Our financial performance during 2010 reflects the benefits of restructuring actions we took in 2009, improved operational performance, acquisitions made during the year and our success in taking advantage of the improving economy. For 2010, Kaman reported net earnings of $38.3 million, or $1.47 per diluted share, compared to $32.6 million, or $1.27 per diluted share, in 2009, an increase of 17.4%. Net sales for 2010 increased 15.0% to $1.32 billion, compared to $1.15 billion in 2009.
Our focus on maintaining a strong balance sheet, emphasizing prudent investments and liquidity, continued during 2010. Cash flow performance during the year was good despite financing higher levels of capital expenditures than in prior years as we accelerated investments for our future. Kaman achieved $15.8 million in free cash flow during 2010, compared to $56.9 million during 2009. Excluding a $25 million voluntary pension plan contribution in 2010, our free cash flow was $40.8 million. This emphasis on maintaining financial strength is a long-standing Kaman tradition, and will continue to be a core commitment. In fact, it is a source of considerable pride that 2010 marked forty consecutive years that Kaman has paid a cash dividend to shareholders.
We had an active year on the financing front. In September, we negotiated a new and upsized revolving credit facility. This extended the term of our credit availability and gave us additional borrowing capacity. In November, we successfully completed a convertible bond offering of $115 million. This was significantly more than the $75 million we initially set out to raise, reflecting strong demand from the market. By diversifying our balance sheet, obtaining additional credit, locking in our interest rate as we enter a period of anticipated rising rates, and extending the maturity date of a large portion of our debt, we have positioned Kaman to fund our future growth, including both acquisitions and investments in our existing businesses.
Our strong balance sheet enabled us to execute on our growth strategy, funding both internal and external investments to accelerate organic growth and four acquisitions during 2010. These acquisitions included the largest distribution acquisition in the company’s history and a key strategic acquisition in aerospace. Further discussion of these acquisitions is included in the segment operations reviews that follow.
Investing in our people is a long-standing Kaman principle. During 2010, we advanced this tradition by inaugurating a new Leadership Development Program. This program identifies high potential employees across the organization who are our future leadership and provides them with development opportunities and resources to achieve their full potential.
The last two years once again validated the soundness of our diversified business model, which is focused on complementary industries. During 2010, Industrial Distribution experienced robust organic growth as the manufacturing sector recovered from a difficult economic period. Aerospace performed well overall but experienced softness in certain commercial markets. This is in contrast to 2009, when strong aerospace performance offset a very challenging operating environment for industrial distribution. We expect this business model to continue to provide stability and confidence in the years ahead.