<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-1093
KAMAN CORPORATION
(Exact Name of Registrant)
Connecticut 06-0613548
(State of Incorporation) (I.R.S. Employer Identification No.)
Blue Hills Avenue, Bloomfield, Connecticut 06002
(Address of principal executive offices)
Registrant's telephone number, including area code-(203) 243-7100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
-Class A Common Stock, Par Value $1.00
-6% Convertible Subordinated Debentures Due 2012
-Series 2 Preferred Stock, Par Value $1.00
-Depositary Shares, each representing one quarter of a
share of Series 2 Preferred Stock
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Section 229.405 of this
chapter) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ X ].
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value
shall be computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as
of a specified date within 60 days prior to the date of filing.
$1,730,406 as of February 1, 1995.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of February 1, 1995.
Class A Common 17,535,987 shares
Class B Common 667,814 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Corporation's 1994 Annual Report to Shareholders
are incorporated by reference and filed as Exhibit 13 to this
Report. No other documents except those previously filed with
the Commission are incorporated herein by reference.
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PART I
ITEM 1. BUSINESS
Kaman Corporation, incorporated in 1945, and its
subsidiaries (collectively, the "Corporation") serve government,
industrial and commercial markets through two industry segments:
Diversified Technologies and Distribution. The Diversified
Technologies group provides design and manufacture of advanced
technology products and systems, advanced technology services and
aircraft manufacturing. The Distribution segment distributes
industrial products, distributes and manufactures music products
and provides support services to its customers and provides
aviation services.
DIVERSIFIED TECHNOLOGIES
The Diversified Technologies segment consists of several
wholly-owned subsidiaries, including Kaman Diversified
Technologies Corporation, Kaman Aerospace Corporation, Kaman
Sciences Corporation, Kamatics Corporation, Kaman
Electromagnetics Corporation, and Kaman Instrumentation
Corporation, as well as a 50% interest in Advanced Energetic
Materials Corporation of America. A former Diversified
Technologies subsidiary, Raymond Engineering Inc., was merged
into Kaman Aerospace Corporation on January 31, 1995.
The Diversified Technologies segment develops and
manufactures various advanced technology products and systems
which are used in markets that the Corporation serves. Among the
products manufactured are self lubricating bearings used on
aircraft and in other systems, flexible couplings for
helicopters, precision measuring instruments, composite flyer
bows, RF transmission and delay lines, telecommunication
products, photonic and optical systems, ruggedized tape and disk
memory systems used primarily in aircraft, and safing and fuzing
systems for use in missiles. The Corporation also develops and
produces various motors, generators, alternators, launchers and
electric drive systems using electromagnetic technology. In
addition, the Corporation has contracts with the U.S. government
for a number of advanced technology programs relating to some of
the systems described above and to other proprietary systems
developed by the Corporation. The Corporation's merger of its
Raymond Engineering Inc. subsidiary into Kaman Aerospace
Corporation was undertaken in order to downsize Raymond
Engineering's operations and to focus on advanced technology
product areas which, in the opinion of the Corporation,
demonstrate the most potential for future success.
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As a second category of its business, the Diversified
Technologies segment also provides advanced technology services
to a number of customers, including all branches of the armed
forces, various Government agencies, the Department of Energy,
Department of Transportation, various defense contractors,
utilities and industrial organizations. The services offered
include software engineering and maintenance, operation of
Government information analysis centers, field and laboratory
testing services, communication system design and analysis,
specialized sensor design, electromagnetic interference and
compatibility evaluations, analysis and simulation of electronic
signals, various types of artificial intelligence systems and
weapon system evaluation.
A third category of this segment's business is aircraft
manufacturing, including the development and manufacture of
helicopters and the integration of systems related to
helicopters. The Corporation is the prime contractor for the
SH-2 series helicopter, a multi-mission aircraft presently
serving the U.S. Navy with two squadrons of the SH-2G
configuration of such helicopter in the Navy's Reserve fleet.
Reductions in defense spending resulted in the phasing out of the
SH-2 series helicopter from the Navy's Active (non-Reserve) fleet
in 1994 and the Corporation's contract with the Navy for
retrofitting certain model SH-2F helicopters to the SH-2G
configuration was completed in 1994. The Corporation is
exploring long term foreign military sales potential for
retrofitting SH-2G helicopters, as maritime helicopters operating
off FF-1052 class frigates being leased to foreign governments by
the U.S. Navy. In 1994 the Arab Republic of Egypt signed a
letter of agreement for the foreign military sale of ten
retrofitted SH-2G helicopters having dipping sonar capability.
The Corporation is in the process of negotiating its contract
with the U.S. Navy to perform such retrofit work for such
helicopters which is expected to have a value of $100 million
over a three year period. The Corporation also produces a new
commercial helicopter, known as the K-MAX (registered trademark)
"aerial truck" incorporating intermeshing rotor technology
developed by the Corporation. The K-MAX is a medium lift
helicopter designed to provide superior operational capabilities.
The Corporation has devoted a substantial portion of its research
and development activities to this product during the past
several years and continues to do so. In 1994 the Corporation
received Federal Aviation Administration (FAA) type certification
and a total of five (5) K-MAX helicopters were delivered to
customers under a special lease program in order to maintain
active involvement in the product's introduction to the
marketplace.
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Kaman manufactures subcontract aircraft products for
government and commercial customers on programs such as the
McDonnell Douglas C-17 and the Boeing 767 and 777, and is
involved in various programs requiring development of new
technologies such as composite structural components for the F-22
and V-22 aircraft. It also manufactures composite rotor blades
for helicopters, and airborne laser-based electro-optical imaging
and detection systems for military and commercial operations.
Such electro-optical systems include imaging LIDAR systems and
the Corporation's proprietary Magic Lantern (registered
trademark) system which allows underwater objects to be detected
from an airborne platform.
DISTRIBUTION
The Distribution segment consists of several wholly-owned
subsidiaries including the following: Kaman Industrial
Technologies Corporation, Kaman Music Corporation, and AirKaman
of Jacksonville, Inc. This segment distributes industrial
products, manufactures and distributes music products, and
provides aviation services.
Kaman Industrial Technologies Corporation is a national
distributor of industrial products operating through more than
150 service centers located in 29 states and British Columbia,
Canada. The Corporation supplies a broad range of industries
with original equipment, repair and replacement products needed
to maintain traditional manufacturing processes and,
increasingly, with products of higher technological content that
are required to support automated production processes. The
Corporation serves nearly every sector of heavy and light
industry, including automobile manufacturing, agriculture, food
processing, pulp and paper manufacturing, mining, chemicals,
electronics and general manufacturing. Products available
include various types of standard and precision mounted and
unmounted bearings; mechanical power transmission equipment such
as V-belts, couplings, and gear reducers; electrical power
transmission products, motors, AC/DC controls, sensors and motion
control devices; materials handling equipment, belts, conveyor
idlers and pulleys; hydraulic drive systems and parts; and
accessory products such as lubricants and seals. Although the
vast majority of the company's business consists of resale of
products, operations include some design, fabrication, and
assembly work in connection with products sold.
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The Corporation continues to develop certain support service
capabilities in order to meet the maintenance needs of its
customers' manufacturing operations. These services include
electrical panel and systems fabrication centers capabilities and
similar capabilities for hydraulic and pneumatic control panels,
linear positioning systems, and material handling systems. In
1994 the Corporation, on a limited basis, continued to act as a
supplier of capital equipment to various systems engineering and
manufacturing customers by acting as a sales agent for certain
equipment manufacturers. As the Corporation has entered new
market areas, it has invested in new product inventory and in
some instances it has established inventory on consignment in
customer locations. The Corporation maintains a management
information system, consisting of an on-line computer network
linking all of its mainland U.S. and Canadian industrial
distribution facilities, which enhances its ability to provide
more efficient nationwide service and to improve inventory
management. In addition, the Corporation has undertaken
initiatives to address the needs of certain national account
customers that desire to reduce their vendor base by entering
into "partnering" relationships to broaden geographical coverage.
