Kaman Sales Decline 13.5% in 3Q

By MDM Staff

November 6, 2009

More about: Industrial, Kaman, PT/Motion Control/Fluid Power

Industrial Distribution sales fall 20.2% for Kaman.

Kaman Corp. (Nasdaq: KAMN), Bloomfield, CT, reported sales for the third quarter ended Oct. 2, 2009, were down 13.5% from the prior-year period. Profit was $9.6 million, down from $13.5 million.

Sales for the first nine months were $877.2 million, down from $937.2 million in the prior-year period. Profit for the first nine months was $24.3 million.

President and CEO Neal J. Keating said: "Aerospace sales declined although slightly less than we expected and despite a challenging market environment we were able to improve margin at Industrial Distribution. During the quarter, we signed an agreement with Bell Helicopters, adding a key customer to our helicopter subcontract business, and we expanded our Joint Programmable Fuze (JPF) contract with the U.S. government improving the near term profitability of the program.

"We were also awarded a contract by the U.S. Marine Corps for a demonstration of the unmanned K-MAX ® helicopter; if we are ultimately awarded a production contract, this program has the potential to contribute to our growth over the longer term. We were encouraged that during the quarter Industrial Distribution sales showed a slight sequential improvement over the second quarter and we improved our profit conversion on each dollar of sales."

Industrial Distribution segment sales decreased 20.2% in the 2009 third quarter to $162.9 million from $204.3 million a year ago. Segment operating income for the third quarter of 2009 was $3.4 million, a 68.3% decrease from operating income of $10.7 million in the third quarter of 2008.

Industrial Distribution segment sales for the 2009 third quarter reflect the continued difficult economic environment and weak market conditions for the company in addition to a strong comparative period in 2008 which experienced a sales increase of 14.7%.

Aerospace segment sales were $127 million, a decrease of 3% from sales of $130.9 million in the third quarter of 2008. Operating income for the 2009 third quarter was $19.9 million, compared to operating income of $20.9 million in the 2008 third quarter.

The decrease in segment sales from last year's third quarter is a result of several factors including: decreased sales from aerospace bearing programs; the absence of sales under the Australian helicopter program ($2.2 million in Q308); lower shipments of legacy missile fuzes; and $2.8 million related to foreign currency translation. These decreases were partially offset by increased JPF sales; higher BLACKHAWK cockpit deliveries (38 cockpits delivered in Q309 as compared to 31 in Q308); higher sales of SH-2 spares to New Zealand; and increased revenues from erosion coating programs for U.S. military helicopter platforms.

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