31-Jul-2013 Source: Kaman
HeliHub.com editor note – these are extracts from the full release, which includes the financial statements
Neal J. Keating, Chairman, President and Chief Executive Officer, stated, “We achieved strong overall results for the second quarter led by the performance at Aerospace and the sequential improvement in operating profit at Distribution.
Aerospace delivered an operating profit margin of 17.8% for the quarter, due to a favorable product mix led by increased volume for our bearing product lines and a higher level of JPF direct commercial sales. Additionally, we began to record revenue and profit from the sale of the SH-2G(I) aircraft to New Zealand.
Acquisitions drove top line growth in Distribution, offset by a modest decline in organic sales as sluggish market conditions continue to impact select end markets. Distribution operating profit was 5.1% for the second quarter, demonstrating significant sequential improvement over the operating profit of 1.8% in the first quarter, due to the absence of $3.0 million of expense related to our first quarter restructuring, $2.0 million in cost savings resulting from that restructuring and operating leverage from higher sales. Operating margin declined year over year primarily as a result of the impact of lower organic sales volume. For the balance of 2013, we expect sequential sales and operating margin improvement at Distribution.
The sequential improvement we made during the first half provides us confidence that we will deliver a stronger second half. ”
Sales were $161.5 million, an increase of $14.1 million from sales of $147.4 million in the second quarter of 2012, due to a $15.3 million increase in sales on our military programs which was offset by a $1.2 million decrease in sales of commercial products. The increase in military sales was primarily attributable to a higher volume of shipments to foreign customers under our JPF program, higher bearing product sales and $3.8 million of revenue recognized under the SH-2G(I) contract with New Zealand.
Operating income for the second quarter of 2013 was $28.7 million, compared to operating income of $26.2 million in the second quarter of 2012. The operating margin in this year’s second quarter was 17.8%, consistent with the prior year. The segment benefited from higher margin direct commercial sales of the JPF, higher commercial and military bearing product sales and the initial recognition of revenue under the SH-2G(I) program. These increases were offset by the $2.7 million negative impact of adjustments made to our contract margin estimates, lower shipments of the JPF to the USG and an increase in SG&A costs, primarily related to higher research and development expenditures.
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: the continued support of the existing K-MAX® helicopter fleet, including sale of existing K-MAX® spare parts inventory;