Kaman Music Corporation distributes more than 13,000
different music instruments and accessories to independent
retailers in the United States, Canada, and Great Britain and to
international distributors throughout the world. Products
include acoustic, acoustic-electric and electric guitars and
basses, music strings for all fretted instruments, drums,
percussion products and related accessories, instrument and P.A.
amplification systems, electronic tuners and metronomes,
educational percussion and brass instruments and a full range of
accessories for all musical instruments. The Corporation
manufactures and distributes certain guitars under the
Corporation's various brand names including Ovation and Hamer
guitars, fretted musical instrument strings of various brands,
and the Trace Elliot range of stringed instrument amplification
equipment. In 1994 the Corporation acquired B & J Music Ltd., a
Canadian distributor of musical instruments. Operations of Kaman
Music Corporation are conducted through three (3) manufacturing
facilities and seven (7) distribution centers in the United
States and Canada, an international sales division based in the
United States and a manufacturing and distribution facility in
Great Britain.
The segment also distributes aviation fuel and provides
aviation services at Jacksonville International Airport,
Jacksonville, Florida where the Corporation conducts fixed base
operations for general and commercial aviation under a contract
with the Port Authority of the City of Jacksonville which extends
through the year 2008.
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FINANCIAL INFORMATION
Information concerning each segment's performance for the
last three fiscal years appears in the Corporation's 1994 Annual
Report to Shareholders and is included in Exhibit 13 to this Form
10-K, and is incorporated by reference.
PRINCIPAL PRODUCTS AND SERVICES
Following is information for the three preceding fiscal
years concerning the percentage contribution of the Corporation's
classes of products and services to the Corporation's
consolidated net sales:
<TABLE>
Years Ended December 31
1992 1993 1994
------ ------ ------
<S> <C> <C> <C>
Diversified Technologies:
Advanced Technology Products
and Systems 12.6% 13.5% 12.1%
Advanced Technology Services 13.6 14.1 13.5
Aircraft Manufacturing 19.7 15.5 12.3
---- ---- ----
Segment Total 45.9 43.1 37.9
Distribution:
Industrial Products 41.9 42.9 46.7
Music Products and Other Services 12.2 14.0 15.4
---- ---- ----
Segment Total 54.1 56.9 62.1
Total 100.0% 100.0% 100.0%
===== ===== =====
</TABLE>
RESEARCH AND DEVELOPMENT EXPENDITURES
Government sponsored research expenditures by the
Diversified Technologies segment were $123.7 million in 1994,
$142.3 million in 1993, and $124.5 million in 1992. Independent
research and development expenditures were $21.1 million in 1994,
$18.4 million in 1993, and $17.8 million in 1992.
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BACKLOG
Program backlog of the Diversified Technologies segment was
approximately $228.9 million at December 31, 1994, $240.8 million
at December 31, 1993, and $361.4 million at December 31, 1992.
The Corporation anticipates that approximately 88.9% of its
backlog at the end of 1994 will be performed in 1995.
Approximately 69.1% of the backlog at the end of 1994 is related
to government contracts or subcontracts which are included in
backlog to the extent that funding has been appropriated by
Congress and allocated to the particular contract by the relevant
procurement agency. Certain of these government contracts, less
than 1% of the backlog, have been funded but not signed.
GOVERNMENT CONTRACTS
During 1994, approximately 50% of the work performed by the
Corporation directly or indirectly for the United States
government was performed on a fixed-price basis and the balance
was performed on a cost-reimbursement basis. Under a fixed-price
contract, the price paid to the contractor is negotiated at the
outset of the contract and is not generally subject to adjustment
to reflect the actual costs incurred by the contractor in the
performance of the contract. Cost reimbursement contracts
provide for the reimbursement of allowable costs and an
additional negotiated fee.
The Corporation's United States government contracts and
subcontracts contain the usual required provisions permitting
termination at any time for the convenience of the government
with payment for work completed and associated profit at the time
of termination.
