Exhibit 99.1
Kaman Corporation
Bloomfield, CT 06002
(860) 243-7100 NEWS
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[KAMAN GRAPHIC OMITTED]
KAMAN CORPORATION ANNOUNCES
SUBSTITUTE RECAPITALIZATION PROPOSAL
BLOOMFIELD, CONNECTICUT, (July 28, 2005) - In connection with the
recapitalization agreement between Kaman Corporation (NASDAQ: KAMNA) and
members of the Kaman family that was previously announced on June 7, 2005, the
company reported today that the corporation's board of directors has approved
a "substitute recapitalization proposal", as permitted under the
recapitalization agreement.
As previously reported, on June 28, 2005 the Company received a letter from
Kaman family representatives indicating that the family intended to terminate
the recapitalization agreement in order to complete what they represented as a
"qualifying alternative transaction" contemplating a purchase of all of the
667,814 outstanding shares of the Company's Class B common stock for $55.00
per share in cash. As permitted under the recapitalization agreement, the
corporation's Board of Directors submitted questions to arbitration as to
whether or not the proposed alternative transaction constituted a "qualifying
alternative transaction" under the recapitalization agreement. On July 22,
2005, the arbiter confirmed that the alternative transaction was a "qualifying
alternative transaction". Under the recapitalization agreement, the Company
had a period of five business days within which 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 transaction" plus
$.65, with both all stock and part stock/part cash alternatives and 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 Kaman family agreed to support any
"substitute recapitalization proposal" approved by the Board of Directors.
The board has approved a "substitute recapitalization proposal" with the
equivalent value of $55.65 per share that increases the number of voting
common shares into which each share of Class B common stock would be
converted. For this purpose, one share of the voting stock would be valued at
$15.54, which was the average closing price for the Class A common stock over
the ten trading day period prior to the recapitalization agreement being
signed. Accordingly, the "substitute recapitalization proposal" has an
exchange ratio of 3.58 voting common shares for each share of Class B common
stock and a part stock/part cash alternative under which holders would have
the right to elect instead to receive for each of their shares of Class B
common stock 1.84 voting common shares and $27.10 in cash. The Kaman family
has agreed to make the part stock/part cash election in an amount directed by
the Company so as to avoid application of the higher voting requirement of
Section 33-841 of the Connecticut Business Corporation Act. In that regard,
the company has advised the Kaman family that the minimum part stock/part cash
election for them collectively is 516,735 shares, which means that the Kaman
family is free to make either election for their remaining 34,976 shares.
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Kaman Corporation
July 28, 2005
"After appropriate deliberation, the board came to the conclusion that the
recapitalization proposal continues to be in the best interest of all
shareholders. Shareholders will now have the opportunity to approve the
recapitalization proposal in order to eliminate the existing dual class
structure and provide all shareholders with voting control proportionate to
their economic interest in the company," stated Paul R. Kuhn, Kaman's
chairman, president and chief executive officer. Kuhn added, "The Company has
continued to achieve progress, and as a result the dividend was increased in
June, as previously announced. By approving a one-share one-vote capital
structure, I believe shareholders would be setting the stage for the financial
markets to properly value the Company going forward."
Further detail on the proposed recapitalization and recapitalization agreement
can be found in the recapitalization agreement, which was filed as Exhibit 2.1
to a Form 8-K filed by the company on June 8, 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;
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Kaman Corporation
July 28, 2005
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; 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.
The Corporation 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