Barnes, a global leader in engineered products, advanced industrial technologies, and innovative solutions, has reported its financial results for Q3 2024. Despite ongoing production delays from aircraft manufacturers, our Aerospace OEM segment generated exceptionally strong orders, anticipating an industry ramp-up,” said Thomas J. Hook, CEO of Barnes. “Our aftermarket business remains robust with strong top-line growth. The integration of MB Aerospace is progressing well, helping us scale and transform Barnes. Over the past 18 months, we’ve taken numerous actions to grow Aerospace, simplify our industrial sector, streamline costs, and drive long-term profitability, drawing external interest such as our pending acquisition by Apollo Funds.”
Barnes to be Acquired by Apollo Funds
As announced on October 7, 2024, Barnes has agreed to be acquired by funds managed by Apollo Global Management, Inc. (NYSE: APO) for $3.6 billion in an all-cash deal. Under the agreement, shareholders will receive $47.50 per share, with the transaction expected to close in early 2025, subject to regulatory and shareholder approval.
Q3 2024 Financial Highlights
- Sales: $388 million, up 7% year-over-year, including 4% organic growth and 3% acquisition impact.
- Operating Income: Adjusted operating income of $47.9 million, up 23%, with an adjusted operating margin of 12.3%.
- Interest Expense: $19.6 million, reduced by 14% due to last year’s one-time bridge financing fees.
- Net Loss: Reported at $2.1 million, or -$0.04 per share, improved from a net loss of $21.7 million the previous year.
- Adjusted Net Income: $0.09 per share, down 53% from $0.19.
- Cash Flow: Year-to-date cash from operations was $49.8 million, down from $71 million last year, with capital expenditures at $41.8 million, reflecting strategic investments.
Segment Performance
- Aerospace: Q3 sales reached $232 million, a 49% increase, with a 9% organic growth contribution. OEM sales were up 38%, while aftermarket sales rose 67%. Adjusted operating profit surged by 55%, with a 15.7% adjusted margin.
- Industrial: Sales in the Industrial segment dropped 24%, primarily due to divestitures. Adjusted operating profit was $11.6 million, with a 7.4% margin.
Financial Position and Leverage
Barnes’ net debt to EBITDA ratio was 3.35x as of September 30, 2024, down from 3.48x in June.
Canceled Q3 Earnings Call and Suspension of Guidance
In light of the pending Apollo acquisition, Barnes has canceled its Q3 2024 earnings call and suspended its 2024 financial guidance.
Non-GAAP Financial Measures
Barnes reports non-GAAP metrics such as organic sales growth, adjusted operating profit, and free cash flow to provide insights into its baseline operational performance. These metrics complement GAAP results by highlighting cash flow and earnings performance.
