Business Wire | Oct 29, 2021 06:30AM EDT

Barnes Group Inc. Reports Third Quarter 2021 Financial Results

Oct. 29, 2021

BRISTOL, Conn.--(BUSINESS WIRE)--Oct. 29, 2021--Barnes Group Inc. (NYSE: B), a global provider of highly engineered products, differentiated industrial technologies, and innovative solutions, today reported financial results for the third quarter of 2021.

"Barnes Group generated a strong quarter of year-over-year performance with solid organic sales growth, further margin expansion, and increased earnings per share. Sequentially, sales, margin, and earnings likewise improved," said Patrick J. Dempsey, President and Chief Executive Officer of Barnes Group Inc. "Aerospace end markets continue to demonstrate solid recovery with improving flight activity. Industrial end markets, while seeing good customer demand, are experiencing some headwinds as supply chain issues remain a near-term challenge," added Dempsey.

Third Quarter 2021 Highlights

Third quarter 2021 net sales of $325 million were up 21% from $269 million in the prior year period, with organic sales (1) increasing 20%. Each of the Company's strategic business units generated double digit organic sales growth. Foreign exchange had a positive impact on sales of approximately 1%. On a sequential basis, sales improved 1% from the second quarter of 2021. Operating income was $43.7 million versus $31.2 million a year ago and operating margin was 13.4% versus 11.6% last year. Excluding restructuring charges of $0.2 million this year and $0.3 million in the prior year period, adjusted operating income was up 39% and adjusted operating margin was up 180 bps from a year ago.

Interest expense was $4.0 million, an increase of $0.3 million from the prior year quarter due to a higher average interest rate, offset in part by lower average borrowings.

The Company's effective tax rate for the third quarter of 2021 was 27.6% compared with 44.1% in the third quarter of 2020 and 37.6% for the full year 2020. The decrease in the third quarter 2021 effective tax rate from the full year 2020 rate is primarily due to the absence of tax expense related to the sale of the Seeger business in 2020, a benefit relating to the tax basis of goodwill at Automation, the positive resolution of a foreign tax matter in the current year quarter, and a favorable mix in earnings based on tax jurisdictions. These items were partially offset by a charge relating to UK legislative changes.

Net income for the third quarter was $27.9 million, or $0.55 per diluted share, compared to $15.4 million, or $0.30 per diluted share, a year ago.

Year-to-date 2021 cash provided by operating activities was $127.8 million versus $163.8 million in the prior year period. Free cash flow was $101.1 million compared to $133.7 million last year. Capital expenditures were $26.7 million, down $3.4 million from a year ago.

Segment Performance and End Market Outlook

Industrial

Third quarter sales were $232 million, up 18% from $197 million in the prior year period. Organic sales increased 17% reflecting strong sales performance across each of our businesses. Favorable foreign exchange increased sales by approximately $2 million, or 1%. On a sequential basis, total Industrial sales decreased slightly from the second quarter of 2021.

Operating profit in the third quarter was $30.1 million, up 23% from $24.4 million in the prior year period. The increase in operating profit was driven by the contribution of higher sales volumes, offset in part by higher personnel costs including incentive compensation, higher raw material and freight costs, and costs incurred in support of segment growth initiatives. Operating margin was 13.0%, up 60 bps from a year ago.

Aerospace

Third quarter sales were $94 million, up 30% from $72 million last year, benefitting from an improving aerospace end market. Aerospace original equipment manufacturing ("OEM") sales increased 23%, while aftermarket sales increased 46%. On a sequential basis, Aerospace sales increased 8% from the second quarter of 2021.

Operating profit was $13.6 million, up 100% from $6.8 million in the prior year period. Excluding $0.2 million of restructuring costs this year and $0.3 million in the prior year period, adjusted operating profit was up 95% from a year ago. The increase in adjusted operating profit was driven by the contribution of higher sales volumes and favorable productivity, offset in part by higher compensation costs including incentive compensation. Adjusted operating margin was 14.8%, up 490 bps from 9.9% last year.

Aerospace OEM backlog ended the third quarter at $665 million, down 4% from June 2021. The Company expects to convert approximately 40% of this backlog to revenue over the next 12 months.

