Barrick Mining Corporation

Ladies and gentlemen, thank you for standing by, and welcome to the Barnes Group, Inc. Second Quarter 2021 Earnings Conference Call. At this time, all participants are in listening mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn the conference over to their speaker today, Mr. William Pitt, Director of Investor Relations. Please go ahead, sir.

Thank you, Angie. Good morning, and thank you for joining us for our second quarter 2021 earnings call. With me are Barnes Group's President and Chief Executive Officer, Patrick Dempsey, and newly appointed Senior Vice President and Chief Financial Officer, Julie Stryke. If you have not received a copy of our earnings press release, you can find it on the investor relations section of our corporate website at bginc.com. During our call, we will be referring to the earnings release supplement slides, which are also posted on our website. Our discussion today includes certain non-GAAP financial measures, which provide additional information we believe is helpful to our investors. These measures have been reconciled to the related GAAP measures in accordance with SEC regulations. You will find a reconciliation table on our website as part of the press release and in the Form 8K submitted to the Securities and Exchange Commission. Be advised that certain statements we make on today's call, both during the opening remarks and during the question and answer session, may be forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Please consider the risks and uncertainties that are mentioned in today's call and are described in our periodic filings with the SEC. The filings are available through the investor relations section of our corporate website at BGINC.com. Let me now turn the call over to Patrick for his opening remarks. Then Julie will provide a review of our financial results and details of our updated outlook for 2021. After that, we'll open up the call for questions. Patrick.

