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"We achieved a good quarter, as net sales, operating income and net income all grew nicely. We've laid a stable foundation for our three businesses for the rest of 2003, even as our end markets were somewhat impacted by a number of external challenges," said Edmund M. Carpenter, Barnes Group Inc.'s President and C.E.O.
Sales at Barnes Distribution were $93.8 million for the quarter ended March 31, 2003, up 29 percent from $72.9 million in the quarter ended March 31, 2002. Of this $20.9 million increase, $19.2 million was contributed by Kar Products, which was purchased by Barnes Group on February 6, 2003. Barnes Distribution generated operating income of $3.2 million in the first quarter of 2003, up 68 percent from operating income of $1.9 million in the first quarter of 2002. The improvement in operating results was driven primarily by higher profitability in Barnes Distribution's North American operations, which included a higher gross profit margin, and incremental operating profit contributed by Kar Products.
"We continue to enjoy success with the new growth programs we put into place in 2002," Carpenter stated. "Two of these programs, our increased focus on new national and regional customer development and our e-commerce platforms, contributed roughly $2.4 million in sales to the most recent quarter. We added 34 new national and regional customers this quarter, bringing to 150 the total new customers gained since the beginning of 2002," Carpenter added.
Carpenter continued, "The integration of Kar Products is running at or slightly ahead of our original schedule. Customer and salesperson retention has been extremely strong, and the first elements of the infrastructure consolidation took place at the end of the first quarter. Clearly, the successful integration of Kar will remain a primary focus for the team at Barnes Distribution for the balance of the year."
Sales at Associated Spring were $85.1 million for the quarter ended March 31, 2003, up 13 percent from $75.6 million in the quarter ended March 31, 2002. Top line growth in the 2003 period reflected approximately $10.1 million of incremental sales from recent acquisitions and continued growth in the sales of nitrogen gas spring products. Partially offsetting these items were a drop in sales related to a planned withdrawal from the heavy truck brake spring market, as well as a decline in organic sales to the telecommunications and electronics markets.
Associated Spring's operating profit was $7.6 million for the first quarter of 2003, up from an operating profit of $7.0 million in the first quarter of 2002. Operating profit growth reflected a higher sales volume and the benefits of consolidation of the Dallas facility, which were partially offset by higher personnel costs, primarily pension and other postretirement expenses.
Carpenter commented, "We indicated, at the time we announced the Dallas plant closure, that our actions would provide us with long-term expense reduction benefits. These benefits started to manifest themselves in the most recent quarter, as Associated Spring grew operating profit even as it began to absorb a higher pension expense burden."
Sales at Barnes Aerospace were $42.3 million for the first quarter of 2003, down 11 percent from $47.4 million in the first quarter of 2002. Operating profit was $2.7 million for the quarter ended March 31, 2003, down slightly from $2.9 million in