Long-term Profitable Growth Strategy Driving a More Aerospace
Oriented Business
Comparisons are year-over-year unless noted otherwise
First Quarter 2024:
- Sales of $431 million, up 28%; Organic Sales up 4%
- Operating Margin of 9.2%; Adjusted Operating Margin of 11.9%,
up 80 bps
- Adjusted EBITDA Margin of 18.7%, up 130 bps
- GAAP EPS of $0.04; Adjusted EPS of $0.38, down 19%
2024 Outlook:
- Sales Growth of 13% to 16%; Organic Sales Growth of 5% to
8%
- Adjusted EBITDA Margin of 20% to 22%
- GAAP EPS of $1.08 to $1.28; Adjusted EPS of $1.62 to $1.82
Barnes Group Inc. (NYSE: B), a global provider of highly
engineered products, differentiated industrial technologies, and
innovative solutions, today reported financial results for the
first quarter 2024.
"Barnes continues to advance our business transformation
strategy with solid first-quarter results, additional long-term
Aerospace agreements benefiting from our MB Aerospace acquisition,
and the completed sale of the Associated Spring and Hanggi
businesses in April," said Thomas J. Hook, President and Chief
Executive Officer of Barnes. “Following the divestiture, an
increasing majority of our earnings are driven by Aerospace, where
we are investing to take full advantage of strong demand and
attractive growth opportunities. And we continue to integrate,
consolidate, and rationalize our Industrial business to further
optimize our portfolio for long-term profitable growth. Our
comprehensive strategic review is ongoing, and we remain committed
to reshaping and positioning Barnes to maximize value for our
shareholders. We look forward to sharing our ongoing progress."
First Quarter 2024 Highlights
Sales of $431 million were up 28%, supported by organic
growth(1) of 4% and acquisition-related growth of approximately
25%. The foreign exchange impact on sales was neutral. Operating
income of $39.7 million was up 70%, and operating margin of 9.2%
was up 230 bps.
Adjusted operating income of $51.1 million was up 37% and
adjusted operating margin of 11.9% was up 80 bps. Adjusted
operating income excludes restructuring and transformation related
charges of $4.1 million, divestiture transaction costs of $3.1
million, MB Aerospace short-term purchase accounting adjustments of
$2.1 million, and shareholder advisory costs of $2.0 million.
Adjusted EBITDA(2) was $80.4 million, up 38% from a year ago and
adjusted EBITDA margin was 18.7%, up 130 bps.
Interest expense was $24.8 million, up from $5.3 million a year
ago, primarily due to higher average borrowings from the purchase
of MB Aerospace and a higher average interest rate given the
recapitalization of the Company’s debt structure.
The effective tax rate for the quarter was 85% compared with 21%
last year primarily driven by $6.8 million of tax expense relating
to the sale of the Associated Spring and Hanggi businesses.
Net income was $1.9 million, or $0.04 per share, compared to
$13.2 million, or $0.26 per share in the prior year. On an adjusted
basis, net income per share of $0.38 was down 19% from $0.47.
Adjusted net income per share excludes $0.06 of restructuring and
transformation related charges, $0.02 of acquisition related costs,
$0.20 of divestiture transaction costs, $0.03 of MB Aerospace
short-term purchase accounting adjustments, and $0.03 of
shareholder advisory costs.
Year-to-date cash used by operating activities was $2.3 million
versus cash provided of $32.2 million a year ago. The decrease from
the prior year was due to a use of cash for working capital, higher
outflows for accrued liabilities, and an increase in other current
assets. Capital expenditures of $12.8 million increased $1.9
million over the prior year, driven by investments related to the
Company’s restructuring program and investments for growth. Free
cash flow was negative $15.2 million.
Segment Performance
Aerospace
First quarter sales in the Aerospace segment were $221 million,
up 89%. Organic sales increased 19% and sales related to the
acquisition of MB Aerospace added 70%. Aerospace original equipment
manufacturing (“OEM”) sales increased 85%, while aftermarket sales
increased 94%. On an organic basis, OEM sales increased 16% and
aftermarket sales increased 23%. Segment operating profit was $31.1
million, up 66%. Adjusted operating profit of $34.6 million was up
69%, while adjusted operating margin declined 180 bps to 15.7%.
Adjusted operating profit excludes restructuring and
transformation-related charges of $0.4 million, MB Aerospace
short-term purchase accounting adjustments of $2.1 million, and
allocated shareholder advisory costs of $1.0 million. Adjusted
operating profit benefited from the contribution of higher organic
sales volumes, inclusive of pricing, favorable aftermarket mix, and
the contribution of MB Aerospace sales, partially offset by the
amortization of long term acquired intangibles for the MB Aerospace
acquisition and lower productivity. Aerospace adjusted EBITDA was
$53.5 million, up 75%, and adjusted EBITDA margin was 24.2% versus
26.1% a year ago.
