Kaman 3Q Profits, Earnings Decrease

BLOOMFIELD, Conn. — Kaman Corp. reported financial results for the third fiscal quarter ended September 30, 2022.

“In September, we executed on our growth strategy with the acquisition of Parker-Hannifin’s Aircraft Wheel and Brake division, the largest in our company’s history. This acquisition expands the breadth of our product offerings and will drive meaningful margin and cash flow accretion. During the quarter, consolidated results benefited from strong performance in Engineered Products while some program and supplier challenges pressured current results and full year expectations. We continue to see strength in market demand with healthy order rates for our most profitable bearings, springs, seals and contacts products. In addition, demand in the commercial aerospace market is ramping, as sales increased to Boeing and Airbus for the fifth quarter in a row,” said Ian K. Walsh, Chairman, President and Chief Executive Officer.

“In the third quarter, our Engineered Products segment delivered excellent performance with year over year sales growth of 9% which was 11% excluding the increase from Aircraft Wheel and Brake and foreign exchange pressures. Additionally, order rates remained strong with backlog growing organically by nearly 40 percent since the beginning of the year. Margins were slightly tempered by some supply chain challenges in this segment; however, we are pleased with the way our teams have been managing these issues in order to limit disruptions, while continuing to meet our customer requirements.”

“In Precision Products, our fuze delivery plan is slightly below our prior expectations due to a delay in receipt of a supplied component. This has shifted the timing of deliveries, which will postpone a significant portion of our cash receipts to 2023. With regard to our air vehicles program, we are excited to announce that the Marine Corps selected KARGO UAV for its MULS-A program. They will be funding a prototype build starting in 2023 with a customer Field User Capability Assessment to follow.”

“In our Structures segment, certain program and supplier challenges are delaying the recovery we had anticipated, impacting our expected earnings and cash flow performance for the full year. We remain focused on improving the operational performance of this segment and winning new business opportunities in complex structural programs,” said Walsh.

Outlook

“Kaman is seeing sustained strength in our backlog of greater than $765 million and robust revenue, margins and backlog for bearings, seals, springs and contacts products driven by persistently strong demand. Guidance for the full year 2022 is being revised to include Aircraft Wheel and Brake and account for a decrease from our prior expectations based on a combination of execution on our programs and supplier challenges in Precision Products and Structures. The most meaningful change is the reduction in our cash flow for the year driven mostly by a delay in cash collections which will shift to 2023 due to the push out of deliveries.”

“Over the long term, Kaman is positioned to provide meaningful shareholder returns. We will remain disciplined in our approach to capital allocation and our main priority is to deleverage our balance sheet. We will continue to invest in research and development of new products and remain thoughtful in our strategy to achieve top quartile EBITDA margin, free cash flow and return on invested capital,” Walsh said.