Kaman 8K Other Events | KAMN 17 May 07

INVESTOR PRESENTATION

Kaman Corporation

(NASDAQ - NGM: KAMN)

1Q 2007

Slide 1

    Forward-looking Statements

This presentation may contain forward-looking information relating to the company's business and prospects, including the Aerospace,Industrial Distribution and Music businesses, operating cash flow, and other matters that involve a number of uncertainties that may cause actual results to differ materially from expectations. Those uncertainties include, but are not limited to: 1) the successful conclusion of competitions for government programs and thereafter contract negotiations with government authorities, both foreign and domestic; 2) political conditions in countries where the company does or intends to do business; 3) standard government contract provisions permitting renegotiation of terms and termination for the convenience of the government; 4) domestic and foreign economic and competitive conditions in markets served by the company, particularly defense, commercial aviation, industrial production and the consumer market for music products; 5) satisfactory completion of the Australian SH-2G(A)program, including resolution of the current contract dispute with the Commonwealth; 6) receipt and successful execution of production orders for the JPF U.S. government contract including the exercise of all contract options and receipt of orders from allied militaries, as both have been assumed in connection with goodwill impairment evaluations; 7) in the EODC/University of Arizona litigation, successful defeat of the University’s appeal of the jury verdict in the company’s favor; 8) satisfactory resolution of (i) the company’s dispute with the U.S. Army procurement agency relating to warranty work for the FMU-143 program and (ii) the 2005 DCIS investigation of that program; 9) satisfactory results of negotiations with NAVAIR concerning purchase of the company's leased facility in Bloomfield, Conn.; 10) continued support of the existing K-MAX helicopter fleet, including sale of existing K-MAX spare parts inventory and in 2007, availability of a redesigned clutch assembly system; 11) cost growth in connection with environmental remediation activities at the Moosup facility and such potential activities at the Bloomfield facility; 12) profitable integration of acquired businesses into the company's operations; 13) changes in supplier sales or vendor incentive policies; 14) the effect of price increases or decreases; 15) pension plan assumptions and future contributions; 16) future levels of indebtedness and capital expenditures; 17) continued availability of raw materials in adequate supplies; 18) the effects of currency exchange rates and foreign competition on future operations; 19) changes in laws and regulations, taxes, interest rates, inflation rates, general business conditions and other factors; and 20) other risks and uncertainties set forth in the company's annual, quarterly and current reports, and proxy statements. Any forward-looking information provided in this report should be considered with these factors in mind. The company assumes no obligation to update any forward-looking statements contained in this presentation..

Contact:
Russell H. Jones, SVP, Chief Investment Officer & Treasurer
(860) 243-6307
Russell.Jones@kaman.com

Aerospace 27% $326.0 $288.0 13.2%

Corporate Profile

Slide 2

Percent Distribution of Sales

By Segment For 2006

 Millions $ Sales

   Percent of

 Total Sales

      Percent

    Increase

Sales by Segment:

Segment:

For the year ended

Industrial Distribution 55% 665. 621.9 7.0%

100% $1,206.2 $1,101.2 9.5%

Music 18% 214.8 191.3 12.2%

–
            
 Strong performance in 2006 and 1Q/2007

–
            
 Aerospace Segment drove earnings improvement

–
            
Record results at Kamatics/RWG:  Largest part of Aerospace Segment

–
            
Good programs on line at Aerostructures plants in Jacksonville and Wichita

–
            
Progress in ramping up Fuzing Division’s Joint Programmable Fuze program

–
            
New subcontract work at Bloomfield Helicopters Division plant

–
            
Australia Helicopter Program nearer to completion but could be cancelled

–
            
Favorable climate for commercial aviation and military helicopters

–
            
Industrial Distribution:  1Q/2007 economy softer after record 2006

–
            
Winning new national accounts and gaining market share

–
            
Segment tends to follow national economic trends

–
            
Continuously looking at potential acquisitions

–
            
Music Segment: Costs cut, Musicorp consolidation complete

–
            
Difficult market conditions in 2006 and 1Q/2007; disappointing holiday season

–
            
Performance should improve when consumer spending normalizes

Slide 3

Key Messages

Aerospace

SEGMENT OVERVIEW

Slide 4

2006 segment sales: $326.0 million

27%


            
  Aerostructures                   $78.7
            
      69%
            
         $25.2                  $ 16.9

Fuzing & M/M
            
              71.1
            
          89%                  18.5                      19.0


            
  Helicopters                              69.9
            
          83%                  17.4                      11.5


            
  Kamatics & RWG                106.3                    20%            32.0               26.2
            
