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.
|
||
|
|
|
Item 4.
|
||
|
|
|
Part II.
|
OTHER INFORMATION
|
|
|
|
|
Item 1.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
||
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
$
|
376,692
|
|
|
$
|
366,660
|
|
|
|
|
|
||||
Cost of sales
|
244,643
|
|
|
237,134
|
|
||
Selling and administrative expenses
|
81,400
|
|
|
72,893
|
|
||
|
326,043
|
|
|
310,027
|
|
||
Operating income
|
50,649
|
|
|
56,633
|
|
||
|
|
|
|
||||
Interest expense
|
5,113
|
|
|
3,892
|
|
||
Other expense (income), net
|
1,806
|
|
|
1,763
|
|
||
Income before income taxes
|
43,730
|
|
|
50,978
|
|
||
Income taxes
|
9,738
|
|
|
12,160
|
|
||
Net income
|
$
|
33,992
|
|
|
$
|
38,818
|
|
|
|
|
|
||||
Per common share:
|
|
|
|
||||
Basic
|
$
|
0.66
|
|
|
$
|
0.73
|
|
Diluted
|
0.65
|
|
|
0.72
|
|
||
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
51,660,804
|
|
|
53,535,424
|
|
||
Diluted
|
52,189,465
|
|
|
54,089,327
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
33,992
|
|
|
$
|
38,818
|
|
Other comprehensive (loss) income, net of tax
|
|
|
|
||||
Unrealized (loss) gain on hedging activities, net of tax (1)
|
(568
|
)
|
|
396
|
|
||
Foreign currency translation adjustments, net of tax (2)
|
(9,225
|
)
|
|
26,953
|
|
||
Defined benefit pension and other postretirement benefits, net of tax (3)
|
1,615
|
|
|
3,164
|
|
||
Total other comprehensive (loss) income, net of tax
|
(8,178
|
)
|
|
30,513
|
|
||
Total comprehensive income
|
$
|
25,814
|
|
|
$
|
69,331
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
103,507
|
|
|
$
|
100,719
|
|
Accounts receivable, less allowances (2019 - $4,957; 2018 - $5,010)
|
377,826
|
|
|
382,253
|
|
||
Inventories
|
257,249
|
|
|
265,990
|
|
||
Prepaid expenses and other current assets
|
58,839
|
|
|
57,184
|
|
||
Total current assets
|
797,421
|
|
|
806,146
|
|
||
|
|
|
|
||||
Deferred income taxes
|
19,609
|
|
|
20,474
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
856,661
|
|
|
853,497
|
|
||
Less accumulated depreciation
|
(488,790
|
)
|
|
(482,966
|
)
|
||
|
367,871
|
|
|
370,531
|
|
||
|
|
|
|
||||
Goodwill
|
944,809
|
|
|
955,524
|
|
||
Other intangible assets, net
|
617,562
|
|
|
636,538
|
|
||
Other assets
|
52,403
|
|
|
19,757
|
|
||
Total assets
|
$
|
2,799,675
|
|
|
$
|
2,808,970
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Notes and overdrafts payable
|
$
|
23,051
|
|
|
$
|
2,137
|
|
Accounts payable
|
132,329
|
|
|
143,419
|
|
||
Accrued liabilities
|
208,420
|
|
|
206,782
|
|
||
Long-term debt - current
|
5,231
|
|
|
5,522
|
|
||
Total current liabilities
|
369,031
|
|
|
357,860
|
|
||
|
|
|
|
||||
Long-term debt
|
877,540
|
|
|
936,357
|
|
||
Accrued retirement benefits
|
102,061
|
|
|
104,302
|
|
||
Deferred income taxes
|
103,366
|
|
|
106,559
|
|
||
Long-term tax liability
|
72,961
|
|
|
72,961
|
|
||
Other liabilities
|
50,213
|
|
|
27,875
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock - par value $0.01 per share
Authorized: 150,000,000 shares
Issued: at par value (2019 - 63,417,803 shares; 2018 - 63,367,133 shares)
|
634
|
|
|
634
|
|
||
Additional paid-in capital
|
474,857
|
|
|
470,818
|
|
||
Treasury stock, at cost (2019 - 12,034,986 shares; 2018 - 12,033,580 shares)
|
(441,748
|
)
|
|
(441,668
|
)
|
||
Retained earnings
|
1,389,438
|
|
|
1,363,772
|
|
||
Accumulated other non-owner changes to equity
|
(198,678
|
)
|
|
(190,500
|
)
|
||
Total stockholders' equity
|
1,224,503
|
|
|
1,203,056
|
|
||
Total liabilities and stockholders' equity
|
$
|
2,799,675
|
|
|
$
|
2,808,970
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
33,992
|
|
|
$
|
38,818
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
25,100
|
|
|
23,677
|
|
||
Loss (gain) on disposition of property, plant and equipment
|
91
|
|
|
(158
|
)
|
||
Stock compensation expense
|
3,021
|
|
|
2,501
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
4,345
|
|
|
(26,841
|
)
|
||
Inventories
|
7,300
|
|
|
(13,920
|
)
|
||
Prepaid expenses and other current assets
|
(2,670
|
)
|
|
(6,028
|
)
|
||
Accounts payable
|
(9,179
|
)
|
|
4,488
|
|
||
Accrued liabilities
|
(4,708
|
)
|
|
10,494
|
|
||
Deferred income taxes
|
(872
|
)
|
|
(66
|
)
|
||
Long-term retirement benefits
|
(3,428
|
)
|
|
(2,213
|
)
|
||
Other
|
68
|
|
|
(269
|
)
|
||
Net cash provided by operating activities
|
53,060
|
|
|
30,483
|
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Proceeds from disposition of property, plant and equipment
|
322
|
|
|
552
|
|
||
Capital expenditures
|
(13,738
|
)
|
|
(11,210
|
)
|
||
Other
|
—
|
|
|
(1,000
|
)
|
||
Net cash used by investing activities
|
(13,416
|
)
|
|
(11,658
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Net change in other borrowings
|
20,903
|
|
|
9,169
|
|
||
Payments on long-term debt
|
(152,195
|
)
|
|
(111,845
|
)
|
||
Proceeds from the issuance of long-term debt
|
102,990
|
|
|
87,500
|
|
||
Proceeds from the issuance of common stock
|
986
|
|
|
317
|
|
||
Common stock repurchases
|
—
|
|
|
(33,541
|
)
|
||
Dividends paid
|
(8,217
|
)
|
|
(7,453
|
)
|
||
Withholding taxes paid on stock issuances
|
(80
|
)
|
|
(68
|
)
|
||
Other
|
(1,340
|
)
|
|
(6,546
|
)
|
||
Net cash used by financing activities
|
(36,953
|
)
|
|
(62,467
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash flows
|
97
|
|
|
3,053
|
|
||
Increase (decrease) in cash and cash equivalents
|
2,788
|
|
|
(40,589
|
)
|
||
Cash and cash equivalents at beginning of period
|
100,719
|
|
|
145,290
|
|
||
Cash and cash equivalents at end of period
|
$
|
103,507
|
|
|
$
|
104,701
|
|
|
Three months ended March 31,
|
||||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||||
|
Industrial
|
|
Aerospace
|
|
Total Company
|
|
Industrial
|
Aerospace
|
Total Company
