KAMN - Earnings call transcript Q4 2021

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Kary Bare

Good morning. I’d like to welcome everyone to Kaman’s fourth quarter 2021 earnings call. Conducting the call today are Ian Walsh, Chairman, President and Chief Executive Officer; and Jamie Coogan, Senior Vice President and Chief Financial Officer.

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

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

our posted for call Finally, an financial website supplement and earnings which our XXXX. our outlook context we on performance on provides additional

presentation You www.kaman.com/investors/presentations. can this at find

to Now, turn call I’ll the Walsh. Ian over

Ian Walsh

Kaman Thank as you, team Relations. our new aboard and welcome of Investor Kary, to Head

here share in some call you good at year, glad financial start We innovations us then our and new this passing some discuss our expectations discussion and highlights each results business for with operational segments, by on full very updates the our more providing joining for everyone, time exciting Jamie earnings over of morning, quarter quarter some our fourth to you call. before detailed are important and of XXXX. for and the XXXX I’ll and journey, and are on our thank

sales XXXX, declined. During

contacts XXXX, In our basis several significantly continued improved and present margin the free financial seals, economic Gross targets points the per cash of first the achieved adjusted XXX delivering of more to EBITDA we springs our our more businesses, than performance of increased earnings by primarily However, in metrics XX.X%, EBITDA, challenges. share, to while pandemic half in for products. and margin driven flow.

contacts products. fourth bearings, commercial, strong by and and in for springs, aviation order our intake saw across meaningful increases business we order markets, seals However, the quarter, general led

XX% sales a on including demand also achieve for each as performance our to fact, an and second a to the model. last quarter in the tools focused the increases new order of that excellence our In drive increased backlog and rebounding. to that training pleased in improvement new airline allow segments. progress improved have to operations our of across to Airbus businesses. new on am We’ve us leadership building is order is top I year year. deployment which the This a indicator we future in growth row. the of steps, made of These as number Boeing and will promising implementation time a systems many was XXXX compared our building a a performance team to Company, same well foundation for increased taken say quartile more notable formal that all contributed

We see are actions in as we our the of variation benefits and waste processes. beginning reduce these to eliminate

portfolio This management. we to part reported and support results and growth our provide our a structure. of transparency Kaman’s strategy, overarching segment new commitment As of under strategy reinforces our

segments with are Products, Precision well capabilities Our new architecture. our three segments Structures. Engineered new The our Products, and and product brand align

aim innovation. will Over the on new focus complexities brand in strategy, you and the to the customers is the of rollout our rooted see coming months, for Company’s which simplify

incremental The aviation. medical we strength in demand. end commercial recovery our order increasing displayed increased segments. business in team tremendous is the Engineered to XXXX. worked the the to and meet diligently highlight expectedly markets saw have rates Products and strategy resiliency industrial and We in continue in position segment for high the for to products, our market XXXX, me Let confidence level of each in

needs the engineering application solutions continue end We to provide across serve. of of our all that and customers push the of to boundaries material innovative markets meet will the science we

launch proprietary James technology, to our which example, self-lubricating was historic NASA’s support KAron selected supports Webb for the Space of bearings Our Telescope.

streamline Our advance Precision positive development the improve new Products organization, segment we to transition product continue and our in state business is efforts. of as

recently two successful with completed for deliveries FireBurst, opportunities customer to technology, burst overseas our sensor of have for We demonstrations an commercial the near-term. in leading height

JPF, to fulfill are we funnel. Regarding laser-focused DCS on our continuing

program. pursuing over time, we in offsetting reduced growth to anticipate and lower the expect our we of backlog Ultimately, increase that Although DCS meaningful JPF with are the life volume several our sales we organic other business. expected of are the extend opportunities however, areas

autonomous partnership technologies, with make substantial system aerial on Autonomy. Near aerial unmanned and to UAV, progress K-MAX logistics TITAN Earth continue we KARGO addition, in our In system

Moving Structures to our segment.

business We the the in segment. financial this improving have progress made of performance meaningful

