 37.3 | ||||||||||||||
Full-Year 2013 | Full-Year 2014 Outlook | |||||||||||||||||||||||
Diluted Income from Continuing Operations per Share (GAAP) | $ | 1.31 | $ | 2.10 | to | $ | 2.15 | |||||||||||||||||
Männer short-term purchase accounting adjustments | 0.07 | 0.13 | ||||||||||||||||||||||
Männer acquisition transaction costs | 0.03 | — | ||||||||||||||||||||||
Restructuring charges | — | 0.07 | ||||||||||||||||||||||
CEO transition costs | 0.12 | — | ||||||||||||||||||||||
April 2013 tax court decision | 0.30 | — | ||||||||||||||||||||||
Diluted Income from Continuing Operations per Share as adjusted (Non-GAAP) (1) | $ | 1.83 | $ | 2.30 | to | $ | 2.35 | |||||||||||||||||
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