<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 30, 1999
Barnes Group Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-04801 06-0247840
-----------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
123 Main Street Bristol, CT 06010
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(860) 583-7070
--------------------------------------------------
Registrant's telephone number, including area code
N/A
----------------------------------------------------------
(Former name or former address, if changed since last report)
-1-
<PAGE>
AMENDMENT NO. 1
The Registrant amends its Current Report on Form 8-K, filed
September 14, 1999, by including the following information
regarding ITEM 2, the refinancing of a portion of the funds
needed for the acquisition and ITEM 7, adding financial
statements and pro forma financial information that were
unavailable at the time the Current Report on Form 8-K was filed.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 12, 1999, the Registrant refinanced a portion of the
funds needed to purchase the assets of the Nitrogen Business Unit
of the Teledyne Fluid Systems Division of Teledyne Industries,
Inc. through the issuance of $70 million of long-term private
placement debt. The debt ranges in maturity from eight to eleven
years at an average annual interest rate of 7.75%.
ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(a) Financial Statements of Business Acquired.
The audited consolidated balance sheet of Teledyne Fluid Systems'
Nitrogen Business Unit as of December 31, 1998, the statement of
income and comprehensive income and cash flow for the year ended
December 31, 1998, the related notes to the audited financial
statements and the related independent auditors' report are filed
with this report as Exhibit 99.1.
(b) Pro Forma Financial Information.
The following unaudited pro forma consolidated financial
statements of Barnes Group Inc. with explanatory notes reflecting
the impact of the acquisition are filed with this report as
Exhibit 99.2.
(1) The unaudited pro forma consolidated balance sheet as
of December 31, 1998 reflecting the impact on the balance
sheet as if the acquisition occurred on December 31, 1998.
(2) The unaudited pro forma consolidated income statement
for the year ended December 31, 1998, reflecting the impact
on the income statement as if the acquisition had occurred
on January 1, 1998.
(3) The unaudited pro forma consolidated income statement
for the nine months ended September 30, 1999, reflecting the
impact on the income statement as if the acquisition had
occurred on January 1, 1999.
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<PAGE>
(c) Exhibits.
23 Consent of Independent Auditors.
99.1 Teledyne Fluid Systems' Nitrogen Business Unit
Audited Financial Statements, For The Year Ended
December 31, 1998 With Report of Independent
Auditors.
99.2 Unaudited Barnes Group Inc. Pro Forma Consolidated
Financial Statements Information With Explanatory
Notes.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Dated: November 12, 1999 BARNES GROUP INC.
By:/s/ Signe S. Gates
-------------------
Signe S. Gates
Senior Vice President
General Counsel & Secretary
EXHIBIT INDEX
Exhibit No. Description
- ---------- ------------
Exhibit 23 Consent of Independent Auditors.
Exhibit 99.1 Teledyne Fluid Systems' Nitrogen Business Unit
Audited Financial Statements, For The Year Ended
December 31, 1998 With Report of Independent
Auditors.
Exhibit 99.2 Unaudited Barnes Group Inc. Pro Forma Consolidated
Financial Statements Information With Explanatory
Notes.
-3-
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS.
We hereby consent to the incorporation by reference in the
Registration Statements on Form S-8 (No. 2-56437, pertaining to
the Employee Stock Purchase Plan; No. 2-91285, pertaining to the
1981 Stock Incentive Plan; Nos. 33-20932 and 33-30229, pertaining
to the Guaranteed Stock Plan; and the registration statements
filed on July 18, 1994, No. 33-91758 and May 16, 1997, No. 33-
27339, pertaining to the 1991 Barnes Group Stock Incentive Plan)
of Barnes Group Inc. of our report dated October 8, 1999, with
respect to the financial statements of Teledyne Fluid Systems'
Nitrogen Business Unit included in this Form 8-K/A for the year
ended December 31, 1998.
Ernst & Young LLP
/s/ ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
November 10, 1999
<PAGE>
EXHIBIT 99.1
TELEDYNE FLUID SYSTEMS' NITROGEN BUSINESS UNIT AUDITED FINANCIAL
STATEMENTS, FOR THE YEAR ENDED DECEMBER 31, 1998 WITH REPORT OF
INDEPENDENT AUDITORS.
