Kaman Reports 2019 First Quarter Results
Increases Full Year Outlook
First Quarter Highlights:
-
Diluted earnings per share of
$0.50 , or$0.57 adjusted* -
Distribution sales up 2.5% or 4.1% on a sales per sales day* basis
to
$291.0 million - Aerospace operating margin increased 340 bps to 16.0%
-
Year-to-date operating cash flow of
$22.6 million ; Free Cash Flow* of$15.2 million -
Consolidated backlog of
$949.3 million
Table 1. Summary of Financial Results (unaudited) | ||||||||||||
In thousands except per share amounts |
||||||||||||
|
For the Three Months Ended | |||||||||||
March 29, | March 30, | |||||||||||
2019 | 2018 | Change | ||||||||||
Net sales: | ||||||||||||
Distribution | $ | 290,954 | $ | 283,932 | $ | 7,022 | ||||||
Aerospace | 166,434 | 179,395 | (12,961 | ) | ||||||||
Net sales | $ | 457,388 | $ | 463,327 | $ | (5,939 | ) | |||||
Operating income: | ||||||||||||
Distribution | $ | 12,697 | $ | 11,834 | $ | 863 | ||||||
% of sales | 4.4 | % | 4.2 | % | 0.2 | % | ||||||
Aerospace | 26,612 | 22,662 | 3,950 | |||||||||
% of sales | 16.0 | % | 12.6 | % | 3.4 | % | ||||||
Net gain on sale of assets | 61 | 63 | (2 | ) | ||||||||
Corporate expense | (16,006 | ) | (13,835 | ) | (2,171 | ) | ||||||
Operating income | $ | 23,364 | $ | 20,724 | $ | 2,640 | ||||||
Adjusted EBITDA*: | ||||||||||||
Net earnings | $ | 14,125 | $ | 14,066 | $ | 59 | ||||||
Adjustments | 21,710 | 22,041 | (331 | ) | ||||||||
Adjusted EBITDA* | $ | 35,835 | $ | 36,107 | $ | (272 | ) | |||||
% of sales | 7.8 | % | 7.8 | % | — | % | ||||||
Earnings per share: | ||||||||||||
Diluted earnings per share | $ | 0.50 | $ | 0.50 | $ | — | ||||||
Adjustments | 0.07 | 0.05 | 0.02 | |||||||||
Adjusted Diluted Earnings per Share* | $ | 0.57 | $ | 0.55 | $ | 0.02 | ||||||
At Distribution, sales increased 2.5%, or 4.1% on a sales-per-sales day*
basis to
Aerospace's operating profit increased 17.4% to
Through the balance of the year, we expect continued growth from Distribution with increased profitability as we continue to benefit from improved fixed cost leverage. Aerospace operating profit performance is expected to remain strong due to the sales and profit mix of our specialty bearings and JPF products and the continued realization of the benefit from our restructuring actions. In addition, increased order activity for our bearings products and our recently announced JPF DCS award give us the confidence to increase our Aerospace outlook for the remainder of the year."
Chief Financial Officer,
Our outlook for 2019 has improved. For Distribution, we are maintaining
our prior outlook as the strong start to the year provides us confidence
in achieving our full year expectations. At Aerospace, performance for
the year is ahead of our prior expectations and, based on the progress
we have made to date, we are increasing our outlook for sales and
operating profit for the remainder of the year. We now expect sales in
the range of
Additionally, we are lowering the full year expectation for net periodic
pension benefit from
Finally, our first quarter earnings were ahead of expectations and we note that approximately 50% of this was due to a shift in earnings previously expected in the second quarter, with the remainder representing incremental earnings for the year. We continue to expect nearly 40% of our full year earnings in the fourth quarter. As previously discussed, the back half weighting of our earnings is largely dependent on the timing of sales and profit for our specialty bearings products and JPF DCS units."
