Kaydon Corp. (USA; NYSE: KDN) reported financial results for second quarter 2007, ended June 30.

Sales hit a new quarterly record, rising 10.4% to 113.4 million from 2006's $102.7 million

Operating income for the quarter was up $28.3 million, or 25% of sales, slipping from 2006's $26.2 million or 25.5% of sales.

Net income rose to $19.6 million, or 17.3% of sales, from $17.7 million, or 17.2% of sales in 2006.

Kaydon is a diversified manufacturer of bearings, filtration devices and other precision manufactured components for the aircraft and aerospace, military and other industries.

Bearings are included in the friction and motion control product segment, which recorded sales of $65 million in the quarter, up 7% from 2006's $61 million. Operating income for the segment grew 4.5% to $18.6 million. Kaydon operates North American bearing plants in Muskegon, Michigan; Sumter, South Carolina; Mocksville, North Carolina; and Monterrey, Mexico.

Split roller bearings were strong in the quarter, as Kaydon said recent growth in targeted industrial markets continued. There was also higher demand for specialty bearings used in defense, machinery and heavy equipment markets and applications.

Kaydon's wind energy markets, as for other bearing manufacturers, continued to see increasing demand.

To address the increasing demand from wind energy, Kaydon announced an additional expansion project. On top of an already-announced project, the two will provide Kaydon, "with substantially increased manufacturing capabilities to satisfy the rapidly growing wind turbine business."

This new expansion is budgeted at approximately $25 million by the end of 2008, and is designed to meet wind turbine manufacturers' requirements for advanced custom bearing assemblies up to 11 feet in diameter for next generation wind turbines capable of generating up to 3 megawatts.

Growth will primarily benefit one of the company's plants in Sumter, South Carolina, further widening its product lines beyond military slewing ring bearing applications such as for tank turrets. Another recent Sumter expansion program targets medical imaging bearings.

article: Kaydon expanding Sumter plant
In all, Kaydon's investment programs for wind energy bearings will top $78 million. For 2007, the company said capex will be close to $56 million, from $26.3 million last year.

President and CEO, James O'Leary, said: "We are pleased with the strong sales, operating income and orders achieved during the second quarter. Our record order intake during the quarter and resultant $201.5 million backlog position us well for the remainder of 2007."