x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
06-0247840
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|||
123 Main Street, Bristol, Connecticut
|
|
06010
|
|
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Large accelerated filer
x
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
|
|
Page
|
Part I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
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|
|
Item 4.
|
||
|
|
|
Part II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
||
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net sales
|
$
|
341,802
|
|
|
$
|
288,332
|
|
|
|
|
|
||||
Cost of sales
|
219,833
|
|
|
186,255
|
|
||
Selling and administrative expenses
|
66,221
|
|
|
60,550
|
|
||
|
286,054
|
|
|
246,805
|
|
||
Operating income
|
55,748
|
|
|
41,527
|
|
||
|
|
|
|
||||
Interest expense
|
3,349
|
|
|
2,991
|
|
||
Other expense (income), net
|
23
|
|
|
227
|
|
||
Income before income taxes
|
52,376
|
|
|
38,309
|
|
||
Income taxes
|
14,073
|
|
|
9,461
|
|
||
Net income
|
$
|
38,303
|
|
|
$
|
28,848
|
|
|
|
|
|
||||
Per common share:
|
|
|
|
||||
Basic
|
$
|
0.71
|
|
|
$
|
0.53
|
|
Diluted
|
0.70
|
|
|
0.53
|
|
||
Dividends
|
0.13
|
|
|
0.12
|
|
||
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
54,179,130
|
|
|
54,245,728
|
|
||
Diluted
|
54,651,835
|
|
|
54,672,773
|
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
38,303
|
|
|
$
|
28,848
|
|
Other comprehensive income, net of tax
|
|
|
|
||||
Unrealized gain (loss) on hedging activities, net of tax (1)
|
83
|
|
|
(148
|
)
|
||
Foreign currency translation adjustments, net of tax (2)
|
18,609
|
|
|
20,713
|
|
||
Defined benefit pension and other postretirement benefits, net of tax (3)
|
1,265
|
|
|
1,318
|
|
||
Total other comprehensive income, net of tax
|
19,957
|
|
|
21,883
|
|
||
Total comprehensive income
|
$
|
58,260
|
|
|
$
|
50,731
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
88,283
|
|
|
$
|
66,447
|
|
Accounts receivable, less allowances (2017 - $3,707; 2016 - $3,992)
|
302,569
|
|
|
287,123
|
|
||
Inventories
|
237,618
|
|
|
227,759
|
|
||
Prepaid expenses and other current assets
|
27,595
|
|
|
27,163
|
|
||
Total current assets
|
656,065
|
|
|
608,492
|
|
||
|
|
|
|
||||
Deferred income taxes
|
25,111
|
|
|
25,433
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
779,319
|
|
|
762,187
|
|
||
Less accumulated depreciation
|
(441,202
|
)
|
|
(427,698
|
)
|
||
|
338,117
|
|
|
334,489
|
|
||
|
|
|
|
||||
Goodwill
|
644,958
|
|
|
633,436
|
|
||
Other intangible assets, net
|
515,677
|
|
|
522,258
|
|
||
Other assets
|
15,725
|
|
|
13,431
|
|
||
Total assets
|
$
|
2,195,653
|
|
|
$
|
2,137,539
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes and overdrafts payable
|
$
|
5,908
|
|
|
$
|
30,825
|
|
Accounts payable
|
122,860
|
|
|
112,024
|
|
||
Accrued liabilities
|
158,256
|
|
|
156,967
|
|
||
Long-term debt - current
|
1,920
|
|
|
2,067
|
|
||
Total current liabilities
|
288,944
|
|
|
301,883
|
|
||
|
|
|
|
||||
Long-term debt
|
491,123
|
|
|
468,062
|
|
||