Balance Sheet and Liquidity

Barnes Group's balance sheet and liquidity profile remain well-positioned and supportive of ongoing investments in growth initiatives. The Company has liquidity of $93 million in cash and approximately $477 million available under the revolving credit facility, subject to covenants which would have allowed $283 million under our current credit agreements. With respect to the balance sheet, our "Debt to EBITDA" ratio, as defined in our credit agreements, was approximately 2.6 times at quarter end, down from 2.9 times at the end of the second quarter 2021.

Updated 2021 Outlook

Barnes Group continues to expect 2021 organic sales to be up 11% to 12%. Foreign exchange is anticipated to have an approximate 2% favorable impact on 2021 sales, while divested revenues will have an approximate negative 1% impact. Operating margin is now forecasted to be approximately 12.5%, down from the prior outlook of approximately 13% as raw material and freight costs are forecasted to have an impact on our Industrial business. Adjusted earnings per share are now anticipated to be in the range of $1.83 to $1.93, up 12% to 18% from 2020's adjusted earnings per share of $1.64 and lower at the top end of our prior range of $1.83 to $1.98. The Company expects capital expenditures of approximately $40 million and an effective tax rate of approximately 29% for 2021. Cash conversion in now expected to be approximately 120% of net income.

Conference Call Information

Barnes Group Inc. will conduct a conference call with investors to discuss third quarter 2021 results at 8:30 a.m. ET today, October 29, 2021. 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 8123687. 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 29, 2021 until 11:59 p.m. (ET) on Friday, November 5, 2021, by dialing (416) 621-4642; Conference ID 8123687.

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, automation, healthcare, and packaging. The skilled and dedicated employees of Barnes Group around the globe are committed to the highest performance standards and achieving consistent, sustainable profitable growth. Barnes Group is committed to corporate accountability and furthering environmental, social and governance principles as evidenced by our listing as one of America's Most Responsible Companies by Newsweek. 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," "continue," "will," "should," "may," 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, 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 and avoid infringing upon 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; the continuing impact of the COVID-19 pandemic on our business, including on demand, supply chains, operations and our ability to maintain sufficient liquidity; the failure to achieve anticipated cost savings and benefits associated with workforce reductions and restructuring actions; 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; government tariffs, trade agreements and trade policies; the impact of new or revised tax laws and regulations; the adoption of laws, directives or regulations that impact the materials processed by our products or their end markets; fluctuations in the pricing, quality or availability of raw materials, supplies, freight, transportation, utilities and other items required by operations; labor shortages or other business interruptions at transportation centers, shipping ports, our suppliers' facilities or our facilities; disruptions in information technology systems, including as a result of cybersecurity or data security breaches; 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 ability to achieve social and environmental performance goals; the outcome of pending and future legal, governmental, or regulatory proceedings and contingencies; the impact of actual, potential or alleged defects or failures of our products or third-party products within which our products are integrated, including product liabilities, product recall costs and uninsured claims; 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, social, economic, business, competitive, environmental, regulatory and public health nature; 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, 2021 2020 % 2021 2020 % Change Change

Net sales $ 325,059 $ 269,059 20.8 $ 947,846 $ 835,266 13.5

Cost of sales 205,079 176,908 15.9 602,943 532,214 13.3

Selling and 76,271 60,908 25.2 230,271 212,380 8.4 administrativeexpenses 281,350 237,816 18.3 833,214 744,594 11.9

Operating 43,709 31,243 39.9 114,632 90,672 26.4 income Operating 13.4 % 11.6 % 12.1 % 10.9 %margin Interest 4,027 3,701 8.8 12,443 11,924 4.4 expenseOther expense 1,217 47 NM 3,952 2,700 46.4 (income), net Income before 38,465 27,495 39.9 98,237 76,048 29.2 income taxes Income taxes 10,602 12,137 (12.6 ) 26,501 30,390 (12.8 )

Net income $ 27,863 $ 15,358 81.4 $ 71,736 $ 45,658 57.1

Common $ 8,099 $ 8,097 0.0 $ 24,293 $ 24,302 (0.0 )dividends Per commonshare: Net income:Basic $ 0.55 $ 0.30 83.3 $ 1.41 $ 0.90 56.7

Diluted 0.55 0.30 83.3 1.40 0.89 57.3

Dividends 0.16 0.16 - 0.48 0.48 -

Weightedaverage commonsharesoutstanding:Basic 50,905,202 50,833,157 0.1 50,925,702 50,886,094 0.1

Diluted 51,060,684 50,937,093 0.2 51,085,509 51,123,024 (0.1 )