We deployment is our of excellence there have strong model through and accomplished operations for further opportunity significant enhancement. this believe

consolidating Our in model improved manufacturing the embraced they eliminate from down flow. plants drive order manufacturing to opportunities Jacksonville, and and performance. example, in to teams are seeking Jacksonville, and Vermont of are in have Wichita space four our to excess two, optimize capacity and to for for process In

on through cockpits from originally focused planned quality December. Hawk which in significant have their on-time recognized by Black in increased multiyear The delivery. efforts and awarded their that our were those follow-on has principles in they efforts for driving the improvements of results important contract, addition, be Sikorsky, lean to to programs production enough quantities In these led

solve me alloys, and outside to of a for manufacturing while in utilizing our Products characteristics the durability of began hardness, let problems. which titanium In provides exciting underway wear and range end proprietary hardening customers markets Engineered service wide of we quarter, a them aerospace helping as process, our first our listening and of several defense. products segment, diffused highlight improving benefits the extending their Now, and toughest innovations titanium result

nautical those variety to In actively new unveil teams fielding Our weapons in fully-autonomous, in exploring segment, the aerial to UAV and This a easily medical including miles, Products KARGO pounds for to empty. we orthopedics, extremely lift excited XXX vehicle are logistics X deployed our XXX designed purpose-built, team hauling when is up Formula from be our accessory while cargo provide is requests cost-effective unmanned applications, and a system and quarter. medium applications third of racing manufacturers. Precision up to

help market wide U.S. to logistics which companies the applications addressable capabilities lend of Operations rescue, themselves value-added commercial the for with could applications, several to search Military range to for and partner a platform expand and is as Special had oil the and initial this and capabilities, looking middle-mile used us Commands, longer-term, vehicle. delivery Our platforms, companies. provide We’ve such servicing

for secure received international U.S. In program. from direct customers, are initial and the addition, orders have military we inquiries working we to

to of Finally, of KARGO in the Program, opportunities of unmanned that growth our that to the team UAV validation as system aerial Force the continue our will asked Kaman are military. significant exciting accomplishments team just to some are announce Air to proud execute participate interest of a and the Prime we U.S. These Agility was Phase X U.S. against.

commercial continues rebounding recover. Looking the feel to aerospace economy market is confident ahead, we the as that

flight. will We sophisticated transform, Kaman’s in Products industrial, which key Products markets, especially aviation, core Engineered to applications are measuring our stronger Precision segment. to precision competencies seeing end of are autonomous benefit in manufacturing, demand profitable expected and and continue very fully advancing equipment medical and

on get operationally continue Our applications. Structures composite focus healthier will and segment to advanced

extremely our best-in-class for of position we are new the performance. innovations horizon, Company as for We excited several what’s the with on

identifying approach a acquisitions. continue Lastly, we the right will take also pursuing disciplined to in strategic and

Now, to a our detailed of results. for I more call turn the will over discussion Jamie financial

Jamie Coogan

sales outlook providing quarter and Thank an $XXX year the markets, medical million a fourth the to everyone. of our anticipated our Adjusted Sales $XXX both, the for partially XXXX. of declines. for Today, of Net our in business XXXX. in million JPF consolidated and in in $XXX to basis, fourth margin industrial in Good of were products, sales in markets. $XX.X of quarter XXXX. UK $XX.X in reduction JPF year decline third offsetting were to margin quarter the X.X% or compared you, composites increased Ian. aviation compared due results largely full the to XX.X% sales program, net morning, $XXX I an before million of a sale lower the commercial XXXX. compared the the XX.X% our well million general discuss was recognized On EBITDA will as third The and serving as million fourth a million was or and quarter quarter We on business. sales these

million. For full $XX the year XXXX, EBITDA X% declined to adjusted

our However, adjusted improved a to EBITDA excellence. margin operations in points on XX.X% XX.X% focus XXXX, from XXXX in of result XX as basis

