Barnes Group Inc.
), in an attempt to reduce its debts, recently announced plans to
redeem its 3.375% Convertible Senior Subordinated Notes due 2027.
The notes worth $55.4 million will be redeemed effective Jul 31,
The company intends to pay cash for the redeemed debentures,
financed primarily through its senior credit facility. This not
only indicates the company's strong cash position but also its
efforts to improve the debt-to-equity ratio.
Exiting first-quarter 2014, Barnes Group had cash and cash
equivalents of approximately $61.4 million while long-term debts,
excluding current portion of $56.6 million, stood at $503.1
million. Currently, the company's debt-to-equity ratio is 43.8%
versus 107.4% for the industry.
A brief discussion on Barnes Group's first-quarter results is
Earnings came in at 50 cents per share, up 25% year over year
but below the Zacks Consensus Estimate of 52 cents. Revenues grew
18%, including organic sales growth of 4%. Business at the
Industrial segment flourished with revenues rising 23% year over
year. Aerospace segment revenues were up 10.4%. Operating margin
expanded 180 basis points.
The Zacks Consensus Estimate for Barnes Group is pegged at $2.26
for 2014 and $2.54 for 2015, reflecting year-over-year growth of
23.7% and 12.4% respectively. Earnings are anticipated to grow by
10.0% in the next five years.
Barnes Group is a well-known industrial equipment and components
maker, currently carrying a Zacks Rank #3 (Hold). Some
better-ranked stocks in the same industry include
Blount International Inc.
). All these companies hold a Zacks Rank #2 (Buy).
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