 
            

                                                         $326.0                           60%              $ 93.1                $ 73.6

Aerospace

Slide 5

Aerospace Operating Unit:

Percent of Total Operating Unit Sales
to Total Segment Sales for 2006

  Year ended
            

            
                                 Quarter ended

Millions $ Sales 
            
                                Millions $ Sales

 12/31/06                         2006
            
               3/30/07
            
   3/31/06

PeMilitary
            
rcent

Sales by Principal Aerospace Operating Unit

Aerospace

Slide 6

Top and Middle: Metals-oriented at Jacksonville
Bottom: Composites-oriented at Wichita

 Aerostructures: Facilities in Jacksonville, FL and Wichita, KS

Produces parts and subassemblies for
Tier 1 Prime Manufacturers:

Military programs including Boeing C-17
internal wing structures, Sikorsky
BLACK HAWK helicopter cockpits, and
Sikorsky MH-92 helicopter composite tail rotor pylons

Seeing opportunity for new
programs at both locations: Available
capacity, well-located, non-union, flexible,
competitive

Commercial programs including Boeing 777
subassemblies and 787 composite structures

Strategy:  Take advantage of substantial
opportunities arising from the larger producers’
(Airbus, Bell, Boeing, Sikorsky, Vought, etc.)
offloading of manufacturing work

Aerospace

Slide 7

Fuzes for high profile missiles such as the
Hawk; and bomb programs including the Joint
Programmable Fuze (JPF)

 Fuzing: Facilities in Middletown, CT and Orlando, FL

Manufactures safe, arm and fuzing devices
for a number of major missile and bomb programs

Missile programs: AMRAAM, ATACMS, Brimstone,
M-100 Hawk, Harpoon, JASSM, Maverick,
SLAM-ER, Standard and Tactical Tomahawk

Bomb programs: Joint Programmable Fuze,
FMU-143, FMU-139, 40mm

Strategy:  Become the leading producer of
fuzing systems for the U.S. and allied militaries
Market size estimate: $650 million

Division includes Measuring & Memory
Systems pPrincipal customers: U.S. and allied militaries,
Boeing, General Dynamics, Lockheed and
Raytheon
            
roducts

Principal customers: U.S. and allied militaries,

Boeing, General Dynamics, Lockheed and

Raytheon

Aerospace

Slide 8

Top:  Kaman SH-2G Super Seasprites
Middle:  Kaman K-MAX BURRO
Bottom:  Joining BLACK HAWK         
helicopter sections at Bloomfield facility

 Helicopters: Facilities in Bloomfield, CT

4
            
Markets and supports Kaman-made SH-2G Super
      Seasprite maritime helicopter and K-MAX
     “Aerial Truck” helicopter -  and performs
      subcontract helicopter programs

4
            
Strategy:  Take advantage of increasing
      opportunities in subcontracting as the Tier 1
      Prime producers shift from manufacturing to
     final assembly and systems integration

4
            
Principal customers include: The governments
      of Australia, Egypt, New Zealand and Poland;
      and The Sikorsky Aircraft Corporation

4
            
Current principal programs include: SH-2G(A)
      program for Australia (in a loss position), depot
      level maintenance and upgrades to SH-2G(E)
      helicopters for Egypt, K-MAX BURRO UAV program
      and BLACK HAWK subcontract work for Sikorsky.