medical our markets into the margin of of our this medical year. the I’d as medical we XXXX. the by these like for improved during products products the well aerospace strong primarily Adjusted to seals, and third sales looking partially XX% in ongoing Despite EBITDA springs, of profit with small backdrop the full our results lower $XX The each recovery. we of primarily a serving prove these offset significantly quarter, the prior $XX.X the contacts, XXXX year. industrial contacts the to quarter, segment, million We markets. fourth products volumes XXXX. the And for sales Engineered devices, half in and of economic and demand springs of expect annual end Now, by expect has in Products year in This end gross products with margin of was was Engineered on beginning over on Adjusted rates demand to in markets, segment for seals, markets. the Products. for a analytical with Annual bearing impacts commercial for see EBIDA for and XX COVID And and segments, bearings a with for fourth quarter, was with XX.X%. Compared million implantables, increase order in the $XXX quarter declined driven medical against walk decline instruments. year continued increased for of higher strength backlog commercial the as million the XX.X%. ahead, a through first volume

year. by we year-over-year in order date, rate to In seen encouraged we the fact, have significant far thus increases are the

segment. Now, moving to profit to the and Compared of aircraft quarter, third due in the K-MAX gross sales to spares. our fourth Precision quarter lower declined Products

declined, This segment XX%. aerial new for on margin and by gross associated KARGO in fourth was profit, segment of EBITDA the fuze $X.X UAV our program Additionally, New $XX XX.X%. system. profit legacy with was decrease we programs. driven with JPF results was of gross a our gross Adjusted quarter margin for a and for increased higher Zealand. Adjusted partially and full sales year XXXX by program the a on on this with offset our profit SH-X USG sales JPF such gross million, combined profit EBIDA for DCS R&D as with million investments this and sales lower in technologies, unmanned Annual the higher

are our orders We additional and to DCS are secure JPF in pipeline managing looking near current the we term.

make to family continue devices. with our and and efforts sensor We burst for all fuzing counter of and patented are platforms, capabilities in existing arm new progress our height and in that technologies UAV hypersonics ammunition, UAV developing of bring safe R&D new to we sensors,

third of $X.X quarter, EBITDA traction margin long-term margin on composites with the contracts. compared relatively set fourth $X.X a in losses million Now moving for Annual was profit $X This year to margin profit offset driven to higher deployment. operations of significantly, program. and changes our to gross a excellence Adjusted some due in for XXXX. segment, Compared our the and results lower was volume A-XX by were AH-XZ results a with full of Adjusted million by UK sales our third EBITDA estimates to on unchanged loss our with our for from was million profit with the former absence business, X.X% quarter sales the X.X%. Structures. the negative improved and gross X.X% of program a of higher of overall

opportunities for XXXX. segment, is in further to Structures be our identify improvement expected to in healthier operational continue We which

this deployment from our sales solutions We segment. XX.X%. for XXXX imaging On customer for increased operations in margin springs improvements the We our as percentage on to will profitability benefited our of to a as and performance will Sikorsky contacts, financial XX.X%. SG&A gross driving was consolidated of additional focus higher medical with seals, aerospace basis, a in order XXXX the through net leverage well relationships model. technologies and improved we continue utilize for drive longstanding continue as for and excellence to to in our performance Boeing,

earlier, Structures the seek Ian which quarter were saving million XXXX were on from the is prior approximately will these manufacturing continue the half discussed $X.XX opportunities and continuing continuing our we to earnings in in organization. of that share mentioned sites One As first to rationalization share per realization in increase result XXXX. we quarter cost $X.XX to across efficiencies quarter the third compared facilities earnings example Diluted the $X.XX On cost for per at call, our the expected $X activities manage plan total beginning compared operations of diluted is with basis, adjusted from in of by XXXX. third of $X.XX the quarter. an operations to to

acquisition. an continuing diluted to UK in compared were adjustments continuing a were $X.XX business impairment full-year, XXXX. share earnings Recall, $X.XX On non-cash from adjusted on cost with goodwill compared XXXX, impairment our largely and associated to $X.XX by were earnings Seal non-tax per the former charge, the share in in operations per driven For loss Bal asset charge operations per basis, XXXX. $X.XX share from of an diluted

we free of of improved management as cash generated flow capital strong million, cash During excellence. focus and on the a function $XX adjusted collections by working quarter, operations driven our

adjusted flow compared year, was $XX the free million to cash generation usage XXXX. $X in For million of a

with Now, for I’ll our XXXX. provide you outlook

million, consolidated million with XX.X%. of to We range a of in to million expect adjusted the sales EBITDA deliver $XX we $XX.X and of to range EBITDA an adjusted million margin expect to XX% $XXX $XXX the level in on