2019 Outlook
Our revised 2019 outlook is as follows:
-
Distribution:
-
Sales of
$1.19 billion to $1.22 billion - Operating margins of 5.0% to 5.3%
-
Depreciation and amortization expense of approximately
$16.0 million
-
Sales of
-
Aerospace:
-
Sales of
$730.0 million to $760.0 million - Operating margins of 16.7% to 17.2%
-
Depreciation and amortization expense of approximately
$21.0 million
-
Sales of
-
Interest expense of approximately
$20.0 million -
Corporate expenses of approximately
$58.0 million to $59.0 million -
Net periodic pension benefit of approximately
$0.4 million - Estimated annualized tax rate of approximately 24.0%
-
Consolidated depreciation and amortization expense of approximately
$41 million -
Capital expenditures of approximately
$35.0 million -
Cash flows from operations in the range of
$105.0 million to $125.0 million ; Free Cash Flow* in the range of$70.0 million to $90.0 million - Weighted average diluted shares outstanding of 28.1 million
Please see the MD&A section of the Company's Form 10-Q filed with the
A conference call has been scheduled for tomorrow,
About
Table 2. Summary of Segment Information (in thousands) (unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 29, | March 30, | |||||||
2019 | 2018 | |||||||
Net sales: | ||||||||
Distribution | $ | 290,954 | $ | 283,932 | ||||
Aerospace | 166,434 | 179,395 | ||||||
Net sales | $ | 457,388 | $ | 463,327 | ||||
Operating income: | ||||||||
Distribution | $ | 12,697 | $ | 11,834 | ||||
Aerospace | 26,612 | 22,662 | ||||||
Net gain (loss) on sale of assets | 61 | 63 | ||||||
Corporate expense | (16,006 | ) | (13,835 | ) | ||||
Operating income | $ | 23,364 | $ | 20,724 | ||||
Table 3. Depreciation and Amortization by Segment (in thousands) (unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 29, | March 30, | |||||||
2019 | 2018 | |||||||
Depreciation and Amortization: | ||||||||
Distribution | $ | 3,892 | $ | 3,506 | ||||
Aerospace | 5,318 | 6,310 | ||||||
Corporate | 804 | 845 | ||||||
Consolidated Total | $ | 10,014 | $ | 10,661 | ||||
Non-GAAP Measures Disclosure
Management believes that the Non-GAAP (i.e. Financial measures that are noted computed in accordance with Generally Accepted Accounting Principles) financial measures identified by an asterisk (*) used in this release or in other disclosures provide important perspectives into the Company's ongoing business performance. The Company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define the measures differently. We define the Non-GAAP measures used in this release and other disclosures as follows:
Organic Sales - Organic Sales is defined as "Net Sales" less
sales derived from acquisitions completed during the preceding twelve
months. We believe that this measure provides management and investors
with a more complete understanding of underlying operating results and
trends of established, ongoing operations by excluding the effect of
acquisitions, which can obscure underlying trends. We also believe that
presenting Organic Sales separately for our segments provides management
and investors with useful information about the trends impacting our
segments and enables a more direct comparison to other businesses and
companies in similar industries. Management recognizes that the term
"Organic Sales" may be interpreted differently by other companies and
under different circumstances. No other adjustments were made during the
three-month fiscal periods ended
Table 4. Organic Sales (in thousands) (unaudited) | |||||||
For the Three Months Ended | |||||||
March 29, | March 30, | ||||||
2019 | 2018 | ||||||
Distribution | |||||||
Net sales | $ | 290,954 | $ | 283,932 | |||
Acquisition Sales | — | — | |||||
Organic Sales | $ | 290,954 | $ | 283,932 | |||
Aerospace | |||||||
Net sales | $ | 166,434 | $ | 179,395 | |||
Acquisition Sales | — | — | |||||
Organic Sales | $ | 166,434 | $ | 179,395 | |||
Consolidated | |||||||
Net sales | $ | 457,388 | $ | 463,327 | |||
Acquisition Sales | — | — | |||||
Organic Sales | $ | 457,388 | $ | 463,327 | |||
Organic Sales per Sales Day - Organic Sales per Sales Day is defined as GAAP "Net sales of the Distribution segment" less sales derived from acquisitions completed during the preceding twelve months divided by the number of Sales Days in a given period. Sales days ("Sales Days") are the days that the Distribution segment's branch locations were open for business and exclude weekends and holidays. Management believes Organic Sales per Sales Day provides an important perspective on how net sales may be impacted by the number of days the segment is open for business and provides a basis for comparing periods in which the number of Sales Days differs.
