Kaman Corporation (KAMN) reported impressive results for fourth-quarter 2014. Adjusted earnings came in at 76 cents per share, reflecting an increase of 33.3% over the year-ago quarter. The bottom line also surpassed the Zacks Consensus Estimate of 72 cents per share.
For 2014, Kaman’s adjusted earnings were $2.43 per share, up compared with $2.25 per share in 2013 and above the Zacks Consensus Estimate of $2.34.
Revenues
Kaman generated net sales of $477.9 million in the fourth quarter, reflecting a 10.9% year-over-year increase. However, the top line lagged the Zacks Consensus Estimate of $487 million.
Kaman reports its net sales under two heads/segments. The segmental results are briefly discussed below:
The Distribution segment generated sales of $302.7 million, increasing 16.3% year over year. Organic revenue grew 4.8%. Revenues from the Aerospace segment climbed 2.6% year over year to $175.2 million.
For 2014, the company’s net sales totaled $1,795 million, up 8.5% year over year.
Margins
Kaman’s cost of sales increased 8.5% year over year, representing 71.5% of total revenue as against 73.1% in the year-ago quarter. Gross margin improved 160 basis points year over year to 28.5%. Selling, general and administrative (SG&A) expenses, as a percentage of revenue, stood at 21.5%, against 20.5% recorded in the year-ago quarter.
Operating income increased 31.1% year over year to $33.2 million, while margin came in at 7% versus 5.9% in the year-ago comparable quarter.
Balance Sheet
Exiting fourth-quarter 2014, Kaman’s cash and cash equivalents were $12.4 million, up compared with $9.8 million at the end of the preceding quarter. Long-term debt decreased 16.7% sequentially to $271.2 million.
Cash Flow
In 2014, Kaman generated cash of $109.1 million from its operating activities versus $64.8 million in the previous year. Capital spending declined 30.8% year over year to $28.3 million.
During the year, the company distributed $17.3 million as dividends.
Concurrent with the earnings release, Kaman announced its board of directors’ approval for a 12.5% increase in the quarterly dividend rate to 18 cents per share.
Outlook: For 2015, Kaman expects Distribution sales within $1,250−$1,280 million and Aerospace sales within roughly $635−$655 million. Operating margin for the Distribution and Aerospace segments are predicted in the respective ranges of 4.9−5.2% and 16.8−17.2%.
Interest expense is estimated at approximately $13 million and corporate expense is predicted to fall within $52−$53 million. Tax rate is projected at 34%.
Capital expenditure will come roughly within $30−$40 million, while free cash flow is forecasted in the $75−$90 million range.
With a market capitalization of $1.1 billion, Kaman currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include II-VI Incorporated (IIVI), Kadant Inc. (KAI) and Pioneer Power Solutions, Inc. (PPSI). While II-VI Incorporated sports a Zacks Rank #1 (Strong Buy), both Kadant and Pioneer Power hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment