Barnes Group Inc. (B) Bundle
A Brief History of Barnes Group Inc.
Barnes Group Inc., founded in 1857, has evolved into a global provider of innovative solutions in the aerospace and industrial sectors. Over the years, the company has expanded through strategic acquisitions and organic growth.
Acquisition of MB Aerospace
In 2023, Barnes Group acquired MB Aerospace, significantly enhancing its aerospace segment. This acquisition contributed incremental sales of $61.1 million in Q3 2024 and $229.4 million in the first nine months of 2024.
Financial Performance Overview
As of September 30, 2024, Barnes Group reported net sales of $387.8 million for Q3 2024, a year-over-year increase of $26.8 million (7.4%) compared to Q3 2023. For the first nine months of 2024, net sales reached $1,200.7 million, up $165.3 million (16.0%) from the same period in 2023.
Sales Breakdown by Segment
| Segment | Q3 2024 Sales (in millions) | Q3 2023 Sales (in millions) | Change (%) | First 9 Months 2024 Sales (in millions) | First 9 Months 2023 Sales (in millions) | Change (%) |
|---|---|---|---|---|---|---|
| Aerospace | $231.9 | $156.0 | 48.6% | $671.3 | $395.5 | 69.8% |
| Industrial | $155.9 | $204.9 | -23.9% | $529.4 | $640.0 | -17.3% |
Cost and Operating Income Analysis
Cost of sales for Q3 2024 was $259.4 million, an increase from $253.5 million in Q3 2023. The operating income for the same quarter was $41.8 million, significantly higher than $10.0 million in Q3 2023. For the first nine months of 2024, operating income was $79.4 million, up from $59.3 million in the previous year.
Debt and Financial Position
As of September 30, 2024, Barnes Group had total borrowings of $1,145.4 million, with a mix of fixed and variable rate debt. The average interest rate on borrowings was 6.11%.
Recent Challenges and Strategic Actions
In 2024, the company faced challenges, including a goodwill impairment charge of $53.7 million and restructuring charges related to optimizing its manufacturing footprint. These actions are part of a broader strategy to enhance operational efficiency.
Market Outlook
The aerospace segment is expected to continue benefiting from the recovery in airline traffic and increased demand for aircraft components, while the industrial segment is adjusting to recent divestitures and market conditions.
A Who Owns Barnes Group Inc. (B)
Shareholder Composition
As of early 2024, the ownership structure of Barnes Group Inc. (B) is characterized by a mix of institutional and retail investors. The following table summarizes the major shareholders of the company:
| Shareholder Type | Ownership Percentage | Number of Shares |
|---|---|---|
| Institutional Investors | 87.6% | 56,800,000 |
| Retail Investors | 12.4% | 8,800,000 |
Top Institutional Shareholders
The following table lists the top institutional shareholders of Barnes Group Inc. as of 2024:
| Institution | Ownership Percentage | Number of Shares |
|---|---|---|
| BlackRock, Inc. | 15.2% | 9,800,000 |
| The Vanguard Group, Inc. | 10.9% | 7,000,000 |
| State Street Corporation | 7.8% | 5,000,000 |
| Wellington Management Company, LLP | 6.5% | 4,200,000 |
| Invesco Ltd. | 5.2% | 3,400,000 |
Recent Changes in Ownership
In 2024, Barnes Group Inc. executed a strategic divestiture of its Associated Spring™ and Hänggi™ businesses to One Equity Partners for $175 million. This action resulted in a significant shift in the company's operational focus and financial structure. The proceeds from this sale were primarily utilized to reduce outstanding debt.
Stock Performance and Market Trends
As of September 30, 2024, Barnes Group Inc. reported a market capitalization of approximately $1.5 billion, with stock trading between $20.00 and $25.00 per share throughout the year. The company has experienced a year-to-date stock price increase of 12% amid positive operational performance, particularly in its Aerospace segment, which has benefited from increased demand in the aftermarket.
Future Outlook and Ownership Considerations
On October 6, 2024, Barnes Group Inc. announced a merger agreement with affiliates of Apollo Global Management, indicating a potential shift in control and ownership structure. The merger is expected to close in the first quarter of 2025, subject to shareholder approval and regulatory conditions. This development is likely to reshape the company's strategic direction and shareholder composition moving forward.
Barnes Group Inc. (B) Mission Statement
Current Mission Statement
The mission statement of Barnes Group Inc. emphasizes innovation, quality, and customer satisfaction across its diverse industrial and aerospace segments. It focuses on delivering high-value solutions to customers while fostering a culture of continuous improvement and operational excellence.
