BARNES GROUP INC, 10-Q filed on 11/1/2013
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2013
Oct. 30, 2013
Document and Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q3 
 
Entity Registrant Name
BARNES GROUP INC 
 
Entity Central Index Key
0000009984 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
52,752,161 
Consolidated Statements of Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Income Statement [Abstract]
 
 
 
 
Net sales
$ 269,491 
$ 232,476 
$ 800,430 
$ 670,580 
Cost of sales
189,488 
170,349 
544,615 
483,138 
Selling and administrative expenses
51,972 
39,641 
166,679 
114,578 
Total operating costs and expenses
241,460 
209,990 
711,294 
597,716 
Operating income
28,031 
22,486 
89,136 
72,864 
Interest expense
2,401 
3,243 
10,000 
8,046 
Other expense (income), net
241 
873 
1,702 
1,787 
Income from continuing operations before income taxes
25,389 
18,370 
77,434 
63,031 
Income taxes
4,008 
2,342 
31,426 
9,926 
Income from continuing operations
21,381 
16,028 
46,008 
53,105 
(Loss) income from discontinued operations, net of income taxes (Note 2)
(476)
2,453 
197,696 
12,414 
Net income
$ 20,905 
$ 18,481 
$ 243,704 
$ 65,519 
Basic:
 
 
 
 
Income from continuing operations (in dollars per share)
$ 0.40 
$ 0.30 
$ 0.86 
$ 0.97 
(Loss) income from discontinued operations, net of income taxes (in dollars per share)
$ (0.01)
$ 0.04 
$ 3.67 
$ 0.23 
Net income (in dollars per share)
$ 0.39 
$ 0.34 
$ 4.53 
$ 1.20 
Diluted:
 
 
 
 
Income from continuing operations (in dollars per share)
$ 0.39 
$ 0.30 
$ 0.84 
$ 0.97 
(Loss) income from discontinued operations, net of income taxes (in dollars per share)
$ (0.01)
$ 0.04 
$ 3.60 
$ 0.22 
Net income (in dollars per share)
$ 0.38 
$ 0.34 
$ 4.44 
$ 1.19 
Dividends (in dollars per share)
$ 0.11 
$ 0.10 
$ 0.31 
$ 0.30 
Weighted average common shares outstanding:
 
 
 
 
Basic (in shares)
53,009,720 
54,508,387 
53,818,950 
54,618,636 
Diluted (in shares)
54,304,990 
55,098,263 
54,854,456 
55,234,478 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 20,905 
$ 18,481 
$ 243,704 
$ 65,519 
Other comprehensive (loss) income, net of tax
 
 
 
 
Unrealized (loss) income on hedging activities, net of tax (1)
(144)1
95 1
202 1
(302)1
Foreign currency translation adjustments, net of tax (2)
21,876 2
24,567 2
10,344 2
14,112 2
Defined benefit pension and other postretirement benefits, net of tax (3)
1,874 3
394 3
19,814 3
4,305 3
Total other comprehensive income, net of tax
23,606 
25,056 
30,360 
18,115 
Total comprehensive income
44,511 
43,537 
274,064 
83,634 
Unrealized (loss) income on hedging activities, tax
(106)
(106)
331 
(425)
Foreign currency translation adjustment, tax
843 
1,587 
332 
1,095 
Defined benefit pension and other postretirement benefits, tax
$ 1,500 
$ 687 
$ 12,871 
$ 2,848 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Current assets
 
 
Cash and cash equivalents
$ 230,285 
$ 86,356 
Accounts receivable, less allowances (2013 - $3,247; 2012 - $2,858)
230,167 
253,202 
Inventories
179,963 
226,220 
Deferred income taxes
26,301 
33,906 
Prepaid expenses and other current assets
16,747 
18,856 
Total current assets
683,463 
618,540 
Deferred income taxes
29,523 
29,961 
Property, plant and equipment
600,477 
634,464 
Less accumulated depreciation
(376,066)
(401,367)
Property, plant and equipment, net
224,411 
233,097 
Goodwill
452,935 
579,905 
Other intangible assets, net
366,979 
383,972 
Other assets
21,863 
23,121 
Total assets
1,779,174 
1,868,596 
Current liabilities
 
 
Notes and overdrafts payable
7,700 
3,795 
Accounts payable
92,580 
99,037 
Accrued liabilities
127,768 
96,364 
Long-term debt - current
54,833 
699 
Total current liabilities
282,881 
199,895 
Long-term debt
285,600 
642,119 
Accrued retirement benefits
130,190 
159,103 
Deferred income taxes
48,498 
48,707 
Other liabilities
15,459 
18,654 
Commitments and contingencies (Note 13)
   
   
Stockholders' equity
 
 
Common stock - par value $0.01 per share Authorized: 150,000,000 shares Issued: at par value (2013 - 60,164,924 shares; 2012 - 59,202,029 shares)
602 
592 
Additional paid-in capital
362,351 
332,588 
Treasury stock, at cost (2013 - 7,420,504 shares; 2012 - 4,999,556 shares)
(170,409)
(99,756)
Retained earnings
860,394 
633,446 
Accumulated other non-owner changes to equity
(36,392)
(66,752)
Total stockholders' equity
1,016,546 
800,118 
Total liabilities and stockholders' equity
$ 1,779,174 
$ 1,868,596 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Allowance for doubtful accounts
$ 3,247 
$ 2,858 
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized (in shares)
150,000,000 
150,000,000 
Common stock, shares issued (in shares)
60,164,924 
59,202,029 
Treasury stock, at cost (in shares)
7,420,504 
4,999,556 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Operating activities:
 
 
Net income
$ 243,704 
$ 65,519 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
44,957 
40,190 
Amortization of convertible debt discount
1,776 
1,641 
Gain on disposition of property, plant and equipment
(632)
(214)
Stock compensation expense
16,092 
6,564 
Withholding taxes paid on stock issuances
(2,045)
(1,123)
(Gain) loss on the sale of businesses
313,471 
(788)
Changes in assets and liabilities, net of the effects of acquisitions/divestitures:
 
 
Accounts receivable
(11,694)
(12,317)
Inventories
(405)
981 
Prepaid expenses and other current assets
(815)
(5,683)
Accounts payable
8,988 
2,756 
Accrued liabilities
27,784 
(4,295)
Deferred income taxes
(6,603)
1,470 
Long-term retirement benefits
238 
(17,967)
Other
4,700 
(1,009)
Net cash provided by operating activities
12,574 
77,301 
Investing activities:
 
 
Proceeds from disposition of property, plant and equipment
895 
556 
Proceeds from (payments for) the sale of businesses
539,116 
(339)
Change in restricted cash
4,900 
Capital expenditures
(33,799)
(22,923)
Business acquisitions, net of cash acquired
(296,717)
Other
(1,901)
(3,013)
Net cash provided (used) by investing activities
504,311 
(317,536)
Financing activities:
 
 
Net change in other borrowings
3,887 
(4,558)
Payments on long-term debt
(482,158)
(78,065)
Proceeds from the issuance of long-term debt
178,000 
376,000 
Proceeds from the issuance of common stock
10,873 
5,630 
Common stock repurchases
(68,608)
(19,037)
Dividends paid
(16,495)
(16,245)
Excess tax benefit on stock awards
3,312 
1,659 
Other
(1,320)
(1,184)
Net cash (used) provided by financing activities
(372,509)
264,200 
Effect of exchange rate changes on cash flows
(447)
884 
Increase in cash and cash equivalents
143,929 
24,849 
Cash and cash equivalents at beginning of period
86,356 
62,505 
Cash and cash equivalents at end of period
230,285 
87,354 
Supplemental Disclosure of Cash Flow Information:
 
 
Debt assumed in connection with acquisition of Synventive Molding Solutions
 
$ 45,537 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

The accompanying unaudited consolidated balance sheet and the related unaudited consolidated statements of income, comprehensive income and cash flows have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The consolidated financial statements do not include all information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. The balance sheet as of December 31, 2012 has been derived from the 2012 financial statements of Barnes Group Inc. (the “Company”). For additional information, please refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments, including normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three- and nine-month periods ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. Certain reclassifications have been made to the prior year amounts to conform to the current year presentation.

In the second quarter of 2013, the Company completed the sale of its Barnes Distribution North America business ("BDNA") to MSC Industrial Direct Co., Inc. ("MSC") pursuant to the terms of the Asset Purchase Agreement dated February 22, 2013 (the "APA") between the Company and MSC. The Company received proceeds of $539,116 through September 30, 2013, net of transaction costs and closing adjustments paid. All previously reported financial information has been adjusted on a retrospective basis to reflect BDNA results as discontinued operations in the consolidated statements of income. See Note 2.

In the first quarter of 2013, the Company changed its organizational structure to align its strategic business units into two reportable business segments: Aerospace and Industrial. The Company has transferred the Associated Spring Raymond business ("Raymond"), its remaining business within the former Distribution segment, to the Industrial segment. Raymond sells, among other products, springs that are manufactured by certain Industrial businesses. All previously reported financial information has been adjusted on a retrospective basis to reflect the segment realignment. See Note 12.

In the third quarter of 2012, the Company completed its acquisition of Synventive Molding Solutions. The acquired business has been integrated into the Industrial segment.
Discontinued Operations
Discontinued Operations
Discontinued Operations
 
Barnes Distribution Europe

On December 30, 2011, the Company sold substantially all of the assets of its Barnes Distribution Europe ("BDE") business to Berner SE (the "Purchaser") in a cash transaction pursuant to the terms of a Share and Asset Purchase Agreement ("SPA") among the Company, the Purchaser, and their respective relevant subsidiaries. The Company received gross proceeds of $33,358, which represented the initial stated purchase price, and yielded net cash proceeds of $22,492 after consideration of cash sold, transaction costs paid and closing adjustments. The final amount of proceeds from the sale of the BDE business was subject to post closing adjustments that were reflected in discontinued operations in periods subsequent to the disposition. The income from operations of discontinued businesses for the nine-month period ended September 30, 2013 includes a final settlement of a retained liability related to BDE.

