Barnes Group's Bottom-Line Beats Street View; Clocks 8% Sales Growth

  • Barnes Group Inc. B reported fourth-quarter FY21 sales growth of 8% year-over-year to $311 million, +9% on an organic basis, missing the consensus of $315.58 million.
  • Industrial segment sales increased 1% Y/Y to $210.28 million, and adjusted operating margin contracted by 280 bps to 9%.
  • Aerospace segment sales increased by 26% Y/Y to $101 million, and the adjusted operating margin expanded by 620 bps to 16.4%.
  • Adjusted EPS improved to $0.55 (+53% Y/Y), beating the consensus of $0.47.
  • The operating income increased 8.2% Y/Y to $35.39 million, and the margin expanded by 10 bps to 11.4%. The adjusted operating margin was flat at 11.4%.
  • Barnes generated cash from operating activities of $167.8 million in FY21, compared to $215.5 million a year ago. Free cash flow was $133.7 million.
  • Aerospace OEM backlog was $680 million, +2% from September 2021. The company expects to convert ~40% of this backlog to revenue over 12 months.
  • Barnes held liquidity of $103 million in cash and ~$505 million available under the revolving credit facility at the end of the quarter.
  • 2022 Outlook: Barnes expects organic sales growth of +8% to +10%; Adjusted EPS of $2.20 - $2.45, Up 13% - 26% from FY21, versus consensus of $2.34. It expects adjusted operating margin of 13.0% - 14.0%. 
  • "As aerospace flight activity further rebounds, and we build upon the progress made in our automation and medical end markets, we envision 2022 as another step towards our return to sustainable growth and margin improvement," said CEO Patrick J. Dempsey.
  • Price Action: B shares closed lower by 0.88% at $47.42 on Thursday.
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