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Emerging growth company |
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☐ |
KAMAN CORPORATION | ||
By: | /s/ Robert D. Starr | |
Robert D. Starr | ||
Executive Vice President and | ||
Chief Financial Officer |
Exhibit | Description | |
99.1 | Attached | |
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101 |
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NEWS RELEASE | |
Kaman Corporation | |
1332 Blue Hills Avenue Bloomfield, CT USA | |
P 860.243.7100 www.kaman.com |
• | Net sales up 7.7% to $237.8 million versus prior year |
• | Aerospace operating income increased 7.9% to $45.0 million, or 18.9% of sales |
• | Net earnings increased $18.5 million to $34.1 million |
• | Diluted earnings per share rose $0.66 to $1.22, or $0.80 adjusted* |
• | Net sales up 3.5% to $761.6 million versus prior year |
• | Aerospace operating margin up 430 basis points to 17.1%, or 17.2% adjusted* |
• | Diluted earnings per share $2.01, or $1.63 adjusted* |
• | Record JPF deliveries of 41,429 units |
• | Record order intake for specialty bearing and engineered products |
Table 1. Summary of Financial Results (unaudited) | |||||||||||||
In thousands except per share amounts | For the Three Months Ended | ||||||||||||
December 31, 2019 | December 31, 2018 | Change | |||||||||||
Net sales from continuing operations | $ | 237,792 | $ | 220,859 | $ | 16,933 | |||||||
Operating income from continuing operations: | |||||||||||||
Aerospace | $ | 45,041 | $ | 41,748 | $ | 3,293 | |||||||
% of sales | 18.9 | % | 18.9 | % | — | % | |||||||
Loss on sale of business | (3,739 | ) | (5,722 | ) | 1,983 | ||||||||
Net gain (loss) on sale of assets | 114 | (528 | ) | 642 | |||||||||
Corporate expense | (26,576 | ) | (11,379 | ) | (15,197 | ) | |||||||
Operating income from continuing operations | $ | 14,840 | $ | 24,119 | $ | (9,279 | ) | ||||||
Adjusted EBITDA*: | |||||||||||||
Earnings from continuing operations | $ | 34,105 | $ | 15,632 | $ | 18,473 | |||||||
Adjustments | 2,641 | 26,098 | (23,457 | ) | |||||||||
Adjusted EBITDA* | $ | 36,746 | $ | 41,730 | $ | (4,984 | ) | ||||||
% of sales | 15.5 | % | 18.9 | % | (3.4 | )% | |||||||
Earnings per share: | |||||||||||||
Diluted earnings per share from continuing operations | $ | 1.22 | $ | 0.56 | $ | 0.66 | |||||||
Adjustments | (0.42 | ) | 0.33 | (0.75 | ) | ||||||||
Adjusted diluted earnings per share from continuing operations* | $ | 0.80 | $ | 0.89 | $ | (0.09 | ) | ||||||
(in millions) | 2019 | 2020 Outlook | ||||||||
Actual | Low End | High End | ||||||||
Sales from continuing operations | $ | 761.6 | $ | 860.0 | $ | 880.0 | ||||
Operating Margins | ||||||||||
Operating margin from continuing operations | 7.0 | % | 5.0 | % | 6.7 | % | ||||
Operating margin impact of adjustments | 2.6 | % | 5.0 | % | 4.8 | % | ||||
Operating margin from continuing operations, adjusted* | 9.6 | % | 10.0 | % | 11.5 | % | ||||
Adjusted EBITDA | ||||||||||
Earnings from continuing operations | $ | 56.4 | $ | 38.5 | $ | 50.5 | ||||
Adjustments | $ | 42.9 | $ | 82.2 | $ | 85.8 | ||||
Adjusted EBITDA* from continuing operations | $ | 99.3 | $ | 120.7 | $ | 136.3 | ||||
Adjusted EBITDA margin* from continuing operations | 13.0 | % | 14.0 | % | 15.5 | % | ||||
Free Cash Flow | ||||||||||
Operating cash flow from continuing operations | $ | 42.5 | $ | 85.0 | $ | 95.0 | ||||
Cash used for the purchase of property, plant and equipment | $ | (22.5 | ) | $ | (25.0 | ) | $ | (25.0 | ) | |
Free Cash Flow* from continuing operations | $ | 20.0 | $ | 60.0 | $ | 70.0 |
• | Expenses associated with the purchase accounting of Bal Seal of approximately $32 million |
• | Depreciation and amortization expense of approximately $35 million |