As required by the terms of the SPA, the Company was required to place €9,000 of the proceeds in escrow to be used for any settlement of general representation and warranty claims. Absent a breach of warranty claim, the funds would be released from escrow on August 31, 2012 unless there were any then pending claims. Cash related to a pending claim would remain in escrow until a final determination of the claim had been made. On August 17, 2012, the Purchaser provided a notice of breach of various warranties to the Company.  The Company rejected the Purchaser's notice and demanded release of the full escrow effective August 31, 2012.  The Purchaser refused to release the full escrow, and only €3,900 plus interest was released whereas €5,100 ($6,895 at September 30, 2013) plus interest remains in escrow. The Company objected to the retention of the escrow and expects to prevail in this matter. The Company has recorded the restricted cash in other assets at September 30, 2013 and December 31, 2012.



Barnes Distribution North America

On April 22, 2013, the Company completed the sale of BDNA to MSC pursuant to the terms of the APA between the Company and MSC. The total cash consideration received for BDNA through September 30, 2013 was $539,116, net of transaction costs and closing adjustments paid. The net after-tax proceeds are expected to be $406,267 after consideration of certain post closing adjustments, transaction costs and income taxes. The Company has made income tax payments of $95,714 related to the gain on sale during the nine-month period ended September 30, 2013. The remaining income taxes payable have been recorded in accrued liabilities in the consolidated balance sheets. The Company recorded a net after-tax gain of $194,417 on the transaction in the nine-month period ended September 30, 2013, net of transaction-related costs of $9,986.

The following amounts related to BDE and BDNA were derived from historical financial information. The amounts have been segregated from continuing operations and reported as discontinued operations within the consolidated financial statements:

 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Net sales
$

 
$
73,583

 
$
93,173

 
$
231,996

Income before income taxes
10

 
4,973

 
4,967

 
21,700

Income tax expense
463

 
2,505

 
1,688

 
8,537

(Loss) income from operations of discontinued businesses, net of income taxes
(453
)
 
2,468

 
3,279

 
13,163

(Loss) gain on transaction
(7
)
 
(21
)
 
313,471

 
(788
)
Income tax (expense) benefit on sale
(16
)
 
6

 
(119,054
)
 
39

(Loss) gain on the sale of businesses, net of income taxes
(23
)
 
(15
)
 
194,417

 
(749
)
(Loss) income from discontinued operations, net of income taxes
$
(476
)
 
$
2,453

 
$
197,696

 
$
12,414

Net Income Per Common Share
Net Income Per Common Share
Net Income Per Common Share

For the purpose of computing diluted income from continuing operations and net income per common share, the weighted-average number of common shares outstanding is increased for the potential dilutive effects of stock-based incentive plans and convertible senior subordinated notes. For the purpose of computing diluted income from continuing operations and net income per common share, the weighted-average number of common shares outstanding was increased by 1,295,270 and 589,876 for the three-month periods ended September 30, 2013 and 2012, respectively, and 1,035,506 and 615,842 for the nine-month periods ended September 30, 2013 and 2012, respectively, to account for the potential dilutive effect of stock-based incentive plans and convertible senior subordinated notes. There were no adjustments to income from continuing operations or net income for the purposes of computing income available to common stockholders for those periods.

The calculation of weighted-average diluted shares outstanding excludes all shares that would have been anti-dilutive. During the three-month periods ended September 30, 2013 and 2012, the Company excluded 27,300 and 367,428 stock options, respectively, from the calculation of weighted average diluted shares outstanding as the stock options would have been anti-dilutive. During the nine-month periods ended September 30, 2013 and 2012, the Company excluded 177,550 and 331,618 stock options, respectively, from the calculation of weighted average diluted shares outstanding as the stock options would have been anti-dilutive.

The Company granted 130,600 stock options, 161,295 restricted stock unit awards and 135,055 performance share awards in February 2013 as part of its annual grant awards. All of the stock options and the restricted stock unit awards vest upon meeting certain service conditions. The restricted stock unit awards are included in basic average common shares outstanding as they contain nonforfeitable rights to dividend payments. The performance share awards are part of a long-term Relative Measure program, which is designed to assess the Company's performance relative to the performance of companies included in the Russell 2000 Index over the three-year term of the program ending December 31, 2015. The performance goals are independent of each other and based on three metrics: the Company's total shareholder return ("TSR"), basic earnings per share growth and operating income before depreciation and amortization growth (weighted equally). The participants can earn from zero to 250% of the target award and the award includes a forfeitable right to dividend equivalents, which are not included in the aggregate target award numbers. The fair value of the TSR portion of the performance share awards was determined using a Monte Carlo valuation method as the award contains a market condition.

In the first quarter of 2013, the Board of Directors of the Company approved a Transition and Resignation Agreement (the "Agreement") for its former Chief Executive Officer (“Former CEO”) in connection with his resignation of the CEO role and his assumption of a Vice Chairman role. The Agreement provided that, in exchange for the Former CEO's delivery of an effective release of claims, his adherence to certain restrictive covenants, and the successful provision of transition services, including with regard to certain equity grants, the successful sale of the BDNA business, the Former CEO's outstanding equity awards are modified to increase the post-termination exercise period for stock options until the earlier of ten years from the date of grant or five years from the retirement date and made non-forfeitable all outstanding stock options, restricted stock unit awards and performance share awards that remained unvested on the day of his agreed to resignation date from the Company.  The original vesting dates of the equity awards serve as the delivery dates and the performance metrics continue to apply to the performance share awards. The Company recorded $10,492 of stock compensation expense in the first quarter of 2013 as a result of the modifications.

The 3.375% convertible senior subordinated notes due in March 2027 (the “Notes”) are convertible, under certain circumstances, into a combination of cash and common stock of the Company. The conversion price as of September 30, 2013 was approximately $28.31 per share of common stock. The dilutive effect of the Notes is determined based on the average closing price of the Company's stock for the last 30 trading days of the quarter as compared to the conversion price of the Notes. Under the net share settlement method, there were 286,205 and 128,594 potential shares issuable under the Notes that were considered dilutive for the three- and nine- month periods ended September 30, 2013, respectively. There were no potential shares issuable under the Notes for the three- and nine- month periods ended September 30, 2012 as the Notes would have been anti-dilutive.
Inventories
Inventories
Inventories

The components of inventories consisted of:
 
September 30, 2013
 
December 31, 2012
Finished goods
$
71,078


$
126,139

Work-in-process
60,386

 
56,186

Raw material and supplies
48,499

 
43,895

 
$
179,963


$
226,220

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

Goodwill:
The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company as of and for the period ended September 30, 2013:
 
Aerospace
 
Industrial
 
Other
 
Total Company
January 1, 2013
$
30,786

 
$
414,244

 
$
134,875

 
$
579,905

Divestiture

 

 
(134,704
)
 
(134,704
)
Purchase accounting adjustment

 
2,627

 

 
2,627

Foreign currency translation

 
5,278

 
(171
)
 
5,107

September 30, 2013
$
30,786

 
$
422,149

 
$

 
$
452,935



In the first quarter of 2013, the Company realigned its reportable business segments by transferring the Associated Spring Raymond business ("Raymond"), its remaining business within the former Distribution segment, to the Industrial segment. The goodwill related to BDNA ("BDNA goodwill"), also a business within the former Distribution segment, was $134,875 at December 31, 2012. BDNA was sold on April 22, 2013. See Note 2. In the nine months ended September 30, 2013, certain purchase price adjustments were made in connection with the acquisition of Synventive.
In the second quarter of 2013, management performed its annual goodwill impairment testing. Based on this assessment, there was no goodwill impairment recognized.
Other Intangible Assets:
Other intangible assets consisted of:
 
 
 
September 30, 2013
 
December 31, 2012
 
Range of
Life -Years
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
Revenue sharing programs (RSPs)
Up to 30
 
$
293,700

 
$
(61,965
)
 
$
293,700

 
$
(54,638
)
Customer lists/relationships
10-15
 
91,306

 
(15,575
)
 
102,806

 
(21,727
)
Patents and technology
7-14
 
41,972

 
(12,274
)
 
41,972

 
(7,758
)
Trademarks/trade names
5-30
 
11,950

 
(7,393
)
 
12,750

 
(7,497
)
Other
Up to 15
 
12,692

 
(7,701
)
 
12,692

 
(6,927
)
 
 
 
451,620

 
(104,908
)
 
463,920

 
(98,547
)
Unamortized intangible asset:
 
 
 
 
 
 
 
 
 
Trade name
 
 
10,000

 


 
10,000

 


 
 
 
 
 
 
 
 
 
 
Foreign currency translation
 
 
10,267

 

 
8,599

 

Other intangible assets
 
 
$
471,887

 
$
(104,908
)
 
$
482,519

 
$
(98,547
)


Gross amounts of $11,500 and $800 (accumulated amortization of $11,387 and $800) that were included within customer lists and trademarks, respectively, at December 31, 2012, were related to BDNA.
Estimated amortization of intangible assets for future periods is as follows: 2013 - $24,000; 2014 - $24,000; 2015 - $24,000; 2016 - $23,000 and 2017 - $24,000.
In the third quarter of 2013, management performed its annual impairment testing of its trade name, an indefinite-lived intangible asset. Based on this assessment, there was no trade name impairment recognized.
Debt
Debt
Debt

The Company's debt agreements contain financial covenants that require the maintenance of interest coverage and leverage ratios. The Company is in compliance with its debt covenants as of September 30, 2013, and closely monitors its future compliance based on current and anticipated future economic conditions.

