KAMN - Earnings call transcript Q2 2021

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Operator

Good day, and thank you for standing by. Welcome to the Kaman Corporation Second Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand of Rebecca would to conference Accounting. I speaker your Stath, Instructions] like the to over [Operator Vice President Please go ahead.

Rebecca Stath

quarter Vice Chairman, President like to Chief Executive the I'd welcome Jamie and Chief today XXXX Coogan, Financial and second Senior call Walsh, morning. Conducting and earnings Ian Good are Officer; call. President to Kaman's everyone Officer.

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

with and Walsh. that, non-GAAP in call information expect included company's Ian regulations. are release, measures as the measures With also I'll over in certain earnings rules that GAAP financial the X-K. the applicable and to We to filed Reconciliations to discuss turn defined measures SEC yesterday's are

Ian Walsh

for quarter earnings would our and revised second updates growth turn which the quarter a everyone, initiatives. improved call to over and today's a our I reflects on Jamie guidance, of brief call. year, profitability joining our several to begin morning, thank for with call Good the and of financial I discussion by summary operations our of then will for results. like you XXXX the more followed detailed key R&D

first and as Jamie strong and our I'm strategic his Chief Before to training forward know coupled the Kaman, great get sets will he's his our invaluable stakeholders, our reputation team move a his like closely initiatives. to with strong running. well to joining with believe and have of with relationships external priorities. on has prove work Financial jumping ground work opportunity him the and skill I've key already in, hit well history company execute Jamie promotion as as and I'd with our leadership mindset, quite on strategic recent financial had and Coogan Officer. to him we congratulate Since and I Jamie to a Kaman. on knowledge Kaman ethic on excited

Turning to adjusted raising share. projections, halfway internal the which we for gives and per results, outlook in ahead year, our confidence full our year through of earnings our are us diluted EBITDA running

we of as continue aerospace end our we up Our continue organically year. business which the of across and for in see earnings year, position Products the in million, than primarily of of as X.X% the were to quarter many Adjusted markets. per lines, also improvement Engineered normalize most share was was to or to X.X% conditions compared higher prior start product prior diluted quarter commercial was the to $X.XX sequential our performance portfolio, ourselves Sales by second recovery the $XXX.X our driven market.

from period. was second or adjusted and the year XXX Our sales up XXX sequentially up of quarter $XX.X basis XX.X% points million EBITDA points basis prior

ran and quarter. total levels pre-pandemic aftermarket the toward the bearings better self-lubricating the improvement This saw miniature demand improved to improved order DCS seals in leverage of favorable for strength margin These and Fuze the and of quarter solutions. a timing year contacts, more We our springs, in profitability mostly offset volume stems the commercial for solid weighted traditional a rates of from were which across business medical sequential performance our from in model very our products, market. was this new excellence bearings high above operations end related by as the partially stronger mix in in bearings strong company. our Our engine volume recovery improvements and of bearings, our function specifically, our aerospace

traffic half rebound, bearings second products anticipate we significant commercial the sales our airline to commercial continues As year. of for the in a ramp in

in the and higher running growth drivers continued prior that the against now XXXX. ahead variants, any industrial to and and seals springs, primary am of speak I quarter. margins to into results year contacts, volume, continue the performance and through engineered pleased internal improved COVID medical end volume our also of These profit, to markets. resiliency we levels. we of posted and pre-pandemic products highly impact was portfolio are sharply Turning second our balance plan. and Absent of year report to within expect of we the performance further our this improve the the to the one the results sequentially from improved of With

fuzes delivered Programmable Fuze the X,XXX quarter. program, For Joint our during we

mix with all the in line fuze a year, precision orders and DCS Our financial higher was as offset for roughly of performance prior products volume.