The following table illustrates the calculation of Organic Sales per
Sales Day using “Net sales: Distribution” from the “Segment and
Geographic Information” footnote in the “Notes to Consolidated Financial
Statements” included in the Company's Form 10-Q filed with the
Table 5. Distribution - Organic Sales Per Sales Day (in thousands, except days) (unaudited) |
||||||||||
|
For the Three Months Ended | |||||||||
March 29, | March 30, | |||||||||
2019 | 2018 | |||||||||
Current period | ||||||||||
Net sales | $ | 290,954 | $ | 283,932 | ||||||
Sales days | 63 | 64 | ||||||||
Sales per Sales Day for the current period | a | $ | 4,618 | $ | 4,436 | |||||
Prior period | ||||||||||
Net sales from the prior year | $ | 283,932 | $ | 271,618 | ||||||
Sales days from the prior year | 64 | 64 | ||||||||
Sales per Sales day from the prior year | b | $ | 4,436 | $ | 4,244 | |||||
% change | (a-b)÷b | 4.1 | % | 4.5 | % | |||||
Table 6. Distribution - Sales Days | |||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||
Distribution Sales Days | |||||||||||
2019 Sales Days by quarter | 63 | 64 | 63 | 63 | |||||||
2018 Sales Days by quarter | 64 | 64 | 63 | 62 | |||||||
2017 Sales Days by quarter | 64 | 64 | 62 | 62 | |||||||
Adjusted EBITDA - Adjusted EBITDA is defined as net earnings before interest, taxes, other expense (income), net, depreciation and amortization and certain items that are not indicative of the operating performance of the Company's segments or corporate function for the period presented. Adjusted EBITDA differs from net earnings, as calculated in accordance with GAAP, in that it excludes interest expense, net, income tax expense, depreciation and amortization, other expense (income), net and certain items that are not indicative of the operating performance of the Company's segments or corporate function for the period presented. We have made numerous investments in our business, such as acquisitions and capital expenditures, including facility improvements, new machinery and equipment, improvements to our information technology infrastructure and new ERP systems, which we have adjusted for in Adjusted EBITDA. Adjusted EBITDA also does not give effect to cash used for debt service requirements and thus does not reflect funds available for distributions, reinvestments or other discretionary uses.
Management believes Adjusted EBITDA provides an additional perspective
on the operating results of the organization and its earnings capacity
and helps improve the comparability of our results between periods
because it provides a view of our operations that excludes items that
management believes are not reflective of operating performance, such as
items traditionally removed from net earnings in the calculation of
EBITDA as well as Other expense (income), net and certain items that are
not indicative of the operating performance of the Company's segments or
corporate function for the period presented. Adjusted EBITDA is not
presented as an alternative measure of operating performance, as
determined in accordance with GAAP. No other adjustments were made
during the three-month fiscal periods ended
Table 7. Adjusted EBITDA (in thousands) (unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 29, | March 30, | |||||||
2019 | 2018 | |||||||
Adjusted EBITDA | ||||||||
Consolidated Results | ||||||||
Sales | $ | 457,388 | $ | 463,327 | ||||
Net earnings | $ | 14,125 | $ | 14,066 | ||||
Interest expense, net | 5,313 | 5,352 | ||||||
Income tax expense | 4,116 | 4,677 | ||||||
Other income, net | (91 | ) | (342 | ) | ||||
Depreciation and amortization | 10,014 | 10,661 | ||||||
Other Adjustments: | ||||||||
Restructuring and severance costs | 266 | 1,693 | ||||||
Costs associated with corporate development activities | 2,092 | — | ||||||
Adjustments | $ | 21,710 | $ | 22,041 | ||||
Adjusted EBITDA | $ | 35,835 | $ | 36,107 | ||||
Adjusted EBITDA margin | 7.8 | % | 7.8 | % | ||||
Free Cash Flow - Free Cash Flow is defined as GAAP “Net cash provided by (used in) operating activities” in a period less “Expenditures for property, plant & equipment” in the same period. Management believes Free Cash Flow provides an important perspective on our ability to generate cash from our business operations and, as such, that it is an important financial measure for use in evaluating the Company's financial performance. Free Cash Flow should not be viewed as representing the residual cash flow available for discretionary expenditures such as dividends to shareholders or acquisitions, as it may exclude certain mandatory expenditures such as repayment of maturing debt and other contractual obligations. Management uses Free Cash Flow internally to assess overall liquidity. The following table illustrates the calculation of Free Cash Flow using “Net cash provided by (used in) operating activities” and “Expenditures for property, plant & equipment”, GAAP measures from the Condensed Consolidated Statements of Cash Flows included in this release.
Table 8. Free Cash Flow (in thousands) (unaudited) | ||||
For the Three Months Ended |
||||
March 29, | ||||
2019 | ||||
Net cash provided by operating activities | $ | 22,636 | ||
Expenditures for property, plant & equipment | (7,425 | ) | ||
Free Cash Flow | $ | 15,211 | ||
Table 9. Free Cash Flow - 2019 Outlook (in millions) | 2019 Outlook | |||||||
Free Cash Flow: | ||||||||
Net cash provided by operating activities | $ | 105.0 | to | $ | 125.0 | |||
Less: Expenditures for property, plant and equipment | (35.0 | ) | to | (35.0 | ) | |||
Free Cash Flow | $ | 70.0 | to | $ | 90.0 | |||
Debt to Capitalization Ratio - Debt to Capitalization Ratio is calculated by dividing debt by capitalization. Debt is defined as GAAP “Current portion of long-term debt” plus “Long-term debt, excluding current portion”. Capitalization is defined as Debt plus GAAP “Total shareholders' equity”. Management believes that Debt to Capitalization Ratio is a measurement of financial leverage and provides an insight into the financial structure of the Company and its financial strength. The following table illustrates the calculation of Debt to Capitalization Ratio using GAAP measures from the Condensed Consolidated Balance Sheets included in this release.
Table 10. Debt to Capitalization Ratio (in thousands) (unaudited) | ||||||||
March 29, | December 31, | |||||||
2019 | 2018 | |||||||
Current portion of long-term debt | $ | 10,000 | $ | 9,375 | ||||
Long-term debt, excluding current portion, net of debt issuance costs | 274,176 | 284,256 | ||||||
Debt | $ | 284,176 | $ | 293,631 | ||||
Total shareholders' equity | 642,167 | 633,157 | ||||||
Capitalization | $ | 926,343 | $ | 926,788 | ||||
Debt to Capitalization Ratio | 30.7 | % | 31.7 | % | ||||
Adjusted Net Earnings and Adjusted Diluted Earnings Per Share - Adjusted Net Earnings and Adjusted Diluted Earnings per Share are defined as GAAP "Net earnings" and "Diluted earnings per share", less items that are not indicative of the operating performance of the business for the periods presented. These items are included in the reconciliation below. Management uses Adjusted Net Earnings and Adjusted Diluted Earnings per Share to evaluate performance period over period, to analyze the underlying trends in our business and to assess its performance relative to its competitors. We believe that this information is useful for investors and financial institutions seeking to analyze and compare companies on the basis of operating performance.
The following table illustrates the calculation of Adjusted Net Earnings
and Adjusted Diluted Earnings per Share using “Net earnings” and
“Diluted earnings per share” from the “Consolidated Statements of
Operations” included in the Company's Form 10-Q filed with the
Table 11. Adjusted Net Earnings and Adjusted Diluted Earnings per Share | |||||||
(In thousands except per share amounts) (unaudited) | |||||||
For the Three Months Ended | |||||||
March 29, | March 30, | ||||||
2019 | 2018 | ||||||
Adjustments to Net Earnings, pre tax | |||||||
Restructuring and severance costs at Aerospace | $ | 266 | $ | 1,693 | |||
Costs associated with corporate development activities | 2,092 | — | |||||
Adjustments, pre tax | $ | 2,358 | $ | 1,693 | |||
Tax Effect of Adjustments to Net Earnings | |||||||
Restructuring and severance costs at Aerospace | $ | 60 | $ | 423 | |||
Costs associated with corporate development activities | 472 | — | |||||
Tax effect of Adjustments | $ | 532 | $ | 423 | |||
Adjustments to Net Earnings, net of tax | |||||||
GAAP Net Earnings, as reported | $ | 14,125 | $ | 14,066 | |||
Restructuring and severance costs at Aerospace | 206 | 1,270 | |||||
Costs associated with corporate development activities | 1,620 | — | |||||
Adjusted Net Earnings | $ | 15,951 | $ | 15,336 | |||
Calculation of Adjusted Diluted Earnings per Share | |||||||
GAAP diluted earnings per share | $ | 0.50 | $ | 0.50 | |||
Restructuring and severance costs at Aerospace | 0.01 | 0.05 | |||||
Costs associated with corporate development activities | 0.06 | — | |||||
Adjusted Diluted Earnings per Share | $ | 0.57 | $ | 0.55 | |||
Diluted weighted average shares outstanding | 28,070 | 28,168 | |||||
Adjusted Net Sales and Adjusted Operating Income - Adjusted Net
Sales is defined as net sales, less items not indicative of normal
sales, such as revenue recorded related to the settlement of claims.
