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"We continued to successfully execute on our business strategies this past quarter, generating the highest quarterly sales in our Company's history while achieving higher profitability than a year ago. We attained these results despite the dampening effects of the war in Iraq, SARS and the weak industrial economy in many of our end markets," said Edmund M. Carpenter, Barnes Group Inc.'s president and C.E.O.
Sales at Barnes Distribution were $104.7 million for the quarter ended June 30, 2003, up 41 percent from $74.3 million in the quarter ended June 30, 2002. Kar Products, which Barnes Group purchased on February 6, 2003, contributed $31.0 million of sales in the most recent quarter. Barnes Distribution generated operating profit of $4.9 million in the second quarter of 2003, up 42 percent from operating profit of $3.5 million in the second quarter of 2002. The improvement in operating profit was driven primarily by incremental operating profit contributed by Kar Products.
"Excluding Kar, sales at Barnes Distribution were essentially flat versus a year ago. While the industrial economy remains a hurdle to sales expansion, several of our growth initiatives continued to accelerate," Carpenter stated. "Our increased focus on new national and regional customer development and our e-commerce platforms together contributed $3.4 million in sales to the most recent quarter. More than 40 new national and regional customers were added this quarter, bringing to 191 the total new customers gained since January, 2002. And, new Tier 2 relationships we've launched with four strategic partners in the MRO marketplace are showing some very promising early results," Carpenter added.
Carpenter continued, "The integration of Kar Products continues to go well, as a number of critical functions were consolidated this past quarter. During the third quarter, a key integration of the order entry system is scheduled to take place, paving the way to the initial phase of the distribution center consolidation. Thus, we believe our original estimate of having a fully-integrated operation within the first 12 months of our ownership is right on schedule."
Sales at Associated Spring were $86.6 million for the quarter ended June 30, 2003, down two percent from $88.0 million in the quarter ended June 30, 2002. The decline reflected lower sales into the light vehicle, telecommunications and electronics markets, as well as a planned drop in sales related to heavy trucks. Partially offsetting this were higher sales of nitrogen gas springs and products used in industrial markets.
Associated Spring's operating profit was $9.1 million for the second quarter of 2003, up from $7.7 million in the second quarter of 2002. Operating profit growth reflected the benefits from the 2002 closure of Associated Spring's Dallas facility and the absence of $0.8 million of purchase price accounting adjustments related to Seeger-Orbis that were incurred in the year-ago period. Partially offsetting this was the lower profit contribution on the lower sales volume.
Carpenter commented, "Our sales of products destined for light vehicles were down only four percent this quarter, even as light vehicle production in North America fell by nearly nine percent. By positioning Associated Spring over the past several years to be less dependent on a handful of customers, we have been able to partially mitigate our exposure to this most