Financial News
Barnes Group Inc. Reports Third Quarter 2018 Financial Results
Barnes Group Inc. (NYSE: B), a global provider of highly engineered products and differentiated industrial technologies, today reported financial results for the third quarter 2018. Net sales of $370 million were up 4% from $357 million in the prior year period driven by organic sales growth (1) of 4%. Acquisition sales added 1% while unfavorable foreign exchange had a negative impact of 1%. Net income for the third quarter was $39.1 million, or $0.75 per diluted share, compared to net income of $35.3 million, or $0.65 per diluted share, a year ago. On an adjusted basis, net income was $0.78 per diluted share, up 18% from $0.66 last year. Third quarter 2018 adjusted diluted net income excludes $0.02 of Industrial Gas Springs (IGS) short-term purchase accounting adjustments and $0.01 of acquisition transaction costs in our Industrial Segment. Adjusted diluted net income per share in the third quarter of 2017 excludes $0.01 of FOBOHA short-term purchase accounting, also in our Industrial Segment.
A table reconciling 2018 and 2017 non-GAAP adjusted results presented in this release to the Company’s GAAP results is included at the end of this press release.
“Barnes Group’s third quarter was another quarter of strong operating results, along with key steps taken toward our continued portfolio transformation,” said Patrick J. Dempsey, President and Chief Executive Officer of Barnes Group Inc. “Year over year operating profit and margins were up impressively in both our Aerospace and Industrial businesses. While certain markets we operate in have introduced heightened uncertainty, we remain positioned to deliver our full year outlook within prior ranges. Moreover, our recent acquisitions expand our offerings of leading edge industrial technologies while providing us further end market diversification,” added Dempsey.
Industrial
- Third quarter 2018 sales were $244.1 million, up 2% from $240.4 million in the prior year period. Driven by strength in the Molding Solutions business, Industrial organic sales increased by 2%. Unfavorable foreign exchange decreased sales by $4.1 million, or 2%, while acquisition revenues contributed $2.9 million, or 1%.
- Operating profit in the third quarter was $33.3 million, up 10% from $30.3 million in the prior year period. The increase was driven by the profit impact of positive organic sales volume and improved cost productivity. Excluding IGS short-term purchase accounting adjustments and acquisition transaction costs this year, and FOBOHA short-term purchase accounting adjustments and restructuring expenses last year, adjusted operating profit of $34.9 million was up 12% from an adjusted $31.1 million a year ago. Adjusted operating margin was 14.3%, up 140 bps.
Aerospace
- Third quarter 2018 sales were $125.7 million, up 8% from $116.8 million in the same period last year. Aerospace original equipment manufacturing (“OEM”) sales increased 3% while aftermarket sales increased 19% from sustained growth in maintenance, repair and overhaul, and spare parts sales.
- Operating profit was $25.7 million for the third quarter of 2018, up 39% as compared to $18.6 million in the prior year period, reflecting the profit impact from higher sales volumes and productivity improvements, offset in part by scheduled price deflation. Operating margin of 20.5% was up 460 bps from 15.9% a year ago, benefiting from the higher aftermarket contribution.
- Aerospace OEM backlog ended the third quarter 2018 at $807 million, up 14% compared to a year ago, and down slightly from the second quarter of 2018. The Company expects to ship approximately 45% of this backlog over the next 12 months.
Additional Information
- Third quarter interest expense increased $0.3 million to $4.1 million as a result of higher average borrowings, partially offset by a lower average interest rate.
- Other expense, net for the quarter was $2.4 million versus $1.5 million in the prior year period.
- The Company’s effective tax rate was 25.6% in the third quarter of 2018 compared with 19.1% in the third quarter of 2017. The primary driver of last year’s lower tax rate was the settlement of tax audits along with the closure of tax years for various tax jurisdictions. For the full year 2017, the Company’s effective tax rate was 69.6%. Excluding the impact of discrete tax expense related to the Tax Cuts and Jobs Act, the effective tax rate for 2017 would have been 20.2%.
Updated 2018 Outlook
Barnes Group now expects 2018 total
revenue growth of 4% to 5%, with organic sales growth of 2% to 3%.
