Attached files
| file | filename |
|---|---|
| 8-K - KAMAN CORPORATION FORM 8-K DATED JANUARY 14, 2010 - KAMAN Corp | form8-k.htm |
Kaman
Corporation (NASDAQ-GS: KAMN)
Kaman
Corporation (NASDAQ-GS: KAMN)
CJS
Securities, Inc.
10th Annual “New Ideas for
the New Year” Investor Conference
January
14, 2010
2
Distribution
57%
Aerospace
43%
2009
Nine Month Sales
Distribution
14%
Aerospace
86%
2009
Nine Month
Operating
Income
2009
YTD Sales 9/30/09 $877M;
4,100
Employees
Aerospace
Industrial
Distribution
NASDAQ
GS: KAMN
KAMAN
CORPORATION
3
AEROSPACE
SEGMENT
2009
YTD Nine Month Sales $381 million
4
Bloomfield,
CT
700,000
sq ft
•Mechanical
•Composites
•Large
Assembly
Wichita,
KS
168,000
sq ft
•Composites
•Structural
Bondments
•Composite
Assemblies
Jacksonville,
FL
220,000
sq ft
•Fabrication-
ØMachining
ØSheet
Metal Form
ØExtrusion
•Assembly
ØMajor
Subs
ØFinal
Structure
•Product
Integration
Darwen,
UK
208,000
sq ft
•Composites
•Metal
Fabrication
•Tooling
•Assembly
AEROSPACE -
Primary Facilities
•Helicopter
assembly
and
test facilities
•Bearing
manufacturing
5
Commercial
Military
Business/Regional
28%
69%
3%
Note: Based on
YTD sales at 10/2/09
AEROSPACE -
Business Mix
6
Manufacture
of cockpit
Blade
erosion coating
Manufacture
and assembly
of tail rotor pylon
of tail rotor pylon
Sub
assembly and
joining of fuselage
joining of fuselage
Blade
manufacture, repair
and overhaul
and overhaul
Driveline
couplings
Bushings
Flight
control bearings
AEROSPACE -
Programs/Capabilities
7
JSF
C-17
A-10
E-2D
Typhoon
UH-60
A400
CH-47
AEROSPACE -
Principal Military Platforms
8
Fixed
trailing edge
Fuel
tank access doors
Top
covers
Bearing
products
Nose
landing gear
Rudder
Main
landing gear
Flaps
Horizontal
stabilizer
Doors
Engine/thrust
reverser
Flight
controls
AEROSPACE -
Programs/Capabilities
9
AEROSPACE -
Commercial Significant Platforms
Airbus
A320
Boeing
777
K-MAX
Airbus
A330
Bell
Helicopter
Boeing
787
Boeing
737
10
Kaman
K-MAX
§ K-MAX Commercial
Helicopter
Support
Support
§ Teamed with Lockheed
Martin to
develop an unmanned military version
of the K-Max
develop an unmanned military version
of the K-Max
AEROSPACE -
Kaman Helicopters
Kaman
SH-2G Naval Helicopters
§ Support and
Upgrades
§ Currently in service
with Egypt,
New Zealand, Poland
New Zealand, Poland
§ Remarketing eleven
SH-2G(I)s,
formerly Royal Australian Navy aircraft
formerly Royal Australian Navy aircraft
11
Aerospace -
Programs/Capabilities
Other:
§ Composite tooling
design and
manufacture
manufacture
§ Joint Programmable
Fuze
§ Missile
fuzes
• Tomahawk
• Harpoon
• AMRAAM
• Maverick
12
AEROSPACE -
Market Environment/Opportunities
§ Stable
programs
• C-17
• JPF
• BLACKHAWK
§ Ramp
up programs
• A-10
re-wing
• Bell
Helicopters
• B787
• JSF
• A380
§ Continuation
of outsourcing trend - primes and super tier 1’s
§ Unmanned
K-MAX program
§ Sale
of SH-2G(I) helicopters
§ Acquisitions
providing complementary capabilities and platforms
13
INDUSTRIAL
DISTRIBUTION SEGMENT
2009
YTD Nine Month Sales $496 million
14
INDUSTRIAL
DISTRIBUTION SEGMENT
Third
largest industrial distribution firm serving $13 billion of a $23 billion
power
transmission market.
transmission market.