Long-term debt and notes and overdrafts payable at September 30, 2013 and December 31, 2012 consisted of:
 
 
September 30, 2013
 
December 31, 2012
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
3.375% Convertible Notes
 
$
55,636

 
$
69,921

 
$
55,636

 
$
57,977

Unamortized debt discount – 3.375% Convertible Notes
 
(1,346
)
 

 
(3,122
)
 

Revolving credit agreement
 
285,600

 
286,677

 
589,200

 
599,172

Borrowings under lines of credit and overdrafts
 
7,700

 
7,700

 
3,380

 
3,380

Foreign bank borrowings
 
540

 
541

 
945

 
947

Other
 
3

 
3

 
574

 
574

 
 
348,133

 
364,842

 
646,613

 
662,050

Less current maturities
 
(62,533
)
 
 
 
(4,494
)
 
 
Long-term debt
 
$
285,600

 
 
 
$
642,119

 
 


The 3.375% Convertible Notes are subject to redemption at their par value at any time, at the option of the Company, on or after March 20, 2014. The note holders may also require the Company to redeem some or all of the notes at their par value on March 15th of 2014, 2017 and 2022. As such, the balance of these Notes of $54,290 ($55,636 par value) and the related deferred tax balances are classified as current in the accompanying balance sheet as of September 30, 2013. The 3.375% Convertible Notes are also eligible for conversion upon meeting certain conditions as provided in the indenture agreement. The eligibility for conversion is determined quarterly. During the third quarter of 2013, the 3.375% Convertible Notes were not eligible for conversion. During the fourth quarter of 2013, the 3.375% Convertible Notes will not be eligible for conversion. The fair value of the Notes was determined using quoted market prices that represent Level 2 observable inputs.

On September 27, 2013, the Company entered into a second amendment to its fifth amended and restated revolving credit agreement (the "Amended Credit Agreement”) and retained Bank of America, N.A. as Administrative Agent for the lenders. The Amended Credit Agreement extends the maturity date of the debt facility by two years from September 2016 to September 2018 and includes an option to extend the maturity date for an additional year, subject to certain conditions. The Amended Credit Agreement also adds a new foreign subsidiary borrower in Germany, Barnes Group Acquisition GmbH, maintains the borrowing availability of the Company at $750,000 and adds an accordion feature to increase this amount to $1,000,000. The Company may exercise the accordion feature upon request to the Administrative Agent as long as an event of default has not occurred or is continuing. Borrowings under the Amended Credit Agreement continue to bear interest at LIBOR plus a spread ranging from 1.10% to 1.70%. The Company paid fees and expenses of $1,159 in conjunction with executing the second amendment; such fees will be deferred and amortized into interest expense on the accompanying Consolidated Statements of Income through its maturity.
 
The Company's borrowing capacity remains limited by various debt covenants in the Amended Credit Agreement, certain of which have been amended in September 2013. The Amended Credit Agreement requires the Company to maintain a ratio of Consolidated Senior Debt, as defined in the Amended Credit Agreement, to Consolidated EBITDA, as defined, of not more than 3.25 times at the end of each fiscal quarter, a ratio of Consolidated Total Debt, as defined, to Consolidated EBITDA of not more than 4.00 times at the end of each fiscal quarter, and a ratio of Consolidated EBITDA to Consolidated Cash Interest Expense, as defined, of not less than 4.25 times at the end of each fiscal quarter. The Amended Credit Agreement also provided that in connection with certain permitted acquisitions with aggregate consideration in excess of $150,000, the Consolidated Senior Debt to EBITDA ratio and the Consolidated Total Debt to EBITDA ratio are permitted to increase to 3.50 times and 4.25 times, respectively, for a period of the four fiscal quarters ending after the closing of the acquisition. At September 30, 2013, the Company was in compliance with all covenants under the Amended Credit Agreement. The fair value of the borrowings is based on observable Level 2 inputs using discounted cash flows based upon the Company's estimated interest costs for similar types of borrowings.

In addition, the Company has available approximately $15,000 in uncommitted short-term bank credit lines ("Credit Lines"), of which $7,700 was borrowed at September 30, 2013 at an interest rate of 2.14% and $2,800 was borrowed at December 31, 2012 at an interest rate of 2.16%. The Company had also borrowed $580 under overdraft facilities at December 31, 2012. There were no borrowings under overdrafts facilities at September 30, 2013. Repayments under the Credit Lines are due within seven days after being borrowed. Repayments of the overdrafts are generally due within two days after being borrowed. The carrying amounts of the Credit Lines and overdrafts approximate fair value due to the short maturities of these financial instruments.

The Company also has foreign bank borrowings. The fair value of the foreign bank borrowings are based on observable Level 2 inputs. These instruments are valued using discounted cash flows based upon the Company's estimated interest costs for similar types of borrowings.

Other debt consists primarily of bank acceptances which are used to pay certain vendors. Bank acceptances represent financial instruments accepted by certain Chinese vendors in lieu of cash paid on payables, generally range from three to six months in maturity and are guaranteed by banks. The fair value of the bank acceptances are based on observable Level 2 inputs and their carrying amounts approximate fair value due to their short maturities.
Derivatives
Derivatives
Derivatives

The Company has manufacturing, sales and distribution facilities around the world and thus makes investments and conducts business transactions denominated in various currencies. The Company is also exposed to fluctuations in interest rates and commodity price changes. These financial exposures are monitored and managed by the Company as an integral part of its risk management program.

Financial instruments have been used by the Company to hedge its exposure to fluctuations in interest rates. In April 2012, the Company entered into five-year interest rate swap agreements transacted with three banks which together convert the interest on the first $100,000 of the Company's one-month LIBOR-based borrowings from a variable rate plus the borrowing spread to a fixed rate of 1.03% plus the borrowing spread. These interest rate swap agreements were accounted for as cash flow hedges.

The Company also uses financial instruments to hedge its exposures to fluctuations in foreign currency exchange rates. The Company has various contracts outstanding which primarily hedge recognized assets or liabilities, and anticipated transactions in various currencies including the British pound sterling, U.S. dollar, Euro, Singapore dollar, Swedish kroner and Swiss franc. Certain foreign currency derivative instruments are treated as cash flow hedges of forecasted transactions.  All foreign exchange contracts are due within two years.

The Company does not use derivatives for speculative or trading purposes or to manage commodity exposures.

Changes in the fair market value of derivatives that qualify as fair value hedges or cash flow hedges are recorded directly to earnings or accumulated other non-owner changes to equity, depending on the designation. Amounts recorded to accumulated other non-owner changes to equity are reclassified to earnings in a manner that matches the earnings impact of the hedged transaction. Any ineffective portion, or amounts related to contracts that are not designated as hedges, are recorded directly to earnings.

The following table sets forth the fair value amounts of derivative instruments held by the Company.
 
September 30, 2013
 
December 31, 2012
 
Asset Derivatives
 
Liability Derivatives
 
Asset Derivatives
 
Liability Derivatives
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
$

 
$
(486
)
 
$

 
$
(1,818
)
Foreign exchange contracts
146

 

 
945

 

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange contracts
410

 
(46
)
 
2,370

 
(152
)
Total derivatives
$
556

 
$
(532
)
 
$
3,315

 
$
(1,970
)

Asset derivatives are recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Liability derivatives related to interest rate contracts and foreign exchange contracts are recorded in other liabilities and accrued liabilities, respectively, in the accompanying consolidated balance sheets.

The following table sets forth the gain (loss), net of tax, recorded in accumulated other non-owner changes to equity for the three- and nine- month periods ended September 30, 2013 and 2012 for derivatives held by the Company and designated as hedging instruments.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Cash flow hedges:
 
 
 
 
 
 
 
Interest rate contracts
$
(242
)
 
$
(551
)
 
$
825

 
$
(1,250
)
Foreign exchange contracts
98

 
646

 
(623
)
 
948

 
$
(144
)
 
$
95

 
$
202

 
$
(302
)

Amounts included within accumulated other non-owner changes to equity that were reclassified to expense during the first nine months of 2013 and 2012 related to the interest rate swaps resulted in a fixed rate of interest of 1.03% plus the borrowing spread for the first $100,000 of one-month LIBOR borrowings. The amounts reclassified for the foreign exchange contracts were not material in any period presented. Additionally, there were no amounts recognized in income for hedge ineffectiveness during the three- and nine- month periods ended September 30, 2013 and 2012.

The following table sets forth the (losses) gains recorded in other expense (income), net in the consolidated statements of income for the three- and nine- month periods ended September 30, 2013 and 2012 for non-designated derivatives held by the Company. Such amounts were substantially offset by gains (losses) recorded on the underlying hedged asset or liability.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Foreign exchange contracts
$
1,361

 
$
2,380

 
$
(2,121
)
 
$
3,305

Fair Value Measurements
Fair Value Measurements
Fair Value Measurements

The provisions of the accounting standard for fair value define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard classifies the inputs used to measure fair value into the following hierarchy:

Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3
Unobservable inputs for the asset or liability

The following table provides the financial assets and financial liabilities reported at fair value and measured on a recurring basis:
 
 
 
 
Fair Value Measurements Using
Description
 
Total
 
Quoted Prices in Active Markets for
Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
September 30, 2013
 
 
 
 
 
 
 
 
Asset derivatives
 
$
556

 
$

 
$
556

 
$

Liability derivatives
 
(532
)
 

 
(532
)
 

Bank acceptances
 
4,013

 

 
4,013

 

Rabbi trust assets
 
1,854

 
1,854

 

 

 
 
$
5,891

 
$
1,854

 
$
4,037

 
$

 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
Asset derivatives
 
$
3,315

 
$

 
$
3,315

 
$

Liability derivatives
 
(1,970
)
 

 
(1,970
)
 

Bank acceptances
 
3,441

 

 
3,441

 

Rabbi trust assets
 
1,831

 
1,831

 

 

 
 
$
6,617


$
1,831

 
$
4,786

 
$



The derivative contracts are valued using observable current market information as of the reporting date such as the prevailing LIBOR-based and U.S. treasury interest rates and foreign currency spot and forward rates. Bank acceptances represent financial instruments accepted from certain Chinese customers in lieu of cash paid on receivables, generally range from three to six months in maturity and are guaranteed by banks. The carrying amounts of the bank acceptances, which are included within prepaid expenses and other current assets, approximate fair value due to their short maturities. The fair values of rabbi trust assets are based on quoted market prices from various financial exchanges.
Pension and Other Postretirement Benefits
Pension and Other Postretirement Benefits
Pension and Other Postretirement Benefits