NM - NotmeaningfulBARNES GROUP INC.OPERATIONS BY REPORTABLE BUSINESS SEGMENT(Dollars in thousands)(Unaudited)Three months ended September 30,

Nine months ended September 30,

2021

2020

% Change

2021

2020

% Change

Net salesIndustrial$

231,549

$

196,916

17.6

$

686,220

$

561,047

22.3

Aerospace93,511

72,148

29.6

261,639

274,227

(4.6

)

Intersegment sales(1

)

(5

)

(13

)

(8

)

Total net sales$

325,059

$

269,059

20.8

$

947,846

$

835,266

13.5

Operating profitIndustrial$

30,067

$

24,438

23.0

$

78,635

$

42,063

86.9

Aerospace13,642

6,805

100.5

35,997

48,609

(25.9

)

Total operating profit$

43,709

$

31,243

39.9

$

114,632

$

90,672

26.4

Operating marginChangeChangeIndustrial13.0

%

12.4

%

60

bps.11.5

%

7.5

%

400

bps.Aerospace14.6

%

9.4

%

520

bps.13.8

%

17.7

%

(390

)

bps.Total operating margin13.4

%

11.6

%

180

bps.12.1

%

10.9

%

120

bps. BARNES GROUP INC.OPERATIONS BY REPORTABLE BUSINESS SEGMENT(Dollars in thousands)(Unaudited) Three months ended September 30, Nine months ended September 30,

2021 2020 % 2021 2020 % Change Change

Net sales Industrial $ 231,549 $ 196,916 17.6 $ 686,220 $ 561,047 22.3

Aerospace 93,511 72,148 29.6 261,639 274,227 (4.6 )

Intersegment (1 ) (5 ) (13 ) (8 )sales Total net sales $ 325,059 $ 269,059 20.8 $ 947,846 $ 835,266 13.5

Operating profit Industrial $ 30,067 $ 24,438 23.0 $ 78,635 $ 42,063 86.9

Aerospace 13,642 6,805 100.5 35,997 48,609 (25.9 )

Total operating $ 43,709 $ 31,243 39.9 $ 114,632 $ 90,672 26.4 profit Operating margin Change Change Industrial 13.0 % 12.4 % 60 bps. 11.5 % 7.5 % 400 bps.

Aerospace 14.6 % 9.4 % 520 bps. 13.8 % 17.7 % (390 ) bps.

Total operating 13.4 % 11.6 % 180 bps. 12.1 % 10.9 % 120 bps.margin BARNES GROUP INC.CONSOLIDATED BALANCE SHEETS(Dollars in thousands)(Unaudited)September 30, 2021

December 31, 2020

AssetsCurrent assetsCash and cash equivalents$

93,475

$

79,145

Accounts receivable260,146

251,460

Inventories238,842

238,008

Prepaid expenses and other current assets79,594

73,732

Total current assets672,057

642,345

Deferred income taxes21,153

22,092

Property, plant and equipment, net347,541

370,947

Goodwill967,481

1,011,580

Other intangible assets, net517,324

564,132

Other assets61,033

65,130

Total assets$

2,586,589

$

2,676,226

Liabilities and Stockholders' EquityCurrent liabilitiesNotes and overdrafts payable$

1,799

$

2,115

Accounts payable124,603

112,428

Accrued liabilities179,185

178,560

Long-term debt - current1,969

2,276

Total current liabilities307,556

295,379

Long-term debt628,689

699,868

Accrued retirement benefits91,685

98,171

Deferred income taxes73,292

91,668

Long-term tax liability52,114

59,063

Other liabilities40,024

49,400

Total stockholders' equity1,393,229

1,382,677

Total liabilities and stockholders' equity$

2,586,589

$

2,676,226

BARNES GROUP INC.CONSOLIDATED BALANCE SHEETS(Dollars in thousands)(Unaudited) September 30, December 31, 2021 2020

AssetsCurrent assetsCash and cash equivalents $ 93,475 $ 79,145

Accounts receivable 260,146 251,460

Inventories 238,842 238,008

Prepaid expenses and other current 79,594 73,732assets Total current assets 672,057 642,345

Deferred income taxes 21,153 22,092

Property, plant and equipment, net 347,541 370,947

Goodwill 967,481 1,011,580

Other intangible assets, net 517,324 564,132

Other assets 61,033 65,130

Total assets $ 2,586,589 $ 2,676,226

Liabilities and Stockholders' EquityCurrent liabilitiesNotes and overdrafts payable $ 1,799 $ 2,115