Adjusted Operating Income is defined as operating income, less items
that are not indicative of the operating performance of the Company's
segments or corporate function for the period presented. These items are
included in the reconciliation below. Management uses Adjusted Net Sales
and Adjusted Operating Income to evaluate performance period over
period, to analyze underlying trends in our segments and corporate
function and to assess their performance relative to their competitors.
We believe that this information is useful for investors and financial
institutions seeking to analyze and compare companies on the basis of
operating performance. The following table illustrates the calculation
of Adjusted Operating Income using information found in Note 17, Segment
and Geographic Information, to the Consolidated Financial Statements
included in the Company's Form 10-Q filed with the
Table 12. Adjusted Net Sales and Adjusted Operating Income | ||||||||
(In thousands) (unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 29, | March 30, | |||||||
2019 | 2018 | |||||||
DISTRIBUTION SEGMENT OPERATING INCOME: | ||||||||
Net Sales | $ | 290,954 | $ | 283,932 | ||||
GAAP Operating income - Distribution segment | 12,697 | 11,834 | ||||||
% of GAAP net sales | 4.4 | % | 4.2 | % | ||||
Adjusted Operating Income - Distribution segment | $ | 12,697 | $ | 11,834 | ||||
% of net sales | 4.4 | % | 4.2 | % | ||||
AEROSPACE SEGMENT OPERATING INCOME: | ||||||||
Net Sales | $ | 166,434 | $ | 179,395 | ||||
GAAP Operating income - Aerospace segment | 26,612 | 22,662 | ||||||
% of GAAP net sales | 16.0 | % | 12.6 | % | ||||
Restructuring and severance costs | 266 | 1,693 | ||||||
Adjusted Operating Income - Aerospace segment | $ | 26,878 | $ | 24,355 | ||||
% of GAAP net sales | 16.1 | % | 13.6 | % | ||||
CORPORATE EXPENSE: | ||||||||
GAAP Corporate Expense | $ | (16,006 | ) | $ | (13,835 | ) | ||
Cost associated with corporate development activities | 2,092 | — | ||||||
Adjusted Corporate Expense | $ | (13,914 | ) | $ | (13,835 | ) | ||
CONSOLIDATED OPERATING INCOME: | ||||||||
Net Sales | $ | 457,388 | $ | 463,327 | ||||
GAAP - Operating income | 23,364 | 20,724 | ||||||
% of GAAP net sales | 5.1 | % | 4.5 | % | ||||
Restructuring and severance costs at Aerospace | 266 | 1,693 | ||||||
Costs associated with corporate development activities | 2,092 | — | ||||||
Adjusted Operating Income | $ | 25,722 | $ | 22,417 | ||||
% of GAAP net sales | 5.6 | % | 4.8 | % | ||||
FORWARD-LOOKING STATEMENTS
This release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements also may be included in other publicly available documents issued by the Company and in oral statements made by our officers and representatives from time to time. These forward-looking statements are intended to provide management's current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid. They can be identified by the use of words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "would," "could," "will" and other words of similar meaning in connection with a discussion of future operating or financial performance. Examples of forward looking statements include, among others, statements relating to future sales, earnings, cash flows, results of operations, uses of cash and other measures of financial performance.