Accrued retirement benefits
|
107,416
|
|
|
109,350
|
|
||
Deferred income taxes
|
67,574
|
|
|
66,446
|
|
||
Other liabilities
|
23,829
|
|
|
23,440
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock - par value $0.01 per share
Authorized: 150,000,000 shares
Issued: at par value (2017 - 62,722,086 shares; 2016 - 62,692,403 shares)
|
627
|
|
|
627
|
|
||
Additional paid-in capital
|
445,959
|
|
|
443,235
|
|
||
Treasury stock, at cost (2017 - 8,999,149 shares; 2016 - 8,889,947 shares)
|
(257,316
|
)
|
|
(251,827
|
)
|
||
Retained earnings
|
1,208,368
|
|
|
1,177,151
|
|
||
Accumulated other non-owner changes to equity
|
(180,871
|
)
|
|
(200,828
|
)
|
||
Total stockholders' equity
|
1,216,767
|
|
|
1,168,358
|
|
||
Total liabilities and stockholders' equity
|
$
|
2,195,653
|
|
|
$
|
2,137,539
|
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
38,303
|
|
|
$
|
28,848
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
21,366
|
|
|
18,786
|
|
||
Gain on disposition of property, plant and equipment
|
(46
|
)
|
|
(252
|
)
|
||
Stock compensation expense
|
2,490
|
|
|
3,011
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(15,252
|
)
|
|
(4,213
|
)
|
||
Inventories
|
(7,329
|
)
|
|
(153
|
)
|
||
Prepaid expenses and other current assets
|
734
|
|
|
(524
|
)
|
||
Accounts payable
|
8,064
|
|
|
(285
|
)
|
||
Accrued liabilities
|
5,117
|
|
|
2,292
|
|
||
Deferred income taxes
|
(705
|
)
|
|
251
|
|
||
Long-term retirement benefits
|
(1,812
|
)
|
|
(16,631
|
)
|
||
Other
|
906
|
|
|
(601
|
)
|
||
Net cash provided by operating activities
|
51,836
|
|
|
30,529
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Proceeds from disposition of property, plant and equipment
|
170
|
|
|
313
|
|
||
Capital expenditures
|
(11,727
|
)
|
|
(13,297
|
)
|
||
Business acquisitions
|
—
|
|
|
(1,546
|
)
|
||
Component Repair Program payments
|
—
|
|
|
(900
|
)
|
||
Net cash used by investing activities
|
(11,557
|
)
|
|
(15,430
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Net change in other borrowings
|
(24,947
|
)
|
|
(14,179
|
)
|
||
Payments on long-term debt
|
(24,768
|
)
|
|
(69,013
|
)
|
||
Proceeds from the issuance of long-term debt
|
47,550
|
|
|
76,503
|
|
||
Proceeds from the issuance of common stock
|
379
|
|
|
196
|
|
||
Common stock repurchases
|
(5,383
|
)
|
|
(8,000
|
)
|
||
Dividends paid
|
(6,997
|
)
|
|
(6,468
|
)
|
||
Withholding taxes paid on stock issuances
|
(106
|
)
|
|
(369
|
)
|
||
Other
|
(5,828
|
)
|
|
(2,921
|
)
|
||
Net cash used by financing activities
|
(20,100
|
)
|
|
(24,251
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash flows
|
1,657
|
|
|
2,085
|
|
||
Increase (decrease) in cash and cash equivalents
|
21,836
|
|
|
(7,067
|
)
|
||
Cash and cash equivalents at beginning of period
|
66,447
|
|
|
83,926
|
|
||
Cash and cash equivalents at end of period
|
$
|
88,283
|
|
|
$
|
76,859
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Finished goods
|
$
|
69,982
|
|
|
$
|
71,100
|
|
Work-in-process
|
107,855
|
|
|
98,246
|
|
||
Raw material and supplies
|
59,781
|
|
|
58,413
|
|