Accounts payable 124,603 112,428

Accrued liabilities 179,185 178,560

Long-term debt - current 1,969 2,276

Total current liabilities 307,556 295,379

Long-term debt 628,689 699,868

Accrued retirement benefits 91,685 98,171

Deferred income taxes 73,292 91,668

Long-term tax liability 52,114 59,063

Other liabilities 40,024 49,400

Total stockholders' equity 1,393,229 1,382,677

Total liabilities and stockholders' $ 2,586,589 $ 2,676,226equity BARNES GROUP INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(Unaudited)Nine months ended September 30,2021

2020

Operating activities:Net income$

71,736

$

45,658

Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization68,004

66,045

Gain on disposition of property, plant and equipment(414

)

(303

)

Stock compensation expense9,212

8,094

Seeger divestiture charges-

6,620

Changes in assets and liabilities, net of the effects of divestitures:Accounts receivable(15,649

)

103,161

Inventories(5,582

)

(11,616

)

Prepaid expenses and other current assets(7,205

)

(10,168

)

Accounts payable17,827

(24,476

)

Accrued liabilities(1,051

)

(7,981

)

Deferred income taxes(7,052

)

(5,032

)

Long-term retirement benefits2,308

(2,517

)

Long-term tax liability(6,949

)

(6,949

)

Other2,605

3,296

Net cash provided by operating activities127,790

163,832

Investing activities:Proceeds from disposition of property, plant and equipment1,204

580

Proceeds from the sale of businesses, net of cash sold-

36,879

Capital expenditures(26,735

)

(30,170

)

Other2,107

-

Net cash (used) provided by investing activities(23,424

)

7,289

Financing activities:Net change in other borrowings(226

)

6,794

Payments on long-term debt(73,081

)

(219,279

)

Proceeds from the issuance of long-term debt25,000

75,000

Proceeds from the issuance of common stock464

1,661

Common stock repurchases(5,229

)

(15,550

)

Dividends paid(24,293

)

(24,302

)

Withholding taxes paid on stock issuances(1,356

)

(3,177

)

Other(9,835

)

(2,217

)

Net cash used by financing activities(88,556

)

(181,070

)

Effect of exchange rate changes on cash flows(2,923

)

675

Increase (decrease) in cash, cash equivalents and restricted cash12,887

(9,274

)

Cash, cash equivalents and restricted cash at beginning of period91,468

93,805

Cash, cash equivalents and restricted cash at end of period104,355

84,531

Less: Restricted cash, included in Prepaid expenses and other current assets(6,239

)

-

Less: Restricted cash, included in Other assets(4,641

)

(7,046

)

Cash and cash equivalents at end of period$

93,475

$

77,485

BARNES GROUP INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)(Unaudited) Nine months ended September 30, 2021 2020

Operating activities:Net income $ 71,736 $ 45,658

Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization 68,004 66,045

Gain on disposition of property, plant and (414 ) (303 )equipmentStock compensation expense 9,212 8,094

Seeger divestiture charges - 6,620

Changes in assets and liabilities, net of theeffects of divestitures:Accounts receivable (15,649 ) 103,161

Inventories (5,582 ) (11,616 )

Prepaid expenses and other current assets (7,205 ) (10,168 )

Accounts payable 17,827 (24,476 )

Accrued liabilities (1,051 ) (7,981 )

Deferred income taxes (7,052 ) (5,032 )

Long-term retirement benefits 2,308 (2,517 )

Long-term tax liability (6,949 ) (6,949 )

Other 2,605 3,296

Net cash provided by operating activities 127,790 163,832

Investing activities:Proceeds from disposition of property, plant and 1,204 580 equipmentProceeds from the sale of businesses, net of cash - 36,879 soldCapital expenditures (26,735 ) (30,170 )

Other 2,107 -

Net cash (used) provided by investing activities (23,424 ) 7,289

Financing activities:Net change in other borrowings (226 ) 6,794

Payments on long-term debt (73,081 ) (219,279 )

Proceeds from the issuance of long-term debt 25,000 75,000

Proceeds from the issuance of common stock 464 1,661

Common stock repurchases (5,229 ) (15,550 )

Dividends paid (24,293 ) (24,302 )

Withholding taxes paid on stock issuances (1,356 ) (3,177 )

Other (9,835 ) (2,217 )

Net cash used by financing activities (88,556 ) (181,070 )

