Results Reflect Execution of Portfolio Optimization and Focus on
Long-term Profitable Growth Strategy
Comparisons are year-over-year unless noted otherwise
Fourth Quarter 2023:
- Sales of $416 million, up 33%; Organic Sales up 2%
- Operating Margin of 7.1%; Adjusted Operating Margin of 11.5%,
up 30 bps
- Adjusted EBITDA Margin of 18.8%, up 50 bps
- GAAP EPS of $0.14; Adjusted EPS of $0.41, down 21% on
acquisition-related interest
Full Year 2023:
- Sales of $1,451 million, up 15% ; Organic Sales up 5%
- Operating Margin of 6.1%; Adjusted Operating Margin of 11.5%,
down 10 bps
- Adjusted EBITDA Margin of 18.6%, up 20 bps
- GAAP EPS of $0.31; Adjusted EPS of $1.65, down 17% on
acquisition-related interest
2024 Outlook:
- Sales Growth of 12% to 16%; Organic Sales Growth of 4% to
8%
- Adjusted EBITDA Margin of 20% to 22%
- GAAP EPS of $0.94 to $1.19; Adjusted EPS of $1.55 to $1.80
Financial Disclosure Update
- The Company is introducing Adjusted EBITDA metrics to its
reporting and outlook, which management believes are useful
measures to evaluate the operating performance and cash generation
of the overall business and segments following the MB Aerospace
acquisition(1)
Barnes Group Inc. (NYSE: B), a global provider of highly
engineered products, differentiated industrial technologies, and
innovative solutions, today reported financial results for the
fourth quarter and full year 2023.
"Barnes has made meaningful progress executing our business
transformation and long-term profitable growth strategy. We
delivered full year organic sales growth in our Aerospace business,
and the acquisition of MB Aerospace further enhances our
capabilities and scale as we deepen and broaden our customer
relationships,” said Thomas J. Hook, President and Chief Executive
Officer of Barnes. “With the recent announcement of the divestiture
of our Associated Spring™ and Hänggi™ businesses, we continue to
shift our portfolio to a high growth, high margin, and value-driven
business. As we enter 2024, I am confident in our ability to
position Barnes for sustainable, profitable growth and create value
for all our stakeholders.”
Fourth Quarter 2023 Highlights
Comparisons are year-over-year unless noted otherwise
Sales of $416 million were up 33% compared to the prior year,
supported by organic growth(2) of 2%, acquisition-related growth of
28%, and favorable foreign exchange of 2%. Operating income of
$29.7 million was up 23%, and operating margin of 7.1% was down 60
bps.
Adjusted operating income of $47.7 million was up 36% and
adjusted operating margin of 11.5% was up 30 bps. Adjustments
excluded restructuring charges of $4.8 million, acquisition and
divestiture expenses of $2.0 million, and MB Aerospace short-term
purchase accounting adjustments of $11.2 million. Adjusted EBITDA
was $78.2 million, up 36% from a year ago and adjusted EBITDA
margin was 18.8%, up 50 bps.
Interest expense was $23.6 million versus $4.4 million 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 Company’s annual effective tax rate was 52% compared with
65% last year. During the quarter, the Company completed an
intercompany transaction between related entities in several tax
jurisdictions which, based on the tax law in those jurisdictions,
provided a favorable tax benefit.
Net income was $7.2 million, or $0.14 per share, compared to
$15.6 million, or $0.30 per share. On an adjusted basis, net income
per share of $0.41 was down 21% from $0.52. Adjusted net income per
share excludes $0.07 of restructuring charges, acquisition and
divestiture expenses of $0.03, and MB Aerospace short-term purchase
accounting adjustments of $0.17.
Full Year 2023 Highlights
Comparisons are year-over-year unless noted otherwise
Sales of $1,451 million, were up 15% compared to 2022, supported
by organic growth of 5%, acquisition-related growth of 9%, and
favorable foreign exchange of 1%. Operating income of $89.0 million
was up 56%, and operating margin increased 160 bps to 6.1%.
