KAMN - Earnings call transcript Q4 2017

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Operator

Good day ladies and gentlemen, and welcome to the Kaman Corporation Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Jamie Coogan, Vice President, Investor Relations. Sir, you may begin.

Jamie Coogan

morning. Good welcome fourth to call. XXXX to everyone like quarter Kaman’s earnings I’d and the Keating, Rob Officer President Neal today Starr, Financial President Vice Conducting are Executive Chairman, call and Chief Executive Chief Officer. and

information These forth from company its would current of I annual forward-looking filed our earnings actual the consist note company’s regarding of latest any call begin, Form The the XX-K company’s the we factors, statements including Commission, statements expectations discussed financial statements release. due the include the and with the other the economy on events. like projections with Exchange filings these to underlying other the company report in on future setting most Before earnings with during forward-looking future are and described indicated performance; our current and that the statements on which and business, items; those evening revenue, to of assumptions statements some management; important many of of together Securities plans economic in the of differ our report of objectives business. Form materially to the will XXXX company’s and results its respect and or the and yesterday could X-K future

measures the GAAP as non-GAAP In applicable addition, company’s we filed expect included SEC Reconciliations to with measures earnings and defined release in measures to X-K. and discuss that are in certain information yesterday’s financial rules the regulations. are

the accounting XXXX. on call provide of website in QX, from XXXX supplement our we that will additional impact and standards earnings two Outlook our designed this adoption call resulting is posted X, we to the to January XXXX context around Finally, reference to

over can Neal Neal? this Keating. to call I’ll www.command.com/investors/presentations. the at that, You With turn find presentation

Neal Keating

the events update like to on results outlook then call. review When increased while distribution Thank our turn costs the X.X% you, the in adjusted an over we for at on joining and and in will Diluted fourth share of items, $X.XX key segments. our Sales XXXX. our $X.XX, diluted $XXX.X each included quarter for incurred sales earnings achieved sales and sales per per today as of increased I'd Good thank impact morning call a reform severance at discuss and for achieved in to share begin prior provide to XX.X% to today's results you quarter share quarter. earnings increased us the over restructuring increased Rob aerospace Consolidated the Jamie. segment. earnings I financial fourth million the X.X%. of tax and adjusted both these in of a XX% per diluted increase year. with

increase leading quarter, primarily to $XX.X the more of volume the approximately compared higher quarter the The Turning commercial aerospace direct XX.X% in the in sales deliveries operating to due the between our segments; to volume quarter as and higher JPF next U.S. sales operating of million. profit to was and increased profit JPF, government, deliveries in increased by the JPF year, record XXXX. Beginning to XX%. fuses with well the our as have over products. of deliveries XX,XXX for XXXX, in we bearing in delivered than XX,XXX Since deliveries almost specialty XX,XXX in to of

shift XXXX. performance of proportion our to higher mix XX,XXX in will sales fuses, to As higher expected JPF a U.S. into government which sales provide however, a we the and delivering to we forward margin anticipate see headwind look expect will XXXX, to XX,XXX

while meet their customers that high increased our recognize I supply this Before I quality move want require. on, demand, maintaining the efforts Gerry for ability team Rickets of the in JPF reliability and to the our to and base

our since JPF we announced throughout continues XXXX, $XXX contract million strong, of last call sale in million commercial for most in in successful discussed the Deliveries $XXX including for demand orders, direct be under were the we’ve U.S. we Option of January. XX As and million now in this to closing very to up U.S. $XXX contract foreign are XXXX. XXXX. total expected our expected to and go through in begin and continue government with orders will government Orders support Option XXXX militaries, additional in received the XX XX under contract