we fuzes for year, historical on this to XX,XXX XX,XXX full consistent are delivery to the For levels with track product. deliver

fleet. financing customer have of K-MAX shifted of a timing Looking the we as their at in second K-MAX our of second half our the program, and delivery function end

the remain We we both and manned within the about as the continue and optimistic interest four unmanned strong prospects aircraft we to K-MAX. for see to year, expect sell

we closely the we unmanned quarter, K-MAX retrofit continued the the During of Corps of Marine on the our system, aircraft. and unmanned development with commercial were working their

workforce levels programs, our in to sales related quarter commercial some the facilities. and a in pressured of some of in lower our Finally, Structures were challenges as demand aerospace result

a function the anticipate retention second focus to We to support continue We our strategy talent the businesses. training we as ease challenges our year. will on of employee these half and as progress of

to to design, that call I pleased the would autonomous lift, update Jamie, test vehicle discussed over our that the some Before of flights. fabrication and scale, provide R&D to period achieved of very we completed we am assembly and also the announce like medium I purpose-built, turning last a during initiatives quarter. important an of successful half several aerial

excited in its market in aerial addressable This our lift commercial TITAN defense K-MAX this developed half unmanned We expect and vehicle share on new upcoming and both the to scale medium product to quarter with technology innovative requirements are customers, demonstrate autonomous to stakeholders. investors, the leverages in platform missions and and broadens this applications.

additional assess noted in target this our R&D diffuse and As to last work this we addressable quarter hardening on this spend or TDH, solution. process, effort customers, in with customers proprietary application with our we On for to XXXX. market we the titanium have support continue committed total coordination

In TDH addition friction to the The human for by TDH commercial in a space provided utilized fit winning system in high-performance, a lightweight, quarter, travel was new on successful low aircraft mission. second solutions technology are mission this great bearing positions the in July.

our land, capabilities into commercial to expand end this general suited market. and also sea medical markets. travel, traditional aviation We're as technology In the industrial commercial as new well its space and for business perfectly eager air platforms addition is to

our believe with type a driver solutions, closely in work we prove to innovation of the this and differentiator to will meaningful customers provide for we future. creative strong be command As

acquisition several the In specific for expenses modest addition targets. costs R&D, in with to efforts quarter our associated on we incurred

or with have aircraft. Furthermore, our We lows with multiple of vision, vertical results our have to strategic that progress have types a goals. continue seeking and meaningful space. solutions are industrialize of to complex which higher underlying and that and for strategy builder pandemic, who our from our our new at solutions. volumes new earnings lift companies, the the by of will manufacturers precision imagining well manufacturing financial these power and this propel our business is we eVTOL customers we the process designer, to assess we leading as engineered see operations approached pipeline market to their and and a Kaman we're capture of highly beginning by power align our end made markets assist We positions very the believe targets are certification the strategic are and delivering our legacy to against of in us Overall, been Most pleased and share certifier date our in root. year recently excellence process of the forward to like recovering we taking model

well-positioned we we to to of back half As the deliver year, the are on our commitments. look

for will the a call at turn the Now Jamie numbers. closer to I Jamie? look over

Jamie Coogan

the our well I will ahead and Today, includes before in and running has Volume categories, you, our forecast year product We most our our of largely remainder which as good of across the quarter perform XXXX. to you and Thank are everyone. of medical for results, first the turning Ian business. of growth half second morning, our industrial recovered Ian, noted. walk through outlook through

and aerospace soft, were quarter X.X% recovery. commercial continuing position Consolidated ourselves Organic sequentially. the sales primarily sales organic operation growth excludes driven year year-over-year in expected, volume in our As sales our business aviation. we second period, from the up and medical for which general commercial prior channels into softer and U.K by was offset $XXX.X partially industrial our sequentially. from and up operations and products, were other by X.X% with sales, associated in million, commercial X.X% as former increased X.X% The sales improvement to continue the

sales sales overall business. second precision U.K. markets, and fuze sequentially by year Turning up X.X% ago due X.X% XX.X% XXXX to to result compared as customers. Organically, joint defense to Composites quarter of of sale in programmable the our end driven our of the year-over-year to DCS were higher products of deliveries our slightly defense period, were a our down the

and OEM down Compared particularly sales business the to impacted and volume. the period were for of ago than quarter, quarter due by largely the general to with U.K. commercial relative prior absence to lower second was volume expected, the our aviation the period, products bearings, year business ago slightly Composites commercial As also our more year the customers. XX% of

forecast traffic airline to to of half strong XXXX second as a continue continues We recover.

