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Barnes Slides Post Q1 Results, Surpasses Street Estimates

Benzinga · 04/29/2022 11:01
  • Barnes Group Inc. (NYSE:Breported first-quarter FY22 sales growth of 4% year-over-year to $312.4 million, +6% on an organic basis, beating the consensus of $306.63 million.
  • Operating income declined by 3.9% Y/Y to $31.11 million, and the margin was 10% down by 70 bps. Adjusted operating margin was 10.2%, down 50 bps.
  • Industrial segment sales decreased by 3.8% Y/Y to $211.67 million, and adjusted operating margin contracted by 260 bps to 7.1%.
  • Aerospace segment sales increased by 23.4% Y/Y to $100.71 million, and the adjusted operating margin expanded by 300 bps to 16.6%.
  • Adjusted EPS improved to $0.41 compared to $0.38 in 1Q21, beating the consensus of $0.40.
  • Barnes' cash used in operating activities totaled $9.31 million in Q1, compared to cash generated of $35.61 million a year ago. Free cash outflow of $16.72 million.
  • Aerospace OEM backlog was at $716 million, up 5% sequentially from December 2021. The company expects to convert ~45% of this backlog to revenue over the next 12 months.
  • The company's liquidity comprised $75 million in cash and approximately $510 million available under the revolving credit facility.
  • "Customer demand remained healthy as indicated by a Company-wide book-to-bill ratio of 1.15x, and our team's multipronged approach to mitigate the impacts of the current macro-environment should support improved performance as the year progresses," commented Julie K. Streich, Interim CEO, and SVP Finance and CFO of Barnes.
  • FY22 Outlook: Barnes continues to expect organic sales growth of 8% - 10%. It sees an adjusted operating margin of 12.5% - 13.5%, down slightly from the prior view of 13.0% to 14.0%, reflecting ongoing supply chain and inflationary pressures.
  • It expects Adjusted EPS of $2.20 - $2.40 (prior view $2.20 - $2.45), vs. consensus of $2.27.
  • The updated adjusted EPS forecast reflects the macroeconomic headwinds in the Industrial segment.
  • Price Action: B shares are trading lower by 3.16% at $35.20 on the last check Friday.