Kaman (KAMN) 8-K Regulation FD Disclosure

Kaman Corporation (NASDAQ-GS: KAMN)

Kaman Corporation (NASDAQ-GS: KAMN)

Investor Presentation

March 22, 2011

2

Investment Summary

§Significant long-term organic growth opportunities in Aerospace
and Industrial Distribution

§High margin Aerospace business anchored by market leading
position in specialty bearings

§Military platforms in Aerospace provide recurring revenue stream

§Industrial Distribution business benefiting from industrial sector
momentum and gaining scale via recent acquisitions

§Investing in new product development, new product applications,
acquisitions and technology for long-term growth

§Strong balance sheet to drive growth and strategic initiatives

§New, experienced management team

3

Distribution

63%

Aerospace

37%

2010 Sales

§Kaman Corporation is a diversified company that conducts
business in the aerospace and industrial distribution markets

§The Company has two segments

–Industrial Distribution

•Third largest distributor in the power transmission / motion
control market

•Distributes over four million SKUs to over 50K customers

via 207 branches

–Aerospace

•Manufacturer and subcontractor in the global commercial
and military aerospace and defense market

•Diverse customer base of government divisions and blue
chip customers

§Publicly listed on NASDAQ with a market capitalization of
$795 million as of March 17, 2011

§2010 Sales $1.3 billion; 4,300 Employees

Corporate Overview

(1) Operating profit after depreciation and before interest and corporate charges

Distribution

31%

Aerospace

69%

2010 Segment

Operating Income (1)

4

	2009	2010	Change
Sales	$ 1,146	$ 1,319	+15.0%
Earnings per share	$1.27	$  1.59(1)	+25.2%
Free cash flow	$56.9	$  15.8(2)	-72.2%
Market capitalization	$ 594.9	$ 756.6	+27.2%
Price per share	$ 23.09	$ 29.07	+25.9%

(In millions except per share amounts)

(2) Includes a $25 million voluntary pension plan contribution

(1) Adjusted - excludes $6.4 million goodwill impairment charge, $2.0 million aerospace

contract settlement and $6.6 million look-back interest benefit

Key Metrics

5

§Acquisitions and expansions

–Industrial Distribution

•Acquired Minarik Corporation of Glendale, CA, a national
distributor of motion control and automation products

•Acquired Allied Bearings Supply Company of Tulsa, OK

•Acquired the assets of Fawick de Mexico, S.A. de C. V. of Mexico
City, Mexico

–Aerospace

•Acquired Global Aerosystems, LLC, a provider of aerostructure
engineering design analysis and FAA certification services to the
aerospace industry

•Opened a new, state of the art manufacturing facility in
Chihuahua, Mexico

Recent Significant Events

6

Recent Significant Events

§Contract Awards

–Last twelve months awarded purchase orders for JPF fuzes totaling
$150 million

–Awarded a contract with a potential value in excess of $60 million to
manufacture cabins for the AH-1Z attack helicopter

–Awarded a contract from Bombardier to manufacture composite
doors for the Learjet 85 business jet

–Team K-MAX awarded a $45.8 million contract for the evaluation of
unmanned aircraft systems for the USMC

§Financing

–Completed new four-year $275 million revolving credit facility

–Completed $115 million offering of 3.25% convertible senior notes
due 2017

–S&P reaffirmed Kaman’s BBB- investment grade credit rating

7

AEROSPACE

2010 Sales $487 Million

8

Aerospace

OBJECTIVE:

§$1 billion in sales - “high teens” operating profit margin by 2014

STRATEGY:

§GROWTH - Increased capabilities through both internal development
and acquisitions to win major OEM and Tier 1 programs

§BALANCE - Expand commercial content via growth initiatives to
achieve a better balance of aerospace revenues

§PROFITABILITY - Expand engineering capability to provide
differentiation and improved margins

9

Aerospace Sales

Business/

Regional

3%

Defense

72%

Commercial

25%

Based on 2010 Sales

10

Fixed trailing edge

Fuel tank access doors

Top covers

Red denotes bearing products

Nose landing gear

Rudder

Main landing gear

Flaps

Horizontal stabilizer

Door assemblies

Engine/thrust reverser

Aircraft Programs/Capabilities

Flight controls

Doors

11

Manufacture of cockpit

Blade erosion coating

Manufacture and assembly
of tail rotor pylon

Manufacture, sub assembly
and joining of fuselage

Blade manufacture,
repair and overhaul

Driveline couplings

Bushings

Flight control bearings

Aircraft Programs/Capabilities

Red denotes bearing products

12

Aerospace - Budget Impact on Military
Programs

§Backlog is comprised largely of programs that are unaffected by the
proposed near-term budget cuts

