Barnes Reports Second Quarter 2024 Financial Results
Barnes Group Inc. (NYSE: B) reported Q2 2024 financial results, showing sales of $382 million, up 13% year-over-year with organic growth of 5%. The company recorded an operating loss of $2.1 million due to a $53.7 million non-cash impairment charge in the Automation business unit. Adjusted operating income was $47.6 million, up 9%, with adjusted operating margin at 12.4%, down 40 bps. Adjusted EBITDA was $76.5 million, up 14%, with a margin of 20.0%, up 20 bps. Barnes reported a net loss of $46.8 million, or -$0.91 per share, compared to net income of $17.4 million, or $0.34 per share in the prior year. Adjusted EPS was $0.37, down 36% from $0.58 last year. The company updated its 2024 guidance, projecting organic sales growth of 4% to 6% and adjusted EPS of $1.55 to $1.75.
- Sales increased 13% year-over-year to $382 million
- Adjusted operating income up 9% to $47.6 million
- Adjusted EBITDA increased 14% to $76.5 million
- Aerospace segment sales up 79%, with organic growth of 8%
- Aerospace OEM backlog up 3% sequentially to $1.51 billion
- Recorded $53.7 million non-cash impairment charge in Automation business unit
- Net loss of $46.8 million, or -$0.91 per share
- Adjusted EPS down 36% to $0.37
- Industrial segment operating loss of $31.5 million
- Year-to-date free cash flow negative at $14.5 million
Barnes Group's Q2 2024 results present a mixed picture. While overall sales increased by 13% to
- Operating margin turned negative at
-0.6% due to a$53.7 million goodwill impairment in the Automation business unit. - Adjusted EPS declined by
36% to$0.37 , impacted by higher interest expenses and tax rates. - Free cash flow was negative
$14.5 million year-to-date, adjusted for divestiture-related tax payments.
The Aerospace segment showed strong growth, with sales up
The company's debt position remains a concern, with a Net Debt to EBITDA ratio of 3.48x. Barnes aims to reduce this to 3.0x by year-end, which will be important for financial stability.
The updated 2024 guidance suggests caution, with adjusted EPS forecast at
Barnes' Aerospace segment performance reveals both opportunities and challenges in the current market:
- The
79% sales increase, largely driven by the MB Aerospace acquisition, demonstrates Barnes' strategic move to expand its aerospace footprint. - Organic growth of
8% in Aerospace, with aftermarket sales up19% , indicates robust demand in fleet maintenance and repair. - However, Aerospace OEM organic sales grew only
1% , highlighting persistent supply chain and productivity issues in new aircraft production.
The Aerospace OEM backlog of
The decline in Aerospace adjusted operating margin by 220 basis points to
Barnes' transformation into an aerospace-focused company is progressing, but near-term headwinds in the OEM sector will likely continue to impact overall performance.
Barnes' strategic shift towards becoming an aerospace-focused company is evident in this quarter's results, but the transition presents both opportunities and challenges:
- The divestiture of Associated Spring and Hänggi businesses for
$175 million demonstrates Barnes' commitment to reducing automotive exposure and focusing on higher-growth sectors. - The MB Aerospace acquisition has significantly boosted Aerospace segment sales, but integration costs and margin pressures are apparent in the short term.
- The
$53.7 million goodwill impairment in the Automation business unit signals potential miscalculations in previous acquisitions or market changes, necessitating a strategic review of the Industrial segment.
The Barnes Transformation Office (BTO) initiatives are showing some positive impact, particularly in cost management within the Industrial segment. However, the overall transformation is creating near-term volatility in financial results.
The company's focus on debt reduction, aiming for a leverage ratio of 2.5x by 2025, is important for maintaining financial flexibility during this transition period. The success of this strategy will depend on improving free cash flow generation and potentially further portfolio optimization.
While the aerospace focus aligns with long-term industry growth trends, Barnes must navigate the current supply chain and productivity challenges to fully capitalize on its strategic repositioning.
Significant Progress Made on Transforming to an Aerospace Focused Company
Comparisons are year-over-year unless noted otherwise
Second Quarter 2024:
-
Sales of
, up$382 million 13% ; Organic Sales up5% -
Operating Margin of -
0.6% ; Adjusted Operating Margin of12.4% , down 40 bps -
Adjusted EBITDA Margin of
20.0% , up 20 bps -
GAAP EPS of -
; Adjusted EPS of$0.91 , down$0.37 36% - Records Automation goodwill impairment
2024 Outlook:
-
Sales Growth of
10% to12% ; Organic Sales Growth of4% to6% -
Adjusted EBITDA Margin of
20% to22% -
GAAP EPS of -
to$0.36 - ; Adjusted EPS of$0.16 to$1.55 $1.75
“For the second quarter, strong Aerospace aftermarket and Molding Solutions revenue growth partially offset lower than expected Aerospace OEM sales, as industry supply chain and productivity constraints continue to temper our Aerospace OEM results," said Thomas J. Hook, President and Chief Executive Officer of Barnes. “These industry factors will impact our overall near-term Aerospace outlook, even as our aftermarket continues to benefit from growing fleet opportunities and synergies from our acquisition of MB Aerospace remain on track. Despite these headwinds, we are making significant progress across the company in transforming Barnes into a higher growth, higher value company, led by a strong Aerospace business and a streamlined Industrial business.”
