Barnes Group Inc. Reports First Quarter 2019 Financial Results
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 of 2019.
“For the first quarter, Barnes Group delivered financial performance in-line with our overall expectations. Excellent performance in our Aerospace business helped to substantially overcome continued pressure in select end markets within our Industrial business,” said Patrick J. Dempsey, President and Chief Executive Officer of Barnes Group Inc. “At Aerospace, record revenues and operating profit, coupled with a healthy backlog, position us favorably for the remainder of the year. At Industrial, we foresee a slow growth environment with declining auto production, delayed auto program launches, and lingering trade and tariff concerns. We continue to closely monitor current market conditions and will adapt as needed to deliver on our commitments,” added Dempsey.
First Quarter 2019 Highlights
Net sales of $377 million in the first quarter were up 3% from $367 million in the prior year period driven by acquisition sales of 5% and organic sales growth (1) of 1%. Foreign exchange negatively impacted sales by 3%. Operating income was $50.6 million, down 11% from $56.6 million in the first quarter of 2018. Excluding Gimatic short term purchase accounting adjustments of $4.0 million, adjusted operating income was $54.6 million, down 4% from a year ago. Adjusted operating margin declined 90 bps to 14.5%.
Interest expense increased $1.2 million, or 31%, to $5.1 million as a result of higher average borrowings due to the Gimatic acquisition, partially offset by a lower average interest rate.
The Company’s effective tax rate was 22.3% for the first quarter of 2019 compared with 23.9% for the prior year period primarily due to international tax holidays awarded in late 2018 offset slightly by the absence of adjustments to certain international valuation reserves.
Net income was $34.0 million, or $0.65 per diluted share, compared to $38.8 million, or $0.72 per diluted share, a year ago. On an adjusted basis, net income per share of $0.71 was down 1% from $0.72 a year ago. First quarter 2019 adjusted net income per share excludes $0.06 of Gimatic short-term purchase accounting adjustments in our Industrial Segment.
For the first quarter, cash provided by operating activities was $53.1 million versus $30.5 million last year with working capital primarily driving the change. Free cash flow was $39.3 million compared to $19.3 million last year. Capital expenditures were $13.7 million, up $2.5 million from a year ago.