–UH-60 BLACK HAWK Program

–Joint Programmable Fuze

–Joint Strike Fighter

–A-10

–AH-1Z

§C-17 has a firm backlog into 2013

§Canceled programs had minimal overall impact to the company

–Nuclear ballistic missile defense

–Naval surface ships

–F-22

–Future Combat System

13

Strong Base Business

§BLACK HAWK

§Joint Programmable Fuze (JPF)

§C-17

14

Growth Programs

§A-10 re-wing

§Boeing 787

§F-35 (Joint Strike Fighter)

§Airbus A380

§Bell Helicopter - AH-1Z/Commercial

§Unmanned K-MAX®

§Learjet 85

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§Teamed with Lockheed Martin to
develop an unmanned military
version of the Kaman K-MAX
commercial helicopter

§Lockheed Martin / Kaman team
awarded a $45.8 million contract
for the evaluation of unmanned
aircraft systems by the USMC

Contract Award - Unmanned K-MAX®

16

New Program - Bell Helicopter AH-1Z

§Latest version of the AH-1 attack
helicopter for the USMC

§Leverages capabilities of the
Aerospace Group

–New cabins will be
manufactured in Jacksonville
facility

–Tooling will be designed and
built by UK tooling division

§Initial period of performance
runs through 2015

§Program value could exceed $60
million

17

§LJ85 mid-size eight passengerbusiness jet

§Kaman will manufacture:

–Passenger door composite
assembly

–Stair assembly

–Over wing emergency exit door

§First significant award from
Bombardier for aerostructures

New Program - Learjet 85

18

19

UP

24%

$533 Million

at 12/31/10

$431 Million

at 12/31/09

Backlog

20

INDUSTRIAL DISTRIBUTION

2010 Sales $832 Million

21

§Third largest industrial distribution firm serving $15 billion of the $23
billion power transmission / motion control market.

§207 branches and 5 distribution centers

§Major product categories:

–Bearings

–Mechanical and electrical power transmission

–Fluid Power

–Motion control

–Automation

–Material handling

§Metrics:

–$470,000 sales per employee (2010)

–2,000 employees (approximately one third outside sales)

–4.0 million SKUs

–50,000+ customers

Industrial Distribution Overview

22

Industrial Distribution

OBJECTIVE:

§$1.5 billion in sales - 7% operating profit margin by 2014

STRATEGY:

§SCALE/GROWTH - Broaden product offering organically and through
acquisitions.Expand geographic footprint to enhance position in the
national accounts market

§PRODUCTIVITY - Execute organizational realignment and implement
multi-faceted technology investments

§PROFITABILITY - Recognize sales and cost synergies from the three
acquisitions completed in 2010.Enhance margins through new higher
margin product lines, a focus on pricing management and leverage
increased purchasing scale

23

Executing Strategy and Building Network

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§Strong organic growth

–Q410 up 23.0%, Q310 up 17.1%, Q210 up 17.5%

–OEM markets extremely strong

–MRO markets turned positive in Q210

–Broad based growth across geographies and end markets

–January and February 2011 daily sales levels were above comparable
months in the fourth quarter of 2010

§Acquisitions accelerating top line and building scale

–Added geographic coverage, product line expansions, strong franchises

–Acquisitions added $96.2 million in sales in 2010

–Minarik and Allied were accretive in 2010

Growth is Well Rounded

25

Industrial Distribution Sales Per Day

2,670

2,744

2,839

2,880

3,481

3,490

3,457

3,454

3,685

3,518

3,636

3,771

3,469

3,718

Organic

Acquisition

26

Industrial Distribution Opportunities

§Broaden product offering organically and through acquisition to win
additional business from existing customers and gain market share

§Enhance margins through new higher margin product lines, a focus
on pricing management and leverage from higher sales

§Recognize sales and cost synergies from the three acquisitions
completed in 2010

§Expand geographic footprint through additional acquisitions to
enhance Kaman’s position in the competition for national accounts

§Improve productivity through technology investments to enhance
return on sales

27

§Full year 2011 Industrial Distribution’s sales to be approximately
$930M to $960M, up 12.0% to 15.0%.Operating margins are
projected to be between 4.2% and 4.5%

§Full year 2011 Aerospace sales to be approximately $550M to
$565M, up 13.0% to 16.0%.Operating margins are estimated to be
15.2% to 15.5%

§Net interest expense will be approximately $12.5M

§Corporate expenses are expected to be in the range of $10.0M to
$10.5M per quarter

