Barrick Mining Corporation

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Barnes Group Inc. 4th Quarter 2021 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. Thank you. Bill Pitts, Vice President, Investor Relations. You may begin your conference.

Thank you, Rob. Good morning, and thank you for joining us for our fourth quarter and full year 2021 earnings call. With me are Barnes President and Chief Executive Officer Patrick Dempsey and Senior Vice President Finance 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 barnesgroupinc.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 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 our 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 make 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 These filings are available through the investor relations section of our corporate website at barnesgroupinc.com. Let me now turn the call over to Patrick for his opening remarks. Then Julie will provide a review of our financial results in details of our initial outlook for 2022. After that, we will open up the call for questions. Patrick.

Thank you, Bill, and good morning, everyone. Barnes closed out 2021 with solid year-over-year revenue growth, a significant increase in earnings per share, and good cash performance. Backlogs remained healthy, and orders in the fourth quarter generated a book-to-bill of 1.1 times. In the fourth quarter, organic revenues increased 9% versus the prior year period, while adjusted earnings per share increased 53%. Adjusted operating margin was flat to a year ago, though given supply chain challenges, inflation, and the impact of COVID on employee absenteeism, the team did a good job to hold margins. Within our segments, starting with industrial, fourth quarter organic sales grew 3% versus the entire year period, while organic orders declined 2%. From a macro standpoint, our European end markets were soft through the quarter. Across the segment, the Omicron variant, coupled with ongoing supply chain disruption, impacted demand and shipments. We saw COVID-related absenteeism jump as we exited the fourth quarter, and that carried over into January. Automotive end markets remained challenged as global auto production was down throughout the fourth quarter, and ended with 2021 up only modestly. Global auto production is expected to increase high single digits in 2022, and we expect an uptick in auto program releases as OEMs continue to accelerate their investment in electric vehicles. Timing of improved semiconductor availability will play a key role in overall production levels and the industry's ability to meet strong consumer demand. Regarding the global manufacturing environment, PMIs in the US and Europe remain well in expansionary territory, while China continues to hover around neutral 50 mark. So overall, good news with respect to the demand environment for 2022. Within molding solutions, organic orders were up 3% year over year, with automotive and personal care driving the positive comparison. Medical and packaging orders, while at respectable levels, were down compared to a year ago due to difficult comps. Organic sales increased 4% led by strong medical and automotive new program launches. Closing out 2021, we have lined up additional medical market wins in vision care and glucose monitoring applications anticipated to benefit 2022 revenue. These orders reflect the combination of multiple technologies within molding solutions being brought to the market as an integrated solution that creates even greater value for our customers. As we look to the upcoming year, we expect molding solutions organic growth to be up mid-single digits. At force and motion control, organic orders were up 6%, with organic sales up 9%. Sheet metal forming, our largest end market for FMC, is seeing an increased pipeline of new opportunities with the launch of electric vehicle projects driving the activity. For this business, we anticipate mid-single-digit organic sales growth for the year. Engineered components saw organic orders decline 22% as compared to the prior year period, while organic sales decreased 5%. Our automotive production and market was meaningfully impacted by semiconductor challenges, impacting revenues by approximately 8 million in the fourth quarter and approximately 21 million for the full year. We anticipate this issue to continue into 2022 with an expectation that chip supply will improve as the year goes on. Meanwhile, general industrial revenues remained very strong, with recent investments in sales coverage having a positive impact on new business wins. For engineered components, our full-year organic sales growth outlook is to be up mid-single digits. At automation, organic orders improved approximately 4%, while organic sales were approximately flat to a year ago. For full year 2021, our dramatic business delivered record sales and operating profit. Sales grew 21% organically, capitalizing on favorable trends in industrial automation. While we anticipate a slower first quarter to begin 2022, we foresee organic growth to be in the mid-teens for the full year. To close my industrial discussion, we anticipated supply chain and inflation headwinds into the fourth quarter, and those came to pass. In addition, the Omicron COVID-19 variant resulted in higher absenteeism and labor shortages globally. Through the discipline of the Barnes Enterprise System, we continue to work price actions to mitigate inflation impacts, manage costs, drive productivity, and focus on delivering growth from our strategic investments. For 2022, we forecast industrial segment organic growth in the mid to high single digits with operating margins of 12% to 13%. We do anticipate revenues and operating profit to be weighted towards the second half and expect first quarter 2022 results to be similar to the fourth quarter of 2021. Moving to aerospace, sales improved 26% over the prior year period, with both original equipment manufacturing and aftermarket businesses delivering strong growth. Adjusted operating margin improved 620 basis points from a year ago, so great results from the aerospace team. In OEM, orders were once again healthy, as our fourth quarter book-to-bill was 1.2 times, and sales rose to 18% over the prior year period. As of October 2022, we anticipate high single-digit growth in OEM, supported by increased production levels of both Airbus and Boeing, driven by the ramp in narrow-body platforms. Relative to the aftermarket, we generated 45% growth with our MRO business up approximately 30% and spare parts up approximately 70%. Very strong performance. The positive recovery looks set to continue as airlines are planning for growth in 2022 with incremental flights in their schedules and aircraft retirements remain at low levels. We expect narrowbody activity to propel a solid year for our aftermarket business looking forward we anticipate full year sales for MRO to be up in the high 20% with spare parts up in the mid teens. Aerospace adjusted operating margin is anticipated to be between 16% and 17%. Before concluding, I'd like to reflect upon significant progress made over the past year on several important investments we've made in our business. We touched upon a couple of these during our recent Investor Day held in December. During the year, we embarked on a strategic marketing initiative to evolve our corporate brand, including refreshed positioning, refined Barnes values, and established a modern identity that better aligns with our transformation goals and strategic growth aspirations. We intensified our focus on digitalization by integrating our digital initiatives as an essential component within our Barnes Enterprise System with a view towards consistent, scalable solutions that drive value for Barnes and our customers. Our aerospace business further advanced its smart factory efforts by introducing connected machines and dashboards to track data from our production processes which will help our operations team improve quality, safety, delivery, and cost. Simultaneously, Barnes Industrial leveraged digital tools to enhance our customers' engagement and experience, making advancements in the development of smart products, digital lead generation, and e-commerce. In our quest to deliver persistent ingenuity, our multifaceted innovation efforts are bringing new products, such as the vacuum product line we launched this year at Automation, and the introduction of advanced solutions for medical products like Kipens at our molding solutions business. Development also continues to harness the power of molding solutions integrated technologies aimed at providing a common platform and suite of capabilities that deliver state-of-the-art process solutions to enhance productivity and the user experience. Additionally, our work to enable the widespread adoption of environmentally friendly and recycled materials to drive a circular economy is ongoing. reflective of our commitment to sustainability and all aspects of ESG. And finally, with regards to our talent management system, we welcome the first group of participants into our BarnesWorks community. This program provides Barnes with access to a wide and diverse pool of talented individuals who possess specialized skills and capabilities that will help us address evolving business needs. In closing, we delivered good fourth quarter and full year financial performance while overcoming multiple headwinds. We generated solid sales and earnings growth, and we achieved these results by making significant investments in strategic marketing, innovation, digitalization, and our people, including expanding our sales force. We see the demand environment holding up across our end markets, and coupled with the benefits from our growth investments, look to drive another good performance year in 2022. Lastly, I would like to thank our 5,100 employees across the globe for their significant contributions to the company's overall success in 2021. A solid year of business recovery, evolution, and accomplishment for Barnes. Now let me pass the call over to Julie for a discussion on the financial details.