||
|
$
|
237,618
|
|
|
$
|
227,759
|
|
|
Industrial
|
|
Aerospace
|
|
Total Company
|
||||||
January 1, 2017
|
$
|
602,650
|
|
|
$
|
30,786
|
|
|
$
|
633,436
|
|
Acquisition related
|
1,809
|
|
|
—
|
|
|
1,809
|
|
|||
Foreign currency translation
|
9,713
|
|
|
—
|
|
|
9,713
|
|
|||
March 31, 2017
|
$
|
614,172
|
|
|
$
|
30,786
|
|
|
$
|
644,958
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Range of
Life -Years
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Gross Amount
|
|
Accumulated Amortization
|
||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue sharing programs (RSPs)
|
Up to 30
|
|
$
|
293,700
|
|
|
$
|
(98,617
|
)
|
|
$
|
293,700
|
|
|
$
|
(95,701
|
)
|
Component repair programs (CRPs)
|
Up to 30
|
|
111,839
|
|
|
(12,018
|
)
|
|
111,839
|
|
|
(10,497
|
)
|
||||
Customer lists/relationships
|
10-16
|
|
215,266
|
|
|
(56,100
|
)
|
|
215,266
|
|
|
(53,198
|
)
|
||||
Patents and technology
|
4-14
|
|
84,052
|
|
|
(40,245
|
)
|
|
84,052
|
|
|
(37,897
|
)
|
||||
Trademarks/trade names
|
10-30
|
|
11,950
|
|
|
(10,075
|
)
|
|
11,950
|
|
|
(9,967
|
)
|
||||
Other
|
Up to 15
|
|
20,551
|
|
|
(16,556
|
)
|
|
20,551
|
|
|
(16,338
|
)
|
||||
|
|
|
737,358
|
|
|
(233,611
|
)
|
|
737,358
|
|
|
(223,598
|
)
|
||||
Unamortized intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Trade names
|
|
|
42,770
|
|
|
—
|
|
|
42,770
|
|
|
—
|
|
||||
Foreign currency translation
|
|
|
(30,840
|
)
|
|
—
|
|
|
(34,272
|
)
|
|
—
|
|
||||
Other intangible assets
|
|
|
$
|
749,288
|
|
|
$
|
(233,611
|
)
|
|
$
|
745,856
|
|
|
$
|
(223,598
|
)
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Revolving credit agreement
|
|
$
|
386,625
|
|
|
$
|
387,628
|
|
|
$
|
363,300
|
|
|
$
|
364,775
|
|
3.97% Senior Notes
|
|
100,000
|
|
|
102,960
|
|
|
100,000
|
|
|
101,598
|
|
||||
Borrowings under lines of credit and overdrafts
|
|
5,908
|
|
|
5,908
|
|
|
30,825
|
|
|
30,825
|
|
||||
Capital leases
|
|
5,138
|
|
|
5,614
|
|
|
5,413
|
|
|
5,902
|
|
||||
Other foreign bank borrowings
|
|
1,280
|
|
|
1,292
|
|
|
1,416
|
|
|
1,428
|
|
||||
|
|
498,951
|
|
|
503,402
|
|
|
500,954
|
|
|
504,528
|
|
||||
Less current maturities
|
|
(7,828
|
)
|
|
|
|
(32,892
|
)
|
|
|
||||||
Long-term debt
|
|
$
|
491,123
|
|
|
|
|
$
|
468,062
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(78
|
)
|
Foreign exchange contracts
|
—
|
|
|
(130
|
)
|
|
—
|
|
|
(177
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
1,195
|
|
|
(151
|
)
|
|
397
|
|
|
(1,499
|
)
|
||||
Total derivatives
|
$
|
1,195
|
|
|
$
|
(285
|
)
|
|
$
|
397
|
|
|
$
|
(1,754
|
)
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flow hedges:
|
|
|
|
||||
Interest rate contracts
|
$
|
47
|
|
|
$
|
(65
|
)
|
Foreign exchange contracts
|
36
|
|
|
(83
|
)
|
||
|
$
|
83
|
|
|
$
|
(148
|
)
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Foreign exchange contracts
|
$
|
(896
|
)
|
|
$
|
(3,712
|
)
|
Level 1
|
Unadjusted quoted prices in active markets for identical assets or liabilities
|
Level 2
|
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
|
Level 3
|
