BRISTOL, Conn., Apr 29, 2011 (BUSINESS WIRE) --

Barnes Group Inc. (NYSE: B), a diversified global manufacturer and logistical services company, today reported financial results for the first quarter 2011. Net sales grew 15 percent to $318.8 million from $278.1 million in the first quarter of 2010. Net income for the first quarter was up 61 percent to $19.1 million, or $0.34 per diluted share, from $11.8 million, or $0.21 per diluted share, a year earlier.

"Barnes Group's first quarter of 2011 was a good start to the year," said Gregory F. Milzcik, President and Chief Executive Officer. "We delivered solid improvements in net sales, operating margin, net income and earnings per share, while continuing to strengthen our position in attractive and growing end-markets around the world. These results demonstrate positive and building momentum from our ongoing growth and profitability initiatives. These initiatives have contributed to the fundamental value of our business, and we expect to unlock more of this value in 2011 and the years ahead."

Logistics and Manufacturing Services

• First-quarter 2011 net sales were $150.0 million, up 11 percent from $135.3 million in the same period last year. This growth was driven by strengthening end-market demand in the Company's North American distribution businesses and increased overhaul and repair activity in the aerospace aftermarket business. Foreign currency translation positively affected first-quarter 2011 net sales by approximately $1.4 million.
• Operating profit increased 56 percent to $13.0 million, from $8.3 million in the first quarter of 2010. This growth was driven primarily by the profit impact of the higher sales volumes in all businesses, particularly those in North America. These factors were partially offset by higher employee-related costs and other accruals.

Precision Components

• First-quarter 2011 net sales were $171.6 million, up 18 percent from $145.8 million in the same period last year. This increase was primarily a result of improvements in North American and European industrial manufacturing markets, as well as greater demand from the Company's customers in the transportation industry, including automotive. Net sales in the aerospace original equipment manufacturing business also improved compared with the first quarter of 2010. Foreign exchange positively affected net sales by approximately $3.4 million in the first quarter.
• Operating profit increased 45 percent to $16.4 million, from $11.3 million in the first quarter of 2010. This growth primarily reflected the profit impact of higher sales levels, combined with lower cost structures resulting from the Company's previous actions and lean initiatives. These factors were partially offset by higher costs related to investments in operational improvements, employee-related costs and investments in new product introductions.

Additional Information

• During the quarter, Barnes Group exercised its right to redeem the remaining $92.5 million principal amount of the 3.75 percent Convertible Notes, effective April 5, 2011. The Company has elected to pay cash to holders of the 3.75 percent Convertible Notes surrendered for conversion, including the value of any residual value shares of common stock that might be payable. The Company intends to use borrowings under its senior credit facility to finance the redemption of the 3.75 percent Convertible Notes.
• Interest expense decreased $1.5 million in the first quarter of 2011 to $3.7 million. The decrease was primarily a result of lower interest rates and lower debt discount amortization related to the 3.75 percent Convertible Notes.
• The Company's effective tax rate for the first quarter of 2011 was 24.5 percent, compared to 16.8 percent in the first quarter and full year 2010. The increase in the first quarter 2011 effective tax rate from the full year 2010 rate was primarily driven by the projected shift of income to higher-taxing jurisdictions and the planned repatriation of a portion of current year foreign earnings.

Revised 2011 Outlook

Barnes Group is updating its guidance for 2011. The Company now expects revenue to grow 8 to 11 percent from 2010, and earnings per diluted share to be in the range of $1.23 to $1.38, up 30 to 45 percent.

Conference Call

Barnes Group Inc. will conduct a conference call with investors to discuss first-quarter 2011 results at 8:30 a.m. EST today, April 29, 2011. A webcast of the live call and an archived replay will be available on the Barnes Group investor relations link at www.BGInc.com.

Barnes Group Inc. (NYSE:B) is a diversified global manufacturer and logistical services company focused on providing precision component manufacturing and operating service support. Founded in 1857, approximately 4,900 dedicated employees at more than 67 locations worldwide are committed to achieving consistent and sustainable profitable growth. For more information, visit www.BGInc.com. Barnes Group, the Critical Components People.

This release may contain certain forward-looking statements as defined in the Private Securities Litigation and Reform Act of 1995. Forward-looking statements are made based upon management's good faith expectations and beliefs concerning future developments and their potential effect upon the Company and can be identified by the use of words such as "anticipated," "believe," "expect," "plans," "strategy," "estimate," "project," and other words of similar meaning in connection with a discussion of future operating or financial performance. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. The risks and uncertainties, which are described in our periodic filings with the Securities and Exchange Commission, include, among others, uncertainties arising from the behavior of financial markets; future financial performance of the industries or customers that we serve; changes in market demand for our products and services; integration of acquired businesses; restructuring costs or savings; introduction or development of new products or transfer of work; changes in raw material or product prices and availability; foreign currency exposure; our dependence upon revenues and earnings from a small number of significant customers; a major loss of customers; the outcome of pending and future claims or litigation or governmental, regulatory proceedings, investigations, inquiries, and audits; uninsured claims and litigation; outcome of contingencies; future repurchases of common stock; future levels of indebtedness; and numerous other matters of global, regional or national scale, including those of a political, economic, business, competitive, environmental, regulatory and public health nature. The Company assumes no obligation to update our forward-looking statements.

SOURCE: Barnes Group Inc.

Barnes Group Inc.
Chris Stephens, 860-583-7070
SVP of Finance & Chief Financial Officer