• | Net periodic pension benefit of approximately $16.5 million |
• | Interest expense of approximately $15.0 million |
• | Estimated annualized tax rate of 23.0% |
Table 2. Summary of Segment Information (in thousands) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Net sales from continuing operations | $ | 237,792 | $ | 220,859 | $ | 761,608 | $ | 735,994 | ||||||||
Operating income from continuing operations: | ||||||||||||||||
Aerospace | $ | 45,041 | $ | 41,748 | $ | 130,393 | $ | 94,357 | ||||||||
Loss on sale of business | (3,739 | ) | (5,722 | ) | (3,739 | ) | (5,722 | ) | ||||||||
Net gain (loss) on sale of assets | 114 | (528 | ) | (237 | ) | 1,031 | ||||||||||
Corporate expense | (26,576 | ) | (11,379 | ) | (73,006 | ) | (56,703 | ) | ||||||||
Operating income from continuing operations | $ | 14,840 | $ | 24,119 | $ | 53,411 | $ | 32,963 |
Table 3. Depreciation and Amortization from continuing operations (in thousands) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Depreciation and Amortization: | ||||||||||||||||
Aerospace | $ | 5,766 | $ | 5,945 | $ | 22,697 | $ | 24,506 | ||||||||
Corporate | 780 | 850 | 3,157 | 3,369 | ||||||||||||
Consolidated Total | $ | 6,546 | $ | 6,795 | $ | 25,854 | $ | 27,875 |
Organic Sales from continuing operations (in thousands) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Net sales | $ | 237,792 | $ | 220,859 | $ | 761,608 | $ | 735,994 | ||||||||
Acquisition Sales | — | — | — | — | ||||||||||||
Organic Sales | $ | 237,792 | $ | 220,859 | $ | 761,608 | $ | 735,994 |
Adjusted EBITDA from continuing operations (in thousands) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Adjusted EBITDA from continuing operations | ||||||||||||||||
Consolidated Results | ||||||||||||||||
Sales from continuing operations | $ | 237,792 | $ | 220,859 | $ | 761,608 | $ | 735,994 | ||||||||
Earnings from continuing operations, net of tax | $ | 34,105 | $ | 15,632 | $ | 56,446 | $ | 15,877 | ||||||||
Interest expense, net | 2,607 | 4,639 | 17,202 | 20,046 | ||||||||||||
Income tax (benefit) expense | (19,103 | ) | 6,883 | (15,859 | ) | 9,259 | ||||||||||
Non-service pension and post retirement benefit income | (98 | ) | (3,084 | ) | (396 | ) | (12,127 | ) | ||||||||
Other expense (income), net | 58 | 49 | (309 | ) | (92 | ) | ||||||||||
Depreciation and amortization | 6,546 | 6,795 | 25,854 | 27,875 | ||||||||||||
Other Adjustments: | ||||||||||||||||
Restructuring and severance costs | 1,005 | 2,642 | 1,558 | 7,353 | ||||||||||||
Non-cash intangible asset impairment charge | — | — | — | 10,039 | ||||||||||||
Non-cash write-off of inventory | — | — | — | 709 | ||||||||||||
Employee tax-related matters in foreign operations | — | 1,761 | — | 3,040 | ||||||||||||
Cost associated with corporate development activities | 7,097 | 30 | 10,090 | 1,081 | ||||||||||||
Costs from transition services agreement | 3,519 | — | 4,673 | — | ||||||||||||
Income from transition services agreement | (2,729 | ) | — | (3,673 | ) | — | ||||||||||
Loss on sale of U.K. Tooling business | 3,739 | 5,722 | 3,739 | 5,722 | ||||||||||||
Loss on sale of assets and liabilities of Engineering Services business | — | 661 | — | 661 | ||||||||||||
Gain on the sale of land | — | — | — | (1,520 | ) | |||||||||||
Adjustments | $ | 2,641 | $ | 26,098 | $ | 42,879 | $ | 72,046 | ||||||||
Adjusted EBITDA from continuing operations | $ | 36,746 | $ | 41,730 | $ | 99,325 | $ | 87,923 | ||||||||
Adjusted EBITDA margin | 15.5 | % | 18.9 | % | 13.0 | % | 11.9 | % |
Outlook - Adjusted EBITDA from continuing operations (in millions) | ||||||||
2020 Outlook | ||||||||
Low | High | |||||||
Adjusted EBITDA from continuing operations | ||||||||
2020 Outlook | ||||||||
