Kaman Reports Fourth Quarter, Year 2004 Results BLOOMFIELD, Conn.,
March 16 /PRNewswire-FirstCall/ -- Kaman Corp. (NASDAQ:KAMNA) today
reported financial results for its fourth quarter and year ended
December 31, 2004. The company reported net earnings for the 2004
fourth quarter of $0.5 million, or $0.02 per share diluted,
compared to $1.0 million or $0.04 per share diluted the previous
year. The 2004 fourth quarter results include a loss before income
taxes of $2.5 million, offset by a fourth quarter tax benefit of
$3.0 million due to an adjustment in the estimated effective tax
rate established at the end of the third quarter to the actual
effective tax rate based upon annual results. Net sales for the
2004 fourth quarter were $256.2 million compared to $238.9 million
in the 2003 fourth quarter. For the year ended December 31, 2004,
the company reported a net loss of $11.8 million, or $0.52 loss per
share diluted, compared to net earnings of $19.4 million, or $0.86
per share diluted, in 2003. The 2004 loss is primarily attributable
to events in the Aerospace segment, including $41.6 million of
adjustments for the year, $10.8 million of which were taken in the
fourth quarter to address issues with certain of the segment's
programs and contracts. All of these actions are discussed in the
Aerospace segment section of this release. Results for 2003 include
an after-tax gain of $10.6 million, or $0.48 per share, from the
sale in the first quarter of the company's Electromagnetics
Development Center. Net sales for the 2004 full year were $995.2
million, compared to $894.5 million in 2003. Paul R. Kuhn,
chairman, president and chief executive officer, said, "The
execution of strategies put in place three years ago for each Kaman
segment continued to prove their relevance in 2004. Two segments,
Industrial Distribution and Music, and the Kamatics subsidiary
within the Aerospace segment, performed very well, each reporting
record sales for the year, and demonstrating a considerable market
presence for our products and services. These good results,
however, were overshadowed by adjustments taken in the Aerospace
segment that resulted in the loss for the year. The company
believes that meaningful progress was achieved in 2004 toward
resolving business issues in the Aerospace segment. In order to
address differences among its various businesses and the changing
markets they serve, and to provide for a more focused management
structure, various portions of the segment were reconfigured into
three new operating divisions. The company expects that each will
be better able to effectively control expenses for the services and
functions they require, and achieve optimal customer service. As
the process of reconfiguring the segment progressed during the
year, the company continued to identify and work through segment
program and contract issues. Some of these involve internal
business issues; others involve external forces or market
circumstances. Several of these issues are now behind us or appear
to be approaching resolution. One issue the company has reported on
in some detail over the past several quarters is the time and
expense involved with the relocation of certain aircraft structures
and components operations to Jacksonville, Florida and the adverse
effect the transition has had on segment profitability. While we
are still on a learning curve, significant progress was made in
improving performance metrics and reestablishing levels of customer
satisfaction. Additionally, the company received a significant new
contract for the Jacksonville facility involving the production of
pilot cockpits for the Sikorsky BLACK HAWK helicopter. The company
has also previously reported on the delays experienced in achieving
qualification for the Joint Programmable Fuze (JPF). In 2004, this
goal was achieved, and the company received authorization from the
U.S. Air Force to begin low rate initial production of the fuze. At
the same time, Lot 1 of this production contract was released for
production through 2005, and in December 2004, Lot 2 was released
for production through 2006. Having achieved qualification, the
fuze is now ready to market to international customers, and the
company expects program profitability to improve as deliveries to
the U.S. military ramp up and be further enhanced once orders are
received from allied militaries." A summary of segment information
follows. Summary of Segment Information (In millions) For the Three
Months For the Twelve Months Ended December 31, Ended December 31,
2004 2003 2004(2) 2003 Net sales: Aerospace $71.5 $63.8 $252.4
$251.2 Industrial Distribution 141.6 133.2 581.8 497.9 Music 43.1