Audited Financial Statements
Teledyne Fluid Systems'
Nitrogen Business Unit
For the year ended December 31, 1998
with Report of Independent Auditors
<PAGE>
Teledyne Fluid Systems' Nitrogen Business Unit
Audited Financial Statements
Year ended December 31, 1998
Contents
Report of Independent Auditors 1
Audited Financial Statements
Balance Sheet 2
Statement of Income and Comprehensive Income 3
Statement of Cash Flow 4
Notes to Audited Financial Statements 5
<PAGE>
Report of Independent Auditors
Board of Directors
Barnes Group Inc.
We have audited the accompanying balance sheet of Teledyne Fluid
Systems' Nitrogen Business Unit (the "Company") as of December
31, 1998 and the related statements of income and comprehensive
income and cash flow for the period then ended. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based upon our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Teledyne Fluid Systems' Nitrogen Business Unit at December 31,
1998, and the results of its operations and its cash flows for
the period then ended, in conformity with generally accepted
accounting principles.
Ernst & Young LLP
/s/ ERNST & YOUNG LLP
Pittsburg, Pennsylvania
October 8, 1999
-1-
<PAGE>
<TABLE>
<CAPTION>
Teledyne Fluid Systems' Nitrogen Business Unit
Balance Sheet
December 31, 1998
(000's omitted)
Assets
Current assets:
<S> <C>
Cash and cash equivalents $ 4,764
Accounts receivable, net 8,633
Inventory, net 5,116
Due from affiliates 2,320
Prepaid expenses 78
Deferred tax asset 385
--------
Total current assets 21,296
Land 201
Buildings 4,411
Equipment 18,904
--------
23,516
Accumulated depreciation (14,601)
--------
Net property, plant and equipment 8,915
Goodwill-net 899
Deferred tax asset 127
Other assets 307
--------
Total assets $ 31,544
========
Liabilities and stockholder's equity
Liabilities:
Accounts payable $ 3,360
Accrued liabilities 3,100
Foreign income tax liability 2,022
Deferred tax liability 415
--------
Total current liabilities 8,897
Notes payable and long term debt 124
Deferred tax liability 205
--------
Total liabilities 9,226
Stockholder's equity
Net advances from Allegheny Teledyne Incorporated 23,534
Accumulated other comprehensive income (1,216)
--------
Total stockholder's equity 22,318
--------
Total liabilities and stockholder's equity $ 31,544
========
<FN>
See accompanying notes.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Teledyne Fluid Systems' Nitrogen Business Unit
Statement of Income and Comprehensive Income
Year ended December 31, 1998
(000's omitted)
<S> <C>
Sales $ 47,408
Cost of sales 28,917
---------
Gross profit 18,491
Selling, general and administrative expenses 8,318
---------
Earnings before other income 10,173
Other income:
Interest income 76
Other income 16
---------
Income before income taxes 10,265
Income taxes 3,666
---------
Net income 6,599
Other comprehensive income, net of tax:
Foreign currency translation adjustments (808)
Realized gain included in net income (16)
---------
Comprehensive income $ 5,775
=========
<FN>
See accompanying notes.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Teledyne Fluid Systems' Nitrogen Business Unit
Statement of Cash Flow
Year ended December 31, 1998
(000's omitted)
Operating activities:
<S> <C>
Net income $ 6,599
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,659
Deferred income taxes 272
Change in operating assets and liabilities:
Accounts receivable (1,112)
Due from affiliates (1,854)
Inventories 358
Accounts payable 1,440
Other 28
--------
Cash provided by operating activities 7,390
Investing activities:
Purchases of property, plant and equipment (3,078)
--------
Cash used in investing activities (3,078)
Financing activities:
Net advances to Allegheny Teledyne Incorporated (1,147)
--------
Cash used in financing activities (1,147)
Effect of foreign currency exchange rate changes on
cash and cash equivalents (808)
--------
Net increase in cash and cash equivalents 2,357
Cash and cash equivalents at beginning of year 2,407
--------
Cash and cash equivalents at end of year $ 4,764
========
<FN>
See accompanying notes.
</TABLE>
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<PAGE>
Teledyne Fluid Systems' Nitrogen Business Unit
Notes to Audited Financial Statements
December 31, 1998
(All dollar amounts included in the notes are stated in thousands
except per share data.)
1. Summary of Significant Accounting Policies
Basis of Combination
Teledyne Fluid Systems' Nitrogen Business Unit (the Company or
the Nitrogen Business Unit) consists of the Hyson, Kaller and
Stromsholmen facilities of Teledyne Fluid Systems' Division of
Teledyne Industries, Inc., a wholly owned subsidiary of Allegheny
Teledyne Incorporated (Allegheny Teledyne). The Nitrogen Business
Unit has no separate legal existence.