Adjusted operating profit of $167.3 million was up 15% and
adjusted operating margin of 11.5% was down 10 bps. Full year
adjusted operating profit excludes restructuring charges of $45.8
million, acquisition and divestiture expenses of $13.3 million, and
MB Aerospace short-term purchase accounting adjustments of $19.2
million. Adjusted EBITDA was $270.2 million, up 16% from a year ago
and adjusted EBITDA margin was 18.6%, up 20 bps.
Interest expense was $58.2 million versus $14.6 million,
primarily due to higher average borrowings from the purchase of MB
Aerospace and a higher average interest rate. Full year interest
expense also includes one-time bridge financing fees of $9.6
million from the MB Aerospace acquisition.
Other Income was $2.4 million versus last year’s expense of $4.3
million, primarily driven by a reduction in non-operating pension
expense.
The Company’s effective tax rate was 52% compared with 65% last
year. The 2023 effective tax rate reflects the non-deductibility of
a portion of our interest expense, transaction costs associated
with the MB Aerospace acquisition that are capitalized for tax, and
a change in the geographic mix of earnings.
Net income was $16.0 million, or $0.31 per share, compared to
$13.5 million, or $0.26 per share. On an adjusted basis, net income
per share of $1.65 was down 17% and excludes $0.66 of restructuring
charges, acquisition and divestiture expenses of $0.39, and MB
Aerospace short-term purchase accounting adjustments of $0.29.
Full year cash provided by operating activities was $112.4
million versus $75.6 million. The increase from the prior year was
due to a lower increase in working capital. Capital expenditures of
$55.7 million increased $20.7 million over the prior year, driven
by investments related to the Company’s restructuring program and
tied to productivity improvement. Free cash flow increased $16.2
million to $56.7 million.
Segment Performance
Comparisons are year-over-year unless noted otherwise
Aerospace Fourth quarter sales were $213 million, up 96%.
Organic sales increased 15% and acquisition-related sales added
81%. Aerospace total original equipment manufacturing (“OEM”) sales
increased 109% and aftermarket sales increased 77%. On an organic
basis, OEM sales increased 17% and aftermarket sales increased 12%.
Operating profit was $14.0 million, down 22%. Adjusted operating
profit of $27.2 million was up 53%, while adjusted operating margin
declined 360 bps to 12.8%. Adjustments to operating profit exclude
restructuring and transformation-related charges of $1.3 million,
acquisition transaction costs of $0.8 million, and MB Aerospace
short-term purchase accounting adjustments of $11.2 million.
Adjusted operating profit benefited from the contribution of higher
organic sales volumes, inclusive of pricing, and the contribution
of MB Aerospace sales, partially offset by the amortization of long
term acquired intangibles for the MB Aerospace acquisition, lower
productivity, and unfavorable OEM mix. Aerospace adjusted EBITDA
was $45.7 million, up 69%, and adjusted EBITDA margin was 21.5%
versus 24.9% a year ago.
Full year 2023 sales were $608 million, up 42%. Organic sales
increased by 15% and acquisition-related sales added 27%. Operating
profit was $53.0 million, down 30%, while operating margin was 8.7%
versus 17.7% a year ago. Operating profit includes approximately
$8.2 million of long-term purchase accounting adjustments related
to the MB Aerospace acquisition. Adjusted operating profit was
$91.9 million, up 21%, and adjusted operating margin was 15.1%,
down 260 bps. Adjusted operating profit excludes restructuring and
transformation charges of $7.6 million, acquisition transaction
costs of $12.2 million, and short-term purchase accounting
adjustments of $19.2 million. Adjusted EBITDA was $142.8 million,
up 19%, and adjusted EBITDA margin was 23.5% versus 27.9% a year
ago.
Aerospace OEM backlog ended the year at $1.23 billion, down 1%
sequentially from September 2023. The Company expects to convert
approximately 50% of this backlog to revenue over the next 12
months.
Industrial Fourth quarter sales were $203 million, down
1%. Organic sales decreased 4%, which was partly offset by
favorable foreign exchange rates of 3%. Operating profit was $15.7
million versus $6.1 million in the prior year. Adjusted operating
profit was $20.4 million, up 19% and adjusted operating margin was
10.1%, up 170 bps. Adjusted operating profit reflects lower organic
sales volumes and unfavorable mix, partially offset by positive
pricing and favorable productivity. Adjusted operating profit
excludes restructuring charges of $3.5 million and
divestiture-related costs of $1.2 million. Adjusted EBITDA was
$32.5 million, up 4% from a year ago, and adjusted EBITDA margin
was 16.0%, up 80 bps.