metallic XXXX, In continue growth the position on miniature opportunities. platforms, part look XXX we operating we opportunity customers the U.S. demand higher the support the take and Looking expect our quarter due of new government these and our for and ahead, growth our while programs to rolling business, declined for of DCS continued with lines. The over and advantage to lines across In single program. year on for gained we see full over structures volume to several have we was lower also we XX and the our digit efficiencies partnering on upper to product improved our sales significantly PMA prior to lube Sales XX. year bearing over the XXXX. in year structures the in held K-MAX and self Boeing our see element helicopter, our and airframe result programs [ph] the forward bearings performance Options sales traditional as A-XX growth strong

the through third announced in work the restructuring to continue we transition steps addition, In quarter. and

there than certain the slightly of incurred approximately shifted into currently year, estimates these In new positive anticipated expense, We as $X CH-XXK such $X.X actions and million. restructuring number programs expect of our include Hawk, the $X our of and timing are amount; such XXXX. million associated million million $X.X previous restructuring of this of actions costs we with $X for had have the of million, helicopter. UH-XX reviewing a number transition the lower we of For to as legacy as A-XX request, a XXXX of and Black programs. combat aerospace well Department These budget our Defense indicators programs as as the $XX to rescue AH-XZ million

request the budget through the legislative continue As moves the you to as of progress we process. it monitor would expect, will

of per to initiatives basis metals of remained distribution, year day quarter, in February. sales and X.X% markets fourth over per or Also, X.X% XX sales the top increased for of the November, adjusted basis over look positive quarter incurred in Taking our the prior when XXX am of month with Segment sales food. a points eight the pleased report the our in the Moving a we turned associated to were by year the led market machinery, quarter mining, points on I positive basis. the costs operating increased have for fabricated for that prior end up sales XXXX. XX or the day performance fourth and sales period productivity at X.X% profit through level

rest year, the providing for of are our the we As optimism look underlying outlook going sales improving the trends forward. at

with First through of the day half organic an run February, our than sales trend first the acceleration more we’ve up seen rate per latter fourth we our quarter. the a quarter in recovery of nice in X% saw

recently in the to trends through to number a have robust reform. pleased sales transitioning provide these of have accounts we a Rob? backdrop begun in performance I’ll and for contribution distribution XXXX. year XXXX, we and a the expect our as secured we new over continued backlog, Overall, customers tax finish topline call year. move the turn business aerospace the And to improving benefits improvement the our increase with These and national and trends Second, given from are the to year the positions are for the Rob. now, about optimistic and favorable ahead, process of

Robert Starr

fourth Thank before and for quarter for touching you, Neal, good XXXX. providing by performance everyone. outlook our will I the begin morning, today on our

prior diluted the sales associated the quarter expenses. when prior expense primarily our compared Operating million transmission segments Our million year. saw or driven compares SG&A year. in mix year. cost of year distribution our to distribution. million performance at power the period. Consolidated increases the power sales JPF $X.X the aerospace in to of X.X% The was fluid restructuring profit by or increase improved to deferred shares Distribution Diluted deliveries $XXX.X were $X.XX increased with prior increased for JPF and XX.X% of by due $XXX.X increased period. as in relative in bearing income higher margin of $XXX.X fourth up in $X.XX $XX.X $XX.X a and net for and gross favorably the of the productivity led favorable increased sales offset consolidated products. quarter quarter was for quarter prior profit XX.X% the sales sales million This compared $X.XX to fourth were prior segment, year. over SG&A year million both million X.X% prior bearing our associated and pretax the products of adjusted fourth our modest to and to earned This of growth sales sales sales in $XXX in sales year cost or gross to XX.X% sales in the share by the quarter to $XXX.X tax million to sales reform products. year million or our in $XXX.X was compared million X.X% expenses. million asset the $X.XX in and fourth the $X.X the to compared million $XXX.X XX% to the or higher of volume for period. volume mix to million for $XXX.X quarter of per quarter, to $XXX.X prior the a million in due Lower to year earnings the record bearing restructuring was and in compared X.X% and initiatives a the revaluation period, compared X.X% per adjusted specialty tax the or severance to lower $XXX.X prior year to prior By due led the relating was severance prior growth The in with compared of XX.X% million to to

