Kaman Industrial Technologies Q4 report

Industrial Distribution operating profits were $13.2 million in 2001, compared to $22.9 million in the previous year. 2000 operating profits included the addition of $1.7 million in the fourth quarter, which was the unused portion of a $12.4 million pre-tax charge taken in 1999 for reorganization of operations, including closures of certain facilities and the write-off of excess inventory.

Industrial Distribution net sales for the full year were $453.7 million, compared to 2000 net sales of $520.8 million, consistent with the effect of the manufacturing recession on the total distribution industry.

Fourth quarter operating profits were $1.9 million, compared to $6.1 million in the 2000 period. Net sales for the 2001 fourth quarter, including an acquisition mentioned below, were $108.0 million, compared to $117.8 million in the period last year. The reduction in earnings for the quarter reflects lower sales due to recession, the $1.7 million addition to 2000 results described above, and lower buyer incentives as the company cut back on inventory purchases to reflect conditions in the market. Buyer incentives were also booked earlier in 2001, based on buying patterns.

"A weakened manufacturing sector brought the industrial production index, the key economic indicator for this business, down to levels not seen since the early 1980s," said Paul R. Kuhn, president and CEO. "In addition, specific events affecting particular industries, such as the effect the energy crisis in the West had on the aluminum industry, worsened the situation. The company took steps in the fourth quarter of 2000 to implement manpower adjustments and cost savings, and as conditions for our customers deteriorated throughout 2001, we stayed ahead of the curve with further reductions, efficiencies and savings. These actions, good results with business retention efforts, and new national account wins helped the segment remain profitable despite lower sales."

Late in the year, the company acquired the industrial distribution business of A-C Supply of Milwaukee, Wisconsin. "This acquisition provides Kaman Industrial Technologies with increased penetration in key industrial markets in the upper Midwest, where we have had a limited presence," Kuhn said. "This purchase is in keeping with our intention to build the value of our businesses through both acquisitions and internal growth." The company also continued to develop its e-business infrastructure for expanded market presence.

Kaman Corp., headquartered in Bloomfield, CT, conducts business in the aerospace, industrial distribution and music distribution markets.