EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
Kaman Corporation (NASDAQ-GS: KAMN)
Kaman Corporation (NASDAQ-GS: KAMN)
Investor Presentation
November 2009
 
 
 
2
KAMAN CORPORATION - Investment Highlights
 ü High margin aerospace business led by specialty bearing product lines
 ü Industrial distribution business gaining market share in a fragmented
 market via national account growth, geographic and product line
 expansion
 ü Long-term organic growth opportunities in both segments
 ü Potential to accelerate growth and increase scale through acquisitions
 ü Initiatives to optimize profit, increase cash flow generation, strengthen
 competitive position
 ü Strong balance sheet to fund growth and strategic initiatives
 
 
 
3
KAMAN CORPORATION - Overview
Nine month YTD sales
thru 10/2/09 $877 million
 Two business segments
 
 
 
4
Source: Boeing and Airbus historical data and ISM
AEROSPACE ORDERS and DELIVERIES VS. ISM INDEX OVER TIME
 
 
 
5
 ü December 2007 - Sold Music segment to Fender focusing the company on
  its core industrial distribution and aerospace businesses
 ü 2008 - Completed first acquisition in aerospace since 2002 and first
 acquisitions in industrial distribution since 2003
 ü February 2009 - Took title to eleven Kaman manufactured SH-2G helicopters
 under a previously negotiated settlement with the Commonwealth of Australia
 ü July 2009 - Received a contract modification award for the JPF program
 significantly improving profit on U.S. Government sales
RECENT SIGNIFICANT EVENTS
 
 
 
6
 ü August 2009 - Awarded contract to demonstrate unmanned version of the
  company’s K-MAX® helicopter to the U.S. Marine Corps
 ü August 2009 - Introduced the proprietary ReliaMark™ brand of power
  transmission products
 ü August 2009 - Awarded a five year potentially $53 million program to provide
  composite helicopter blade skins and skin core assemblies for Bell
  Helicopter
 ü August 2009 - $200 million Shelf registration (S-3) took effect
 ü September 2009 - Completed new three year $225 million revolving credit
  facility
RECENT SIGNIFICANT EVENTS
 
 
 
7
RECENT KEY APPOINTMENTS
 ü Neal Keating, Chairman, President and CEO
 ü Thomas Rabaut, Director
 ü Greg Steiner, President, Kaman Aerospace Group
 ü Bill Denninger, Senior Vice President and CFO
 ü Phil Goodrich, Vice President - Business Development
 ü William Higgins, Director
 ü Rob Starr, Vice President and Treasurer
 ü George Minnich, Director
 ü Steven Smidler, Senior Vice President and COO, Kaman Industrial
 Technologies
 
 
 
8
INDUSTRIAL DISTRIBUTION SEGMENT
2009 YTD Nine Month Sales $496 million
 
 
 
9
INDUSTRIAL DISTRIBUTION SEGMENT
                       
                       
                     
                    
Third largest industrial distribution firm serving $13 billion of a $23 billion power
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
 
 
 
10
INDUSTRIAL DISTRIBUTION SEGMENT
                       
                       
                     
                    
Strategy:
 § Expand our geographic footprint in major industrial 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:
 § Broad cross section of industry with 48,000 customers served from local
 branches in 72 of the top 100 U.S. Industrial markets. Growing national
 account base.
 
 
 
11
INDUSTRIAL DISTRIBUTION SEGMENT
 
 
 
12
INDUSTRIAL DISTRIBUTION SEGMENT
 
 
 
13
AEROSPACE SEGMENT
2009 YTD Nine Month Sales $381 million
 
 
 
14
Commercial
Military
Business/Regional
28%
69%
3%
Note: Based on YTD sales at 10/2/09
AEROSPACE - Business Mix
 
 
 
15

              
                         
          
AEROSPACE - Aerospace Bearing Products
Machineable Self-Lubricating Bearings
Brands KAron®, KAtherm®, KAcarb®, and others,
Custom Air Frame Bearings
 § Fraslip® and other brands
 § Plain and self-lubricating sliding bearings, ball bearings
 § Customized to meet specialized customer requirements in demanding aerospace
  and industrial applications
Low-Maintenance Flexible Couplings
 § KAflex® and Tufflex® brands
 § Used extensively in the main and tail rotor drive systems of helicopters
 § Custom-designed and engineered for each application
 