41.9 161.0 145.4 256.2 238.9 995.2 894.5 Operating income (loss):
Aerospace 1.2 (0.6) (14.3) 14.8 Industrial Distribution 3.0 3.7
19.3 12.7 Music 4.3 3.5 11.1 9.5 Net gain on sale of product lines
and other assets - - .2 18.2 Corporate expense (1) (9.7) (4.0)
(28.8) (19.1) Operating income (loss) (1.2) 2.6 (12.5) 36.1
Interest expense, net (1.0) (.8) (3.6) (3.0) Other expense, net
(.3) (.2) (1.1) (1.3) Earnings/(loss) before income taxes $(2.5)
$1.6 $(17.2) $ 31.8 (1) "Corporate expense" increased for the three
months ended December 31, 2004, compared to the prior year period,
primarily due to a $1.2 million increase in pension expense, a $2.9
million accrual for the long-term incentive program, a $0.8 million
increase in supplemental retirement plan expense and a $0.5 million
increase in integrated audit services. The increase for the twelve
months ended December 31, 2004, compared to the prior year period,
is primarily due to a $4.7 million increase in pension expense, a
$2.9 million increase for the long-term incentive program, a $2.7
million increase in supplemental retirement plan expense, a $0.7
million cumulative catch-up adjustment for rent expense, a $0.7
million increase in integrated audit services, and $0.7 million of
additional insurance expense for senior executive life insurance
offset by the $1.6 million refund related to group insurance. The
increase in corporate expense was also offset by a $1.2 million
reduction in consulting expense. (2) In addition, the corporation
has restated its statement of operations beginning with the first
quarter of 2004 to correct its accounting by recording a cumulative
catch-up pre-tax adjustment of approximately $0.7 million in rent
expense and related deferred rent liability pertaining to lease
accounting as well as a negative sales adjustment of $0.5 million
for the University of Arizona contract in the Aerospace segment.
The corporation also recorded net pre-tax adjustments of $1.0
million related to prior periods as a reduction to selling, general
and administrative expenses. Additional immaterial adjustments of
which the majority relates to the lease accounting and University
of Arizona contract were recorded during the second and third
quarters of 2004. REPORT BY SEGMENT Aerospace Segment The Aerospace
segment generated a fourth quarter operating profit of $1.2 million
in 2004, compared to an operating loss of $0.6 million a year ago.
The 2004 fourth quarter results include $10.8 million in
adjustments taken to address issues involving the company's
advanced technology and helicopter programs and $0.9 million in
idle facility and related costs. The 2003 results include the
effect of $1.4 million in relocation and recertification costs
related to the Moosup, Conn., plant closure and $1.0 million in
idle facility and related costs. Segment sales for the fourth
quarter of 2004 were $71.5 million, compared to $63.8 million in
the 2003 period. For the 2004 year the segment had an operating
loss of $14.3 million as a result of $41.6 million in adjustments
involving various aspects of the company's Aircraft Structures,
Advanced Technology Products, and Helicopter Programs work, as
discussed below, and $2.0 million in third quarter severance costs
associated with a management realignment in the Aerospace
subsidiary; $3.3 million in idle facility and related costs, and
$0.4 million in relocation and recertification costs related to
closure of the company's Moosup plant. This compares to an
operating profit of $14.8 million in 2003. Results for 2003 include
the effect of $3.6 million in relocation and recertification costs
related to the Moosup, Conn. plant closure and $1.4 million in idle
facilities and related costs. Sales for 2004 were $252.4 million,
including the effect of an $18.2 million negative sales adjustment
to eliminate the company's investment in contracts with MDHI,
compared to $251.2 million in 2003. With the 2004 realignment, the
segment now has new operating divisions: Kaman Aerostructures,
responsible for the Kaman Aerospace Jacksonville and PlasticFab
Wichita operations; Kaman Fuzing, responsible for the Kaman
Aerospace Middletown and Kaman Dayron Orlando operations; and Kaman
Helicopters, responsible for the Kaman Aerospace Bloomfield
operations. They join Kamatics (including RWG, the company's German
aircraft bearing manufacturer) to make up the four major operating
elements of the segment. For the fourth quarter and year 2004,
results for the Aerospace segment have been reported in the
traditional format. Beginning with results for the first quarter of
2005, the company will report sales for each of the segment's