of of result end difficult We and rates this timing higher our the quarter by we monitoring Sales was magnitude exact bearing volume the ongoing growth devices. in And have market used implantables recovery medical products analytical encouraged over year. order the half. in balance the the and anticipate the first to seen this are continue we COVID year and increased The recovery. to this of for miniature products in which to when prior XX.X% are medical increase compared through the it we XX.X% ago markets and related respectively. of and predict make However, period developments,

Finally, springs. industrial and improved XX.X% our from industrial bearings increased end sales ago seals the for for as our and year demand markets sequentially and period XX.X% miniature

We to XX%, balance in and expect JPF the our XX.X% XXXX. our of many to gross economic businesses. driven performance solid in these for recovery see margin and Gross increase to springs, of was of the mix and our the from prior was by by the The and strong quarter year-over-year prior benefit the and performance FHX year sequential spares order from in products, year contacts, our the program margin fiscal strong quarter. seals the through ongoing operational DCS period rates products into continue XX.X% for compared

of and our item of intangible to drive out to making When lower efficiencies During face of XX.X% provides for that quarter period, year, XX organic second discrete reduction the from during the these We basis was final the remain adjusted second expect the TSA from our part a or quarter, costs believe This of completed XXX G&A, and cost in XX% operating the to our loss with amortization asset our percentage income the and at or the environment. term. in in our XX.X% associated as reclassification basis we prior SG&A million statement. and our from XXXX basis both development of respectively the basis, reduction testament from was a activities quarter previous of in to in XX.X% the $XX.X stemmed operations the substantially million line of the costs acquisition $XX.X and year this absent points growth. agreement mitigation and million $X.X $XX.X cost of sequential investments by the our are results, a the of structure the of prior period we of period in year-over-year expense prior reclassified We our our and non-recurring inorganic absence visibility benefit that greater Seal and looking underlying or on sales, SG&A as EBITDA operating cost agile efforts. cost near Adjusted the XX.X% compared research the EBITDA million efforts. costs, compared margin our to a to income TSA closeout and manage higher closely the sales On to of quarter operating profitability down increase points second Bal of in XXX sales year of is driven points was quarter. sales dynamic consolidated a ability and an continuing

$X.XX to $X.XX XXXX. drive to a XX% the earnings controlling U.K. increased earned associated and a the growth. making of efforts cost gross per Diluted from tax from an we margin continue our corporate to in basis, in business, year future from R&D operations the costs on TSA SG&A, restructuring activities. $X.XX share charge Composites severance were sale maximizing share We adjustments adjusted the to and with $X.XX On discrete quarter and aggressively the basis per related current activities The development quarter net operations at GAAP investments target the period. earnings continuing include compared while to the of second the expenses associated smart continuing prior with in diluted

receipts of million During year outstanding usage DCS offset in of the partially quarter, million free the to receivables. higher had cash Cash by working JPF, prior additional flow on $XX usage reflects we capital $XX.X effects period. the compared

Moving expected our the Structures we our lower revenue We for now in revising expect to million guidance full sales $XXX XXXX. programs. the are year to $XXX outlook, of year due full range from to million

general to strong of and second we the aviation business of to I'll the million for share million impact turn $XX.X and $XX.X expected call diluted are Ian recovery and variants However, adjusted from industrial This our products remain medical $X.XX. raising potential continued commercial anticipated half. the With commercial, in adjusted aerospace to that reflects earnings recovery guidance markets our performance per mindful to It's back in EBITDA $X.XX to the market. we and remarks. the for the end the timing the over to important of COVID note in that, to closing our

Ian Walsh

Jamie. Thanks,

strategic and on recovery and the focused We the with in second first pace highly of demonstrated plan, to the the is which pleased are organic growth invest in intently precision of a quarter remain executing our engineered product offerings.

future drive accretive strength we company. businesses to improve And operational of to will Second, few our drive to and that over acquire about drive shareholder to return value. the shareholders. are are profitability beginning made our across third, past to And R&D years Investments excellence best-in-class growth. pipeline the excited

lines open you. has questions. comes more for our first like talent Our that, been Instructions] commitment question, Capital dedicated thankful dependent Thank on future than and Markets. is instrumental [Operator our have the the from I'd Barger please? Our Steve our employees, KeyBanc to with first whose With question we success. workforce am I of to in X,XXX May

Your is line open.

