Barnes Group Inc. (NYSE:B) Q2 2023 Earnings Call Transcript

Thomas Hook: Well, Michael, excellent question is, is that I think your question obviously is very important because it fit kind of takes continued growth within the industry which is a positive factor for us from OEM all the way through aftermarket. And — but what that requires is to do to maintain the pace of the demand output both the OEM and aftermarket is for us to and production capacity and add direct and indirect labor now and train it and get it capable of increasing output. That in and of itself, that incremental labor, which tends to come with not as much training and we have — there’s a training lag that has to occur to the higher that growth demand, we’ve had to get ourselves an inflection point in catching up, which we’ve been doing all year on productive operations by onboarding more labor.

That’s been a headwind that we’ve had to face. It has affected our numbers in the second quarter. We’re jumping ahead of it with more aggressive leadership and management. Some facilities in fairness have already mastered the productivity training dilemma but some of the facilities have not, which has created the drag and our expectations are we will fix that over the course of the second half and get ahead of that, so we can maintain our output at what the industry is ramping towards. We’re very well aware of the ramp. We have a clear signal from our customers on what it looks like. So we are doing all the operational things in terms of property plant equipment and workforce to be prepared for us. As you would expect, growth is in terms of the challenges in the Aerospace side.

I mean we don’t want to be a lagger. We’re not holding – the customers today, so we are purposely making sure that the customer is taken care of and we’ve done a very good job on that, but it is a headwind in terms of profitability that we’ve had to face. But we knew it was coming. We just didn’t proactively manage it at all the facilities as well as we should have.

Michael Ciarmoli: Got it. That’s helpful. I’ll jump back in the queue. Thanks guys.

Operator: And there are no further questions at this time. I will turn the call back to Mr. Bill Pitts for closing remarks.

Bill Pitts: Thank you, Abby. We’d like to thank all of you for joining us this morning. And we look forward to speaking with you next in October for our third quarter 2023 earnings conference call. Abby, we will now conclude today’s call.

Operator: Thank you. And ladies and gentlemen, once again, this concludes today’s conference call, and we thank you for your participation. You may now disconnect.