COMPETITION
The Diversified Technologies segment operates in a highly
competitive environment with many other organizations which are
substantially larger and have greater financial and other
resources. For sales of advanced technology products and
systems, the Corporation competes with a wide range of
manufacturers primarily on the basis of price and the quality,
endurance, reliability and special performance characteristics of
those products. Operations also depend in part on the ability to
develop new technologies which have effective commercial and
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military applications. Examples of proprietary or patented
products developed by the Corporation include the Magic Lantern
(Registered Trademark) system for detecting underwater objects
from a helicopter, the Kamatics line of specialty bearings and
the Corporation's line of electromagnetic motors and drives,
among others. In providing scientific services and systems
development, the Corporation competes primarily on the basis of
the technical capabilities and experience of its personnel in
specific fields. When bidding for aerospace contracts and
subcontracts, the Corporation competes on the basis of price and
quality of its products and services as well as the availability
of its facilities, equipment and personnel to perform the
contract. Defense market conditions have been significantly
affected by an ongoing slowdown in defense spending; continued
decreases in federal government expenditures are anticipated in
future periods as well. During 1994 the Department of Defense
actively pursued its implementation of defense acquisition reform
by emphasizing the use of commercially developed state-of-the-art
technology products and performance-based procurement standards
rather than traditional military specification standards. The
change in defense program emphasis and greater constraints in the
federal budget have increased the level of competition for
defense programs. The Corporation's contract to retrofit certain
of its SH-2 series helicopters to the SH-2G configuration for the
U.S. Navy was completed in 1994 and, as the U.S. Navy reduces the
size of its fleet, the Corporation expects a corresponding
reduction in the level of logistics and spare parts required. In
providing spare parts, the Corporation competes with other
helicopter manufacturers on the basis of price, performance and
product capabilities and also on the basis of its experience as a
manufacturer of helicopters. The Corporation's FAA certificated
K-MAX helicopters will compete with other helicopters suitable
for lifting, with surplus U.S. military helicopters, and with
alternative methods of meeting lifting requirements.
Distribution operations are subject to a high degree of
competition from several other national distributors and many
regional and local firms both in the U.S. and elsewhere in the
world. Certain musical instrument products of the Corporation
are subject to competition from U.S. and foreign manufacturers
also. The Corporation competes in these markets on the basis of
service, price, performance, and inventory variety and
availability.
The Corporation also competes on the basis of quality and
market recognition of its music products and has established
certain trademarks and trade names under which certain of its
music products are produced both in the United States and under
private label manufacturing in foreign countries.
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EMPLOYEES
As of December 31, 1994, the Corporation employed 5,239
individuals throughout its industry segments as follows:
<TABLE>
<S> <C>
Diversified Technologies 2,939
Distribution 2,241
Corporate Headquarters 59
</TABLE>
PATENTS AND TRADEMARKS
The Corporation holds patents reflecting scientific and
technical accomplishments in a wide range of areas covering both
basic production of certain products, including aerospace
products and musical instruments, as well as highly specialized
devices and advanced technology products in such areas as nuclear
sciences, strategic defense and other commercial, scientific and
defense related fields.
Although the Corporation's patents enhance its competitive
position, management believes that none of such patents or patent
applications is singularly or as a group essential to its
business as a whole. The Corporation holds or has applied for
U.S. and foreign patents with expiration dates that range through
the year 2011.
These patents are allocated among the Corporation's industry
segments as follows:
<TABLE>
U.S. PATENTS FOREIGN
Patents
Segment Issued Pending Issued Pending
<S> <C> <C> <C> <C>
Diversified Technologies 113 24 53 45
Distribution 26 0 13 0
</TABLE>
Trademarks of Kaman Corporation include Adamas, Applause,
Hamer, KAflex, KAron, K-Max, Magic Lantern, and Ovation. In all,
the Corporation maintains 208 U.S. and foreign trademarks with 51
applications pending, most of which relate to music products in
the Distribution segment.
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COMPLIANCE WITH ENVIRONMENTAL PROTECTION LAWS
In the opinion of management, based on the Corporation's
knowledge and analysis of relevant facts and circumstances, there
will be no material adverse effect upon the capital expenditures,
earnings or competitive position of the Corporation or any of its
subsidiaries occasioned by compliance with any environmental
protection laws.
