--Diluted earnings per share of $0.62; net sales $405 million
--Aerospace segment operating profit of 17.8%, driven by bearing product line performance
--Industrial Distribution operating profit margin of 5.7% on record sales
--JPF deliveries meet year-to-date expectations
Kaman Corp. KAMN +1.04% today reported financial results for the second quarter ended June 29, 2012.
Neal J. Keating, Chairman, President and Chief Executive Officer, stated, "We are pleased with the results achieved during the second quarter of 2012. In our Aerospace business, we continued to experience stronger demand for our bearing product lines, driving the overall Aerospace operating margin to 17.8%. In addition, we delivered approximately 5,900 Joint Programmable Fuzes during the quarter, meeting our delivery expectations year-to-date on this key program.
Industrial Distribution achieved a strong operating profit margin of 5.7% for the second quarter of 2012 compared to 5.0% in the first quarter of 2012 and 5.3% in the second quarter last year. This margin performance was achieved despite experiencing organic sales growth of just 2.1% for the second quarter. We are pleased that we were able to deliver solid profit performance as we continue to focus on gross margin improvement, cost control and continuing contributions from acquisitions.
During the quarter, we also made progress toward the sale of our SH-2G(I) helicopters and the formation of a joint venture in India for an additional low-cost manufacturing alternative. In Industrial Distribution, we launched a program to implement a new state of the art business system to support our long-term growth strategy. We continue to leverage our recent acquisitions and remain committed to pursuing acquisition targets for both of our businesses. The addition of Florida Bearings in July, which expanded our geographical footprint, diversified our customer base and added additional end market exposure, demonstrates our commitment to continue to complement our organic growth with acquisitions."
Segment reports follow:
Industrial Distribution segment
Sales increased 7.9% in the second quarter of 2012 to a record $258.1 million compared to $239.3 million a year ago. Acquisitions contributed $13.8 million in sales in the quarter (sales from acquisitions are classified as organic beginning with the thirteenth month following the acquisition). On a sales per sales day* basis, sales increased 7.9% over last year's second quarter, with organic sales representing 2.1% of the increase. (See Table 3 for additional details regarding the Segment's sales per sales day performance.) Sales growth was driven by increases in fabricated metal product manufacturing, nonmetallic mineral manufacturing and primary metal manufacturing. These increases were partially offset by declines in the food and beverage, semi-conductor and solar power industries.
Segment operating income for the second quarter of 2012 was $14.6 million compared to operating income of $12.6 million in the second quarter of 2011. The operating profit margin for the second quarter of 2012 was 5.7%. In comparison, the operating profit margin was 5.0% in the first quarter of 2012 and 5.3% in the second quarter of 2011. Operating profit was higher year over year as a result of higher sales volume; increased gross profit, which reached a record level in the quarter; and effective SG&A expense control.
Aerospace segment
Sales were $147.4 million, an increase of $1.6 million from sales of $145.8 million in the second quarter of 2011. The increase was due to strong performance from bearing product lines; increased deliveries under the A-10 re-wing program; higher sales of commercial K-MAX service, support and spares; and contributions from the acquisition of Vermont Composites. The increases were offset by lower sales on several programs including the JPF program which had the benefit of significant direct commercial sales volume in the second quarter of 2011. Other programs generating lower sales were Unmanned K-MAX, BLACK HAWK cockpit production and our legacy fuze programs.
Operating income for the second quarter of 2012 was $26.2 million, compared to operating income of $22.4 million in the 2011 second quarter. The operating margin in this year's second quarter was 17.8% as compared to 15.3% in the comparable period in the prior year. The increase in operating income resulted from higher gross profit on our bearing products and helicopter programs, including the Egypt SH-2G(E) maintenance and upgrade program, commercial K-MAX service, support and spares, and the Bell blade program. Also benefiting margin was the absence of legal fees related to FMU-143 litigation. These increases were offset by a less profitable mix of JPF sales, lower sales volume on our Unmanned K-MAX program, lower volume on our Sikorsky BLACK HAWK programs and lower sales volume on our legacy fuze programs.