Second Quarter 2024 Highlights
Sales of
In the quarter, the sales and cash flow expectations for the Automation business unit within the Industrial segment were reduced, which among other factors, resulted in a non-cash impairment charge of
Adjusted operating income of
In early April, Barnes closed the divestiture of the Associated Spring and Hänggi businesses, materially reducing its exposure to automotive component manufacturing. The headline price of the transaction was
Interest expense was
The effective tax rate for the quarter was -
Net loss was
Year-to-date cash provided by operating activities was
Segment Performance
Aerospace
Second quarter sales in the Aerospace segment were
Aerospace OEM backlog ended the second quarter at
Industrial
Second quarter sales in the Industrial segment were
Balance Sheet and Liquidity
As of June 30, 2024, the Company had
Updated 2024 Full Year Outlook
The Company is updating its full year 2024 guidance to the following:
|
|
2024 Guidance |
Organic sales growth |
|
|
Adjusted operating margin |
|
|
Adjusted EBITDA margin |
|
|
Adjusted earnings per share |
|
|
Capital expenditures |
|
|
Free cash flow |
|
|
Adjusted effective tax rate |
|
|
The Company’s 2024 Adjusted EPS guidance excludes a
Conference Call Information
Barnes will conduct a conference call with investors to discuss the second quarter 2024 results at 8:30 a.m. ET today, July 26, 2024. The public may access the conference through a live audio webcast available on the Investor Relations section of Barnes’ website at www.onebarnes.com.
The conference is also available by direct dial at (888) 510-2379 in the
In addition, the call will be recorded and available for playback from 12:00 p.m. (ET) on Friday, July 26, 2024, until 11:59 p.m. (ET) on Friday, August 2, 2024, by dialing (609) 800-9909; Conference ID 1137078.
Notes:
(1) Organic sales growth represents the total reported sales increase within the Company’s ongoing business less the impact of foreign currency translation and acquisitions and divestitures completed in the preceding twelve months.
(2) While Barnes reports financial results in accordance with
About Barnes
Barnes Group Inc. (NYSE: B) leverages world-class manufacturing capabilities and market-leading engineering to develop advanced processes, automation solutions, and applied technologies for industries ranging from aerospace and medical & personal care to mobility and packaging. With a celebrated legacy of pioneering excellence, Barnes delivers exceptional value to customers through advanced manufacturing capabilities and cutting-edge industrial technologies. Barnes Aerospace specializes in the production and servicing of intricate fabricated and precision-machined components for both commercial and military turbine engines, nacelles, and airframes. Barnes Industrial excels in advancing the processing, control, and sustainability of engineered plastics and delivering innovative, custom-tailored solutions for industrial automation and metal forming applications. Established in 1857 and headquartered in
Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future operating and financial performance and financial condition, and often contain words such as "anticipate," "believe," "expect," "plan," "estimate," "project," "continue," "will," "should," "may," and similar terms. These forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include, among others: the Company’s ability to manage economic, business and geopolitical conditions, including rising interest rates, global price inflation and shortages impacting the availability of materials; the duration and severity of unforeseen events such as an epidemic or a pandemic, including their impacts across our business on demand, supply chains, operations and liquidity; failure to successfully negotiate collective bargaining agreements or potential strikes, work stoppages or other similar events; changes in market demand for our products and services; rapid technological and market change; the ability to protect and avoid infringing upon intellectual property rights; challenges associated with the introduction or development of new products or transfer of work; higher risks in global operations and markets; the impact of intense competition; the physical and operational risks from natural disasters, severe weather events, and climate change which may limit accessibility to sufficient water resources, outbreaks of contagious diseases and other adverse public health developments; acts of war, terrorism and other international conflicts; the failure to achieve anticipated cost savings and benefits associated with workforce reductions and restructuring actions; currency fluctuations and foreign currency exposure; impacts from goodwill impairment and related charges; our dependence upon revenues and earnings from a small number of significant customers; a major loss of customers; inability to realize expected sales or profits from existing backlog due to a range of factors, including changes in customer sourcing decisions, material changes, production schedules and volumes of specific programs; the impact of government budget and funding decisions; our ability to successfully integrate and achieve anticipated synergies associated with recently announced and future acquisitions, including the acquisition of MB Aerospace; government-imposed sanctions, tariffs, trade agreements and trade policies; changes or uncertainties in laws, regulations, rates, policies or interpretations that impact the Company’s business operations or tax status, including those that address climate change, environmental, health and safety matters, and the materials processed by our products or their end markets; fluctuations in the pricing or availability of raw materials, freight, transportation, energy, utilities and other items required by our operations; labor shortages or other business interruptions at transportation centers, shipping ports, our suppliers’ facilities or our facilities; disruptions in information technology systems, including as a result of cybersecurity attacks or data security breaches; the ability to hire and retain senior management and qualified personnel; the continuing impact of prior acquisitions and divestitures, and any ongoing and future strategic actions, and our ability to achieve the financial and operational targets set in connection with any such actions; the ability to achieve social and environmental performance goals; the outcome of pending and future litigation and governmental proceedings; the impact of actual, potential or alleged defects or failures of our products or third-party products within which our products are integrated, including product liabilities, product recall costs and uninsured claims; future repurchases of common stock; future levels of indebtedness; the impact of shareholder activism; and other risks and uncertainties described in documents filed with or furnished to the Securities and Exchange Commission ("SEC") by the Company, including, among others, those in the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections of the Company's filings. The Company assumes no obligation to update its forward-looking statements.