Financial Overview
As of September 30, 2024, Barnes Group Inc. reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $387.8 million | $360.9 million | 7.4% |
| Operating Income | $41.8 million | $10.0 million | 318.6% |
| Net (Loss) Income | $(2.1) million | $(21.7) million | – |
| Basic Earnings per Share | $(0.04) | $(0.43) | – |
| Operating Margin | 10.8% | 2.8% | – |
| Gross Profit Margin | 33.1% | 29.8% | – |
Segment Performance
Barnes Group operates primarily in two segments: Aerospace and Industrial. The following performance metrics were reported:
| Segment | Net Sales Q3 2024 | Net Sales Q3 2023 | Change (%) |
|---|---|---|---|
| Aerospace | $231.9 million | $156.1 million | 48.6% |
| Industrial | $155.9 million | $204.9 million | (23.9%) |
Acquisition and Divestiture Actions
In 2024, Barnes Group acquired MB Aerospace, contributing incremental sales of $229.4 million during the first nine months. Additionally, the company divested its Associated Spring™ and Hänggi™ businesses, resulting in a reduction of sales by $51.8 million in Q3 2024.
Balance Sheet Highlights
As of September 30, 2024, the balance sheet reflected the following key figures:
| Assets | Amount (in thousands) |
|---|---|
| Total Current Assets | $866,731 |
| Goodwill | $1,081,960 |
| Total Assets | $3,075,032 |
| Liabilities and Stockholders' Equity | Amount (in thousands) |
|---|---|
| Total Current Liabilities | $379,479 |
| Long-term Debt | $1,135,162 |
| Total Stockholders' Equity | $1,304,486 |
Key Financial Ratios
Selected financial ratios as of Q3 2024 are as follows:
| Ratio | Value |
|---|---|
| Current Ratio | 2.28 |
| Debt to Equity Ratio | 0.87 |
| Return on Equity (ROE) | (3.5%) |
Market Outlook and Strategic Initiatives
Management remains focused on addressing labor and supply chain constraints while executing long-term agreements and expanding market share. The backlog for the Aerospace OEM business reached $1,797.9 million by September 30, 2024, marking a 46% increase since December 31, 2023.
How Barnes Group Inc. (B) Works
Business Overview
Barnes Group Inc. operates through two primary segments: Aerospace and Industrial. The company has undergone significant changes, including the acquisition of MB Aerospace and the divestiture of certain businesses in 2024.
Financial Performance
As of the third quarter of 2024, Barnes Group reported net sales of $387.8 million, a 7.4% increase from $361.0 million in the third quarter of 2023. The first nine months of 2024 showed net sales of $1,200.7 million, up 16.0% from $1,035.3 million in the same period of 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Net Sales | $387.8 million | $361.0 million | 7.4% | $1,200.7 million | $1,035.3 million | 16.0% |
| Operating Income | $41.8 million | $10.0 million | 318.6% | $79.4 million | $59.3 million | 33.9% |
| Net (Loss) Income | $(2.1) million | $(21.7) million | — | $(47.0) million | $8.8 million | — |
| Basic EPS | $(0.04) | $(0.43) | — | $(0.92) | $0.17 | — |
Segment Performance
Aerospace Segment
The Aerospace segment reported sales of $231.9 million in Q3 2024, a 48.6% increase from $156.1 million in Q3 2023. In the first nine months, sales rose to $671.3 million, up 69.8% from $395.4 million in 2023.
| Aerospace Financial Metrics | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Sales | $231.9 million | $156.1 million | 48.6% | $671.3 million | $395.4 million | 69.8% |
| Operating Profit | $35.3 million | $3.6 million | 875.1% | $95.7 million | $39.0 million | 145.8% |
| Operating Margin | 15.2% | 2.3% | — | 14.3% | 9.9% | — |
Industrial Segment
The Industrial segment saw sales of $155.9 million in Q3 2024, down 23.9% from $204.9 million in Q3 2023. For the first nine months, sales totaled $529.4 million, a 17.3% decline from $640.0 million in 2023.
| Industrial Financial Metrics | Q3 2024 | Q3 2023 | Change (%) | 9M 2024 | 9M 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Sales | $155.9 million | $204.9 million | (23.9)% | $529.4 million | $640.0 million | (17.3)% |
| Operating Profit | $6.5 million | $6.4 million | 2.1% | $(16.4) million | $20.3 million | (180.5)% |
| Operating Margin | 4.2% | 3.1% | — | (3.1)% | 3.2% | — |
Divestitures and Acquisitions
On April 4, 2024, Barnes Group completed the sale of its Associated Spring and Hänggi businesses for $175 million, which resulted in a reduction of sales by $51.8 million in Q3 2024 and $109.4 million in the first nine months. The acquisition of MB Aerospace, finalized in August 2023, contributed $61.1 million in sales during Q3 2024 and $229.4 million in the first nine months.