expect range diluted share to be For currently in $X.XX. the XXXX, the per earnings of full-year we to $X.XX

flow adjusted to the $XX operating to flow be from million. of range $XX $XX cash cash to expect We million activities leading in to $XX of million, an free million

be the second quarter towards our to first being of of period earnings of lowest weighted half the cadence with the expect XXXX performance. We results

recovery Our year. I’ll end back performance call for aviation Ian the and the through the commercial continued strong the that, incremental of closing and the general results With markets, for medical business XXXX to and reflect expected remarks. of in over the products industrial and turn anticipated

Ian Walsh

of building foundation for Kaman a was year in XXXX processes Jamie. performance. Thanks, and terms people,

performance. We we well-positioned by priorities. are more profitable opportunity continuing The achieving developed we serve the are until share, will markets and year-over-year quartile win top never unprofitable in capitalize will new solid be profitability, we Together that programs, we and organic shut and satisfied with are end our our to improvements encouraging, to strategy a leadership, improve work growth. deliver with our expand market we’ve our on on

in strategic facilities we every innovation, talented through pillars: I we we As cash continue our to operations a continue segments, and in will our on we in to improving day. what performance be financial quick all our third, our three flow overarching workforce metrics will employees and to our capital will that products, and our conversion, focus have approach to it’s excellence ROIC for to second, and achieve accretive disciplined DNA every margin, M&A all world to aimed recap grow strategy, of of free we With First, business like I’d helping three Can shareholder and people; vision lead top us accelerating question, until are pillars lead line the our to allocation; best-in-class at exceptional returns. we one will quartile at that, who open are do the continue driving reality, in These please? thankful EBITDA questions. around to am our become our greater. and each we the and are making first a customers investments

Operator

Steve of Capital Barger our Instructions] line Thank Markets. with you. question the from And first comes [Operator KeyBanc

is line ahead. open. Your go Please

Steve Barger

guessed. wanted JPF. I to with $X.XX program start specifically than bigger a slide Hi. the last Good year morning, was everyone. I contributor on headwind bridge That the XX, from would’ve

still a how directionally, headwind further extent And that, down and this to in a talk much contributor you that the about will be it significant is can ‘XX? business year? that Just that is

Jamie Coogan

Yes.

about Engineered growth we contribution the about We’ve some like Steve, be JPF contribution is transparent demonstrate we now, really, for in rest Structures program the there here our to we to think trying good But wanted of time this So, remaining business. talked here. seeing been we businesses, really there. we’re of again, that right? disclosures a headwind. Precision Products the is And the And in Products, yes, and importance the the

to that of as are terms continue in our now. through work we costs, JPF, In have we to backlog going

additional we on the in of our remaining remarks, we is sight our really As the But of do growing to mentioned prepared DCS line additional focus opportunities. business. have portion

Ian Walsh

Yes. And Steve, this is Ian.

as have build good know been on we program we very has of like businesses, strategic that to what do some to Just really show we inclusive organic But, said, of of our feel upcoming as it that, lot by can And of rest this, there. kind pipeline. that’s focused, on the we across demonstrate about a to got the We’ve much we super which of a runs prospects that its course. wanted growth out are way offsetting relative to And purposely as years. with Jamie acquisitions. strongly -- we kind

Steve Barger

Yes, understandable.

Just you given can us last year, of much that ‘XX? ‘XX idea the directional size of the versus down just contribution for give is how a

Jamie Coogan

got of I XX-K very specific given programs, there program. have a for we’ve mix, for disclosures XX-K. not backlog profitable we Yes. $XXX contracts. profitability And the worth right negotiate we now been mean, disclosed to customer million has We’ve But, typically those program related a inside in there, us just that the is forward the on looking past. as that that

Steve Barger

ahead. go Yes. The biggest --

Jamie Coogan

of Sorry. to year. is we So, profitability towards lower this go the given that little this out expected units The mix, having mix just on a pricing year-over-year year bit are are weighted right? more USG, the

