Kaman Reports Second Quarter 2006 Results

Kaman Reports Second Quarter 2006 Results Kaman Corp. (USA; NASDAQ: KAMN; website) reported fiscal second quarter 2006 results, for the period ended June 30, 2006. Overall, sales in the quarter were exceptionally strong, hitting USD $293.0 million from 2005's $271.3 million. Operating income nearly doubled, to $14.0 million, from $7.3 million in 2005. Net income almost tripled, reaching $7.5 million from 2005's $2.6 million. 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. Manufacturing takes place in Bloomfield, Connecticut and Dachsbach, Germany. 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 the second quarter, the Kamatics / RWG subsidiary marked sales of $27.5 million, a record high and up strongly from 2005's $22.8 million. Kaman said orders, shipments and backlogs for both Kamatics and RGW were all at record high levels in the quarter. Activity from the commercial aviation sector was the primary driver behind the unexpectedly strong first quarter results. As a result of that strength in the bearing markets, Kaman said it is now in the process of adding approximately 30,000 square feet of additional manufacturing floorspace to the Bloomfield facility. Additional bearing production from that addition is forecast to be online by mid-2007. Kaman's Industrial Distribution Segment sells industrial supplies and power transmission products, including bearings and related equipment. Sales there were also strong in the quarter, at $170.5 million from $157.5 million in 2005. Operating income was $9.3 million, up from $8.4 million in 2005. Paul Kuhn, Kaman's Chairman, President and CEO, said: We are very pleased with the continued strong performance of the company in the 2006 second quarter. The new business wins we are achieving continue to validate the strategies we have put in place for each of our segments." Commenting on the Industrial Distribution business, Mr. Kuhn said it, "continued its strong performance for the quarter, achieving gains in market share and margin improvement driven by a strong focus on each of these areas. Sales to an expanding book of national account business grew at approximately twice the rate of the base business. Overall, U.S. industrial activity remained a positive factor for the segment, despite the dampening effect of multiple interest rate increases by the Federal Reserve." He also indicated Kaman, "continues to review acquisition opportunities that would expand the geographic footprint of the segment while adding to the business base and enhancing the national account effort." Looking forward to the second half of 2006, Mr. Kuhn said the company believes the demand markets will continue strong, particularly for military and commercial aerospace, and for Industrial Distribution.