kamn-20210402

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	April 2, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ______


Commission File Number:			001-35419


KAMAN CORPORATION
(Exact name of registrant as specified in its charter)


Connecticut			06-0613548
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1332 Blue Hills Avenue,

Bloomfield,

Connecticut

06002

(Address of principal executive offices)

(Zip Code)


(860)			243-7100
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock ($1 par value)

KAMN

New York Stock Exchange LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes			☒			No			☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes			☒			No			☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes			☐			No			☒


At April 30, 2021, there were			27,810,056			shares of Common Stock outstanding.

PART I

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

KAMAN CORPORATION AND SUBSIDIARIES

(In thousands, except share and per share amounts) (Unaudited)


	April 2, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	120,724	$	104,377
Restricted cash	—		25,121
Accounts receivable, net	102,328		153,806
Contract assets	114,601		108,645
Contract costs, current portion	5,050		3,511
Inventories	197,303		185,072
Income tax refunds receivable	4,851		5,269
Other current assets	12,628		12,173
Total current assets	557,485		597,974
Property, plant and equipment, net of accumulated depreciation of $233,534 and $228,984, respectively	207,145		210,852
Operating right-of-use assets, net	12,048		12,880
Goodwill	243,688		247,244
Other intangible assets, net	146,626		150,198
Deferred income taxes	37,540		39,809
Contract costs, noncurrent portion	7,205		8,311
Other assets	39,000		39,125
Total assets	$	1,250,737	$	1,306,393
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable – trade	$	45,887	$	60,200
Accrued salaries and wages	40,306		70,552
Contract liabilities, current portion	32,622		39,073
Operating lease liabilities, current portion	4,057		4,305
Income taxes payable	1,203		19
Liabilities held for sale, current portion	—		18,086
Other current liabilities	35,722		36,177
Total current liabilities	159,797		228,412
Long-term debt, excluding current portion, net of debt issuance costs	186,378		185,401
Deferred income taxes	7,205		7,381
Underfunded pension	63,185		69,610
Contract liabilities, noncurrent portion	12,120		11,019
Operating lease liabilities, noncurrent portion	8,632		9,325
Liabilities held for sale, noncurrent portion	—		1,171
Other long-term liabilities	46,201		47,636
Commitments and contingencies (Note 14)
Shareholders' equity:
Preferred stock, $1 par value, 200,000 shares authorized; none outstanding	—		—
Common stock, $1 par value, 50,000,000 shares authorized; voting; 30,370,157 and 30,278,668 shares issued, respectively	30,370		30,279
Additional paid-in capital	241,444		238,829
Retained earnings	730,913		728,764
Accumulated other comprehensive income (loss)	(114,466)		(130,821)
Less 2,564,358 and 2,555,785 shares of common stock, respectively, held in treasury, at cost	(121,042)		(120,613)
Total shareholders’ equity	767,219		746,438
Total liabilities and shareholders’ equity	$	1,250,737	$	1,306,393

See accompanying notes to condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

KAMAN CORPORATION AND SUBSIDIARIES

(In thousands, except per share amounts) (Unaudited)


	For the Three Months Ended
	April 2, 2021		April 3, 2020
Net sales	$	171,616	$	207,322
Cost of sales	118,711		139,620
Gross profit	52,905		67,702
Selling, general and administrative expenses	44,991		60,989
Costs from transition services agreement	705		4,140
Cost of acquired retention plans	—		5,703
Restructuring and severance costs	1,352		1,795
Loss (gain) on sale of business	234		(493)
Net loss (gain) on sale of assets	10		(10)
Operating income (loss)	5,613		(4,422)
Interest expense, net	4,251		3,247
Non-service pension and post retirement benefit income	(6,643)		(4,063)
Income from transition services agreement	(475)		(2,974)
Other expense, net	289		218
Earnings (loss) from continuing operations before income taxes	8,191		(850)
Income tax expense (benefit)	207		(443)
Earnings (loss) from continuing operations	7,984		(407)
Earnings from discontinued operations before gain on disposal, net of tax	—		—
Gain on disposal of discontinued operations, net of tax	—		692
Total earnings from discontinued operations	—		692
Net earnings	$	7,984	$	285

Earnings per share:
Basic earnings (loss) per share from continuing operations	$	0.29	$	(0.01)
Basic earnings per share from discontinued operations	0.00		0.02
Basic earnings per share	$	0.29	$	0.01
Diluted earnings (loss) per share from continuing operations	$	0.29	$	(0.01)
Diluted earnings per share from discontinued operations	0.00		0.02
Diluted earnings per share	$	0.29	$	0.01
Average shares outstanding:
Basic	27,815		27,809
Diluted	27,867		27,891

See accompanying notes to condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

KAMAN CORPORATION AND SUBSIDIARIES

(In thousands) (Unaudited)


	For the Three Months Ended
	April 2, 2021		April 3, 2020
Net earnings	$	7,984	$	285
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments and other	15,513		(10,826)
Change in pension and post-retirement benefit plan liabilities, net of tax expense of $250 and $330, respectively	842		1,107
Other comprehensive income (loss)	16,355		(9,719)
Comprehensive income (loss)	$	24,339	$	(9,434)

See accompanying notes to condensed consolidated financial statements.


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS KAMAN CORPORATION AND SUBSIDIARIES (In thousands) (Unaudited)


	For the Three Months Ended
	April 2, 2021		April 3, 2020
Cash flows from operating activities:
Net earnings	$	7,984	$	285
Less: Total earnings from discontinued operations	—		692
Earnings (loss) from continuing operations	$	7,984	$	(407)
Adjustments to reconcile net earnings from continuing operations to net cash (used in) provided by operating activities of continuing operations:
Depreciation and amortization	9,209		9,509
Amortization of debt issuance costs	424		492
Accretion of convertible notes discount	738		702
Provision for doubtful accounts	173		179
Loss (gain) on sale of business	234		(493)
Net loss (gain) on sale of assets	10		(10)
Net loss on derivative instruments	590		983
Stock compensation expense	1,743		1,633
Deferred income taxes	1,793		3,493
Changes in assets and liabilities, excluding effects of acquisitions/divestitures:
Accounts receivable	50,254		(6,531)
Contract assets	(5,704)		(11,665)
Contract costs	(432)		(709)
Inventories	(13,655)		(25,206)
Income tax refunds receivable	418		(2,078)
Operating right of use assets	799		1,223
Other assets	1,042		(917)
Accounts payable - trade	(14,707)		(6,405)
Contract liabilities	(5,439)		1,743
Operating lease liabilities	(908)		(1,183)
Acquired retention plan payments	(25,108)		—
Other current liabilities	(6,796)		(8,079)
Income taxes payable	1,173		(1,038)
Pension liabilities	(5,452)		(12,887)
Other long-term liabilities	(798)		2,209
Net cash used in operating activities of continuing operations	(2,415)		(55,442)
Net cash used in operating activities of discontinued operations	—		—
Net cash used in operating activities	(2,415)		(55,442)
Cash flows from investing activities:
Proceeds from sale of assets	54		11
Proceeds from sale of discontinued operations	—		5,223
Proceeds from sale of business, net of cash on hand	(3,428)		493
Expenditures for property, plant & equipment	(4,678)		(5,559)
Acquisition of businesses, net of cash acquired

SEC Form 10-Q filed by Kaman Corporation