Category: Earnings
BARNES GROUP INC. | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF (LOSS) INCOME | |||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||
2024 |
2023 |
% Change | 2024 |
2023 |
% Change | ||||||||||||||||
Net sales | $ |
382,232 |
|
$ |
338,984 |
|
12.8 |
|
$ |
812,870 |
|
$ |
674,341 |
|
20.5 |
|
|||||
Cost of sales |
|
258,188 |
|
|
224,625 |
|
14.9 |
|
|
558,284 |
|
|
450,868 |
|
23.8 |
|
|||||
Selling and administrative expenses |
|
82,667 |
|
|
88,350 |
|
(6.4 |
) |
|
170,394 |
|
|
174,180 |
|
(2.2 |
) |
|||||
Goodwill impairment charge |
|
53,694 |
|
|
- |
|
100.0 |
|
|
53,694 |
|
|
- |
|
100.0 |
|
|||||
Gain on the sale of businesses |
|
(10,204 |
) |
|
- |
|
NM |
|
|
(7,071 |
) |
|
- |
|
NM |
|
|||||
|
384,345 |
|
|
312,975 |
|
22.8 |
|
|
775,301 |
|
|
625,048 |
|
24.0 |
|
||||||
Operating (loss) income |
|
(2,113 |
) |
|
26,009 |
|
(108.1 |
) |
|
37,569 |
|
|
49,293 |
|
(23.8 |
) |
|||||
Operating margin |
|
-0.6 |
% |
|
7.7 |
% |
|
4.6 |
% |
|
7.3 |
% |
|||||||||
Interest expense |
|
20,812 |
|
|
6,512 |
|
219.6 |
|
|
45,643 |
|
|
11,819 |
|
286.2 |
|
|||||
Other expense (income), net |
|
(845 |
) |
|
(2,894 |
) |
(70.8 |
) |
|
850 |
|
|
(1,553 |
) |
NM |
|
|||||
(Loss) income before income taxes |
|
(22,080 |
) |
|
22,391 |
|
(198.6 |
) |
|
(8,924 |
) |
|
39,027 |
|
(122.9 |
) |
|||||
Income taxes |
|
24,741 |
|
|
5,039 |
|
391.0 |
|
|
35,949 |
|
|
8,516 |
|
322.1 |
|
|||||
Net (loss) income | $ |
(46,821 |
) |
$ |
17,352 |
|
(369.8 |
) |
$ |
(44,873 |
) |
$ |
30,511 |
|
(247.1 |
) |
|||||
Common dividends | $ |
8,118 |
|
$ |
8,099 |
|
0.2 |
|
$ |
16,229 |
|
$ |
16,195 |
|
0.2 |
|
|||||
Per common share: | |||||||||||||||||||||
Net (loss) income: | |||||||||||||||||||||
Basic | $ |
(0.91 |
) |
$ |
0.34 |
|
(367.6 |
) |
$ |
(0.88 |
) |
$ |
0.60 |
|
(246.7 |
) |
|||||
Diluted |
|
(0.91 |
) |
|
0.34 |
|
(367.6 |
) |
|
(0.88 |
) |
|
0.60 |
|
(246.7 |
) |
|||||
Dividends |
|
0.16 |
|
|
0.16 |
|
- |
|
|
0.32 |
|
|
0.32 |
|
- |
|
|||||
Weighted average common shares outstanding: | |||||||||||||||||||||
Basic |
|
51,302,547 |
|
|
51,051,780 |
|
0.5 |
|
|
51,263,503 |
|
|
51,020,648 |
|
0.5 |
|
|||||
Diluted |
|
51,302,547 |
|
|
51,225,545 |
|
0.2 |
|
|
51,263,503 |
|
|
51,245,163 |
|
0.0 |
|
|||||
NM - Not meaningful |
BARNES GROUP INC. | ||||||||||||||||||||||
OPERATIONS BY REPORTABLE BUSINESS SEGMENT | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||
2024 |
2023 |
% Change | 2024 |
2023 |
% Change | |||||||||||||||||
Net sales | ||||||||||||||||||||||
Aerospace | $ |
217,958 |
|
$ |
122,015 |
|
78.6 |
|
$ |
439,328 |
|
$ |
239,272 |
|
83.6 |
|
||||||
Industrial |
|
164,274 |
|
|
216,971 |
|
(24.3 |
) |
|
373,542 |
|
|
435,079 |
|
(14.1 |
) |
||||||
Intersegment sales |
|
- |
|
|
(2 |
) |
|
- |
|
|
(10 |
) |
||||||||||
Total net sales | $ |
382,232 |
|
$ |
338,984 |
|
12.8 |
|
$ |
812,870 |
|
$ |
674,341 |
|
20.5 |
|
||||||
Operating (loss) profit | ||||||||||||||||||||||
Aerospace | $ |
29,344 |
|
$ |
16,580 |
|
77.0 |
|
$ |
60,430 |
|
$ |
35,331 |
|
71.0 |
|
||||||
Industrial |
|
(31,457 |
) |
|
9,429 |
|
(433.6 |
) |
|
(22,861 |
) |
|
13,962 |
|
(263.7 |
) |
||||||
Total operating (loss) profit | $ |
(2,113 |
) |
$ |
26,009 |
|
(108.1 |
) |
$ |
37,569 |
|
$ |
49,293 |
|
(23.8 |
) |
||||||
Operating margin | Change | Change | ||||||||||||||||||||
Aerospace |
|
13.5 |
% |
|
13.6 |
% |
(10 |
) |
bps. |
|
13.8 |
% |
|
14.8 |
% |
(100 |
) |
bps. | ||||
Industrial |
|
-19.1 |
% |
|
4.3 |
% |
(2,340 |
) |
bps. |
|
-6.1 |
% |
|
3.2 |
% |
(930 |
) |
bps. | ||||
Total operating margin |
|
-0.6 |
% |
|
7.7 |
% |
(830 |
) |
bps. |
|
4.6 |
% |
|
7.3 |
% |
(270 |
) |
bps. |
