BRISTOL, Conn. — Barnes Group Inc. (NYSE: B), an international industrial and aerospace manufacturer and service provider, reported on Friday its financial results for the third quarter 2014. Net sales of $317.7 million were up 18 percent from $269.5 million in the third quarter of 2013, driven by the sales contribution from the acquired Männer business and strong organic sales growth of 8 percent. Income from continuing operations for the third quarter was $34.3 million, or $0.62 per diluted share, compared to $21.4 million, or $0.39 per diluted share in the prior year period. In the third quarter of 2013, income from continuing operations included an $8.6 million pre-tax inventory valuation charge related to exchange engine parts within the Aerospace repair and overhaul business. On an adjusted basis, income from continuing operations was $0.64 per diluted share, up 64 percent from $0.39 a year ago. Third quarter 2014 adjusted diluted earnings from continuing operations exclude the impact of Männer short-term purchase accounting adjustments of $0.9 million pre-tax, or $0.01 per diluted share, and costs related to the close of production operations at Associated Spring’s Saline, Michigan facility which were $0.5 million pre-tax, or $0.01 per diluted share.
“Barnes Group produced an excellent quarter of financial performance driven by continued margin expansion and strong revenue growth,” said Patrick J. Dempsey, President and Chief Executive Officer of Barnes Group Inc. “Our Industrial and Aerospace Segments each delivered high-single digit organic growth and orders in the quarter were solid which supports an improved outlook for 2014 and positive momentum heading into 2015,” added Dempsey.
Industrial
- Third quarter 2014 sales were $207.2 million, up 24 percent from $167.7 million in the same period last year. The Männer business, acquired in October 2013, provided $29.6 million of the sales increase while unfavorable foreign exchange negatively impacted sales by $1.8 million. Industrial’s organic sales grew 7 percent over the prior year period.
- Operating profit of $33.2 million in the third quarter was up 59 percent from $20.9 million in the prior year period. Operating profit benefited from the contribution of Männer and higher organic sales, and was partially offset by $0.9 million of pre-tax Männer short-term purchase accounting adjustments and $0.5 million of pre-tax restructuring charges related to the closure of production operations at the Saline, Michigan facility. Excluding the acquisition related expenses and Saline closure costs, adjusted operating profit was $34.6 million, up 66 percent. Adjusted operating margin was 16.7 percent, up 430 bps from last year’s operating margin of 12.4 percent.
Aerospace
- Third quarter 2014 sales were $110.4 million, up 9 percent from $101.7 million in the same period last year. Increased sales from original equipment manufacturing ("OEM") business were partially offset by lower sales in the aftermarket repair and overhaul ("MRO") business. Aerospace spare part sales were flat on a year-over-year basis.
- Operating profit was $17.7 million for the third quarter of 2014 as compared to $7.2 million for the prior year period. Operating profit benefited from the contributions of increased sales in the OEM business, higher profits in the MRO business and the absence of the $8.6 million inventory valuation charge taken in last year’s third quarter. These benefits were partially offset by increased employee related costs. Operating margin was 16.0 percent in the quarter, compared to 7.0 percent a year ago.
- Aerospace backlog was $511 million at the end of the third quarter, down 3 percent from the second quarter of 2014.
