<page>
Exhibit 99.1
KAMAN REPORTS FIRST QUARTER 2003 RESULTS
BLOOMFIELD, Connecticut (April 15, 2003) - Kaman Corp.
(NASDAQ:KAMNA) today reported financial results for the first
quarter ended March 31, 2003.
Net earnings for the first quarter were $14.0 million, or $0.60
per share diluted, compared to $5.3 million, or $0.24 cents per
share diluted, the previous year. First quarter 2003 results
include an after-tax gain of $10.1 million, or $0.45 on a per
share basis, from the sale of the company's Electromagnetics
Development Center (EDC) in January. Net sales for the first
quarter were $216.0 million, compared to $223.1 million in the
2002 quarter.
Paul R. Kuhn, chairman, president and chief executive officer,
said, "While continuing economic uncertainty, war concerns, and
rising energy costs impacted all of our businesses to varying
degrees during the first quarter, as discussed below, I believe
our practice of conservative financial management and the
application of lean-thinking principles throughout the company
have helped us weather these circumstances. We have taken
advantage of this period of economic uncertainty by selectively
acquiring businesses over the past 18 months that are already
contributing and will increasingly help each of our segments as
the economy eventually improves. We also divested two non-core
elements of the business, including EDC, that were no longer
considered strategic assets."
REPORT BY SEGMENT
Aerospace Segment
First quarter operating profits for the segment were $7.2 million
(including the effect of $700 thousand in ongoing relocation and
recertification costs related to the Moosup, Conn. plant
closure), compared to $9.2 million last year. Sales for the
quarter were $61.7 million, including $7.1 million from
acquisitions made during the past year, compared to $75.6 million
in the 2002 first quarter, which included sales of $6.8 million
from the two divested activities.
Kuhn said, "The Aerospace segment continued to be affected by
weakness in its aviation markets. The production void being
generated by the winding down of the New Zealand and Australian
helicopter programs has been worsened by continued softening in
the commercial aerospace market and the absence of new helicopter
production orders. As a result of the lower production levels,
which continued through the first quarter, overhead expenditures
are being absorbed at higher rates by active programs, which is
Page 1
<page>
resulting in higher costs and lower profitability for these
programs."
As previously reported, this condition has necessitated
significant measures that are being taken to sustain the
Aerospace segment through these difficult economic conditions as
well as to prepare the company for future growth. The segment
has reduced its staff and taken other cost-cutting measures in an
attempt to bring operating overheads in line with a lower revenue
base. These actions will continue, along with the previously
announced closure of the company's oldest and least efficient
facility in Moosup, Conn. and relocation of that work to other
Kaman facilities.
Helicopter Programs
Sales generated by the SH-2G Super Seasprite and K-MAX helicopter
programs, including spare parts and sales support, totaled $17.7
million in the first quarter, compared to $24.5 million in the
period last year. This represented approximately 29 percent of
segment sales for the quarter, compared to approximately 33
percent a year ago. These results reflect reduced revenues from
the SH-2G helicopter programs as the New Zealand program is now
essentially completed and the Australia program is in its later
stages. In addition, there were no sales or leases of K-MAX
helicopters entered into during the quarter.
Ten of the eleven aircraft comprising the Australian SH-2G
program are substantially complete; the eleventh aircraft has
been retained at the company for test purposes. As previously
reported, all of the aircraft lack the full Integrated Tactical
Avionics System (ITAS) software and this element of the program
is in the process of completion. The company and the Royal
Australian Navy (RAN) have agreed on a plan for phased acceptance
of the aircraft and the completion of aircraft deliveries. Under
the agreement, phased acceptance is contingent upon the RAN's
satisfaction with the company's progress with respect to certain
important project milestones during 2003. The company continues
to expect that the software will be fully completed, installed
and operational on all of the Australian aircraft by the end of
2004.
