Kaman Corp. (KAMN, Financial) filed Quarterly Report for the period ended 2010-10-01.
Kaman Corp. has a market cap of $694 million; its shares were traded at around $26.95 with a P/E ratio of 26.9 and P/S ratio of 0.6. The dividend yield of Kaman Corp. stocks is 2.1%.KAMN is in the portfolios of Mario Gabelli of GAMCO Investors, John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Gross profit increased for the nine months ended October 1, 2010 versus the comparable period in 2009 primarily due to an increase in gross profit at our Industrial Distribution segment, offset by a decrease in gross profit at our Aerospace segment. The increase in Industrial Distribution gross profit was primarily a result of higher sales volume compared to the prior year and the addition of gross profit from the acquisitions completed during the year. The decrease in gross profit at our Aerospace segment was due to a decrease in sales volume related to our bearing product lines, $3.2 million in contract losses on the Sikorsky Canadian MH-92 program, $1.1 million in losses on our Bell Helicopter program due to inefficiencies and scrap on our initial production units, reduced gross profit on the C-17 program due to a reduction in volume requirements and $2.2 million in losses resulting from a reduction in quantities required by our customer for one of our fuze programs. These decreases were partially offset by an increase in gross profit for our JPF program resulting from the improved pricing related to deliveries under Option 6, an increase in gross profit on the Sikorsky BLACK HAWK Helicopter program resulting from an increase in deliveries compared to the prior year and an increase in gross profit on our blade erosion coating programs.
S,G&A increased for the three months ended October 1, 2010 versus the comparable period in 2009 due to the additional S,G&A expense resulting from the three Industrial Distribution acquisitions, an increase in our Industrial Distribution segment s organic S,G&A expenses and an increase in expense at our Aerospace segment. These increases were partially offset by a decrease in Corporate expense. The increase in organic S,G&A expense at our Industrial Distribution segment is due to an increase in variable costs such as sales commissions and other employee related costs resulting from the higher sales volume. The increase in expense at our Aerospace segment is due an increase in legal fees associated with the FMU-143 program litigation matters. See Note 11, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements for further discussion of this matter. The decrease in Corporate expense is primarily attributable to a $1.5 million decrease in group health insurance expense as a result of lower medical claim activity and a $0.4 million decrease in post-retirement benefits expense, partially offset by a $1.0 million increase in incentive compensation expense.
Net interest expense generally consists of interest charged on borrowings and the amortization of capitalized debt issuance costs, offset by interest income. The change in net interest (income) expense, net for the three months and nine months ended October 1, 2010 versus the comparable periods in 2009 was primarily due to the receipt of $6.6 million of look-back interest during the period, partially offset by an increase in interest expense. The increase in interest expense is due to higher interest rates on amounts outstanding under our revolving credit agreement and increased amortization of capitalized fees. For the full year, we anticipate interest expense, excluding the $6.6 million in look-back interest, to be $9.8 million when compared to 2009.
In the third quarter of 2010, sales volume increased from the levels experienced during the second quarter. Additionally, the acquired businesses have performed beyond our expectations and are expected to be accretive for 2010. We have seen an increase in our operating margin for the nine months ended October 1, 2010 to 3.4% from 1.9% during the same period in 2009. This increase is due to increased sales volume across all markets, higher operating margin on sales contributed by our acquired businesses, and the 2010 impact of measured and appropriate cost reductions undertaken during 2009. This higher operating margin was achieved despite increased pressure on pricing as our customers continue to focus on cost control. We will continue to emphasize cost reduction, margin improvements, and market share gains. For the full year 2010, we anticipate organic sales growth to be 10-13%; sales, inclusive of completed acquisitions, to be $810 million to $830 million; and full-year operating margin to be 3.3-3.5%.