185
branches and 5 distribution centers
Major
product categories:
§ Bearings
§ Mechanical and
electrical power transmission
§ Motion
control
§ Material
handling
§ Fluid
power
Statistics
§ CAGR 2003 to 2008 =
9.3%
§ Sales per employee
$435,000
§ 1,700 employees
(approximately one third outside sales)
§ SKUs 3.25
million
§ 48,000
customers
15
INDUSTRIAL
DISTRIBUTION SEGMENT
16
INDUSTRIAL
DISTRIBUTION SEGMENT - Key Suppliers
17
INDUSTRIAL
DISTRIBUTION - Market Environment/Opportunities
§ Market
recovery - positive ISM index points to improving market
environment
environment
§ Expand
our geographic footprint through acquisitions in major industrial
markets to enhance our position in the competition for national and
regional accounts
markets to enhance our position in the competition for national and
regional accounts
§ Broaden
our product offerings to gain additional business from existing
customers and new opportunities from a wider slice of the market
customers and new opportunities from a wider slice of the market
18
KAMAN
CORPORATION - Summary
§ High
margin aerospace business led by specialty bearing product lines
§ Industrial
distribution business gaining market share in a fragmented
market via national account growth, geographic and product line
expansion
market via national account growth, geographic and product line
expansion
§ Long-term
organic growth opportunities in both segments
§ Potential
to accelerate growth and increase scale through acquisitions
§ Initiatives
to optimize profit, increase cash flow generation, strengthen
competitive position
competitive position
§ Strong
balance sheet to fund growth and strategic initiatives
Kaman
Corporation (NASDAQ-GS: KAMN)
Kaman
Corporation (NASDAQ-GS: KAMN)
Q&A
20
APPENDIX
43%
2009
YTD Nine Month Sales $877 million
21
OUTLOOK
Aerospace
segment
§ Full year 2009 sales
expected to be up 5% to 7% year-over-year
§ Operating margin for
2009 expected to be in the “mid-teens”
§ Stable military
programs - limited near term impact from DOD reductions
Industrial
Distribution segment
§ Full year 2009 sales
are expected to decline toward the high end of stated range
of down 10% to 15%
of down 10% to 15%
§ Full year 2009
operating margin is expected to be between 2.1% and 2.5%
Cash
Flow
§ Full year 2009 free
cash flow is expected to be between $35M and $40M
22
1 Corporate expense percentage is to Total Sales
|
(In
thousands)
SEGMENTS
|
Net
Sales |
Operating
Income/(Loss) |
Operating
Margin |
|||
|
Q3
2009
|
Q3
2008
|
Q3
2009
|
Q3
2008
|
Q3
2009
|
Q3
2008
|
|
|
Industrial
Distribution
|
$162,921
|
$204,275
|
$3,388
|
$10,704
|
2.1%
|
5.2%
|
|
Aerospace
|
126,980
|
130,858
|
19,906
|
20,865
|
15.7%
|
15.9%
|
|
Net
gain/(loss) on sale of assets
|
|
|
(3)
|
301
|
|
|
|
Corporate
expense
|
|
|
(8,625)
|
(7,422)
|
1
(3.0%)
|
1(2.2%)
|
|
Sales/Op.
inc. from continuing ops
|
$289,901
|
$335,133
|
$14,666
|
$24,448
|
5.1%
|
7.3%
|
INCOME
STATEMENT HIGHLIGHTS
For quarters ended October 2, 2009 and September 26, 2008
For quarters ended October 2, 2009 and September 26, 2008
23
1 Corporate expense percentage is to Total Sales
|
(In
thousands)
SEGMENTS
|
Net
Sales |
Operating
Income/(Loss) |
Operating
Margin |
|||
|
YTD
2009
|
YTD
2008
|
YTD
2009
|
YTD
2008
|
YTD
2009
|
YTD
2008
|
|
|
Industrial
Distribution
|
$495,781
|
$589,773
|
$9,232
|
$29,512
|
1.9%
|
5.0%
|
|
Aerospace
|
381,378
|
347,426
|
56,803
|
46,920
|
14.9%
|
13.5%
|
|
Net
gain/(loss) on sale of assets
|
|
|
37
|
94
|
|
|
|
Corporate
expense
|
|
|
(25,836)
|
(23,704)
|
1
(2.9%)
|
1(2.5%)
|
|
Sales/Op.