|
||||||||||||
Product and Services
|
|
|
|
|
|
|
|
|
|
||||||||||||
Engineered Components Products
|
$
|
69,684
|
|
|
$
|
—
|
|
|
$
|
69,684
|
|
|
$
|
77,090
|
|
$
|
—
|
|
$
|
77,090
|
|
Molding Solutions Products
|
106,793
|
|
|
—
|
|
|
106,793
|
|
|
119,099
|
|
—
|
|
119,099
|
|
||||||
Force & Motion Control Products
|
51,617
|
|
|
—
|
|
|
51,617
|
|
|
49,772
|
|
—
|
|
49,772
|
|
||||||
Automation Products
|
14,408
|
|
|
—
|
|
|
14,408
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Aerospace Original Equipment Manufacturer Products
|
—
|
|
|
87,939
|
|
|
87,939
|
|
|
—
|
|
80,695
|
|
80,695
|
|
||||||
Aerospace Aftermarket Products and Services
|
—
|
|
|
46,251
|
|
|
46,251
|
|
|
—
|
|
40,004
|
|
40,004
|
|
||||||
|
$
|
242,502
|
|
|
$
|
134,190
|
|
|
$
|
376,692
|
|
|
$
|
245,961
|
|
$
|
120,699
|
|
$
|
366,660
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Geographic Regions
(A)
|
|
|
|
|
|
|
|
|
|
||||||||||||
Americas
|
$
|
98,288
|
|
|
$
|
96,144
|
|
|
$
|
194,432
|
|
|
$
|
96,527
|
|
$
|
85,961
|
|
$
|
182,488
|
|
Europe
|
94,430
|
|
|
24,324
|
|
|
118,754
|
|
|
94,140
|
|
24,675
|
|
118,815
|
|
||||||
Asia
|
48,942
|
|
|
12,404
|
|
|
61,346
|
|
|
54,380
|
|
8,913
|
|
63,293
|
|
||||||
Other
|
842
|
|
|
1,318
|
|
|
2,160
|
|
|
914
|
|
1,150
|
|
2,064
|
|
||||||
|
$
|
242,502
|
|
|
$
|
134,190
|
|
|
$
|
376,692
|
|
|
$
|
245,961
|
|
$
|
120,699
|
|
$
|
366,660
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
$ Change
|
|
% Change
|
|||||||
Unbilled receivables (contract assets)
|
$
|
17,501
|
|
|
$
|
11,844
|
|
|
$
|
5,657
|
|
|
48
|
%
|
Contract liabilities
|
(56,606
|
)
|
|
(57,522
|
)
|
|
916
|
|
|
(2
|
)%
|
|||
Net contract liabilities
|
$
|
(39,105
|
)
|
|
$
|
(45,678
|
)
|
|
$
|
6,573
|
|
|
(14
|
)%
|
|
March 31, 2019
|
December 31, 2018
|
||||
Tooling
|
$
|
6,058
|
|
$
|
6,155
|
|
Design costs
|
2,281
|
|
2,285
|
|
||
Other
|
—
|
|
5
|
|
||
|
$
|
8,339
|
|
$
|
8,445
|
|
|
|
Common
Stock (Number of Shares) |
|
Common
Stock (Amount) |
|
Additional
Paid-In Capital |
|
Treasury
Stock (Number of Shares) |
|
Treasury
Stock (Amount) |
|
Retained
Earnings |
|
Accumulated
Other Non-Owner Changes to Equity |
|
Total
Stockholders’ Equity |
||||||||||||||
December 31, 2018
|
|
63,367
|
|
|
$
|
634
|
|
|
$
|
470,818
|
|
|
12,034
|
|
|
$
|
(441,668
|
)
|
|
$
|
1,363,772
|
|
|
$
|
(190,500
|
)
|
|
$
|
1,203,056
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
33,992
|
|
|
(8,178
|
)
|
|
25,814
|
|
|||||||||||
Dividends declared ($0.16 per share)
|
|
|
|
|
|
|
|
|
|
|
|
(8,217
|
)
|
|
|
|
(8,217
|
)
|
||||||||||||
Employee stock plans
|
|
51
|
|
|
|
|
4,039
|
|
|
1
|
|
|
(80
|
)
|
|
(109
|
)
|
|
|
|
3,850
|
|
||||||||
March 31, 2019
|
|
63,418
|
|
|
$
|
634
|
|
|
$
|
474,857
|
|
|
12,035
|
|
|
$
|
(441,748
|
)
|
|
$
|
1,389,438
|
|
|
$
|
(198,678
|
)
|
|
$
|
1,224,503
|
|
|
|
Common
Stock (Number of Shares) |
|
Common
Stock (Amount) |
|
Additional
Paid-In Capital |
|
Treasury
Stock (Number of Shares) |
|
Treasury
Stock (Amount) |
|
Retained
Earnings |
|
Accumulated
Other Non-Owner Changes to Equity |
|
Total
Stockholders’ Equity |
||||||||||||||
December 31, 2017
|
|
63,034
|
|
|
$
|
630
|
|
|
$
|
457,365
|
|
|
9,656
|
|
|
$
|
(297,998
|
)
|
|
$
|
1,206,723
|
|
|
$
|
(106,399
|
)
|
|
$
|
1,260,321
|
|
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
38,818
|
|
|
30,513
|
|
|
69,331
|
|
|||||||||||
Dividends declared ($0.14 per share)
|
|
|
|
|
|
|
|
|
|
|
|
(7,453
|
)
|
|
|
|
(7,453
|
)
|
||||||||||||
Common stock repurchases
|
|
|
|
|
|
|
|
533
|
|
|
(33,541
|
)
|
|
|
|
|
|
(33,541
|
)
|
|||||||||||
Reclassification pursuant to
accounting guidance related to
U.S. Tax Reform (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
19,331
|
|
|
(19,331
|
)
|
|
—
|
|
|||||||||||
Cumulative effect of change in accounting guidance related to Revenue (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
4,295
|
|
|
|
|
4,295
|
|
||||||||||||
Employee stock plans
|
|
20
|
|
|
1
|
|
|
2,874
|
|
|
1
|
|
|
(68
|
)
|
|
(174
|
)
|
|
|
|
2,633
|
|
|||||||
March 31, 2018
|
|
63,054
|
|
|
$
|
631
|
|
|
$
|
460,239
|
|
|
10,190
|
|
|
$
|
(331,607
|
)
|
|
$
|
1,261,540
|
|
|
$
|
(95,217
|
)
|
|
$
|
1,295,586
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Finished goods
|
$
|
84,965
|
|
|
$
|
87,779
|
|
Work-in-process
|
96,146
|
|
|
98,426
|
|
||
Raw material and supplies
|
76,138
|
|
|
79,785
|
|
||
|
$
|
257,249
|
|
|
$
|
265,990
|
|
|
Industrial
|
|
Aerospace
|
|
Total Company
|
||||||
January 1, 2019
|
$
|
924,738
|
|
|
$
|
30,786
|
|
|
$
|
955,524
|
|
Acquisition related
|
681
|
|
|
—
|
|
|
681
|
|
|||
Foreign currency translation
|
(11,396
|
)
|
|
—
|
|
|
(11,396
|
)
|
|||
March 31, 2019
|
$
|
914,023
|
|
|
$
|
30,786
|
|
|
$
|
944,809
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Range of
Life - Years
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Gross Amount
|
|
Accumulated Amortization
|
||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue sharing programs (RSPs)
|
Up to 30
|
|
$
|
299,500
|
|
|
$
|
(125,533
|
)
|
|
$
|
299,500
|
|
|
$
|
(121,957
|
)
|
Component repair programs (CRPs)
|
Up to 30
|
|
111,839
|
|
|
(23,404
|
)
|
|
111,839
|
|
|
(21,895
|
)
|
||||
Customer relationships
|
10-16
|
|
338,366
|
|
|
(84,496
|
)
|
|
338,366
|
|
|
(79,439
|
)
|
||||
Patents and technology
|
4-14
|
|
125,852
|
|
|
(62,600
|
)
|
|
125,852
|
|
|
(59,205
|
)
|
||||
Trademarks/trade names
|
10-30
|
|
11,950
|
|
|
(10,830
|
)
|
|
11,950
|
|
|
(10,731
|
)
|
||||
Other
|
Up to 15
|
|
7,296
|
|
|
(3,662
|
)
|
|
7,296
|
|
|
(3,551
|
)
|
||||
|
|
|
894,803
|
|
|
(310,525
|
)
|
|
894,803
|
|
|
(296,778
|
)
|
||||
Unamortized intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Trade names
|
|
|
55,670
|
|
|
—
|
