The following is a summary of the Barnes Group Inc. (B) Q1 2024 Earnings Call Transcript:
Financial Performance:
Barnes Group reported Q1 2024 revenue of $431 million, a 28% increase, while adjusted EBITDA grew 38% to $80 million.
Aerospace sector sales for Q1 were $221 million, a reported increase of 89% and organic increase of 19%. Adjusted operating profit for this sector was $35 million, up by 69%.
Industrial sales in Q1 were $209 million, down 4% on both a reported and organic basis. The adjusted operating margin was 7.8%, an increase of 20 basis points.
The company completed the sale of Associated Spring and Hanggi business yielding a net proceeds of approximately $150 million which will be used to reduce debt.
The company reported Q1 2024 performance with cash flow generation and cash conversion exceeding 100%.
Business Progress:
Barnes Group has achieved substantial progress on its three strategic pillars: core business execution, scaling aerospace, and integrative consolidation & rationalization of the industrial sector.
Long-term agreements with large customers like General Electric, Rolls-Royce, and Pratt & Whitney resulted in robust orders during the quarter. The Aerospace OEM backlog has risen to a record $1.46 billion, up 19% since December 2023.
Barnes has opened a new aftermarket facility in Singapore to increase engine component repair capacity in the Asia-Pacific region.
Barnes Group is targeting to achieve $1 billion in annual aerospace revenue by 2025 by focusing on transforming their services to the high growth and high margin aerospace market and improving their industrial businesses.
The company is targeting to achieve a leverage ratio of 3 times or lower by the end of 2024 and 2.5 times by the end of 2025, with the support of a new Term-B loan that has been refinanced.
Productivity issues in Aerospace facilities are being addressed with the expectation of strong progress over the course of 2024. Investments in Aerospace are ongoing to fully exploit strong demand and attractive growth opportunities. Simultaneously, growth is anticipated across all businesses from new commercial initiatives. Efforts are ongoing towards reducing lead times and expanding capacity, particularly in the multi-cavity molds division.
More details: Barnes Group IR
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