Unobservable inputs for the asset or liability
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
Description
|
|
Total
|
|
Quoted Prices in Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
March 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Asset derivatives
|
|
$
|
1,195
|
|
|
$
|
—
|
|
|
$
|
1,195
|
|
|
$
|
—
|
|
Liability derivatives
|
|
(285
|
)
|
|
—
|
|
|
(285
|
)
|
|
—
|
|
||||
Bank acceptances
|
|
9,999
|
|
|
—
|
|
|
9,999
|
|
|
—
|
|
||||
Rabbi trust assets
|
|
2,341
|
|
|
2,341
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
13,250
|
|
|
$
|
2,341
|
|
|
$
|
10,909
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Asset derivatives
|
|
$
|
397
|
|
|
$
|
—
|
|
|
$
|
397
|
|
|
$
|
—
|
|
Liability derivatives
|
|
(1,754
|
)
|
|
—
|
|
|
(1,754
|
)
|
|
—
|
|
||||
Bank acceptances
|
|
9,690
|
|
|
—
|
|
|
9,690
|
|
|
—
|
|
||||
Rabbi trust assets
|
|
2,216
|
|
|
2,216
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
10,549
|
|
|
$
|
2,216
|
|
|
$
|
8,333
|
|
|
$
|
—
|
|
|
Three months ended March 31,
|
||||||
Pensions
|
2017
|
|
2016
|
||||
Service cost
|
$
|
1,643
|
|
|
$
|
1,384
|
|
Interest cost
|
4,621
|
|
|
4,836
|
|
||
Expected return on plan assets
|
(6,860
|
)
|
|
(7,543
|
)
|
||
Amortization of prior service cost
|
109
|
|
|
50
|
|
||
Amortization of actuarial losses
|
2,480
|
|
|
2,556
|
|
||
Settlement gain
|
(261
|
)
|
|
—
|
|
||
Net periodic benefit cost
|
$
|
1,732
|
|
|
$
|
1,283
|
|
|
|
|
|
|
Three months ended March 31,
|
||||||
Other Postretirement Benefits
|
2017
|
|
2016
|
||||
Service cost
|
$
|
22
|
|
|
$
|
34
|
|
Interest cost
|
389
|
|
|
453
|
|
||
Amortization of prior service credit
|
(17
|
)
|
|
(93
|
)
|
||
Amortization of actuarial losses
|
69
|
|
|
176
|
|
||
Net periodic benefit cost
|
$
|
463
|
|
|
$
|
570
|
|
|
Gains and Losses on Cash Flow Hedges
|
|
Pension and Other Postretirement Benefit Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
January 1, 2017
|
$
|
(227
|
)
|
|
$
|
(114,570
|
)
|
|
$
|
(86,031
|
)
|
|
$
|
(200,828
|
)
|
Other comprehensive income (loss) before reclassifications to consolidated statements of income
|
27
|
|
|
(214
|
)
|
|
18,609
|
|
|
18,422
|
|
||||
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
|
56
|
|
|
1,479
|
|
|
—
|
|
|
1,535
|
|
||||
Net current-period other comprehensive income
|
83
|
|
|
1,265
|
|
|
18,609
|
|
|
19,957
|
|
||||
March 31, 2017
|
$
|
(144
|
)
|
|
$
|
(113,305
|
)
|
|
$
|
(67,422
|
)
|
|
$
|
(180,871
|
)
|
|
Gains and Losses on Cash Flow Hedges
|
|
Pension and Other Postretirement Benefit Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
January 1, 2016
|
$
|
115
|
|
|
$
|
(105,703
|
)
|
|
$
|
(37,664
|
)
|
|
$
|
(143,252
|
)
|
Other comprehensive (loss) income before reclassifications to consolidated statements of income
|
(239
|
)
|
|
(436
|
)
|
|
20,713
|
|
|
20,038
|
|
||||
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
|
91
|
|
|
1,754
|
|
|
—
|
|
|
1,845
|
|
||||
Net current-period other comprehensive (loss) income
|
(148
|
)
|
|
1,318
|
|
|
20,713
|
|
|
21,883
|
|
||||