Sales from continuing operations | $ | 860.0 | $ | 880.0 | ||||
Earnings from continuing operations, net of tax | $ | 38.5 | $ | 50.5 | ||||
Interest expense, net | 15.0 | 15.0 | ||||||
Income tax (benefit) expense | 11.5 | 15.1 | ||||||
Net Periodic Pension Benefit | (16.5 | ) | (16.5 | ) | ||||
Other expense (income), net | 1.5 | 1.5 | ||||||
Depreciation and amortization | 35.0 | 35.0 | ||||||
Other Adjustments: | ||||||||
Bal Seal Purchase Accounting - Inventory Step-up | 9.2 | 9.2 | ||||||
Bal Seal Purchase Accounting - Compensation Expense | 22.8 | 22.8 | ||||||
Cost associated with corporate development activities | 1.5 | 1.5 | ||||||
Costs from transition services agreement, net of income received | 2.2 | 2.2 | ||||||
Total Adjustments | $ | 82.2 | $ | 85.8 | ||||
Adjusted EBITDA from continuing operations | $ | 120.7 | $ | 136.3 | ||||
Adjusted EBITDA margin | 14.0 | % | 15.5 | % |
Free Cash Flow from continuing operations (in thousands) | ||||||||||||
For the Twelve Months Ended | For the Nine Months Ended | For the Three Months Ended | ||||||||||
December 31, 2019 | September 27, 2019 | December 31, 2019 | ||||||||||
Net cash provided by operating activities from continuing operations | $ | 42,488 | $ | 11,336 | $ | 31,152 | ||||||
Expenditures for property, plant & equipment | (22,447 | ) | (17,411 | ) | (5,036 | ) | ||||||
Free Cash Flow from continuing operations | $ | 20,041 | $ | (6,075 | ) | $ | 26,116 |
Debt to Capitalization Ratio (in thousands) (unaudited) | ||||||||
December 31, 2019 | December 31, 2018 | |||||||
Current portion of long-term debt | $ | — | $ | 9,375 | ||||
Long-term debt, excluding current portion | 181,622 | 284,256 | ||||||
Debt | $ | 181,622 | $ | 293,631 | ||||
Total shareholders' equity | 823,202 | 633,157 | ||||||
Capitalization | $ | 1,004,824 | $ | 926,788 | ||||
Debt to Capitalization Ratio | 18.1 | % | 31.7 | % |
Adjusted Earnings from continuing operations and Adjusted Diluted Earnings per Share from continuing operations | ||||||||||||||||
(In thousands except per share amounts) (unaudited) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Adjustments to Earnings from Continuing Operations | ||||||||||||||||
Restructuring and severance costs | $ | 1,005 | $ | 2,642 | $ | 1,558 | $ | 7,353 | ||||||||
Costs associated with corporate development activities | 7,097 | 30 | 10,090 | 1,081 | ||||||||||||
Loss on sale of U.K. Tooling business | 3,739 | 5,722 | 3,739 | 5,722 | ||||||||||||
Costs from transition services agreement | 3,519 | — | 4,673 | — | ||||||||||||
Income from transition services agreement | (2,729 | ) | — | (3,673 | ) | — | ||||||||||
Tax benefit from change in state tax laws | — | — | (2,137 | ) | — | |||||||||||
Tax benefit of foreign derived income included in discontinued operations | 3,360 | — | 3,360 | — | ||||||||||||
Tax benefit from change in U.K. entity tax classification | (25,710 | ) | — | (25,710 | ) | — | ||||||||||
Non-cash non-taxable intangible assets impairment charge | — | — | — | 10,039 | ||||||||||||
Non-cash non-taxable write-off of inventory | — | — | — | 709 | ||||||||||||
Employee tax-related matters in foreign operations | — | 1,761 | — | 3,040 | ||||||||||||
Loss on sale of assets and liabilities of Engineering Services business | — | 661 | — | 661 | ||||||||||||
Gain on the sale of land | — | — | — | (1,520 | ) |
Adjusted Earnings from continuing operations and Adjusted Diluted Earnings per Share from continuing operations | ||||||||||||||||
(In thousands except per share amounts) (unaudited) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Adjustments, pre tax | $ | (9,719 | ) | $ | 10,816 | $ | (8,100 | ) | $ | 27,085 | ||||||
Tax Effect of Adjustments to Earnings from Continuing Operations | ||||||||||||||||