Foreign exchange and acquisition revenues are each anticipated to
benefit revenues by approximately 1% for the year. Adjusted operating
margins are forecasted to be approximately 16.4%. Adjusted earnings from
continuing operations are expected to be in the range of $3.21 to $3.26
per diluted share, up 11% to 13% from 2017’s adjusted diluted earnings
per share of $2.88. Further, the Company anticipates capital
expenditures in the range of $60 to $65 million and cash conversion of
approximately 100% of net income. Based upon our forecasted geographic
mix of earnings, the effective tax rate for 2018 is expected to be
approximately 23.5%, excluding tax adjustments related to IGS short-term
purchase accounting and acquisition transaction costs and the second
quarter U.S. tax reform adjustment.
Our updated 2018 outlook excludes any impact from the Gimatic acquisition which we expect to close in the near term.
Conference Call Information
Barnes Group Inc. will conduct a conference call with investors to discuss third quarter 2018 results at 8:30 a.m. ET today, October 26, 2018. The public may access the conference through a live audio webcast available on the Investor Relations section of Barnes Group’s website at www.BGInc.com. The conference is also available by direct dial at (844) 884-8225 in the U.S. or (647) 689-4194 outside of the U.S.; Conference ID 6288677. Supplemental materials will be posted to the Investor Relations section of the Company's website prior to the conference call.
In addition, the call will be recorded and available for playback from 12:00 p.m. (ET) on Friday, October 26, 2018 until 11:59 p.m. (ET) on Friday, November 2, 2018, by dialing (416) 621-4642; Conference ID 6288677.
Note:
(1) Organic sales growth represents the
total reported sales increase within the Company’s ongoing businesses
less the impact of foreign currency translation and acquisition and
divestitures completed in the preceding twelve months.
About Barnes Group
Barnes Group Inc. (NYSE: B) is a global
provider of highly engineered products, differentiated industrial
technologies, and innovative solutions, serving a wide range of end
markets and customers. Its specialized products and services are used in
far-reaching applications including aerospace, transportation,
manufacturing, healthcare, and packaging. Barnes Group’s skilled and
dedicated employees around the globe are committed to the highest
performance standards and achieving consistent, sustainable profitable
growth. For more information, visit www.BGInc.com.
Forward-Looking Statements
This press release contains
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements often address
our expected future operating and financial performance and financial
condition, and often contain words such as "anticipate," "believe,"
"expect," "plan," "estimate," "project," and similar terms. These
forward-looking statements do not constitute guarantees of future
performance and are subject to a variety of risks and uncertainties that
may cause actual results to differ materially from those expressed in
the forward-looking statements. These include, among others: difficulty
maintaining relationships with employees, including unionized employees,
customers, distributors, suppliers, business partners or governmental
entities; failure to successfully negotiate collective bargaining
agreements or potential strikes, work stoppages or other similar events;
difficulties leveraging market opportunities; changes in market demand
for our products and services; rapid technological and market change;
the ability to protect intellectual property rights; introduction or
development of new products or transfer of work; higher risks in global
operations and markets; the impact of intense competition; acts of
terrorism, cybersecurity attacks or intrusions that could adversely
impact our businesses; uncertainties relating to conditions in financial
markets; currency fluctuations and foreign currency exposure; future
financial performance of the industries or customers that we serve; our
dependence upon revenues and earnings from a small number of significant
customers; a major loss of customers; inability to realize expected
sales or profits from existing backlog due to a range of factors,
including changes in customer sourcing decisions, material changes,
production schedules and volumes of specific programs; the impact of
government budget and funding decisions; the impact of new or revised
tax laws and regulations; changes in raw material or product prices and
availability; integration of acquired businesses; restructuring costs or
savings; the continuing impact of prior acquisitions and divestitures;
and any other future strategic actions, including acquisitions,
divestitures, restructurings, or strategic business realignments, and
our ability to achieve the financial and operational targets set in
connection with any such actions; the outcome of pending and future
legal, governmental, or regulatory proceedings and contingencies and
uninsured claims; product liabilities; future repurchases of common
stock; future levels of indebtedness; and numerous other matters of a
global, regional or national scale, including those of a political,
economic, business, competitive, environmental, regulatory and public
health nature; government tariffs, trade agreements and trade policies;
and other risks and uncertainties described in documents filed with or
furnished to the Securities and Exchange Commission ("SEC") by the
Company, including, among others, those in the Management's Discussion
and Analysis of Financial Condition and Results of Operations and Risk
Factors sections of the Company's filings. The Company assumes no
obligation to update its forward-looking statements.