|
|
55,670
|
|
|
—
|
|
||||
Foreign currency translation
|
|
|
(22,386
|
)
|
|
—
|
|
|
(17,157
|
)
|
|
—
|
|
||||
Other intangible assets
|
|
|
$
|
928,087
|
|
|
$
|
(310,525
|
)
|
|
$
|
933,316
|
|
|
$
|
(296,778
|
)
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Revolving credit agreement
|
|
$
|
772,737
|
|
|
$
|
788,492
|
|
|
$
|
831,016
|
|
|
$
|
828,800
|
|
3.97% Senior Notes
|
|
100,000
|
|
|
102,504
|
|
|
100,000
|
|
|
100,185
|
|
||||
Borrowings under lines of credit and overdrafts
|
|
23,051
|
|
|
23,051
|
|
|
2,137
|
|
|
2,137
|
|
||||
Capital leases
|
|
9,400
|
|
|
9,563
|
|
|
10,216
|
|
|
10,503
|
|
||||
Other foreign bank borrowings
|
|
634
|
|
|
638
|
|
|
647
|
|
|
651
|
|
||||
|
|
905,822
|
|
|
924,248
|
|
|
944,016
|
|
|
942,276
|
|
||||
Less current maturities
|
|
(28,282
|
)
|
|
|
|
(7,659
|
)
|
|
|
||||||
Long-term debt
|
|
$
|
877,540
|
|
|
|
|
$
|
936,357
|
|
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||
|
|
Fair Value
|
|
|
Fair Value
|
||||||||||
|
Balance Sheet Location
|
March 31, 2019
|
December 31, 2018
|
|
Balance Sheet Location
|
March 31, 2019
|
December 31, 2018
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
Other assets
|
$
|
773
|
|
$
|
1,412
|
|
|
Other liabilities
|
$
|
—
|
|
$
|
—
|
|
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
—
|
|
—
|
|
|
Accrued liabilities
|
(361
|
)
|
(258
|
)
|
||||
Total derivatives designated as hedging instruments
|
|
773
|
|
1,412
|
|
|
|
(361
|
)
|
(258
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
20
|
|
1,105
|
|
|
Accrued liabilities
|
(949
|
)
|
(90
|
)
|
||||
Total derivatives not designated as hedging instruments
|
|
20
|
|
1,105
|
|
|
|
(949
|
)
|
(90
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Total derivatives
|
|
$
|
793
|
|
$
|
2,517
|
|
|
|
$
|
(1,310
|
)
|
$
|
(348
|
)
|
|
Amount of (Loss) Gain Recognized in Accumulated Other Comprehensive (Loss) Income on Derivative
|
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
|
||||||||||||
|
Three months ended March 31,
|
Three months ended March 31,
|
|||||||||||||
Derivatives in Hedging Relationships
|
2019
|
|
2018
|
2019
|
|
2018
|
|||||||||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
$
|
(487
|
)
|
|
$
|
1,235
|
|
Interest expense
|
$
|
142
|
|
|
$
|
(82
|
)
|
Foreign exchange contracts
|
(81
|
)
|
|
(839
|
)
|
Net sales
|
(337
|
)
|
|
(226
|
)
|
||||
Total
|
$
|
(568
|
)
|
|
$
|
396
|
|
|
$
|
(195
|
)
|
|
$
|
(308
|
)
|
|
Location and Amount of Gain (Loss) Recognized in Income on Hedging Relationships
|
||||||||||||||
|
Three months ended March 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Net sales
|
|
Interest expense
|
|
Net sales
|
|
Interest expense
|
||||||||
Total amounts of income and expense line items presented in the consolidated statements of income in which the effects of hedges are recorded
|
$
|
376,692
|
|
|
$
|
5,113
|
|
|
$
|
366,660
|
|
|
$
|
3,892
|
|
The effects of hedging:
|
|
|
|
|
|
|
|
||||||||
Gain (Loss) on cash flow hedging relationships
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income
|
|
|
142
|
|
|
|
|
(82
|
)
|
||||||
Foreign exchange contracts
|
|
|
|
|
|
|
|
||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into income
|
(337
|
)
|
|
|
|
(226
|
)
|
|
|
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, 2019
|
|
|
|
|
|
|
|
|
||||||||
Asset derivatives
|
|
$
|
793
|
|
|
$
|
—
|
|
|
$
|
793
|
|
|
$
|
—
|
|
Liability derivatives
|
|
(1,310
|
)
|
|
—
|
|
|
(1,310
|
)
|
|
—
|
|
||||
Bank acceptances
|
|
10,212
|
|
|
—
|
|
|
10,212
|
|
|
—
|
|
||||
Rabbi trust assets
|
|
2,704
|
|
|
2,704
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
12,399
|
|
|
$
|
2,704
|
|
|
$
|
9,695
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Asset derivatives
|
|
$
|
2,517
|
|
|
$
|
—
|
|
|
$
|
2,517
|
|
|
$
|
—
|
|
Liability derivatives
|
|
(348
|
)
|
|
—
|
|
|
(348
|
)
|
|
—
|
|
||||
Bank acceptances
|
|
17,698
|
|
|
—
|
|
|
17,698
|
|
|
—
|
|
||||
Rabbi trust assets
|
|
2,457
|
|
|
2,457
|
|
|
—
|
|
|
—
|
|
||||
|
|
$
|
22,324
|
|
|
$
|
2,457
|
|
|
$
|
19,867
|
|
|
$
|
—
|
|
|
Three months ended March 31,
|
||||||
Pensions
|
2019
|
|
2018
|
||||
Service cost
|
$
|
1,433
|
|
|
$
|
1,590
|
|
Interest cost
|
4,536
|
|
|
4,309
|
|
||
Expected return on plan assets
|
(7,078
|
)
|
|
(7,394
|
)
|
||
Amortization of prior service cost
|
103
|
|
|
141
|
|
||
Amortization of actuarial losses
|
2,158
|
|
|
2,811
|
|
||
Net periodic benefit cost
|
$
|
1,152
|
|
|
$
|
1,457
|
|
|
|
|
|
|
Three months ended March 31,
|
||||||
Other Postretirement Benefits
|
2019
|
|
2018
|
||||
Service cost
|
$
|
19
|
|
|
$
|
24
|
|
Interest cost
|
340
|
|
|
344
|
|
||
Amortization of prior service cost
|
6
|
|
|
5
|
|
||
Amortization of actuarial losses
|
10
|
|
|
160
|
|
||
Net periodic benefit cost
|
$
|
375
|
|
|
$
|
533
|
|
|
|
|
|
|
||
Operating Leases
|
|
Classification
|
|
March 31, 2019
|
||
Leased Assets
|
|
|
|
|
||
ROU assets
|
|
Other assets
|
|
$
|
33,316
|
|
|
|
|
|
|
||
Lease Liabilities
|
|
|
|
|
||
Current lease liability
|
|
Accrued liabilities
|
|
10,689
|
|
|
Long term lease liability
|
|
Other liabilities
|
|
23,470
|
|
|
|
|
|
|
$
|
34,159
|
|
|
|
|
||
|
|
Operating Leases
|
||
2019
|
|
$
|
9,266
|
|
2020
|
|
9,582
|
|
|
2021
|
|
6,995
|
|
|
2022
|
|
3,251
|
|
|
2023
|
|
2,453
|
|
|
After 2023
|
|
7,688
|
|
|
Total lease payments
|
|
$
|
39,235
|
|
Less: Interest
|
|
5,076
|
|
|
Present value of lease payments
|
|
$
|
34,159
|
|
|
|
|
|
Lease Term and Discount Rate
|
|
March 31, 2019
|
|
Weighted-average remaining lease term (years)
|
|
|
|
Operating leases
|
|
6.2
|
|
Weighted-average discount rate
|
|
|
|
Operating leases
|
|
3.97
|
%
|
|
|
|
||
Other Information
|
|
March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
