Kaman Reports Second Quarter Earnings Per Share Up 18 Percent
BLOOMFIELD, Conn., July 20 /PRNewswire/ -- Kaman Corp. (NASDAQ:KAMNA)
today reports second quarter net earnings rose to $9.3 million from $8.0 million a year ago. Net earnings were 39 cents per share on a diluted basis, up 18 percent compared to second quarter 1999 diluted net earnings per share of 33 cents.
The second quarter of 1999 included a gain of approximately 6 cents per share as a result of reversing a $2.5 million reserve established in 1994 associated with Raymond Engineering (now part of Kaman Aerospace).
Revenues for the second quarter 2000 increased to $256.4 million, compared to $246.7 million a year ago.
For the first six months of 2000, net earnings were $17.8 million, compared to $15.3 million a year ago. Excluding the reserve reversal, the 1999 six month net earnings were $13.8 million. Net earnings for the first six months of this year were 75 cents per share on a diluted basis, compared to 63 cents per share diluted in 1999.
Revenues for the first six months of 2000 were $516.3 million, compared to $496.5 million the previous year.
Paul R. Kuhn, president and CEO, said, "We are continuing to build on the progress made in the first quarter. All of our operating segments have shown improvement, with a particularly strong performance by our industrial distribution business."
PERFORMANCE Industrial Distribution
Operating profit for Kaman Industrial Technologies (KIT) increased to $6.1 million in the second quarter, compared to $3.2 million in the 1999 quarter. Sales also increased to $130.1 million in the second quarter, compared to $125.8 million a year ago.
For the six months, KIT operating profits grew to $11.6 million, compared to $7.2 million in the previous year. Sales for the six months were $263.3 million, compared to $254.5 million in the 1999 period.
"KIT's solid performance this quarter reflects the overall improvement of market conditions in the industries it serves, especially in the Midwest and Northeast regions, as well as steps taken earlier to improve cost efficiencies through consolidation of branch operations and the implementation of better inventory controls," Kuhn said. "In particular, we benefited from an increase in sales in four of the industries we serve -- electronics, primary metals, industrial machinery and lumber -- which more than offset declines in the coal and metal mining industries."
Aerospace
Operating profits for Kaman's Aerospace business were $11.4 million in the second quarter, compared to $12.7 million ($10.2 million excluding the 1999 reserve reversal) in the previous year's quarter.
Sales for Aerospace were $98.9 million in the quarter, compared to $97.2 million last year.
For the first six months, Aerospace had an operating profit of $22.2 million, compared to $23.1 million ($20.6 million excluding the 1999 reserve reversal) the previous year. Sales for the six months just ended were $195.4 million, compared to $189.9 million for the 1999 period.
The company's SH-2G Super Seasprite helicopter program was again a leading contributor to Aerospace's results in the second quarter. Assembly of the first of five SH-2G(NZ) helicopters for the Royal New Zealand Navy was completed in June, and the aircraft is expected to begin flight testing this month. The Royal Australian Navy has 11 SH-2G(A) aircraft on order, and the first of these is currently undergoing systems integration and flight testing. Deliveries to New Zealand and Australia will begin next year.
The aircraft structures and components business also was an important contributor to Aerospace's results in the quarter, despite a continuing softness in the commercial market. In early April, the company announced it had been selected by MD Helicopters, Inc., Mesa, Ariz., to build fuselages for MD 500 and MD 600 commercial helicopters. The multi-year program has a potential value of $100 million to Kaman. On July 19, the company announced a second contract award from MD Helicopters, this one to supply composite rotor blades for the MD Explorer(R) helicopter. The multi-year blade contract, including options, has a potential value of $75 million to Kaman.
In April, the company announced its second sale of the year of a K-MAX helicopter, this one to Wucher Helicopters, GmbH, Austria. The first sale of the year was to Heli-Air Zagel Lufftransport AG of Hersbruck, Germany. The company continues its efforts to further develop additional global market opportunities for K-MAX.
Music Distribution
Kaman Music's operating profit in the second quarter was $500,000, compared to $364,000 a year ago. Sales during the quarter were $27.1 million, compared to $23.3 million the previous year.