BARNES GROUP INC. | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Dollars in thousands) | |||||||
(Unaudited) | |||||||
June 30, 2024 | December 31, 2023 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ |
65,909 |
$ |
89,827 |
|||
Accounts receivable |
|
345,482 |
|
353,923 |
|||
Inventories |
|
350,292 |
|
365,221 |
|||
Prepaid expenses and other current assets |
|
104,689 |
|
97,749 |
|||
Total current assets |
|
866,372 |
|
906,720 |
|||
Deferred income taxes |
|
- |
|
10,295 |
|||
Property, plant and equipment, net |
|
351,879 |
|
402,697 |
|||
Goodwill |
|
1,046,822 |
|
1,183,624 |
|||
Other intangible assets, net |
|
662,666 |
|
706,471 |
|||
Other assets |
|
109,348 |
|
98,207 |
|||
Total assets | $ |
3,037,087 |
$ |
3,308,014 |
|||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Notes and overdrafts payable | $ |
6,547 |
$ |
16 |
|||
Accounts payable |
|
152,271 |
|
164,264 |
|||
Accrued liabilities |
|
217,793 |
|
221,462 |
|||
Long-term debt - current |
|
10,518 |
|
10,868 |
|||
Total current liabilities |
|
387,129 |
|
396,610 |
|||
Long-term debt |
|
1,149,386 |
|
1,279,962 |
|||
Accrued retirement benefits |
|
36,825 |
|
45,992 |
|||
Deferred income taxes |
|
115,950 |
|
120,608 |
|||
Long-term tax liability |
|
- |
|
21,714 |
|||
Other liabilities |
|
71,299 |
|
80,865 |
|||
Total stockholders' equity |
|
1,276,498 |
|
1,362,263 |
|||
Total liabilities and stockholders' equity | $ |
3,037,087 |
$ |
3,308,014 |
BARNES GROUP INC. | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(Dollars in thousands) | |||||||||
(Unaudited) | |||||||||
Six months ended June 30, | |||||||||
|
2024 |
|
|
2023 |
|
||||
Operating activities: | |||||||||
Net (loss) income | $ |
(44,873 |
) |
$ |
30,511 |
|
|||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||
Depreciation and amortization |
|
59,563 |
|
|
46,913 |
|
|||
Gain on disposition of property, plant and equipment |
|
(50 |
) |
|
(180 |
) |
|||
Stock compensation expense |
|
6,464 |
|
|
4,832 |
|
|||
Non-cash goodwill impairment charge |
|
53,694 |
|
|
- |
|
|||
Gain on sale of businesses |
|
(5,545 |
) |
|
- |
|
|||
Changes in assets and liabilities, net of the effects of divestiture: | |||||||||
Accounts receivable |
|
(12,173 |
) |
|
(18,102 |
) |
|||
Inventories |
|
(23,011 |
) |
|
(9,743 |
) |
|||
Prepaid expenses and other current assets |
|
(12,532 |
) |
|
(5,183 |
) |
|||
Accounts payable |
|
2,862 |
|
|
(2,300 |
) |
|||
Accrued liabilities |
|
(645 |
) |
|
16,745 |
|
|||
Deferred income taxes |
|
3,454 |
|
|
779 |
|
|||
Long-term retirement benefits |
|
(10,336 |
) |
|
(10,636 |
) |
|||
Long-term tax liability |
|
(17,372 |
) |
|
(13,029 |
) |
|||
Other |
|
3,550 |
|
|
1,860 |
|
|||
Net cash provided by operating activities |
|
3,050 |
|
|
42,467 |
|
|||
Investing activities: | |||||||||
Proceeds from disposition of property, plant and equipment |
|
344 |
|
|
149 |
|
|||
Proceeds from the sale of businesses |
|
146,041 |
|
|
- |
|
|||
Capital expenditures |
|
(29,854 |
) |
|
(21,617 |
) |
|||
Business acquisitions, net of cash acquired |
|
159 |
|
|
- |
|
|||
Other |
|
- |
|
|
(722 |
) |
|||
Net cash provided (used) by investing activities |
|
116,690 |
|
|
(22,190 |
) |
|||
Financing activities: | |||||||||
Net change in other borrowings |
|
6,568 |
|
|
7,775 |
|
|||
Payments on long-term debt |
|
(233,207 |
) |
|
(112,927 |
) |
|||
Proceeds from the issuance of long-term debt |
|
110,000 |
|
|
101,208 |
|
|||
Proceeds from the issuance of common stock |
|
122 |
|
|
189 |
|
|||
Dividends paid |
|
(16,229 |
) |
|
(16,195 |
) |
|||
Withholding taxes paid on stock issuances |
|
(141 |
) |
|
(376 |
) |
|||
Cash settlement of foreign currency hedges related to intercompany financing |
|
(9,967 |
) |
|