§Free cash flow is expected to be $30.0M to $35.0M

Outlook

28

Kaman Investment Merits

§A Leading Market Position in Both Business Segments

§Two Distinct Markets Balance Overall Company
Performance

§Continued Focus on Profit Optimization, Increasing Cash
Flows and Strengthening Competitive Position

§Strong Liquidity and Conservative Financial Profile

§Disciplined and Focused Acquisition Strategy

§New, experienced Management Team

29

FINANCIAL SUMMARY

37%

2010 Sales $1.32 Billion

30

(1)Adjusted - excludes $6.4 million goodwill impairment, $2.0 million aerospace contract settlement and

$6.6 look-back interest benefit

Financial Highlights - Full Year

31

(1)Adjusted - excludes $6.4 million goodwill impairment

Financial Highlights - Q4 2010

32

(In Millions)	As of 12/31/10	As of 12/31/09	As of 12/31/08
Cash and Cash Equivalents	$32.2	$18.0	$8.2
Notes Payable and Long-term Debt	$ 148.4	$63.6	94.2
Shareholders’ Equity	$ 362.7	$ 312.9	$274.3
Debt as % of Total Capitalization	29.0%	16.9%	25.6%
Capital Expenditures	$21.5	$13.6	$16.0
Depreciation & Amortization	$20.5	$16.1	$12.8

Balance Sheet and Capital Factors

33

APPENDIX I

34

Source:Boeing and Airbus historical data and ISM

Aerospace Orders and Deliveries vs. ISM Index

Why Two Businesses?Diversifies Revenue

0

500

1,000

1,500

2,000

2,500

3,000

30.0

35.0

40.0

45.0

50.0

55.0

60.0

65.0

70.0

Boeing

Airbus

Boeing

Airbus

ISM index

Orders

Deliveries

35

Industrial Distribution Acquisitions

3 Acquisitions Completed in 2010:

§Minarik (April 30, 2010)

–Only national distributor of motion control & automation products

–2009 sales: $84 million; Purchase price: $42.5 million

–Expands geographic coverage in 3 of the top 15 markets where Kaman has not been
well represented (e.g. San Jose, Cleveland, Chicago)

–Diversifies traditional MRO customer base through primary OEM presence

–Expands product offering; positions Kaman as a leader in motion control &
automation

§Allied Bearings Supply (April 5, 2010)

–Distributor of bearings, power transmission, material handling, and industrial supplies

–2009 sales: $22 million; Purchase price: $15 million

–Expands Kaman’s coverage in Oklahoma, Arkansas and Texas

–Adds volume in core product lines and provides access to chemical and petro-
chemical industries and oil and gas industries

§Fawick de Mexico (February 26, 2010)

–Mexico City based fluid power distributor with coverage throughout most of Mexico

–2009 sales: ~$4 million (USD); Purchase price: ~$5.0 million (USD)

36

Industrial Distribution Improving
Productivity Illustration

§Ft. Wayne Processing Center

§Processes accounts payable and accounts receivable transactions -
more than 1.4 million documents annually

§Disburses more than $600 million annually

§Applies more than $700 million in cash collections annually

§From 2007 to 2010 utilizing process improvements and new
technology improved productivity per employee 32% on a 19%
reduction in headcount

37

Global Aerosystems

§Global Aerosystems acquisition (December 2010)

–Strongly supports strategic initiative to grow design content for
higher more protected margins (life of program vs. build to print)

–Strong experienced base of 120 engineers

–Key customer positions

•Boeing, Kawasaki Heavy Industries, Mitsubishi Aircraft
Corporation, Mitsubishi Heavy Industries, Bombardier, Aviation
Partners Boeing and the Department of Defense

–Already bidding on design and build packages

38

Market Leading Self Lube Airframe Bearing
Product Lines

§Content on virtually every aircraft manufactured today
with a growing installed base

§Proprietary technology:

–KAron® bearing liner system

–KAflex® driveline couplings

–Tufflex® machined driveline couplings

§95% of sales are for custom engineered applications

§Operational excellence through lean manufacturing

§Industry leading lead times

39

Kamatics Lean Journey

§Bloomfield Kamatics facility has successfully
implemented lean manufacturing processes

§Since introducing lean in 2000 Kamatics has:

–Doubled sales

–Increased return on identifiable assets by more than
5,400 basis points

–Kept headcount constant

–Doubled sales per employee

–Increased on-time deliveries to more than 90% from
less than 50%

–Developed industry leading lead-times of 4-8 weeks
from 12-18 weeks

40

Learjet 85 Award

Stair Assembly - fitted to
PAX composite door
assembly along with door
opening mechanism