The company continues work on a smaller program involving four
SH-2G helicopters granted by the U.S. government to Poland for
deployment aboard two Polish frigates. These aircraft were
previously in service with the U.S. Navy Reserves. The program
involves reactivation of the four aircraft, training, and
logistics support, including delivery of initial spare
components. Reactivation of two of the aircraft was completed in
the fourth quarter of 2002, and these aircraft have been shipped
to Poland. The balance of the program is scheduled for
Page 2
<page>
completion by the third quarter of 2003. The company is actively
pursuing other opportunities for the SH-2G in the international
defense market.
Aircraft Structures and Components
First quarter aircraft structures and components sales were $32.2
million, compared to $35.0 million in the period a year ago.
This business contributed approximately 52 percent of the
Aerospace segment's sales in the first quarter, compared to
approximately 46 percent a year ago.
Aerostructure subcontract work involves commercial and military
aircraft programs. Current programs include production of
assemblies such as wing structures and other parts for virtually
all Boeing commercial aircraft and the C-17 military transport.
Helicopter subcontract work involves commercial helicopter
programs. Current programs include multi-year contracts for
production of fuselages and rotor systems for various MD
Helicopters, Inc. (MDHI) aircraft. Total orders received from
MDHI are running at significantly lower rates than originally
anticipated. The company has developed a large investment in
these contracts (including receivables, start-up costs, and other
program expenditures) and has experienced difficulty with receipt
of payments from MDHI. The company is concerned about this
exposure and is working with MDHI in an effort to address their
payment issues.
The company's Kamatics specialty bearing business, a separate
component of the Aerospace segment, was also impacted by the
commercial and regional aircraft downturn, but that was offset to
a significant degree by increases in commercial aftermarket and
military programs. The company strengthened its presence in the
European market last year with the acquisition of RWG
Frankenjura, a German specialty bearing company. Its largest
customer is Airbus Industrie.
Advanced Technology Products
Sales of the company's advanced technology products in the first
quarter were $11.8 million, compared to $16.1 million a year ago.
The business accounted for approximately 19 percent of Aerospace
segment sales, compared to 21 percent a year ago. The 2002 first
quarter sales included $4.9 million from the Electromagnetics
Development Center, which the company sold in January 2003.
The company manufactures a mix of products for military and
commercial markets, including safe, arm and fuzing devices for a
number of major missile and bomb programs; and precision
measuring systems, mass memory systems and electro-optic systems.
Page 3
<page>
The advanced technology products area is expected to benefit from
increased defense spending as materiel used in the war in Iraq is
replenished.
The company's Kaman Dayron operation, acquired in July 2002,
manufactures fuzes for a variety of munitions programs, and has
the contract to develop a fuze for the U. S. Air Force and Navy
Joint Programmable Fuze (JPF) program. As a result of
qualification test results received during the first quarter of
2003, the company is evaluating the need for certain changes to
the fuze and its production process. The customer has also
requested incorporation of a modification and the company
currently expects to complete any changes and resume final
qualification testing by early in the third quarter of 2003.
Industrial Distribution
First quarter operating profits for the Industrial Distribution
segment were $2.8 million, compared to $2.6 million in the 2002
period. Sales were $120.3 million in the first quarter,
including $1.3 million from an acquisition made in March 2002,
compared to $117.4 million a year ago.
Kuhn said, "The Industrial Distribution segment's quarterly
performance was consistent with our expectations. The broad
sectors of American industry served by the segment continued to
be affected by the uncertain economic environment, and that has
held customer spending down in the quarter."
Pricing pressures continue to reflect the highly competitive
nature of this business. The industry's practice of providing
vendor incentives continues to be an important contributor to the
segment's operating profits.
Music Distribution
Music Distribution's first quarter operating profit was $1.8
million, compared to $1.4 million in the year-ago period. Sales
for the quarter were $34.0 million, including $4.0 million from
an acquisition made in October 2002, compared to $30.1 million a
year ago.
