Aerospace and industrial manufacturer Barnes Group Inc. (B: Quote) on Friday reported higher profit and sales for the fourth quarter that topped estimates. Further, the company named Patrick Dempsey as new chief executive to succeed Gregory Milzcik, who is retiring.
Barnes Group also agreed to sell its Barnes Distribution North America business or BDNA to MSC Industrial Direct Co., Inc. (MSM: Quote) for $550 million.
Net income for the quarter was $29.73 million or $0.54 per share, compared to $66 thousand or $0.00 per share last year. The prior year included a hefty loss from discontinued operations.
Income from continuing operations per share was $0.54, while it totaled $0.43 last year.
Adjusted income from continuing operations per share was $0.55 in the just concluded quarter. On average, 6 analysts polled by Thomson Reuters expected earnings of $0.51 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales climbed 15.6 percent to $327.38 million from $283.29 million, driven primarily by the sales contribution of the acquired Synventive Molding Solutions business. Analysts expected revenues of $326.20 million for the quarter.
Aerospace sales rose 2 percent to $101.09 million, as an increase in aerospace original equipment manufacturing sales was largely offset by declines in aftermarket repair and overhaul and spare parts sales.
Industrial sales climbed 43.9 percent to $147.64 million, helped by the acquisition of Synventive that contributed $44 million to sales.
Distribution revenues were lower by 4.3 percent at $79.74 million due to softness in the North American markets and a focus on more profitable accounts.
Gregory Milzcik, president and chief executive officer, said, ''We delivered record fourth quarter Net Income despite lingering challenges in some of our global markets...Even as some of our end-markets continued to reflect top-line softness, we generated improvement in operating margins.''
Looking ahead, Barnes Group expects earnings per share in the range of $2.03 to $2.18. The company earned adjusted earnings per share from continuing operations of $1.86 in 2012. Revenue is expected to grow 14 percent to 18 percent from 2012. Net sales totaled $1.23 billion in 2012.
Analysts expect 2013 earnings of $2.15 per share on revenues of $1.40 billion.
The company also said it has entered into a definitive agreement to sell BDNA to MSC Industrial Direct. The transaction is expected to close in late March or early in the second quarter of 2013.
BDNA provides inventory management, technical sales, and supply chain solutions for maintenance, repair, operating and production supplies. Headquartered in Cleveland, Ohio, it has around 1,400 employees and had 2012 revenues of around $300 million.
Barnes Group expects to report BDNA as discontinued operations beginning with the first quarter of 2013. After-tax proceeds from the transaction are expected to be about $400 million. The company expects to utilize a portion of the proceeds to reduce debt, buy back shares and invest in profitable growth initiatives such as acquisitions as well as for general corporate purposes.
Separately, the company's Board of Directors appointed Chief Operating Officer Patrick Dempsey, 48, to President and Chief Executive Officer of the company, effective March 1.
Gregory Milzcik, who is retiring after serving as President and CEO and Director of Barnes Group Inc. since 2006, will remain with the company through May 3, as Executive Vice Chairman to help effect a smooth transition of leadership.
Dempsey, who was appointed Senior Vice President and Chief Operating Officer in 2012, has spent the past 12 years with Barnes Group. Dempsey played a key role in the divestiture of Barnes Distribution Europe in 2011 and the acquisition of Synventive Molding Solutions in 2012. He joined Barnes Group in 2000 as President, Barnes Aerospace, Windsor Airmotive.
Prior to joining Barnes Group, Dempsey held leadership positions at United Technologies' Pratt and Whitney Division and the Interturbine Group of Companies.
B closed at $24.47 on Thursday.
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by RTT Staff Writer
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