Aerospace OEM backlog ended the first quarter at $1.46 billion,
up 19% sequentially from December 2023. The Company expects to
convert approximately 45% of this backlog to revenue over the next
12 months.
Industrial
First quarter sales in the Industrial segment were $209 million,
down 4% reported and organic. Operating profit was $8.6 million
versus $4.5 million in the prior year. Adjusted operating profit
was $16.4 million, down 1%, and adjusted operating margin was 7.8%,
up 20 bps. Adjusted operating profit reflects lower organic sales
volumes and unfavorable mix, partially offset by positive pricing
and Barnes Transformation Office (BTO) cost initiatives. Adjusted
operating profit excludes restructuring and transformation related
charges of $3.7 million, divestiture-related costs of $3.1 million,
and allocated shareholder advisory costs of $1.0 million. Adjusted
EBITDA was $27.2 million, down 6% from a year ago, and adjusted
EBITDA margin was 13.0%, down 30 bps.
Associated Spring and Hanggi Divestiture
On April 4, 2024, Barnes completed the sale of the Associated
Spring & Hanggi businesses to One Equity Partners. This
divestiture materially reduces the Company’s exposure to automotive
component manufacturing and represents an important step in our
ongoing strategy to integrate, consolidate and rationalize the
Industrial business. Net cash proceeds of approximately $150
million will be used to reduce debt.
Balance Sheet and Liquidity
As of March 31, 2024, the Company had $82 million in cash and
$344 million available capacity under its revolving credit
facility. The “Net Debt to EBITDA” ratio, as defined in our credit
agreements, was 3.62 times, down slightly from 3.64 times at the
end of 2023. Barnes remains committed to achieving a leverage ratio
of 3.0x or lower by the end of 2024 and reaffirms its long-term
leverage goal of 2.5x by 2025.
During the quarter, Barnes refinanced its Term Loan B facility,
which resulted in a 60 bps decrease in the interest rate applied to
outstanding borrowings. All other terms of the loan facility are
essentially unchanged. The Company expects interest and tax savings
from the refinancing of approximately $1.4 million in 2024 and $4.7
million in 2025.
Updated 2024 Full Year Outlook
The Company is updating its full year 2024 guidance to the
following:
2024
Guidance
Organic sales growth
5% to 8%
Adjusted operating margin
12% to 14%
Adjusted EBITDA margin
20% to 22%
Adjusted earnings per share
$1.62 to $1.82
Capital expenditures
$60 million to $70 million
Free cash flow
$75 million to $85 million
Adjusted effective tax rate
31% to 33%
The Company’s 2024 Adjusted EPS guidance excludes $0.23 related
to restructuring and transformation activities, $0.06 of MB
Aerospace short-term purchase accounting adjustments, $0.02 of
acquisition related impacts, $0.20 of divestiture impacts related
to the sale of the Associated Spring™ and Hänggi™ businesses, and
$0.03 of shareholder advisory costs.
Conference Call Information
Barnes will conduct a conference call with investors to discuss
the first quarter 2024 results at 8:30 a.m. ET today, April 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 U.S. or (646) 960-0691 outside of the U.S.;
Conference ID 1137078. Supplemental materials will be posted to the
Investor Relations section of the Company's website prior to the
conference call.
In addition, the call will be recorded and available for
playback from 12:00 p.m. (ET) on Friday, April 26, 2024, until
11:59 p.m. (ET) on Friday, May 3, 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 acquisition and divestitures
completed in the preceding twelve months.
(2) While Barnes reports financial results in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
provides additional information with respect to a non-GAAP measure,
“Adjusted Earnings Before Interest, Income Tax, Depreciation and
Amortization” (Adjusted EBITDA). With the acquisition of MB
Aerospace, the largest transaction in Barnes’ history, the Company
incurred related expenses, including acquired intangible assets and
additional interest expense from the debt-funded acquisition.
Accordingly, the Company uses Adjusted EBITDA, among other
measures, to monitor our business performance. While EBITDA is not
a U.S. GAAP measure, nor is it a substitute for a U.S. GAAP
measure, we believe it provides helpful information to investors in
understanding the ongoing operating performance of the Company.