Over Wing Emergency
Exit Door

41

March 2010	Option 7 USG	$46 million
September 2010	Option 7 FMS	$36 million
November 2010	Commercial	$25 million
December 2010	Commercial	$19 million
March 2011	Option 8 USG	$24 million
TOTAL		$150 million

JPF Orders - Last Twelve Months

42

Aerospace Awards

§UTC Supplier Gold at Kamatics

§Top 100 Supplier to Sikorsky

–Kamatics

–Aerostructures - Jacksonville

§Aviation Week - Top Performing Companies

–2009 Five-Year Most Improved

43

Pension Plan Funded Status

§During 2010 Kaman took numerous actions to address the
company’s unfunded pension liability including:

–Executed comprehensive pension plan redesign

–Successfully implemented Liability Driven Investment strategy

–Made $25 million voluntary contribution in December 2010

•Funded with convertible bond proceeds

44

APPENDIX II

Executive Compensation &
Corporate Governance

45

Executive Compensation Aligned with
Shareholder Interests

§Alignment with the market allows Company to attract and retain
key talent

§Company and individual performance drive base salary, annual
cash incentives and long-term incentives

§Total compensation only reaches the median of market when
Company financial performance also is at the median of similar
sized industrial companies

§The direct linkage to company financial performance serves
shareholder interests

§SERP and Pensions benefit accruals ended in 2010

§Perquisites have been eliminated for executive officers (MERP,
financial counseling, tax planning)

46

§Base Salary

§Long-Term Incentive

§Benefit Plans - Same plans as all other employees

§Car Allowance - Limited to executive officers and business unit heads

§Perquisites - Other executive perquisites eliminated

§Management Agreements - Limited to six key executives

All compensation components compared to industrial surveys of similar
sized companies every 2-3 years

Total compensation is driven by company and individual performance

75% of CEO’s compensation in 2010 was performance related

Targeted at the median of

industrial companies of similar size

Compensation Components

47

Performance-Driven Annual Cash Incentive

§Annual cash incentive driven by financial performance

–Corporate - compared against the 5-year average of Russell 2000:

•Return on Investment

•EPS growth

•EPS performance against plan

•Individual Performance

§Business Units- compared against the 3-year moving average of past
performance

•Return on Investment

•Growth in operating income

•Additional annual objectives determined by business priorities

Reviewed and approved by the Personnel and Compensation
Committee of the Board of Directors

48

Corporate Governance

§Strong and Independent Board of Directors

§Ten members; nine are independent with no relationship to the
Company other than Board service.

§Independent Lead Director in place since 2002

§Board has majority voting policy for director elections

§Directors have broad senior leadership qualifications:

–Chief executive or chief financial officer roles

–Industry experience includes aerospace, defense, engineering,
distribution and financial services, both domestic and international

§Virtually all directors serve on the board of other public companies
(generally not more than three)

49

Forward Looking Statement

This presentation contains forward-looking information relating to the company's business and prospects, including the Aerospace and
Industrial Distribution 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 the defense, commercial aviation and industrial production markets; 5) risks associated with successful
implementation and ramp up of significant new programs; 6) potential difficulties associated with variable acceptance test results, given
sensitive production materials and extreme test parameters; 7) management's success in increasing the volume of profitable work at
the Wichita facility; 8) successful resale of the SH-2G(I) aircraft, equipment and spare parts; 9) 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 all
have been assumed in connection with goodwill impairment evaluations; 10) satisfactory resolution of the company’s litigation relating to the
FMU-143 program; 11) continued support of the existing K-MAX® helicopter fleet, including sale of existing K-MAX® spare parts inventory;
12) cost estimates associated with environmental remediation activities at the Bloomfield, Moosup and New Hartford, CT facilities and our U.K.
facilities; 13) profitable integration of acquired businesses into the company's operations; 14) changes in supplier sales or vendor incentive
policies; 15) the effects of price increases or decreases; 16) the effects of pension regulations, pension plan assumptions and future
contributions; 17) future levels of indebtedness and capital expenditures; 18) continued availability of raw materials and other commodities in
adequate supplies and the effect of increased costs for such items; 19) the effects of currency exchange rates and foreign competition on
future operations; 20) changes in laws and regulations, taxes, interest rates, inflation rates and general business conditions; 21) future
repurchases and/or issuances of common stock; and 22) other risks and uncertainties set forth in the company's annual, quarterly and current
releases, proxy statements and other filings with the U.S. Securities and Exchange Commission. Any forward-looking information provided in
this presentation should be considered with these factors in mind. The company assumes no obligation to update any forward-looking
statements contained in this presentation.

Contact: Eric Remington

V.P., Investor Relations

(860) 243-6334

Eric.Remington@kaman.com