Full year 2023 sales were $843 million, up 1%. Organic sales
were flat while favorable foreign exchange had a positive impact of
1%. Full year operating profit was $36.0 million versus operating
loss of $19.1 million last year. Adjusted operating profit was
$75.5 million, up 8% and adjusted operating margin was 9.0%, up 60
bps. Adjusted operating profit excludes restructuring charges of
$38.3 million and divestiture-related costs of $1.2 million.
Adjusted EBITDA was $126.1 million, up 9%, and adjusted EBITDA
margin was 15.0% versus 13.8% a year ago.
Balance Sheet and Liquidity
As of December 31, 2023, the Company had $90 million in cash and
$357 million available capacity under its revolving credit
facility. The “Net Debt to EBITDA” ratio, as defined in our credit
agreements, was approximately 3.64, down from 3.77 times at the end
of third quarter. 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.
“In 2022, we set a strategic course to reposition Barnes for
long-term value creation and we made considerable progress during
2023. For 2024, we stay focused on profitable growth and
disciplined cost management to drive margin expansion and cash
flow, which will support our commitment to reduce debt,” said Julie
K. Streich, Senior Vice President, Finance and Chief Financial
Officer, Barnes.
2024 Full Year Outlook
The Company is providing full year 2024 guidance as follows:
2024
Guidance
Organic sales growth
4% to 8%
Adjusted operating margin
12% to 14%
Adjusted EBITDA margin
20% to 22%
Adjusted earnings per share
$1.55 to $1.80
Capital expenditures
$60 million to $70 million
Free cash flow
$75 million to $85 million
Adjusted effective tax rate
30% to 32%
The Company’s 2024 Adjusted EPS guidance excludes $0.17 related
to restructuring and transformation activities, $0.06 of MB
Aerospace short-term purchase accounting adjustments, and $0.38 of
estimated divestiture impacts related to the pending sale of the
Associated Spring™ and Hänggi™ businesses.
The Company’s outlook assumes that the announced divestiture of
the Associated Spring™ and Hänggi™ businesses closes at the end of
the first quarter (Link). Accordingly, the outlook includes three
months of financial performance forecasted for these
businesses.
Conference Call Information
Barnes will conduct a conference call with investors to discuss
the fourth quarter and full year 2023 results at 8:30 a.m. ET
today, February 16, 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, February 16, 2024, until
11:59 p.m. (ET) on Friday, February 23, 2024, by dialing (647)
362-9199; Conference ID 1137078.
Notes:
(1) While Barnes reports financial results in accordance with
U.S. generally accepted accounting principles (GAAP), beginning
with this earnings release, the Company will provide 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.
(2) 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.
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.
BARNES GROUP INC. CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(Unaudited) Three months ended December 31,
Twelve months ended December 31,
2023
2022
% Change
2023
2022
% Change Net sales
$
415,542
$
313,473
32.6
$
1,450,871
$
1,261,868
15.0
Cost of sales
304,426
211,402
44.0
1,008,786
839,996
20.1
Selling and administrative expenses
81,405
77,914
4.5
353,093
296,559
19.1
Goodwill impairment charge
-
-
NM
-
68,194
NM
385,831
289,316
33.4
1,361,879
1,204,749
13.0
Operating income
29,711
24,157
23.0
88,992
57,119
55.8
Operating margin
7.1
%
7.7
%
6.1
%
4.5
%