Steve Barger

just JPF. I Or like guys, start on morning the about electronic looks to business could to decelerating. development talk outlook it comes to be like Can But and product the efforts XXXX through have program Good anything fuze? make assuming congratulations an the Reading Option it have Ian, you you new the will revenue seems through. Jamie. there? XX that extend XX-Q, with Fuze

Ian Walsh

sure, Yes. Steve. No,

just XX exciting. First very last positive since it. which deal, signed late-breaking night, of Literally Option mentioned our news, we all, you is

we've different that in at and into other systems. XXXX with got I programs Force focus what's some weapon to and systems. lot XXXX. Not the some Relative I sight Air now, fuze So their the different to through think fusing line of into and new of looking Army that burst there, electronic come works weapon strongly height are of working actually specific got about think the us and We've things, which on of bit going types little the on awesome, XXXX. very we're of and go in that brings a on has talked right nicely, of a types technologies we've

the some down upside there's there think I road. So

terms really looking down replace In electronic what we've fuze the future technology, we're We're that electronic of to at programs but got not JPF, path. for future really going holds there.

Steve Barger

you And Okay. with Gross several the in expect do for is Or all what margin driven was highest Was the being industrial sustainable? years. strong? that mix and back medical half? by that

Ian Walsh

of to bit businesses. nice. a is also this all talk new our Yes, and really you I'll the say, and a year. can of excellence effort. come pushing is about new There's to, folks a it root architected we'll in But which and hard if operations margin start, want been applications. the through. that lot more year, and gross training across here. Jamie take we something model kicked and are little GMs and through we're seeing of This lot mix, exciting weigh Very of team also and off last Obviously, I see really late the the driving Russ tools and new it but

also that's helping tremendously. So

but where will And to of we're in year, it's mentioned, excited the kind accelerated we all a of exciting. which of This of half a about, very that it's next to becoming run is terms I'm is absolutely I what be going all about maintain just and see year, margin. of intend operationally businesses. In full excellent really which that journey, we've path, rate our just back the

Jamie Coogan

through year of well the to forward. Yes. of We part pandemic the to us margin aerospace actions first back Steve, an that, move as this And really the try last year, rate a the as half opportunities in related are over lot add sales see commercial taken, of well. to do that to just acceleration to we've our for the we as maintain as designed

pick that come G&A. leverage as to the the of both get actions starts up, well we've sales through cost from to so as And through meaningfully that taken will we'll start as

Steve Barger

of what Jamie, you get And along vision a quarterly for do, it. the lines is Can look got slides? had like segment revenue I Will know Got and but breakdown you've forward? will seat you've we only ton for to to your what the back margins minute, going a expect provide? the we reporting

Jamie Coogan

I questions point, some think the at to yes. answer those all

quarterly get those make for In and up we'll you something We'll sure slides for do we we can there That's the others, sure out we terms up gate. make guys there. have that sure. of of right

of relates a to sort of support some comes way I that And reporting in evaluation it we're his Ian one in. put organization, That the out we business year other know the for structurally and is management the there. reporting, feed his set of of set how important is of first then the want that of consideration will the the it we have part to that's what up I us here things up. know kind is the ultimately As structurally through that here needs, of determine as that to to

the is accounting clear know, how need to report. terms you of pretty As in we on this

Ian underway. ahead make But of don't to works. that want sure we currently so get the that in And is has with is something that we what

Ian Walsh

that, that comfortable structure got we're just with mean, very And point, your I to the we've add to Yes. to Steve, today.

consider. elements discussing to it. a lot of There's are We

we'll evaluate posted. it, you So as keep we

Operator

next comes question JPMorgan. Seifman from Our with Seth

line is Your open.

