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Barnes Group Inc. Reports Operating Results (10-K)

February 18, 2011 | About:
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10qk

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Barnes Group Inc. (B) filed Annual Report for the period ended 2010-12-31.

Barnes Group Inc. has a market cap of $1.19 billion; its shares were traded at around $21.73 with a P/E ratio of 24.7 and P/S ratio of 1.1. The dividend yield of Barnes Group Inc. stocks is 1.5%. Barnes Group Inc. had an annual average earning growth of 5.9% over the past 10 years.Mutual Fund and Other Gurus that owns B: David Dreman of Dreman Value Management, Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

The backlog of the Companys orders believed to be firm at the end of 2010 was $482 million as compared with $428 million at the end of 2009. Of the 2010 year-end backlog, $444 million was attributable to the Precision Components segment and the balance was attributable to the Logistics and Manufacturing Services segment. Precision Components backlog included $119 million which is scheduled to be shipped after 2011. The remainder of the Companys backlog is scheduled to be shipped during 2011. General Electric and its affiliates accounted for 18% of the Companys total sales in 2010.

Although most of the products manufactured by us are custom parts made to customers specifications, we are engaged in continuing efforts aimed at discovering and implementing new knowledge that is useful in developing new products or services and significantly improving existing products or services. We spent approximately $6 million, $4 million and $6 million in 2010, 2009 and 2008, respectively, on research and development activities.

We could be adversely affected by changes in interest rates. Our profitability may be adversely affected as a result of increases in interest rates. At December 31, 2010, we and our subsidiaries had approximately $357.7 million aggregate principal amount of consolidated debt and capitalized lease obligations outstanding, of which approximately 58% had interest rates that float with the market. A 100 basis point increase in the interest rate on the floating rate debt in effect at December 31, 2010 would have resulted in an approximate $2.0 million annualized increase in interest expense.

We may not realize all of the sales expected from our existing backlog or anticipated orders. At December 31, 2010, we had $482.1 million of order backlog of which $346.7 million related to the aerospace OEM business of Precision Components. There can be no assurances that the revenues projected in our backlog will be realized or, if realized, will result in profits. We consider backlog to be firm customer orders for future delivery. From time to time, OEM customers of Precision Components provide projections of components and assemblies that they anticipate purchasing in the future under new and existing programs. Such projections are not included in our backlog unless we have received a firm release from our customers. Our customers may have the right under certain circumstances and with certain penalties or consequences to terminate, reduce or defer firm orders that we have in backlog. If our customers terminate, reduce or defer firm orders, we may be protected from certain costs and losses, but our sales will nevertheless be adversely affected. Although we strive to maintain ongoing relationships with our customers, there is an ongoing risk that orders may be cancelled or rescheduled due to fluctuations in our customers business needs or purchasing budgets.

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