Interest expense
23,559
4,375
438.5
58,171
14,624
297.8
Other expense (income), net
(14
)
660
(102.1
)
(2,443
)
4,310
(156.7
)
Income before income taxes
6,166
19,122
(67.8
)
33,264
38,185
(12.9
)
Income taxes
(1,050
)
3,553
NM
17,268
24,706
(30.1
)
Net income
$
7,216
$
15,569
(53.7
)
$
15,996
$
13,479
18.7
Common dividends
$
8,109
$
8,094
0.2
$
32,412
$
32,376
0.1
Per common share: Net income: Basic
$
0.14
$
0.31
(54.8
)
$
0.31
$
0.26
19.2
Diluted
0.14
0.30
(53.3
)
0.31
0.26
19.2
Dividends
0.16
0.16
-
0.64
0.64
-
Weighted average common shares outstanding: Basic
51,112,969
50,904,802
0.4
51,052,963
50,962,447
0.2
Diluted
51,152,276
51,057,653
0.2
51,205,888
51,084,167
0.2
NM - Not meaningful
BARNES GROUP INC. OPERATIONS
BY REPORTABLE BUSINESS SEGMENT (Dollars in thousands)
(Unaudited) Three months ended December 31,
Twelve months ended December 31,
2023
2022
% Change
2023
2022
% Change Net sales Aerospace
$
212,688
$
108,504
96.0
$
608,050
$
429,153
41.7
Industrial
202,854
204,969
(1.0
)
842,831
832,715
1.2
Intersegment sales
-
-
(10
)
-
Total net sales
$
415,542
$
313,473
32.6
$
1,450,871
$
1,261,868
15.0
Operating profit (loss) Aerospace
$
14,000
$
18,012
(22.3
)
$
52,953
$
76,174
(30.5
)
Industrial
15,711
6,145
155.7
36,039
(19,055
)
NM
Total operating profit
$
29,711
$
24,157
23.0
$
88,992
$
57,119
55.8
Operating margin
Change Change
Aerospace
6.6
%
16.6
%
(1,000
)
bps.
8.7
%
17.7
%
(900
)
bps. Industrial
7.7
%
3.0
%
470
bps.
4.3
%
-2.3
%
660
bps. Total operating margin
7.1
%
7.7
%
(60
)
bps.
6.1
%
4.5
%
160
bps. NM - Not meaningful
BARNES GROUP INC.
CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
(Unaudited) December 31, 2023
December 31, 2022 Assets Current assets Cash and cash
equivalents
$
89,827
$
76,858
Accounts receivable
353,923
291,883
Inventories
365,221
283,402
Prepaid expenses and other current assets
97,749
80,161
Total current assets
906,720
732,304
Deferred income taxes
10,295
18,028
Property, plant and equipment, net
402,697
320,139
Goodwill
1,183,624
835,472
Other intangible assets, net
706,471
442,492
Other assets
98,207
65,295
Total assets
$
3,308,014
$
2,413,730
Liabilities and Stockholders' Equity Current
liabilities Notes and overdrafts payable
$
16
$
8
Accounts payable
164,264
145,060
Accrued liabilities
221,462
158,568
Long-term debt - current
10,868
1,437
Total current liabilities
396,610
305,073
Long-term debt
1,279,962
569,639
Accrued retirement benefits
45,992
54,352
Deferred income taxes
120,608
62,562
Long-term tax liability
21,714
39,086
Other liabilities
80,865
36,691
Total stockholders' equity
1,362,263
1,346,327
Total liabilities and stockholders' equity
$
3,308,014
$
2,413,730
BARNES GROUP INC. CONSOLIDATED STATEMENTS OF CASH
FLOWS (Dollars in thousands) (Unaudited)
Twelve months ended December 31,
2023
2022
Operating activities: Net income
$
15,996
$
13,479
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
115,818
92,150
Loss on disposition of property, plant and equipment
(1,197
)
(821
)
Stock compensation expense
10,201
12,804
Non-cash goodwill impairment charge
-
68,194
Changes in assets and liabilities, net of the effects of
acquisition: Accounts receivable
(6,074
)
(39,484
)
Inventories
622
(48,591
)
Prepaid expenses and other current assets
1,321
(9,257
)
Accounts payable
(5,493
)
15,998
Accrued liabilities
22,673
(25,659
)
Deferred income taxes
(16,058
)
2,645
Long-term retirement benefits
(17,256
)
(1,474
)
Long-term tax liability
(13,029
)
(6,948
)
Other
4,891
2,523
Net cash provided by operating activities