Seth Seifman

about was if much, and on the I everyone, you mix versus how in Safe a that could in talk wonder the that and second little expect Thanks and for domestic you guess I quarter? Jamie. morning, Arm DCS the kind good of helpful the and congratulations, half very

Jamie Coogan

great a That’s question.

deliveries. will and for towards slight we JPF weighting little year as be it a to about full year, on we think haven't this generally a we back over be towards DCS USG half. for the the DCS And back As bit overall, half, than the orders relative the sort are given of more the there advantage specifics do the first weighted expect half in again, they to to relates But past. full speaking,

more than So last we year. deliver period, in DCS -- we the this the did JPF quarter of QX did of in during

Seth Seifman

environment then you go of I out bit sense the cool. more, you things valuations and And into the and it trigger Ian, when different a numbers what compares M&A ahead terms the necessary about normalized think bottlenecks M&A, the company's if had little on to think might of maybe in settle all evaluating guess we've coming little Is of Okay, these bit pull some and how makes results kind Or more kind go the about you of and how how different can to and a noise it on all recent talk the of could maybe about context, company out near be given putting see ahead things. you term? in kind more? pandemic,

Ian Walsh

share looking active. Yes. deals exciting No, accretive, it's exactly that. to fit question, bunch we're our of We engineered and it do precision headed, to start Seth. that very businesses. those sheet our the put are balance assess know there. excited pipeline. about keep refined level of the We've highly as that very a the to see and continue kind that's intend far. are fully more. and activity where filters. that so that's absolutely continue posted. which We we'll products all types at a by know companies to We've out And in think, We'll I'll It saying our We'll can. is and of assessed is strategy of big you opportunities And that for, we're but we out activity it's more, quite look very that multiples our frankly, you have aggressive. there, When we'll we aggressively if guys we've Pricing We're move we as opportunities, is I stuff, got we to the work. to interesting.

Seth Seifman

and get stop Great. back now in Thanks much. queue. very I’ll for the

Operator

Skibitski Our next comes with Global. Alembic Instructions] Pete question from [Operator

open. is Your line

Pete Skibitski

Congrats luck Jamie. echo Jamie. Steve of new with best just a Maybe Ian. of couple top-level I'll the and role. and in Good Seth, start questions, and Ian morning,

to of your dive level? on you I of think Can that, top kind back kind scheduled of out deep you what kind in how just maybe you're were May, touch reviews. guys of have came thinking strategic

Ian Walsh

map love was business through System Cycle, our And units Business I And business five-year assessments. strategic in really beauty It's No, which top of job, what call trajectory the the our each their achieving marvelous time Good really memory. a template trajectories. our just over team just quartile each that. really first the we to own A, here Yes. a reviews. that that what out that Kaman rolled on out went what's their period. together not was We based we exciting, putting a performance about they allowed of segments our of did

our takes the get actually have of us Others, real And now support, of the a we understanding the a deep in dimension beauty five-year that and working their already metric depending have to our to Some and businesses, each with concert gap what are on general that period. that understanding, to businesses, fill. the is it of there. of teams, of managers over that point

have all the required and the again, this I first get businesses the sit through out. of And and ins really, that opportunity and each to outs a with mapped time to understand So and resources walk process competitive the and dynamic honestly, was think there. those been

which of of next the rolling And targets the for to finished plans system. we we'll be cycle round whole complement that, So just that understanding into year, the reviews, business that And second at then a year. talent and annual then very was the a is exercise. end operating in our of refining really and powerful

Pete Skibitski

on. lot Okay. going A

Steve mentioned Another top the fuze level one, outlook.

me the was Black a Hawk is big outlook. mean, obviously Hawk and yesterday, decline, program recently it's just other of Black a Lockheed concerned as you that kind program as midterm the been for pretty I about guys. gets The little talking

sheet wise all midterm so we've for thinking the to we've M&A Kaman, fuze Black and that utilize it's to important Hawk reshape So got the balance Is headwind, am thinking? got headwind, company the of -- some are are as I legacy the and kind headwinds of page you offset kind some of -- guys platforms? way same from the the in those that we

Ian Walsh

you're yes, -- I it's think think the we way I of thinking are. it

to is in. in just XX future prospects. I'd the relative one a headwind. strong came very not headwind, position kind refinement, a Although make DCS me Option on it's We're of which just fuze still to

we've got other we're we a they're shifting. beauty nice of a of positioned that seeing but The we're here. OEMs, there's programs with future technologies coming that Hawk developing. think are of, the is know Black whole as window the then up And We're know, you other bunch I that that program, on. well some

part So and that will that I future fill natural, third will be yes, gap feel us. replace then think, would we that way. accretive that And the a really And inorganically is, attractive in that's we both a meaningful programs. just that, I stuff the think, in of know a evolution that for those there's lot of