The accompanying financial statements have been prepared solely
to comply with the requirements of the Securities and Exchange
Commission (for inclusion in the Barnes Group Inc.'s current
report on Form 8-k(a).)
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect reported amounts and
related disclosures. Actual results could differ from those
estimates.
Revenue Recognition
Sales of nitrogen gas springs are recognized as product sales
when the unit is shipped and title has passed to the customer.
Inventories
Inventories are stated at the lower of cost (last-in, first-out;
and first-in, first-out cost methods) or market. Costs include
direct material, direct labor and applicable manufacturing and
engineering overhead, and other direct costs.
Income Taxes
Provision for income taxes includes deferred taxes resulting from
temporary differences in income for financial and tax purposes
using the liability method. Such temporary differences result
primarily from differences in the carrying value of assets and
liabilities.
-5-
<PAGE>
Teledyne Fluid Systems' Nitrogen Business Unit
Notes to Audited Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Accounts Receivable
Accounts receivable is presented net of a reserve for doubtful
accounts of $28 at December 31, 1998. The Company markets its
products and services principally throughout the United States,
Europe and Asia. Trade credit is extended based upon evaluation
of each customer's ability to perform its obligations, which are
updated periodically.
Property, Plant and Equipment
Property, plant and equipment are carried at cost. The method of
depreciation adopted for all property placed into service after
June 30, 1996 is the straight-line method. For buildings and
equipment acquired prior to July 1, 1996, depreciation is
computed using a combination of accelerated and straight-line
methods.
Foreign Currency Translation
The Company's Stromsholmen entity's accounts are measured using
local currency as the functional currency. Assets and liabilities
are translated at the exchange rate in affect at year-end.
Revenues and expenses are translated at the rates of exchange
prevailing during the year. Translation adjustments arising from
differences in exchange rates from period to period are reflected
in accumulated other comprehensive income within stockholder's
equity.
2. Accounts Receivable
<TABLE>
<CAPTION>
Accounts receivable is summarized as follows at December 31,
1998:
<S> <C>
Trade accounts receivable $ 8,608
Other receivables 53
Reserve for doubtful accounts (28)
--------
Total accounts receivable $ 8,633
========
</TABLE>
-6-
<PAGE>
Teledyne Fluid Systems' Nitrogen Business Unit
Notes to Audited Financial Statements (continued)
3. Inventories
<TABLE>
<CAPTION>
Inventories are summarized as follows at December 31, 1998:
<S> <C>
Raw materials $ 1,669
Work-in-process 1,642
Finished goods 2,253
--------
Total inventories at current cost 5,564
Less allowance to reduce current cost value
to LIFO basis (227)
Less reserve for obsolete inventory (221)
--------
Total inventories $ 5,116
========
Inventories determined on the last-in, first-out method were
$1,726 at December 31, 1998.
4. Related Party Transactions
</TABLE>
<TABLE>
<CAPTION>
The accompanying financial statements include transactions with
Allegheny Teledyne as follows at December 31, 1998:
<S> <C>
Net advances from Allegheny Teledyne,
beginning of the year $ 18,082
Net income 6,599
Net cash transactions with Allegheny Teledyne (1,147)
--------
Net advances from Allegheny Teledyne,
end of the year $ 23,534
========
</TABLE>
The Nitrogen Business Unit participates in Allegheny Teledyne's
centralized cash management system. Cash receipts in excess of
cash requirements are transferred to Allegheny Teledyne. These
transactions with Allegheny Teledyne are non-interest bearing and
the net advances fluctuate on a daily basis.
The Company's general and administrative expenses include
allocated expenses incurred by Allegheny Teledyne on the
Company's behalf including costs for finance, legal, tax and
human resources functions. The Nitrogen Business Unit also
participates in casualty, medical and life insurance programs
sponsored by Allegheny Teledyne.
-7-
<PAGE>
Teledyne Fluid Systems' Nitrogen Business Unit
Notes to Audited Financial Statements (continued)
5. Income Taxes
<TABLE>
<CAPTION>
The Nitrogen Business Unit is included in the consolidated
federal and certain state income tax returns of Allegheny
Teledyne. Any required tax payments were made by Allegheny
Teledyne as part of its consolidated returns. Provision for
income taxes was calculated as if the Company had filed separate
income tax returns. Provision for income taxes was as follows for
the year ended December 31, 1998:
<S> <C>
Current:
Federal $ 1,420
State 254
Foreign 1,720
--------
Total 3,394
--------
Deferred:
Federal 245
State 27
--------
272
--------
Total provision for income taxes $ 3,666
========
</TABLE>
Deferred income taxes result from temporary differences in the
recognition of income and expense for financial and income tax
reporting purposes. Deferred income taxes represent future tax
benefits or costs to be recognized when those temporary
differences reverse.
