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April 28, 2023

Barnes Group says facility consolidation, benefits freezes part of restructuring

COSTAR Barnes Group's Main Street headquarters in Bristol.

Barnes Group on Thursday announced the third phase of its multi-year restructuring effort, which company officials said will include more facility consolidation and employee benefit freezes.

Bristol-based aerospace and industrial parts manufacturer Barnes Group released its first-quarter earnings for 2023 this week, posting net income of $13.2 million, or 26 cents per share, compared to $20.5 million, or 40 cents per share, in the year-ago period. Revenue in the quarter was $335.4 million, up from $312.4 million posted in the first quarter of 2022.

Accompanying the earnings, Barnes announced the next step in its multi-phase, cost-cutting initiative, which was first announced in 2022. Phase three will impact both the company’s industrial and aerospace divisions, officials said, including “facility transfers of work to generate production efficiencies and reduce costs,” Barnes President and CEO Thomas Hook said on an earnings call with analysts.

Hook said that last week the company notified two of its facilities in Germany that work would be undergoing a consolidation, but further details weren’t available.

“Some work from these locations were transitioned to existing production facilities in Italy and China. In the U.S., the company has elected to freeze the benefits associated with one of its defined benefit pension plans, which will provide pension savings over time. We'll share further program details as they unfold,” Hook said on the call.

The third and final phase of the cost-cutting effort, rolling out over the next two years, will include $28 million in restructuring charges, $16 million in external transformation-related charges and $14 million in capital investment. 

Hook said phase three affects the company’s businesses in the Americas, Asia and Europe.

“We've comprehensively looked at overhead across the organization and there are overhead actions in this initiative that are at all levels of the organization,” Hook said.

Company officials said the first two phases have progressed well since last year and the company expects $26 million of annual savings in 2024. As part of phase one, Barnes Group announced it was closing production operations at its engineered components facility in Bristol, impacting 95 workers at the site.

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