Because forward-looking statements relate to the future, they are
subject to inherent risks, uncertainties and other factors that may
cause the Company's actual results and financial condition to differ
materially from those expressed or implied in the forward-looking
statements. Such risks, uncertainties and other factors include, among
others: (i) changes in domestic and foreign economic and competitive
conditions in markets served by the Company, particularly the defense,
commercial aviation and industrial production markets; (ii) changes in
government and customer priorities and requirements (including
cost-cutting initiatives, government and customer shut-downs, the
potential deferral of awards, terminations or reductions of expenditures
to respond to the priorities of
Any forward-looking information provided in this release should be considered with these factors in mind. We assume no obligation to update any forward-looking statements contained in this report.
KAMAN CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (unaudited) |
||||||||
For the Three Months Ended | ||||||||
March 29, | March 30, | |||||||
2019 | 2018 | |||||||
Net sales | $ | 457,388 | $ | 463,327 | ||||
Cost of sales | 320,603 | 329,220 | ||||||
Gross profit | 136,785 | 134,107 | ||||||
Selling, general and administrative expenses | 113,216 | 111,753 | ||||||
Restructuring costs | 266 | 1,693 | ||||||
Net gain on sale of assets | (61 | ) | (63 | ) | ||||
Operating income | 23,364 | 20,724 | ||||||
Interest expense, net | 5,313 | 5,352 | ||||||
Non-service pension and post retirement benefit cost (income) | (99 | ) | (3,029 | ) | ||||
Other income, net | (91 | ) | (342 | ) | ||||
Earnings before income taxes | 18,241 | 18,743 | ||||||
Income tax expense | 4,116 | 4,677 | ||||||
Net earnings | $ | 14,125 | $ | 14,066 | ||||
Earnings per share: | ||||||||
Basic earnings per share | $ | 0.51 | $ | 0.51 | ||||
Diluted earnings per share | $ | 0.50 | $ | 0.50 | ||||
Average shares outstanding: | ||||||||
Basic | 27,908 | 27,851 | ||||||
Diluted | 28,070 | 28,168 | ||||||
KAMAN CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except share and per share amounts) (unaudited) |
||||||||
March 29, | December 31, | |||||||
2019 | 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 28,356 | $ | 27,711 | ||||
Accounts receivable, net | 260,461 | 301,094 | ||||||
Contract assets | 121,621 | 108,861 | ||||||
Contract costs, current portion | 6,158 | 5,993 | ||||||
Inventories | 313,894 | 294,912 | ||||||
Income tax refunds receivable | 2,145 | 1,752 | ||||||
Other current assets | 36,332 | 32,782 | ||||||
Total current assets | 768,967 | 773,105 | ||||||
Property, plant and equipment, net of accumulated depreciation of $268,261 and $262,306, respectively | 183,930 | 184,224 | ||||||
Operating right-of-use assets, net | 87,825 | — | ||||||
Goodwill | 343,988 | 345,365 | ||||||
Other intangible assets, net | 87,737 | 91,007 | ||||||
Deferred income taxes | 22,960 | 24,437 | ||||||
Contract costs, noncurrent portion | 9,503 | 10,666 | ||||||
Other assets | 31,058 | 31,509 | ||||||
Total assets | $ | 1,535,968 | $ | 1,460,313 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt, net of debt issuance costs | $ | 10,000 | $ | 9,375 | ||||
Accounts payable – trade | 149,084 | 158,627 | ||||||
Accrued salaries and wages | 40,497 | 46,634 | ||||||
Contract liabilities, current portion | 34,283 | 28,865 | ||||||
Operating lease liabilities, current portion | 24,345 | — | ||||||
Income taxes payable | 1,935 | 139 | ||||||
Other current liabilities | 58,244 | 54,836 | ||||||
Total current liabilities | 318,388 | 298,476 | ||||||
Long-term debt, excluding current portion, net of debt issuance costs | 274,176 | 284,256 | ||||||
Deferred income taxes | 7,486 | 7,027 | ||||||
Underfunded pension | 102,228 | 104,988 | ||||||
Contract liabilities, noncurrent portion | 72,081 | 78,562 | ||||||