3,363
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
4,563
|
|
|
Gains and Losses on Cash Flow Hedges
|
|
Pension and Other Postretirement Benefit Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
January 1, 2019
|
$
|
834
|
|
|
$
|
(138,690
|
)
|
|
$
|
(52,644
|
)
|
|
$
|
(190,500
|
)
|
Other comprehensive (loss) income before reclassifications
|
(723
|
)
|
|
(122
|
)
|
|
(9,225
|
)
|
|
(10,070
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
|
155
|
|
|
1,737
|
|
|
—
|
|
|
1,892
|
|
||||
Net current-period other comprehensive income
|
(568
|
)
|
|
1,615
|
|
|
(9,225
|
)
|
|
(8,178
|
)
|
||||
March 31, 2019
|
$
|
266
|
|
|
$
|
(137,075
|
)
|
|
$
|
(61,869
|
)
|
|
$
|
(198,678
|
)
|
|
Gains and Losses on Cash Flow Hedges
|
|
Pension and Other Postretirement Benefit Items
|
|
Foreign Currency Items
|
|
Total
|
||||||||
January 1, 2018
|
$
|
72
|
|
|
$
|
(103,844
|
)
|
|
$
|
(2,627
|
)
|
|
$
|
(106,399
|
)
|
Other comprehensive income before reclassifications
|
157
|
|
|
763
|
|
|
26,953
|
|
|
27,873
|
|
||||
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
|
239
|
|
|
2,401
|
|
|
—
|
|
|
2,640
|
|
||||
Net current-period other comprehensive income
|
396
|
|
|
3,164
|
|
|
26,953
|
|
|
30,513
|
|
||||
Amounts reclassified from accumulated other comprehensive income to retained earnings (A)
|
—
|
|
|
(19,331
|
)
|
|
—
|
|
|
(19,331
|
)
|
||||
March 31, 2018
|
$
|
468
|
|
|
$
|
(120,011
|
)
|
|
$
|
24,326
|
|
|
$
|
(95,217
|
)
|
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, 2019
|
|
Three months ended March 31, 2018
|
|
|
||||
Gains and losses on cash flow hedges
|
|
|
|
|
|
|
||||
Interest rate contracts
|
|
$
|
142
|
|
|
$
|
(82
|
)
|
|
Interest expense
|
Foreign exchange contracts
|
|
(337
|
)
|
|
(226
|
)
|
|
Net sales
|
||
|
|
(195
|
)
|
|
(308
|
)
|
|
Total before tax
|
||
|
|
40
|
|
|
69
|
|
|
Tax benefit
|
||
|
|
(155
|
)
|
|
(239
|
)
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Pension and other postretirement benefit items
|
|
|
|
|
|
|
||||
Amortization of prior-service costs
|
|
$
|
(109
|
)
|
|
$
|
(146
|
)
|
|
(A)
|
Amortization of actuarial losses
|
|
(2,168
|
)
|
|
(2,971
|
)
|
|
(A)
|
||
|
|
(2,277
|
)
|
|
(3,117
|
)
|
|
Total before tax
|
||
|
|
540
|
|
|
716
|
|
|
Tax benefit
|
||
|
|
(1,737
|
)
|
|
(2,401
|
)
|
|
Net of tax
|
||
|
|
|
|
|
|
|
||||
Total reclassifications in the period
|
|
$
|
(1,892
|
)
|
|
$
|
(2,640
|
)
|
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net sales
|
|
|
|
||||
Industrial
|
$
|
242,502
|
|
|
$
|
245,967
|
|
Aerospace
|
134,190
|
|
|
120,699
|
|
||
Intersegment sales
|
—
|
|
|
(6
|
)
|
||
Total net sales
|
$
|
376,692
|
|
|
$
|
366,660
|
|
|
|
|
|
||||
Operating profit
|
|
|
|
||||
Industrial
|
$
|
21,502
|
|
|
$
|
32,378
|
|
Aerospace
|
29,147
|
|
|
24,255
|
|
||
Total operating profit
|
50,649
|
|
|
56,633
|
|
||
Interest expense
|
5,113
|
|
|
3,892
|
|
||
Other expense (income), net
|
1,806
|
|
|
1,763
|
|
||
Income before income taxes
|
$
|
43,730
|
|
|
$
|
50,978
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Industrial
|
$
|
1,934,014
|
|
|
$
|
1,962,362
|
|
Aerospace
|
706,633
|
|
|
692,584
|
|
||
Other
(A)
|
159,028
|
|
|
154,024
|
|
||
Total assets
|
$
|
2,799,675
|
|
|
$
|
2,808,970
|
|
/s/ PricewaterhouseCoopers LLP
|
|
PricewaterhouseCoopers LLP
Hartford, Connecticut
|
|
April 26, 2019
|
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|||||||||
Industrial
|
$
|
242.5
|
|
|
$
|
246.0
|
|
|
$
|
(3.5
|
)
|
|
(1.4
|
)%
|
Aerospace
|
134.2
|
|
|
120.7
|
|
|
13.5
|
|
|
11.2
|
%
|
|||
Total
|
$
|
376.7
|
|
|
$
|
366.7
|
|
|
$
|
10.0
|
|
|
2.7
|
%
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|||||||||
Cost of sales
|
$
|
244.6
|
|
|
$
|
237.1
|
|
|
$
|
7.5
|
|
|
3.2
|
%
|
% sales
|
64.9
|
%
|
|
64.7
|
%
|
|
|
|
|
|||||
Gross profit
(1)
|
$
|
132.0
|
|
|
$
|
129.5
|
|
|
$
|
2.5
|
|
|
1.9
|
%
|
% sales
|
35.1
|
%
|
|
35.3
|
%
|
|
|
|
|
|||||
Selling and administrative expenses
|
$
|
81.4
|
|
|
$
|
72.9
|
|
|
$
|
8.5
|
|
|
11.7
|
%
|
% sales
|
21.6
|
%
|
|
19.9
|
%
|
|
|
|
|
|||||
Operating income
|
$
|
50.6
|
|
|
$
|
56.6
|
|
|
$
|
(6.0
|
)
|
|
(10.6
|
)%
|
% sales
|
13.4
|
%
|
|
15.4
|
%
|
|
|
|
|
|
Three months ended March 31,
|
|||||||||||||
(in millions, except per share)
|
2019
|
|
2018
|
|
Change
|
|||||||||
Net income
|
$
|
34.0
|
|
|
$
|
38.8
|
|
|
$
|
(4.8
|
)
|
|
(12.4
|
)%
|
Net income per common share:
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
0.66
|
|
|
$
|
0.73
|
|
|
$
|
(0.07
|
)
|
|
(9.6
|
)%
|
Diluted
|
0.65
|
|
|
0.72
|
|
|
(0.07
|
)
|
|
(9.7
|
)%
|
|||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|||||||
Basic
|
51.7
|
|
|
53.5
|
|
|
(1.9
|
)
|
|
(3.5
|
)%
|
|||
Diluted
|
52.2
|
|
|
54.1
|
|
|
(1.9
|
)
|
|
(3.5
|
)%
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|||||||||
Sales
|
$
|
242.5
|
|
|
$
|
246.0
|
|
|
$
|
(3.5
|
)
|
|
(1.4
|
)%
|
Operating profit
|
21.5
|
|
|
32.4
|
|
|
(10.9
|
)
|
|
(33.6
|
)%
|
|||
Operating margin
|
8.9
|
%
|
|
13.2
|
%
|
|
|
|
|
|
Three months ended March 31,
|
|||||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
|||||||||
Sales
|
$
|
134.2
|
|
|
$
|
120.7
|
|
|
$
|
13.5
|
|
|
11.2
|
%
|
Operating profit
|
29.1
|
|
|
24.3
|
|
|
4.9
|
|
|
20.2
|
%
|
|||
Operating margin
|
21.7
|
%
|
|
20.1
|
%
|
|
|
|
|
|
Three months ended March 31,
|
||||||||||
(in millions)
|
2019
|
|
2018
|
|
Change
|
||||||
Operating activities
|
$
|
53.1
|
|
|
$
|
30.5
|
|
|
$
|
22.6
|
|
Investing activities
|
(13.4
|
)
|
|
(11.7
|
)
|
|
(1.8
|
)
|
|||
Financing activities
|
(37.0
|
)
|
|
(62.5
|
)
|
|
25.5
|
|
|||
Exchange rate effect
|
0.1
|
|
|
3.1
|
|
|
(3.0
|
)
|
|||
Increase (decrease) in cash
|
$
|
2.8
|
|
|
$
|
(40.6
|
)
|
|
$
|
43.4
|
|
|