the in net successful years. have of at XX% earnings cash free We flow goal have of focus over couple been the past excess our convergent of on cash discussed XXX% achieving our our long-range past and generation of to in free flow

free or timing shifted cash flows in XXXX, from into of million delivered million to XXX% flow Despite shift timing, led which of deliveries net of end, $XX.X the For we at the cash earnings. XXXX. of year $XX.X cash operations receipts

to store like would I input provide tax details on some rate. Next, the

for tax reform For expectations. have in would XX.X% rate was the of tax impact rate normalized our been line with XX%. quarter, our Adjustment our the

XXXX for charge our the Despite we as reduction this With to beyond. resulted million tax one-time we expect earlier, late deferred significant and net asset mentioned quarter. passage $X.X charge, reform revalue in in required this tax of a XXXX, federal to we in rate in our were of position tax and the see

rate we my federal of Although tax anticipate change primarily transition from year improvement the for a $XXX deductions like in XX.X% the have XX.X% our Starting benefit code. the products, certain costs. benefit expect margins there from to adoption offset our longer our structures XXXX. mix Sales The actions our $XXX of to inclusive be for these growth XX.X% previously the we under by operating in the million the specialty of to state tax to I’d significant standard. taxes. effective of USG production outlook the aerospace, restructuring standard. and in sales adoption bearings and and prior utilized XX.X% by growth with JPF range balance of primarily XXX be margins to number the million employees. are these will sales our composite of reform deductions, with structures year our recognition specialty XXX no Passing reduced and in due compensation for local of transition revenue now bearing high the XX%, to pension programs we million the restructuring engineer and range tax to and costs, composite for revenue remarks new tax higher the for of XX.X% accounting covered on driven most are XXXX when domestic and and programs and recognition to deductions for be the of the focus lines, Section available $X.X a based paid lower the of product is than from will in of new in rate or volumes performance deductions Operating the XX.X% Section that approximately adjusted resulting

in to will the expect result XXXX. to to sales of we and to range sales growth Moving sales in billion $X.X $X.XX billion volume distribution, be The increase pricing. both higher of representing X% in X% over

improve will volume sales our slight higher operating margin our leverage, sales While account add increased headwinds. will national

for of the to be result, to in margins range As XXXX X.X% X.X%. operating a we expect

range from and see to estimate significant XX.X% rate earlier, be we tax XX.X%. to our tax benefit will XXXX As a mentioned of the in reform

for earnings half occurring Moving sequentially of to similar earnings year, through the cadence year with the we to the of of our earnings expect to last in year. year, the XX% the first increase

four to conversion of well the are our excess to of year. Over This last continue the XX% earnings. goal free in XXX% items our flow for years, long-term has flow outlook provide will our XXX%, cash averaged a of into XXXX, where cash a benefit number of trend will net

$XXX $XXX to a For operations $XXX XXXX, million from million cash million we $XXX of expect cash to flow flows million. or of free

and we contract. accounting DCS of XXXX additional as XXXX businesses on advance and XXXX, We cash some well generation in call receipt from of that under to morning our strong posted were JPF the have outlook. impact website receipts earnings our as underlying the a to flow changes that QX, into expected contacts will This the our these an shifted XXXX payment benefit cash provide from supplement onto changes

classification first accounting income pension separates change the the which of for costs, of The costs components and into the pension changes in is two statement. these in costs these changes

plan, a and took we our the resulting in $X.X assets from pension XXXX. the anticipate we plan return the experience on XXXX, we net actions For to significant million benefit freeze plan from

the million operating of which income. net benefit The in costs included X.X is pension first component service calculation of for expense this is