Operating lease liabilities, noncurrent portion | 64,643 | — | ||||||
Other long-term liabilities | 54,799 | 53,847 | ||||||
Commitments and contingencies (Note 13) | ||||||||
Shareholders' equity: | ||||||||
Preferred stock, $1 par value, 200,000 shares authorized; none outstanding | — | — | ||||||
Common stock, $1 par value, 50,000,000 shares authorized; voting; 29,639,122 and 29,544,714 shares issued, respectively | 29,639 | 29,545 | ||||||
Additional paid-in capital | 203,922 | 200,474 | ||||||
Retained earnings | 641,741 | 610,103 | ||||||
Accumulated other comprehensive income (loss) | (157,973 | ) | (134,898 | ) | ||||
Less 1,725,972 and 1,672,917 shares of common stock, respectively, held in treasury, at cost | (75,162 | ) | (72,067 | ) | ||||
Total shareholders’ equity | 642,167 | 633,157 | ||||||
Total liabilities and shareholders’ equity | $ | 1,535,968 | $ | 1,460,313 | ||||
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (In thousands) (unaudited) |
||||||||
For the Three Months Ended | ||||||||
March 29, | March 30, | |||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 14,125 | $ | 14,066 | ||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 10,014 | 10,661 | ||||||
Amortization of debt issuance costs | 461 | 449 | ||||||
Accretion of convertible notes discount | 669 | 637 | ||||||
Provision for doubtful accounts | 44 | 295 | ||||||
Net gain on sale of assets | (61 | ) | (63 | ) | ||||
Net loss (gain) on derivative instruments | 247 | (391 | ) | |||||
Stock compensation expense | 1,880 | 1,455 | ||||||
Deferred income taxes | 1,150 | 2,232 | ||||||
Changes in assets and liabilities, excluding effects of acquisitions/divestitures: | ||||||||
Accounts receivable | 40,518 | (6,014 | ) | |||||
Contract assets | (12,635 | ) | (25,130 | ) | ||||
Contract costs | 1,015 | (4,990 | ) | |||||
Inventories | (19,475 | ) | (1,947 | ) | ||||
Income tax refunds receivable | (394 | ) | 2,893 | |||||
Operating right of use assets | 3,603 | — | ||||||
Other assets | (4,160 | ) | (5,615 | ) | ||||
Accounts payable - trade | (9,594 | ) | 10,187 | |||||
Contract liabilities | (1,063 | ) | 75,986 | |||||
Operating lease liabilities | (3,458 | ) | — | |||||
Other current liabilities | (6,980 | ) | (8,209 | ) | ||||
Income taxes payable | 1,783 | (1,817 | ) | |||||
Pension liabilities | 1,043 | (11,938 | ) | |||||
Other long-term liabilities | 3,904 | 4,166 | ||||||
Net cash provided by operating activities | 22,636 | 56,913 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from sale of assets | 65 | 103 | ||||||
Expenditures for property, plant & equipment | (7,425 | ) | (6,422 | ) | ||||
Other, net | (732 | ) | (293 | ) | ||||
Net cash used in investing activities | (8,092 | ) | (6,612 | ) | ||||
Cash flows from financing activities: | ||||||||
Net repayments under revolving credit agreements | (8,500 | ) | (50,708 | ) | ||||
Debt repayment | (1,875 | ) | (1,875 | ) | ||||
Net change in bank overdraft | 4,058 | 2,598 | ||||||
Proceeds from exercise of employee stock awards | 1,519 | 2,687 | ||||||
Purchase of treasury shares | (2,951 | ) | (4,600 | ) | ||||
Dividends paid | (5,578 | ) | (5,569 | ) | ||||
Other | (382 | ) | (271 | ) | ||||
Net cash used in financing activities | (13,709 | ) | (57,738 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 835 | (7,437 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (190 | ) | 583 | |||||
Cash and cash equivalents at beginning of period | 27,711 | 36,904 | ||||||
Cash and cash equivalents at end of period | $ | 28,356 | $ | 30,050 | ||||
Supplemental disclosure of noncash activities: | ||||||||
Value of common shares issued for unwind of warrant transactions | $ | — | $ | 2,281 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190501005959/en/
Source:
James Coogan
V.P., Investor Relations
(860) 243-6342
James.Coogan@kaman.com