Kaman announces next phase of transformation

Kaman Corporation today announced actions to continue reshaping the Company's portfolio, enhance operational efficiency, improve financial performance and position Kaman for long-term growth and sustainable value creation.

“Building on Kaman's long track record of innovation and active portfolio management, we continue to take decisive actions to unlock value and build a more durable and resilient company,” said Ian K. Walsh, Chairman, President and Chief Executive Officer. “Recent initiatives include investing in talent, segmenting our businesses, expanding the capabilities of our Engineered Products segment with the acquisition of Aircraft Wheel & Brake, selling our underperforming UK and Mexico businesses, consolidating operations at our Jacksonville Structures facility, investing in our autonomy partner, Near Earth Autonomy and launching our new KARGO UAV program.”

Mr. Walsh added, “We know there is more work to do, and as we continue to transform Kaman, we are focusing our investments on the highest growth and highest margin businesses. Our goal is to position Kaman to deliver consistent revenue growth, EBITDA margin expansion, enhanced free cash flow generation and improved return on invested capital, which we believe will drive sustainable, profitable growth and superior shareholder returns.”

Actions Planned by Kaman Include:

Consolidating Joint Programmable Fuze (JPF) production: As the JPF program winds down, the Company will consolidate the production of fuzes at Kaman's Middletown, Connecticut facility, which has the potential capacity to deliver against future direct commercial sales (DCS). Given the completion of the Joint Air-to-Surface Standoff Missile (JASSM) program and evolving market trends, the Orlando facility is expected to fully cease operations by the end of 2024. The actions taken with respect to Orlando are expected to result in annualized run-rate cost savings of approximately $12 to $15 million and total pre-tax restructuring charges of $8 to $10 million.

Optimizing cost structure to ensure alignment with highest return growth opportunities: Kaman will continue improving its legacy structures programs, enhancing overall execution and focusing on winning new and more profitable programs, including growing the Company's aftermarket portfolio. In all businesses, Kaman will maintain focus on continuous improvement, reducing variation and inefficiencies in the Company's value streams. Kaman is also in the process of streamlining and re-sizing the corporate organization to better reflect the current size of the Company, while also executing SG&A reductions at the strategic business unit (“SBU”) level driven by reducing layers, consolidating support functions, eliminating redundancies between corporate and SBU, among other efforts.

These actions support Kaman's objective to de-lever its balance sheet, improve net working capital, expand gross margins and increase overall EBITDA and free cash flow generation. The Company expects these combined efforts to result in greater alignment of its cost structure with future growth opportunities, enhancing Kaman's long-term competitive profile.

As part of Kaman's portfolio reshaping efforts, the management team continues to evaluate the Company's business lines and programs with the goal of best positioning Kaman to deliver long-term shareholder value creation. The Company plans to provide an estimate of its annualized cost savings objective as well as an update on its ongoing portfolio shaping and cost reduction efforts early in the first quarter of 2023.