Pension and other postretirement benefits expenses consisted of the following:
 
Three months ended September 30,
 
Nine months ended September 30,
Pensions
2013
 
2012
 
2013
 
2012
Service cost
$
1,393

 
$
1,704

 
$
4,839

 
$
4,962

Interest cost
5,018

 
5,419

 
15,043

 
16,156

Expected return on plan assets
(8,273
)
 
(8,216
)
 
(24,867
)
 
(24,506
)
Amortization of prior service cost
185

 
209

 
567

 
629

Amortization of actuarial losses
4,038

 
3,170

 
12,331

 
9,029

Curtailment loss

 

 
199

 

Settlement loss

 
91

 
637

 
91

Special termination benefits

 

 
1,016

 

Net periodic benefit cost
$
2,361

 
$
2,377

 
$
9,765

 
$
6,361

 
 
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
Other Postretirement Benefits
2013
 
2012
 
2013
 
2012
Service cost
$
58

 
$
69

 
$
176

 
$
205

Interest cost
513

 
643

 
1,548

 
1,902

Amortization of prior service credit
(223
)
 
(396
)
 
(783
)
 
(1,189
)
Amortization of actuarial losses
241

 
269

 
762

 
811

Curtailment gain

 

 
(3,081
)
 

Net periodic benefit cost
$
589

 
$
585

 
$
(1,378
)
 
$
1,729



The curtailment loss (gain), settlement loss and special termination benefits during the first nine months of 2013 relate to certain defined benefit pension and other postretirement benefit plans that were impacted by the completed sale of BDNA in April 2013. These amounts have been segregated from continuing operations and reported as discontinued operations within the Consolidated Financial Statements.

The Company contributed to a multi-employer defined benefit pension plan under the terms of a collective bargaining agreement. This multi-employer plan provides pension benefits to certain former union-represented employees at BDNA. The Company determined that a withdrawal from this multi-employer plan, following its entry into a definitive agreement to sell BDNA in February 2013, was probable. The Company has estimated that its assessment of a withdrawal liability, on a pre-tax discounted basis, is $2,788. The expense was recorded within discontinued operations during the first quarter of 2013. The Company completed the sale of BDNA during the second quarter of 2013.
Income Taxes
Income Taxes
Income Taxes

The Company's effective tax rate from continuing operations for the first nine months of 2013 was 40.6% compared with 15.7% in the first nine months of 2012 and 13.5% for the full year 2012 and includes the impact of $16,389 of tax expense related to the April 16, 2013 U.S. Tax Court Decision (see Note 13 of the Consolidated Financial Statements). Excluding the impact of the U.S. Tax Court Decision, the Company's effective tax rate from continuing operations for the first nine months of 2013 was 19.6%. The remaining increase in the first nine months of 2013 effective tax rate from the full year 2012 rate is due to the absence of the 2012 reversal of certain foreign valuation allowances and tax rate decreases in certain foreign jurisdictions, the increase in the Company's Swedish effective tax rate and the projected change in the mix of earnings attributable to higher-taxing jurisdictions or jurisdictions where losses cannot be benefited in 2013. The Aerospace segment was previously awarded international tax incentives, none of which are scheduled to expire in 2013.
Changes in Accumulated Other Comprehensive Income by Component
Changes in Accumulated Other Comprehensive Income by Component
Changes in Accumulated Other Comprehensive Income by Component

The following table sets forth the changes in accumulated other comprehensive income by component for the nine-month period ended September 30, 2013:
 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2013
$
(432
)
 
$
(146,441
)
 
$
80,121

 
$
(66,752
)
Other comprehensive income before reclassifications to consolidated statements of income
321

 
12,671

 
6,201

 
19,193

Amounts reclassified from accumulated other comprehensive (loss) income to the consolidated statements of income
(119
)
 
7,143

 
4,143

 
11,167

Net current-period other comprehensive income
202

 
19,814

 
10,344

 
30,360

September 30, 2013
$
(230
)
 
$
(126,627
)
 
$
90,465

 
$
(36,392
)


The following table sets forth the reclassifications out of accumulated other comprehensive income by component for the three- and nine-month periods ended September 30, 2013:
Details about Accumulated Other Comprehensive Income Components
 
Amount Reclassified from Accumulated Other Comprehensive Income
 
Affected Line Item in the Consolidated Statements of Income
 
 
Three months ended September 30, 2013
 
Nine months ended September 30, 2013
 
 
Gains and losses on cash flow hedges
 
 
 
 
 

     Interest rate contracts
 
$
(220
)
 
$
(631
)
 
Interest expense
     Foreign exchange contracts
 
132

 
659

 
Net sales
 
 
(88
)
 
28

 
Total before tax
 
 
53

 
91

 
Tax benefit
 
 
(35
)
 
119

 
Net of tax
 
 
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
 
 
     Amortization of prior-service credits, net
 
$
38

 
$
216

 
(A)
Amortization of actuarial losses
 
(4,279
)
 
(13,093
)
 
(A)
Curtailment gain (net)
 

 
2,882

 
(A)
     Settlement loss
 

 
(637
)
 
(A)
 
 
(4,241
)
 
(10,632
)
 
Total before tax
 
 
1,500

 
3,489

 
Tax benefit
 
 
(2,741
)
 
(7,143
)
 
Net of tax
 
 
 
 
 
 
 
Foreign currency items
 
 
 
 
 
 
Charge to cumulative translation adjustment (sale of BDNA)
 
$

 
$
(4,143
)
 
Income from discontinued operations
 
 

 

 
Tax benefit
 
 

 
(4,143
)
 
Net of tax
 
 
 
 
 
 
 
Total reclassifications in the period
 
$
(2,776
)
 
$
(11,167
)
 
 

(A) These accumulated other comprehensive income components are included within the computation of net periodic pension cost. See Note 9.
Information on Business Segments
Information on Business Segments
Information on Business Segments

The Company is organized based upon the nature of its products and services. Segment information is consistent with how management reviews the businesses, makes investing and resource allocation decisions and assesses operating performance. The Company has not aggregated operating segments for purposes of identifying reportable segments.

In the first quarter of 2013, the Company changed its organizational structure to align its strategic business units into two reportable segments: Aerospace and Industrial. The Company has transferred the Associated Spring Raymond business ("Raymond"), its remaining business within the former Distribution segment, to the Industrial segment. Raymond sells, among other products, springs that are manufactured by certain Industrial businesses. All previously reported financial information has been adjusted on a retrospective basis to reflect the segment realignment.

The Aerospace segment produces precision-machined and fabricated components and assemblies for original equipment manufacturers (“OEM”) of commercial jet engines, airframes and industrial gas turbines throughout the world, and for the military. Aerospace also provides jet engine component overhaul and repair services for many of the world's major jet engine manufacturers, commercial airlines and the military. In addition, Aerospace manufactures and provides aerospace aftermarket spare parts. The Industrial segment is a global supplier of high quality manufactured precision components for critical applications, and a leading designer and manufacturer of highly engineered and customized hot runner systems and components, serving diverse industrial end-markets such as transportation, energy, electronics, medical devices and consumer products. The Industrial segment also participates in the design, assembly and distribution of engineered supplies for the global industrial base.

The following tables, adjusted on a retrospective basis to reflect the segment alignment, set forth information about the Company's operations by its two reportable segments:
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Net sales
 
 
 
 
 
 
 
   Aerospace
$
101,744

 
$
98,370

 
$
296,622

 
$
289,391

   Industrial
167,747

 
134,107

 
503,809

 
381,191

   Intersegment sales

 
(1
)
 
(1
)
 
(2
)
Total net sales
$
269,491

 
$
232,476

 
$
800,430

 
$
670,580

 
 
 
 
 
 
 
 
Operating profit
 
 
 
 
 
 
 
   Aerospace
$
7,157

 
$
14,122

 
$
32,730

 
$
39,798

   Industrial
20,874

 
8,364

 
56,406

 
33,066

Total operating profit
28,031

 
22,486

 
89,136

 
72,864

   Interest expense
2,401

 
3,243

 
10,000

 
8,046

   Other expense (income), net
241

 
873

 
1,702

 
1,787

Income from continuing operations before income taxes
$
25,389

 
$
18,370

 
$
77,434

 
$
63,031



 
September 30, 2013
 
December 31, 2012
Assets
 
 
 
   Aerospace
$
525,296

 
$
533,465

   Industrial
929,453

 
907,124

   Other (A)
324,425

 
428,007

Total assets
$
1,779,174

 
$
1,868,596


(A) "Other" assets include corporate-controlled assets, the majority of which are cash and deferred tax assets. Other assets as of December 31, 2012 also include the assets of BDNA, which was sold on April 22, 2013. See Note 2.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Product Warranties

The Company provides product warranties in connection with the sale of certain products. From time to time, the Company is subject to customer claims with respect to product warranties. Product warranty liabilities were not material as of September 30, 2013 and December 31, 2012.

The Company was named in a lawsuit arising out of an alleged breach of contract and implied warranty by a customer of Toolcom Suppliers Limited (“Toolcom”), a business previously included within the former Logistics and Manufacturing Services segment, related to the sale of certain products prior to the Company’s 2005 acquisition of Toolcom. In 2006, the plaintiff filed the lawsuit in civil court in Scotland and asserted that certain products sold were not fit for a particular use. The Company settled the lawsuit during the first quarter of 2013 with an outcome that did not have a material effect on the consolidated financial statements. The final settlement expense is included within the income from operations of discontinued businesses in the consolidated statements of income for the nine-month period ended September 30, 2013.

Income Taxes

On April 16, 2013, the United States Tax Court rendered an unfavorable decision in the matter Barnes Group Inc. and Subsidiaries v. Commissioner of Internal Revenue (“Tax Court Decision”). The Tax Court rejected the Company's objections and imposed penalties. The case involved IRS proposed adjustments of approximately $16,500, plus a 20% penalty and interest for the tax years 1998, 2000 and 2001.

