Kaman Reports 2021 First Quarter Results

Kaman Corp. (NYSE:KAMN) today reported financial results for the first fiscal quarter ended April 2, 2021.

	Table 1. Summary of Financial Results (unaudited)
	In thousands except per share amounts	For the Three Months Ended
		April 2, 2021				April 3, 2020				Change
	Net sales from continuing operations	$	171,616			$	207,322			$	(35,706	)
	Operating income from continuing operations:
	Operating income (loss) from continuing operations	$	5,613			$	(4,422	)		$	10,035
	% of sales	3.3		%		(2.1		)%		5.4		%
	Adjustments	$	2,291			$	21,117			$	(18,826	)
	Adjusted operating income from continuing operations*	$	7,904			$	16,695			$	(8,791	)
	% of sales	4.6		%		8.1		%		(3.5		)%
	Adjusted EBITDA from continuing operations*:
	Earnings (loss) from continuing operations	$	7,984			$	(407	)		$	8,391
	Adjustments	9,129				26,611				(17,482		)
	Adjusted EBITDA from continuing operations*	$	17,113			$	26,204			$	(9,091	)
	% of sales	10.0		%		12.6		%		(2.6		)%
	Earnings per share from continuing operations:
	Diluted earnings per share from continuing operations	$	0.29			$	(0.01	)		$	0.30
	Adjustments	—				0.49				(0.49		)
	Adjusted diluted earnings per share from continuing operations*	$	0.29			$	0.48			$	(0.19	)

Ian K. Walsh, Chairman, President and Chief Executive Officer, commented, “We begin the year with a solid quarter and confidence in our end-market recovery seeing significant sequential improvements in our Medical and Industrial end markets with strong order rates for these products. Sales for our Defense and Commercial, Business and General Aviation products declined both year-over-year and sequentially due to lower JPF volume and the impact of COVID-19, respectively. Looking to the remainder of the year, our JPF program remains on track and we anticipate a significant ramp up in sales for our Commercial, Business and General Aviation products in the second half of the year and are encouraged by increased air traffic and vaccination rates in the United States."

"Our cost control efforts carried forward into the first quarter where we achieved Adjusted EBITDA* margin of 10.0%. This result demonstrates our ability to maintain profitability despite the year-over-year and sequential sales declines we experienced. We remain focused on implementing our operational excellence model that is designed to improve EBITDA Margin, Free Cash Flow, and Return on Invested Capital and we are starting to see positive results."

"New product development remains an important part of our future growth and we have made significant progress on a number of these initiatives, including the opening of our first production cell for highly engineered products utilizing our proprietary Titanium Diffusion Hardening process and the successful test flight for our new unmanned K-MAX TITAN ^TM system. This test flight is a significant milestone in enabling us to meet the future unmanned logistics requirements of our commercial and defense customers. As we look to the remainder of the year, we anticipate sequential organic growth and continued progress on our new product development efforts and our strategic acquisitions priorities."

Management's Commentary on First Quarter Results:

Net sales for the quarter decreased 17.2% when compared to the first quarter of 2020 and 7.4% sequentially. Organic sales*, which excludes sales from our former U.K. composite operations, decreased 14.5% from the first quarter of 2020 and decreased 5.6% from the fourth quarter of 2020. Sales declines were due to lower sales volume of our Defense products and our Commercial, Business and General Aviation products, partially offset by increased sales for our Medical and Industrial products.

Sales for our Defense products decreased 20.2% when compared to the first quarter of 2020 and 10.7% when compared to the fourth quarter of 2020. The sequential decrease was due in large part to lower volume for our Joint Programmable Fuze program offset by a modest increase in our other defense offerings. During the quarter we delivered 8,090 fuzes and we continue to expect to deliver 30,000 to 35,000 Joint Programmable Fuzes in the year.

Sales for our Commercial, Business and General Aviation products decreased 24.2% from the first quarter of 2020 and 14.8% from the fourth quarter of 2020. This sequential decrease was due to a 19.9% decrease in sales for our commercial aviation products