Aerospace

Slide 9

Kamatics and RWG aerospace bearings

Kamatics & RWG: Facilities in Bloomfield, Ct and Dachsbach, Germany

4
            
Designs and manufactures proprietary self-lubricating
      bearings for OEM and MRO use in nearly all military
      and commercial aircraft produced in North and
      South America and Europe

4
            
Strategy: Maintain leadership in product technical
      performance and application engineering support
      while staying ahead of the curve in product
      technology enhancement:

4
            
Target the most demanding applications early in the aircraft
     design process as part of prime-contractors’ problem-
     solving teams - and effectively address customers’ needs
     by providing the highest performance available

4
            
Market size:  $0.5 billion high-end portion of the $ 1.2 billion
     aerospace bearing market

4
            
Key customers include:  Military (U.S. and allied)
      (20% of 2006 sales), and Commercial
      (Boeing, Airbus, Embraer, Bombardier and others)

Industrial Distribution

SEGMENT OVERVIEW

Slide 10

2006 segment sales: $665.4 million

55%

Industrial Dist

Industrial Distribution

Slide 11

Industrial Distribution Segment

Extensive product catalogue

Value-added service

4
            
Third largest player in $12 billion power transmission
      market.  Provides nearly two million products to more
      than 50,000 MRO and OEM customers

4
            
Strategy:

4
            
Expand the geographic footprint in major industrial markets
     to enhance competition for national and regional accounts.

4
            
Broaden the product line and further enhance operating and
     asset utilization efficiencies throughout the enterprise

4
            
Serves a broad cross section of North American
      industry with local branches in 70 of the top 100 U.S.
      Industrial markets.  Growing national account base

4
            
Now nearly 200 locations in the U.S., Canada
      and Mexico

4
            
The business tends to track the U.S. Industrial
      production and capacity utilization indices

Industrial Distribution

Source: Federal Reserve Board

Slide 12

FRB Indices Of Industrial Production and Capacity Utilization:
Predictability: Segment tends to track national indices

Industrial Distribution

Slide 13

Portfolio Of Recognized Brands:
More than 1.7 million products sold to more than 50,000 MRO and OEM customers

Industrial Distribution

Slide 14

Geographical Coverage:  Nearly 200 locations in U.S. Canada and Mexico

Music

SEGMENT OVERVIEW

Slide 15

2006 Segment sales: $214.8 million

18%

Music

Music

Slide 16

Music Segment

Largest independent distributor of percussion and
fretted musical instruments and accessories;
Industry-leading information technology systems

4
            
Largest independent distributor of musical
      instruments and accessories in a $2.5 billion slice
      of the $7.0 billion U.S. musical instruments market:
      More than 20,000 products

4
            
Strategy:  Build on Kaman’s strong brand identity
      while adding new market-leading names to the
      company’s offering of proprietary products

4
            
Leads the market in use of technology, providing
      systems to service customers at all levels

4
            
U.S. and Asian manufacturing supports Kaman’s
      proprietary and licensed brands of
      premium products

4
            
Market is driven by consumer sentiment with
      the Holiday selling season a key driver

Music

Slide 17

Source:  The Conference Board

Consumer Confidence Index:
Music Segment Sales are Driven by Consumer Sentiment/Holiday spending

Music

Slide 18

Largest Independent Distributor:  Over 20,000 Products in Total
Premier Branded Products: 51% of Segment Sales

Segment Summary

Slide 19

EXHIBIT 2

Key Segment Messages: First Quarter Ended March 30, 2007

Slide 20

Aerospace Segment:  Sales up 26.5%; Operating income up 66.1% for the quarter

ü
            
Aerostructures: Sales up 48.8% for quarter driven by Sikorsky BLACK HAWK and Boeing 777
      work at Jacksonville, and by new composites contracts at Wichita

ü
            
Fuzing: Sales down 2.8% for quarter.  Still subject to quarter-by-quarter fluctuations.  Annual
      shipments up for legacy fuze programs and JPF

ü
            
Helicopters: Sales up 51.8% in quarter.  Quarter driven by Egypt SH-2G depot level maintenance
      program and upgrades - and by subcontract work on BLACK HAWK for Sikorsky.

ü
            
Kamatics/RWG: Sales up 22.2% in quarter.  Markets remain solid.