Pete Skibitski

Great.

return for one a think type about you is guys, ensure you you so margin ensure being it's do program, This early hard fascinates an to you how ton you sneak as that that How of been out. days, you business adequate the me. Let There start that get lose on just has there, a get track. losers? a me do in a opportunities, more. there's you guys program obviously, to -- structures of thing, And it's out Ian, winners historically just for feel lower eVTOL and players almost

it and that can lucrative thinking Kaman? for you how be are whole how area So about

Ian Walsh

start, we phone folks out it, of calls so there, for like And and Pete, of I I studying And its Yes. getting know I'll are some long. we've it know industry, mentioned. I've got with this and a around evolving. been it just in whom lot who

it I go. several can ways think there's that

something up We're we we for I with our in precision us, the of signing aligned for strategy. feel is higher-margin think We things. make fundamentally, that not business towards are don't moving businesses.

very think And of having think that that providing assembly, eVTOL folks it's so, and next that of years And level to see our you're in it's quite take part this form. think, a robust of the manufacturing, type real I or or I frankly whether going it's about those levels XX manufacturing real so life to of when because be such, actually business. parts can eVTOL you or

strategy say. some are whatever think unique bridge I make to there's of and bridges talking we I you the is going nicely go But lot that early in, mobility still we've movement as which there. then and into urban got said, fits application, and strongly players out really sure future that something We're absolutely of it's not actually winners. this a important As feel kind think we to in but our very ones to trying And do, be involved a it's we that we directly in to the in towards feel of to to investing where company. there. it And it's the really capability, it, that some that is autonomous a got eVTOL are we're

Jamie Coogan

also supporting very thing And others, and lightweight, our specifically as Yes. all types we maintain to we and by means supportive and them, for to mind little technologies. able first by bit very our which structures means, springs Seal them And on through And think bit of comes just which extra then a contacts about opportunity, to aspect of to are Bal that very the add the we're that is that we lightweight, Pete, made of bit, bearings get electrical out the But potentially little have a as yes, that. efficient mean to community for technologies. a I get know in TDH, battery support really small, that's little very, But important very reducing the bearings our these contacts, technology, investments of ultimately, bearings some eVTOL which that life. are their they self-lubricating try with to that's extra weight. about distance, we've of

So broad than range we expertise. bring capabilities structures our to more just a these of folks,

Operator

follow-up, Our Markets. question Steve KeyBanc with Capital Barger next is a

Your is open. line

Steve Barger

Thanks.

Just clarification. a

electronic agree nice And that got technologies window XXXX, On isn't business, working the but with. them. through there an get right? you you're revenue Fuze I you've Did I said a on, other one of fuze are which

Ian Walsh

where are Yes, and there. actually not to just continue competing technology, right? current we're not That -- we're things, being over We're very mean, necessarily a fuze clear. really the we go current technology plenty contracts, I next the is but like LTK talk to that working the is, trying It's again, gen. opportunities There's contracts, yes, where very we fuzes. the exciting that's we're And about still there is, know and know things. opportunities contract came Small still happens. replace, where some to with munitions, that out on online there's precision those that, the earlier, Well, with we that those XXX, about, we Option what on. Where trying proven future reliable. munitions. realistic is we're can't know XX extremely And is fuze, coming which, we're and we DCS in. their XXX work the just proven see of there our we said there. there's TK more We'll XXX

see. we'll So

Steve Barger

understand to program other? how the way just any the next to the time one about generation but stuff, you for I trying gauge talk the to can't think from bridge you technology, what, frame? Anyway about

Ian Walsh

will it's we strong think capability from But there. of headline early really and timing knowing any a perspective Safe of our Arm, I to you I kind an capability things. say, too investment give No, with have of those and on the very kind

to reviews, we're strategic part go. the we can assess, of as where So trying

Steve Barger

Okay. And hear about optimism for back the good commercial to your half aero.