The case arose out of an Internal Revenue Service (“IRS”) audit for the tax years 2000 through 2002. The adjustment relates to the federal taxation of foreign income of certain foreign subsidiaries. The Company filed an administrative protest of these adjustments.  In the third quarter of 2009, the Company was informed that its protest was denied and a tax assessment was received from the Appeals Office of the IRS.  Subsequently, in November 2009, the Company filed a petition against the IRS in the United States Tax Court, contesting the tax assessment. A trial was held and all briefs were filed in 2012. In April 2013 the Tax Court Decision was then issued rendering an unfavorable decision against the Company and imposing penalties.

On August 20, 2013, the Tax Court issued an order reflecting the tax and penalties due (“Court Approved Assessment”). Following entry of this order, both parties have until November 18, 2013 to decide whether or not to appeal the Tax Court Decision. On November 18, 2013, or earlier if an appeal is filed by the Company, the Court Approved Assessment becomes due.  The Company plans to appeal the Tax Court Decision to the United States Court of Appeals for the Second Circuit. As a result of the unfavorable Tax Court Decision the Company has recorded an additional tax charge in the first nine months of 2013 for $16,389. The Company's reserve balance now includes the estimated Court Approved Assessment and the presumed utilization of net operating losses related to this matter.

In the fourth quarter of 2013, the Company expects to make a cash payment of approximately $13,000 related to tax, interest and penalties as a result of the Tax Court Decision.

Acquisition
On September 30, 2013, the Company entered into a Share Purchase and Assignment Agreement (the "Share Purchase Agreement") with Otto Männer Holding AG, a German company based in Bahlingen, Germany (the "Seller"), and three shareholders of the Seller, for the acquisition (the "Acquisition") of all the shares of the capital stock of the operating subsidiaries through which the Seller operates (the "Männer Business"). The Männer Business is a leader in the development and manufacture of high precision molds, valve gate hot runner systems, and system solutions for the medical/ pharmaceutical, packaging, and personal care/health care industries. The Männer Business includes manufacturing locations in Germany, Switzerland and the United States, and sales and service offices in Europe, Hong Kong/China and Japan. The purchase price payable by the Company for the Acquisition pursuant to the terms of the Share Purchase Agreement is €275,000, comprised of €247,500 in cash (subject to certain adjustments under the Share Purchase Agreement) and shares of the Company’s common stock having a value of €27,500 as calculated under the Share Purchase Agreement. The Männer Business will operate within the Company's Industrial segment and the Company has funded the cash portion of the purchase price from cash on hand and borrowings under the Amended Credit Facility. The Company completed the acquisition of the Männer business on October 31, 2013. The accounting for the Acquisition has not been completed at the date of this filing given the proximity to the Acquisition date. See Note 14.
Subsequent Event
Subsequent Event
Subsequent Event

On October 31, 2013, the Company completed the acquisition of the Männer Business.  Pursuant to the terms of the Share Purchase Agreement, the Company acquired all the shares of capital stock of the Männer Business for an aggregate purchase price of €281,200 ($381,331) which was paid through a combination of €253,726 in cash ($344,636) and 1,032,493 shares of the Company's common stock (valued at €27,500 pursuant to the Share Purchase Agreement and $36,695 based upon market value at close).  The purchase price includes preliminary adjustments under the terms of the Share Purchase Agreement, including approximately €26,000 related to cash acquired ($35,316), and is subject to post closing adjustments. The Company funded the cash portion of the purchase price from cash on hand and borrowings under the Amended Credit Facility.
Discontinued Operations (Tables)
Schedule of Disposal Groups, Including Discontinued Operations
The following amounts related to BDE and BDNA were derived from historical financial information. The amounts have been segregated from continuing operations and reported as discontinued operations within the consolidated financial statements:

 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Net sales
$

 
$
73,583

 
$
93,173

 
$
231,996

Income before income taxes
10

 
4,973

 
4,967

 
21,700

Income tax expense
463

 
2,505

 
1,688

 
8,537

(Loss) income from operations of discontinued businesses, net of income taxes
(453
)
 
2,468

 
3,279

 
13,163

(Loss) gain on transaction
(7
)
 
(21
)
 
313,471

 
(788
)
Income tax (expense) benefit on sale
(16
)
 
6

 
(119,054
)
 
39

(Loss) gain on the sale of businesses, net of income taxes
(23
)
 
(15
)
 
194,417

 
(749
)
(Loss) income from discontinued operations, net of income taxes
$
(476
)
 
$
2,453

 
$
197,696

 
$
12,414

Inventories (Tables)
Schedule of Inventory
The components of inventories consisted of:
 
September 30, 2013
 
December 31, 2012
Finished goods
$
71,078


$
126,139

Work-in-process
60,386

 
56,186

Raw material and supplies
48,499

 
43,895

 
$
179,963


$
226,220

Goodwill and Other Intangible Assets (Tables)
The following table sets forth the change in the carrying amount of goodwill for each reportable segment and for the Company as of and for the period ended September 30, 2013:
 
Aerospace
 
Industrial
 
Other
 
Total Company
January 1, 2013
$
30,786

 
$
414,244

 
$
134,875

 
$
579,905

Divestiture

 

 
(134,704
)
 
(134,704
)
Purchase accounting adjustment

 
2,627

 

 
2,627

Foreign currency translation

 
5,278

 
(171
)
 
5,107

September 30, 2013
$
30,786

 
$
422,149

 
$

 
$
452,935

Other intangible assets consisted of:
 
 
 
September 30, 2013
 
December 31, 2012
 
Range of
Life -Years
 
Gross Amount
 
Accumulated Amortization
 
Gross Amount
 
Accumulated Amortization
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
Revenue sharing programs (RSPs)
Up to 30
 
$
293,700

 
$
(61,965
)
 
$
293,700

 
$
(54,638
)
Customer lists/relationships
10-15
 
91,306

 
(15,575
)
 
102,806

 
(21,727
)
Patents and technology
7-14
 
41,972

 
(12,274
)
 
41,972

 
(7,758
)
Trademarks/trade names
5-30
 
11,950

 
(7,393
)
 
12,750

 
(7,497
)
Other
Up to 15
 
12,692

 
(7,701
)
 
12,692

 
(6,927
)
 
 
 
451,620

 
(104,908
)
 
463,920

 
(98,547
)
Unamortized intangible asset:
 
 
 
 
 
 
 
 
 
Trade name
 
 
10,000

 


 
10,000

 


 
 
 
 
 
 
 
 
 
 
Foreign currency translation
 
 
10,267

 

 
8,599

 

Other intangible assets
 
 
$
471,887

 
$
(104,908
)
 
$
482,519

 
$
(98,547
)
Debt (Tables)
Schedule of Debt
Long-term debt and notes and overdrafts payable at September 30, 2013 and December 31, 2012 consisted of:
 
 
September 30, 2013
 
December 31, 2012
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
3.375% Convertible Notes
 
$
55,636

 
$
69,921

 
$
55,636

 
$
57,977

Unamortized debt discount – 3.375% Convertible Notes
 
(1,346
)
 

 
(3,122
)
 

Revolving credit agreement
 
285,600

 
286,677

 
589,200

 
599,172

Borrowings under lines of credit and overdrafts
 
7,700

 
7,700

 
3,380

 
3,380

Foreign bank borrowings
 
540

 
541

 
945

 
947

Other
 
3

 
3

 
574

 
574

 
 
348,133

 
364,842

 
646,613

 
662,050

Less current maturities
 
(62,533
)
 
 
 
(4,494
)
 
 
Long-term debt
 
$
285,600

 
 
 
$
642,119

 
 
Derivatives (Tables)
The following table sets forth the (losses) gains recorded in other expense (income), net in the consolidated statements of income for the three- and nine- month periods ended September 30, 2013 and 2012 for non-designated derivatives held by the Company. Such amounts were substantially offset by gains (losses) recorded on the underlying hedged asset or liability.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Foreign exchange contracts
$
1,361

 
$
2,380

 
$
(2,121
)
 
$
3,305

The following table sets forth the gain (loss), net of tax, recorded in accumulated other non-owner changes to equity for the three- and nine- month periods ended September 30, 2013 and 2012 for derivatives held by the Company and designated as hedging instruments.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Cash flow hedges:
 
 
 
 
 
 
 
Interest rate contracts
$
(242
)
 
$
(551
)
 
$
825

 
$
(1,250
)
Foreign exchange contracts
98

 
646

 
(623
)
 
948

 
$
(144
)
 
$
95

 
$
202

 
$
(302
)

Amounts included within accumulated other non-owner changes to equity that were reclassified to expense during the first nine months of 2013 and 2012 related to the interest rate swaps resulted in a fixed rate of interest of 1.03% plus the borrowing spread for the first $100,000 of one-month LIBOR borrowings. The amounts reclassified for the foreign exchange contracts were not material in any period presented. Additionally, there were no amounts recognized in income for hedge ineffectiveness during the three- and nine- month periods ended September 30, 2013 and 2012.
The following table sets forth the fair value amounts of derivative instruments held by the Company.
 
September 30, 2013
 
December 31, 2012
 
Asset Derivatives
 
Liability Derivatives
 
Asset Derivatives
 
Liability Derivatives
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Interest rate contracts
$

 
$
(486
)
 
$

 
$
(1,818
)
Foreign exchange contracts
146

 

 
945

 

 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
Foreign exchange contracts
410

 
(46
)
 
2,370

 
(152
)
Total derivatives
$
556

 
$
(532
)
 
$
3,315

 
$
(1,970
)

Asset derivatives are recorded in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Liability derivatives related to interest rate contracts and foreign exchange contracts are recorded in other liabilities and accrued liabilities, respectively, in the accompanying consolidated balance sheets.