The Corporation is subject to the usual reviews and
inspections by environmental agencies of the various states in
which the Corporation has facilities, and the Corporation has
entered into agreements and consent decrees at various times in
connection with such reviews. On occasion the Corporation also
has been identified as a potentially responsible party ("PRP") by
the U.S. Environmental Protection Agency in connection with its
investigation of certain waste disposal sites. In each such
instance to date, the Corporation's involvement, if any, has
been either of a de minimis nature or the Corporation has been
able to determine, based on its current knowledge, that
resolution of such matters is not likely to have a material
adverse effect on the future financial condition of the
Corporation.
In arriving at this conclusion, the Corporation has taken
into consideration site-specific information available regarding
total costs of any work to be performed, and the extent of work
previously performed. Where the Corporation has been identified
as a PRP at a particular site, the Corporation, using information
available to it, also has reviewed and considered (i) the
financial resources of other PRP's involved in each site, and
their proportionate share of the total volume of waste at the
site; (ii) the existence of insurance, if any, and the financial
viability of the insurers; and (iii) the success others have had
in receiving reimbursement for similar costs under similar
policies issued during the periods applicable to each site.
FOREIGN SALES
Ninety-three percent (93%) of the sales of the Corporation
are made to customers located in the United States. In 1994, the
Corporation continued its efforts to develop international
markets for its products and foreign sales (including sales for
export).
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ITEM 2. PROPERTIES
The Corporation occupies approximately 4.6 million square
feet of space throughout the United States, Canada, and Great
Britain, distributed as follows:
<TABLE>
SEGMENT SQUARE FEET (in thousands)
<S> <C>
Diversified Technologies 2,105
Distribution 2,412
Corporate Headquarters 40
</TABLE>
Diversified Technologies principal facilities are located in
Arizona, Colorado, Connecticut, Florida, Massachusetts,
Pennsylvania and Virginia; other facilities including offices and
smaller manufacturing and assembly operations are located in
several other states. These facilities are used for
manufacturing, scientific research and development, engineering
and office purposes. The U.S. Government owns 154 thousand
square feet of the space occupied by Kaman Aerospace Corporation
in Bloomfield, Connecticut in accordance with a facility
contract. In 1994 the Corporation purchased an 80 thousand
square foot office building in Colorado Springs, Colorado, for
use by its subsidiary, Kaman Sciences Corporation.
The Distribution segment occupies approximately 2.1 million
square feet of space throughout the United States with principal
facilities located in California, Connecticut, New York, Texas
and Utah; approximately 100 thousand square feet of space in
British Columbia, Canada; approximately 40 thousand square feet
of space in Ontario, Canada; and approximately 150 thousand
square feet of space in Essex, England. These facilities consist
principally of regional distribution centers, service centers
and office space with a portion used for fabrication and assembly
work. Also included are facilities used for manufacturing
musical instruments, and facilities leased in Florida for
aviation services operations.
Kaman Corporation occupies a 40 thousand square foot
Corporate headquarters building in Bloomfield, Connecticut.
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The Corporation's facilities are suitable and adequate to
serve its purposes. While substantially all of such properties
are currently fully utilized, the Corporation consolidated some
of its properties in the Diversified Technologies segment during
1994 and expects to consolidate further in the next few years.
Many of the properties, especially within the Distribution
segment, are leased and certain of the Corporation's properties
are subject to mortgages.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the
Corporation or any of its subsidiaries is a party or to which any
of their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security
holders during the fourth quarter of 1994.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
CAPITAL STOCK AND PAID-IN CAPITAL
Information required by this item appears in the
Corporation's 1994 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference.
DIVIDEND REINVESTMENT PLAN
Registered shareholders of Kaman Class A common stock are
eligible to participate in the Automatic Dividend Reinvestment
Program. A booklet describing the plan may be obtained by
writing to the Corporation's transfer agent, Chemical Bank,
Securityholder Relations, J.A.F. Building, P. O. Box 3068, New
York, NY 10116-3068.
