Barnes Beats Q2 Earnings Estimates, Raises FY21 Sales Guidance

Barnes Group Inc. B reported second-quarter sales growth of 36.4% year-over-year to $321.16 million (up 31% on an organic basis), beating the consensus estimate of $302.12 million.
Segment Revenue: Industrial $234.68 million (42.2% Y/Y) and Aerospace $86.49 million (+22.7% Y/Y).
Adjusted EPS increased by 67% Y/Y to $0.45, beating consensus estimates of $0.43.
Adjusted operating income increased by 41% Y/Y to $39.21 million, and margin expanded by 40 bps to 12.2%.
Barnes generated a YTD operating cash flow of $85.7 million, compared to $123.2 million a year ago. Free cash flow of $68.2 million.
The debt to EBITDA ratio was approximately 2.9 times at quarter-end, down from 3.1 times at the end of Q1.
Aerospace OEM backlog was at $694 million, up 16% sequentially. With a strong book-to-bill of 1.3 times, the total Company backlog increase by 12% sequentially.
At Q2, the Company had liquidity of $91 million in cash and approximately $451 million available under the revolving credit facility.
Outlook: Barnes expects FY21 organic sales growth of 11% to 12% ( from the prior 10% to 12% expectation)
It sees an operating margin of 13%; adjusted EPS of $1.83 to $1.98 (up 12% to 21% from last year) versus the $1.91 consensus. Cash conversion is expected to be greater than 110% of net income.
Price action: B shares closed higher by 1.33% at $51.17 on Thursday.

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