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Kaman (KAMN) Q2 2022 Earnings Call Transcript

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Kaman (KAMN 0.57%)
Q2 2022 Earnings Call
Aug 05, 2022, 8:30 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Ladies and gentlemen, thank you for standing by and welcome to the Kaman Corporation Q2 2022 earnings call. [Operator instructions] I would now like to turn the call over to your host, Kary Bare. You may begin.

Kary BareHead of Investor Relations

Good morning. Welcome to Kaman’s second quarter 2022 earnings call. Leading 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, please 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 on plans and objectives of the company or its management, statements of future economic performance and assumptions underlying these statements regarding the company and its business. The company’s actual results could differ materially from those indicated in any forward-looking statements due to many factors. The most important of which are described in the company’s latest filings with the Securities and Exchange Commission, including the company’s second quarter 2022 results included on Form 10-Q and the current report on Form 8-K, filed yesterday evening together with our earnings release. We also expect to discuss certain financial measures and information that are non-GAAP measures, as defined in applicable SEC rules and regulations.

Reconciliations to the company’s GAAP measures are included in the earnings release filed with yesterday’s 8-K. Finally, we posted an earnings call supplement on our website, which provides additional context on our financial performance. You can find this presentation at www.kaman.com/investors/quarterly earnings-calls. Now I will turn the call over to Ian Walsh.

Ian WalshChairman, President, and Chief Executive Officer

Thank you, Kary. Good morning, everyone, and thank you for joining us for our second quarter 2022 earnings call. I’ll start by providing highlights on the quarter and then share some operational and business updates, along with some respective innovations in each segment before passing the call over to Jamie for more detailed discussion of our financial results and outlook for the remainder of the year. Results for the second quarter were in line with our expectations with sales, earnings, and adjusted EBITDA higher than the last quarter, but lower than the second quarter of 2021.

We continue to expect stronger sales and margins in the second half of the year. Gross margin for the company decreased slightly to 32.4%, 160 basis points lower than the second quarter of 2021. Compared to both periods, JPF sales and associated gross profit were lower, while sales and margins improved for our engineered products segment. Since joining Kaman, I’ve worked with the board and our new leadership team on positioning our company for organic and inorganic growth in our highly engineered and precision parts businesses and improve profitability across all our businesses, with the goal of achieving top quartile performance in the markets we serve over time.

In May, we were extremely excited to announce that Kaman signed a definitive agreement to acquire the Parker-Hannifin aircraft wheel and brake division. This transaction, which is expected to close before the end of the year, offers a unique opportunity to expand our highly engineered product portfolio by investing in a high-margin quality asset with potential for growth. For more than 80 years, aircraft wheel and brake has been a trusted provider of mission-critical wheel and brake technology products and solutions. They have a strong OEM and aftermarket portfolio of more than 100 platforms, specializing in wheels, brakes, and related hydraulic components for helicopters, fixed-wing, and UAV aircraft.

They have an install base of approximately 450,000 aircraft, globally serviced by distribution and long-standing global relationships with leading defense and general aviation customers. They provide customized proprietary designs protected by intellectual property. Aircraft wheel and brake operates out of one centralized facility in Avon, Ohio, providing a full suite of capabilities including design, development, and qualification, as well as manufacturing, assembly, product support and repairs. The complementary strength of aircraft wheel and brake will advance our strategy by expanding the breadth of our…

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