XX calculation been and included component of basis our the operating below resulted with approximately consistent would of income. an item accounting XX and aerospace points million included this which basis is margins benefit the a second million income pension the is this XX.X Heavy calculation of XX.X of The operating to points benefit distribution net respectively. have and operating significant in benefit in increase for is XXXX,

income, of expense Additionally, have our lower year. the expectations our been operating impact for expectation is the to net for the by important this it million. has impacted of would corporate $X approximately $XX for that change of million earnings Despite note not calculation

the JPF adoption the of the number XXXX changes the The The We from to of our to programs. standard revenue however, future sales The that XXXX related significant January adoption a approximately timing aerospace of million earnings operating and of expected our benefit provide respectively. associated of sales to second distribution; changes accounting recognition. not UH-XX net USD to revenue $XX million to most structures will these new shift are impact is these changes approximately $XX program, and AH-XZ with the aerospace X, recognition this of impact expected K-MAX of on income commercial and have million of estimate a standard. will material is see changes helicopter $XX program, a and

XXXX accounting earnings basis, outlook supplement. For XXXX see of our call a turn Neal. slide the I back five QX, a to call and accounting that, the a over these on please impact forma of pro the of of summary With changes will net XXXX

Neal Keating

Thanks, Rob.

commitment investments to continue for As and of from customers close businesses benefit than every delivering momentum. I’d to support enter their to products with and their and services out thank our to we our another very across more dedication each employees investors we our in XXXX interest year, for XXXX like our and day. world-class our positive

the to call Jamie? over turn I’ll Now Jamie. back

Jamie Coogan

Operator, question have may first we please? the

Operator

Our Company. comes Marshall from Sidoti Instructions] [Operator Edward with question first &

begin. may You

Edward Marshall

you? are Good how guys, Hey morning.

Neal Keating

Ed. Good morning,

Robert Starr

Ed. morning, Good

Edward Marshall

the the on didn’t I foreign the wanted quarter what as on of to good. the But quarter, throughout DCS that the year? into guidance to you sense slip some the want just so ask or did remaining I shipped to of much XXXX, of being was a if in too fourth to So focus JPF cadence get because trying kind

Neal Keating

to likely Yes, question. ship Yes, them has year. of we expect portion most first XXXX previous a the moved good half of order the and DCS in the into

Edward Marshall

we to I And talk pension, second. just the a wanted about understand when

you through, will and the said? for two like position getting of million separate in looks I First, secondly, kind pension, of later, it’s what kind income. unfunded about questions, you the still I is yet, what know flow are income froze line but guess out believe I other you forward, in the maybe the as you of break going income a a question that that that’s $X.X

Neal Keating

the the both clear Yes, XXXX want cost Edward, PBCC on premium. given no item. are touched and at $XX.X million I $X.X comments, magnitude be credit certainly in we service their likely million other being we’ve which of separate active be the just as is prepared income expect magnitude about that, to That that below service line the ended of just in really in pension benefit given which the of But that put to end there and service accrued. is a supplements XXXX. the will a we

Edward Marshall

Got just cost elaborate it. why – kind accounting remaining did than premium years that’s think a the service the you to see is premiums grow that maybe of to a I that many way the slower the second, is of in in benefit of on the this and ago. portions – And

Neal Keating

the cost, XXXX, through retrospectively this at Ed. we when will for as you Yes, we move accounting be look service

what on in expect strong service assets XXXX. helped our based you’re in particular in in items, assumption to there’s footnote, particular really the from you’ll That and year. in pension number XXXX. seeing a every on calculation that generated it’s year see a We assets we we year, real roughly this return this change on to that a significant was the had in improvement the -- performance our XX% is done just flat. XXXX that cost the but expected So of see is XXXX basically the And couple credit, in return the

Edward Marshall

to Got went plan? actuarial And there that it. into was your pension change assumptions the

Neal Keating

there Nothing assumptions by change, but in material, really pretty move I are interest demographic rate large sometimes little bit, assumptions, mortality mean, year-to-year. a assumptions consistent

Edward Marshall

quick I we put some could. more, seeing changes I any one, for if backlog? are recognition, as changes in that on of year is know should companies portion One Backlog, XQ a XXXX we some there revenue assume

Robert Starr

POs -- the really our requirement always now standard. reported new actually which firm based backlog It under the on No. we’ve is

because accepting not we’re at used. in So, our backlog all, methodology material we've the any always changes that’s

Edward Marshall

Appreciate it. Thanks guys.