BARNES GROUP INC. | ||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||
2018 | 2017 (1) | % | 2018 | 2017 (1) | % | |||||||||||||||||||||||
Net sales | $ | 369,797 | $ | 357,156 | 3.5 | $ | 1,111,772 | $ | 1,063,451 | 4.5 | ||||||||||||||||||
Cost of sales | 236,880 | 235,406 | 0.6 | 711,622 | 697,493 | 2.0 | ||||||||||||||||||||||
Selling and administrative expenses | 73,854 | 72,852 | 1.4 | 220,575 | 210,023 | 5.0 | ||||||||||||||||||||||
310,734 | 308,258 | 0.8 | 932,197 | 907,516 | 2.7 | |||||||||||||||||||||||
Operating income | 59,063 | 48,898 | 20.8 | 179,575 | 155,935 | 15.2 | ||||||||||||||||||||||
Operating margin | 16.0 | % | 13.7 | % | 16.2 | % | 14.7 | % | ||||||||||||||||||||
Interest expense | 4,054 | 3,748 | 8.2 | 12,078 | 10,638 | 13.5 | ||||||||||||||||||||||
Other expense (income), net | 2,447 | 1,469 | 66.6 | 5,157 | (3,965 | ) | NM | |||||||||||||||||||||
Income before income taxes | 52,562 | 43,681 | 20.3 | 162,340 | 149,262 | 8.8 | ||||||||||||||||||||||
Income taxes | 13,453 | 8,348 | 61.2 | 34,983 | 30,599 | 14.3 | ||||||||||||||||||||||
Net income | $ | 39,109 | $ | 35,333 | 10.7 | $ | 127,357 | $ | 118,663 | 7.3 | ||||||||||||||||||
Common dividends | $ | 8,201 | $ | 7,518 | 9.1 | $ | 23,996 | $ | 22,042 | 8.9 | ||||||||||||||||||
Per common share: | ||||||||||||||||||||||||||||
Net income: | ||||||||||||||||||||||||||||
Basic | $ | 0.76 | $ | 0.65 | 16.9 | $ | 2.42 | $ | 2.19 | 10.5 | ||||||||||||||||||
Diluted | 0.75 | 0.65 | 15.4 | 2.40 | 2.17 | 10.6 | ||||||||||||||||||||||
Dividends | 0.16 | 0.14 | 14.3 | 0.46 | 0.41 | 12.2 | ||||||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||||||||
Basic | 51,569,764 | 54,066,509 | (4.6 | ) | 52,555,130 | 54,140,551 | (2.9 | ) | ||||||||||||||||||||
Diluted | 52,080,676 | 54,570,677 | (4.6 | ) | 53,091,468 | 54,649,723 | (2.9 | ) | ||||||||||||||||||||
NM - Not Meaningful | ||||||||||||||||||||||||||||
Notes:
(1) Results for 2017
have been adjusted on a retrospective basis to reflect the impact of the
adoption of revised guidance for the presentation of pension and other
postretirement benefit costs in the first quarter of 2018.
BARNES GROUP INC. | ||||||||||||||||||||||||||||||
OPERATIONS BY REPORTABLE BUSINESS SEGMENT | ||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||
2018 | 2017 (1) | % | 2018 | 2017 (1) | % | |||||||||||||||||||||||||
Net sales | ||||||||||||||||||||||||||||||
Industrial | $ | 244,133 | $ | 240,390 | 1.6 | $ | 739,677 | $ | 719,556 | 2.8 | ||||||||||||||||||||
Aerospace | 125,665 | 116,767 | 7.6 | 372,102 | 343,899 | 8.2 | ||||||||||||||||||||||||
Intersegment sales | (1 | ) | (1 | ) | (7 | ) | (4 | ) | ||||||||||||||||||||||
Total net sales | $ | 369,797 | $ | 357,156 | 3.5 | $ | 1,111,772 | $ | 1,063,451 | 4.5 | ||||||||||||||||||||
Operating profit | ||||||||||||||||||||||||||||||
Industrial | $ | 33,329 | $ | 30,336 | 9.9 | $ | 104,004 | $ | 95,117 | 9.3 | ||||||||||||||||||||
Aerospace | 25,734 | 18,562 | 38.6 | 75,571 | 60,818 | 24.3 | ||||||||||||||||||||||||
Total operating profit | $ | 59,063 | $ | 48,898 | 20.8 | $ | 179,575 | $ | 155,935 | 15.2 | ||||||||||||||||||||
Operating margin | Change | Change | ||||||||||||||||||||||||||||
Industrial | 13.7 | % | 12.6 | % | 110 | bps. | 14.1 | % | 13.2 | % | 90 | bps. | ||||||||||||||||||
Aerospace | 20.5 | % | 15.9 | % | 460 | bps. | 20.3 | % | 17.7 | % | 260 | bps. | ||||||||||||||||||
Total operating margin | 16.0 | % | 13.7 | % | 230 | bps. | 16.2 | % | 14.7 | % | 150 | bps. | ||||||||||||||||||
Notes:
(1) Results for 2017
have been adjusted on a retrospective basis to reflect the impact of the
adoption of revised guidance for the presentation of pension and other
postretirement benefit costs in the first quarter of 2018.
