Kaman Corp. (USA) reported results for third quarter 2007, ended September 30, and the divestiture of its Music division.

Sales for the quarter were USD $331.9 million, up 7.9% over 2006's $307.6 million.

Net earnings were $11.7 million, up more than 34% from 2006's $8.7 million.

Kaman announced it will sell its Music Division to Fender Musical Instruments for $117 million cash. The deal is set to close January 1, 2008. Without Music, sales were $275 million, up 9%, and earnings were $9.4 million, up 48%.

Kaman is a diversified industrial product manufacturer and distributor. Important market segments are dedicated to aerostructures, fuzing, helicopters, specialty bearings, and traditional industrial distribution. The military, aerospace and industrial target markets are primarily OEM, but include large parallel aftermarket replacement markets.

Kaman's proprietary self-lubricating bearings are currently in used in almost every military and commercial aircraft produced in Europe, North America, and South America. They are the leading products for applications requiring sophisticated engineering and specialization in the aircraft bearing market.

Proprietary bearings has long been part of the former Kamatics operation, primarily targeting bearings for aircraft and aerospace applications. It also owns German aircraft bearing manufacturer RWG Frankenjura-Industrie Flugwerklager GmbH, which it acquired in 2001. Bearing manufacturing takes place in Bloomfield, Connecticut and Dachsbach, Germany.

The company recently added 35,000 square feet of additional bearing manufacturing floorspace to the Bloomfield facility. 25,000 square feet was online by October 2006, and the remaining 10,000 square feet came online during this past quarter.

In third quarter, Kaman's Specialty Bearings segment set a new divisional sales record, notching $31 million, a 17.5% increase over third quarter 2006's $26.2 million. Thanks to a 35.5% margin, operating income rose to $11 million, up almost 56% from 2006's $7 million, and the division ended third quarter with a record order backlog.

Kaman's outgoing Chairman and CEO, Paul Kuhn, said bearing operations, "are continuing to benefit from a strong market environment, our positioning as a market leader and from our focus on process improvement, operating efficiencies and customer service, which have allowed us to manage a high level of order activity and backlog, as well as maintain delivery schedules which remain among the shortest in the industry."

Mr. Kuhn went on to comment: "We have also been opening up new markets for our products while ensuring a high level of performance for existing customers. The 35,000 square feet of additional space we have added over the past year at the Bloomfield location should provide us the capacity we need to meet market demands over the next few years."

Bearing sales growth in export markets has been key in recent quarters. Kaman said it has been working hard and successfully finding new sales in both Russia and China.

In the earnings call Mr. Kuhn elaborated that while some aerospace bearing manufacturers have been quoting lead times up to 110 weeks in some cases, Kaman has generally been responding with much faster lead times, which has helped the company capture some market share from competitors.

Like other bearing manufacturers, Kaman has had some trouble with materials sourcing for aerospace bearings, but credits the bearing manufacturing business' embracing lean manufacturing for its ability to maintain production and offer shipping lead times shorter than competitors. The company acknowledged it has, however, been bumping up against some internal manufacturing lead times.

Kaman's Industrial Distribution segment turned in third quarter sales up 7% from 2006, with operating income up 5.3%. The company credited higher sales in concert with ongoing cost control programs, partially offset by initial startup costs to support new national account contract awards. Sales to the new accounts are just now ramping up and beginning to contribute toward Distribution segment results.

Neal Keating, Kaman's new President and COO, will take over as CEO from Mr. Kuhn as of January 1, 2008, when Mr. Kuhn retires.