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Kaman Corp. has a market cap of $694 million; its shares were traded at around $26.95 with a P/E ratio of 26.9 and P/S ratio of 0.6. The dividend yield of Kaman Corp. stocks is 2.1%.KAMN is in the portfolios of Mario Gabelli of GAMCO Investors, John Keeley of Keeley Fund Management, Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
The increase in net sales for the three months ended October 1, 2010 versus the comparable period in 2009 was attributable to an increase in sales at our Industrial Distribution and Aerospace segments, partially offset by the unfavorable impact of foreign currency exchange rates of $0.5 million. The increase in net sales for the nine months ended October 1, 2010 versus the comparable period in 2009 was attributable to an increase in sales at our Industrial Distribution segment and the favorable impact of foreign currency exchange rates of $1.8 million, partially offset by a decrease in sales at our Aerospace segment. See Segment Results of Operations and Financial Condition for further discussion of segment net sales.Gross profit increased for the nine months ended October 1, 2010 versus the comparable period in 2009 primarily due to an increase in gross profit at our Industrial Distribution segment, offset by a decrease in gross profit at our Aerospace segment. The increase in Industrial Distribution gross profit was primarily a result of higher sales volume compared to the prior year and the addition of gross profit from the acquisitions completed during the year. The decrease in gross profit at our Aerospace segment was due to a decrease in sales volume related to our bearing product lines, $3.2 million in contract losses on the Sikorsky Canadian MH-92 program, $1.1 million in losses on our Bell Helicopter program due to inefficiencies and scrap on our initial production units, reduced gross profit on the C-17 program due to a reduction in volume requirements and $2.2 million in losses resulting from a reduction in quantities required by our customer for one of our fuze programs. These decreases were partially offset by an increase in gross profit for our JPF program resulting from the improved pricing related to deliveries under Option 6, an increase in gross profit on the Sikorsky BLACK HAWK Helicopter program resulting from an increase in deliveries compared to the prior year and an increase in gross profit on our blade erosion coating programs.
S,G&A increased for the three months ended October 1, 2010 versus the comparable period in 2009 due to the additional S,G&A expense resulting from the three Industrial Distribution acquisitions, an increase in our Industrial Distribution segment s organic S,G&A expenses and an increase in expense at our Aerospace segment. These increases were partially offset by a decrease in Corporate expense. The increase in organic S,G&A expense at our Industrial Distribution segment is due to an increase in variable costs such as sales commissions and other employee related costs resulting from the higher sales volume. The increase in expense at our Aerospace segment is due an increase in legal fees associated with the FMU-143 program litigation matters. See Note 11, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements for further discussion of this matter. The decrease in Corporate expense is primarily attributable to a $1.5 million decrease in group health insurance expense as a result of lower medical claim activity and a $0.4 million decrease in post-retirement benefits expense, partially offset by a $1.0 million increase in incentive compensation expense.
Net interest expense generally consists of interest charged on borrowings and the amortization of capitalized debt issuance costs, offset by interest income. The change in net interest (income) expense, net for the three months and nine months ended October 1, 2010 versus the comparable periods in 2009 was primarily due to the receipt of $6.6 million of look-back interest during the period, partially offset by an increase in interest expense. The increase in interest expense is due to higher interest rates on amounts outstanding under our revolving credit agreement and increased amortization of capitalized fees. For the full year, we anticipate interest expense, excluding the $6.6 million in look-back interest, to be $9.8 million when compared to 2009.
In the third quarter of 2010, sales volume increased from the levels experienced during the second quarter. Additionally, the acquired businesses have performed beyond our expectations and are expected to be accretive for 2010. We have seen an increase in our operating margin for the nine months ended October 1, 2010 to 3.4% from 1.9% during the same period in 2009. This increase is due to increased sales volume across all markets, higher operating margin on sales contributed by our acquired businesses, and the 2010 impact of measured and appropriate cost reductions undertaken during 2009. This higher operating margin was achieved despite increased pressure on pricing as our customers continue to focus on cost control. We will continue to emphasize cost reduction, margin improvements, and market share gains. For the full year 2010, we anticipate organic sales growth to be 10-13%; sales, inclusive of completed acquisitions, to be $810 million to $830 million; and full-year operating margin to be 3.3-3.5%.
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