For the six month period, Kaman Music had operating profits of $2.0 million, compared to $1.7 million in the first half of 1999. Sales for the six months were $57.1 million, compared to $51.3 million in the previous year. Sales for the first half of the year are traditionally lower than in the second half.
"The improving trend in Music's domestic business continued through the second quarter due to favorable market conditions," Kuhn said. "International sales also continue to exceed 1999 results due in part to increased penetration of our major brands, as well as improved economic conditions in those countries where we do business."
Kaman Corp., based here, is a $1 billion company with businesses in aerospace manufacturing, and industrial and music distribution markets.
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Summaries of Operations
(In thousands except per share amounts)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
Revenues $ 256,351 $ 246,685 $ 516,327 $ 496,516
Costs and expenses:
Cost of sales 192,191 182,650 386,811 367,364
Selling, general and
administrative expense 49,875 50,999 101,853 103,950
Interest income, net (564) (365) (914) (525)
Other expense, net 418 250 725 506
241,920 233,534 488,475 471,295
Earnings before
income taxes 14,431 13,151 27,852 25,221
Income taxes 5,160 5,120 10,025 9,917
Net earnings $ 9,271 $ 8,031 $ 17,827 $ 15,304
Net earnings per share:
Basic $ .40 $ .34 $ .77 $ .65
Diluted $ .39 $ .33 $ .75 $ .63
Average shares outstanding:
Basic 23,166 23,540 23,146 23,596
Diluted 24,328 24,874 24,342 24,968
Dividends declared
per share $ .11 $ .11 $ .22 $ .22
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (In thousands)
June 30, December 31,
2000 1999
Assets
Current assets:
Cash and cash equivalents $ 58,664 $ 76,249
Accounts receivable, net 198,645 156,173
Inventories 192,922 199,731
Other current assets 29,019 27,958
Total current assets 479,250 460,111
Property, plant and equipment, net 62,215 64,332
Other assets 10,386 9,760
$ 551,851 $ 534,203
Liabilities and shareholders' equity
Current liabilities:
Notes payable $ 4,123 $ 4,514
Accounts payable 60,549 48,760
Accrued liabilities 27,276 31,421
Advances on contracts 45,546 50,243
Other current liabilities 31,848 29,499
Income taxes payable 3,822 3,937
Total current liabilities 173,164 168,374
Deferred credits 24,324 22,906
Long-term debt,
excluding current portion 24,886 26,546
Shareholders' equity 329,477 316,377
$ 551,851 $ 534,203
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
For the Six Months
Ended June 30,
2000 1999
Cash flows from operating activities:
Net earnings $ 17,827 $ 15,304
Depreciation and amortization 5,777 5,969
Accounts receivable (42,472) 53,504
Inventory 6,809 (6,049)
Accounts payable 11,789 (2,654)
Advances on contracts (4,697) (22,776)
Changes in other current assets and liabilities (2,980) 2,621
Other, net 1,491 1,214
Cash provided by (used in)
operating activities (6,456) 47,133
Cash flows from investing activities:
Expenditures for property,
plant & equipment (3,779) (3,698)
Other, net (146) 95
Cash provided by (used in)
investing activities (3,925) (3,603)
Cash flows from financing activities:
Additions (reductions) to notes payable (391) 463
Reductions to long-term debt (1,660) (1,660)
Purchase of treasury stock (833) (3,945)
Dividends paid (5,089) (5,203)
Other, net 769 908
Cash provided by (used in)
financing activities (7,204) (9,437)
Net increase (decrease) in
cash and cash equivalents (17,585) 34,093
Cash and cash equivalents
at beginning of period 76,249 65,130
Cash and cash equivalents
at end of period $ 58,664 $ 99,223
Source: Kaman Corp.
Contact: David M. Long of Kaman, 860-243-6319, dml-corp@kaman.com
Website: http://www.kaman.com/
Company News On-Call: http://www.prnewswire.com/comp/480450.html or fax,
800-758-5804, ext. 480450