(1,176 |
) |
|||
Other |
|
(232 |
) |
|
(2,588 |
) |
|||
Net cash used by financing activities |
|
(143,086 |
) |
|
(24,090 |
) |
|||
Effect of exchange rate changes on cash flows |
|
(2,784 |
) |
|
(466 |
) |
|||
Decrease in cash, cash equivalents and restricted cash |
|
(26,130 |
) |
|
(4,279 |
) |
|||
Cash, cash equivalents and restricted cash at beginning of the period |
|
92,039 |
|
|
81,128 |
|
|||
Cash, cash equivalents and restricted cash at end of period |
|
65,909 |
|
|
76,849 |
|
|||
Less: Restricted cash, included in Prepaid expenses and other current assets |
|
- |
|
|
(2,176 |
) |
|||
Cash and cash equivalents at end of period | $ |
65,909 |
|
$ |
74,673 |
|
|||
BARNES GROUP INC. | |||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | |||||||
(Dollars in thousands) | |||||||
(Unaudited) | |||||||
Six months ended June 30, |
|||||||
2024 |
|
2023 |
|||||
Free cash flow: | |||||||
Net cash provided by operating activities | $ |
3,050 |
|
$ |
42,467 |
|
|
Capital expenditures |
|
(29,854 |
) |
|
(21,617 |
) |
|
Free cash flow(1) | $ |
(26,804 |
) |
$ |
20,850 |
|
|
Free cash flow (as adjusted): | |||||||
Free cash flow (from above) | $ |
(26,804 |
) |
$ |
20,850 |
|
|
Income tax payments related to the sale of the businesses |
|
12,280 |
|
|
- |
|
|
Free cash flow (as adjusted) (1) | $ |
(14,524 |
) |
$ |
20,850 |
|
|
Notes: | |||||||
(1) The Company defines free cash flow as net cash provided by operating activities less capital expenditures. In 2024, net cash provided by operating activities was negatively impacted by |
|||||||
BARNES GROUP INC. | ||||||||||||||||||||||||
NON-GAAP FINANCIAL MEASURE RECONCILIATION | ||||||||||||||||||||||||
ADJUSTED OPERATING PROFIT AND ADJUSTED DILUTED EARNINGS PER SHARE | ||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||
2024 |
2023 |
% Change | 2024 |
2023 |
% Change | |||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||
Operating Profit - Aerospace Segment (GAAP) | $ |
29,344 |
|
$ |
16,580 |
|
|
77.0 |
|
$ |
60,430 |
|
$ |
35,331 |
|
71.0 |
|
|||||||
Restructuring/reduction in force and transformation related charges |
|
2,247 |
|
|
545 |
|
|
2,638 |
|
|
2,314 |
|
||||||||||||
Shareholder advisory costs |
|
50 |
|
|
- |
|
|
1,078 |
|
|
- |
|
||||||||||||
Acquisition related costs |
|
- |
|
|
3,559 |
|
|
- |
|
|
3,559 |
|
||||||||||||
MB Short-term purchase accounting adjustments |
|
685 |
|
|
- |
|
|
2,826 |
|
|
- |
|
||||||||||||
Operating Profit - Aerospace Segment as adjusted (Non-GAAP) (1) | $ |
32,326 |
|
$ |
20,684 |
|
|
56.3 |
|
$ |
66,972 |
|
$ |
41,204 |
|
62.5 |
|
|||||||
Operating Margin - Aerospace Segment (GAAP) |
|
13.5 |
% |
|
13.6 |
% |
|
(10 |
) |
bps. |
|
13.8 |
% |
|
14.8 |
% |
(100 |
) |
bps. | |||||
Operating Margin - Aerospace Segment as adjusted (Non-GAAP) (1) |
|
14.8 |
% |
|
17.0 |
% |
|
(220 |
) |
bps. |
|
15.2 |
% |
|
17.2 |
% |
(200 |
) |
bps. | |||||
Operating (Loss) Profit - Industrial Segment (GAAP) | $ |
(31,457 |
) |
$ |
9,429 |
|
|
(433.6 |
) |
$ |
(22,861 |
) |
$ |
13,962 |
|
(263.7 |
) |
|||||||
Restructuring/reduction in force and transformation related charges |
|
3,167 |
|
|
13,351 |
|
|
6,888 |
|
|
25,461 |
|
||||||||||||
Shareholder advisory costs |
|
50 |
|
|
- |
|
|
1,022 |
|
|
- |
|
||||||||||||
Gain on the sale of businesses |
|
(10,204 |
) |
|
- |
|
|
(7,071 |
) |
|
- |
|
||||||||||||
Goodwill impairment charge |
|
53,694 |
|
|
- |
|
|
53,694 |
|
|
- |
|
||||||||||||
Operating Profit - Industrial Segment as adjusted (Non-GAAP) (1) | $ |
15,250 |
|
$ |
22,780 |
|
|
(33.1 |
) |
$ |
31,672 |
|
$ |
39,423 |
|
(19.7 |
) |
|||||||
Operating Margin - Industrial Segment (GAAP) |
|
-19.1 |
% |
|
4.3 |
% |
|
(2,340 |
) |
bps. |
|
-6.1 |
% |