Investors should consider non-GAAP measures in addition to, not as
a substitute for, or as superior to, measures of financial
performance prepared in accordance with U.S. GAAP. Tables
reconciling non-GAAP to GAAP financial measures, including forward
looking outlook information, are presented at the end of this press
release.
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 Bristol, Connecticut, USA, the Company has manufacturing and
support operations around the globe. For more information, visit
please visit www.onebarnes.com.
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 INCOME
(Dollars in thousands, except per share data)
(Unaudited) Three months ended March 31,
2024
2023
% Change Net sales
$
430,638
$
335,357
28.4
Cost of sales
300,096
226,242
32.6
Selling and administrative expenses
90,860
85,831
5.9
390,956
312,073
25.3
Operating income
39,682
23,284
70.4
Operating margin
9.2
%
6.9
%
Interest expense
24,831
5,308
367.8
Other expense (income), net
1,696
1,340
26.6
Income before income taxes
13,155
16,636
(20.9
)
Income taxes
11,208
3,477
222.3
Net income
$
1,947
$
13,159
(85.2
)
Common dividends
$
8,111
$
8,096
0.2
Per common share: Net income: Basic
$
0.04
$
0.26
(84.6
)
Diluted
0.04
0.26
(84.6
)
Dividends
0.16
0.16
-
Weighted average common shares outstanding: Basic
51,224,884
50,989,169
0.5
Diluted
51,293,673
51,264,435
0.1
BARNES GROUP INC. OPERATIONS BY REPORTABLE BUSINESS
SEGMENT (Dollars in thousands) (Unaudited)
Three months ended March 31,
2024
2023
% Change Net sales Aerospace
$
221,371
$
117,256
88.8
Industrial
209,267
218,109
(4.1
)
Intersegment sales
-
(8
)
Total net sales
$
430,638
$
335,357
28.4
Operating profit Aerospace
$
31,087
$
18,751
65.8
Industrial
8,595
4,533
89.6
Total operating profit
$
39,682
$
23,284
70.4
Operating margin
Change Aerospace
14.0
%
16.0
%
(200
)
bps. Industrial
4.1
%
2.1
%
200
bps. Total operating margin
9.2
%
6.9
%
230
bps.
BARNES GROUP INC. CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (Unaudited)
March 31, 2024 December 31, 2023 Assets
Current assets Cash and cash equivalents
$
81,638
$
89,827
Accounts receivable
308,732
353,923
Inventories
336,153
365,221
Prepaid expenses and other current assets
103,699
97,749
Assets held for sale
84,778
-
Total current assets
915,000
906,720
Deferred income taxes
-
10,295
Property, plant and equipment, net
348,509
402,697
Goodwill
1,102,353
1,183,624
Other intangible assets, net
684,392
706,471
Other assets
109,174
98,207
Assets held for sale
114,339
-
Total assets
$
3,273,767
$
3,308,014
Liabilities and Stockholders' Equity Current
liabilities Notes and overdrafts payable
$
10,025
$
16
Accounts payable
145,694
164,264
Accrued liabilities
186,707
221,462
Long-term debt - current
10,922
10,868
Liabilities held for sale
25,860
-
Total current liabilities
379,208
396,610
Long-term debt
1,293,109
1,279,962
Accrued retirement benefits
41,477
45,992
Deferred income taxes
121,722
120,608
Long-term tax liability
21,714
21,714
Other liabilities
77,143
80,865
Liabilities held for sale
8,045
-
Total stockholders' equity
1,331,349
1,362,263
Total liabilities and stockholders' equity
$
3,273,767
$
3,308,014
BARNES GROUP INC. CONSOLIDATED STATEMENTS OF CASH
FLOWS (Dollars in thousands) (Unaudited)
Three months ended March 31,
2024
2023
Operating activities: Net income
$
1,947
$
13,159
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
31,009
24,048
Loss (gain) on disposition of property, plant and equipment
67
(55
)
Stock compensation expense
3,422
2,627
Changes in assets and liabilities, net of the effects of
acquisition: Accounts receivable
(896
)
(2,209
)
Inventories
(6,500
)
(7,062
)
Prepaid expenses and other current assets
(11,416
)
(3,412
)
Accounts payable
(1,494
)