inc. from continuing ops
|
$877,159
|
$937,199
|
$40,236
|
$52,822
|
4.6%
|
5.6%
|
INCOME
STATEMENT HIGHLIGHTS
For nine months ended October 2, 2009 and September 26, 2008
For nine months ended October 2, 2009 and September 26, 2008
24
|
(In
Millions)
|
As
of 10/2/09
|
As of
12/31/08
|
As of
12/31/07
|
|
Cash
and Cash Equivalents
|
$16.6
|
$8.2
|
$73.9
|
|
Notes
Payable and Long-term Debt
|
$78.7
|
$94.2
|
$12.9
|
|
Shareholders’
Equity
|
$299.8
|
$274.3
|
$394.5
|
|
Debt
as % of Total Capitalization
|
20.8%
|
25.6%
|
3.2%
|
|
Capital
Expenditures
(YTD
Continuing Operations)
|
$8.9
|
$16.0
|
$14.2
|
|
Depreciation & Amortization (YTD
Continuing Operations)
|
$11.8
|
$12.8
|
$9.9
|
BALANCE SHEET
AND CAPITAL FACTORS
25
Sales
EPS
Stock
Price (one
year)
Return
on Invested Capital
PERFORMANCE
METRICS
26
Forward-Looking
Statements
This
presentation may contain forward-looking information relating to the company's
business and prospects, including the
Aerospace and Industrial Distribution businesses, operating cash flow, and other matters that involve a number of uncertainties that
may cause actual results to differ materially from expectations. Those uncertainties include, but are not limited to: 1) the successful
conclusion of competitions for government programs and thereafter contract negotiations with government authorities, both foreign
and domestic; 2) political conditions in countries where the company does or intends to do business; 3) standard government
contract provisions permitting renegotiation of terms and termination for the convenience of the government; 4) domestic and foreign
economic and competitive conditions in markets served by the company, particularly the defense, commercial aviation and industrial
production markets; 5) risks associated with successful implementation and ramp up of significant new programs; 6) management's
success in resolving operational issues at the Aerostructures Wichita facility; 7) successful negotiation of the Sikorsky Canadian MH-
92 program; 8) successful resale of the SH-2G(I) aircraft, equipment and spare parts; 9) receipt and successful execution of
production orders for the JPF U.S. government contract, including the exercise of all contract options and receipt of orders from allied
militaries, as all have been assumed in connection with goodwill impairment evaluations; 10) satisfactory resolution of the company’s
litigation relating to the FMU-143 program; 11) continued support of the existing K-MAX helicopter fleet, including sale of existing K-
MAX spare parts inventory; 12) cost growth in connection with environmental remediation activities at the Bloomfield, Moosup and
New Hartford, CT facilities and our U.K. facilities; 13) profitable integration of acquired businesses into the company's operations; 14)
changes in supplier sales or vendor incentive policies; 15) the effects of price increases or decreases; 16) the effects of pension
regulations, pension plan assumptions and future contributions; 17) future levels of indebtedness and capital expenditures; 18)
continued availability of raw materials and other commodities in adequate supplies and the effect of increased costs for such items;
19) the effects of currency exchange rates and foreign competition on future operations; 20) changes in laws and regulations, taxes,
interest rates, inflation rates and general business conditions; 21) future repurchases and/or issuances of common stock; and 22)
other risks and uncertainties set forth in the company's annual, quarterly and current reports, and proxy statements. Any forward-
looking information provided in this presentation should be considered with these factors in mind. The company assumes no
obligation to update any forward-looking statements contained in this presentation.
Aerospace and Industrial Distribution businesses, operating cash flow, and other matters that involve a number of uncertainties that
may cause actual results to differ materially from expectations. Those uncertainties include, but are not limited to: 1) the successful
conclusion of competitions for government programs and thereafter contract negotiations with government authorities, both foreign
and domestic; 2) political conditions in countries where the company does or intends to do business; 3) standard government
contract provisions permitting renegotiation of terms and termination for the convenience of the government; 4) domestic and foreign
economic and competitive conditions in markets served by the company, particularly the defense, commercial aviation and industrial
production markets; 5) risks associated with successful implementation and ramp up of significant new programs; 6) management's
success in resolving operational issues at the Aerostructures Wichita facility; 7) successful negotiation of the Sikorsky Canadian MH-
92 program; 8) successful resale of the SH-2G(I) aircraft, equipment and spare parts; 9) receipt and successful execution of
production orders for the JPF U.S. government contract, including the exercise of all contract options and receipt of orders from allied
militaries, as all have been assumed in connection with goodwill impairment evaluations; 10) satisfactory resolution of the company’s
litigation relating to the FMU-143 program; 11) continued support of the existing K-MAX helicopter fleet, including sale of existing K-
MAX spare parts inventory; 12) cost growth in connection with environmental remediation activities at the Bloomfield, Moosup and
New Hartford, CT facilities and our U.K. facilities; 13) profitable integration of acquired businesses into the company's operations; 14)
changes in supplier sales or vendor incentive policies; 15) the effects of price increases or decreases; 16) the effects of pension
regulations, pension plan assumptions and future contributions; 17) future levels of indebtedness and capital expenditures; 18)
continued availability of raw materials and other commodities in adequate supplies and the effect of increased costs for such items;
19) the effects of currency exchange rates and foreign competition on future operations; 20) changes in laws and regulations, taxes,
interest rates, inflation rates and general business conditions; 21) future repurchases and/or issuances of common stock; and 22)
other risks and uncertainties set forth in the company's annual, quarterly and current reports, and proxy statements. Any forward-
looking information provided in this presentation should be considered with these factors in mind. The company assumes no
obligation to update any forward-looking statements contained in this presentation.
Contact:
Eric B. Remington, Vice President
(860) 243-6334
Eric.Remington@kaman.com
Eric B. Remington, Vice President
(860) 243-6334
Eric.Remington@kaman.com