Restructuring and severance costs | $ | 212 | $ | 808 | $ | 328 | $ | 2,706 | ||||||||
Costs associated with corporate development activities | 1,496 | 9 | 2,124 | 398 | ||||||||||||
Loss on sale of U.K. Tooling business | — | — | — | — | ||||||||||||
Costs from transition services agreement | 742 | — | 984 | — | ||||||||||||
Income from transition services agreement | (575 | ) | — | (773 | ) | — | ||||||||||
Tax benefit from change in state tax laws | — | — | — | — | ||||||||||||
Tax benefit of foreign derived income included in discontinued operations | — | — | — | — | ||||||||||||
U.K. entity classification election for tax purposes | — | — | — | — | ||||||||||||
Non-cash non-taxable intangible assets impairment charge | — | — | — | — | ||||||||||||
Non-cash non-taxable write-off of inventory | — | — | — | — | ||||||||||||
Employee tax-related matters in foreign operations | — | 538 | — | 1,119 | ||||||||||||
Loss on sale of assets and liabilities of Engineering Services business | — | 202 | — | 243 | ||||||||||||
Gain on the sale of land | — | — | — | (559 | ) | |||||||||||
Tax effect of Adjustments | $ | 1,875 | $ | 1,557 | $ | 2,663 | $ | 3,907 | ||||||||
Adjusted Earnings from continuing operations and Adjusted Diluted Earnings per Share from continuing operations | ||||||||||||||||
(In thousands except per share amounts) (unaudited) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Adjustments to Earnings from Continuing Operations, net of tax | ||||||||||||||||
GAAP Earnings from continuing operations, as reported | $ | 34,105 | $ | 15,632 | $ | 56,446 | $ | 15,877 | ||||||||
Restructuring and severance costs | 793 | 1,834 | 1,230 | 4,647 | ||||||||||||
Costs associated with corporate development activities | 5,601 | 21 | 7,966 | 683 | ||||||||||||
Loss on sale of U.K. Tooling business | 3,739 | 5,722 | 3,739 | 5,722 | ||||||||||||
Costs from transition services agreement | 2,777 | — | 3,689 | — | ||||||||||||
Income from transition services agreement | (2,154 | ) | — | (2,900 | ) | — | ||||||||||
Tax benefit from change in state tax laws | — | — | (2,137 | ) | — | |||||||||||
Tax benefit of foreign derived income included in discontinued operations | 3,360 | — | 3,360 | — | ||||||||||||
U.K. entity classification election for tax purposes | (25,710 | ) | — | (25,710 | ) | — | ||||||||||
Non-cash non-taxable intangible assets impairment charge | — | — | — | 10,039 | ||||||||||||
Non-cash non-taxable write-off of inventory | — | — | — | 709 | ||||||||||||
Employee tax-related matters in foreign operations | — | 1,223 | — | 1,921 | ||||||||||||
Loss on sale of assets and liabilities of Engineering Services business | — | 459 | — | 418 | ||||||||||||
Gain on the sale of land | — | — | — | (961 | ) | |||||||||||
Adjusted Earnings from continuing operations | $ | 22,511 | $ | 24,891 | $ | 45,683 | $ | 39,055 | ||||||||
Calculation of Adjusted Diluted Earnings per Share from Continuing Operations | ||||||||||||||||
GAAP diluted earnings per share from continuing operations | $ | 1.22 | $ | 0.56 | $ | 2.01 | $ | 0.56 | ||||||||
Restructuring and severance costs at Aerospace | 0.03 | 0.07 | 0.04 | 0.16 | ||||||||||||
Costs associated with corporate development activities | 0.20 | — | 0.29 | 0.02 | ||||||||||||
Loss on sale of U.K. Tooling business | 0.13 | 0.20 | 0.13 | 0.20 | ||||||||||||
Costs from transition services agreement | 0.10 | — | 0.13 | — | ||||||||||||
Income from transition services agreement | (0.08 | ) | — | (0.10 | ) | — | ||||||||||
Tax benefit from change in state tax laws | — | — | (0.07 | ) | — | |||||||||||
Tax benefit of foreign derived income included in discontinued operations | 0.12 | — | 0.12 | — | ||||||||||||