Effect of exchange rate changes on cash flows (2,923 ) 675

Increase (decrease) in cash, cash equivalents and 12,887 (9,274 )restricted cash Cash, cash equivalents and restricted cash at 91,468 93,805 beginning of period Cash, cash equivalents and restricted cash at end 104,355 84,531 of period Less: Restricted cash, included in Prepaid expenses (6,239 ) - and other current assetsLess: Restricted cash, included in Other assets (4,641 ) (7,046 )

Cash and cash equivalents at end of period $ 93,475 $ 77,485

BARNES GROUP INC.RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW(Dollars in thousands)(Unaudited)Nine months ended September 30,2021

2020

Free cash flow:Net cash provided by operating activities$

127,790

$

163,832

Capital expenditures(26,735

)

(30,170

)

Free cash flow(1)$

101,055

$

133,662

BARNES GROUP INC.RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW(Dollars in thousands)(Unaudited) Nine months ended September 30, 2021 2020

Free cash flow:Net cash provided by operating activities $ 127,790 $ 163,832

Capital expenditures (26,735 ) (30,170 )

Free cash flow^(1) $ 101,055 $ 133,662

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. Notes:

(1) The Company defines free cash flow as net cash provided by operatingactivities less capital expenditures. The Company believes that the free cashflow metric is useful to investors and management as a measure of cashgenerated by business operations that can be used to invest in future growth,pay dividends, repurchase stock and reduce debt. This metric can also be usedto evaluate the Company's ability to generate cash flow from businessoperations 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 30,2021

2020

% Change

2021

2020

% Change

SEGMENT RESULTSOperating Profit - Industrial Segment (GAAP)$

30,067

$

24,438

23.0

$

78,635

$

42,063

86.9

Restructuring/reduction in force charges(59

)

-

246

15,766

Seeger divestiture adjustments-

-

-

2,409

Operating Profit - Industrial Segment as adjusted (Non-GAAP) (1)$

30,008

$

24,438

22.8

$

78,881

$

60,238

30.9

Operating Margin - Industrial Segment (GAAP)13.0

%

12.4

%

60

bps.11.5

%

7.5

%

400

bps.Operating Margin - Industrial Segment as adjusted (Non-GAAP) (1)13.0

%

12.4

%

60

bps.11.5

%

10.7

%

80

bps.Operating Profit - Aerospace Segment (GAAP)$

13,642

$

6,805

100.5

$

35,997

$

48,609

(25.9

)

Restructuring/reduction in force charges222

304

671

2,243

Operating Profit - Aerospace Segment as adjusted (Non-GAAP) (1)$

13,864

$

7,109

95.0

$

36,668

$

50,852

(27.9

)

Operating Margin - Aerospace Segment (GAAP)14.6

%

9.4

%

520

bps.13.8

%

17.7

%

(390

)

bps.Operating Margin - Aerospace Segment as adjusted (Non-GAAP) (1)14.8

%

9.9

%

490

bps.14.0

%

18.5

%

(450

)

bps.CONSOLIDATED RESULTSOperating Income (GAAP)$

43,709

$

31,243

39.9

$

114,632

$

90,672

26.4

Restructuring/reduction in force charges163

304

917

18,009

Seeger divestiture adjustments-

-

-

2,409

Operating Income as adjusted (Non-GAAP) (1)$

43,872

$

31,547

39.1

$

115,549

$

111,090

4.0

Operating Margin (GAAP)13.4

%

11.6

%

180

bps.12.1

%

10.9

%

120

bps.Operating Margin as adjusted (Non-GAAP) (1)13.5

%

11.7

%

180

bps.12.2

%

13.3

%

(110

)

bps.Diluted Net Income per Share (GAAP)$

0.55

$

0.30

83.3

$

1.40

$

0.89

57.3

Foreign tax matters-

-

(0.04

)

-

Restructuring/reduction in force charges-

-

0.01

0.26

Seeger divestiture adjustments-

-

-

0.13

Diluted Net Income per Share as adjusted (Non-GAAP) (1)$

0.55

$

0.30

83.3

$

1.37

$

1.28

7.0

Full-Year 2020

Full-Year 2021 Outlook

Diluted Net Income per Share (GAAP)$

1.24

$

1.85

to

$

1.95

Seeger divestiture adjustments0.13

-

Restructuring/reduction in force charges0.27

0.02

Foreign tax matters-

(0.04

)