BARNES GROUP INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Dollars in thousands) | ||||||||
(Unaudited) | ||||||||
September 30, | December 31, | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 79,387 | $ | 145,290 | ||||
Accounts receivable | 372,531 | 348,943 | ||||||
Inventories | 258,374 | 241,962 | ||||||
Prepaid expenses and other current assets | 53,281 | 32,526 | ||||||
Total current assets | 763,573 | 768,721 | ||||||
Deferred income taxes | 11,336 | 12,161 | ||||||
Property, plant and equipment, net | 358,868 | 359,298 | ||||||
Goodwill | 688,227 | 690,223 | ||||||
Other intangible assets, net | 489,977 | 507,042 | ||||||
Other assets | 32,462 | 28,271 | ||||||
Total assets | $ | 2,344,443 | $ | 2,365,716 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Notes and overdrafts payable | $ | 63 | $ | 5,669 | ||||
Accounts payable | 130,756 | 127,521 | ||||||
Accrued liabilities | 203,481 | 181,241 | ||||||
Long-term debt - current | 2,496 | 1,330 | ||||||
Total current liabilities | 336,796 | 315,761 | ||||||
Long-term debt | 560,645 | 525,597 | ||||||
Accrued retirement benefits | 82,901 | 89,000 | ||||||
Deferred income taxes | 64,746 | 73,505 | ||||||
Long-term tax liability | 72,305 | 79,770 | ||||||
Other liabilities | 20,145 | 21,762 | ||||||
Total stockholders' equity | 1,206,905 | 1,260,321 | ||||||
Total liabilities and stockholders' equity | $ | 2,344,443 | $ | 2,365,716 |
BARNES GROUP INC. | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(Dollars in thousands) | ||||||||||
(Unaudited) | ||||||||||
Nine months ended September 30, | ||||||||||
2018 | 2017 | |||||||||
Operating activities: | ||||||||||
Net income | $ | 127,357 | $ | 118,663 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 70,405 | 68,535 | ||||||||
Loss (gain) on disposition of property, plant and equipment | 124 | (96 | ) | |||||||
Stock compensation expense | 8,850 | 8,472 | ||||||||
Changes in assets and liabilities, net of the effects of acquisitions: | ||||||||||
Accounts receivable | (12,136 | ) | (26,773 | ) | ||||||
Inventories | (24,525 | ) | (11,454 | ) | ||||||
Prepaid expenses and other current assets | (7,186 | ) | (2,398 | ) | ||||||
Accounts payable | 4,824 | 14,134 | ||||||||
Accrued liabilities | 9,765 | 28,889 | ||||||||
Deferred income taxes | (13,758 | ) | (18,063 | ) | ||||||
Long-term retirement benefits | 544 | (11,469 | ) | |||||||
Long-term tax liability | (7,465 | ) | - | |||||||
Other | 1,162 | (677 | ) | |||||||
Net cash provided by operating activities | 157,961 | 167,763 | ||||||||
Investing activities: | ||||||||||
Proceeds from disposition of property, plant and equipment | 491 | 401 | ||||||||
Capital expenditures | (40,168 | ) | (41,957 | ) | ||||||
Business acquisitions, net of cash acquired | (30,837 | ) | (8,922 | ) | ||||||
Revenue sharing program payments | (5,800 | ) | - | |||||||
Other | (1,000 | ) | (3,000 | ) | ||||||
Net cash used by investing activities | (77,314 | ) | (53,478 | ) | ||||||
Financing activities: | ||||||||||
Net change in other borrowings | (5,542 | ) | (14,103 | ) | ||||||
Payments on long-term debt | (381,887 | ) | (60,897 | ) | ||||||
Proceeds from the issuance of long-term debt | 414,989 | 89,118 | ||||||||
Proceeds from the issuance of common stock | 721 | 1,731 | ||||||||
Common stock repurchases | (138,275 | ) | (23,300 | ) | ||||||
Dividends paid | (23,996 | ) | (22,042 | ) | ||||||
Withholding taxes paid on stock issuances | (5,149 | ) | (4,851 | ) | ||||||
Other | (3,598 | ) | (17,773 | ) | ||||||
Net cash used by financing activities | (142,737 | ) | (52,117 | ) | ||||||