6,450
Accrued liabilities
(22,984
)
(636
)
Deferred income taxes
9,792
1,356
Long-term retirement benefits
(4,395
)
(3,883
)
Other
(867
)
1,832
Net cash (used) provided by operating activities
(2,315
)
32,215
Investing activities: Proceeds from disposition of
property, plant and equipment
20
190
Capital expenditures
(12,838
)
(10,946
)
Business acquisitions, net of cash acquired
159
-
Other
-
(525
)
Net cash used by investing activities
(12,659
)
(11,281
)
Financing activities: Net change in other borrowings
10,049
(109
)
Payments on long-term debt
(70,587
)
(44,343
)
Proceeds from the issuance of long-term debt
90,000
31,208
Proceeds from the issuance of common stock
67
94
Dividends paid
(8,111
)
(8,096
)
Withholding taxes paid on stock issuances
(71
)
(252
)
Cash settlement of foreign currency hedges related to intercompany
financing
(11,213
)
1,353
Other
(1,556
)
(2,492
)
Net cash provided (used) by financing activities
8,578
(22,637
)
Effect of exchange rate changes on cash flows
(1,546
)
1,438
(Decrease) increase in cash, cash equivalents and restricted
cash
(7,942
)
(265
)
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
84,097
80,863
Less: Restricted cash, included in Prepaid expenses and
other current assets
-
(2,179
)
Less: Cash, included in Assets held for sale
(2,459
)
-
Cash and cash equivalents at end of period
$
81,638
$
78,684
BARNES GROUP INC. RECONCILIATION OF NET CASH (USED)
PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (Dollars
in thousands) (Unaudited) Three months
ended March 31,
2024
2023
Free cash flow: Net cash (used) provided by operating
activities
$
(2,315
)
$
32,215
Capital expenditures
(12,838
)
(10,946
)
Free cash flow(1)
$
(15,153
)
$
21,269
Notes: (1) The Company defines
free cash flow as net cash provided by operating activities less
capital expenditures. The Company believes that the free cash flow
metric is useful to investors and management as a measure of cash
generated by business operations that can be used to invest in
future growth, pay dividends, repurchase stock and reduce debt.
This metric can also be used to evaluate the Company's ability to
generate cash flow from business operations and the impact that
this cash flow has on the Company's liquidity.
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 March 31,
2024
2023
% Change SEGMENT RESULTS
Operating Profit - Aerospace Segment (GAAP)
$
31,087
$
18,751
65.8
Restructuring/reduction in force and transformation related
charges
391
1,769
Shareholder advisory costs
1,028
-
MB Short-term purchase accounting adjustments
2,141
-
Operating Profit - Aerospace Segment as adjusted
(Non-GAAP) (1)
$
34,647
$
20,520
68.8
Operating Margin - Aerospace Segment (GAAP)
14.0
%
16.0
%
(200
)
bps.
Operating Margin - Aerospace Segment as adjusted (Non-GAAP)
(1)
15.7
%
17.5
%
(180
)
bps.
Operating Profit - Industrial Segment (GAAP)
$
8,595
$
4,533
89.6
Restructuring/reduction in force and transformation related
charges
3,721
12,110
Shareholder advisory costs
972
-
Divestiture transaction costs
3,134
-
Operating Profit - Industrial Segment as adjusted
(Non-GAAP) (1)
$
16,422
$
16,643
(1.3
)
Operating Margin - Industrial Segment (GAAP)
4.1
%
2.1
%
200
bps.
Operating Margin - Industrial Segment as adjusted
(Non-GAAP) (1)
7.8
%
7.6
%
20
bps.
CONSOLIDATED
RESULTS Operating Income (GAAP)
$
39,682
$
23,284
70.4
Restructuring/reduction in force and transformation related
charges
4,112
13,879
Shareholder advisory costs
2,000
-
Divestiture transaction costs
3,134
-
MB Short-term purchase accounting adjustments
2,141
-
Operating Income as adjusted (Non-GAAP) (1)
$
51,069
$
37,163
37.4
Operating Margin (GAAP)
9.2
%
6.9
%
230
bps.
Operating Margin as adjusted (Non-GAAP) (1)
11.9
%
11.1
%
80
bps.
