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Form 8-K KAMAN Corp For: Sep 07

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September 7, 2016 4:13 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): September 7, 2016



Kaman Corporation
(Exact Name of Registrant as Specified in Its Charter)


Connecticut
(State or Other Jurisdiction of Incorporation)

001-35419
 
06-0613548
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
1332 Blue Hills Avenue, Bloomfield, Connecticut
 
06002
(Address of Principal Executive Offices)
 
(Zip Code)

(860) 243-7100
(Registrant's Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 7.01    Regulation FD Disclosure.

From time to time, members of the Company’s senior management present information about the Company to investors. A copy of an investor presentation dated September 8, 2016 is attached as Exhibit 99.1.

The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.


Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits

The following documents are furnished as Exhibits pursuant to Item 7.01 hereof:

Exhibit 99.1 - Investor Presentation dated September 8, 2016.





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
KAMAN CORPORATION
 
 
 
 
By:
/s/ Shawn G. Lisle
 
 
Shawn G. Lisle
 
 
Senior Vice President, General Counsel
 
 
and Assistant Secretary

Date: September 7, 2016





KAMAN CORPORATION AND SUBSIDIARIES

Index to Exhibits


Exhibit
Description
 
 
 
99.1
Investor Presentation dated September 8, 2016
Attached



1 Investor Presentation September 8, 2016

 
2 Forward Looking Statements FORWARD-LOOKING STATEMENTS This presentation contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements also may be included in other publicly available documents issued by the Company and in oral statements made by our officers and representatives from time to time. These forward-looking statements are intended to provide management's current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid. They can be identified by the use of words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "would," "could," "will" and other words of similar meaning in connection with a discussion of future operating or financial performance. Examples of forward looking statements include, among others, statements relating to future sales, earnings, cash flows, results of operations, uses of cash and other measures of financial performance. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that may cause the Company's actual results and financial condition to differ materially from those expressed or implied in the forward-looking statements. Such risks, uncertainties and other factors include, among others: (i) changes in domestic and foreign economic and competitive conditions in markets served by the Company, particularly the defense, commercial aviation and industrial production markets; (ii) changes in government and customer priorities and requirements (including cost-cutting initiatives, government and customer shut-downs, the potential deferral of awards, terminations or reductions of expenditures to respond to the priorities of Congress and the Administration, or budgetary cuts resulting from Congressional actions or automatic sequestration); (iii) changes in geopolitical conditions in countries where the Company does or intends to do business; (iv) the successful conclusion of competitions for government programs (including new, follow-on and successor programs) and thereafter successful contract negotiations with government authorities (both foreign and domestic) for the terms and conditions of the programs; (v) the existence of standard government contract provisions permitting renegotiation of terms and termination for the convenience of the government; (vi) the successful resolution of government inquiries or investigations relating to our businesses and programs; (vii) risks and uncertainties associated with the successful implementation and ramp up of significant new programs, including the ability to manufacture the products to the detailed specifications required and recover start-up costs and other investments in the programs; (viii) potential difficulties associated with variable acceptance test results, given sensitive production materials and extreme test parameters; (ix) the receipt and successful execution of production orders under the Company's existing U.S. government JPF contract, including the exercise of all contract options and receipt of orders from allied militaries, but excluding any next generation programmable fuze programs, as all have been assumed in connection with goodwill impairment evaluations; (x) the continued support of the existing K-MAX® helicopter fleet, including sale of existing K-MAX® spare parts inventory and the receipt of orders for new aircraft sufficient to recover our investment in the restart of the K- MAX® production line; (xi) the accuracy of current cost estimates associated with environmental remediation activities; (xii) the profitable integration of acquired businesses into the Company's operations; (xiii) the ability to implement our ERP systems in a cost-effective and efficient manner, limiting disruption to our business, and allowing us to capture their planned benefits while maintaining an adequate internal control environment; (xiv) changes in supplier sales or vendor incentive policies; (xv) the effects of price increases or decreases; (xvi) the effects of pension regulations, pension plan assumptions, pension plan asset performance, future contributions and the pension freeze; (xvii) future levels of indebtedness and capital expenditures; (xviii) the continued availability of raw materials and other commodities in adequate supplies and the effect of increased costs for such items; (xix) the effects of currency exchange rates and foreign competition on future operations; (xx) changes in laws and regulations, taxes, interest rates, inflation rates and general business conditions; (xxi) the effects, if any, of the United Kingdom's exit from the European Union; (xxii) future repurchases and/or issuances of common stock; (xxiii) the incurrence of unanticipated restructuring costs or the failure to realize anticipated savings or benefits from past or future expense reduction actions; and (xxiv) other risks and uncertainties set forth herein and in our 2015 Form 10-K. Any forward-looking information provided in this presentation should be considered with these factors in mind. We assume no obligation to update any forward-looking statements contained in this presentation.

