Barnes Group (B) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 were $387.8M, up 7.4% year-over-year, driven by Aerospace growth and MB Aerospace acquisition.

• Operating margin rose to 10.8% from 2.8% in Q3 2023, with adjusted margin at 12.3% and adjusted EBITDA margin at 19.8%.

• Net loss for Q3 2024 was $2.1M, a significant improvement from a $21.7M loss in Q3 2023.

• Entered a definitive agreement to be acquired by Apollo for $47.50/share in cash, valuing the company at $3.6B, expected to close Q1 2025.

• Sale of Associated Spring and Hänggi businesses completed in April 2024, with proceeds used to reduce debt.

Financial highlights

• Q3 2024 net sales: $387.8M (+7.4%); nine months: $1,200.7M (+16.0%).

• Q3 2024 operating income: $41.8M (318.6% increase); adjusted operating income: $47.9M (+23%).

• Q3 2024 gross margin: 33.1% (up from 29.8%); adjusted EBITDA: $76.9M (+16%).

• Q3 2024 EPS: $(0.04); adjusted EPS: $0.09 (down from $0.19); nine months: $(0.92).

• Q3 2024 interest expense: $19.6M (down 14% year-over-year); nine months: $65.2M.

Outlook and guidance

• Aerospace OEM backlog at $1.8B, up 46% since year-end and 19% sequentially; book-to-bill 2.9x.

• Guidance for full-year 2024 suspended due to pending Apollo acquisition.

• Aerospace Aftermarket outlook remains positive with healthy airline traffic and utilization.

• Industrial segment faces macro headwinds, including inflation and China weakness; management focused on cost reduction.

• Company expects 2024 capital spending to approximate $60M.