Thank you, Bill, and good morning, everyone. Continuing with a clear focus on our business recovery, Barnes Group produced another solid quarter of year over year and sequential improvement in orders, organic sales, operating margins, and earnings. With total backlog at its highest point since the end of 2019, expanding revenue outlook, strengthening industrial end markets and a progressing aerospace environment, we feel confident about the prospects for the second half of the year. More importantly, our improving financial results continue to be supported by significant investments in growth initiatives that position us to sustain performance over the long term. In the second quarter, organic sales were up 31%, with sizable gains in both our operating segments. Industrial was particularly strong, while aerospace continues to build momentum after the significant effects of the pandemic on that industry. Similarly, orders were very good, as we generated a book to bill of 1.3 times, with aerospace driving that result. Our total backlog stands at 984 million at quarter end, reflecting a 12% increase from the end of the first quarter. Adjusted operating income and margins were up 41% and 40 bps respectively. Adjusted earnings per share were 45 cents, up 67% from last year. Again, really great results by the team. Moving now to a discussion of end market dynamics, beginning with industrial. Our industrial segment generated another strong quarter, with each of our businesses generating excellent year-over-year organic orders and revenue growth. For the segment, orders were up 37% organically, with a book-to-bill of approximately one times. Industrial sales grew 42%, with organic sales growth of 35%, Of note, second quarter total industrial sales were ahead of pre-COVID second quarter of 2019. As a macro-level backdrop, like last quarter, manufacturing PMIs in the U.S. and Eurozone remain strong, with China in the expansion territory, though not as robust as the other regions. Notwithstanding the ongoing semiconductor issue that's dampening automotive bills, IHS still predicts 2021 global production to be up 10% over last year and up an additional 11% in 2022. With respect to new platform launches and major refresh programs of light vehicles, 2021 2022 and 2023 are forecast to be sustained at a healthy level within our molding solutions business we saw a good orders quarter of 17 percent organically automotive packaging and personal care each saw double-digit orders growth with automotive being particularly strong medical mold orders took a dip in the quarter not an unusual dynamic as these large ticket products can be somewhat lumpy. Organic sales were up 22% year over year, while sequential sales were up 13%. On many occasions, you've heard me talk about investments in growth that we're making across the businesses to drive our sales and marketing efforts, innovation, and new product development. Recently, I discussed the launch of our new vacuum gripper technology in our automation business. At Moulding Solutions, we are also working hard to expand our leading technology-based solutions across multiple end markets. A prime example, relative to the public health crisis we've all experienced over the last year or so, is our Mould technology serving the global medical market and our investment and development of a new product offering known as Pipette Tips. Petite tips are a high volume critical item used in the world of laboratory diagnostics for collecting a precise amount of liquid and transferring it to a test apparatus. This market has expanded recently in order to meet the enormous demand brought on by the pandemic. Our customers require a technology based solution that consistently delivers high output rates with extremely tight tolerances. The pipette tips geometry must be precise to ensure that test results are both accurate and reliable. Our molding solutions business has developed a mold concept specifically for production of pipette tips, which not only meets strict technical requirements, but also focuses on superior reliability and ease of maintenance. To maximize uptime in an operation that runs 24 hours a day, seven days a week, The configuration of the mold allows for required maintenance of worn parts to occur right on the machine through replaceable modular units or clusters, allowing for minimum disruption and production to come quickly back online. Delivering leading technology-based solutions such as the pipette tip mold system and focusing on customer success allows our molding solutions business to demonstrate extraordinary value. To close my Moulding Solutions comments, our sales outlook has improved once again as we now forecast organic sales growth in the mid-teens, a bit better than our prior view. At force of motion control, organic orders were up over 50% with organic sales up double digits. FMC's two major end markets, Sheep Metal Forming and General Industrial, both saw robust orders and sales growth. On a sequential basis, sales increased 6%. We continue to see full-year 2021 organic sales growth to be up mid-Teens. Engineer components once again generated high double-digit organic orders and revenue growth on a year-over-year basis. Sequentially, we saw a modest dip in orders and sales as automotive semiconductor issues weigh on automotive end markets. As a result of this issue, we saw a second quarter revenue impact of approximately $5 million, very much aligned with the exposure we disclosed in April. We expect a third quarter semiconductor revenue impact of $3 million and another $1 million in the fourth quarter. Our general industrial markets remain very healthy and are helping to mitigate some of the impact. Our outlook for organic sales growth is now forecast to be up in high teens, a step up from our prior view of mid-teens growth. At automation, as economies rebound, the migration towards industrial robotics and more complex end-of-arm tooling solutions continues to be favorable. On a year-over-year basis, organic orders and sales growth were well into the double digits. Sequential growth in orders and sales also continues along a healthy trend. We now expect 2021 to deliver organic growth of approximately 20%, better than our April expectation of mid-teens growth. To wrap up on industrial, Clearly, our year-over-year growth rates across the segment compare favorably to last year's second quarter, which was the trough quarter relative to the impact of the pandemic. Comparables get more difficult over the next few quarters, though we expect to perform well. At industrial, we see 2021 organic growth in the mid-teens with operating margins of 12% to 13%. Our margin expectation is down slightly as we continue to make strategic investments in our people, products and systems. However, we view these investments as critical to setting us up for long-term growth and profitability. Additionally, in the near term, we are managing supply chain challenges, which Julie will address in a moment. Moving to aerospace, it's fair to say that the environment continues to improve. Airbus and Boeing narrow-body production levels are anticipated to increase meaningfully, although wide-body recovery is still a way off. Global traffic and capacity trends are improving, and that all bodes well for a strengthening aftermarket. At the segment level, we've been seeing good sequential sales growth and expect that trend to continue. And beginning this quarter, we'll see favorable year-over-year comparisons as we move through the year. Aerospace sales improved 23% over last year and 6% sequentially from the first quarter. OEM led the growth while aftermarket was down modestly, which we believe is simply timing. A highlight of the quarter was our strong OEM orders, which generated a book to bill of 2.5 times. That's three quarters in a row with a strong order book. This reflects our customers' confidence in a narrowbody ramp as most of the order volume relates to the LEAP engine platform. Our 2021 outlook for aerospace is unchanged from our prior view. Total aerospace sales are expected to be up low single digits. Within the segment, OEM sales are forecast to be up mid single digits, MRO down low single digits, and spare parts down in the mid teens. Segment operating margin is anticipated to be 13% to 14%, slightly higher than our April outlook. In closing, the second quarter finished with excellent results, positive momentum, and a healthy outlook for the remainder of the year. Several growth initiatives have been driven across the organization to help advance our recovery and position us to execute on our profitable growth strategy. While supply chain and inflation risks are present, our teams are doing a good job mitigating the impacts and implementing pricing actions as appropriate. We remain confident in the strength of our end markets and our team's ability to convert that into new business opportunities. Now, let me pass the call over to Julie Strike, our new Senior Vice President and Chief Financial Officer, for details on our quarterly performance. Julie brings to us a highly qualified business background and proven leadership in corporate finance. We're very happy to have you as part of our team. Julie?