112,415
75,559
Investing activities: Proceeds from disposition of
property, plant and equipment
7,921
1,825
Capital expenditures
(55,739
)
(35,082
)
Business acquisitions, net of cash acquired
(718,782
)
-
Other
(921
)
(2,729
)
Net cash used by investing activities
(767,521
)
(35,986
)
Financing activities: Net change in other borrowings
(257
)
(1,333
)
Payments on long-term debt
(314,167
)
(108,415
)
Proceeds from the issuance of long-term debt
1,019,708
98,285
Payments of debt issuance costs
(11,341
)
-
Proceeds from the issuance of common stock
353
513
Common stock repurchases
-
(6,721
)
Dividends paid
(32,412
)
(32,376
)
Withholding taxes paid on stock issuances
(908
)
(1,144
)
Other
5,586
(13,638
)
Net cash provided (used) by financing activities
666,562
(64,829
)
Effect of exchange rate changes on cash flows
(545
)
(5,525
)
Increase (decrease) in cash, cash equivalents and restricted
cash
10,911
(30,781
)
Cash, cash equivalents and restricted cash at beginning of
the year
81,128
111,909
Cash, cash equivalents and restricted cash at end of year
92,039
81,128
Less: Restricted cash, included in Prepaid expenses and
other current assets
(2,212
)
(2,135
)
Less: Restricted cash, included in Other assets
-
(2,135
)
Cash and cash equivalents at end of year
$
89,827
$
76,858
BARNES GROUP INC. RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES TO FREE CASH FLOW (Dollars in
thousands) (Unaudited) Twelve months
ended December 31,
2023
2022
Free cash flow: Net cash provided by operating
activities
$
112,415
$
75,559
Capital expenditures
(55,739
)
(35,082
)
Free cash flow(1)
$
56,676
$
40,477
Free cash flow to net income cash conversion ratio (as
adjusted): Net income
$
15,996
$
13,479
Goodwill impairment charge
-
68,194
Net income (as adjusted)(2)
$
15,996
$
81,673
Free cash flow to net income cash conversion ratio (as
adjusted)(2)
354
%
50
%
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. (2) For the purpose
of calculating the cash conversion ratio, the Company has excluded
the goodwill impairment charge recorded in the second quarter of
2022 related to the Automation reporting unit from 2022 net income.
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
December 31, Twelve months ended December 31,
2023
2022
% Change
2023
2022
% Change SEGMENT RESULTS
Operating Profit - Aerospace Segment (GAAP)
$
14,000
$
18,012
(22.3
)
$
52,953
$
76,174
(30.5
)
Restructuring/reduction in force and transformation related
charges
1,295
(250
)
7,557
(255
)
Acquisition transaction costs
776
-
12,152
-
MB Short-term purchase accounting adjustments
11,173
-
19,192
-
Operating Profit - Aerospace Segment as adjusted
(Non-GAAP) (1)
$
27,244
$
17,762
53.4
$
91,854
$
75,919
21.0
Operating Margin - Aerospace Segment (GAAP)
6.6
%
16.6
%
(1,000
)
bps.
8.7
%
17.7
%
(900
)
bps.
Operating Margin - Aerospace Segment as adjusted (Non-GAAP)
(1)
12.8
%
16.4
%
(360
)
bps.
15.1
%
17.7
%
(260
)
bps.
Operating Profit (Loss) - Industrial Segment
(GAAP)
$
15,711
$
6,145
155.7
$
36,039
$
(19,055
)
NM
Restructuring/reduction in force and transformation related
charges
3,548
11,052
38,259
20,853
Divestiture transaction costs
1,174
-
1,174
-
Goodwill impairment charge
-
-
-
68,194
Operating Profit - Industrial Segment as adjusted
(Non-GAAP) (1)
$
20,433
$
17,197
18.8
$
75,472
$
69,992
7.8
Operating Margin - Industrial Segment (GAAP)
7.7
%
3.0
%
470
bps.
4.3
%
-2.3
%
660
bps.
Operating Margin - Industrial Segment as adjusted
(Non-GAAP) (1)
10.1
%
8.4
%
170
bps.
9.0
%
8.4
%
60
bps.