Effect of exchange rate changes on cash flows | (3,813 | ) | 5,856 | |||||||
(Decrease) increase in cash and cash equivalents | (65,903 | ) | 68,024 | |||||||
Cash and cash equivalents at beginning of period | 145,290 | 66,447 | ||||||||
Cash and cash equivalents at end of period | $ | 79,387 | $ | 134,471 |
BARNES GROUP INC. | ||||||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||
(Dollars in thousands) | ||||||||||
(Unaudited) | ||||||||||
Nine months ended September 30, | ||||||||||
2018 | 2017 | |||||||||
Free cash flow: | ||||||||||
Net cash provided by operating activities | $ | 157,961 | $ | 167,763 | ||||||
Capital expenditures | (40,168 | ) | (41,957 | ) | ||||||
Free cash flow(1) | $ | 117,793 | $ | 125,806 | ||||||
Notes:
(1) The Company defines free cash flow as net cash provided by operating activities less capital expenditures. The Company believes that the free cash flow metric is useful to investors and management as a measure of cash generated by business operations that can be used to invest in future growth, pay dividends, repurchase stock and reduce debt. This metric can also be used to evaluate the Company's ability to generate cash flow from business operations and the impact that this cash flow has on the Company's liquidity.
BARNES GROUP INC. | ||||||||||||||||||||||||||||||||||
NON-GAAP FINANCIAL MEASURE RECONCILIATION | ||||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||
2018 | 2017 (2) | % Change | 2018 | 2017 (2) | % Change | |||||||||||||||||||||||||||||
SEGMENT RESULTS | ||||||||||||||||||||||||||||||||||
Operating Profit - Industrial Segment (GAAP) | $ | 33,329 | $ | 30,336 | 9.9 | $ | 104,004 | $ | 95,117 | 9.3 | ||||||||||||||||||||||||
FOBOHA short-term purchase accounting adjustments | - | 501 | - | 2,294 | ||||||||||||||||||||||||||||||
Restructuring actions | - | 260 | - | 6,055 | ||||||||||||||||||||||||||||||
IGS short-term purchase accounting adjustments | 1,160 | - | 1,160 | - | ||||||||||||||||||||||||||||||
Acquisition transaction costs | 366 | - | 366 | - | ||||||||||||||||||||||||||||||
Operating Profit - Industrial Segment as adjusted (Non-GAAP) (1) | $ | 34,855 | $ | 31,097 | 12.1 | $ | 105,530 | $ | 103,466 | 2.0 | ||||||||||||||||||||||||
Operating Margin - Industrial Segment (GAAP) | 13.7 | % | 12.6 | % | 110 | bps. | 14.1 | % | 13.2 | % | 90 | bps. | ||||||||||||||||||||||
Operating Margin - Industrial Segment as adjusted (Non-GAAP) (1) | 14.3 | % | 12.9 | % | 140 | bps. | 14.3 | % | 14.4 | % | (10 | ) | bps. | |||||||||||||||||||||
CONSOLIDATED RESULTS | ||||||||||||||||||||||||||||||||||
Operating Income (GAAP) | $ | 59,063 | $ | 48,898 | 20.8 | $ | 179,575 | $ | 155,935 | 15.2 | ||||||||||||||||||||||||
FOBOHA short-term purchase accounting adjustments | - | 501 | - | 2,294 | ||||||||||||||||||||||||||||||
Restructuring actions | - | 260 | - | 6,055 | ||||||||||||||||||||||||||||||
IGS short-term purchase accounting adjustments | 1,160 | - | 1,160 | - | ||||||||||||||||||||||||||||||
Acquisition transaction costs | 366 | - | 366 | - | ||||||||||||||||||||||||||||||
Operating Income as adjusted (Non-GAAP) (1) | $ | 60,589 | $ | 49,659 | 22.0 | $ | 181,101 | $ | 164,284 | 10.2 | ||||||||||||||||||||||||
Operating Margin (GAAP) | 16.0 | % | 13.7 | % | 230 | bps. | 16.2 | % | 14.7 | % | 150 | bps. | ||||||||||||||||||||||
Operating Margin as adjusted (Non-GAAP) (1) | 16.4 | % | 13.9 | % | 250 | bps. | 16.3 | % | 15.4 | % | 90 | bps. | ||||||||||||||||||||||
Diluted Net Income per Share (GAAP) | $ | 0.75 | $ | 0.65 | 15.4 | $ | 2.40 | $ | 2.17 | 10.6 | ||||||||||||||||||||||||
