Bristol-based aerospace and industrial parts manufacturer Barnes Group Inc. saw its stock price fall more than 30% on Friday after reporting a third-quarter loss amid a restructuring effort.
Barnes Group on Friday reported a third-quarter net loss of $21.7 million, or 43 cents per share, compared to a nearly $17 million profit (33 cents per share) in the year-ago period.
The company’s quarterly revenue was about $361 million, up from the $314.7 million posted in the third quarter of 2022.
Barnes has been in a transitional period since late 2022, when it announced a multi-phase, cost-cutting initiative that aimed to reduce annual costs by $26 million beginning in 2024.
The company began consolidating facilities and reducing headcount in the U.S. and abroad late last year and into 2023.
Barnes has also made some growth-related acquisitions recently. The company in August completed a $740 million purchase of U.K. aerospace manufacturer MB Aerospace, a maker of precision aero-engine component manufacturing and repair services serving major aerospace and defense engine companies.
While the purchase was touted as one of the company’s largest ever, Barnes said Friday it had higher average borrowing costs to close the deal, and a higher average interest rate due to the recapitalization of the firm’s debt structure to support the acquisition.
Because of that, plus one-time financing fees, the company’s interest expense in the third quarter was $22.8 million versus just $3.4 million a year ago.
Barnes Group’s opening $27 stock price Friday morning fell sharply throughout the day, and was trading at $20.55 around 1:15 p.m., down more than 31%.
Barnes Group’s aerospace segment saw sales increase 41% in the quarter to $156 million, driven by the MB Aerospace acquisition.
Industrial segment sales were flat at $205 million, the company said.
“As we work to transform the Barnes portfolio, a significant amount of progress was made in the third quarter,” said Thomas J. Hook, the company’s president and CEO. “We successfully recapitalized the business and closed on the MB Aerospace acquisition earlier than originally anticipated, accelerating the integration of operations, and realization of forecasted synergies. The combined entity has been well-received by our customers, and we look forward to delivering solid, profitable growth.”
He added: “Momentum behind industrial restructuring continues with facility closures tracking to plan and a new cost rationalization activity implemented. That said, we remain unsatisfied with Industrial results and are engaged in multiple activities to deliver improved operational and financial performance. Executing our strategic priorities, which begins with fundamental core business execution, remains the primary focus across the Company.”