CONSOLIDATED
RESULTS Operating Income (GAAP)
$
29,711
$
24,157
23.0
$
88,992
$
57,119
55.8
Restructuring/reduction in force and transformation related
charges
4,843
10,802
45,816
20,598
Acquisition transaction costs
776
-
12,152
-
Divestiture transaction costs
1,174
-
1,174
-
MB Short-term purchase accounting adjustments
11,173
-
19,192
-
Goodwill impairment charge
-
-
-
68,194
Operating Income as adjusted (Non-GAAP) (1)
$
47,677
$
34,959
36.4
$
167,326
$
145,911
14.7
Operating Margin (GAAP)
7.1
%
7.7
%
(60
)
bps.
6.1
%
4.5
%
160
bps.
Operating Margin as adjusted (Non-GAAP) (1)
11.5
%
11.2
%
30
bps.
11.5
%
11.6
%
(10
)
bps.
Diluted Net Income per Share (GAAP)
$
0.14
$
0.30
(53.3
)
$
0.31
$
0.26
19.2
Restructuring/reduction in force and transformation related
charges
0.07
0.16
0.66
0.33
Acquisition transaction costs
0.01
-
0.37
-
Divestiture transaction costs
0.02
-
0.02
-
MB Short-term purchase accounting adjustments
0.17
-
0.29
-
Tax related CEO transition costs
-
0.06
-
0.06
Goodwill impairment charge
-
-
-
1.33
Diluted Net Income per Share as adjusted (Non-GAAP)
(1)
$
0.41
$
0.52
(21.2
)
$
1.65
$
1.98
(16.7
)
Full-Year 2024 Outlook Operating Margin
(GAAP)
11.5
%
to
13.5
%
Restructuring/reduction in force and transformation related
charges
0.7
%
Divestiture related impacts
-0.5
%
MB Short-term purchase accounting adjustments
0.2
%
Operating Margin as adjusted (Non-GAAP) (1)
12.0
%
to
14.0
%
Diluted Net Income per Share (GAAP)
$
0.94
to
$
1.19
Restructuring/reduction in force and transformation related
charges
0.17
Divestiture related impacts
0.38
MB Short-term purchase accounting adjustments
0.06
Diluted Net Income per Share as adjusted (Non-GAAP)
(1)
$
1.55
to
$
1.80
NM - Not meaningful
Notes: (1) The Company has excluded the
following from its "as adjusted" financial measurements for 2023:
1) charges related to restructuring/reduction in force actions at
certain businesses and business transformation costs (consulting
fees related to transformation initiatives), including $45.8M
reflected within operating profit ($4.8M in the fourth quarter) and
($1.1M) reflected within other expense (income), net ($0.0 in the
fourth quarter), 2) acquisition transaction costs related to the
acquisition of MB Aerospace, including $12.2M reflected within
operating profit ($0.8M in the fourth quarter) and $9.6M reflected
within interest expense, 3) divestiture transaction costs related
to the planned divestiture of the Associated Spring™ and Hänggi™
businesses, including $1.2M reflected within operating profit in
the fourth quarter, and 4) short-term purchase accounting
adjustments related to its MB Aerospace acquisition, including
$19.2M reflected within operating profit ($11.2M in the fourth
quarter). The Company has excluded the following from its "as
adjusted" financial measurements for 2022: 1) charges related to
restructuring activities and actions at certain businesses,
including $20.6M reflected within operating profit ($10.8M in the
fourth quarter) and $1.4M reflected within other expense (income),
net ($0.0M in the fourth quarter), 2) tax charges resulting from
the CEO transition in 2022 and 3) the goodwill impairment charge
recorded in the second quarter of 2022 related to the Automation
reporting unit. 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%. The goodwill impairment charge did not have a
tax effect as it is not deductible for book purposes. The majority
of the transaction costs did not have a tax effect as costs were