 
 
16
AEROSPACE - Aerospace Bearing Products
Aerospace and niche industrial markets.
 § Fixed Wing (Commercial, Military)
 Flight Controls
 Landing Gear and Doors
 Engines and Accessories
 § Helicopters (Commercial, Military)
 Rotor System and Controls
 Landing Gear and Doors
 Engines and Accessories
 Main Engine and Tail Rotor Driveshaft Systems
 § Spacecraft, Submarines, Launch Vehicles and Satellites
 Flight Controls
 Power Systems
 Solar Array Deployment Systems
 Hatches and Doors
 § Industrial
 Hydropower Systems
 Motor Sport - Steering and Suspension Systems
 
 
 
17
AEROSPACE - Metallic and Composite Structures
JACKSONVILLE, FL
WICHITA, KS
DARWEN, UK
Capabilities:
 § Build-to-Print manufacturing of metal and
 composite structures and assemblies
 § Composite tooling design and manufacture
Major Customers:
 § Sikorsky, Boeing IDS, BAe, Spirit, Airbus,
 Boeing Commercial, Aircell
Core Competencies:
 § Sheet Metal Fabrication
 § Composite Part Fabrication
 § Tooling design and manufacture
 § Aircraft Structure Assembly
 § Program Management
 § Supply Chain Management
 
 
 
18
AEROSPACE - Helicopter Services
Aftermarket Business
 § SH-2G Naval Helicopter - Support and Upgrades
 § K-MAX Commercial Helicopter Support
 § Blade Overhaul, Repairs, and Erosion Coating
HeliworX Subcontract Business
 § Bell blade skins and skin core assemblies
 § MDHI Explorer Rotor Blade System
 § Sikorsky - H-60 Blackhawk
 § Northrop Grumman Hawkeye
 § A-10 Re-wing Program
 § Small Composite Main Rotor Blade (SCRB)
Unmanned Airborne Systems (UAS)
 § Unmanned K-MAX
 
 
 
19
AEROSPACE - New Bell Blade Program
Customer / Contract Overview
 § Bell Helicopter - Textron
 § Fort Worth, Texas 
 § Award - 28 August 2009
 § $53M / Five-Year Program
Product Description / Application
 § Main Rotor Blade Composite Skins and Skin / Core Assemblies
 § 18 Total Part Numbers
 § Bell Models - H1, 406, 407, 412, 427, 429, 430 and BA609
Composite Materials
 § Fiberglass & Graphite Pre-Impregnated (Prepreg) Material
 § Nomex Honeycomb Core
 
 
 
20
HARPOON
FMU-139
TOMAHAWK
STANDARD
MISSILE
SLAM-ER
AMRAAM
KPP Fuzes are on a Majority of Major Weapons
Systems
STANDARD
MISSILE
JPF
SLAM-ER
TOMAHAWK
AMRAAM
MAVERICK
AGM-65M
AEROSPACE - Fuzing Systems
 
 
 
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%
 § 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
OPPORTUNITIES
 ü Market recovery - Industrial Distribution
 ü Ramp up programs
 - A-10 re-wing
 - Bell blades
 - B787
 - JSF
 - A380
 ü Acquisitions - both businesses
 ü Sale of SH-2(I) helicopters
 ü Unmanned K-MAX program
 ü Continuation of outsourcing trend - primes and super tier 1’s
 
 
 
23
FINANCIAL REVIEW
43%
2009 YTD Nine Month Sales $887 million
 
 
 
24

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
 
 
 
25

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
 
 
 
26
(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
 
 
 
27
Sales
EPS
Stock Price (one year)
Return on Invested Capital
PERFORMANCE METRICS
 
 
 
28
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.
Contact:
Eric B. Remington, Vice President
(860) 243-6334
Eric.Remington@kaman.com