will own as at your can is look production the keep As ability Or consolidated ramp where do start mix even backlog again? just revenue you it you backlog increases? expect orders, grow and to to

Jamie Coogan

question. a Yes. that's Steve, great

those at where exposure and actually in year-end in As we backlog others, look saw we growth business greater backlog about from think Bearings we business have our aero, to we that to units today. commercial specifically are

So seeing we of are grow. the that portion backlog business

You times given for we short-cycle lead have business, recall much Yes. a that those more that that's of the products.

we still for within lead well times So full our year. are the

because well. advantage know customers they they the lead that that urgently, in it's placing us But when have take of that of those double-edged need advantages sword a we customers our that also them and as little provide Our what need something to times so orders. can their a are, bit

high So of still confidence. we a level have

overall, back in monitor that But prepared around the said global be remarks, in to us we're the COVID could we think situation continuing we're As to pretty would half. more do. bullish our you expect as we still where on

Ian Walsh

rising. clarity, it's commercial mean, on. positioned we're the a Yes. is And well there. know little just medical market aviation well but this Business I to more that too, a guys from actually market really is General us, industrial nicely. perspective, It's you give up and positioned really for We're and really responding

see drop-through start increase. to those we're those Just deliveries and want platforms those really then, And again, to going that nicely. see very sales and to

Steve Barger

And Airbus is some the How think production, have rates build down slow the does ships per I to and January wide-bodies ramp they're to bit. and started OEMs? the start we But XX by actually month watch watch lead targeting going we as Boeing of XXXX. to I as think Kaman a -- MAX

Jamie Coogan

Yes.

as so little last and that inventory way necessarily as into But as looked sales lag, year, last best us. the that visibility of from a the that the our Boeing And bit recall about year, think trended sort lead we for of have we Airbus you the course at maybe don't over have we indication. right

given a QX. we nice a very strong QX, global So had, the We very again, pressures. had

our of As maybe at through we that to sort where sales a pace year, was. continued the but a else everybody of was course behind bit moved decline, little last

that as to six come or seeing ahead, bit what months what it's of into we we're are is six look don't with sort is months. more perfect be. with at to less we as again, three we three so Boeing, clarity maybe a think lead ultimately, time rate, orders Clearly, lag is higher we chain to so going thinking And levels. up a inventory supply the likely little but have, But Airbus, that

Steve Barger

Got I talked for and seen starting disruptions. And some challenges. chain material one to issues labor lot supply of companies last see around think you are about it. Ian, have costs, A me.

decent looks supply that on the a risk in think for Any COVID comments what like chain broad all you? any Or Just is to barring do the shape? you uptick? half back

Ian Walsh

start went through think I to I'll we're right bunch was now. at because talking a we great high I place general And everybody's operating level, question it's our good on and reviews, level. in for a a just of Yes, a sure. high just It's mind managers, something

us. a got not production We sole really It's are seeing things, we've stuff, extending so of lead little some shortages still not bit. and a affecting source little problem se. signs small times there, here per within but process, our that's it's for planning And

it's So shortage we're in on whether think side, availability, the or I material decent shape.

labor a talking about. honestly, the side, On depending case case, by really situation. kind of It's same of business kind which we're on

relatively they're we But to I with the just with overall, when aggressive went challenge people things to think it because in continue done, work, we've think to going going things that. We're unemployment they're and like this there's back that the still shape. we're going whole and talent get and actually yet stimulation, and where already work the reviews people sitting on pretty back to to monitor through good I we're are that.

things the types of feeling to very confident doing people attract right that and we're retain I the think people. we're right our

the to what's and that. moment. very at things it's coming we're So like there's going out carefully again, closely COVID, think, D and But really -- the with with this it concern happening manage I no, variant

Jamie Coogan

in meaningful greatest that some cost, we the pricing as And that's the where to labor those kind I'll to add as just flexibility where protect well to might be well. areas contributor to that, of more of relative a of help have