U.K. entity classification election for tax purposes | (0.92 | ) | — | (0.92 | ) | — | ||||||||||
Non-cash non-taxable intangible assets impairment charge | — | — | — | 0.36 | ||||||||||||
Non-cash non-taxable write-off of inventory | — | — | — | 0.03 | ||||||||||||
Employee tax-related matters in foreign operations | — | 0.04 | — | 0.07 | ||||||||||||
Loss on sale of assets and liabilities of Engineering Services business | — | 0.02 | — | 0.01 | ||||||||||||
Gain on the sale of land | — | — | — | (0.03 | ) | |||||||||||
Adjusted Diluted Earnings per Share from continuing operations | $ | 0.80 | $ | 0.89 | $ | 1.63 | $ | 1.38 | ||||||||
Diluted weighted average shares outstanding | 28,056 | 28,119 | 28,092 | 28,223 |
Adjusted Net Sales and Adjusted Operating Income from Continuing Operations | ||||||||||||||||
(In thousands) (unaudited) | ||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
AEROSPACE SEGMENT OPERATING INCOME: | ||||||||||||||||
Net Sales | $ | 237,792 | $ | 220,859 | $ | 761,608 | $ | 735,994 | ||||||||
GAAP Operating income - Aerospace segment | $ | 45,041 | $ | 41,748 | $ | 130,393 | $ | 94,357 | ||||||||
% of GAAP net sales | 18.9 | % | 18.9 | % | 17.1 | % | 12.8 | % | ||||||||
Restructuring and severance costs | 78 | 2,305 | 631 | 7,016 | ||||||||||||
Non-cash non-taxable intangible assets impairment charge | — | — | — | 10,039 | ||||||||||||
Non-cash non-taxable write-off of inventory | — | — | — | 709 | ||||||||||||
Employee tax-related matters in foreign operations | — | 1,761 | — | 3,040 | ||||||||||||
Adjusted Operating Income - Aerospace segment | $ | 45,119 | $ | 45,814 | $ | 131,024 | $ | 115,161 | ||||||||
% of GAAP net sales | 19.0 | % | 20.7 | % | 17.2 | % | 15.6 | % | ||||||||
CORPORATE EXPENSE: | ||||||||||||||||
GAAP Corporate Expense | $ | (26,576 | ) | $ | (11,379 | ) | $ | (73,006 | ) | $ | (56,703 | ) | ||||
Restructuring and severance costs | 927 | 337 | 927 | 337 | ||||||||||||
Costs associated with corporate development activities | 7,097 | 30 | 10,090 | 1,081 | ||||||||||||
Costs from transition services agreement | 3,519 | — | 4,673 | — | ||||||||||||
Adjusted Corporate Expense | $ | (15,033 | ) | $ | (11,012 | ) | $ | (57,316 | ) | $ | (55,285 | ) | ||||
CONSOLIDATED OPERATING INCOME: | ||||||||||||||||
Net Sales from continuing operations | $ | 237,792 | $ | 220,859 | $ | 761,608 | $ | 735,994 | ||||||||
GAAP - Operating income from continuing operations | $ | 14,840 | $ | 24,119 | $ | 53,411 | $ | 32,963 | ||||||||
% of GAAP net sales | 6.2 | % | 10.9 | % | 7.0 | % | 4.5 | % | ||||||||
Restructuring and severance costs | 1,005 | 2,642 | 1,558 | 7,353 | ||||||||||||
Costs associated with corporate development activities | 7,097 | 30 | 10,090 | 1,081 | ||||||||||||
Costs from transition services agreement | 3,519 | — | 4,673 | — | ||||||||||||
Non-cash non-taxable intangible assets impairment charge | — | — | — | 10,039 | ||||||||||||
Non-cash non-taxable write-off of inventory | — | — | — | 709 | ||||||||||||
Employee tax-related matters in foreign operations | — | 1,761 | — | 3,040 | ||||||||||||
Loss on sale of U.K. Tooling business | 3,739 | 5,722 | 3,739 | 5,722 | ||||||||||||
Loss on sale of assets and liabilities of Engineering Services business | — | 661 | — | 661 | ||||||||||||
Gain on sale of land | — | — | — | (1,520 | ) | |||||||||||
Adjusted Operating Income | $ | 30,200 | $ | 34,935 | $ | 73,471 | $ | 60,048 | ||||||||
% of GAAP net sales | 12.7 | % | 15.8 | % | 9.6 | % | 8.2 | % |
Outlook - Adjusted Net Sales and Adjusted Operating Income from Continuing Operations | ||||||||
(In millions) (unaudited) | ||||||||
2020 Outlook | ||||||||
Low | High | |||||||
OPERATING INCOME FROM CONTINUING OPERATIONS | ||||||||