Diluted Net Income per Share (GAAP)
$
0.04
$
0.26
(84.6
)
Restructuring/reduction in force and transformation related
charges
0.06
0.21
Shareholder advisory costs
0.03
-
Divestiture transaction costs
0.20
-
MB Short-term purchase accounting adjustments
0.03
-
Acquisition related costs
0.02
-
Diluted Net Income per Share as adjusted (Non-GAAP)
(1)
$
0.38
$
0.47
(19.1
)
Full-Year 2023 Full-Year 2024 Outlook
Operating Margin (GAAP)
6.1
%
11.2
%
to
13.2
%
Restructuring/reduction in force and transformation related charges
3.2
%
0.9%
Divestiture transaction costs
0.1
%
-0.5%
MB Short-term purchase accounting adjustments
1.3
%
0.1%
Shareholder advisory costs
-
0.2%
Acquisition related costs
0.8
%
-
Operating Margin as adjusted (Non-GAAP) (1)
11.5
%
12.0
%
to
14.0
%
Diluted Net Income per Share (GAAP)
$
0.31
$
1.08
to
$
1.28
Restructuring/reduction in force and transformation related charges
0.66
0.23
Divestiture transaction costs
0.02
0.20
MB Short-term purchase accounting adjustments
0.29
0.06
Shareholder advisory costs
-
0.03
Acquisition related costs
0.37
0.02
Diluted Net Income per Share as adjusted (Non-GAAP) (1)
$
1.65
$
1.62
to
$
1.82
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) divestiture
transaction costs related to the divestiture of the Associated
Spring™ and Hänggi™ businesses, including $3.1M reflected within
operating profit, $1.4M reflected within other expense, net and a
$6.8M charge reflected within income taxes, 3) shareholder advisory
costs, 4) short-term purchase accounting adjustments related to its
MB Aerospace acquisition, and 5) acquisition costs related to the
acquisition of MB Aerospace, including $1.6M reflected within
interest expense. The Company has excluded charges related to
restructuring/reduction in force actions at certain businesses and
business transformation costs (consulting fees related to
transformation initiatives) from its "as adjusted" financial
measurements for 2023. The tax effects of the restructuring related
actions and acquisition related actions were calculated based on
the respective tax jurisdictions and ranged from approximately 15%
to approximately 30%. Management believes that these adjustments
provide the Company and its investors with an indication of our
baseline performance excluding items that are not considered to be
reflective of our ongoing results. Management does not intend
results excluding the adjustments to represent results as defined
by GAAP, and the reader should not consider it as an alternative
measurement calculated in accordance with GAAP, or as an indicator
of the Company's performance. Accordingly, the measurements have
limitations depending on their use.
BARNES GROUP INC.
NON-GAAP FINANCIAL MEASURE RECONCILIATION EBITDA, EBITDA
MARGIN, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Dollars
in thousands) (Unaudited) Three months
ended March 31,
2024
2023
Aerospace Industrial Other (1) Total
Aerospace Industrial Other (1) Total
Net Sales
$
221,371
209,267
-
$
430,638
$
117,256
218,109
(8
)
$
335,357
Net Income
$
1,947
$
13,159
Interest expense
24,831
5,308
Other expense (income), net
1,696
1,340
Income taxes
11,208
3,477
Operating Profit (GAAP)
$
31,087
$
8,595
$
-
$
39,682
$
18,751
$
4,533
$
-
$
23,284
Operating Margin (GAAP)
14.0
%
4.1
%
9.2
%
16.0
%
2.1
%
6.9
%
Other expense (income), net
-
-
(1,696
)
(1,696
)
-
-
(1,340
)
(1,340
)
Depreciation (2)
7,856
5,591
-
13,447
4,952
7,476
-
12,428
Amortization (3)
11,636
5,926
-
17,562
5,106
6,514
-
11,620
EBITDA (Non-GAAP) (4)
$
50,579
$
20,112
$
(1,696
)
$
68,995
$
28,809
$
18,523
$
(1,340
)
$
45,992
EBITDA Margin (Non-GAAP) (4)
22.8
%
9.6
%
16.0
%
24.6
%
8.5
%
13.7
%
Restructuring/reduction in force and transformation related
charges
391
2,997
-
3,388
1,769
10,517
-
12,286
Shareholder advisory costs
1,028
972
-
2,000
-
-
-
-
MB Short-term purchase accounting adjustments
1,498
-
-
1,498
-
-
-
-
Pension related loss
-
-
1,370
1,370
-
-
-
-
Divestiture transaction costs
-
3,134
-
3,134
-
-
-
-
Adjusted EBITDA (Non-GAAP) (4)
$
53,496
$
27,215
$
(326
)
$
80,385
$
30,578
$
29,040
$
(1,340
)
$
58,278
Adjusted EBITDA Margin (Non-GAAP) (4)
24.2
%
13.0
%
18.7
%
26.1
%
13.3
%
17.4
%
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 $0.7
million of accelerated depreciation charges related to
restructuring actions. Depreciation in 2023 includes $1.5 million
of similar accelerated depreciation charges.(3) Amortization
expense in 2024 includes $0.6 million of short-term purchase
accounting adjustments related to backlog amortization, attributed
to the acquisition of MB Aerospace.(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/20240426174596/en/
Investors: Barnes Group Inc. William Pitts Vice
President, Investor Relations ir@onebarnes.com 860.583.7070
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