Steve Barger

when just just talk like what of the bridge in tell in XXXX area is improvement. Understood. specific Structures. basis? you segment about that it that or an And look quartile? that level And top does in your was Thanks. And confidence the biggest margin Can positive on that contributor us improvement what in EBITDA is EBIT

Jamie Coogan

start don’t -- the margin Ian talk in It time. with I’ll of to was about is what pass I over maybe that why XXXX? that vision term X% there positive, about that And to Steve, segment. in Yes. for longer I’ll period do the

Ian Walsh

Yes. major And segment healthy. It’s around a variation us. different us focus we’ve actually we there’s Steve, that a like been talked different for about. get to that’s sites, got programs,

our programs, nice programs the programs. historically we nice new the some other is weren’t incoming had that types example, of order right all programs margins. example, has quite for working Bell stronger program the did work a And boom A-XX, CH-XX nice got is year. the much profitability function But, with part -- Vermont really really Black had follow-on really very the businesses, we So for frankly, work, that the business we’ve of Hawk of last

materials, shooting low year, get to Fundamentally trying So, end and digits, where ‘XX that’s high we go, the we’re And to doing ‘XX, at you’re feel should this really that where programs, improvement for is kudos though, composite -- composites, I you just to between we’re double target. when the and be team That’s Structures question, what trying the look comfortable. and digits. there. complex the single to and think right high if that’s we’re even

Steve Barger

follow-up And on Jamie. quick Ian. EBITDA? so, that, you, question just EBIT And a Was for same that X% or

Ian Walsh

EBITDA.

Steve Barger

EBITDA.

last single high double able you’re digit in so, margin for being digit, can Ian, Structures? And there. just a if you or see single one, high to saying, get EBITDA And EBITDA timeframe digit

Ian Walsh

Yes.

XXX Jacksonville, want Wichita already Wichita -- Part mention, and way, too, has certification. So and the to by I

are of doing. shift little right conscious bit highly And that’s got more a work, work which capable -- a also we’ve there’s much profitable. So, coming aftermarket on in focus we to now it’s of some

for in could feel other probably high we five-year this effectively right get three-year be that we we comfortable five-year I now, time could got but confident low the single digits. to our and So, and very we’ve a think the digits, mark, segments, the timeline in in be line double a mark, true is and there,

Operator

JP you. next question the from Seth comes Thank And our Seifman with line of Morgan.

ahead. Your Please go open. line is

Seth Seifman

Hey. Thanks very much.

kind maybe Engineered wondering level. And back aircraft recovery getting there’s never forth Products, kind ahead but of aircraft? mid-decade of I XXXX looking rates XXXs, that on there if what guys you there, could think mid-decade we guess, to How much about Engineered sales a thinking are the at? the and Products about some of be is maybe many as bit I little I for business? in AXXXs, profile, there’s build more So, kind are back build What rates commercial we guess, was some

Jamie Coogan

a question. That’s great Yes.

if Engineered show there disclosures to back, where Products tried in was some look So, you put to you we XXXX. in exactly

of did aerospace. you can around point. to $XXX at we sales in That margins, XXXX million that Bal XX%, was At unit Seal a generating about see peak So, that point have business, bridge back the the at not time, business XX% EBITDA effectively. the

the -- look taken that we’ve that cost growth from is that facilities new of to So, meaningfully. And and because our we’ve sales as drop-through the discussions to there a is at over through believe year, actions this business back do opportunity that incremental for today, on fairly sort top-line automation we had of in the performance we with our to we expect get incremental and -- opportunities past some -- those, investment we some technologies, because as operations, the new those processes and an of come from streamline recovery.

Ian Walsh

for Boeing, XXXX. aisles content slower. that that even we AXXXs, on exceptionally are if like lot historics, Airbus and content been recover got we We’ve Yes. a expanded -- going across Kamatics. double business, at AXXXs, look I whether The the have to mean, the you strong, the XXX, you they’ve we’ve certainly know it’s

out. lot strong operational also are a in cost automate the think, our to work good processes up, but there, lot expand said, we’re from still that we all of the which as Jamie get I So increasing, an in of from rates and perspective, we’ve travel’s not know a a work recovery, done very what and position, to just margins build gone