Four fiscal quarters ended March 31, 2019
|
||
Net income
|
$
|
161.4
|
|
Add back:
|
|
||
Interest expense
|
18.1
|
|
|
Income taxes
|
38.9
|
|
|
Depreciation and amortization
|
95.7
|
|
|
Adjustment for non-cash stock based compensation
|
12.8
|
|
|
Adjustment for acquired businesses
|
13.7
|
|
|
Amortization of Gimatic and IGS acquisition inventory step-ups
|
9.6
|
|
|
Due diligence and transaction expenses
|
5.3
|
|
|
Other adjustments
|
1.7
|
|
|
Consolidated EBITDA, as defined
|
$
|
357.0
|
|
|
|
||
Consolidated Senior Debt, as defined, as of March 31, 2019
|
$
|
905.8
|
|
Ratio of Consolidated Senior Debt to Consolidated EBITDA
|
2.54
|
|
|
Maximum
|
3.50
|
|
|
Consolidated Total Debt, as defined, as of March 31, 2019
|
$
|
905.8
|
|
Ratio of Consolidated Total Debt to Consolidated EBITDA
|
2.54
|
|
|
Maximum
|
4.25
|
|
|
Consolidated Cash Interest Expense, as defined, as of March 31, 2019
|
$
|
25.3
|
|
Ratio of Consolidated EBITDA to Consolidated Cash Interest Expense
|
14.09
|
|
|
Minimum
|
4.25
|
|
|
Three months ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
34.0
|
|
|
$
|
38.8
|
|
Add back:
|
|
|
|
||||
Interest expense
|
5.1
|
|
|
3.9
|
|
||
Income taxes
|
9.7
|
|
|
12.2
|
|
||
Depreciation and amortization
|
25.1
|
|
|
23.7
|
|
||
EBITDA
|
$
|
73.9
|
|
|
$
|
78.5
|
|
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, 2019
|
|
720
|
|
|
$
|
56.12
|
|
|
—
|
|
|
1,479,806
|
|
|
February 1-28, 2019
|
|
458
|
|
|
$
|
59.87
|
|
|
—
|
|
|
1,479,806
|
|
|
March 1-31, 2019
|
|
228
|
|
|
$
|
54.32
|
|
|
—
|
|
|
1,479,806
|
|
|
Total
|
|
1,406
|
|
(1)
|
$
|
57.05
|
|
|
—
|
|
|
|
|
(1)
|
All acquisitions of equity securities during the
first
quarter of
2019
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)
|
At March 31, 2019, 1.5 million shares of common stock had not been purchased under the publicly announced Repurchase Program (the “Program”). On April 25, 2019, the Board of Directors of the Company increased the number of shares authorized for repurchase under the Program by 3.5 million shares of common stock (5.0 million authorized, in total). The Program permits open market purchases, purchases under a Rule 10b5-1 trading plan and privately negotiated transactions.
|
|
|
Barnes Group Inc.
|
|
|
(Registrant)
|
|
|
|
Date:
|
April 26, 2019
|
/s/ CHRISTOPHER J. STEPHENS, JR.
|
|
|
Christopher J. Stephens, Jr.
Senior Vice President, Finance
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
Date:
|
April 26, 2019
|
/s/ MARIAN ACKER
|
|
|
Marian Acker
Vice President, Controller
(Principal Accounting Officer)
|
Exhibit No.
|
|
Description
|
|
Reference
|
10.1
|
|
|
Filed with this report.
|
|
10.2
|
|
|
Filed with this report.
|
|
15
|
|
|
Filed with this report.
|
|
31.1
|
|
|
Filed with this report.
|
|
31.2
|
|
|
Filed with this report.
|
|
32
|
|
|
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.
|
Exhibit 101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Filed with this report.
|
1.
|
Termination Date
.
In exchange for your continued employment through the Termination Date as set forth below and the consideration set forth herein, you agree to (i) execute and not revoke the release attached hereto as Exhibit A (the "First Release") and a second confirmation release attached hereto as Exhibit B ("Second Release"), each within the time frames specified herein, and (ii) comply with the terms and conditions set forth in this Agreement. The following additional terms govern your termination from employment:
|
A.
|
You hereby resign from your position as Senior Vice President, Barnes Group Inc. and President, Barnes Industrial and all other officer, director and/or committee member positions you hold with the Company or any of its subsidiaries or affiliates (collectively "Affiliates") effective as of 5:00 PM Eastern Standard Time on February 8, 2019, and you agree to execute all such documentation as may be required to effectuate such resignations.
|
B.
|
Through the Termination Date, you will continue to: (i) receive your regular salary, at the rate currently in effect, subject to applicable deductions; and (ii) be eligible to participate in the Company benefits plans in which you are currently participating.
|
C.
|
The Termination Date has been selected to allow you to vest in: (i) the four percent Retirement Contribution Plan; (ii) the Non-Qualified DC Retirement Benefit Equalization Plan; and (iii) vest in a pro-rated portion of your unvested equity awards in the form of Performance Share Awards ("PSA") in accordance with the terms of the 2014 Barnes Group Inc. Stock and Incentive Award Plan ("Stock Plan") and the applicable award agreements issued thereunder on or before the Termination Date.
|
D.
|
During the Transition Period, you will no longer perform the regular duties or have decision making authority as Senior Vice President, Barnes Group Inc. and President, Barnes Industrial, and you are not to come to the office, nor interact or communicate with individuals employed by the Company or its Affiliates or interact or communicate with customers, vendors or suppliers of the Company or its Affiliates, except as directed and authorized by the Chief Executive Officer. During the Transition Period, you will perform such transition services for the Company as are reasonably requested by the Chief Executive Officer, in order to facilitate an orderly transition of your duties, including, consultation and other assistance with respect to matters for which you have had responsibility while Senior Vice President, Barnes Group Inc. and President, Barnes Industrial. You will be available for such transition services as reasonably requested, directly or indirectly, by the Chief Executive Officer or his authorized designee.
|
E.