March 31, 2016
|
$
|
(33
|
)
|
|
$
|
(104,385
|
)
|
|
$
|
(16,951
|
)
|
|
$
|
(121,369
|
)
|
Details about Accumulated Other Comprehensive Income (Loss) Components
|
|
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
|
Affected Line Item in the Consolidated Statements of Income
|
|||||||
|
|
Three months ended March 31, 2017
|
|
Three months ended March 31, 2016
|
|
|
||||
Gains and losses on cash flow hedges
|
|
|
|
|
|
|
||||
Interest rate contracts
|
|
$
|
(53
|
)
|
|
$
|
(151
|
)
|
|
Interest expense
|
Foreign exchange contracts
|
|
(30
|
)
|
|
5
|
|
|
Net sales
|
||
|
|
(83
|
)
|
|
(146
|
)
|
|
Total before tax
|
||
|
|
27
|
|
|
55
|
|
|
Tax benefit
|
||
|
|
(56
|
)
|
|
(91
|
)
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Pension and other postretirement benefit items
|
|
|
|
|
|
|
||||
Amortization of prior-service (costs) credits, net
|
|
$
|
(92
|
)
|
|
$
|
43
|
|
|
(A)
|
Amortization of actuarial losses
|
|
(2,549
|
)
|
|
(2,732
|
)
|
|
(A)
|
||
Settlement gain
|
|
261
|
|
|
—
|
|
|
(A)
|
||
|
|
(2,380
|
)
|
|
(2,689
|
)
|
|
Total before tax
|
||
|
|
901
|
|
|
935
|
|
|
Tax benefit
|
||
|
|
(1,479
|
)
|
|
(1,754
|
)
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Total reclassifications in the period
|
|
$
|
(1,535
|
)
|
|
$
|
(1,845
|
)
|
|
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net sales
|
|
|
|
||||
Industrial
|
$
|
227,340
|
|
|
$
|
195,246
|
|
Aerospace
|
114,470
|
|
|
93,087
|
|
||
Intersegment sales
|
(8
|
)
|
|
(1
|
)
|
||
Total net sales
|
$
|
341,802
|
|
|
$
|
288,332
|
|
|
|
|
|
||||
Operating profit
|
|
|
|
||||
Industrial
|
$
|
33,456
|
|
|
$
|
29,644
|
|
Aerospace
|
22,292
|
|
|
11,883
|
|
||
Total operating profit
|
55,748
|
|
|
41,527
|
|
||
Interest expense
|
3,349
|
|
|
2,991
|
|
||
Other expense (income), net
|
23
|
|
|
227
|
|
||
Income before income taxes
|
$
|
52,376
|
|
|
$
|
38,309
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Industrial
|
$
|
1,400,794
|
|
|
$
|
1,356,081
|
|
Aerospace
|
643,510
|
|
|
647,766
|
|
||
Other
(A)
|
151,349
|
|
|
133,692
|
|
||
Total assets
|
$
|
2,195,653
|
|
|
$
|
2,137,539
|
|
/s/ PricewaterhouseCoopers LLP
|
|
PricewaterhouseCoopers LLP
Hartford, Connecticut
|
|
April 28, 2017
|
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Industrial
|
$
|
227.3
|
|
|
$
|
195.2
|
|
|
$
|
32.1
|
|
|
16.4
|
%
|
Aerospace
|
114.5
|
|
|
93.1
|
|
|
21.4
|
|
|
23.0
|
%
|
|||
Total
|
$
|
341.8
|
|
|
$
|
288.3
|
|
|
$
|
53.5
|
|
|
18.5
|
%
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Cost of sales
|
$
|
219.8
|
|
|
$
|
186.3
|
|
|
$
|
33.6
|
|
|
18.0
|
%
|
% sales
|
64.3
|
%
|
|
64.6
|
%
|
|
|
|
|
|||||
Gross profit
(1)
|
$
|
122.0
|
|
|
$
|
102.1
|
|
|
$
|
19.9
|
|
|
19.5
|
%
|
% sales
|
35.7
|
%
|
|
35.4
|
%
|
|
|
|
|
|||||
Selling and administrative expenses
|
$
|
66.2
|
|
|
$
|
60.6
|
|
|
$
|
5.7
|
|
|
9.4
|
%
|
% sales
|
19.4
|
%
|
|
21.0
|
%
|
|
|
|
|
|||||
Operating income
|
$
|
55.7
|
|
|
$
|
41.5
|
|
|
$
|
14.2
|
|
|
34.2
|
%
|
% sales
|
16.3
|
%
|
|
14.4
|
%
|
|
|
|
|
|||||
(1) Sales less cost of sales.