Neal Keating

Thank you, Ed.

Operator

you. Thank

with Dankert comes question Research. next Chris from Our Longbow

may You begin.

Chris Dankert

for taking Thanks guys. morning Hey, question. my

Neal Keating

Good morning, Chris.

Robert Starr

Good morning, Chris.

Chris Dankert

guess shipments March, I the release are as a the as What its Is in guess, first big in expected six? for press part building be Any saw far shipment? really helpful? full would color there K-MAX five or K-MAX we I as year off, pretty month. that the it

Neal Keating

one Yes. of during – with and XXXX, actually course quarter deliveries we at looking first planning are of of three them the about first a will We And came you quarter. the for know we’re fourth from the big XXXX. quarter during as have aircraft over delivering anticipating six Chris,

Chris Dankert

Right, just didn’t right. I an or new orders any there And signings clear, along been announcement, or guess but lines? those see to anything has be

Neal Keating

No.

we’re We’re contracts negotiation working don't we now, have announce time. additional at of but Chris, in orders it. this right Number at to any anything,

Chris Dankert

kind half -- kind assume back of year. you. it’s of guess, loaded earnings the moving the more the typical the the even first of quarter DCS, cadence? fair of of JPF bit it a some I shape to looks first Is the then Got year into And K-MAX, half with

Robert Starr

our shipments business. year, in continued You ramp the increased half similar in up second first earnings the know, last is of and doesn't. delivering JPF as XX% the well year predominantly it in the half Chris, year, well, that actually of its the about actually of bearings as so by to driven anticipate as We

Chris Dankert

more Got outlook, things KIT, commentary fourth at it. could. a just the quarter of getting I now? kind there on and Any if are I mean, firmer it. Got both one And pricing bit

Neal Keating

a to had margin between -- between timing us getting may the those which little of the through is a lot a as we squeeze our pricing bit the it on in anticipate year. suppliers announcements much bit one be We customers the are beginning firmer, course X%, as to environment can more of we seeing to than in Obviously But of increases Chris. recent We be due the favorable in feel of They we've encounter certainly the in a lower with timeframe actually quarter. years. much our our that will XXXX didn't contractual pass arrangements. a fourth

Chris Dankert

Got much, Thanks so guys. it.

Neal Keating

Thank Great. you, Chris.

Operator

you. Thank

comes from Ryan Our Northcoast Cieslak next question from Research.

may begin. You

Ryan Cieslak

Good guys. Thanks. morning,

Neal Keating

Good morning, Ryan.

Ryan Cieslak

expecting, miss to to fourth JPF to be were was sort you the I What range really first some versus then as the just out. was make quarter clear the pushed the that? think size on just what revenue little guys clear the on focus I of wanted we’re gave. well on it bit sounds and just were in getting you below I topline K-MAX maybe like there sure as orders all want aerospace

Robert Starr

were Sure, that end that anticipated – Ryan. we short X was K-MAX. We’d and we low frank contract are negotiating and in million about were it. December still There our signing from to be

obviously was little the business at there were know, of million big So been K-MAX. -- that gives would've than one the more but takes across $X the balance and you

Ryan Cieslak

like at about aerospace range. side. top trending Okay. recognition what looks on And X% Neal, terms on and line when the It about XXXX maybe for out you the of low you’ve of end is towards the talked to growth historically of some strip then, X% you outlook in revenue benefit look the

be talk as maybe as backlog is little you year of some bit higher, this building should is transitional guys XXXX certainly maybe and its higher about and Just takes budget like viewed inflecting there? Thanks. some why a a – not the maybe what the are puts more looks and for the