Operator

next Global. Our Alembic Skibitski Pete comes from with follow-up

open. Your line is

Pete Skibitski

both Yes, there competing you FLRAA Are A were of two there? guys And follow-ups. plan and strategy the Can about like early, very on Farr Hawk kind well. of thoughts you thanks have I as to alluding would to but get or talking, content earlier, hard Black know We those bearings? couple to there? the of maybe and follow-on some quick the structures guys. -- were maybe bearings can you only it's we maybe to you a Is share kind programs? the

Ian Walsh

structures. it's our here. been as on again, A, -- bearings hard all It's But to happen all we those it's Yes. very in already going to platforms. to they're positioned talk yes, teams early, what's those getting tell And have new on And some teams, and aggressive relatively, so cases, platforms. to

OEMs. here, we're So what some depending and be even to technology I table we're, stuff, again, that to think, these in the going and positioned, we're future happens and bringing early better production stuff, just that's LRIP of on with terms of

Pete Skibitski

who the both with matter you going very wins? I main you've Because competitors. of it closely to know to Is worked

to, deep it road mean, you an but I'd want too will down So awful thought lot? don't matter if go just don't that I I ask.

Ian Walsh

but really good we're I platforms. actually I on all about can't We're certain shape. things, again, talk -- I those in really think,

our We track with have also strong very OEMs strong advantage. OEMs, that so relationships those with and also to record plays

Pete Skibitski

me. That’s project along quickly. lift That’s The Last great. one great. coming be medium for seems to pretty

customer expect whether or Just a timing? of commercial you mind, first a defense in customer first we first have kind maybe wondering should customer and a if

Ian Walsh

Yes.

Board very, our talked we we're very supportive. scale about, doing half is right now. model making, like So It's very well. a We've got flying

commercial early quite the here know We've the really which it's is, demo that's a is our commercial applications little doing up something well. you fully of customers. and there's point-to-point time, here involved August, remember, the over now will that the there's When because with coming very purpose But about vehicles, But in, late software now military manned got be question first form with the this Corps. and currently in make pull a different fully large, going different what's of is it's autonomous. no need is where vehicles we're K-MAX and to that's in going then And small, to Very frankly, set. logistics happen. there's fall, just going in Marine this out different September then right our autonomous we focus capabilities medium current there the problem is being side we're vehicle. with in space. Defense look than think is exciting. autonomous right very capabilities and medium with expansion terms intent on family this the trying to and live lift, the autonomous, built, At obviously, technology. with this Our is state And go for the you which the

first then military customer from there. with of So kind take we're this prove really excited and technology to out it the

Pete Skibitski

Okay.

So I Or of type applications? on of logging, the say? commercial thinking about beyond should side, firefighting kind we're moving

Ian Walsh

yes. Oh yes, yes,

So mission I for multi about mean, applications we're sets, multi technology. of talking this type

Operator

next with follow-up from JPMorgan. Seifman comes Our Seth

is open. line Your

Seth Seifman

if high second you the for sales the SG&A dollars in come gross about stay want Jamie, that the for seems end look of second follow-up. second or or the maintain slightly assuming in like above might can not might it is little making Thanks in quick unforeseen Which the above assumptions, I can that's risk particularly assumptions assume high something all EBITDA. cushion. the guidance, you'd those end I the end of it -- the for in at level, a fair, there anything for that things, is slightly a highlight high the of half? midpoint But at bit quarter those is half, the on the the real just quarter at the second margin, you'd potential say be correct understand or

Ian Walsh

thanks the question. Seth, for Yes. No, and

potential customer And look we in. who to are the add half, X in that bring really we working do customers two X We've those aircraft. looking got the one we're line sales is aircraft. actually to to the that we the As again, K-MAX back of have projecting year. half We've at there good sight those back got for hard of

think it's for with COVID necessarily associated given are -- huge us. risk. unforeseen matters is me And your a line That's again, or incorrect. about As think assumptions necessarily I related to not that, that I don't any profit issues top driver

Operator

back I'm call time. showing like no currently remarks. over further I'd at for this closing turn the Jamie And question you. to Coogan to Thank

Jamie Coogan

we with when we again you us just to I forward want thank our results. third all call, for look and speaking report today’s to you joining conference on quarter

Operator

today’s concludes participating. Thank This for you call. conference

You may disconnect.

Kaman (KAMN) 7 Aug 212021 Q2 Earnings call transcript