Fair Value Measurements (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following table provides the financial assets and financial liabilities reported at fair value and measured on a recurring basis:
 
 
 
 
Fair Value Measurements Using
Description
 
Total
 
Quoted Prices in Active Markets for
Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
September 30, 2013
 
 
 
 
 
 
 
 
Asset derivatives
 
$
556

 
$

 
$
556

 
$

Liability derivatives
 
(532
)
 

 
(532
)
 

Bank acceptances
 
4,013

 

 
4,013

 

Rabbi trust assets
 
1,854

 
1,854

 

 

 
 
$
5,891

 
$
1,854

 
$
4,037

 
$

 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
Asset derivatives
 
$
3,315

 
$

 
$
3,315

 
$

Liability derivatives
 
(1,970
)
 

 
(1,970
)
 

Bank acceptances
 
3,441

 

 
3,441

 

Rabbi trust assets
 
1,831

 
1,831

 

 

 
 
$
6,617


$
1,831

 
$
4,786

 
$

Pension and Other Postretirement Benefits (Tables)
Schedule of Net Benefit Costs
Pension and other postretirement benefits expenses consisted of the following:
 
Three months ended September 30,
 
Nine months ended September 30,
Pensions
2013
 
2012
 
2013
 
2012
Service cost
$
1,393

 
$
1,704

 
$
4,839

 
$
4,962

Interest cost
5,018

 
5,419

 
15,043

 
16,156

Expected return on plan assets
(8,273
)
 
(8,216
)
 
(24,867
)
 
(24,506
)
Amortization of prior service cost
185

 
209

 
567

 
629

Amortization of actuarial losses
4,038

 
3,170

 
12,331

 
9,029

Curtailment loss

 

 
199

 

Settlement loss

 
91

 
637

 
91

Special termination benefits

 

 
1,016

 

Net periodic benefit cost
$
2,361

 
$
2,377

 
$
9,765

 
$
6,361

 
 
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
Other Postretirement Benefits
2013
 
2012
 
2013
 
2012
Service cost
$
58

 
$
69

 
$
176

 
$
205

Interest cost
513

 
643

 
1,548

 
1,902

Amortization of prior service credit
(223
)
 
(396
)
 
(783
)
 
(1,189
)
Amortization of actuarial losses
241

 
269

 
762

 
811

Curtailment gain

 

 
(3,081
)
 

Net periodic benefit cost
$
589

 
$
585

 
$
(1,378
)
 
$
1,729

Changes in Accumulated Other Comprehensive Income by Component (Tables)
The following table sets forth the changes in accumulated other comprehensive income by component for the nine-month period ended September 30, 2013:
 
Gains and Losses on Cash Flow Hedges
 
Pension and Other Postretirement Benefit Items
 
Foreign Currency Items
 
Total
January 1, 2013
$
(432
)
 
$
(146,441
)
 
$
80,121

 
$
(66,752
)
Other comprehensive income before reclassifications to consolidated statements of income
321

 
12,671

 
6,201

 
19,193

Amounts reclassified from accumulated other comprehensive (loss) income to the consolidated statements of income
(119
)
 
7,143

 
4,143

 
11,167

Net current-period other comprehensive income
202

 
19,814

 
10,344

 
30,360

September 30, 2013
$
(230
)
 
$
(126,627
)
 
$
90,465

 
$
(36,392
)
The following table sets forth the reclassifications out of accumulated other comprehensive income by component for the three- and nine-month periods ended September 30, 2013:
Details about Accumulated Other Comprehensive Income Components
 
Amount Reclassified from Accumulated Other Comprehensive Income
 
Affected Line Item in the Consolidated Statements of Income
 
 
Three months ended September 30, 2013
 
Nine months ended September 30, 2013
 
 
Gains and losses on cash flow hedges
 
 
 
 
 

     Interest rate contracts
 
$
(220
)
 
$
(631
)
 
Interest expense
     Foreign exchange contracts
 
132

 
659

 
Net sales
 
 
(88
)
 
28

 
Total before tax
 
 
53

 
91

 
Tax benefit
 
 
(35
)
 
119

 
Net of tax
 
 
 
 
 
 
 
Pension and other postretirement benefit items
 
 
 
 
 
 
     Amortization of prior-service credits, net
 
$
38

 
$
216

 
(A)
Amortization of actuarial losses
 
(4,279
)
 
(13,093
)
 
(A)
Curtailment gain (net)
 

 
2,882

 
(A)
     Settlement loss
 

 
(637
)
 
(A)
 
 
(4,241
)
 
(10,632
)
 
Total before tax
 
 
1,500

 
3,489

 
Tax benefit
 
 
(2,741
)
 
(7,143
)
 
Net of tax
 
 
 
 
 
 
 
Foreign currency items
 
 
 
 
 
 
Charge to cumulative translation adjustment (sale of BDNA)
 
$

 
$
(4,143
)
 
Income from discontinued operations
 
 

 

 
Tax benefit
 
 

 
(4,143
)
 
Net of tax
 
 
 
 
 
 
 
Total reclassifications in the period
 
$
(2,776
)
 
$
(11,167
)
 
 
Information on Business Segments (Tables)
Schedule of Segment Reporting Information, by Segment
The following tables, adjusted on a retrospective basis to reflect the segment alignment, set forth information about the Company's operations by its two reportable segments:
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Net sales
 
 
 
 
 
 
 
   Aerospace
$
101,744

 
$
98,370

 
$
296,622

 
$
289,391

   Industrial
167,747

 
134,107

 
503,809

 
381,191

   Intersegment sales

 
(1
)
 
(1
)
 
(2
)
Total net sales
$
269,491

 
$
232,476

 
$
800,430

 
$
670,580

 
 
 
 
 
 
 
 
Operating profit
 
 
 
 
 
 
 
   Aerospace
$
7,157

 
$
14,122

 
$
32,730

 
$
39,798

   Industrial
20,874

 
8,364

 
56,406

 
33,066

Total operating profit
28,031

 
22,486

 
89,136

 
72,864

   Interest expense
2,401

 
3,243

 
10,000

 
8,046

   Other expense (income), net
241

 
873

 
1,702

 
1,787

Income from continuing operations before income taxes
$
25,389

 
$
18,370

 
$
77,434

 
$
63,031



 
September 30, 2013
 
December 31, 2012
Assets
 
 
 
   Aerospace
$
525,296

 
$
533,465

   Industrial
929,453

 
907,124

   Other (A)
324,425

 
428,007

Total assets
$
1,779,174

 
$
1,868,596


(A) "Other" assets include corporate-controlled assets, the majority of which are cash and deferred tax assets. Other assets as of December 31, 2012 also include the assets of BDNA, which was sold on April 22, 2013. See Note 2.
Summary of Significant Accounting Policies (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Mar. 31, 2013
Segment
Sep. 30, 2013
Sep. 30, 2012
Accounting Policies [Abstract]
 
 
 
Proceeds from (payments for) the sale of businesses
 
$ 539,116 
$ (339)
Number of reportable segments (in segments)
 
 
Discontinued Operations (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2013
USD ($)
Sep. 30, 2012
USD ($)
Sep. 30, 2013
USD ($)
Sep. 30, 2012
USD ($)
Dec. 30, 2011
Barnes Distribution Europe [Member]
USD ($)
Sep. 30, 2012
Barnes Distribution Europe [Member]
EUR (€)
Sep. 30, 2013
Barnes Distribution Europe [Member]
USD ($)
Sep. 30, 2013
Barnes Distribution Europe [Member]
EUR (€)
Dec. 30, 2011
Barnes Distribution Europe [Member]
EUR (€)
Sep. 30, 2013
Barnes Distribution Europe and Barnes Distribution North America [Member]
USD ($)
Sep. 30, 2012
Barnes Distribution Europe and Barnes Distribution North America [Member]
USD ($)
Sep. 30, 2013
Barnes Distribution Europe and Barnes Distribution North America [Member]
USD ($)
Sep. 30, 2012
Barnes Distribution Europe and Barnes Distribution North America [Member]
USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from divestiture of businesses
 
 
 
 
$ 33,358 
 
 
 
 
 
 
 
 
Proceeds from the sale of businesses, net of cash sold
 
 
 
 
22,492 
 
 
 
 
 
 
 
 
Decrease in restricted cash
 
 
(4,900)
 
(3,900)
 
 
 
 
 
 
 
Proceeds in escrow
 
 
 
 
 
 
6,895 
5,100 
9,000 
 
 
 
 
Proceeds from (payments for) the sale of businesses
 
 
539,116 
(339)
 
 
 
 
 
 
 
 
 
Estimated after-tax proceeds from divestiture of business
 
 
 
 
 
 
 
 
 
 
 
406,267 
 
Income tax payments related to gain on sale
 
 
 
 
 
 
 
 
 
 
 
95,714 
 
Transaction-related costs
 
 
 
 
 
 
 
 
 
 
 
9,986 
 
Net sales
 
 
 
 
 
 
 
 
 
73,583 
93,173 
231,996 
Income before income taxes
 
 
 
 
 
 
 
 
 
10 
4,973 
4,967 
21,700 
Income tax expense
 
 
 
 
 
 
 
 
 
463 
2,505 
1,688 
8,537 
(Loss) income from operations of discontinued businesses, net of income taxes
 
 
 
 
 
 
 
 
 
(453)
2,468 
3,279 
13,163 
(Loss) gain on transaction
 
 
313,471 
(788)
 
 
 
 
 
(7)
(21)
313,471 
(788)
Income tax (expense) benefit on sale
 
 
 
 
 
 
 
 
 
(16)
(119,054)
39 
(Loss) gain on the sale of businesses, net of income taxes
 
 
 
 
 
 
 
 
 
(23)
(15)
194,417 
(749)
(Loss) income from discontinued operations, net of income taxes
$ (476)
$ 2,453 
$ 197,696 
$ 12,414 
 
 
 
 
 
$ (476)
$ 2,453 
$ 197,696 
$ 12,414 
Net Income Per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
1 Months Ended 3 Months Ended 9 Months Ended
Feb. 28, 2013
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Net Income Per Common Share [Line Items]
 
 
 
 
 
Weighted average number of diluted shares outstanding adjustment (in shares)
 
1,295,270 
589,876 
1,035,506 
615,842 
Adjustments to net income for purposes of computing income available to common stockholders
 
$ 0 
$ 0 
$ 0 
$ 0 
Stock compensation expense
 
 
 
