Kaman Corp., Bloomfield, CT, reported financial results for the third quarter and nine months ended Sept. 30, 2001. Net earnings for the quarter were $8.5 million, compared to $9.5 million in the same quarter last year. Revenues for the third quarter were $219.4 million, compared to $255.4 million in the period last year.
Third quarter and nine month results reflect a weak global economy and were affected by a sales and pre-tax earnings adjustment in the second quarter of $31.2 million, substantially all of which is associated with a change in estimated costs to complete the SH-2G(A) helicopter program for Australia.
This adjustment has had the effect of lowering the profit rate on the Australian program both as of June 30 and for the balance of the contract. The cost growth for that program is related to a contract dispute settlement with Litton Guidance and Control Systems (now part of Northrop Grumman) regarding development of an advanced Integrated Tactical Avionics System (ITAS) that is unique to this particular contract. The company has made progress in negotiating replacement subcontracts for the balance of the ITAS software development work, a principal element of the cost growth.
As a result of the adjustment, the company reported nine-month net earnings of $4.8 million, compared to $27.4 million in the same period last year. Revenues for the nine-month period were $658.8 million compared to $778.8 million last year. Results for the nine-month 2001 period include pre-tax gains of $2.7 million from the sale of two facilities in the first half and $2.1 million from a reduction in the stock appreciation rights accrual in the third quarter. The company has estimated its 2001 effective tax rate to be approximately 25 %, primarily due to reduced tax considerations related to the Australian helicopter program.
Excluding the $31.2 million earnings and tax adjustments, nine month net earnings for 2001 were $24.4 million.
Paul R. Kuhn, president and CEO, said, "Our businesses performed respectably in the third quarter despite difficult economic conditions. We believe this performance reflects the value of Kaman's broad diversification. Furthermore, our strong financial condition gives us the necessary resources to see us through these difficult economic times and the flexibility to take advantage of growth opportunities we are analyzing in each of our segments."
Third quarter operating profits for the company's Aerospace segment were $8.1 million, compared to $10.9 million last year. Sales were $77.1 million compared to $85.6 million a year ago.
The segment had an operating loss of $2.7 million in the nine months ended Sept. 2001, primarily due to the adjustment described above, compared to an operating profit of $33.0 million in the same period last year. Sales for the nine months were $223.8 million, compared to $281.0 million for the period last year.
SH-2G Super Seasprite business for the international naval helicopter market and the K-MAX medium-to-heavy external lift helicopter, along with spare parts and sales support, represented approximately 43 % of Aerospace sales for the third quarter compared to approximately 54 % a year ago. The lower %age is largely due to a tapering off in revenues from the SH-2G program as the Australia and New Zealand programs mature. For the third quarter 2001, virtually all of the helicopter sales came from the SH-2G programs.
The company is continuing work on contracts to supply SH-2G helicopters to the governments of Australia and New Zealand. The New Zealand Ministry of Defence accepted delivery of two SH-2G(NZ) aircraft in August. The two aircraft are the initial delivery of five SH-2G(NZ)s ordered for service with the Royal New Zealand Navy. Shipments of two more of the aircraft to New Zealand are expected by year's