Kaman Q4/Year-end sales up

Net earnings for the fourth quarter were $5.9 million compared to $6.9 million the previous year. Net sales for the fourth quarter were $230.6 million compared to $218.2 million in the 2001 quarter.

The company reported a net loss in 2002 of $33.6 million compared to net earnings of $11.7 million the previous year. The 2002 results include a pre-tax charge of $86.0 million taken in the second quarter to cover the write-down of K-MAX helicopter assets, principally inventories; for cost growth associated with the Australian SH-2G(A) helicopter program; and to phase out operations at the company's Moosup, Conn. plant by the end of 2003. The 2001 results included a $31.2 million adjustment to sales and pre-tax earnings in the second quarter related to growth in estimated costs to complete the SH-2G(A) helicopter program for Australia.

Excluding the second-quarter $86.0 million pre-tax charges, 2002 net earnings would have been $21.8 million. Excluding the $31.2 million adjustment to the Australia program, 2001 net earnings would have been $30.5 million.

Net sales for 2002 were $882.1 million, compared to $876.9 million the previous year. The Australia program adjustments reduced 2002 net sales by $6.5 million and 2001 net sales by $31.2 million.

The company maintains a $225 million revolving credit agreement with eight banks to provide for its working capital needs, business acquisitions, and other corporate requirements. The agreement includes a $150 million five-year credit facility maturing in November 2005 and a $75 million 364-day facility renewable annually in November. In the fourth quarter, the banking group renewed the 364-day facility to November 2003.

SUMMARIZED REPORT BY SEGMENT

Aerospace Segment

Fourth quarter operating profits for the segment were $6.5 million, compared to $9.2 million last year. Sales were $74.7 million for the quarter, including $7.9 million from acquisitions made during 2002 and 2001, compared to $77.8 million a year ago. There were no net sales from acquisitions in 2001.

The segment had an operating loss of $55.2 million for the year, primarily due to the previously described charges. Excluding the charges, segment operating profits in 2002 would have been $30.8 million. In 2001, the segment had an operating profit of $6.5 million. Excluding the adjustment, the segment operating profits would have been $37.7 million in 2001. Sales for 2002 were $275.9 million (including $20.0 million from acquisitions made during 2002 and 2001), compared to $301.6 million last year. Excluding the impact of the Australia program adjustments, 2002 sales would have been $282.4 million, compared to $332.8 million for 2001.

Industrial Distribution Segment

Industrial Distribution's operating profit rose to $3.3 million in the quarter, compared to $1.9 million a year ago. Sales were $118.4 million, including $10.6 million from acquisitions made during 2002 and 2001, compared to $108.0 million a year ago, which included $8.0 million from acquisitions made in 2001.

Segment operating profits for the full year were $12.3 million, compared to $13.2 million the previous year. Sales in 2002 were $477.2 million (including $38.0 million from acquisitions made during 2002 and 2001), compared to $453.7 million in 2001, which included $8.0 million from acquisitions made in 2001.

Music Distribution Segment

Operating profits for the Music segment were $2.8 million in the fourth quarter, compared to $2.4 million a year ago. Sales were $37.5 million in the quarter, including $3.7 million from the acquisition of Latin Percussion in October, compared to $32.4 million a year ago.

Operating profits for the year 2002 were $7.2 million, compared to $6.6 million a year ago. Sales for year were $128.9 million (including $3.7 million from the

Paul R. Kuhn, chairman, president and CEO, said, "The commercial aerospace and industrial markets that we serve were under severe pressure throughout the year. This affected both segments' sales and profits as would be expected. Based on current trends, which do not point to a near-term turnaround in either market, we anticipate that conditions will remain difficult for a while longer. However, our broad business diversification, our 'lean thinking' mentality and our stringent cost controls have enabled us to weather the current economic storm and we have remained focused on executing our growth strategies in each of the business segments."