Exhibit 99.1
Kaman Corporation
Bloomfield, CT 06002
(860) 243-7100 NEWS
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KAMAN [GRAPHIC OMITTED]
KAMAN CORPORATION ANNOUNCES PROPOSAL TO SIMPLIFY CAPITAL
STRUCTURE TO ONE SHARE/ONE VOTE
SEPARATELY, THE COMPANY INCREASES ANNUAL DIVIDEND BY 13.6%
BLOOMFIELD, CONNECTICUT, (June 7, 2005) - Kaman Corporation (NASDAQ:
KAMNA) today announced that it has entered into an agreement with certain
members of the Kaman family that contemplates a proposed recapitalization
which would simplify the corporation's capital structure and enhance its
corporate governance by eliminating the existing two-class structure of common
stock.
In the proposed recapitalization, a single class of voting common
stock will replace the existing non-voting Class A common stock and voting
Class B common stock. Specifically, the approximately 22.1 million shares of
Class A common stock would each remain outstanding as one share of voting
common stock and the approximately 668,000 shares of Class B common stock
would each be converted into 1.95 shares of voting common stock.
Alternatively, the Class B common stockholders would be able to elect instead
to convert each of their Class B shares into one share of voting common stock
and receive $14.76 (which represents .95 times the average closing price of
one share of Class A common stock over the last ten trading days).
At the closing of the proposed recapitalization, the holders of the
existing Class A non-voting common stock will own approximately 94.5% to 97.1%
of the then outstanding voting common stock of Kaman, depending on the extent
to which holders of the Class B common stock make the part stock/part cash
election. The proposed recapitalization is anticipated to be completed by the
end of the third quarter of 2005.
The corporation's Board of Directors also approved an increase in its
expected annual dividend from $.44 to $.50 per share. The dividend increase is
effective immediately and is not contingent on the completion of the proposed
recapitalization. The corporation expects that the annual dividend will be
declared and paid in quarterly dividends of equal amounts, subject to the
Board's periodic review of its dividend policy and consistent with Kaman's
recent dividend payment schedule. Accordingly, the board today declared a
regular quarterly dividend of 12.5 cents per share on shares of Kaman common
stock. The dividend will be paid on July 11, 2005 to shareholders of record on
June 27, 2005.
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Kaman Corporation
June 7, 2005
"We are very pleased to come to this agreement with the Kaman family
to simplify Kaman's capital structure," stated Paul R. Kuhn, Kaman's chairman,
president and chief executive officer. Kuhn added, "The proposed
recapitalization will provide Kaman with a more traditional capital structure
with a minimal impact on current Class A shareholders, and will provide equal
voting rights to all shareholders.
Mr. Kuhn added, "For the past few years, we have taken the actions
necessary to position Kaman for the future. Our strong operational and
financial performance in the first quarter of 2005 reflects the benefits of
these efforts, and we believe the proposed recapitalization will better enable
this performance to be reflected in the price of the company's shares."
Kuhn also noted, "Kaman has paid a cash dividend to its shareholders
each quarter since 1971 and has maintained the current dividend rate for the
past sixteen years. The increase we are announcing today is a reflection of
the progress the Board and management believe has been made over the past
several years and our confidence in the company's competitive position in the
principal markets we serve."
The proposed recapitalization is subject to customary closing
conditions, including the vote of more shares of Class A common stock in favor
than against the recapitalization and the vote of more shares of Class B
common stock in favor than against the recapitalization, each such class
voting separately. The members of the Kaman family that are party to the
recapitalization agreement have agreed to vote all of their shares of Kaman
stock, representing approximately 81.5% of the outstanding shares of Class B
common stock and approximately 2.7% of the outstanding shares of Class A
common stock, in favor of the transaction. They have also agreed to vote their
Class B common stock in favor of certain amendments to the corporation's
certificate of incorporation that would become effective only if the
recapitalization were to be completed and as to which only Class B shareholder
approval would be required, and the Kaman family's vote would be sufficient to
assure approval.
Until Kaman distributes the proxy statement/prospectus for the
proposed recapitalization to stockholders (but in any event for a period of
not less than 35 days), and subject to certain conditions, the members of the
Kaman family would be permitted under the recapitalization agreement to
withdraw their support of the proposed recapitalization in order to accept a
"qualifying alternative transaction" with a minimum value in cash or
marketable publicly traded securities of not less than $46.62 per Class B
common share, which would be made available to all Class B shareholders. Prior
to being permitted to do so, however, the corporation's Board of Directors
would be given the opportunity to approve a "substitute recapitalization
proposal" with a minimum value per Class B common share of at least the value
per share of the "qualifying alternative
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Kaman Corporation
June 7, 2005
transaction" plus $.65, with both all stock and part cash/part stock
alternatives and subject to the same shareholder class votes as noted above.
The Kaman family has agreed to support any "substitute recapitalization
proposal" approved by the Board of Directors.
A special committee of the corporation's Board of Directors comprised
of independent directors who are also unaffiliated with the Kaman family was
formed to evaluate and negotiate the recapitalization agreement with the Kaman
family. The special committee retained separate advisors to consider the
proposed recapitalization from the perspective of its two classes of common
stock. Specifically, the special committee was advised by Evercore Partners,
which delivered an opinion that the proposed recapitalization is fair, from a
financial point of view, to the holders of the Class A stock (solely with
respect to such Class A stock). The special committee was also advised by
Houlihan Lokey Howard & Zukin, which delivered an opinion that the
consideration to be received by the holders of the Class B stock in the
proposed recapitalization is fair, from a financial point of view, to the
holders of the Class B stock (solely with respect to such Class B stock). The
special committee's legal advisor is Skadden Arps. The corporation's Board of
Directors has approved the recapitalization agreement, based in part on the
recommendation of the special committee that it do so.