realigned divisions. Aircraft Structures and Components Fourth
quarter aircraft structures and components sales were $36.7 million
in 2004, compared to $30.4 million in the period a year ago. This
business contributed approximately 51 percent of the Aerospace
segment's sales in the 2004 fourth quarter, compared to
approximately 48 percent a year ago. Aircraft structures and
components sales for the full year were $116.6 million in 2004,
including the effect of the $18.2 million MDHI sales adjustment,
compared to sales of $121.2 million in the previous year. The
business contributed approximately 46 percent of segment sales in
2004, compared to 48 percent in 2003. Aircraft structures and
components work involves commercial and military aircraft programs,
including proprietary aircraft bearings, the production of aircraft
subassemblies and other parts for commercial airliners as well as
the C-17 military transport, and helicopter subcontract work. Since
the expanded Jacksonville aircraft subassemblies and parts facility
began operations in mid-2003, sales volume has not been sufficient
to achieve profitability at that location, resulting in overhead
and general and administrative expenditures being absorbed at
higher rates by active programs, and generally lower profitability
or losses for these programs. Improving performance metrics and
reestablishing levels of customer satisfaction continue to be a
focus at the Jacksonville facility, and the company believes
progress has been made in this area. New orders are now coming on
line and that should help with the overhead absorption and
profitability issue. During the third quarter of 2004, Sikorsky
Aircraft Corporation awarded Kaman a multi-year contract with an
initial two-year value of $27.7 million under which Kaman will
manufacture the pilot cockpit for four models of the Sikorsky BLACK
HAWK helicopter. The work includes installation of all wiring
harnesses, hydraulic assemblies, control pedals and sticks, seat
tracks, pneumatic lines, and the composite structure that holds the
windscreen. The multi-year contract has follow-on options that, if
fully exercised, would include the fabrication of approximately 349
units, and bring the total potential value to Kaman to
approximately $100.0 million over five years. In January 2005, the
U.S. Government selected an international team that includes
Lockheed Martin, Bell Helicopter, and AgustaWestland to provide the
next "Marine One" presidential helicopter. As a member of the
winning team, Kaman anticipates that it will have the opportunity
to share in the work being sourced into the U.S. As previously
reported, in the 2004 third quarter the company recorded a sales
and non-cash pre-tax earnings charge of $20.1 million, consisting
of an $18.2 million negative sales adjustment and a $1.9 million
addition to the corporation's bad debt reserve, to eliminate its
investment in its multi-year contracts for production of fuselages
for the MD Helicopters 500 and 600 series helicopters and composite
rotor blades for the MD Explorer helicopter, and related
receivables. The charge is not expected to result in any future
cash expenditures. Also, as previously reported, in the second
quarter the company recorded a $7.1 million non-cash adjustment to
its Boeing Harbour Pointe contract due to a lower than expected
order flow and unprofitable mix of work. The adjustment consists of
an accrued contract loss of $4.3 million and a valuation adjustment
of $2.8 million associated with portions of the program inventory.
The Kamatics aircraft bearing subsidiary delivered strong
performance in the fourth quarter and full year 2004 as a result of
improving market conditions and increased order activity from
Boeing, Airbus and other customers in both the commercial and
military sectors. While the market for specialized high-performance
products is becoming increasingly competitive, Kamatics proprietary
non-lubricated bearings are currently in use in almost all military
and commercial aircraft in production. As the aviation sector
strengthened during the year, the company increased production
levels to manage an increasing backlog. Advanced Technology
Products Sales of the company's advanced technology products in the
2004 fourth quarter were $19.2 million, compared to $15.0 million a
year ago. The business accounted for approximately 27 percent of
Aerospace segment sales in the fourth quarter of 2004, compared to
23 percent a year ago. Sales of advanced technology products for
the full year 2004 were $63.0 million, compared to $54.0 million in
2003. The business accounted for approximately 25 percent of
segment sales in 2004, compared to 22 percent in the prior year.