|
3.2 |
% |
(930 |
) |
bps. | |||||
Operating Margin - Industrial Segment as adjusted (Non-GAAP) (1) |
|
9.3 |
% |
|
10.5 |
% |
|
(120 |
) |
bps. |
|
8.5 |
% |
|
9.1 |
% |
(60 |
) |
bps. | |||||
CONSOLIDATED RESULTS | ||||||||||||||||||||||||
Operating (Loss) Income (GAAP) | $ |
(2,113 |
) |
$ |
26,009 |
|
|
(108.1 |
) |
$ |
37,569 |
|
$ |
49,293 |
|
(23.8 |
) |
|||||||
Restructuring/reduction in force and transformation related charges |
|
5,414 |
|
|
13,896 |
|
|
9,526 |
|
|
27,775 |
|
||||||||||||
Shareholder advisory costs |
|
100 |
|
|
- |
|
|
2,100 |
|
|
- |
|
||||||||||||
Gain on the sale of businesses |
|
(10,204 |
) |
|
- |
|
|
(7,071 |
) |
|
- |
|
||||||||||||
Acquisition related costs |
|
- |
|
|
3,559 |
|
|
- |
|
|
3,559 |
|
||||||||||||
MB Short-term purchase accounting adjustments |
|
685 |
|
|
- |
|
|
2,826 |
|
|
- |
|
||||||||||||
Goodwill impairment charge |
|
53,694 |
|
|
- |
|
|
53,694 |
|
|
- |
|
||||||||||||
Operating Income as adjusted (Non-GAAP) (1) | $ |
47,576 |
|
$ |
43,464 |
|
|
9.5 |
|
$ |
98,644 |
|
$ |
80,627 |
|
22.3 |
|
|||||||
Operating Margin (GAAP) |
|
-0.6 |
% |
|
7.7 |
% |
|
(830 |
) |
bps. |
|
4.6 |
% |
|
7.3 |
% |
(270 |
) |
bps. | |||||
Operating Margin as adjusted (Non-GAAP) (1) |
|
12.4 |
% |
|
12.8 |
% |
|
(40 |
) |
bps. |
|
12.1 |
% |
|
12.0 |
% |
10 |
|
bps. | |||||
Diluted Net (Loss) Income per Share (GAAP) | $ |
(0.91 |
) |
$ |
0.34 |
|
|
(367.6 |
) |
$ |
(0.88 |
) |
$ |
0.60 |
|
(246.7 |
) |
|||||||
Restructuring/reduction in force and transformation related charges |
|
0.08 |
|
|
0.19 |
|
|
0.14 |
|
|
0.39 |
|
||||||||||||
Shareholder advisory costs |
|
- |
|
|
- |
|
|
0.03 |
|
|
- |
|
||||||||||||
Loss related to sale of businesses, net of tax |
|
0.14 |
|
|
- |
|
|
0.35 |
|
|
- |
|
||||||||||||
MB Short-term purchase accounting adjustments |
|
0.01 |
|
|
- |
|
|
0.04 |
|
|
- |
|
||||||||||||
Acquisition related costs |
|
- |
|
|
0.05 |
|
|
0.02 |
|
|
0.05 |
|
||||||||||||
Goodwill impairment charge |
|
1.05 |
|
|
- |
|
|
1.05 |
|
|
- |
|
||||||||||||
Diluted Net Income per Share as adjusted (Non-GAAP) (1) | $ |
0.37 |
|
$ |
0.58 |
|
|
(36.2 |
) |
$ |
0.75 |
|
$ |
1.04 |
|
(27.9 |
) |
|||||||
Full-Year 2023 | Full-Year 2024 Outlook | |||||||||||||||||||||||
Operating Margin (GAAP) |
|
6.1 |
% |
|
7.1 |
% |
to |
|
9.1 |
% |
||||||||||||||
Restructuring/reduction in force and transformation related charges |
|
3.2 |
% |
1.6 |
% |
|||||||||||||||||||
Divestiture transaction costs/loss related to sale of businesses, net of tax |
|
0.1 |
% |
-0.4 |
% |
|||||||||||||||||||
MB Short-term purchase accounting adjustments |
|
1.3 |
% |
0.3 |
% |
|||||||||||||||||||
Shareholder advisory costs |
|
- |
|
0.1 |
% |
|||||||||||||||||||
Acquisition related costs |
|
0.8 |
% |
- |
|
|||||||||||||||||||
Goodwill impairment charge |
|
- |
|
3.3 |
% |
|||||||||||||||||||
Operating Margin as adjusted (Non-GAAP) (1) |
|
11.5 |
% |
|
12.0 |
% |
to |
|
14.0 |
% |
||||||||||||||
Diluted Net Income (Loss) per Share (GAAP) | $ |
0.31 |
|
$ |
(0.36 |
) |
to | $ |
(0.16 |
) |
||||||||||||||
Restructuring/reduction in force and transformation related charges |
|
0.66 |
|
0.40 |
|
|||||||||||||||||||
Divestiture transaction costs/loss related to sale of businesses, net of tax |
|
0.02 |
|
0.35 |
|
|||||||||||||||||||
MB Short-term purchase accounting adjustments |
|
0.29 |
|
0.06 |
|
|||||||||||||||||||
Shareholder advisory costs |
|
- |
|
0.03 |
|
|||||||||||||||||||
Acquisition related costs |
|
0.37 |
|
0.02 |
|
|||||||||||||||||||
Goodwill impairment charge |
|
- |
|
1.05 |
|
|||||||||||||||||||
Diluted Net Income per Share as adjusted (Non-GAAP) (1) | $ |
1.65 |
|
$ |
1.55 |
|
to | $ |
1.75 |
|
||||||||||||||
