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The eBearing News
October 31, 2005
Kaman Reports Third Quarter 2005 Results
copyright © 2005 eBearing Inc.
Kaman Corporation (USA; Nasdaq: KAMNA) reported financial results for fiscal third quarter 2005, ended
September 31, recording a surprising net loss on top of a strong sales quarter.
Sales for the quarter were up 13%, reaching USD $278.1 million from $246.3 million during the same
period in 2004.
What would have been a profitable quarter, however, vanished amid myriad one-time expenses.
For the quarter, Kaman reported a net loss of $3.6 million, from a year-ago loss of $11.8 million.
What would have been a profitable quarter turned to losses from $16.5 million in unexpected
expenses. A $4.4 million share-price-related executive compensation package related to the share price
appreciation, $1.1 million in expenses related to the company's recapitalization proposal now
in litigation, and an $11 million charge created by restarting of a Helicopter Division program.
Kaman is a diversified industrial product manufacturer and distributor. Important market segments
are dedicated to military, aerospace and industrial products, including parallel aftermarket replacement
product markets.
The company's Kamatics bearing manufacturing business produces proprietary bearings for aircraft and
aerospace applications. It owns German aircraft bearing manufacturer RWG Frankenjura-Industrie
Flugwerklager GmbH, acquired in 2001.
Kaman's Industrial Distribution business is North America's third largest bearing and power transmission
product distributor.
Aerospace Segment, Kamatics Subsidiary
The Kamatics bearing business, including RWG, had net sales
of $22.8 million in the quarter, from $19.7 million in third quarter 2004.
Kaman reported: "Kamatics' proprietary self-lubricating bearings are currently in use in almost all military
and commercial aircraft produced in North and South America and Europe, and are market-leading products for
applications requiring the highest level of engineering and specialization in the airframe bearing
market. Order activity from both Airbus and Boeing continued to be strong in the third quarter, as it was
from other customers in both the commercial and military sectors. As order levels increased, the subsidiary
was able to increase production levels while maintaining delivery schedules, leading to additional
sales opportunities and further penetration of the market."
Industrial Distribution Segment
Sales in the quarter were $156.5 million, up from $149.3 million in the third quarter of 2004, producing
operating profit of $5.2 million, down from $5.5 million in 2004.
Mr. Kuhn commented: "Driven by increased sales levels and an ongoing program to improve margins, the Industrial
Distribution segment delivered solid improvement for the first nine months of 2005, a period in which higher
energy costs together with the massive destruction caused by Hurricanes Katrina and Rita in the third
quarter could have had a damping effect on purchasers' confidence. While the inflationary effect of energy
costs spikes is yet to be fully determined, storm-related disruption to the energy sector
was less than initially feared, and the underlying strength of the economy is showing considerable resilience.
This should support a reasonable business environment over the next several quarters. The segment continues
to track the U.S. Industrial Production Index nationally, but is also affected by sector and regional differences
in the economy. Branches serving the paper, chemicals and mining industries, for instance, benefited from the
strength of those industries while branches serving primarily the machinery manufacturing, primary metal
manufacturing and transportation equipment industries were affected by the relatively weaker performance of
those industries. Due to the particular mix of industries by region, Western branches serving raw materials
industries generally performed better than those in the East, where a continuing exodus of manufacturing
from the region has affected OEM sales. The Central region remained stable. Overall, the segment
continued to compete well."
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Bruce Carr edited this content.
Copyrighted material; unauthorized reproduction prohibited.
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Entire contents Copyright © 1999-2011, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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