The company manufactures products for military and commercial
markets, including safe, arm and fuzing devices for a number of
major missile and bomb programs; and precision measuring systems,
mass memory systems and electro-optic systems. As previously
reported, the company's Electro-Optics Development Center (EODC)
submitted a $6.3 million claim to the University of Arizona
(University) in April 2004 to recover additional costs which EODC
believes are a result of changes in the scope of a project being
performed under a $12.8 million fixed-price contract with the
University. Having been unable to resolve the matter, EODC filed
suit in September 2004 to recover these costs from the University
and discontinued work on the project. The University has since
filed a counterclaim and the litigation process is ongoing.
Although additional efforts were made to resolve the matter out of
court, it became clear during the fourth quarter that EODC is not
likely to complete the contract and therefore, a $3.5 million sales
and pre-tax earnings adjustment was recorded in the fourth quarter
to reflect the contract's curtailed status. Concurrent with the
realignment of the Aerospace segment, management has been working
to identify and correct internal operational and efficiency
shortcomings that have affected profitability at the Dayron Orlando
facility, acquired in 2002. In the fourth quarter, the company
recorded a $3.5 million charge to provide for two product
warranty-related issues, one involving a supplier's recall of a
switch embedded in certain of Dayron's bomb fuzes, and the other
involving bomb fuzes manufactured according to procedures in place
at the time Dayron was acquired that have been found to contain an
incorrect part. Management is currently working with its customers
and other parties to resolve these issues appropriately. The
company has a contract with the U.S. Air Force for production of
the advanced FMU-152A/B Joint Programmable Fuze. The JPF contract
has a value of $13.6 million covering low rate initial production
and production of Lot 1 that extends through 2005 and includes
options for eight additional years of production, which, if fully
exercised, would bring the total potential value of the contract to
$168.7 million. In the past few months, the Air Force has released
production for Lot 2 (including some additional production) for
$11.4 million. These releases under the contract, plus development
and engineering activity along with special tool and test
equipment, bring the total to approximately $36.4 million to date.
During the quarter the company continued working on materials flow
and manpower ramp-up to meet production requirements. Helicopter
Programs Sales generated by the SH-2G Super Seasprite and K-MAX
helicopter programs, including spare parts and sales support,
totaled $15.6 million in the 2004 fourth quarter, compared to $18.4
million in the period last year. This represented approximately 22
percent of segment sales for the quarter, compared to approximately
29 percent a year ago. Helicopter program sales for the full year
2004 were $72.8 million, compared to $76.0 million in 2003. This
represented approximately 29 percent of segment sales in 2004,
compared to 30 percent the previous year. Production of the 11
SH-2G(A) aircraft for the Australia program is essentially
complete. As previously reported, the aircraft lack the full
Integrated Tactical Avionics System (ITAS) software and progress is
continuing on this element of the program. The Australian
government provisionally accepted three additional helicopters
during the fourth quarter, bringing the number of aircraft now
provisionally accepted to eight. The company currently expects to
deliver the first fully operational aircraft by mid-year 2005,
followed by the final acceptance process for all eleven aircraft.
Due to the complexity of the integration process and testing
results that indicate additional work to be done, the company
recorded an additional $5.5 million accrued contract loss during
the year to reflect the current estimate of costs to complete the
program, of which $3.8 million was recorded during the fourth
quarter. The company continues to support K-MAX helicopters that
are operating with customers in the field. As of December 31, 2004,
K-MAX inventories included approximately $20.1 million in K-MAX
spare parts and $9.8 million in aircraft owned by the company.