Neal Keating

year-to-year impact aerospace bit for a It a it’s the it fair have, think certainly which our recognition little One, side you reasons. for of it revenue impact year as – have I standards it's and transition the characterize question of asking is of to good really we probably business. thanks Yes. a new from Sure, it’s couple of a the it. Ryan,

second as of have very addition DCS in shipments know half from we the strong particular year-to-year in XXXX. In you

product so just that’s DCS We’re to in impact order in that going transition year-to-year, begin that to mix JPF, but ship DCS will going end we the against a of to significant a to XXXX lower January. million for $XXX as have we reverse announced

impact So year-to-year. JPF significant customer a and from mix has had

that you rates impacting where are and XXX as business significantly addition ago In our a we XXXX the down from but transition trailing the only edge before business not aircraft. the years know do our that's they fixed couple also structures to bearing for the XXX

are negative So probably begin half that delivery the we impact reverse. of it that volumes Hawk we count significant as XXXX of us. has Defense that aircraft Department Boeing on hope XXXX but through that our deliveries should the budget, we a again to the three plus of the the may but XXXX, the for year-to-year course of in lower in also support Black reverse higher from while to up second impacting or can't the a be volumes new XXXX expect first in in on last XXXX And XXXX yet somewhat because And XXXX. do of quarters would XXXX of

could bit So the when in we outlook. script your a actually transition we probably our look at little word used have

we So call next you might time.

Ryan Cieslak

segment have the quarter fourth helpful. jobs actually some in were of certainly too know look on up, its switching top And sales good else but then the margins. the one I there lower through there, the anything in bringing with that through and range, in the in the there’s just the towards running the you the begin to quarter? in end was P&L extremely curious quarter to the like the below. low That’s color. to much operating but appreciate those to if in that the operating don’t was that’s I deleveraging was want the was line time anything know And really be just impact hop could in fourth unusual because done year there distribution, margins nature quarter I maybe

Neal Keating

more went the two a quarter, impacted one-time anything it, the deliver out the where wasn’t to in engineering have were did not it really Ryan. [ph] projects operating it than quarter. did of unusual We really – there the in of revenue side, of the able system’s us at pass we There on really We were but no the income fourth end year. was significant on group side our events couple but actually it

Ryan Cieslak

What’s there impact about digit, basis, to as above my maybe distribution in February's And here really some maybe the than rest laid comps on sales assuming of baking think just the full what I to single know it starting at good think is quarter. you but -- really guidance breakout, that I’m the leadership and guys? I and there. you daily year internal of a one, conservatism you’re low sales And year expecting said top initiatives Okay. assumes line is the as first in so inflect some how was out still the maybe the getting the at see start the in the higher Thanks. bit then to difficult, more you you X% when look the last that. I Maybe higher up is you at least

Neal Keating

seen far. have so of significant through we acceleration this a course year Ryan, the

and new it's this. think we clearly short in that I leadership to a Too our cycle whether we with think are We have drive the to from that growth second to additional half know the hold. of we've last of we place organic know conservative, place. programs like they are. also number we don't We starting a business early that take we’re in that year say in put benefited being

of more remarks, pension mentioned the other thing Rob as And of is I’d our we’re that for as in year. in outlook So guide accounting the our kind the standards that highlight end we X.X% year-to-year. like is different line have this feel I progress we had the top for confident his year that of to a from outside of in think would we which anticipating and with prepared

Ryan Cieslak

luck, of Best guys. Okay.

Neal Keating

Great. Thank you, Ryan.

Robert Starr

Ryan. you, Thank

Operator

with Our from Thank Instructions] Pete question Hamilton. comes next Skibitski [Operator Drexel you.

may You begin.

Pete Skibitski

good Hey, morning, guy.