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|||||||||||||
(in millions, except per share)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Net income
|
$
|
38.3
|
|
|
$
|
28.8
|
|
|
$
|
9.5
|
|
|
32.8
|
%
|
Net income per common share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
0.71
|
|
|
$
|
0.53
|
|
|
$
|
0.18
|
|
|
34.0
|
%
|
Diluted
|
0.70
|
|
|
0.53
|
|
|
0.17
|
|
|
32.1
|
%
|
|||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
|
54.2
|
|
|
54.2
|
|
|
(0.1
|
)
|
|
(0.1
|
)%
|
|||
Diluted
|
54.7
|
|
|
54.7
|
|
|
—
|
|
|
—
|
%
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Sales
|
$
|
227.3
|
|
|
$
|
195.2
|
|
|
$
|
32.1
|
|
|
16.4
|
%
|
Operating profit
|
33.5
|
|
|
29.6
|
|
|
3.8
|
|
|
12.9
|
%
|
|||
Operating margin
|
14.7
|
%
|
|
15.2
|
%
|
|
|
|
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
|||||||||
Sales
|
$
|
114.5
|
|
|
$
|
93.1
|
|
|
$
|
21.4
|
|
|
23.0
|
%
|
Operating profit
|
22.3
|
|
|
11.9
|
|
|
10.4
|
|
|
87.6
|
%
|
|||
Operating margin
|
19.5
|
%
|
|
12.8
|
%
|
|
|
|
|
|
Three months ended March 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
Change
|
||||||
Operating activities
|
$
|
51.8
|
|
|
$
|
30.5
|
|
|
$
|
21.3
|
|
Investing activities
|
(11.6
|
)
|
|
(15.4
|
)
|
|
3.9
|
|
|||
Financing activities
|
(20.1
|
)
|
|
(24.3
|
)
|
|
4.2
|
|
|||
Exchange rate effect
|
1.7
|
|
|
2.1
|
|
|
(0.4
|
)
|
|||
Increase (decrease) in cash
|
$
|
21.8
|
|
|
$
|
(7.1
|
)
|
|
$
|
28.9
|
|
|
Four fiscal quarters ended March 31, 2017
|
||
Net income
|
$
|
145.1
|
|
Add back:
|
|
||
Interest expense
|
12.2
|
|
|
Income taxes
|
51.6
|
|
|
Depreciation and amortization
|
82.7
|
|
|
Adjustment for non-cash stock based compensation
|
10.4
|
|
|
Adjustment for acquired businesses
|
5.0
|
|
|
Amortization of FOBOHA acquisition inventory step-up
|
2.9
|
|
|
Other adjustments
|
1.1
|
|
|
Consolidated EBITDA, as defined
|
$
|
311.1
|
|
|
|
||
Consolidated Senior Debt, as defined, as of March 31, 2017
|
$
|
499.0
|
|
Ratio of Consolidated Senior Debt to Consolidated EBITDA
|
1.60
|
|
|
Maximum
|
3.25
|
|
|
Consolidated Total Debt, as defined, as of March 31, 2017
|
$
|
499.0
|
|
Ratio of Consolidated Total Debt to Consolidated EBITDA
|
1.60
|
|
|
Maximum
|
3.75
|
|
|
Consolidated Cash Interest Expense, as defined, as of March 31, 2017
|
$
|
13.0
|
|
Ratio of Consolidated EBITDA to Consolidated Cash Interest Expense
|
23.89
|
|
|
Minimum
|
4.25
|
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net income
|
$
|
38.3
|
|
|
$
|
28.8
|
|
Add back:
|
|
|
|
||||
Interest expense
|
3.3
|
|
|
3.0
|
|
||
Income taxes
|
14.1
|
|
|
9.5
|
|
||
Depreciation and amortization
|
21.4
|
|
|
18.8
|
|
||
EBITDA
|
$
|
77.1
|
|
|
$
|
60.1
|
|
Period
|
|
(a)
Total Number of Shares (or Units) Purchased
|
|
(b)
Average Price Paid Per Share (or Unit)
|
|
(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
(d)
Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
(2)
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
January 1-31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
4,449,006
|
|
|
February 1-28, 2017
|
|
31,623
|
|
|
$
|
50.01
|
|
|
29,500
|
|
|
4,419,506
|
|
|
March 1-31, 2017
|
|
77,579
|
|
|
$
|
50.37
|
|
|
77,500
|
|
|
4,342,006
|
|
|
Total
|
|
109,202
|
|
(1)
|
$
|
50.27
|
|
|
107,000
|
|
|
|
|
(1)
|
Other than 107,000 shares purchased in the first quarter of 2017, which were purchased as part of the Company's 2011 Program (defined below), all acquisitions of equity securities during the
first quarter of 2017
were the result of the operation of the terms of the Company's stockholder-approved equity compensation plans and the terms of the equity rights granted pursuant to those plans to pay for the related income tax upon issuance of shares. The purchase price of a share of stock used for tax withholding is the market price on the date of issuance.
