B Barnes Group, Inc.

Management Discussion

• The Company reported net sales of $372.6 million in the third quarter of 2019, an increase of $2.8 million or 0.8%, from the third quarter of 2018. Organic sales decreased by $3.8 million, or 1.0%, including a decrease of $19.0 at Industrial, partially offset by an increase of $15.2 at Aerospace. The decrease at Industrial was driven by organic sales declines within the each of the Industrial business units, largely due to lower global auto production rates and delays in automotive model change releases, reflecting uncertainty related to current and proposed tariffs announced by the United States and China governments and potential changes in regulatory requirements. Acquired businesses contributed incremental sales of $13.6 million in the Industrial segment during the third quarter of 2019. The strengthening of the U.S. dollar against foreign currencies decreased net sales within the Industrial segment by approximately $7.0 million. The increase at Aerospace was driven primarily by sales growth within the aftermarket businesses, whereas continued growth on newer, more technologically advanced engine platforms contributed to increase sales within the original equipment manufacturing business.