Diluted Net Income per Share as adjusted (Non-GAAP) (1)$

1.64

$

1.83

to$

1.93

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, 2021 2020 % 2021 2020 % Change Change

SEGMENTRESULTSOperatingProfit - $ 30,067 $ 24,438 23.0 $ 78,635 $ 42,063 86.9 IndustrialSegment(GAAP) Restructuring (59 ) - 246 15,766 /reduction inforce chargesSeeger - - - 2,409 divestitureadjustments OperatingProfit -Industrial $ 30,008 $ 24,438 22.8 $ 78,881 $ 60,238 30.9 Segment asadjusted(Non-GAAP) ^(1) OperatingMargin - 13.0 % 12.4 % 60 11.5 % 7.5 % 400 Industrial bps. bps.Segment(GAAP)OperatingMargin -Industrial 13.0 % 12.4 % 60 11.5 % 10.7 % 80 Segment as bps. bps.adjusted(Non-GAAP) ^(1) OperatingProfit - $ 13,642 $ 6,805 100.5 $ 35,997 $ 48,609 (25.9 )AerospaceSegment(GAAP) Restructuring 222 304 671 2,243 /reduction inforce charges OperatingProfit -Aerospace $ 13,864 $ 7,109 95.0 $ 36,668 $ 50,852 (27.9 )Segment asadjusted(Non-GAAP) ^(1) OperatingMargin - 14.6 % 9.4 % 520 13.8 % 17.7 % (390 )Aerospace bps. bps.Segment(GAAP)OperatingMargin -Aerospace 14.8 % 9.9 % 490 14.0 % 18.5 % (450 )Segment as bps. bps.adjusted(Non-GAAP) ^(1) CONSOLIDATEDRESULTSOperating $ 43,709 $ 31,243 39.9 $ 114,632 $ 90,672 26.4 Income (GAAP) Restructuring 163 304 917 18,009 /reduction inforce chargesSeeger - - - 2,409 divestitureadjustments OperatingIncome as $ 43,872 $ 31,547 39.1 $ 115,549 $ 111,090 4.0 adjusted(Non-GAAP) ^(1) Operating 13.4 % 11.6 % 180 bps. 12.1 % 10.9 % 120 bps.Margin (GAAP)OperatingMargin as 13.5 % 11.7 % 180 12.2 % 13.3 % (110 )adjusted bps. bps.(Non-GAAP) ^(1) Diluted Net $ 0.55 $ 0.30 83.3 $ 1.40 $ 0.89 57.3 Income perShare (GAAP) Foreign tax - - (0.04 ) - mattersRestructuring - - 0.01 0.26 /reduction inforce chargesSeeger - - - 0.13 divestitureadjustments Diluted NetIncome perShare as $ 0.55 $ 0.30 83.3 $ 1.37 $ 1.28 7.0 adjusted(Non-GAAP) ^(1) Full-Year Full-Year 2021 Outlook 2020

Diluted Net $ 1.24 $ 1.85 to $ 1.95Income perShare (GAAP) Seeger 0.13 - divestitureadjustmentsRestructuring 0.27 0.02 /reduction inforce chargesForeign tax - (0.04 )matters Diluted NetIncome perShare as $ 1.64 $ 1.83 to $ 1.93adjusted(Non-GAAP) ^(1) Notes:(1) The Company has excluded the following from its "as adjusted" financial measurements for 2021: 1) the impact of certain foreign tax matters including a benefit related to the Italy tax realignment, partially offset by a charge related to the UK tax rate and 2) charges related to restructuring actions at certain businesses. The Company has excluded the following from its "as adjusted" financial measurements for 2020: 1) adjustments related to the divestiture of the Seeger business, including $2.5M reflected within the Industrial segment's operating profit ($2.4M through the third quarter of 2020) and $4.2M of tax expense and 2) charges taken in 2020 related to restructuring and workforce reduction actions implemented across its businesses, including $18.2M reflected within operating profit ($18.0M through the third quarter) and $1.0M reflected within other expense (income), net ($0.5M through the third quarter). The tax charges resulting from the divestiture were recorded in the first quarter of 2020 following the completion of the sale. The tax effects of the restructuring actions were calculated based on the respective tax jurisdictions and approximated 20% and 30% for the 2021 and 2020 periods, respectively. 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20211029005046/en/

CONTACT: Barnes Group Inc. William Pitts Director, Investor Relations 860.583.7070