|
If you obtain employment with a new employer before the end of the Transition Period or Termination Date, you and the Company may agree in writing that the end of the Transition Period will be accelerated based on the notice provided by you, in which case the Transition Period will cease effective as of such agreed upon date, and your Termination Date will also be effective as of that agreed upon date. If you elect to continue your employment during the Transition Period and execute the First Release, but voluntarily resign before the Transition Period concludes, your Termination Date will be accelerated to the date of your resignation.
|
F.
|
If you do not execute the First Release within the specified time, or if you execute and subsequently revoke the First Release, then you will not be entitled to continued employment up to your Termination Date. The Company will accelerate your Termination Date and your employment will end at that point.
|
G.
|
Notwithstanding anything in this Agreement to the contrary, if you engage in conduct described in Section 3(a) of the Barnes Group Inc. Executive Separation Pay Plan as amended and restated effective January 1, 2012 (the "Separation Pay Plan"), the Company may accelerate the Termination Date and terminate your employment immediately, and no payments or benefits will be made or provided pursuant to Section 2 below or under the Separation Pay Plan. In that case, your participation in Company benefits, if any, will also cease as of the accelerated Termination Date.
|
H.
|
You agree to comply with the terms of this Agreement, including, without limitation, the confidentiality provisions.
|
I.
|
You are hereby advised to consult with an attorney before signing this Agreement, the First Release or the Second Release
.
|
2.
|
Severance.
You must choose from the two alternatives listed below in A (Minimum Severance) and B (Enhanced Severance):
|
A.
|
Minimum Severance
.
Under the Separation Pay Plan, which is incorporated by reference in this Agreement as if fully set forth herein, you are eligible to receive the minimum severance pay of one month's pay at your current monthly rate of $36,666.67 or the amount, if any, of your accrued unused vacation pay and/or any unused floating holidays, whichever is greater, less all federal, state and customary deductions. Such payment or payments will be made in accordance with the Company's regular payroll practices. You will receive this payment irrespective of whether you sign the Release.
|
B.
|
Enhanced Severance
. I
n order to receive enhanced severance payments and other benefits to which you would not otherwise be entitled, as described in this Section, you must agree to Sections 2 through 20 of this Agreement and execute and not revoke the First Release and Second Release within the specified time frame following your Termination Date. You are advised to consult with an attorney before signing this Agreement, the First Release and Second Release. In exchange for your signed (and non-revoked) First Release and Second Release and compliance with Sections 2 through 20 of this Agreement, assuming you remain eligible under the terms of the Separation Pay Plan, you are eligible to receive severance payments at your current monthly rate of $36,666.67, for a period of up to twelve (12) months following the Termination Date (the "Severance Pay Period"), less federal, state and customary deductions. However, if your Termination Date occurs prior to the end of a month for which your salary has been advanced to you under our routine payroll processing, the amount of your most recent paycheck attributable to the period from the Termination Date through the end of the month for which your salary has been advanced will be deducted from the amount you receive under this section.
|
C.
|
Payment of Severance
.
The first severance payment will be made on the next regular pay date after the Termination Date. Subject to this paragraph, provided that you sign and do not revoke the Second Release, payment of any remaining severance payments will resume on the regular pay date following the Last Revocation Day, as defined in the Second Release, but not later than the 74th day after the Termination Date, and will thereafter be paid on the regular pay dates as per the schedule in place as of the Termination Date until the Severance Pay Period concludes. The first payment made when any remaining severance payments resume pursuant to the preceding sentence shall include any severance payments for regular pay dates after your receipt of the first severance payment and before such remaining severance payments resume. Severance payments will be subject to the federal, state and customary deductions.
|
3.
|
Benefits Following Your Termination Date.
You may, if you are currently enrolled, continue to participate in the Company's medical, vision and dental plans in accordance with the terms of the applicable plans during the period in which you receive severance payments by paying the full cost of the premiums (both employer and employee portions) for these benefits during such period. However, the Company will reimburse you for the employer portion of the premium payments. This reimbursement will be considered
|
4.
|
Performance-Linked Bonus Plan.
As your Termination Date will be on or after November 1, 2018, you will be eligible to be considered for a payment under the Performance Linked Bonus Plan for Select Executive Officers (the "PLBP"), if any, for the 2018 Award Period. As you will not be employed as of November 1, 2019, and you will not otherwise be eligible for retirement as of your Termination Date, you will not be eligible to be considered for a payment under the PLBP for the 2019 Award Period.
|
5.
|
Equity Awards.
Pursuant to the terms of the 2014 Barnes Group Inc. Stock and Incentive Award Plan and the applicable award agreements issued thereunder, all of your unexercisable and unvested stock options, restricted stock units and performance share
|
6.
|
Outplacement Benefit.
To assist you in managing the change and locating a new employment opportunity, the Company will arrange to provide you executive-level outplacement services of up to $15,000 with a mutually acceptable outplacement service firm. These services will be provided to you for six months from the date of this Agreement. Please contact me if you wish to use this outplacement benefit.
|
7.
|
Final Expenses.
Your expense account, if any, and use of any Company credit and/or telephone cards, will cease as of the February 8, 2019. You will promptly return any such cards or other similar Company property in your possession and, if applicable, submit your final expense account, including an accounting for any advances, as of the Termination Date.
|
8.
|
Return of Company Property.
Effective as of the February 8, 2019, you will promptly return to the Company any and all information relating to the Company and Company Property in your possession and you will not, directly or indirectly, copy, take, or remove from the Company's premises, use or disclose to third parties any such information or property. As used herein, "Company Property" includes, without limitation, computers, and other wireless or electronic devices provided to you by the Company during your employment with the Company. To enable the provision of the transition services, you may continue to use your company issued cellular phone during the transition period and contact between you and the CEO or his designee will be facilitated via cellular telephone or teleconferencing through the Termination Date.
|
9.
|
No
Re
-
Employment.
You agree that by signing this Agreement and the Release, you have waived and released any chance, right or opportunity to seek re-employment with the Company or its Affiliates. You further agree not to apply for or seek such re-employment with the Company or its Affiliates and that this Agreement constitutes good and sufficient cause for the Company to reject and/or terminate any such application for re-employment or re-employment.
|
10.
|
Confidentiality.
You acknowledge and agree that any information constituting a trade secret or otherwise of a proprietary, secret or confidential nature of or relating to any business of the Company or any of its Affiliates ("Confidential Information") acquired by you during your employment, or known by you with respect to the businesses of the Company or any Affiliate prior to your employment by the Company, is the exclusive property of, and of great value to, the Company and its Affiliates. You agree that without the prior written permission of the Chief Executive Officer, you will not divulge to any person or entity (other than to officers, directors and employees of the Company and/or its Affiliates or in connection with the proper business and affairs of the Company and/or its Affiliates), at any time, any Confidential Information unless and only (a) to the extent that said information becomes publicly known other than as a result of your acts or omissions to act, or (b) as may be required by applicable law or in connection with any investigation,
|
11.
|
Restrictive Covenants
.
Due to the nature of the role you held while employed by the Company
,
and the Company
'
s interest in protecting Barnes Group Inc.
'
s confidential information that was shared with you during your employment, and in consideration of the enhanced severance compensation offered herein
,
you agree that:
|
A.
|
N
on-Solicitation
.
|
B.
|
Non-Competition.
|
12.
|
Cooperation.