Jamie Coogan

we -- to across all are for year Products, right, Engineered we CapEx -- Yes. this all right, companies think frankly. as both of this costs as about you our ask year, at we cost sort And investing just that, do growth, see of and incremental some

new capital of it’s CapEx as a it’s There’s they towards and a talent engineering, to were you’ll certain are year. right, And expectations results new note as a and XXXX sales on technologies. than business that automation the expenditures, weighing our extent. well to higher continue our that’s last for for development trend new year our little that So little bit bit

Seth Seifman

company great. then, And what looking an guess, I in relative as Engineered Structures, picture on different do the and strategic and it a and strength of following-up the highlighted Structures the being I the Products. the of being thinking back that? guess, Okay, stepping just I about guys mean, -- and over part about just Kaman, of have you kind you portfolio strategic profitability at big time of how Structures, the think segments,

Ian Walsh

We it where is wanted best-in-class, each what for all we’ve understand that sure on I as really to make this, early last reasons. segment, And focused to is reasons of for call in Yes. the talked want different the and segments. before good we year and those quartile top understand trying were people about performance consciously already year,

So early years. set We last plans in trajectories. year, we place, strategies game those over five those laid those

right of to that is each segments get So, quartile our top focus to performance. now our

business go investment front to of our means feel making fundamentally, Structures, effort about we five basis, the going the hard we that consolidated like underway, take be with, the underway, training, in we because operationally we it, again, lot talked consolidation If at expand of our year-over-year we’re and to get a that a top-line. years. to need end that’s it a As from performance, that’s portfolio, know well look we are on what we can’t example, exactly to to quartile where then and top for

Seth Seifman

looking market, developed just we maybe since each terms thinking these something landscape, guess, the the probably multiples And how I talk -- over the there and it’s opportunities, great. year year-end incrementally, in the quarter, of the kind What’s of over past how the things? Okay, in past are about you’re M&A days? things then, but about

Ian Walsh

Yes.

talked front. and on we of did remain to really talked our before portfolio. We of kind about acquisition We look are how that as active, type our the on and last have into trying a very at acquisition about year filters hard fits right focus -- the we we

So, be for behavior your the last small, be very to at opportunities. to it wasn’t really matter, the in of patient. to point conscious We year, out almost crazy and time, about very We multiples, pursuing frankly, some want investing in quite ourselves. there. same were of and But We irrational medium capital, large lack disciplined didn’t several want use effort. and

remain We of plenty got a have We’ve active. ourselves, in opportunities nice but investing we got pipeline. very

We terms a makes for top and business, of to we’ll we think know repositioning in lot strategic sense that certain pursue a the acquisitions big the continue to growth, Company that’s of part of and getting We that. also continue performance. do our that quartile

So, we will continue to pursue that very hard.

Operator

the line with Skibitski Alembic [Operator Instructions] comes of And our Global. from Pete question next

go ahead. Please is line open. Your

Pete Skibitski

Good think a future to discussion to extend margin in -- of about margin wanted to the get Engineered to around a number, at Products. kind I how better Guys, obviously purchase of then you get kind after and better tangibles XX%, sense great the wanted I morning, came down down guys. that, think Hey. a just of XXXX cycle peak there. aerospace think business. the that in peak the cycle, the flowing on I is have The also Bal almost through Seal, but I

us what Products few Engineered maybe looks give if years. sense was in next the that of a So, could in I you like amortization wondering

peak a amortization. including So, is the of be of, kind what likely could to get just we the new sense

Ian Walsh

in mean, talk we Products, kind I we nice -- have do Pete, kind talk we’re Engineered have we Yes. aiming. at targets all highly of amortization. but portfolio, of actually Jamie the and will there. variation where performers, high I’ll businesses again -- When have a a the you look they’re

that some, well margin have consolidated a that We below. some got above little bit are and

And at our our example, sites, tons traditional of we performance at be target said, of got is, we've where, Kamatics. with two a GRW, a we that look Bal there. I to should We’ve look I effort got expand XX%. I And feel for so, And those potential margins north Seal focus German from that. RWG perspective, and like above real a business, of

that for So, that's in that's we're confident we're highly shooting performance and the and top five-year quartile where certainly window the a businesses three-year need mark, to be. those