Net Sales from Continuing Operations | $ | 860.0 | $ | 880.0 | ||||
GAAP - Operating income from Continuing Operations | $ | 43.4 | $ | 59.0 | ||||
Operating margin from Continuing Operations | 5.0 | % | 6.7 | % | ||||
Adjustments | ||||||||
Bal Seal Purchase Accounting - Inventory Step-up | $ | 9.2 | $ | 9.2 | ||||
Bal Seal Purchase Accounting - Compensation Expense | 22.8 | 22.8 | ||||||
Cost associated with corporate development activities | 1.5 | 1.5 | ||||||
Costs from transition services agreement | 8.8 | 8.8 | ||||||
Adjusted Operating Income from Continuing Operations | $ | 85.7 | $ | 101.3 | ||||
Operating margin from continuing operations, adjusted | 10.0 | % | 11.5 | % |
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | |||||||||||||
Net sales | $ | 237,792 | $ | 220,859 | $ | 761,608 | $ | 735,994 | ||||||||
Cost of sales | 165,230 | 147,851 | 520,803 | 508,677 | ||||||||||||
Gross profit | 72,562 | 73,008 | 240,805 | 227,317 | ||||||||||||
Selling, general and administrative expenses | 49,573 | 39,997 | 177,187 | 172,271 | ||||||||||||
Other intangible assets impairment (Note 12) | — | — | — | 10,039 | ||||||||||||
Costs from transition services agreement (Note 3) | 3,519 | — | 4,673 | — | ||||||||||||
Restructuring costs (Note 5) | 1,005 | 2,642 | 1,558 | 7,353 | ||||||||||||
Loss on sale of business (Note 5) | 3,739 | 5,722 | 3,739 | 5,722 | ||||||||||||
Net loss (gain) on sale of assets | (114 | ) | 528 | 237 | (1,031 | ) | ||||||||||
Operating income | 14,840 | 24,119 | 53,411 | 32,963 | ||||||||||||
Interest expense, net | 2,607 | 4,639 | 17,202 | 20,046 | ||||||||||||
Non-service pension and post retirement benefit income | (98 | ) | (3,084 | ) | (396 | ) | (12,127 | ) | ||||||||
Income from transition services agreement (Note 3) | (2,729 | ) | — | (3,673 | ) | — | ||||||||||
Other expense (income), net | 58 | 49 | (309 | ) | (92 | ) | ||||||||||
Earnings from continuing operations before income taxes | 15,002 | 22,515 | 40,587 | 25,136 | ||||||||||||
Income tax (benefit) expense | (19,103 | ) | 6,883 | (15,859 | ) | 9,259 | ||||||||||
Earnings from continuing operations, net of tax | 34,105 | 15,632 | 56,446 | 15,877 | ||||||||||||
Earnings from discontinued operations before gain on disposal, net of tax | 3,787 | 7,945 | 29,027 | 38,292 | ||||||||||||
Gain on disposal of discontinued operations, net of tax | 1,570 | — | 124,356 | — | ||||||||||||
Total earnings from discontinued operations, net of tax | 5,357 | 7,945 | 153,383 | 38,292 | ||||||||||||
Net earnings | $ | 39,462 | $ | 23,577 | $ | 209,829 | $ | 54,169 | ||||||||
Earnings per share: | ||||||||||||||||
Basic earnings per share from continuing operations | $ | 1.22 | $ | 0.56 | $ | 2.02 | $ | 0.57 | ||||||||
Basic earnings per share from discontinued operations | 0.19 | 0.28 | 5.49 | 1.37 | ||||||||||||
Basic earnings per share | $ | 1.41 | $ | 0.84 | $ | 7.51 | $ | 1.94 | ||||||||
Diluted earnings per share from continuing operations | $ | 1.22 | $ | 0.56 | $ | 2.01 | $ | 0.56 | ||||||||
Diluted earnings per share from discontinued operations | 0.19 | 0.28 | 5.46 | 1.36 | ||||||||||||
Diluted earnings per share | $ | 1.41 | $ | 0.84 | $ | 7.47 | $ | 1.92 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 27,922 | 27,951 | 27,936 | 27,945 | ||||||||||||
Diluted | 28,056 | 28,119 | 28,092 | 28,223 |
December 31, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 471,540 | $ | 25,895 | ||||
Accounts receivable, net | 156,492 | 149,338 | ||||||
Contract assets | 121,614 | 99,261 | ||||||
Contract costs, current portion | 6,052 | 5,993 | ||||||
Inventories | 156,353 | 131,569 | ||||||
Income tax refunds receivable | 8,069 | 1,752 | ||||||
Assets held for sale, current portion | — | 351,261 | ||||||