FOBOHA short-term purchase accounting adjustments | - | 0.01 | - | 0.03 | ||||||||||||||||||||||||||||||
Restructuring actions | - | - | - | (0.03 | ) | |||||||||||||||||||||||||||||
Effects of U.S. tax reform | - | - | (0.03 | ) | - | |||||||||||||||||||||||||||||
IGS short-term purchase accounting adjustments | 0.02 | - | 0.02 | - | ||||||||||||||||||||||||||||||
Acquisition transaction costs | 0.01 | - | 0.01 | - | ||||||||||||||||||||||||||||||
Diluted Net Income per Share as adjusted (Non-GAAP) (1) | $ | 0.78 | $ | 0.66 | 18.2 | $ | 2.40 | $ | 2.17 | 10.6 | ||||||||||||||||||||||||
Full-Year 2017 | Full-Year 2018 Outlook | |||||||||||||||||||||||||||||||||
Diluted Net Income per Share (GAAP) | $ | 1.09 | $ | 3.19 | to | $ | 3.24 | |||||||||||||||||||||||||||
FOBOHA short-term purchase accounting adjustments | 0.03 | |||||||||||||||||||||||||||||||||
Effects of U.S. tax reform | 1.77 | (0.03 | ) | |||||||||||||||||||||||||||||||
IGS short-term purchase accounting adjustments | - | 0.04 | ||||||||||||||||||||||||||||||||
Acquisition transaction costs | - | 0.01 | ||||||||||||||||||||||||||||||||
Restructuring actions | (0.01 | ) | ||||||||||||||||||||||||||||||||
Diluted Net Income per Share as adjusted (Non-GAAP) (1) | $ | 2.88 | $ | 3.21 | to | $ | 3.26 | |||||||||||||||||||||||||||
Notes:
(1) The Company has
excluded the following from its "as adjusted" financial measurements for
2018: 1) $1,522 of adjustments made in the second quarter of 2018 to
reduce the tax expense recorded in December 2017 related to the U.S. tax
reform (commonly referred to as the Tax Cuts and Jobs Act), 2)
short-term purchase accounting adjustments related to its Industrial Gas
Springs (IGS) acquisition and 3) transaction costs related primarily to
the IGS acquisition. The Company has excluded the following from its "as
adjusted" financial measurements for 2017: 1) the effects of U.S. tax
reform ($96,700), 2) short-term purchase accounting adjustments related
to its FOBOHA acquisition, 3) charges from restructuring actions related
to the closure and consolidation of two manufacturing facilities within
the Industrial segment and 4) the related pension curtailment and
settlement gains included in non-operating income. The tax effects of
these items, excluding the effects of U.S. tax reform which impacted tax
expense directly, were calculated based on the respective tax
jurisdiction of each item. In 2018, the tax effect on the acquisition
transaction costs is 0% as these costs are not expected to be
deductible. The remaining items include tax effects that range from
approximately 21% to 37%. Management believes that these adjustments
provide the Company and its investors with an indication of our baseline
performance excluding items that are not considered to be reflective of
our ongoing results. Management does not intend results excluding the
adjustments to represent results as defined by GAAP, and the reader
should not consider it as an alternative measurement calculated in
accordance with GAAP, or as an indicator of the Company's performance.
Accordingly, the measurements have limitations depending on their use.
(2)
Results for 2017 have been adjusted on a retrospective basis to reflect
the impact of the adoption of revised guidance for the presentation of
pension and other postretirement benefit costs in the first quarter of
2018.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181026005027/en/
Contacts:
William Pitts
Director, Investor Relations
860.583.7070
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