Jamie Coogan

amortization you XX%. again, performance from the that the And Products EBITDA closer look we unit. for don't to break look the we But specifically Yes. XX%, prior again, would at business in if be depreciation XXXX, at business, to Engineered Pete, the it for as were out

run rate the there's legacy kind Products basis, acquisition Seal. basis it before a So, the of sort of on XXX Engineered call Bal we'll points,

Pete Skibitski

you an Ian, XX% could mean number? that you not some EBIT think EBITDA an So, point, you north of do number, be That's amortization? including at

Ian Walsh

EBITDA. It's

Pete Skibitski

EBITDA. It’s

Okay. one for me. just Then last

follow think to up no? for I talking XX,XXX million about the or that on XX DCS fuze you XXXX, been JPS guidance to quarters, include have this guys XX,XXX. The order it's Does Just that a for conversation. couple

Ian Walsh

not. does that No,

we'll So, that's that work. And high point. secure got again, we've of here in not that degree confidence a that. include it does some at But,

Jamie Coogan

the of always unique, given our remember, JPF program USG again, to, just revenue, to that one is we the overtime one to fuze fuze deliveries nature And do to correlate and versus necessarily our deliveries right, underneath Yes. DCS have programs. reference, program not with

make that kind sure So, that. aware everyone's of of just

Pete Skibitski

Yes, appreciate it. I understood.

are And out there that opportunities DCS are so some there.

mature opportunity, You I to are about think that not guess. it? million they're the way working as guys Is that still $XX just the as

Ian Walsh

line it. to strong certainly And those and of -- sight sight orders. the way again, between I now got That's Yes. line for XXXX we've think think, of about

Operator

the And line Steve we a have you. Barger question of Capital Thank with KeyBanc from Markets. follow-up

open. is Please go line Your ahead.

Steve Barger

do long top three contracts ranges results us Structures. I And you these years. on looking on on to But, a do Thanks. these accelerate program? on you'll think have five run? you're programs tell of to hate how be time. Hey. help this just you target I Obviously general, drive able harp get improvement long in can to the the weight to for know you pricing efficiencies to of it's

Jamie Coogan

on just our those down signed They Yes. new them -- we No, actually in to absolutely. typically is multi-year credit use an as specifically, example. And years. contract. The team recently Jacksonville their five duration

contract. We'll that so positions at know lean, top rate this have be nature of us and multi-year under are costs and work, which that, practices focused the but latest profitable These work on types is -- in want start the lean the that it. comes improved anything new of we're to of the the additional, again, does efficient than that are longer if work organization. why when of sure, But pricing cost more don’t better there's also over we historically out driving on on for Ian. contract performing the operations out you underneath turned contracts. I would win just we new driving And this new it nature term So, a in current we that to have. more to year

Ian Walsh

we're Yes. capabilities. hiring of that some When this type aligned near-term we're year looking much the pursuing. work to Again, will also we've that, got prospects that much with we're that our consciously higher demonstrate really nice more land expecting margins,

with that what some showing fixed, really team piece and more side, last includes there in we're results, of is have growth said, medical with again, down much some consolidation nice really is Vermont, I nice the we're get the work the with like they're of doing. and XXX like you even that Vermont, that folks we Jacksonville, about. kind talked Structures Part with that which healthy which up year I doing on the in Even, our stage profitable said, So operationally, work,

we definitely and back we a And of some time, on that gone for and that to pricing point, renegotiated of work go. some period that some work yes, exit that profitable the not your we as So, we've we've of of actually to confident legacy in there we're and going healthier some work. were feel get was

Steve Barger

great. That's

is this JPF will find the K. if how Sorry it ship much in year? this I can of in million that $XXX But, later.

