Kaman Corp. today reported financial results for the fourth quarter and full year ended December 31, 2011.
Summary of Financial Results In Thousands For the Three Months Ended December 31, 2011:
Net sales:
- Industrial Distribution $233,441
- Aerospace145,283
Operating income:
- Industrial Distribution$11,142
- Aerospace17,472
Neal J. Keating, Chairman, President and Chief Executive Officer, stated, "We delivered great operational performance across the company in 2011 compared to 2010. Our team executed well and demonstrated significant improvement by virtually any measure. Sales reached a record $1.5 billion fueled by both organic growth and the contributions of the twelve acquisitions we have completed over the last four years. Industrial Distribution sales reached a record $951 million compared to $646 million just two years ago. Aerospace sales were up 12.5% as a result of higher sales of our bearing product lines and the contributions from acquisitions. Operating profit was higher in each business including an impressive 59% increase at Industrial Distribution on a 14% sales increase. Aerospace operating profit rose on the elevated sales volume and increased sales of higher margin bearing product lines. This strong operational performance resulted in robust year over year earnings per share growth of 36% (diluted per share, adjusted*).
"The strength of our results has been offset somewhat by lower than expected deliveries of Joint Programmable Fuzes (JPF), due to acceptance testing issues. However, strong demand across the rest of the Aerospace Segment made up for most of the JPF shortfall. The operational performance of the JPF in the field remains extremely high, above Air Force requirements; we continue to book additional orders, are negotiating a new four-year sole source contract with the USAF and have returned to acceptance testing.
"Acquisitions remain a key component of our growth strategy and we are pleased that we completed five acquisitions during 2011. At the forefront, in Industrial Distribution, the acquisition of Catching Fluidpower and our national reseller agreement with Parker Hannifin will form the cornerstone of our strategy to increase our mix of higher margin fluid power product sales. In Aerospace, the acquisition of Vermont Composites expands our customer base and our platform exposure adding further diversity to this segment. All in all 2011 was a great year for Kaman, but most importantly it demonstrates solid progress toward our 2014 goals for sales and profit in both businesses."
Industrial Distribution Segment Report
Industrial Distribution segment sales increased 6.7% in the 2011 fourth quarter to $233.4 million compared to $218.7 million a year ago. Acquisitions contributed $4.9 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, organic sales were up 2.8% over last year's fourth quarter.
Segment operating income for the fourth quarter of 2011 was $11.1 million, a 20.7% increase from operating income of $9.2 million in the fourth quarter of 2010. The operating profit margin for the fourth quarter of 2011 was 4.8%. In comparison, the operating profit margin was 5.1% in the third quarter of 2011 and 4.2% in the fourth quarter of 2010.
Industrial Distribution segment sales for the fourth quarter of 2011 reflect continued positive market conditions. Market strength was broad based across most geographies, customers and end markets.
Operating margin was higher on a year-over-year basis as a result of the higher sales volume, improved productivity resulting from IT investments and our organizational realignment, continued gross margin improvement, and lower pension expense.
Segment sales for the full year 2011 were a record $950.8 million compared to $832.0 million in 2010, an increase of 14.3%. Operating income for the full year 2011 was $48.1 million, an increase of 59.1% over $30.3 million in 2010. The increase in full year sales was a result of the contributions from acquisitions completed in 2011 and 2010 and sustained organic growth. The significant increase in operating income was a result of the higher sales volume, improved gross margin, higher absorption of SG&A expenses, and lower pension expense.
Aerospace segment sales figures and the remainder of this article can be found at www.kaman.com.