Other current assets | 16,368 | 8,036 | ||||||
Total current assets | 936,488 | 773,105 | ||||||
Property, plant and equipment, net of accumulated depreciation of $210,549 and $192,285, respectively | 140,450 | 137,112 | ||||||
Operating right-of-use asset, net | 15,159 | — | ||||||
Goodwill | 195,314 | 196,161 | ||||||
Other intangible assets, net | 53,439 | 58,567 | ||||||
Deferred income taxes | 35,240 | 38,040 | ||||||
Contract costs, noncurrent portion | 6,099 | 10,666 | ||||||
Assets held for sale, noncurrent portion | — | 229,238 | ||||||
Other assets | 36,754 | 31,173 | ||||||
Total assets | $ | 1,418,943 | $ | 1,474,062 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt, net of debt issuance costs | $ | — | $ | 9,375 | ||||
Accounts payable – trade | 70,884 | 56,826 | ||||||
Accrued salaries and wages | 43,220 | 32,795 | ||||||
Contract liabilities, current portion | 42,942 | 28,865 | ||||||
Operating lease liabilities, current portion | 4,306 | — | ||||||
Income taxes payable | 4,722 | 139 | ||||||
Liabilities held for sale, current portion | — | 131,047 | ||||||
Other current liabilities | 37,918 | 39,429 | ||||||
Total current liabilities | 203,992 | 298,476 | ||||||
Long-term debt, excluding current portion, net of debt issuance costs | 181,622 | 284,256 | ||||||
Deferred income taxes | 6,994 | 7,146 | ||||||
Underfunded pension | 97,246 | 104,988 | ||||||
Contract liabilities, noncurrent portion | 37,855 | 78,562 | ||||||
Operating lease liabilities, noncurrent portion | 11,617 | — | ||||||
Liabilities held for sale, noncurrent portion | — | 15,602 | ||||||
Other long-term liabilities | 56,415 | 51,875 | ||||||
Commitments and contingencies (Note 19) | ||||||||
Shareholders’ equity: | ||||||||
Preferred stock, $1 par value, 200,000 shares authorized; none outstanding | — | — | ||||||
Common stock, $1 par value, 50,000,000 shares authorized; voting; 30,058,455 and 29,544,714 shares issued, respectively | 30,058 | 29,545 | ||||||
Additional paid-in capital | 228,153 | 200,474 | ||||||
Retained earnings | 820,666 | 610,103 | ||||||
Accumulated other comprehensive income (loss) | (150,893 | ) | (134,898 | ) | ||||
Less 2,219,332 and 1,672,917 shares of common stock, respectively, held in treasury, at cost | (104,782 | ) | (72,067 | ) | ||||
Total shareholders’ equity | 823,202 | 633,157 | ||||||
Total liabilities and shareholders’ equity | $ | 1,418,943 | $ | 1,474,062 |
KAMAN CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (unaudited) | ||||||||
For the Twelve Months Ended | ||||||||
December 31, 2019 | December 31, 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 209,829 | $ | 54,169 | ||||
Less: Total earnings from discontinued operations, net of tax | 153,383 | 38,292 | ||||||
Earnings from continuing operations, net of tax | 56,446 | 15,877 | ||||||
Adjustments to reconcile earnings from continuing operations, net of tax to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 25,854 | 27,875 | ||||||
Amortization of debt issuance costs | 1,996 | 1,806 | ||||||
Accretion of convertible notes discount | 2,760 | 2,596 | ||||||
Provision for doubtful accounts | 788 | 767 | ||||||
Loss on sale of business | 3,971 | 5,722 | ||||||
Net loss (gain) on sale of assets | 237 | (1,031 | ) | |||||
Other intangible assets impairment | — | 10,039 | ||||||
Net loss (gain) on derivative instruments | 302 | 829 | ||||||
Stock compensation expense | 4,669 | 5,484 | ||||||
Non-cash consideration received for aircraft sale | (3,100 | ) | — | |||||
Deferred income taxes | 182 | 7,834 | ||||||
Changes in assets and liabilities, excluding effects of acquisitions/divestitures: | ||||||||
Accounts receivable | (8,173 | ) | (6,020 | ) | ||||