-8-
<PAGE>
Teledyne Fluid Systems' Nitrogen Business Unit
Notes to Audited Financial Statements (continued)
5. Income Taxes (continued)
<TABLE>
<CAPTION>
The categories of assets and liabilities that have resulted in
differences in the timing of the recognition of income and
expense were as follows as of December 31, 1998:
<S> <C>
Deferred income tax assets:
Reserves $ 203
Deferred compensation and other benefit plans 264
Other 45
--------
Total deferred income tax assets 512
--------
Deferred income tax liabilities:
Basis of property, plant and equipment 205
Inventory valuation 192
Reserves 141
Other 82
--------
Total deferred income tax liabilities 620
--------
Net deferred income tax liabilities $ 108
========
</TABLE>
6. Pension Plan
Certain Nitrogen Business Unit employees participate in a
noncontributory defined benefit plan sponsored by Allegheny
Teledyne. Benefits under the defined benefit plan are generally
based on years of service and/or final average pay. Allegheny
Teledyne funds the pension plan in accordance with the
requirements of the Employee Retirement Income Security Act of
1974 (ERISA), as amended, and the Internal Revenue Code.
Net periodic pension expense allocated to the Nitrogen Business
Unit was $114 for the year ended December 31, 1998.
7. Subsequent Event
On August 30, 1999, Barnes Group Inc. purchased substantially all
of the assets of the nitrogen gas springs business of the
Teledyne Fluid Systems' Division of Teledyne Industries, Inc.
pursuant to an Asset Purchase and Sale Agreement dated as of July
27, 1999 by and between Teledyne Industries, Inc. and Barnes
Group Inc. (the "Purchaser").
-9-
<PAGE>
Teledyne Fluid Systems' Nitrogen Business Unit
Notes to Audited Financial Statements (continued)
7. Subsequent Event (continued)
The Purchaser intends to continue the use of such machinery,
equipment and other physical property in connection with the
operation of such business. The acquired assets also include all
of the capital stock of Stromsholmen AB, a Swedish corporation,
in Tranas, Sweden that produces and distributes nitrogen gas
springs for the metal forming industries. Such stock was acquired
by Barnes Sweden Holding Company AB, a wholly owned subsidiary of
the Purchaser.
-10-
<PAGE>
EXHIBIT 99.2
UNAUDITED BARNES GROUP INC. PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS INFORMATION WITH EXPLANATORY NOTES.
On August 30, 1999, Barnes Group Inc. (the Company)
purchased substantially all of the assets of the nitrogen gas
spring business of the Teledyne Fluid Systems Division of
Teledyne Industries, Inc. pursuant to an Asset Purchase and Sale
Agreement dated as of July 27, 1999. The $89.7 million purchase
price of the Nitrogen Business Unit has been preliminarily
allocated to tangible and intangible assets and liabilities of
the Nitrogen Business Unit based upon estimates of their
respective values. These allocations may be subsequently
adjusted based upon appraisals, valuations and other studies,
which will be finalized over the next several months. Final
values may differ substantially from those shown herein.
The following unaudited pro forma consolidated financial
information has been prepared from the historical financial
statements of Barnes Group Inc. and Teledyne Fluid Systems'
Nitrogen Business Unit and adjusted to reflect the acquisition
using the purchase method of accounting. These unaudited pro
forma financial statements should be read in conjunction with the
Company's historical financial statements and related notes filed
on Form 10-K on March 24, 1999 for the fiscal year ended December
31, 1998 and the Teledyne Fluid Systems' Nitrogen Business Unit
audited financial statements and related notes as presented in
EXHIBIT 99.1 of this report.
The unaudited pro forma consolidated financial statement
information is presented for informational purposes only. The
pro forma results from operations and statement of financial
position are not necessarily indicative of what would have
resulted had the acquisition occurred on January 1, 1998, January
1, 1999 or as of December 31, 1998 or which may result in the
future. The Company believes it has used reasonable methods in
the preparation of this financial statement information.
-1-
<PAGE>
<TABLE>
BARNES GROUP INC.
Pro Forma Consolidated Balance Sheet
December 31, 1998
(Dollars in thousands)
(Unaudited)
<CAPTION>
Nitrogen Pro Forma Barnes
Barnes Business Adjust- Group Inc.
