Kaman Reports Fourth Quarter,Fiscal Year 2005 Results

Kaman Corporation (USA; NASDAQ: KAMN) reported fiscal fourth quarter and full-year 2005 results. Note that following its recent recapitalization, Kaman's ticker symbol changed from KAMNA to KAMN. Fourth quarter sales improved beyond analyst's projections, as the company reversed an unexpected third quarter loss to record $9.2 million net income. Sales for the quarter were USD $288.5 million, up almost 13% from 2004's $256.2 million. Net income reached $9.2 million, or 3.2% of sales, up significantly from 2004's $500,000. 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. Bearings are produced by the company's Kamatics operation, manufacturing proprietary bearings for aircraft and aerospace applications. It also owns German aircraft bearing manufacturer RWG Frankenjura-Industrie Flugwerklager GmbH, which it acquired in 2001. Kamatics' 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. In fourth quarter, the Kamatics / RWG subsidiary had net sales of $23.6 million, up from $19.0 million in 2004. Kaman also distributes bearings, via its Industrial Distribution business -- North America's third largest bearing and power transmission product distributor, serving approximately 50,000 customers from nearly 200 locations across North America. Product lines include SKF, INA, FAG, Timken, Sealmaster, Rexnord, McGill, THK, Browning, Dodge, Thomson and others. Industrial Distribution sales were $152.0 million in fourth quarter, up from $141.6 million in 2004. Operating income more than doubled, to $7.2 million from $3.0 million, primarily due to higher sales, lower incentive compensation expense, and end-of-year accrued liability adjustments. For the fiscal year, Kamatics / RWG set a sales record of $92.2 million, up more than 19% from 2004's $77.1 million. Bearing orders from both Airbus and Boeing were strong in 2005, paralleling orders from airframe customers such as Embraer, Bombardier and others in both commercial and military markets. Kaman's bearing order backlogs at the end of 2005 were at a record level. Although bearing sales through the year were up sharply, the company said it was able to keep pace by increasing production capacity. In doing so, it opened up additional sales opportunities and improved market penetration. Going forward, its strategy in the bearing business is to, "remain the leader in product performance and applications engineering support while staying ahead of the curve in product technology enhancement." Kaman said it targets the most demanding bearing applications early in the aircraft design process as part of each prime contractor's problem-solving team. Industrial Distribution sales for the year set a record at $621.9 million, up 7% from 2004's $581.8 million. Operating income for 2005 also set a record, hitting $29.4 million from 2004's $19.3 million. Paul Kuhn, who serves in all three key roles as Chairman, President and CEO, said, "As these financial results indicate, the segment continued to compete well during 2005. The national accounts program continued to grow, reflecting service excellence and resulting in new or expanded national account contracts ... In addition to benefiting from a strong focus on delivering superior customer service and improving efficiency, the segment's performance was boosted by continued strength in the industrial market in 2005. A strong market climate continued in the West region of the U.S. and helped offset softness in Southern and Gulf Coast markets as they recovered from the hurricanes of 2005. On balance, the market, as measured by the industrial production index and domestic manufacturing plant capacity utilization appears on track for stability in 2006."