Neal Keating

Good morning, Pete.

Robert Starr

Pete. Hi,

Pete Skibitski

the ACE is its In was highest fourth year. a like the of others mix the your distribution. the I was business, me for was – quarter for the start the down also fourth wondering that distribution. issue look know more kind quarter that and I unit full in with Let margin, margin than

curious fourth impacting then mix for guidance of in the with kind back, through I’m coming forward your February kind distribution And is three other? of any XXXX there? in or ongoing line issues So issue each those it quarter there if of all going

Robert Starr

Yes.

the challenge the fourth you're think you quarter did a They bit I Pete, at margin of expecting quarter. margin correct our a in what were we automation good but are delivered Now, below for little little a business. we have

that had impact QX. an So definitely in

As relative positive transmission XXXX say And certainly, power sales well. I our been the in that exhibited also business shown as move strongest fluid KIT, have growth. but platforms, of would to of has, level our February in we growth bearings has strong very growth the product all power across and

we’re pleased in in XXXX. really So the signs early

but As early increased to don't confidence growth think Neil tell. forecast, in point. at we’re indicated to-date but It’s certainly conservative of us gives year this a certainly we’re about being we’re early, level being too X%

Pete Skibitski

it. Got

for XXXX one Okay. then, question either on It’s of fair. And guys. you one

and touched on in JPF the U.S. you any fuzes fuzes the for between mix can quantify you guidance way it, for general On XXXX, DCS that government XXXX? but

Neal Keating

is the a in in to announced going then sales we focused be deliveries It’s mix contract we million really signed XXXX. saw in of $XXX USG January on XXXX. much that beginning and Pete, higher

the as government. and heavily see it of actually margin very the be shipments some the right now, lower of will weighted profile price because what’s to we sell towards So the as government Rob on impacting U.S. U.S. outlined year-to-year that from that's as we

Pete Skibitski

that bearings order give to Neil, simply order an this and attractive be XXXX in visibility DCS aerospace be in about you going next you beyond? best remember guys order, you between good this that got the years certainly leads Does pretty $XXX And Sure. feeling had some is I which margin question and is getting million in rates. big of the to business proved in to and me and the we pretty aerospace this

Neal Keating

years. and that probably than time order Charlie largest back It SH-X was Pete. right running XX order. the we've back We’d the the more we go I probably have had was you’re the company the XX or think joined company took since we to go I when certainly to Australian and

best that look we rate if aerospace I the or incoming for had at we XX So XX years here. our XXXX, that in order been think I've

feel typically start for to we strong XXXX order work about We out you So pointed which very a good the think obviously million we've us. DCS that $XXX very is with had as profitable that.

of profile also very backlog that built that lines. strong the the we've DCS, feel and the orders built we aerospace So and strong across our JPF good backlog product backlog in very of about different with we’ve all bearings

Pete Skibitski

rec from quick just if okay. six of of as you’re great. rules? simple as Rob, per revenue in so million Or ones is Maybe the X quite deliver to different going going bit kind That’s the rev XXXX them. six more The two that’s that plane? it it And on is times new helicopters K-MAX on or because a to of may be

Robert Starr

No.

I you’re K-MAX, For year at but unit terms expected you’re eight, going little K-MAX the course to in the bit in delivery so we’re during of the high you are think to of on neighborhood. for K-MAX, revenue to correct move

Pete Skibitski

Okay. Got last guys. one then And it.