You agree to fully cooperate with the Company by responding truthfully to any questions asked of you by the Company concerning its business, or operational or regulatory issues that may arise following the execution of this Agreement. You further agree to cooperate with any investigation conducted by the Company on its own initiative or pursuant to a request by any government agency or department, including, but not limited to, the provision of personal documents and testimony, in connection with any matter arising out of or related to your duties while employed by the Company. You further agree that if the Company is involved or becomes involved in any legal or administrative claims or proceedings relating to or arising out of events that occurred prior to the execution date of this Agreement or as to which, in the Company's opinion, you have personal knowledge, you will cooperate to the fullest extent possible in the Company's prosecution or defense of such actions without the necessity of a subpoena. Similarly, you will not participate or assist in any legal actions taken by any third party against the Company, except where required by law. You further agree to execute and deliver such instruments, documents, certificates, and affidavits and supply such other information and take such further action as the Company may reasonably require in order to effectuate or document your resignation from all positions with the Company, and its Affiliates, and the termination of your employment.
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13.
|
Non-Disparagement.
You agree that you will make no written or oral statements that directly or indirectly disparage or could reasonably be anticipated to cause damage to the reputation, goodwill, or business of any of the Company or any Affiliate or any of its officers or directors in any manner whatsoever, including but not limited to the working conditions or employment practices of the Company. This covenant is in addition to, and not in lieu of, any other non-disparagement obligation that you have to the Company. You
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14.
|
Code of Conduct and Legal Obligations
.
You represent and agree that you are unaware of any
facts that, if true, may constitute an ongoing or material violation of the Company's Code of Business Ethics and Conduct (the "Code") and/or its legal obligations. You represent that you have fully complied with your obligations to report any violation of the Code and that you are aware of no unreported facts that would constitute a violation of the Code.
|
15.
|
Electronic Media.
You agree to leave intact all electronic Company documents
,
including those that
you developed or helped to develop during your employment, and deliver to the Company concurrent with the execution of this Agreement or upon earlier request the computer media on which such documents are stored and all passwords and keys necessary to access such documents.
|
16.
|
Consequences of Breach; Procedures.
In the event of a breach of any provision of this Agreement, unless the Company decides otherwise in its sole discretion, you agree that (A) if your Termination Date has not yet occurred, the Company reserves the right to accelerate your Terminate Date; and (B) in the Company 's sole discretion, the Company may terminate any of its obligations to pay compensation and benefits to you pursuant to this Agreement, and the Company shall be entitled to immediate restitution of all sums paid to you under this Agreement, except for the sum of $500, which the parties agree constitutes ongoing valid consideration for the waiver and First Release and Second Release. In addition to such right to restitution, and without limitation, the Company shall have the right to enforce the provisions of this Agreement through any and all rights and remedies as may be available to the Company at law or in equity, including injunctive relief and specific performance.
|
17.
|
Tax Considerations.
The parties agree that this Agreement, the First Release, and the Second Release are to be interpreted and administered in accordance with the requirements of Section 409A. The Company is authorized to delay the payment of some or all of the severance benefits until the first business day following the six month anniversary of your termination of employment, if such delay is required in order to comply with the requirements of Section 409A (taking into account the severance exception and the short term deferral rule under Section 409A). The date of your termination of employment will be determined in accordance with the separation from service rules under Section 409A. If the time period for your consideration of the releases of claims and the time period to revoke any acceptance of the releases spans two of your taxable years, then any severance payments hereunder will be paid on the later of: (i) the end of the revocation period (assuming that there has been no revocation); or (ii) the first business day of the second taxable year.
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18.
|
Severability & Enforceability.
The invalidity or unenforceability of any provision of this Agreement, the First Release, and the Second Release will not in any way affect the validity or enforceability of the remainder of any such provision or the remaining provisions of the Agreement, the First Release, and the Second Release. The parties agree that if any particular paragraphs, subparagraphs, phrases, words, or other portions of this Agreement, including the First Release and the Second Release, are determined by an appropriate court to be invalid or unenforceable as written, they shall be modified as necessary to be valid or enforceable, and such modification shall not affect the remaining provisions, or if they cannot be modified to be made valid or enforceable, then they shall be severed from this Agreement, the First Release, or the Second Release, as the case may be, and all remaining terms and provisions shall remain enforceable.
|
19.
|
References.
All requests for information for any prospective future employers relative to your employment at the Company will be forwarded to Dawn N. Edwards, Senior Vice President, Human Resources. Ms. Edwards will make a good faith response to such requests with confirmation of your title, dates of employment, salary and agrees to adhere to the provisions of Section 13 of this
|
20.
|
Representations and Warranties.
The Parties represent and warrant that: (a) they have consulted with the respective counsel of their own choosing prior to executing this Agreement and are relying upon their own and their attorney's judgment, belief, and knowledge with respect to the terms and effect of this Agreement; (b) none of the Parties are relying on another Party, or another Party's attorneys, for any advice or counsel, whether same is legal, tax, or other advice; (c) they have not been induced to enter this Agreement by a statement, action, or representation of any kind or character made by the persons or entities released under this Agreement, or any person or persons representing them, other than those expressly made in this Agreement; (d) they are legally competent to execute this Agreement; (e) they have carefully read and understand this Agreement, and have executed it freely, voluntarily, and without duress; (f) they are fully and completely informed of the facts relating to the subject matter of this Agreement, and all enter into this Agreement voluntarily after having given careful and mature consideration of the making of this Agreement; (g) they fully understand and intend this Agreement to be a full, final, and complete resolution of all matters described herein; and (h) they have actual authority to execute this Agreement.
|
(a)
|
the termination action is determined by the Company to be based on misconduct of any type including, but not limited to, violation of any Company rules or policies, or activity which results in the conviction of a felony; or
|
(b)
|
the termination is the result of the sale of the stock or substantially all of the assets of a business unit of the Company and the employee is offered employment by the purchaser, within 30 days after the closing of the sale, in a position that is at least comparable to, and for compensation and benefits that are, in the aggregate, at least substantially equivalent to, the employee’s position, compensation and benefits with the Company prior to the sale; or
|
(c)
|
the employee is a party on December 31, 2008 to a severance agreement with the Company relating to Separation from Service after a “Change in Control” of the Company as defined in the agreement (a “Severance Agreement”), or is an executive officer of the Company hired after that date, and the Separation from Service is both (i) a Separation from Service within two years following a “Change in Control”, and (ii) either an involuntary Separation from Service (within the meaning of Treasury Regulation section 1.409A-1(n)(1)) by the Company other than for “Cause” or “Disability”, or a Separation from Service by the employee for “Good Reason”, as
|
4.1
|
A terminated employee who is entitled to receive benefits under this Plan is eligible to receive severance pay based on the following schedule:
|
(a)
|
Grades 18-20: four months of base salary plus an additional two weeks of base salary for each year of service over five years up to a maximum total payment of six months of base salary.
|
(b)
|
Grades 21-23: seven months of base salary.
|
(c)
|
Grades 24 and above, except for the President and Chief Executive Officer: twelve months of base salary.
|
4.2
|
Subject to the other provisions of this Section 4 and Section 8.5 below, payment shall be made on the terminated employee’s regularly scheduled payroll payment dates as if no Separation from Service had occurred and he/she had continued as an employee, commencing with the next regularly scheduled payroll payment date after the date on which the terminated employee’s Separation from Service occurs, and continuing on each regularly scheduled payroll payment date thereafter until full payment has been made in accordance with Section 4.1 above, and will be subject to normal deductions for items such as income taxes, Social Security, and Medicare. For the avoidance of doubt, (a) ~regularly scheduled payroll payment dates” means the payroll payment dates per the payroll schedule applicable to the terminated employee immediately prior to the employee’s Separation from Service, and (b) subject to the other provisions of this Section 4 and Section 8.5 below, the amount payable on each such regularly scheduled payment date is the amount of base salary
|
4.3
|
In no event will more than the minimum severance pay benefit (including but not limited to benefits payable pursuant to Section 6 below) be paid or provided unless the terminated employee executes after Separation from Service a release of any claims against the Company in a form approved by the Company’s General Counsel, the executed release is delivered to the Company within 50 days after the Separation from Service or within such lesser period after the Separation from Service as the Company’s General Counsel may require, and the release becomes irrevocable within 60 days after the Separation from Service or within such lesser period after the Separation from Service as the Company’s General Counsel may require. Any severance pay benefits in excess of the minimum severance pay benefit (including but not limited to benefits payable pursuant to Section 6 below) that, in the absence of this Section 4.3, would be paid or provided pursuant to Section 4.2 above or Section 6 below before the release becomes irrevocable shall be paid or provided after the release becomes irrevocable and within 74 days after the Separation from Service.