 
3 What is Kaman? Solving Our Customers’ Critical Problems with Technically Differentiated Products & Services Leading Provider of Highly Engineered Aerospace & Industrial Solutions Serving a Broad Range of End Markets

 
4  Outstanding portfolio of highly engineered products and proprietary technologies across Aerospace  Distribution aligned with best-in-class vendors and delivers system solutions  Diverse end market and customer exposure provides consistent performance to fund growth Strategically Positioned Kaman Investment Highlights Improving Financials Reliable Business Strategies  Focused on driving profitable top-line growth  Delivering EBITDA growth through scale and operational execution  Generating strong consistent cash flow to fund long-term growth  Disciplined acquisition growth to achieve scale and margin expansion  Continuing focus on innovation and internal investment to maintain differentiation and drive productivity  Relentless effort to drive operational excellence across the company

 
5 32% 25% 43% Defense Fuzing Commercial 50% 31% 19% Bearings and Mechanical Power Transmission Automation, Control and Energy Fluid Power 37% 63% Distribution Kaman Corporation Overview Distribution Aerospace $1.8B Revenues Aerospace Based on LTM results as of the quarter ended July 1, 2016

 
6 Capital Deployment Framework Capital deployment is focused on growth investments & return of capital to shareholders Dividends & Share Repurchases Capital Expenditures Acquisitions Total $860 Million Period: 2010 to Q2 2016 62% 23% 15% • Strategic acquisitions to create shareholder value • High return capital expenditures including facility expansions, machinery and equipment, and IT infrastructure • Dividends paid without interruption for 46 years • $100 million share repurchase authorization in place to offset dilution from employee stock plans

 
7 37% Aerospace

 
8 Aerospace Overview v AEROSYSTEMS SPECIALTY BEARINGS & ENGINEERED PRODUCTS FUZING & PRECISION PRODUCTS • Engineering design and testing • Tooling design & manufacture • Advanced machining and composite aerostructure manufacturing • Complex assembly • Helicopter MRO and support • Self-lube airframe bearings • Traditional airframe bearings • Miniature ball bearings • Flexible drive systems • Aftermarket engineered components • Bomb and missile safe and arm fuzing devices • Precision measuring systems • Memory products • Global commercial and defense OEM’s • Super Tier I’s to subcontract manufacturers • Aircraft operators and MRO • Specialized aerospace distributors • Industrial and medical manufacturers of high precision equipment • U.S. and allied militaries • Weapon system OEMs • Consistent growth of bearing product line revenue from new program positions and higher build rates • Expanding engineered products portfolio into new end markets • Assembly and structures capabilities provide opportunities for additional subcontract programs • Exclusivity and significant backlog provide a stable revenue base Business Dynamic Customers Products

 
9 Strong Top Line Growth Performance $450 $500 $550 $600 $650 $700 $750 2011 2012 2013 2014 2015 2016 Aerospace Revenue 2016 revenue growth balanced between organic and acquired sales $ Millions * Aerospace revenue outlook for the full year 2016 is a range of $710 million to $725 million Outlook*

 
10 Primary Aerospace Locations Diverse locations focused on core competencies

 
11 Significant Platforms 737 777 787 K-MAX® A350 AH-1Z UH-60SH-2JPF A-10

 
12 • U.S. Air Force (USAF) multi-function hard/soft target advanced bomb fuze system • Highly flexible fuze system enabling in-flight reprogramming of a weapon on the wing • Operational reliability in the field is greater than 99% • Compatible with most U.S. and NATO aircraft - 27 foreign customers • Kaman is the sole provider of the JPF • Increasing production capacity to meet demand Bomb Compatibility - JDAM - Paveway II and III - GBU-10, 12, 16, 24, 27, 28, 31, 32, 38, 54 - BLU-109, 110, 111, 113, 117, 121, 122, 126 - MK82/BSU-49, MK83/BSU-85, MK84/BSU-50 JPF Program