Jamie Coogan

that. Yes. I continue to work we're again, to going mean, through

year, I Steve. imagine over again… we sort as expectation can be, But the of we'd So, work of much this would through would the that of course as

Steve Barger

there's fuze or unfortunate whether safe What anything, obviously some you or events how about business And just this are if the for Okay. news from that? does the and it's in supply arm, that whatever, inquiries thinking mean, or week. chain

Ian Walsh

that. perspective, at question, really to think from answer chain and we any there's supply a I we've quite don't looked your there frankly, risks think,

might teams to on to specifically a expect its what issues hard think, situation just I pipeline. that's We running that where there, job We've our JPF, way at know nice it is looking any tell. already And our done don't got it's We disclosed have going for there. have mean. too quite with course. the frankly, we've as exactly program that is,

we on. to that, than have comment much other don't really So

Steve Barger

Yes. That's but ask. I thought I'd figured, I just

timeline that inquiries secure what you from you there said when can For of What's talk -- when question various is same from KARGO ship? a can kind your UAV, for customers. and that you about? direct orders there's estimate might Like,

Ian Walsh

can. Yes, sure

this a I productive talked to is actually tell at they before Force, to of them our literally we're a We our We're there. want that full and up that so that's right program. we're a need want things scale seven just timeline of would readiness to like earlier meeting. down talking prototype was flying special six flying commercial I whether yesterday it's our and be would marine So, of a they XXXX. be a forces definitely perspective, this Marine it confident you know we're campus military types the about, [ph] year. teams, really or going again, zoom we military from is Air how, them From to but getting with we've level going ramping now, capabilities timeline technology to have be, perspective, function where with these Corps,

to not year this expect from some orders level this later perspective. So, military we which have -- programmatic run of possibly services, from because coming it either quite a year, initial would the from funding they the in some frankly, and

could there comfortable very a T&E early perspective. companies, test getting whether are airlines, be kind be we they So, And a orders be evaluation or perspective, that it's couple building under from cargoes -- seen, of they those logistics & we've of commercial could could in.

year, So, XXXX. And approach in come part product the of delivering intent again, right we our about, get smart orders delivering teams really to orders, those thinking that's are this with -- and before how doable markets later the starting too, that's the for way of investment, us. in to kind

Steve Barger

then do the how off? about commercial market XXXX you and maybe longer think so, And takes term addressable as in

Ian Walsh

are is unmanned in market. look we some huge market now. starting right Well, initial It's billion to analysis come $XX at perspective, $X that And a systems, billion. to if see from you a commercial addressable

and less side, strategic and On military targeted. it's the naturally, very

kind from thousands little hundreds the anywhere Marine little the different. of we would different; a is got several we’ve be for So, that's of Army's of Air to about range certainly ranges services, talking Corps. a Force

market for all-in-all, a us, side. and the very So nice military commercial in both it's

Steve Barger

XXXX, you're to margin I in this program? on know what's selling hard know hundreds that it's profile if the but now,

Ian Walsh

under precision -- we're it look let's for Well, put I'll a are that way. a Precision Products our margins is this It showing, reason, because the sits for. the if And margins we at product. you that that's shooting that

Steve Barger

it. one then, And final. Got

right consider you of the that small, really you to a you find capital can't other you for or just buyback M&A would good reason, content or some are are whatever find If deals? or avenues candidates allocation, wait for

Ian Walsh

No.

the those Board We at and all of looking supportive that. is are options,

not answer to plenty really And to of go is same at going we yes. going So, the are But after there nice and at for feel out are overpay. look that are time, we sure. targets there the we continue to

Operator

no any Kary like the showing and further turn to remarks. questions Bare I'm And for time, conference you. further back to I'd at Thank this over

Kary Bare

And Thank a quarter our first look back fourth today, our XXXX joining on and day. talking with quarter earnings. And for you, thank XXXX conference you everybody you to great we we when for our Have you getting Michelle. our forward to call update provide earnings.

Operator

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

disconnect. You may now

Kary Bare	Head, IR
Ian Walsh	Chairman, President and CEO
Jamie Coogan	SVP and CFO
Steve Barger	KeyBanc Capital Markets
Seth Seifman	JP Morgan
Pete Skibitski	Alembic Global
Good day. And thank you for standing by. Welcome to Kaman Corporation Fourth Quarter 2021 Conference Call. At this time	all participants are in a listen-only mode. After the speakers’ presentation - there will be a question-and-answer session. [Operator Instructions] Please be advised - today’s conference is being recorded. [Operator Instructions]
I would now like to hand the conference over to your host today	Kary Bare - Head of Investor Relations. Please go ahead.

Kaman (KAMN) 25 Feb 222021 Q4 Earnings call transcript