Notes: | ||||||||||||
(1) The Company has excluded the following from its "as adjusted" financial measurements for 2024: 1) charges related to restructuring/reduction in force actions at certain businesses and transformation costs (consulting/professional fees related to business and portfolio transformation initiatives), 2) a pre-tax gain related to the divestiture of the Businesses, including |
BARNES GROUP INC. | |||||||||||||||||||||||||||||||
NON-GAAP FINANCIAL MEASURE RECONCILIATION | |||||||||||||||||||||||||||||||
EBITDA, EBITDA MARGIN, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN | |||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
Three months ended June 30, | |||||||||||||||||||||||||||||||
2024 |
2023 |
||||||||||||||||||||||||||||||
Aerospace | Industrial | Other (1) | Total | Aerospace | Industrial | Other (1) | Total | ||||||||||||||||||||||||
Net Sales | $ |
217,958 |
|
|
164,274 |
|
|
- |
|
$ |
382,232 |
|
$ |
122,015 |
|
|
216,971 |
|
|
(2 |
) |
$ |
338,984 |
|
|||||||
Net (Loss) Income | $ |
(46,821 |
) |
$ |
17,352 |
|
|||||||||||||||||||||||||
Interest expense |
|
20,812 |
|
|
6,512 |
|
|||||||||||||||||||||||||
Other expense (income), net |
|
(845 |
) |
|
(2,894 |
) |
|||||||||||||||||||||||||
Income taxes |
|
24,741 |
|
|
5,039 |
|
|||||||||||||||||||||||||
Operating Profit (Loss) (GAAP) | $ |
29,344 |
|
$ |
(31,457 |
) |
$ |
- |
|
$ |
(2,113 |
) |
$ |
16,580 |
|
$ |
9,429 |
|
$ |
- |
|
$ |
26,009 |
|
|||||||
Operating Margin (GAAP) |
|
13.5 |
% |
|
-19.1 |
% |
|
-0.6 |
% |
|
13.6 |
% |
|
4.3 |
% |
|
7.7 |
% |
|||||||||||||
Other expense (income), net |
|
- |
|
|
- |
|
|
845 |
|
|
845 |
|
|
- |
|
|
- |
|
|
2,894 |
|
|
2,894 |
|
|||||||
Depreciation (2) |
|
7,463 |
|
|
3,990 |
|
|
- |
|
|
11,453 |
|
|
4,867 |
|
|
6,393 |
|
|
- |
|
|
11,260 |
|
|||||||
Amortization (3) |
|
11,214 |
|
|
5,887 |
|
|
- |
|
|
17,101 |
|
|
5,191 |
|
|
6,413 |
|
|
- |
|
|
11,604 |
|
|||||||
EBITDA (Non-GAAP) (4) | $ |
48,021 |
|
$ |
(21,580 |
) |
$ |
845 |
|
$ |
27,286 |
|
$ |
26,638 |
|
$ |
22,235 |
|
$ |
2,894 |
|
$ |
51,767 |
|
|||||||
EBITDA Margin (Non-GAAP) (4) |
|
22.0 |
% |
|
-13.1 |
% |
|
7.1 |
% |
|
21.8 |
% |
|
10.2 |
% |
|
15.3 |
% |
|||||||||||||
Restructuring/reduction in force and transformation related charges |
|
2,247 |
|
|
3,167 |
|
|
- |
|
|
5,414 |
|
|
545 |
|
|
12,555 |
|
|
- |
|
|
13,100 |
|
|||||||
Shareholder advisory costs |
|
50 |
|
|
50 |
|
|
- |
|
|
100 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Acquisition transaction costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
3,559 |
|
|
- |
|
|
- |
|
|
3,559 |
|
|||||||
MB Short-term purchase accounting adjustments |
|
42 |
|
|
- |
|
|
- |
|
|
42 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Pension related loss |
|
- |
|
|
- |
|
|
156 |
|
|
156 |
|
|
- |
|
|
- |
|
|
(1,144 |
) |
|
(1,144 |
) |
|||||||
Gain on the sale of businesses |
|
- |
|
|
(10,204 |
) |
|
- |
|
|
(10,204 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Goodwill impairment charge |
|
- |
|
|
53,694 |
|
|
- |
|
|
53,694 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Adjusted EBITDA (Non-GAAP) (4) | $ |
50,360 |
|
$ |
25,127 |
|
$ |
1,001 |
|
$ |
76,488 |
|
$ |
30,742 |
|
$ |
34,790 |
|
$ |
1,750 |
|
$ |
67,282 |
|
|||||||
Adjusted EBITDA Margin (Non-GAAP) (4) |
|
23.1 |
% |
|
15.3 |
% |
|
20.0 |
% |
|
25.2 |
% |
|
16.0 |
% |
|
19.8 |
% |
|||||||||||||
Six months ended June 30, | |||||||||||||||||||||||||||||||
2024 |
2023 |
||||||||||||||||||||||||||||||
Aerospace | Industrial | Other (1) | Total | Aerospace | Industrial | Other (1) | Total | ||||||||||||||||||||||||
Net Sales | $ |
439,328 |
|
|
373,542 |
|
|
- |
|
$ |
812,870 |
|
$ |
239,272 |
|
|
435,079 |
|
|