During the fourth quarter, the company continued the process with
the U.S. Naval Air Systems Command (NAVAIR) and the General
Services Administration to develop the method that would be used to
calculate the purchase price of that portion of the Bloomfield,
Conn. complex that the company currently leases from NAVAIR. This
could possibly include the company undertaking some level of the
environmental remediation that may be legally required in the event
of a sale of the property. The company also continued to work with
government and environmental authorities to prepare the closed
Moosup, Conn. facility for eventual sale. Industrial Distribution
Segment Fourth quarter operating profits for the Industrial
Distribution segment were $3.0 million in 2004, compared to $3.7
million in the 2003 period. Sales were $141.6 million in the 2004
fourth quarter, compared to $133.2 million in the same period last
year. With the stronger market, the company achieved margin
improvement on the higher level of sales in the quarter. Operating
profits for the quarter, however, were somewhat lower because the
company's stronger than expected results triggered increased
accruals for a ramp-curved incentive program that rewards a wide
range of branch managers and sales personnel for their
achievements. Also, while vendor incentives in the form of rebates
on volume purchases were at the same approximate level for 2004 as
for the previous year, they were lower in the fourth quarter. With
the increase in business, rebates represented a smaller percentage
of operating profits for the year than for the previous year.
Segment operating profits for the full year 2004 were $19.3
million, compared to $12.7 million the previous year. Sales in 2004
were a record $581.8 million, including $28.3 million from a fourth
quarter 2003 acquisition, compared to $497.9 million, including
$6.5 million from that acquisition, in 2003. Mr. Kuhn said, "The
Industrial Distribution segment had an excellent year in 2004,
reflecting the combined effects of an improved industrial economic
environment, a full-year of benefit from a fourth quarter 2003
acquisition, and market share gains. During the year, Kaman ramped
up its new national account business with Tyco International (US)
Inc., Phelps Dodge, James Hardie and Quad Graphics. During the
fourth quarter of 2004, Procter & Gamble, already a major
customer of the company, selected Kaman as its bearing and power
transmission supplier in Canada. The company opened a new branch in
Toronto to serve that account while providing a platform for
expansion in the area. Kaman added further to its geographic
footprint with the August 2004 acquisition of Brivsa de Mexico, a
small Monterrey, Mexico distributor that enhances the company's
ability to attract and serve national account customers with
operations in this important Mexican industrial center. In
addition, Kaman was named a national distributor for IMI Norgren,
Inc., providing the company an additional major line to sell
through its entire U.S. branch network." Kaman is the third largest
North American industrial distributor serving the bearings,
electrical/mechanical power transmission, fluid power, motion
control and materials handling markets. Kaman offers more than 1.5
million items, as well as value-added services to a base of more
than 50,000 customers spanning nearly every sector of industry,
from its geographically broad-based footprint of nearly 200
locations in the U.S., Canada and Mexico. The company now covers 70
of the top 100 industrial markets in the U.S. This segment
continues to track the U.S. Industrial Production Index and is
affected to a large extent by the overall climate for its customer
industries, including overall plant capacity utilization levels and
the effect of pricing spikes and/or interruptions for basic
commodities such as steel and oil. A weaker U.S. dollar is
currently stimulating customers' export sales, and the demand from
China for raw materials continues to benefit the company's
locations that participate in the mining, steel and cement
production markets. Music Segment Music segment operating profits
for the 2004 fourth quarter were $4.3 million, compared to $3.5
million in the period a year ago. Sales for the 2004 quarter were
$43.1 million, compared to $41.9 million last year. Operating
profits for the year 2004 were $11.1 million, compared to $9.5
million a year ago. Sales for the year 2004 were $161.0 million,
compared to $145.4 million the previous year. Mr. Kuhn said, "Music
delivered a strong performance for the quarter and year, reflecting
a reasonably good Christmas season for the retail sector and, as a
consequence, good demand for the company's lines of branded musical
instruments and accessories. Sales for both the guitar and
percussion lines were up. Among the year's highlights was the
introduction of the Ovation LX series premium guitar, which is
receiving high acceptance ratings from players and positive reviews
in the national music trade press. In addition, continued growth in
sales to both large and small retailers with such products as
Gretsch drums and Sabian cymbals has made 2004 a record sales
year." Kaman is the largest independent distributor of musical
instruments and accessories in the United States, offering more
than 15,000 products for amateurs and professionals. While the vast
majority of Kaman's music sales are to North American customers,
the company has been building its presence in European, Asian and
Australian markets as well. The business is affected by consumer
sentiment as retailers gauge how aggressively to stock for the
holiday selling season, and by actual consumer spending levels. It
is also affected by changes in consumers' musical tastes and
interests. Consequently, a principal strategy of the company over
the past several years has been to add popular premier branded
products that can be brought to market exclusively by Kaman. An
important industry trend of the past several years has been
consolidation in the retail market with the growth in the very
large retail chains. The concentration of sales to these large
customers is increasing. Kaman believes it has built upon its
competitive advantages by creating and maintaining industry-leading
distribution systems and the computerized business-to-business
capabilities that large national retailers increasingly require,
while continuing to support its traditional base of small
retailers. Concluding Remark Mr. Kuhn noted that, "While 2004 was a
year of difficult circumstances for certain of the company's
aerospace businesses, it was also a year of meaningful progress, as
major portions of the corporation performed exceptionally well.