Group Inc. Unit ments Notes Pro Forma
--------- -------- --------- ----- ---------
ASSETS
Current assets
<S> <C> <C> <C> <C> <C>
Cash and cash
equivalents $ 40,206 $ 4,764 $ (4,764) (1) $ 40,206
Short-term investments 2,566 -- -- 2,566
Accounts receivable,
less allowances 82,809 8,633 (18) (1) 91,424
Due from affiliates -- 2,320 (2,320) (1) --
Inventories 64,404 5,116 445 (1) (2) 69,965
Deferred income taxes
and prepaid expenses 17,243 463 (385) (1) 17,321
-------- -------- -------- --------
Total current assets 207,228 21,296 (7,042) 221,482
Deferred income taxes 25,136 127 (127) (1) 25,136
Property, plant
and equipment 139,247 8,915 3,442 (1) (2) 151,604
Goodwill 18,224 899 69,267 (3) 88,390
Other assets 29,069 307 4,424 (2) 33,800
-------- -------- -------- --------
Total assets $418,904 $ 31,544 $ 69,964 $520,412
======== ======== ======== ========
<FN>
See accompanying notes to the pro forma consolidated balance sheet.
</TABLE>
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<PAGE>
<TABLE>
BARNES GROUP INC.
Pro Forma Consolidated Balance Sheet
December 31, 1998
(Dollars in thousands)
(Unaudited)
<CAPTION>
Nitrogen Pro Forma Barnes
Barnes Business Adjust- Group Inc.
Group Inc. Unit ments Notes Pro Forma
--------- -------- -------- ----- ---------
LIABILITIES AND
STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C>
Current liabilities
Notes payable $ 6,766 $ -- $ 829 (4) $ 7,595
Accounts payable 38,439 3,360 3,300 (7) 45,099
Accrued taxes and
other liabilities 52,934 5,537 (1,663) (1) (6) 56,808
Guaranteed ESOP
obligation-current 2,205 -- -- 2,205
-------- -------- -------- --------
Total current liabilities 100,344 8,897 2,466 111,707
Long-term debt 51,000 124 88,876 (4) 140,000
Accrued retirement benefits 68,129 -- -- 68,129
Taxes and other liabilities 10,757 205 940 (1) (6) 11,902
Stockholders' equity
Common stock-par value
$0.01 per share 220 -- -- 220
Additional paid-in capital 49,231 -- -- 49,231
Treasury stock at cost (42,893) -- -- (42,893)
Retained earnings 204,364 23,534 (23,534) (5) 204,364
Accumulated other
comprehensive income (20,043) (1,216) 1,216 (5) (20,043)
Guaranteed ESOP obligation (2,205) -- -- (2,205)
-------- -------- -------- --------
Total stockholders' equity 188,674 22,318 (22,318) 188,674
-------- -------- -------- --------
Total liabilities and
stockholders' equity $418,904 $ 31,544 $ 69,964 $520,412
======== ======== ======== ========
<FN>
See accompanying notes to the pro forma consolidated balance sheet.
</TABLE>
-3-
<PAGE>
BARNES GROUP INC.
Notes to Unaudited Pro Forma Consolidated Balance Sheet
December 31, 1998
The unaudited pro forma consolidated balance sheet includes the pro forma
adjustments to reflect the acquisition of the Nitrogen Business Unit as
if it took place on December 31, 1998.
Note (1) Adjustments to eliminate assets and liabilities that were not
part of the purchase agreement.
Note (2) Adjustments to record Nitrogen Business Unit's assets at
estimated fair market value.
Note (3) Adjustment to record incremental goodwill resulting from the
purchase of Nitrogen Business Unit.
Note (4) Adjustments to reflect impact on debt related to the
acquisition of Nitrogen Business Unit.
Note (5) Adjustments to eliminate equity of Teledyne Industries, Inc. in
Nitrogen Business Unit.
Note (6) Adjustments to reflect deferred taxes related to the non-
deductibility of certain foreign asset values in accordance
with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes."
Note (7) Adjustment to record costs associated with the acquisition.
-4-
<PAGE>
<TABLE>
BARNES GROUP INC.
Pro Forma Consolidated Statements of Income
Year Ended December 31, 1998
(Dollars in thousands, except per share data)
(Unaudited)
<CAPTION>
Nitrogen Pro Forma Barnes
Barnes Business Adjust- Group Inc.