16,092 
6,564 
3.375% Convertible Notes [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Potential shares issuable under net share settlement method (in shares)
 
286,205 
128,594 
Convertible Debt [Member] |
3.375% Convertible Notes [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Convertible notes stated interest rate
 
3.375% 
 
3.375% 
 
Conversion price (in dollars per share)
 
$ 28.31 
 
$ 28.31 
 
Term used to compute average closing price of stock for dilutive effect comparison
 
30 days 
 
30 days 
 
Stock Options [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Antidilutive securities excluded from computation of EPS
 
27,300 
367,428 
177,550 
331,618 
Options, granted (in shares)
130,600 
 
 
 
 
Exercise period of stock options from date of grant
 
 
 
10 years 
 
Exercise period of stock options from date of retirement
 
 
 
5 years 
 
Restricted Stock Units (RSUs) [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Other than options, granted (in shares)
161,295 
 
 
 
 
Performance Share Awards [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Other than options, granted (in shares)
135,055 
 
 
 
 
Award vesting period
 
 
 
3 years 
 
Minimum range of target award of stock plan
 
 
 
0.00% 
 
Maximum range of target award of stock plan
 
 
 
250.00% 
 
Equity Award Modification [Member]
 
 
 
 
 
Net Income Per Common Share [Line Items]
 
 
 
 
 
Stock compensation expense
 
 
 
$ 10,492 
 
Inventories (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Inventory Disclosure [Abstract]
 
 
Finished goods
$ 71,078 
$ 126,139 
Work-in-process
60,386 
56,186 
Raw material and supplies
48,499 
43,895 
Inventories
$ 179,963 
$ 226,220 
Goodwill and Other Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2013
Trade name [Member]
Dec. 31, 2012
Trade name [Member]
Sep. 30, 2013
Revenue sharing programs (RSPs) [Member]
Dec. 31, 2012
Revenue sharing programs (RSPs) [Member]
Sep. 30, 2013
Customer lists/relationships [Member]
Dec. 31, 2012
Customer lists/relationships [Member]
Sep. 30, 2013
Patents and technology [Member]
Dec. 31, 2012
Patents and technology [Member]
Sep. 30, 2013
Trademarks/trade names [Member]
Dec. 31, 2012
Trademarks/trade names [Member]
Sep. 30, 2013
Other [Member]
Dec. 31, 2012
Other [Member]
Sep. 30, 2013
Minimum [Member]
Customer lists/relationships [Member]
Sep. 30, 2013
Minimum [Member]
Patents and technology [Member]
Sep. 30, 2013
Minimum [Member]
Trademarks/trade names [Member]
Sep. 30, 2013
Maximum [Member]
Revenue sharing programs (RSPs) [Member]
Sep. 30, 2013
Maximum [Member]
Customer lists/relationships [Member]
Sep. 30, 2013
Maximum [Member]
Patents and technology [Member]
Sep. 30, 2013
Maximum [Member]
Trademarks/trade names [Member]
Sep. 30, 2013
Maximum [Member]
Other [Member]
Dec. 31, 2012
Barnes Distribution North America [Member]
Dec. 31, 2012
Barnes Distribution North America [Member]
Customer Lists [Member]
Dec. 31, 2012
Barnes Distribution North America [Member]
Trademarks [Member]
Sep. 30, 2013
Aerospace [Member]
Sep. 30, 2013
Industrial [Member]
Sep. 30, 2013
Other [Member]
Goodwill:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill, beginning of period
$ 579,905 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 134,875 
 
 
$ 30,786 
$ 414,244 
$ 134,875 
Divestiture
(134,704)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(134,704)
Purchase accounting adjustment
2,627 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,627 
Foreign currency translation
5,107 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,278 
(171)
Goodwill, end of period
452,935 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
134,875 
 
 
30,786 
422,149 
Goodwill impairment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Intangible Assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Range of life
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
7 years 
5 years 
30 years 
15 years 
14 years 
30 years 
15 years 
 
 
 
 
 
 
Gross Amount
451,620 
463,920 
 
 
293,700 
293,700 
91,306 
102,806 
41,972 
41,972 
11,950 
12,750 
12,692 
12,692 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accumulated Amortization
(104,908)
(98,547)
 
 
(61,965)
(54,638)
(15,575)
(21,727)
(12,274)
(7,758)
(7,393)
(7,497)
(7,701)
(6,927)
 
 
 
 
 
 
 
 
 
(11,387)
(800)
 
 
 
Unamortized intangible asset
 
 
10,000 
10,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation
10,267 
8,599 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other intangible assets
471,887 
482,519 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11,500 
800 
 
 
 
Intangible Assets, Future Amortization Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2013
24,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2014
24,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2015
24,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2016
23,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangible assets expected in 2017
24,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Indefinite-lived intangible asset, impairment recognized
 
 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2013
Minimum [Member]
Sep. 30, 2013
Maximum [Member]
Sep. 30, 2013
Convertible Debt [Member]
3.375% Convertible Notes [Member]
Dec. 31, 2012
Convertible Debt [Member]
3.375% Convertible Notes [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
Sep. 30, 2013
Revolving Credit Agreement [Member]
Dec. 31, 2012
Revolving Credit Agreement [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
Minimum [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
Maximum [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
London Interbank Offered Rate (LIBOR) [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
London Interbank Offered Rate (LIBOR) [Member]
Minimum [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
London Interbank Offered Rate (LIBOR) [Member]
Maximum [Member]
Sep. 27, 2013
Revolving Credit Agreement [Member]
Adjusted for Certain Acquisitons [Member]
Maximum [Member]
Sep. 30, 2013
Lines of Credit and Overdrafts [Member]
Dec. 31, 2012
Lines of Credit and Overdrafts [Member]
Sep. 30, 2013
Foreign Bank Borrowings [Member]
Dec. 31, 2012
Foreign Bank Borrowings [Member]
Sep. 30, 2013
Other Debt Obligations [Member]
Dec. 31, 2012
Other Debt Obligations [Member]
Sep. 30, 2013
Lines of Credit [Member]
Dec. 31, 2012
Lines of Credit [Member]
Sep. 30, 2013
Bank Overdrafts [Member]
Dec. 31, 2012
Bank Overdrafts [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying amount of debt
 
 
 
 
$ 55,636 
$ 55,636 
 
$ 285,600 
$ 589,200 
 
 
 
 
 
 
 
 
$ 540 
$ 945 
$ 3 
$ 574 
 
 
 
 
Fair value of debt
364,842 
662,050 
 
 
69,921 
57,977 
 
286,677 
599,172 
 
 
 
 
 
 
7,700 
3,380 
541 
947 
574 
 
 
 
 
Unamortized debt discount
 
 
 
 
(1,346)
(3,122)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Borrowings under lines of credit and overdrafts
7,700 
3,795 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,700 
3,380 
 
 
 
 
7,700 
2,800 
 
580 
Total debt, net of unamortized discounts
348,133 
646,613 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Less current maturities
(62,533)
(4,494)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
285,600 
642,119 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible notes stated interest rate
 
 
 
 
3.375% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Convertible notes balance
 
 
 
 
54,290 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, maximum borrowing capacity
 
 
 
 
 
 
750,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
15,000 
 
 
 
Line of credit facility with accordian feature, maximum borrowing capacity
 
 
 
 
 
 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable rate basis
 
 
 
 
 
 
 
 
 
 
 
LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable basis spread
 
 
 
 
 
 
 
 
 
 
 
 
1.10% 
1.70% 
 
 
 
 
 
 
 
 
 
 
 
Payments of debt issuance costs
 
 
 
 
 
 
1,159 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt covenant ratio of senior debt to EBITDA
 
 
 
 
 
 
 
 
 
 
3.25 
 
 
 
3.50 
 
 
 
 
 
 
 
 
 
 
Debt covenant ratio of total debt to EBITDA
 
 
 
 
 
 
 
 
 
 
4.00 
 
 
 
4.25 
 
 
 
 
 
 
 
 
 
 
Debt covenant ratio of EBITDA to cash interest expense
 
 
 
 
 
 
 
 
 
4.25 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt covenant, threshold price of acquisition permitting higher ratio limits
 
 
 
 
 
 
 
 
 
$ 150,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit, interest rate at period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.14% 
2.16% 
 
 
Repayment period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7 days 
 
2 days 
 
Maturity of bank acceptances
 
 
3 months 
6 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
$ 556 
$ 3,315 
Derivative Liabilities
(532)
(1,970)
Designated as Hedging Instrument [Member] |
Interest Rate Contract [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
Derivative Liabilities
(486)
(1,818)
Designated as Hedging Instrument [Member] |
Foreign Exchange Contract [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
146 
945 
Derivative Liabilities
Not Designated as Hedging Instrument [Member] |
Foreign Exchange Contract [Member]
 
 
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
 
 
Derivative Assets
410 
2,370 
Derivative Liabilities
$ (46)
$ (152)
Derivatives (Details 1) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Sep. 30, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Interest Rate Contract [Member]
Sep. 30, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2013
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2012
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2013
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2012
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2013
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Sep. 30, 2012
Not Designated as Hedging Instrument [Member]
Foreign Exchange Contract [Member]
Apr. 30, 2012
Interest Rate Swap [Member]
Designated as Hedging Instrument [Member]
Cash Flow Hedging [Member]
Bank
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of interest rate derivatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 years 
Number of banks transacted with for interest rate swap agreements (in banks)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative amount of hedge
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 100,000 
Variable rate basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
one-month LIBOR 
Fixed interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.03% 
Maximum remaining maturity of foreign currency derivatives
2 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Net Hedge Ineffectiveness Gain (Loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net
 
 
 
 
(144)
95 
202 
(302)
(242)
(551)
825 
(1,250)
98 
646 
(623)
948 
 
 
 
 
 
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,361 
$ 2,380 
$ (2,121)
$ 3,305 
 