While we have more work to do before the aerospace transition is
complete, we look to 2005 with optimism." Kaman Corp.,
headquartered in Bloomfield, Conn., conducts business in the
aerospace, industrial distribution and music markets.
Forward-Looking Statements This release may contain forward-looking
information relating to the corporation's business and prospects,
including aerostructures and helicopter subcontract programs and
components, advanced technology products, the SH-2G and K-MAX
helicopter programs, the industrial distribution and music
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 corporation does or intends to do
business; 3) standard government contract provisions permitting
renegotiation of terms and termination for the convenience of the
government; 4) economic and competitive conditions in markets
served by the corporation, particularly defense, commercial
aviation, industrial production and consumer market for music
products, as well as global economic conditions; 5) satisfactory
completion of the Australian SH-2G(A)program, including successful
completion and integration of the full ITAS software; 6) receipt
and successful execution of production orders for the JPF U.S.
government contract (including the exercise of all contract options
as such exercise has been assumed in connection with goodwill
impairment evaluations) and receipt of orders from allied
militaries; 7) satisfactory resolution of the EODC/University of
Arizona litigation; 8) achievement of enhanced business base in the
Aerospace segment in order to better absorb overhead and general
and administrative expenses; 9) satisfactory results of
negotiations with NAVAIR concerning the corporation's leased
facility in Bloomfield, Conn.; 10) profitable integration of
acquired businesses into the corporation's operations; 11) changes
in supplier sales or vendor incentive policies; 12) the effect of
price increases or decreases; 13) pension plan assumptions and
future contributions; 14) continued availability of raw materials
in adequate supplies; 15) satisfactory resolution of the supplier
switch and incorrect part issues attributable to Dayron suppliers
and others; 16) cost growth in connection with potential
environmental remediation activities related to the Bloomfield and
Moosup facilities; 17) successful replacement of the Corporation's
revolving credit facility upon its expiration in November 2005; and
18) currency exchange rates, taxes, changes in laws and
regulations, interest rates, inflation rates, general business
conditions and other factors. Any forward-looking information
provided in this release dated March 16, 2005 should be considered
with these factors in mind. The Corporation assumes no obligation
to update any forward-looking statements contained in this release.