Kuhn said, "Considering all of the problems affecting the
economy, the Music Distribution segment had reasonably good sales
and profits for the quarter. The Latin Percussion acquisition has
been fully integrated into Kaman Music and it is already making
solid contributions to our sales and earnings. Music's internet-
based direct order entry program, kmconline.com, is gaining in
popularity with our retail customers by helping them reduce
inventory costs and enhance service to their customers."
Page 4
<page>
Concluding Remark
"For the company overall," Kuhn concluded, "the business climate
has not improved as many had hoped, and we now have the
additional factor of the nation's response to the war and its
effects to consider. While we will continue to operate
conservatively, which is our tradition, we will also aggressively
seek out business opportunities in the form of new programs and
selective acquisitions."
Forward-Looking Statements
- --------------------------
This report contains forward-looking information relating to the
corporation's business and prospects, including the SH-2G and K-
MAX helicopter programs, aerostructures and helicopter
subcontract programs and components, advanced technology
products, including fuzes for the JPF program, the industrial and
music 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 and thereafter contract negotiations
with government authorities, including foreign governments; 2)
political developments in countries where the corporation intends
to do business; 3) standard government contract provisions
permitting renegotiation of terms and termination for the
convenience of the government; 4) economic and competitive
conditions in markets served by the corporation, including
industry consolidation in the United States and global economic
conditions; 5) attainment of remaining project milestones and
satisfactory completion of the Australian SH-2G(A) program; 6)
recovery of the corporation's investment in the MD Helicopters,
Inc. contracts; 7) actual costs for moving equipment and
recertifying products and processes in connection with phase out
of the Moosup, Connecticut facility; 8) JPF program final
qualification test results and receipt of production orders; 9)
achievement of enhanced business base in the Aerospace segment in
order to better absorb overhead; 10) successful sale or lease of
existing K-MAX inventory; 11) profitable integration of acquired
businesses into the company's operations; 12) U.S. industrial
production levels; 13) changes in supplier sales or vendor
incentive policies; 14) the effect of price increases or
decreases; 15) effects of the war in Iraq; and 16) currency
exchange rates, taxes, changes in laws and regulations, inflation
rates, general business conditions and other factors. Any
forward-looking information should be considered with these
factors in mind.
###
Contact: Russell H. Jones, Vice President & Treasurer
(860) 243-6307
rhj-corp@kaman.com
Page 5
<page>
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands except per share amounts)
<table>
For the Three Months
Ended March 31,
2003 2002
- -----------------------------------------------------------------
<s> <c> <c>
Net sales $ 216,010 $ 223,093
Costs and expenses:
Cost of sales 159,956 162,683
Selling, general and
administrative expense 49,137 51,407
Other operating (income) /
expense, net (273) (270)
Interest expense, net 768 446
Gain on sale of product line
and other assets (16,849) -
Other expense, net 405 216
- -----------------------------------------------------------------
193,144 214,482
- -----------------------------------------------------------------
Earnings before income taxes 22,866 8,611
Income taxes 8,900 3,270
- -----------------------------------------------------------------
Net earnings $ 13,966 $ 5,341
- -----------------------------------------------------------------
Net earnings per share:
Basic $ .62 $ .24
Diluted $ .60 $ .24
- -----------------------------------------------------------------
Average shares outstanding
Basic 22,495 22,328
Diluted 23,480 23,568
Dividends declared per share $ .11 $ .11
</table>
Page 6
<page>
KAMAN CORPORATION AND SUBSIDIARIES
Segment Information
(In thousands)
<table>
For the Three Months
Ended March 31,
2003 2002
- -----------------------------------------------------------------
<s> <c> <c>
Net sales:
Aerospace $ 61,724 $ 75,601
Industrial Distribution 120,266 117,441
Music Distribution 34,020 30,051
- -----------------------------------------------------------------
$ 216,010 $ 223,093
- -----------------------------------------------------------------
Operating profit:
Aerospace $ 7,210 $ 9,150
Industrial Distribution 2,797 2,593
Music Distribution 1,847 1,355
- -----------------------------------------------------------------
11,854 13,098
Interest, corporate and
other expense, net (1) (5,837) (4,487)
Gain on sale of product line
and other assets 16,849 -
- -----------------------------------------------------------------
Earnings before income taxes $ 22,866 $ 8,611
- -----------------------------------------------------------------
<fn>
(1) "Interest, corporate and other expense, net" increased for
the three months ended March 31, 2003 primarily due to a
reduction in group insurance liabilities in 2002, which did not
recur in 2003, and an increase in net interest expense, partially
offset by lower stock appreciation rights expense.