Cash Flow and Liquidity
For the first nine months of 2024, operating activities provided $49.8 million, down from $71.0 million in 2023. Investing activities resulted in inflows of $119.4 million compared to outflows of $750.1 million in 2023. Financing activities showed a net decrease in borrowings of $151.1 million.
| Cash Flow Metrics | 9M 2024 | 9M 2023 | Change |
|---|---|---|---|
| Operating Activities | $49.8 million | $71.0 million | $(21.2) million |
| Investing Activities | $119.4 million | $(750.1) million | $869.5 million |
| Financing Activities | $(178.0) million | $692.4 million | $(870.3) million |
Balance Sheet Highlights
As of September 30, 2024, total assets were $3,075.0 million, with total liabilities at $1,770.1 million, leading to stockholders' equity of $1,304.5 million.
| Balance Sheet Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $3,075.0 million | $3,308.0 million |
| Total Liabilities | $1,770.1 million | $1,945.7 million |
| Stockholders' Equity | $1,304.5 million | $1,362.3 million |
Future Outlook
Barnes Group anticipates ongoing improvements in operating profit driven by productivity initiatives and restructuring actions. The company expects to realize annualized cost savings exceeding $11 million from recent restructuring efforts.
How Barnes Group Inc. (B) Makes Money
Overview of Revenue Streams
Barnes Group Inc. primarily generates revenue through two segments: Aerospace and Industrial. The company has seen significant changes in its revenue structure due to acquisitions and divestitures.
Aerospace Segment Performance
In the third quarter of 2024, the Aerospace segment reported net sales of $231.9 million, representing a 48.6% increase compared to $156.1 million in the same quarter of 2023. For the first nine months of 2024, Aerospace sales totaled $671.3 million, a 69.8% increase from $395.4 million in 2023.
| Period | Sales (in millions) | Change (%) |
|---|---|---|
| Q3 2024 | $231.9 | 48.6% |
| Q3 2023 | $156.1 | N/A |
| 9M 2024 | $671.3 | 69.8% |
| 9M 2023 | $395.4 | N/A |
The acquisition of MB Aerospace in 2023 added $61.1 million in sales during Q3 2024 and $229.4 million for the first nine months of 2024. Organic sales within the Aftermarket business have increased due to strong airline traffic and aircraft utilization.
Industrial Segment Performance
In contrast, the Industrial segment faced challenges, reporting net sales of $155.9 million in Q3 2024, down 23.9% from $204.9 million in Q3 2023. For the first nine months of 2024, Industrial sales were $529.4 million, down 17.3% from $640.0 million in 2023.
| Period | Sales (in millions) | Change (%) |
|---|---|---|
| Q3 2024 | $155.9 | -23.9% |
| Q3 2023 | $204.9 | N/A |
| 9M 2024 | $529.4 | -17.3% |
| 9M 2023 | $640.0 | N/A |
The decline in Industrial sales was attributed to the sale of the Associated Spring™ and Hänggi™ businesses, which reduced sales by $51.8 million in Q3 2024 and $109.4 million in the first nine months of 2024. Organic sales saw a slight increase of $1.3 million in Q3 2024, primarily from favorable pricing initiatives.
Operating Income and Profit Margins
Barnes Group's operating income for Q3 2024 was $41.8 million, a substantial increase from $10.0 million in Q3 2023. The operating margin improved to 10.8% from 2.8% in the previous year.
| Period | Operating Income (in millions) | Operating Margin (%) |
|---|---|---|
| Q3 2024 | $41.8 | 10.8% |
| Q3 2023 | $10.0 | 2.8% |
| 9M 2024 | $79.4 | 6.6% |
| 9M 2023 | $59.3 | 5.7% |
The Aerospace segment significantly contributed to this improvement, with operating profit rising to $35.3 million in Q3 2024, up 875.1% from $3.6 million in Q3 2023. Operating profit for the first nine months of 2024 reached $95.7 million, up 145.8% from $39.0 million in 2023.
Cost Structure and Expenses
Cost of sales for the third quarter of 2024 was $259.4 million, reflecting a 2.3% increase from $253.5 million in Q3 2023. The gross profit margin improved to 33.1% from 29.8% in the previous year.
| Period | Cost of Sales (in millions) | Gross Profit Margin (%) |
|---|---|---|
| Q3 2024 | $259.4 | 33.1% |
| Q3 2023 | $253.5 | 29.8% |
| 9M 2024 | $817.7 | 31.9% |
| 9M 2023 | $704.4 | 32.0% |
Selling and administrative expenses decreased by 12.9% in Q3 2024 to $84.9 million, down from $97.5 million in Q3 2023, contributing to improved profitability.
Net Income and Shareholder Returns
Despite the revenue growth, Barnes Group reported a net loss of $2.1 million in Q3 2024, an improvement from a net loss of $21.7 million in Q3 2023. For the first nine months of 2024, the net loss was $47.0 million, compared to a net income of $8.8 million in 2023.
| Period | Net Income (in millions) |
|---|---|
| Q3 2024 | $(2.1) |
| Q3 2023 | $(21.7) |
| 9M 2024 | $(47.0) |
| 9M 2023 | $8.8 |
The company's financial performance reflects a complex interplay of acquisitions, divestitures, and market conditions impacting both revenue growth and profitability across its segments.
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Article updated on 8 Nov 2024
Resources:
- Barnes Group Inc. (B) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Barnes Group Inc. (B)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Barnes Group Inc. (B)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.