|
(2)
|
The program was publicly announced on October 20, 2011 (the "2011 Program") authorizing repurchase of up to 5.0 million shares of common stock. At December 31, 2015, 1.1 million shares of common stock had not been purchased under the 2011 Program. On February 10, 2016, the Board of Directors of the Company increased the number of shares authorized for repurchase under the 2011 Program by 3.9 million shares of common stock (5.0 million authorized, in total). The 2011 Program permits open market purchases, purchases under a Rule 10b5-1 trading plan and privately negotiated transactions.
|
|
|
Barnes Group Inc.
|
|
|
(Registrant)
|
|
|
|
Date:
|
April 28, 2017
|
/s/ CHRISTOPHER J. STEPHENS, JR.
|
|
|
Christopher J. Stephens, Jr.
Senior Vice President, Finance
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
Date:
|
April 28, 2017
|
/s/ MARIAN ACKER
|
|
|
Marian Acker
Vice President, Controller
(Principal Accounting Officer)
|
Exhibit No.
|
|
Description
|
|
Reference
|
10.1
|
|
Amendment No. 4 to Credit Agreement dated as of February 2, 2017.
|
|
Filed with this report.
|
15
|
|
Letter regarding unaudited interim financial information.
|
|
Filed with this report.
|
31.1
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed with this report.
|
31.2
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Filed with this report.
|
32
|
|
Certification pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished with this report.
|
Exhibit 101.INS
|
|
XBRL Instance Document.
|
|
Filed with this report.
|
Exhibit 101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
Filed with this report.
|
Exhibit 101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
Filed with this report.
|
Exhibit 101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
Filed with this report.
|
Exhibit 101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
Filed with this report.
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Exhibit 101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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Filed with this report.
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Name:
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Michael V. Kennedy
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Title:
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Managing Director
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/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
Hartford, Connecticut
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1.
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I have reviewed this quarterly report on Form 10-Q for the period ended
March 31, 2017
of Barnes Group Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ PATRICK J. DEMPSEY
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Patrick J. Dempsey
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q for the period ended
March 31, 2017
of Barnes Group Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ CHRISTOPHER J. STEPHENS, JR.
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Christopher J. Stephens, Jr.
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Chief Financial Officer
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/s/ PATRICK J. DEMPSEY
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/s/ CHRISTOPHER J. STEPHENS, JR.
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Patrick J. Dempsey
President and Chief Executive Officer
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Christopher J. Stephens, Jr.
Chief Financial Officer
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April 28, 2017
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April 28, 2017
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