KAMAN CORPORATION AND SUBSIDIARIES Condensed Consolidated
Statements of Operations (In thousands except per share amounts)
For the Three Months For the Twelve Months Ended December 31, Ended
December 31, 2004 2003 2004 2003 Net Sales $256,226 $238,854
$995,192 $894,499 Costs and expenses: Cost of sales 198,837 186,017
770,285 671,591 Selling, general and administrative expense 59,186
50,576 239,368 206,416 Net (gain)/loss on sale of product lines and
other assets 16 (20) (199) (18,163) Other operating income (510)
(341) (1,731) (1,448) Interest expense, net 945 750 3,580 3,008
Other expense, net 256 230 1,053 1,265 258,730 237,212 1,012,356
862,669 Earnings (loss) before income taxes (2,504) 1,642 (17,164)
31,830 Income tax benefit/(expense) 2,997 (675) 5,342 (12,425) Net
earnings (loss) $493 $967 $(11,822) $ 19,405 Net earnings (loss)
per share: Basic $.02 $.04 $(.52) $.86 Diluted (1) $.02 $.04 $(.52)
$.86 Average shares outstanding: Basic 22,748 22,616 22,700 22,561
Diluted (2) 23,651 23,621 22,700 23,542 Dividends declared per
share $.11 $.11 $.44 $.44 (1) The calculated diluted per share
amounts for the three months ended December 31, 2004 and 2003 and
the twelve months ended December 31, 2004 are anti-dilutive,
therefore, amounts shown are equal to the basic per share
calculation. (2) Additional potentially diluted average shares
outstanding of 942 for the twelve months ended December 31, 2004
have been excluded from the average diluted shares outstanding due
to the loss from operations in that year. KAMAN CORPORATION AND
SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands)
December 31, 2004 December 31, 2003 Assets Current assets: Cash and
cash equivalents $12,369 $7,130 Accounts receivable, net 190,141
193,243 Inventories 196,718 178,952 Income taxes receivable - 1,043
Deferred income taxes 35,837 26,026 Other current assets 15,270
12,457 Total current assets 450,335 418,851 Property, plant and
equipment, net 48,958 51,049 Goodwill and other intangible assets,
net 55,538 53,347 Other assets 7,500 5,064 $562,331 $528,311
Liabilities and shareholders' equity Current liabilities: Notes
payable $7,255 $6,013 Current portion of long-term debt 17,628
1,660 Accounts payable 74,809 59,600 Accrued contract losses 37,852
23,611 Accrued restructuring costs 3,762 6,109 Other accrued
liabilities 38,961 26,123 Advances on contracts 16,721 19,693 Other
current liabilities 26,305 17,746 Income taxes payable 2,812 -
Total current liabilities 226,105 160,555 Long-term debt, excluding
current portion 18,522 36,624 Other long-term liabilities 33,534
27,949 Shareholders' equity 284,170 303,183 $562,331 $528,311 KAMAN
CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of
Cash Flows (In thousands) For the Twelve Months Ended December 31,
2004 2003 Cash flows from operating activities: Net earnings (loss)
$(11,822) $ 19,405 Depreciation and amortization 8,969 10,019
Provision for losses on accounts receivable 2,180 487 Net gain on
sale of product lines and other assets (199) (18,163) Non-cash
write-down of assets 962 - Non-cash sales adjustment for costs -
not billed 21,332 - Deferred income taxes (11,421) 5,994 Other, net
7,418 2,376 Changes in current assets and liabilities, excluding
effects of acquisitions/divestitures: Accounts receivable (20,179)
2,744 Inventory (18,175) (9,806) Income taxes receivable 1,043
4,149 Accounts payable 15,149 10,106 Accrued contract losses 14,241
(3,063) Accrued restructuring costs (2,347) (1,485) Advances on
contracts (2,972) (1,846) Changes in other current assets and
liabilities 18,484 5,726 Income taxes payable 2,807 - Cash provided
by (used in) operating activities 25,470 26,643 Cash flows from
investing activities: Proceeds from sale of product lines and other
assets 376 28,339 Expenditures for property, plant & equipment
(7,539) (9,069) Acquisition of businesses, less cash acquired
(2,435) (7,748) Other, net (621) (1,599) Cash provided by (used in)
investing activities (10,219) 9,923 Cash flows from financing
activities: Changes to notes payable 1,197 (2,664) Additions /
(reductions) to long-term debt (2,134) (23,508) Proceeds from
exercise of employee stock plans 1,218 1,287 Purchase of treasury
stock (9) (205) Dividends paid (9,979) (9,917) Other (305) - Cash
provided by (used in) financing activities (10,012) (35,007) Net
increase (decrease) in cash and cash equivalents 5,239 1,559 Cash
and cash equivalents at beginning of period 7,130 5,571 Cash and
cash equivalents at end of period $12,369 $7,130 DATASOURCE: Kaman
Corp. CONTACT: Russell H. Jones, SVP, Chief Investment Officer
& Treasurer of Kaman Corp., +1-860-243-6307, Web site:
http://www.kaman.com/ Company News On-Call:
http://www.prnewswire.com/comp/480450.html
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Kaman (NASDAQ:KAMNA)
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