Industrial Distribution Segment: Sales up 1.7%, operating income down 19.6% for the quarter

ü
            
Income comparison includes $1.6 million one-time gain in previous year first quarter

ü
            
Economic conditions mixed but remain moderately favorable

ü
            
Winning large new national account contracts and retaining accounts on renewal

Music Segment: Sales down 3.1%, operating income up 24.9% for the quarter

ü
            
Less than robust market conditions for consumers may continue for a time

ü
            
Cost control across the segment and completion of Musicorp consolidation helped earnings

Financial Review

Slide 21

Sales: 
1Q 2007: up 7.0% over 1Q 2006

Earnings before Income Tax:
See GAAP reconciliation (Slide 23)
for effect of one-time charges and gains in
first quarter 2007 and 2006

Net Earnings:
1Q 2007: up 70.2% over 1Q 2006





EPS - diluted:
Average diluted shares outstanding
1Q/06:24,887; 1Q/07: 25,105

    Income Statement Highlights

  For the three month periods ended

       $296.6

   $317.3

$10.1

$16.0

     $5.9

 $10.1

$0.24

 $0.41

Slide 22

	Three Months ended March 30, 2007			Three Months ended March 31, 2006
(In millions)	Earnings Before Income Taxes	Net Earnings	Net Earnings Per Share Diluted	Earnings Before Income Taxes	Net Earnings	Net Earnings Per Share Diluted
As Reported	$16.0	$10.1	$0.41	$10.1	$ 5.9	$0.24
Add:
Addition to Loss Reserve: Australia	2.5	1.5	0.06	2.5	1.5	0.06
Deductible and Non-Deductible Stock Appreciation Rights	0.2	0.1	--	1.3	1.0	0.05
Subtract:
Gain from Capitalized Freight-Adjustment (KIT)	--	--	--	(1.6)	(0.9)	(0.04)
As Adjusted	$18.7	$11.7	$0.47	$ 12.3	$ 7.5	$ 0.31

These adjustments represent certain discrete items.  The Company uses certain financial measures internally
 to focus management on period-to-period changes in our business. Therefore, we believe that this 
supplemental information is meaningful to investors when considered in connection with the information
 contained in the GAAP presentation of financial information. The presentation of these items is not meant to
represent results as defined by GAAP, nor as an alternative for financial performance as determined unde
r GAAP.

Slide 23

GAAP reconciliations applicable to the First Quarter Periods

	Three Months Ended
	3/30/2007	3/31/2006
Corporate expense before breakout items	$ (6.3)	$ (7.2)
Breakout items:
Stock appreciation rights	(0.2)	(1.3)
Pension expense	(0.1)	(0.7)
Supplemental employees’ retirement plan	(1.5)	(1.3)
Group Insurance	(1.3)	0.1
Corporate expense - total	$ (9.4)	$ (10.4)

First Quarter Corporate Expense Highlights

Slide 24

(In millions)	Sales		Operating Income		Operating Margin
(In millions)	1Q/07	1Q/06	1Q/07	1Q/06	1Q/07	1Q/06
Aerospace	$ 93.1	$ 73.6	$ 16.6	$ 10.0	17.8%	13.6%
Industrial Distribution	173.4	170.6	8.7	¹10.8	5.0%	¹6.3%
Music	50.8	52.4	1.6	1.3	3.1%	2.4%
Corporate Expense			(9.4)	(10.4)	²(2.9%)	²(3.5%)
Total	$ 317.3	$ 296.6	$ 17.5	$ 11.7	5.5%	3.9%


1 Includes one-time $1.6 million gain
2 Corporate expense percentage is to Total Sales

Three Month Periods Ended March 30, 2007 and March 31, 2006

Slide 25

First Quarter Income Statement Highlights

	As of 3/30/07	As of 12/31/06	As of 3/31/06
Notes Payable and Long-term Debt	$90.9	$74.4	$103.5
Shareholders’ Equity	$306.8	$296.6	$274.0
Debt as % of Total Capitalization	22.9%	20.1%	27.4%
Capital Expenditures	$2.9	$13.2	$1.7
Depreciation & Amortization	$2.9	$10.5	$2.5

Slide 26

Balance Sheet and Capital Factors

Public information is available on the Kaman website:  www.kaman.com

KAMN

KAMAN CORPORATION

Traded on NASDAQ Global Market

Kaman (KAMN) 8-KOther Events