April the position to ballot the you company, votes be that fall for shareholder that? you filings guys on expect in at on Some do on meeting the do the of splitting potential in meeting have and a up

Neal Keating

the it certainly Pete, include we will in proxy.

longtime by as was been know command has that stock. the very by very, you of I saying filed supportive Gamco think and we that Gamco holder start [ph] a

the led by organization, for there. Gabelli We the respect Mario extraordinary have

the so. We any we responding will Friday will file to our our expect public. beginning that. response which we and becomes included be be further until ballot in proxy next be or Friday that and on week to will defer in It content the or of

Pete Skibitski

guys. Appreciate great. for Thanks Okay, it. that help

Neal Keating

you. Thanks, Pete. Thank

Operator

Thank you.

from Capital next Our comes question with Steve KeyBanc Markets. Barger

You begin. may

Unidentified Analyst

Good morning, Steve, guys. This is Ryan for on

Neal Keating

morning, Good Ryan. Okay.

Unidentified Analyst

morning. good Hey,

do Should a about XX% incremental. that's rate there? environment? assume room a Just it run going the low back for we improvement to to you the implies mid single-digit guidance, distribution see Or in new

Robert Starr

we’ve do there's Yes. expect for in XX% be room talked XX%, to improvement drop past we and so Ryan, there. the we that think between

but ultimately depend think think in the out number growth I this with that's that I that from it for will product, type and come where think the a to by at point that I go reasonable work is generates of year. – on XX%

Unidentified Analyst

in revisit you’re then, and And seeing strategy at one just allocation what capital Okay. Kaman's pipeline? the M&A

Robert Starr

Brian, Specialty we XX months. tuck that product we’re that did active into more good acquisitions probably to the than very two very about the feel Bearings active, our lines. XX we've been in We last last

what getting businesses more. from those we’d We’re exactly and anticipated

the at be said we’re I again a years. in as than able -- have one, two to we so actually year ready now look So half been the active very more to next and to last

Unidentified Analyst

guys. time the for Thanks

Robert Starr

you, Thank Ryan.

Operator

you. Thank

Research. from next Our follow-up Dankert a Chris is Longbow with question

You may begin.

Chris Dankert

guys. Hey,

here. should XXXX the a guess Egypt wrap supposed your up the bit Thinking comment or time year Just SH-X to not and on of just Peru maybe I this guess little any opportunity on about expectations impact I’m program, you ones on of on mistaken. two if quick there? I movement

Neal Keating

Chris. Good question,

contract are closing anticipating did through or very excess contract, articles as seven the Peru but Egypt and Zealand continue the are XXXX, know off of and right life-support also in with defense you announce ongoing New we we likely government We during -- to the with and life-support out between took XXXX. we eight U.S. the aircraft from XXXX active late they in be

flying upgrade the timing. matter towards we maintenance they will a and So that those today, upper it aircraft the they that to level of and do configuration simply anticipate have certainly current of move

in XXXX So hopefully certainly perhaps it able that, close and will during XXXX. in be tuck-in beginning tuck-in, to --

Chris Dankert

Got it.

combat I one, the know, that the for program? really helicopter, rescue just any last it And that’s congrats looks to win, of the kind too just the But think early know like it's content then I helpful. is on guess, comments early program. for on I Or obviously that?

Neal Keating

to little bit. think like I defer a we’d

to going wait to we’re the As we’re program can to number integrate actually delivers you be Jacksonville of its but early our think at good for a content we the us, very that Sikorsky. in We to know going facility. of see how much

know a as certainly blades on on rotor you with and models long Sikorsky the various we’ve their As the well. relationship very UH-XX of had UH-XX

content be with on on certainly them like team a So to we our to pleased and we rescue combat able were to that. helicopter very maximize

on we’d to that So year. news some later in good hope have the

Chris Dankert

Thanks Understood. much, so guys.

Neal Keating

you. Thank Great.

Operator

And I’m Coogan you. further call to over the showing Jamie remarks. turn back I’d for currently Thank no closing questions. At time, this to like

Jamie Coogan

Thank again quarter first us you We report our look you conference. speaking to with results. when for forward on joining we today’s

Operator

today’s conference. and a for participation. Ladies your wonderful day. this Have concludes Thanks gentlemen,

Kaman (KAMN) 28 Feb 182017 Q4 Earnings call transcript