Contract assets | (21,994 | ) | (24,294 | ) | ||||
Contract costs | 4,506 | (5,834 | ) | |||||
Inventories | (25,129 | ) | 7,135 | |||||
Income tax refunds receivable | (6,296 | ) | 1,136 | |||||
Operating right-of-use assets | 3,390 | — | ||||||
Other assets | (6,108 | ) | (2,944 | ) | ||||
Accounts payable - trade | 14,034 | 10,807 | ||||||
Contract liabilities | (26,638 | ) | 96,430 | |||||
Operating lease liabilities | (3,423 | ) | — | |||||
Other current liabilities | 6,085 | (374 | ) | |||||
Income taxes payable | 7,888 | (2,393 | ) | |||||
Pension liabilities | 4,170 | (38,179 | ) | |||||
Other long-term liabilities | 6,071 | 5,446 | ||||||
Net cash provided by operating activities from continuing operations | 42,488 | 118,714 | ||||||
Net cash (used in) provided by operating activities of discontinued operations | (50,288 | ) | 43,654 | |||||
Net cash (used in) provided by operating activities | (7,800 | ) | 162,368 |
KAMAN CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (unaudited) | ||||||||
For the Twelve Months Ended | ||||||||
December 31, 2019 | December 31, 2018 | |||||||
Cash flows from investing activities: | ||||||||
Proceeds from sale of assets | 196 | 2,138 | ||||||
Proceeds from sale of discontinued operations | 655,030 | — | ||||||
Expenditures for property, plant & equipment | (22,447 | ) | (21,504 | ) | ||||
Other, net | (4,463 | ) | (3,172 | ) | ||||
Net cash provided by (used in) investing activities of continuing operations | 628,316 | (22,538 | ) | |||||
Net cash used in investing activities of discontinued operations | (9,838 | ) | (7,423 | ) | ||||
Net cash provided by (used in) investing activities | 618,478 | (29,961 | ) | |||||
Cash flows from financing activities: | ||||||||
Net repayments under revolving credit agreements | (38,500 | ) | (98,087 | ) | ||||
Debt repayment | (76,875 | ) | (7,500 | ) | ||||
Repayment of convertible notes | (500 | ) | — | |||||
Net change in bank overdraft | 886 | (279 | ) | |||||
Proceeds from exercise of employee stock awards | 19,676 | 7,351 | ||||||
Purchase of treasury shares | (30,060 | ) | (19,278 | ) | ||||
Dividends paid | (22,343 | ) | (22,349 | ) | ||||
Debt and equity issuance costs | (3,584 | ) | — | |||||
Other | (1,413 | ) | (1,003 | ) | ||||
Net cash used in financing activities of continuing operations | (152,713 | ) | (141,145 | ) | ||||
Net cash provided by (used in) financing activities of discontinued operations | 7,967 | (217 | ) | |||||
Net cash used in financing activities | (144,746 | ) | (141,362 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 465,932 | (8,955 | ) | |||||
Cash and cash equivalents of discontinued operations | (21,834 | ) | (1,816 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (269 | ) | (238 | ) | ||||
Cash and cash equivalents at beginning of period | 27,711 | 36,904 | ||||||
Cash and cash equivalents at end of period | $ | 471,540 | $ | 25,895 |
Document Entity Information Document |
Feb. 24, 2020 |
---|---|
Document Entity Information [Abstract] | |
Document Type | 8-K |
Document Period End Date | Feb. 24, 2020 |
Entity Registrant Name | KAMAN CORPORATION |
Entity Incorporation, State or Country Code | CT |
Entity File Number | 001-35419 |
Entity Tax Identification Number | 06-0613548 |
Entity Address, Address Line One | 1332 Blue Hills Avenue, |
Entity Address, City or Town | Bloomfield, |
Entity Address, State or Province | CT |
Entity Address, Postal Zip Code | 06002 |
City Area Code | (860) |
Local Phone Number | 743-7100 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock ($1 par value) |
Trading Symbol | KAMN |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000054381 |
Amendment Flag | false |
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