|
4.4
|
The Company may at any time provide in advance of any date after the employee’s Separation from Service occurs that any severance pay benefit payable to the
|
4.5
|
Severance pay for a terminated employee who was in any of salary grades 18 through 26 shall cease on the date that such terminated employee begins other employment, including but not limited to work for another party. The terminated employee shall promptly notify the Company in writing when he/she commences such employment.
|
4.6
|
Severance pay for a terminated employee who was in any of salary grades 27 and above shall not cease on the date that such terminated employee begins other employment, including but not limited to work for another party, but shall continue throughout the entire severance period.
|
6.1
|
A person may continue participation in the Company's medical and dental plans, in accordance with the terms of the applicable plans, for the period during which he/she receives severance payments. In addition, a person may continue participation
|
6.2
|
Except to facilitate benefit continuation as provided in Section 6.1 hereof, a person’s status as an employee shall cease upon the termination of employment date and not continue during the period in which severance payments are made absent an agreement with the Company to the contrary. Without limiting the foregoing, employment shall be terminated for purposes of the Retirement Savings Plan, any applicable pension or profit-sharing plan, stock option plans, and for all other purposes upon the termination of employment date.
|
6.3
|
The right of a terminated employee to any series of installment payments, including without limitation severance payments and taxable benefits, that are to be paid or provided under this Plan, which right is eligible to be treated as a right to a series of separate payments under Treasury Regulation section 1.409A-2(b)(2)(iii), including in particular but not limited to the right of a terminated employee to the series of severance payments under Section 4 and benefits (including without limitation ELIP and SEELIP benefits) under Section 6.1, shall be treated as a right to a series of separate payments for purposes of Section 409A of the Code, including without limitation for purposes of the short-term deferral rule set forth in Treasury Regulation section 1.409A- 1 (b)(4).
|
7.1
|
Benefits Committee. The Plan is administered by the Benefits Committee appointed by the Company’s Board of Directors (the “Committee”). The Committee may promulgate rules or regulations for the administration of the Plan. The Committee shall, in its sole discretion, interpret and construe the Plan’s terms and conditions, and determine an individual’s eligibility for benefits. Any interpretations, constructions or determinations made by the Committee in good faith shall be final and binding on all concerned.
|
7.2
|
Claims Procedure. If any person believes that he/she is not receiving any benefits to which he/she is entitled under the Plan, the person, after reviewing the matter with the human resource representative serving the person’s place of work, may file a written claim with the Director, Leadership and Development. Barnes Group Inc., 123 Main Street, Bristol, Connecticut 06010, or such other person designated by the Benefits Committee, who shall respond to such claim in writing within 45 days after its receipt. If any claim is denied, the claimant may appeal such denial in writing to the Benefits Committee, c/o Barnes Group Inc., 123 Main Street, Bristol, Connecticut 06010. Any such appeal must be filed within 60 days after the denial of the claim. The Benefits Committee shall notify the claimant of its decision in writing within 60 days after receiving the appeal.
|
8.1
|
This Plan may be amended or terminated at any time and in any respect by the vote of a majority of the members of the Benefits Committee or by the unanimous written consent of the members of the Benefits Committee, except that, with respect to Company Officers, only the Compensation and Management Development
|
8.2
|
The benefits to be provided under this Plan shall not be funded and shall be paid out of the general assets of the Company.
|
8.3
|
For purposes of determining:
|
(a)
|
an employee’s eligibility under Section 2 of the Plan;
|
(b)
|
the schedule of severance pay payments under Section 4 of the Plan; and
|
(c)
|
the period of continuation of other benefits described in Section 6 of the Plan,
|
8.4
|
The Plan shall be construed, administered and enforced under the laws of the State of Connecticut except to the extent such laws are preempted by federal law.
|
8.5
|
Any provision of this Plan to the contrary notwithstanding, (a) no “distributions” (within the meaning of Treasury Regulation section 1.409A- 1(c)(3)(v)) of deferred compensation that is subject to Section 409A of the Code may be made pursuant to this Plan to a “specified employee” (within the meaning of Treasury Regulation section 1.409A-1(i))(“Specified Employee”) due to a Separation from Service before the date that is six months after the date of such Specified Employee’s Separation from Service (or, if earlier than the end of the six month period, the date
|
8.6
|
If at any time during the 12-month period ending on any “specified employee identification date”, which shall be December 31, a person who participates in or has any legally binding right, contingent or otherwise, under this Plan (a “Plan Participant”), is in Salary Grade 20 or above or meets the requirements of Code section 416(i)(1)(A)(ii) or (iii) (applied in accordance with the Treasury Regulations thereunder and disregarding Code Section 41 6(i)(5)), then the Plan Participant shall be treated as a Specified Employee for purposes of Section 8.5 above for the entire 12-month period beginning on the “specified employee effective date”, which shall be the January 1 that immediately follows such specified employee identification date, unless the Board of Directors of the Company (the “Board of Directors”) or
|
8.7
|
Any payments that may be made and benefits that may be provided pursuant to this Plan are intended to qualify for an exclusion from Section 409A of the Code (including without limitation the exclusion for certain welfare benefits under Treasury Regulation section 1.409A-1(a)(5), the exclusion for short-term deferrals under Treasury Regulation section 1.409A-1(b)(4), and the exclusions for separation pay plans under Treasury Regulation section 1.409A-1(b)(9)) and/or are intended to meet the requirements of Section 409A(a)(2), (3) and (4) of the Code, so that none of the payments that may be made and benefits that may be provided pursuant to this Plan will be includible in any Plan Participant’s federal gross income pursuant to Section 409A(a)(1)(A) of the Code. This Plan and any agreement or instrument issued under this Plan shall be administered, interpreted and construed to carry out such intentions and any provision of this Plan or any such agreement or instrument that cannot be so administered, interpreted and construed shall to that extent be disregarded. However, the Company does not represent, warrant or guarantee that any payments that may be made and benefits that may be provided pursuant to this Plan will not be ineludible in any Plan Participant’s federal gross income pursuant to Section 409A(a)(l)(A) of the Code; nor does the Company make any other representation, warranty or guaranty to any Plan Participant as to the tax consequences of this Plan or of participation in this Plan.
|
/s/ PricewaterhouseCoopers LLP
|
|
PricewaterhouseCoopers LLP
Hartford, Connecticut
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended
March 31, 2019
of Barnes Group Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
|
/s/ PATRICK J. DEMPSEY
|
|
Patrick J. Dempsey
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the period ended
March 31, 2019
of Barnes Group Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
|
/s/ CHRISTOPHER J. STEPHENS, JR.
|
|
Christopher J. Stephens, Jr.
|
|
Chief Financial Officer
|
/s/ PATRICK J. DEMPSEY
|
|
/s/ CHRISTOPHER J. STEPHENS, JR.
|
Patrick J. Dempsey
President and Chief Executive Officer
|
|
Christopher J. Stephens, Jr.
Chief Financial Officer
|
April 26, 2019
|
|
April 26, 2019
|