 
13 • 2016 deliveries expected to increase to 30,000 to 34,000 fuzes from 24,700 in 2015 • USAF has stated that current inventory levels are below desired quantity • Solid program multi-year backlog of over $230 million • Order pipeline is robust – including pending orders for USAF and U.A.E. requirements, which would provide visibility into 2020 JPF Demand is Strong ($ Millions)

 
14 Broad Portfolio of Specialty Bearings and Engineered Products Traditional airframe bearings Flexible drive systems Self-lube bearings High precision miniature bearings Aftermarket components

 
15 Airframe Bearings and Components • Flap Systems • Doors • Landing gear • Flight controls • Thrust reversers Fixed Wing Industrial Rotary Wing Marine and Hydro • Flexible drive systems • Flight control bearings • Landing gear bearings • Dive systems • Doors and hatches • Rudder • Periscope • Wicket gates • Navigational locks • Oil sands bearings and track rollers • Motorsport bearings and bushings

 
16 Super Precision Miniature Ball Bearings - Markets • Medical • Dental • Pharmaceutical Healthcare Aviation and Defense Industrial and Distribution Drive Systems and Analysis • General machinery • Distribution • Textile • Printing • Electronics • Vacuum technology • Powertrain / turbo machines • Measurement & analysis equipment • Tooling machine • Civil aviation • Military and defense • Satellites and space vehicles

 
17 Aftermarket Components – Major Platforms Rolls-Royce 250 • Over 600 PMAs • Estimated 11,000 engines in service • Part offerings include: – Compressor wheels – Turbine nozzles – Combustion liners – Vane diffusers PT6 • Over 170 PMAs • Estimated 16,000 engines in service (most popular in GA) • Part offerings include: – Turbine blades – Shroud segments – Gears and shafts Honeywell APU • Over 130 PMAs • Estimated 15,000 APUs in service • Part offerings include: – Turbine blades – Sector gear – Shroud segment – Inlet guide vanes – Aft diffuser housing Medium Helicopter • Over 200 PMAs, including 29 Bell approved parts • Estimated 7,000 aircraft in service • Part offerings include: – Main rotor grips – Tail rotor shafts – Bearings, strap fittings – Blade bolts – Trunnions

 
18 • SH-2G  In service with Egypt, New Zealand, Poland, and Peru  Flying fleet projected to grow at least 40% from 2014 level  Significant opportunity exists to expand and upgrade the size and capability of the Egyptian fleet • K-MAX®  Expect deliveries of new aircraft to begin in the first half of 2017  We continue to pursue unmanned USMC and DOI programs with our partner Lockheed Martin • Aftermarket support including spares, repairs and MRO Air Vehicles and MRO Unmanned K-MAX® Commercial K-MAX®SH-2G Super Seasprite

 
19 Distribution 63%

 
20 Distribution Overview PRODUCT PLATFORM BEARINGS & MECHANICAL POWER TRANSMISSION (BPT) FLUID POWER AUTOMATION, CONTROL & ENERGY (ACE) % of 2015 Sales 50% 19% 31% Market Size(1) $13 Billion $7 Billion $15 Billion Acquisitions since 2010 • Allied Bearings Supply • Plains Bearing • Florida Bearings Inc. • Ohio Gear and Transmission • INRUMEC • Catching • Northwest Hose & Fittings • Western Fluid Components • B. W. Rogers • Calkins Fluid Power • Zeller • Minarik • Target Electronic Supply • B. W. Rogers • G.C. Fabrication Major Suppliers (1) Source: PTDA Market Size Report; US Census Bureau; ARC Advisory

 
21 Scale Distribution – Road to 7+% Operating Margin TODAY <5% FUTURE 7+% Improved Operational Efficiencies Product Mix Strategic Pricing CATALYSTS

 
22 Extensive Solution and Service Capabilities System Design & Build Fluid Power Systems Hose & Coupling Assemblies Application Engineering Belt Fabrication Maintenance & Reliability

 
23 Summary

 
24 • Aerospace – Leveraging unique set of proprietary products and capabilities – Strong platform positions across commercial & defense markets – Robust pipeline of future opportunities • Distribution – Three product platform strategy expands growth opportunities – Increased scale provides improved operating leverage • Track record of delivering value through acquisitions • Leverage experienced management and workforce across the company • Strong financial position provides significant capital deployment opportunities Positioned for Future Growth Executing strategies to deliver shareholder value

 

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