(10 |
) |
$ |
674,341 |
|
|||||||
Net (Loss) Income | $ |
(44,873 |
) |
$ |
30,511 |
|
|||||||||||||||||||||||||
Interest expense |
|
45,643 |
|
|
11,819 |
|
|||||||||||||||||||||||||
Other expense (income), net |
|
850 |
|
|
(1,553 |
) |
|||||||||||||||||||||||||
Income taxes |
|
35,949 |
|
|
8,516 |
|
|||||||||||||||||||||||||
Operating Profit (Loss) (GAAP) | $ |
60,430 |
|
$ |
(22,861 |
) |
$ |
- |
|
$ |
37,569 |
|
$ |
35,331 |
|
$ |
13,962 |
|
$ |
- |
|
$ |
49,293 |
|
|||||||
Operating Margin (GAAP) |
|
13.8 |
% |
|
-6.1 |
% |
|
4.6 |
% |
|
14.8 |
% |
|
3.2 |
% |
|
7.3 |
% |
|||||||||||||
Other expense (income), net |
|
- |
|
|
- |
|
|
(850 |
) |
|
(850 |
) |
|
- |
|
|
- |
|
|
1,553 |
|
|
1,553 |
|
|||||||
Depreciation (2) |
|
15,319 |
|
|
9,581 |
|
|
- |
|
|
24,900 |
|
|
9,820 |
|
|
13,869 |
|
|
- |
|
|
23,689 |
|
|||||||
Amortization (3) |
|
22,850 |
|
|
11,813 |
|
|
- |
|
|
34,663 |
|
|
10,297 |
|
|
12,927 |
|
|
- |
|
|
23,224 |
|
|||||||
EBITDA (Non-GAAP) (4) | $ |
98,599 |
|
$ |
(1,467 |
) |
$ |
(850 |
) |
$ |
96,282 |
|
$ |
55,448 |
|
$ |
40,758 |
|
$ |
1,553 |
|
$ |
97,759 |
|
|||||||
EBITDA Margin (Non-GAAP) (4) |
|
22.4 |
% |
|
-0.4 |
% |
|
11.8 |
% |
|
23.2 |
% |
|
9.4 |
% |
|
14.5 |
% |
|||||||||||||
Restructuring/reduction in force and transformation related charges |
|
2,638 |
|
|
6,164 |
|
|
- |
|
|
8,802 |
|
|
2,314 |
|
|
23,072 |
|
|
- |
|
|
25,386 |
|
|||||||
Shareholder advisory costs |
|
1,078 |
|
|
1,022 |
|
|
- |
|
|
2,100 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Acquisition transaction costs |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
3,559 |
|
|
- |
|
|
- |
|
|
3,559 |
|
|||||||
MB Short-term purchase accounting adjustments |
|
1,540 |
|
|
- |
|
|
- |
|
|
1,540 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Gain on the sale of businesses |
|
- |
|
|
(7,071 |
) |
|
- |
|
|
(7,071 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Pension related loss (gain) |
|
- |
|
|
- |
|
|
1,526 |
|
|
1,526 |
|
|
- |
|
|
- |
|
|
(1,144 |
) |
|
(1,144 |
) |
|||||||
Goodwill impairment charge |
|
- |
|
|
53,694 |
|
|
- |
|
|
53,694 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||||||
Adjusted EBITDA (Non-GAAP) (4) | $ |
103,855 |
|
$ |
52,342 |
|
$ |
676 |
|
$ |
156,873 |
|
$ |
61,321 |
|
$ |
63,830 |
|
$ |
409 |
|
$ |
125,560 |
|
|||||||
Adjusted EBITDA Margin (Non-GAAP) (4) |
|
23.6 |
% |
|
14.0 |
% |
|
19.3 |
% |
|
25.6 |
% |
|
14.7 |
% |
|
18.6 |
% |
|||||||||||||
Notes: | |||||||||||||||
(1) "Other" includes intersegment sales and items that are included within Other expense (income), net that are not allocated to the Company's reportable business segments. (2) Depreciation expense in 2024 includes (3) Amortization expense in 2024 includes (4) The Company defines EBITDA as net income plus interest expense, income taxes, and depreciation and amortization which the Company incurs in the normal course of business; in addition to these adjustments, the Company also excludes the impact of its "as adjusted items" above ("Adjusted EBITDA"). The Company does not intend EBITDA nor Adjusted EBITDA to represent cash flows from operations as defined by GAAP, and the reader should not consider it as an alternative to net income, net cash provided by operating activities or any other items calculated in accordance with GAAP, or as an indicator of the Company's operating performance. Accordingly, the measurements have limitations depending on their use. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240726914672/en/
Investors:
Barnes Group Inc.
William Pitts
Vice President, Investor Relations
ir@onebarnes.com
860.583.7070
Source: Barnes Group Inc.
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