Kaydon reports first quarter results

Kaydon Corporation (USA) reported sales and earnings both improved in 2003's first quarter over the same period in 2002. Sales hit USD $70.8 million, up 7% over $66.1 million a year ago. For the sales improvement, Kaydon cited spikes in demand from both aerospace and military customers for specialty bearing products. Similarly, demand was up in a few heavy equipment markets and for linear deceleration products used in industrial applications. Other important markets, such as electronic manufacturing and construction equipment, power generation equipment and specialty ball markets, were essentially flat, "reflecting customers' cautious capital spending programs," said the company. Net income for the quarter was $7.0 million, much improved from the adjustment-related loss of $7.3 million reported for 2002's first quarter. During first quarter, Kaydon layoffs cost $0.5 million. Through the end of 2003, Kaydon said it expects to incur $1.3 million in additional restructuring costs, related to equipment relocation, headcount reduction and other restructuring expenses. Beginning in 2004, the company said it expects these belt-tightening moves will save at least $2.0 million per year. Brian Campbell, President and CEO, said, "Although benefiting from increased demand for defense-related products, we are encouraged by higher first quarter 2003 order levels of $80.6 million which increased 13.6% over first quarter 2002 and 15.5% over fourth quarter 2002. However, as a larger portion of our business becomes short-cycle in nature, our future financial performance depends on the current pace of incoming orders and sales mix, and we have limited visibility of future business conditions in the current environment." In early March, the U.S. District Court for the Southern District of New York issued a decision granting all defendants, including Kaydon, summary judgment in the 8-year-old, "Transactions Lawsuit." The $700 million suit, brought by creditors of the former Keene Corp., was important for a variety of reasons, not the least of which were the $700 million pricetag and its tie to the events which created Kaydon in 1984. Although the complainants have appealed the verdict, Mr. Campbell said, "We continue to strongly believe that the trial Court's decision will withstand appeal."