Additional details of the recapitalization and related matters,
including the proposed amendments to Kaman's certificate of incorporation and
by-laws, the terms and conditions of the Kaman family's ability to accept any
"qualifying alternative transaction", the terms and conditions of any
"substitute recapitalization proposal" and other provisions of the
recapitalization agreement, including indemnification and expense
reimbursement provisions, can be found by reviewing the recapitalization
agreement, which is being filed with the Securities and Exchange Commission
today by Kaman as an exhibit to a Form 8-K.
Kaman will host an investor call at 9:00 AM EDT, on June 8, 2005 to
discuss the proposed recapitalization, the dividend increase, and related
matters. Interested parties can access the call by dialing (888) 277-8128.
This conference call will also be simultaneously broadcast live over
the Internet. Listeners can access the conference call live and archived over
the Internet through a link at:
http://www.kaman.com
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Please allow 15 minutes prior to the call to visit the site,
download, and install any necessary audio software. A replay of this call will
be available approximately one hour after the live call ends, through June 15,
2005. The replay will be available on the Company's website or by dialing
(877) 519-4471, passcode: 6136358.
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Kaman Corporation
June 7, 2005
Based in Bloomfield, Conn., Kaman Corporation conducts business in
the aerospace, industrial distribution and music markets. Kaman operates its
aerospace business through its Aerostructures, Fuzing, and Helicopters
divisions and its Kamatics subsidiary providing subcontract aerostructure
manufacturing for military and commercial aircraft, missile and bomb fuzing
products, SH-2G and K-MAX helicopters, and proprietary aircraft bearings and
products. Principal aerospace facilities are located in Connecticut, Florida
and Kansas. Kaman is the third largest North American distributor of power
transmission, motion control, material handling and electrical components and
a wide range of bearings offered to a customer base of more than 50,000
customers representing a highly diversified cross-section of North American
industry, with principal facilities in Alabama, California, Connecticut, New
York, Indiana, Kentucky and Utah. Kaman is also the largest independent
distributor of musical instruments and accessories, offering more than 17,500
products for amateurs and professionals, with principal facilities in Arizona,
Connecticut, California, New Jersey and Tennessee.
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Forward-Looking Statements
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This release may contain forward-looking information relating to the
corporation's business and prospects, including aerostructures and helicopter
subcontract programs and components, advanced technology products, the SH-2G
and K-MAX helicopter programs, the industrial distribution and music
businesses, operating cash flow, the benefits of the recapitalization
transaction, 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 corporation does or 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, particularly defense,
commercial aviation, industrial production and consumer market for music
products, as well as global economic conditions; 5) satisfactory completion of
the Australian SH-2G(A)program, including successful completion and
integration of the full ITAS software; 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)
satisfactory resolution of the EODC/University of Arizona litigation; 8)
achievement of enhanced business base in the Aerospace segment in order to
better absorb overhead and general and administrative expenses, including
successful execution of the contract with Sikorsky for the BLACK HAWK
Helicopter program;
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Kaman Corporation
June 7, 2005
9) satisfactory results of negotiations with NAVAIR concerning the
corporation's leased facility in Bloomfield, Conn.; 10) profitable integration
of acquired businesses into the corporation's operations; 11) changes in
supplier sales or vendor incentive policies; 12) the effect of price increases
or decreases; 13) pension plan assumptions and future contributions; 14)
continued availability of raw materials in adequate supplies; 15) satisfactory
resolution of the supplier switch and incorrect part issues at Dayron and the
DCIS investigation; 16) cost growth in connection with potential environmental
remediation activities related to the Bloomfield and Moosup facilities; 17)
successful replacement of the Corporation's revolving credit facility upon its
expiration in November 2005; 18) risks associated with the course of
litigation; 19) changes in laws and regulations, taxes, interest rates,
inflation rates, general business conditions and other factors; 20) the
effects of currency exchange rates and foreign competition on future
operations; and 21) other risks and uncertainties set forth in Kaman's annual,
quarterly and current reports, and proxy statements. Any forward-looking
information provided in this release should be considered with these factors
in mind. The corporation assumes no obligation to update any forward-looking
statements contained in this release.
Kaman intends to file with the Securities and Exchange Commission a
Registration Statement on Form S-4, which will contain a proxy
statement/prospectus in connection with the proposed recapitalization. The
proxy statement/prospectus will be mailed to the stockholders of Kaman when it
is finalized. STOCKHOLDERS OF KAMAN ARE ADVISED TO READ THE PROXY
STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Such proxy statement/prospectus (when available) and
other relevant documents may also be obtained, free of charge, on the
Securities and Exchange Commission's website (http://www.sec.gov) or by
request from the contact listed below.
Kaman and certain persons may be deemed to be participants in the
solicitation of proxies relating to the proposed recapitalization. The
participants in such solicitation may include Kaman's executive officers and
directors. Further information regarding persons who may be deemed
participants will be available in Kaman's proxy statement/prospectus to be
filed with the Securities and Exchange Commission in connection with the
proposed recapitalization.
Contact: Russell H. Jones
SVP, Chief Investment Officer & Treasurer
(860) 243-6307
rhj-corp@kaman.com
www.kaman.com