Barnes Group delivered a very good third quarter of financial performance with 20% organic sales growth, a 180 basis points increase in adjusted operating margin, and an 80-plus percent increase in earnings per share year-over-year.
Similarly, orders were seasonally good as we generated a book-to-bill of 0.9 times for both industrial and aerospace.
Organic sales growth was 17% while organic orders growth was 3%.
China continues to hover around the neutral 50 mark.
Relative to their prior view, 2021 production was reduced by 5 million units or 6%, and 2022 was reduced by 8.5 million units or 9%.
For 2022, IHS expects global auto production to grow 11% over this year, so still a rebound.
Operating margin was 13%, up 60 basis points from a year ago and 130 basis points sequentially.
While our July outlook contemplated $2 million of second half inflation pressure, we saw approximately $2.5 million in the third quarter.
With respect to organic sales, we generated a 15% increase over the prior year quarter.
At Force & Motion Control, organic orders were up 27% with organic sales up 24%.
Engineered Components once again generated solid organic sales growth on a year-over-year basis, up 15%, primarily driven by industrial end markets.
And we saw a third quarter pushout of approximately $6 million in revenue, which was doubled what we anticipated.
We now forecast our fourth quarter impact of a similar $6 million.
However, we continue to expect 2021 to deliver organic growth of approximately 20% on par with our July expectation.
We now anticipate operating margins of 11.5% to 12%, a bit softer than our prior expectation with the decline primarily driven by the current economic environment.
Moving to Aerospace, sales improved 30% over last year and 8% sequentially from the second quarter.
Adjusted operating margin improved 490 basis points from a year ago and 130 basis points sequentially.
Solid order activity continued in the third quarter with total orders of approximately 70% versus a year ago.
OEM orders were up approximately 80% with the aftermarket being up approximately 50%.
Within the aftermarket, MRO was up 40% plus and spare parts up 70%.
Segment operating margin is anticipated to be approximately 14%, slightly higher than our prior outlook benefiting from the better spare parts mix.
Third quarter sales were $325 million, up 21% from the prior year period with organic sales increasing 20%.
Adjusted operating income was $43.9 million, up 39% from $31.5 million last year.
While adjusted operating margin was 13.5% up 180 basis points from a year ago.
Interest expense was $4 million, an increase of $300,000 over last year as a result of a higher average interest rate, offset in part by lower average borrowings.
Sequentially, our interest expense was lower by $448,000.
For the quarter, our effective tax rate of 27.6% compared with 44.1% in the third quarter of 2020 and 37.6% for full year 2020.
Net income was $27.9 million or $0.55 per diluted share compared to $15.4 million or $0.30 per diluted share a year ago.
Third quarter Industrial sales were $232 million, up 18% from a year ago, while organic sales increased 17%.
Favorable foreign exchange increased sales by approximately 1%.
Sequentially sales decreased slightly as they were further impacted by the semiconductor and supply chain issues that Patrick mentioned.
Industrial operating profit was $30.1 million, up 23% from $24.4 million last year.
Operating margin was 13%, up 60 basis points from a year ago and 130 basis points sequentially.
Moving now to Aerospace, sales were $94 million, up 30% driven by a 23% increase in our OEM business and a 46% increase in our aftermarket business.
Operating profit was $13.6 million doubling the $6.8 million in last year's third quarter.
Excluding a small amount of restructuring in the current and prior year period, adjusted operating profit was up 95% from a year ago.
Adjusted operating margin was 14.8%, up 490 basis points from last year and 130 basis points sequentially.
Aerospace OEM backlog ended September at $665 million, down 4% from June 2021 and we expect to convert approximately 40% of this backlog to revenue over the next year.
Accordingly, a downward adjustment of $46 million at Industrial and $19 million at Aerospace was made during the third quarter.
Moving to cash flow performance, year-to-date cash provided by operating activities was $128 million versus $164 million last year with free cash flow of $101 million, down from $134 million last year.
Capital expenditures were $27 million, down approximately $3 million from a year ago.
As a reminder, year-to-date operating cash flow in 2020 saw an approximate $60 million benefit from working capital as cash management was a significant focus during the pandemic.
Regarding the balance sheet, our debt to EBITDA ratio, as defined by our credit agreement was 2.6 times at quarter end, down from 2.9 times at the end of last quarter.
Our third quarter average diluted shares outstanding were 51.1 million during the third quarter, we did not repurchase shares and approximately 3.6 million shares remain available under the Board's 2019 stock repurchase authorization.
Organic sales are forecast to be up 11% to 12% for the year consistent with our prior view.
Foreign exchange is expected to have about a 2% favorable impact on sales, while divested Seeger revenues will have a small negative impact.
Adjusted operating margin is forecast to be approximately 12.5%, down slightly from 13% in our July outlook.
Adjusted earnings per share is expected to be in the range of $1.83 to $1.93 per share, up 12% to 18% from our 2020 adjusted earnings per share of $1.64.
This expectation reflects the decrease at the top end of our previous range of $1.83 to $1.98 related to Q4 headwinds.
A few other outlook items, our interest expense forecast remains approximately $16 million while other expense is anticipated to be $6 million, slightly less than our July outlook.
We expect the full year tax rate of approximately 29% excluding adjusted items, a point lower than our previous estimate.
Estimated Capex of $40 million is down from our prior view of $50 million, average diluted shares of $51 million is consistent with our prior view.
And cash conversion is now anticipated to be approximately 120%, an increase over our prior expectation of greater than 110%.

Summary:
While our July outlook contemplated $2 million of second half inflation pressure, we saw approximately $2.5 million in the third quarter.
Third quarter sales were $325 million, up 21% from the prior year period with organic sales increasing 20%.
Net income was $27.9 million or $0.55 per diluted share compared to $15.4 million or $0.30 per diluted share a year ago.
Sequentially sales decreased slightly as they were further impacted by the semiconductor and supply chain issues that Patrick mentioned.
Organic sales are forecast to be up 11% to 12% for the year consistent with our prior view.
Foreign exchange is expected to have about a 2% favorable impact on sales, while divested Seeger revenues will have a small negative impact.
Adjusted operating margin is forecast to be approximately 12.5%, down slightly from 13% in our July outlook.