Group Inc. Unit ments Notes Pro Forma
-------- -------- -------- ----- --------
<S> <C> <C> <C> <C> <C>
Net sales $651,183 $ 47,408 $ -- $698,591
Cost of sales 435,918 28,917 1,459 (A)(B) 466,294
Selling and admin- (C)
istrative expenses 160,044 8,318 -- 168,362
-------- -------- -------- --------
595,962 37,235 1,459 634,656
-------- -------- -------- --------
Operating income 55,221 10,173 (1,459) 63,935
Other income 5,617 92 5,709
Interest expense 4,106 -- 6,564 (D) 10,670
Other expenses 2,069 -- 1,743 (E) 3,812
-------- -------- -------- --------
Income before income
taxes 54,663 10,265 (9,766) 55,162
Income taxes (benefit) 20,169 3,666 (7,369) (F) 16,466
-------- -------- -------- --------
Net income $ 34,494 $ 6,599 $ (2,397) $ 38,696
======== ======== ======== ========
Per common share:
Net income-basic $ 1.72 $ .33 $ (.12) $ 1.93
-diluted 1.69 .32 (.12) 1.89
Average common shares
outstanding:
-basic 20,095,710 -- -- 20,095,710
-diluted 20,426,369 -- -- 20,426,369
<FN>
See accompanying notes to the pro forma consolidated statement of income.
</TABLE>
-5-
<PAGE>
<TABLE>
BARNES GROUP INC.
Pro Forma Consolidated Statements of Income
Nine Month Period Ended September 30, 1999
(Dollars in thousands, except per share data)
(Unaudited)
<CAPTION>
Nitrogen Pro Forma Barnes
Barnes Business Adjust- Group Inc.
Group Inc. Unit ments Notes Pro Forma
-------- -------- -------- ----- --------
<S> <C> <C> <C> <C> <C>
Net sales $472,574 $ 30,130 $ -- $502,704
Cost of sales 320,485 17,570 973 (A)(B) 339,028
Selling and admin- (C)
istrative expenses 111,326 5,803 -- 117,129
-------- -------- -------- --------
431,811 23,373 973 456,157
-------- -------- -------- --------
Operating income 40,763 6,757 (973) 46,547
Other income 5,255 -- 5,255
Interest expense 3,530 3 4,376 (D) 7,909
Other expenses 1,204 -- 1,162 (E) 2,366
-------- -------- -------- --------
Income before income
taxes 41,284 6,754 (6,511) 41,527
Income taxes (benefit) 14,243 2,511 (4,400) (F) 12,354
-------- -------- -------- --------
Net income $ 27,041 $ 4,243 $ (2,111) $ 29,173
======== ======== ======== ========
Per common share:
Net income-basic $ 1.38 $ .22 $ (.11) $ 1.49
-diluted 1.37 .21 (.11) 1.47
Average common shares
Outstanding:
-basic 19,560,942 -- -- 19,560,942
-diluted 19,796,883 -- -- 19,796,883
<FN>
See accompanying notes to the pro forma consolidated statement of income.
</TABLE>
-6-
<PAGE>
BARNES GROUP INC.
Notes to Unaudited Pro Forma Consolidated Statement of Income
for the Periods Ended December 31, 1998 and September 30, 1999
The unaudited pro forma consolidated statement of income includes the pro
forma adjustments to reflect the acquisition of the Nitrogen Business
Unit as if it took place on January, 1 1998 and January 1, 1999.
Note (A) Adjustment to reflect additional cost related to the write-up
of Nitrogen Business Unit's inventory to estimated fair market
value, expensed over one inventory turn.
Note (B) Adjustment to reflect additional depreciation expense related
to the write-up of Nitrogen Business Unit's fixed assets to
estimated fair market value, depreciated over estimated useful
lives of 8 years for machinery and equipment and 15 years for
buildings.
Note (C) Adjustment to reflect additional cost related to the write-up
of Nitrogen Business Unit's trademarks to estimated fair market
value, amortized over an estimated useful life of 30 years.
Note (D) Adjustment to reflect additional interest expense on the
acquisition related debt. The interest was calculated on a pro
forma basis using an average rate of 7.3% on borrowings of
$89.7 million. A 1% change in the interest rate would impact
the interest expense related to the acquisition debt by $0.9
million per year.
Note (E) Adjustment to reflect additional cost related to acquisition
goodwill amortized over its estimated useful life.
Note (F) Adjustment to reflect the tax deductibility of the above
adjustments on the pro forma statements as well as certain
foreign tax planning strategies.
-7-
