Kaydon Corporation (Ann Arbor, Michigan) reported sales and profits in third quarter 2001 were off sharply from the same period last year. Kaydon is a diversified manufacturing company which produces bearings under the Kaydon brand in the U.S. and Cooper Roller Bearings in the U.K.

Sales dropped to USD $78.6 million in 3Q2001 from $81.3 million in 2000, while operating income fell to $3.5 million from $19 million.

In third quarter 2000 and 2001, the company took special charges against earnings. After special charges, Kaydon reported a net loss in 3Q2001 of $24.4 million, against net earnings of $7.1 million in 3Q2000.

The special charge in third quarter 2001 was $38.1 million to write down the value of hydraulic fluid power businesses and inventories. The write down was primarily to adjust their values to more accurately reflect true market value - in preparation for their disposal. Kaydon's Board recently approved management's plan to sell off the Fluid Power Products Group.

Factoring out recent acquisitions, sales by continuing operations were off 21.4% in 3Q2001 to $64.5 million from $81.3 million in 3Q2000.

Kaydon said the "disappointing shortfall" reflects the broad-based slowdown in industrial manufacturing activity around the world.

The company said it sees little potential for improvement in the next six months.

President and CEO Brian Campbell said, "Our operating results continue to be negatively impacted by the broad-based softness in industrial manufacturing activity. Kaydon was already struggling in virtually all of our key industrial markets when the events of September 11 added additional uncertainty and apprehension to a lackluster demand situation. We continue to see weakness in demand today, and have not seen convincing evidence that our key markets, including construction equipment, other heavy industrial equipment, semiconductor manufacturing equipment, and hydraulic fluid power markets, will rebound within the next five to six months."