</fn>
</table>
Page 7
<page>
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
<table>
March 31, December 31,
2003 2002
- -----------------------------------------------------------------
<s> <c> <c>
Assets
Current assets:
Cash and cash equivalents $ 8,224 $ 5,571
Accounts receivable, net 217,515 195,857
Inventories 170,493 164,715
Income taxes receivable - 5,192
Deferred income taxes 28,459 28,450
Other current assets 13,762 14,460
- -----------------------------------------------------------------
Total current assets 438,453 414,245
- -----------------------------------------------------------------
Property, plant and equipment, net 54,097 61,635
Goodwill and other intangible assets 49,987 50,994
Other assets 8,610 8,666
- ----------------------------------------------------------------
$ 551,147 $ 535,540
- ----------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities:
Notes payable $ 12,233 $ 10,307
Accounts payable 52,981 46,664
Accrued contract loss 26,758 26,674
Accrued restructuring costs 7,514 7,594
Other accrued liabilities 20,947 23,583
Advances on contracts 20,792 22,318
Other current liabilities 20,289 19,954
Income taxes payable 5,260 -
- -----------------------------------------------------------------
Total current liabilities 166,774 157,094
- -----------------------------------------------------------------
Long-term debt, excluding current
portion 54,235 60,132
Other long-term liabilities 26,314 26,367
Shareholders' equity 303,824 291,947
- -----------------------------------------------------------------
$ 551,147 $ 535,540
</table>
Page 8
<page>
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
<table>
For the Three Months
Ended March 31,
- -----------------------------------------------------------------
2003 2002
<s> <c> <c>
Cash flows from operating activities:
Net earnings $ 13,966 $ 5,341
Depreciation and amortization 2,626 2,760
Net gain on sale of product line
and other assets (16,849) -
Other, net 191 896
Changes in current assets and liabilities,
excluding effects of divestiture:
Accounts receivable (24,209) (21,565)
Inventory (7,108) 5,166
Income taxes receivable 5,192 -
Accounts payable 6,393 (7,849)
Advances on contracts (747) 2,069
Income taxes payable 5,260 2,296
Changes in other current assets
and liabilities (1,510) (5,779)
- -----------------------------------------------------------------
Cash provided by (used in)
operating activities (16,795) 16,665)
- -----------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sale of product line
and other assets 28,021 -
Expenditures for property, plant &
equipment (1,789) (1,361)
Acquisition of business, less cash
acquired - (1,724)
Other, net (461) (41)
- -----------------------------------------------------------------
Cash provided by (used in) investing
activities 25,771 (3,126)
- -----------------------------------------------------------------
Page 9
<page>
Cash flows from financing activities:
Changes to notes payable 1,926 238
Reductions to long-term debt (5,897) (1,660)
Dividends paid (2,471) (2,451)
Purchases of treasury stock (205) -
Proceeds from sale of stock 324 438
- -----------------------------------------------------------------
Cash provided by (used in)
financing activities (6,323) (3,435)
- -----------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents 2,653 (23,226)
Cash and cash equivalents at
beginning of period 5,571 30,834
- -----------------------------------------------------------------
Cash and cash equivalents at
end of period $ 8,224 $ 7,608
- -----------------------------------------------------------------
</table>
###
Page 10
<page>