Fair Value Measurements (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2013
Quoted Prices in Active Markets for Identical Assets (Level 1)
Dec. 31, 2012
Quoted Prices in Active Markets for Identical Assets (Level 1)
Sep. 30, 2013
Significant Other Observable Inputs (Level 2)
Dec. 31, 2012
Significant Other Observable Inputs (Level 2)
Sep. 30, 2013
Significant Unobservable Inputs (Level 3)
Dec. 31, 2012
Significant Unobservable Inputs (Level 3)
Sep. 30, 2013
Estimate of Fair Value, Fair Value Disclosure [Member]
Dec. 31, 2012
Estimate of Fair Value, Fair Value Disclosure [Member]
Sep. 30, 2013
Minimum [Member]
Sep. 30, 2013
Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Asset derivatives
$ 556 
$ 3,315 
$ 0 
$ 0 
$ 556 
$ 3,315 
$ 0 
$ 0 
$ 556 
$ 3,315 
 
 
Liability derivatives
(532)
(1,970)
(532)
(1,970)
(532)
(1,970)
 
 
Bank acceptances
 
 
4,013 
3,441 
4,013 
3,441 
 
 
Rabbi trust assets
 
 
1,854 
1,831 
1,854 
1,831 
 
 
Financial assets and financial liabilities, reported at fair value
 
 
$ 1,854 
$ 1,831 
$ 4,037 
$ 4,786 
$ 0 
$ 0 
$ 5,891 
$ 6,617 
 
 
Maturity of bank acceptances
 
 
 
 
 
 
 
 
 
 
3 months 
6 months 
Pension and Other Postretirement Benefits (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Pensions [Member]
 
 
 
 
Pension and other postretirement benefits expenses
 
 
 
 
Service cost
$ 1,393 
$ 1,704 
$ 4,839 
$ 4,962 
Interest cost
5,018 
5,419 
15,043 
16,156 
Expected return on plan assets
(8,273)
(8,216)
(24,867)
(24,506)
Amortization of prior service cost (credit)
185 
209 
567 
629 
Amortization of actuarial losses
4,038 
3,170 
12,331 
9,029 
Curtailment loss (gain)
199 
Settlement loss
91 
637 
91 
Special termination benefits
1,016 
Net periodic benefit cost
2,361 
2,377 
9,765 
6,361 
Other Postretirement Benefits [Member]
 
 
 
 
Pension and other postretirement benefits expenses
 
 
 
 
Service cost
58 
69 
176 
205 
Interest cost
513 
643 
1,548 
1,902 
Amortization of prior service cost (credit)
(223)
(396)
(783)
(1,189)
Amortization of actuarial losses
241 
269 
762 
811 
Curtailment loss (gain)
(3,081)
Net periodic benefit cost
589 
585 
(1,378)
1,729 
Barnes Distribution North America [Member]
 
 
 
 
Pension and other postretirement benefits expenses
 
 
 
 
Withdrawal from multi-employer post-retirement benefit plan expense
 
 
$ 2,788 
 
Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Income Tax Contingency [Line Items]
 
 
 
 
 
Effective tax rate
 
 
40.60% 
15.70% 
13.50% 
Income taxes
$ 4,008 
$ 2,342 
$ 31,426 
$ 9,926 
 
2013 U.S Court Decision [Member]
 
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
 
Effective tax rate
 
 
19.60% 
 
 
Income taxes
 
 
$ 16,389 
 
 
Aerospace [Member]
 
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
 
Tax incentives scheduled to expire in 2013
 
 
 
Changes in Accumulated Other Comprehensive Income by Component (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
$ (66,752)
 
Other comprehensive income before reclassifications to consolidated statements of income
 
 
19,193 
 
Amounts reclassified from accumulated other comprehensive (loss) income to the consolidated statements of income
 
 
11,167 
 
Net current-period other comprehensive income
23,606 
25,056 
30,360 
18,115 
Accumulated other comprehensive income (loss)
(36,392)
 
(36,392)
 
Gains and Losses on Cash Flow Hedges
 
 
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
(432)
 
Other comprehensive income before reclassifications to consolidated statements of income
 
 
321 
 
Amounts reclassified from accumulated other comprehensive (loss) income to the consolidated statements of income
 
 
(119)
 
Net current-period other comprehensive income
 
 
202 
 
Accumulated other comprehensive income (loss)
(230)
 
(230)
 
Pension and Other Postretirement Benefit Items
 
 
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
(146,441)
 
Other comprehensive income before reclassifications to consolidated statements of income
 
 
12,671 
 
Amounts reclassified from accumulated other comprehensive (loss) income to the consolidated statements of income
 
 
7,143 
 
Net current-period other comprehensive income
 
 
19,814 
 
Accumulated other comprehensive income (loss)
(126,627)
 
(126,627)
 
Foreign Currency Items
 
 
 
 
Changes in Accumulated Other Comprehensive Income by Component [Roll Forward]
 
 
 
 
Accumulated other comprehensive income (loss)
 
 
80,121 
 
Other comprehensive income before reclassifications to consolidated statements of income
 
 
6,201 
 
Amounts reclassified from accumulated other comprehensive (loss) income to the consolidated statements of income
 
 
4,143 
 
Net current-period other comprehensive income
 
 
10,344 
 
Accumulated other comprehensive income (loss)
$ 90,465 
 
$ 90,465 
 
Changes in Accumulated Other Comprehensive Income by Component (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Interest expense
$ 2,401 
$ 3,243 
$ 10,000 
$ 8,046 
Net sales
269,491 
232,476 
800,430 
670,580 
Income from continuing operations before income taxes
25,389 
18,370 
77,434 
63,031 
Tax benefit
(4,008)
(2,342)
(31,426)
(9,926)
Income from continuing operations
21,381 
16,028 
46,008 
53,105 
(Loss) income from discontinued operations, net of income taxes
(476)
2,453 
197,696 
12,414 
Total reclassifications in the period
20,905 
18,481 
243,704 
65,519 
Reclassification out of Accumulated Other Comprehensive Income [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
(Loss) income from discontinued operations, net of income taxes
 
(4,143)
 
Total reclassifications in the period
(2,776)
 
(11,167)
 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Gains and Losses on Cash Flow Hedges
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Income from continuing operations before income taxes
(88)
 
28 
 
Tax benefit
53 
 
91 
 
Income from continuing operations
(35)
 
119 
 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Gains and Losses on Cash Flow Hedges |
Interest Rate Contract [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Interest expense
(220)
 
(631)
 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Gains and Losses on Cash Flow Hedges |
Foreign Exchange Contract [Member]
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Net sales
132 
 
659 
 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Pension and Other Postretirement Benefit Items
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Income from continuing operations before income taxes
(4,241)
 
(10,632)
 
Tax benefit
1,500 
 
3,489 
 
Income from continuing operations
(2,741)
 
(7,143)
 
Amortization of prior-service credits, net
38 1
 
216 1
 
Amortization of actuarial losses
(4,279)1
 
(13,093)1
 
Curtailment gain (net)
1
 
2,882 1
 
Settlement loss
1
 
(637)1
 
Reclassification out of Accumulated Other Comprehensive Income [Member] |
Foreign Currency Items
 
 
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
 
 
Tax benefit
 
 
(Loss) income from discontinued operations, net of income taxes
$ 0 
 
$ (4,143)
 
Information on Business Segments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Mar. 31, 2013
Segment
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Segment Reporting Information [Line Items]
 
 
 
 
 
Number of reportable segments (in segments)
 
 
 
 
Net sales
$ 269,491 
 
$ 232,476 
$ 800,430 
$ 670,580 
Operating profit
28,031 
 
22,486 
89,136 
72,864 
Interest expense
2,401 
 
3,243 
10,000 
8,046 
Other expense (income), net
241 
 
873 
1,702 
1,787 
Total before tax
25,389 
 
18,370 
77,434 
63,031 
Aerospace [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Net sales
101,744 
 
98,370 
296,622 
289,391 
Operating profit
7,157 
 
14,122 
32,730 
39,798 
Industrial [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Net sales
167,747 
 
134,107 
503,809 
381,191 
Operating profit
20,874 
 
8,364 
56,406 
33,066 
Intersegment sales [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Net sales
$ 0 
 
$ (1)
$ (1)
$ (2)
Information on Business Segments Details 1 (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Segment Reporting Information [Line Items]
 
 
Assets
$ 1,779,174 
$ 1,868,596 
Aerospace [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
525,296 
533,465 
Industrial [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
929,453 
907,124 
Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Assets
$ 324,425 1
$ 428,007 1
Commitments and Contingencies (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2013
USD ($)
Sep. 30, 2012
USD ($)
Sep. 30, 2013
USD ($)
Sep. 30, 2012
USD ($)
Apr. 16, 2013
USD ($)
Sep. 30, 2013
2013 U.S Court Decision [Member]
USD ($)
Oct. 31, 2013
Subsequent Event [Member]
Männer Business [Member]
USD ($)
Oct. 31, 2013
Subsequent Event [Member]
Männer Business [Member]
EUR (€)
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
IRS proposed adjustments to tax years 2000 through 2002, before penalty and interest
 
 
$ 16,500 
 
 
 
 
 
Potential penalty, percentage of tax assessment
 
 
20.00% 
 
 
 
 
 
Income taxes
4,008 
2,342 
31,426 
9,926 
 
16,389 
 
 
Expected cash payment of tax, interest and penalties
 
 
 
 
13,000 
 
 
 
Purchase price, before adjustments
 
 
 
 
 
 
 
275,000 
Cash portion of purchase price, before adjustments
 
 
 
 
 
 
 
247,500 
Equity portion of purchase price
 
 
 
 
 
 
$ 36,695 
€ 27,500 
Subsequent Event (Details) (Subsequent Event [Member], Männer Business [Member])
In Thousands, unless otherwise specified
0 Months Ended
Oct. 31, 2013
USD ($)
Oct. 31, 2013
EUR (€)
Subsequent Event [Line Items]
 
 
Purchase price
$ 381,331 
€ 281,200 
Cash portion of purchase price
344,636 
253,726 
Equity portion of purchase price
36,695 
27,500 
Equity portion of purchase price, shares
1,032,493 
1,032,493 
Preliminary adjustments related to cash acquired
$ 35,316 
€ 26,000