capitalized for tax purposes. 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 December 31,
2023
2022
Aerospace Industrial Other (1) Total
Aerospace Industrial Other (1) Total
Net Sales
$
212,688
202,854
-
$
415,542
$
108,504
204,969
-
$
313,473
Net Income
$
7,216
$
15,569
Interest expense
23,559
4,375
Other expense (income), net
(14
)
660
Income taxes
(1,050
)
3,553
Operating Profit (GAAP)
$
14,000
$
15,711
$
-
$
29,711
$
18,012
$
6,145
$
-
$
24,157
Operating Margin (GAAP)
6.6
%
7.7
%
7.1
%
16.6
%
3.0
%
7.7
%
Other expense (income), net
-
-
14
14
-
-
(660
)
(660
)
Depreciation (2)
8,785
6,191
-
14,976
4,419
7,640
-
12,059
Amortization (3)
15,545
6,101
-
21,646
4,784
6,285
-
11,069
EBITDA (Non-GAAP) (4)
$
38,330
$
28,003
$
14
$
66,347
$
27,215
$
20,070
$
(660
)
$
46,625
EBITDA Margin (Non-GAAP) (4)
18.0
%
13.8
%
16.0
%
25.1
%
9.8
%
14.9
%
Restructuring/reduction in force and transformation related
charges
1,295
3,328
-
4,623
(250
)
11,052
-
10,802
Acquisition transaction costs
776
-
-
776
-
-
-
-
MB Short-term purchase accounting adjustments
5,299
-
-
5,299
-
-
-
-
Divestiture transaction costs
-
1,174
-
1,174
-
-
-
-
Adjusted EBITDA (Non-GAAP) (4)
$
45,700
$
32,505
$
14
$
78,219
$
26,965
$
31,122
$
(660
)
$
57,427
Adjusted EBITDA Margin (Non-GAAP) (4)
21.5
%
16.0
%
18.8
%
24.9
%
15.2
%
18.3
%
Twelve months ended December 31,
2023
2022
Aerospace Industrial Other (1) Total
Aerospace Industrial Other (1) Total
Net Sales
$
608,050
842,831
(10
)
$
1,450,871
$
429,153
832,715
-
$
1,261,868
Net Income
$
15,996
$
13,479
Interest expense
58,171
14,624
Other expense (income), net
(2,443
)
4,310
Income taxes
17,268
24,706
Operating Profit (Loss) (GAAP)
$
52,953
$
36,039
$
-
$
88,992
$
76,174
$
(19,055
)
$
-
$
57,119
Operating Margin (GAAP)
8.7
%
4.3
%
6.1
%
17.7
%
-2.3
%
4.5
%
Other expense (income), net
-
-
2,443
2,443
-
-
(4,310
)
(4,310
)
Depreciation (2)
23,504
28,582
-
52,086
18,075
29,088
-
47,163
Amortization (3)
38,304
25,428
-
63,732
25,644
19,343
-
44,987
EBITDA (Non-GAAP) (4)
$
114,761
$
90,049
$
2,443
$
207,253
$
119,893
$
29,376
$
(4,310
)
$
144,959
EBITDA Margin (Non-GAAP) (4)
18.9
%
10.7
%
14.3
%
27.9
%
3.5
%
11.5
%
Restructuring/reduction in force and transformation related
charges
7,557
34,854
-
42,411
(255
)
17,668
-
17,413
Acquisition transaction costs
12,152
-
-
12,152
-
-
-
-
MB Short-term purchase accounting adjustments
8,318
-
-
8,318
-
-
-
-
Divestiture transaction costs
-
1,174
-
1,174
-
-
-
-
Pension related (gain)/loss
-
-
(1,144
)
(1,144
)
-
-
1,417
1,417
Goodwill impairment charge
-
-
-
-
-
68,194
-
68,194
Adjusted EBITDA (Non-GAAP) (4)
$
142,788
$
126,077
$
1,299
$
270,164
$
119,638
$
115,238
$
(2,893
)
$
231,983
Adjusted EBITDA Margin (Non-GAAP) (4)
23.5
%
15.0
%
18.6
%
27.9
%
13.8
%
18.4
%
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 2023
includes $3.4 million ($0.2M related to the fourth quarter) of
accelerated depreciation charges related to restructuring actions.
Depreciation in 2022 includes $3.2 million ($0.0M related to the
fourth quarter) of similar accelerated depreciation charges.(3)
Amortization expense in 2023 includes $10.9 million ($5.9M related
to the fourth quarter) 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.
Category: Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240216668980/en/
Investors: Barnes Group Inc. William Pitts Vice
President, Investor Relations ir@onebarnes.com 860.583.7070
Barnes (NYSE:B)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Barnes (NYSE:B)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
