Kaydon Reports Third Quarter 2006 Results

Kaydon Reports Third Quarter 2006 Results Kaydon Corp. (USA; NYSE: KDN) reported third quarter 2006 financial results, for the period ended September 30, 2006. Sales in the quarter set a new record, reaching $99.7 million, up 16% over 2005's $85.9 million. The company said sales were stronger across most product lines, including specialty bearings, specialty balls, linear deceleration products, sealing products, air and liquid filters, and metalforming equipment. Operating income also reached a new high, of $24.9 million (25% of sales), up 43% over 2005's $17.4 million (20.3% of sales). Similarly, net income from continuing operations reached $17.6 million (17.6% of sales) from $11.6 million (13.6% of sales) in 2005. 2005's income is $37.2 million if the now-divested Power and Data Transmission Products Group results are included. Kaydon's order backlog at the end of the quarter was $155.0 million, from $127.2 million at the end of third quarter 2005. The company said third quarter sales are seasonally lower each year due to business patterns. The sale of its Power and Data Transmission Products Group, considered a discontinued operation, netted $25.4 million in the quarter. Specialty bearing production at plants in the U.S. and Mexico received $5.5 million additional investment in third quarter, driven by demand from the wind energy market. By the end of 2007, the program is forecast to invest $30 million to expand specialty bearing production. Another bearing-related manufacturing program is scheduled to begin in the fourth quarter and continue through 2009. In this newest at program, Kaydon plans to invest at least $7.5 million, expanding production of specialty bearings for the medical and security equipment markets. Kaydon operates North American bearing plants in Muskegon, Michigan; Sumter, South Carolina; Mocksville, North Carolina; and Monterrey, Mexico. Bearing manufacturing and sales are part of Kaydon's Friction and Motion Control segment. In third quarter 2006, the segment recorded sales of $57.5 million, from $48.2 million in 2005. Operating income hit $16.9 million in 2006 from $11.6 million in 2005. President and CEO, Brian Campbell, said: "The excellent sales growth and positive earnings momentum we experienced during third quarter reflect not only continued strong demand for our performance-critical products that meet demanding customer needs, but also the operational execution of the Kaydon team." Mr. Campbell was upbeat about the future, saying: "Our current order backlog and incoming order flow make us highly confident that we will achieve record annual sales in 2006. Looking beyond fourth quarter, we are confident that Kaydon will continue its sales and earnings growth in 2007. Company-wide manufacturing initiatives, together with expanded productive capacity, and new product development and market share programs, will all support our growth and operating performance going forward."