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<TABLE>
QUARTERLY CLASS A COMMON STOCK INFORMATION
- -----------------------------------------------------------------
High Low Close Dividend
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
1994
First $10 3/8 $9 $ 9 5/8 $.11
Second 10 1/8 8 7/8 9 1/8 $.11
Third 10 1/8 8 1/2 9 5/8 $.11
Fourth 11 1/8 9 1/8 11 $.11
- -----------------------------------------------------------------
1993
First $12 1/8 $9 1/2 $11 1/4 $.11
Second 11 3/4 9 7/8 10 3/4 $.11
Third 11 1/2 9 1/2 10 $.11
Fourth 10 1/8 8 5/8 10 1/8 $.11
- -----------------------------------------------------------------
QUARTERLY DEBENTURE INFORMATION (6% Conv. Subordinated)(Bid)
- -----------------------------------------------------------------
High Low Close
- -----------------------------------------------------------------
<S> <C> <C> <C>
1994
First $85 $83 $83
Second 83 76 76
Third 76 74 74
Fourth 74 71 74
- -----------------------------------------------------------------
1993
First $88 1/2 $77 $88 1/2
Second 88 1/2 85 85
Third 89 1/2 83 1/2 89 1/4
Fourth 89 3/4 84 3/4 85
- -----------------------------------------------------------------
QUARTERLY DEPOSITARY SHARES INFORMATION
- -----------------------------------------------------------------
High Low Close Dividend
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
1994
First $52 $50 1/2 $50 3/4 $.81 1/4
Second 51 42 1/2 42 1/2 $.81 1/4
Third 46 40 3/4 43 5/8 $.81 1/4
Fourth 48 42 3/4 46 3/4 $.81 1/4
- -----------------------------------------------------------------
</TABLE>
Kaman's Depositary Shares (each representing a one-quarter
interest in a share of its Series 2 preferred stock, $200
liquidation preference) were issued in October 1993, and traded
in a range between 48 and 51 1/2, closing 1993 at 51 1/2.
NASDAQ market quotations reflect inter-dealer prices,
without retail mark-up, mark-down, or commission and may not
necessarily represent actual transactions.
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ANNUAL MEETING
The Annual Meeting of Shareholders will be held on Tuesday,
April 18, 1995 at 11:00 a.m. in the offices of the Corporation,
1332 Blue Hills Avenue, Bloomfield, Connecticut 06002.
ITEM 6. SELECTED FINANCIAL DATA
Information required by this item appears in the
Corporation's 1994 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Information required by this item appears in the
Corporation's 1994 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required by this item appears in the
Corporation's 1994 Annual Report to Shareholders and is included
in Exhibit 13 to this Form 10-K, and is incorporated herein by
reference. Additional financial information is contained in the
Financial Data Schedule included as Exhibit 27 to this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Following is information concerning each Director and
Executive Officer of Kaman Corporation including name, age,
position with the Corporation, and business experience during the
last five years:
T. Jack Cahill Mr. Cahill, 46, has held various
positions with Kaman Industrial
Technologies Corporation, a subsidiary
of the Corporation, since 1975. He was
appointed President of Kaman Industrial
Technologies in 1993.
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E. Reeves Callaway, II Mr. Callaway, 47, is a Director Nominee
for election at the Corporation's 1995
Annual Meeting of Shareholders. He is
President of The Callaway Companies,
Inc.
Frank C. Carlucci Mr. Carlucci, 64, has been a Director
since 1989. He is Chairman of The
Carlyle Group, merchant bankers, having
formerly served as Vice Chairman since
1989. Prior to that he served as U.S.
Secretary of Defense. Mr. Carlucci is
also a Director of Westinghouse Electric
Corporation, Ashland Oil, Inc., Bell
Atlantic Corporation, General Dynamics
Corporation, Neurogen Corporation,
Northern Telecom Limited, Quaker Oats
Company, The Upjohn Company, Sun
Resorts, Inc., and Texas Biotechnology
Corporation.
William P. Desautelle Mr. Desautelle, 55, has been Senior Vice
President and Treasurer since 1990 and
was also designated Chief Investment
Officer in April 1992. Prior to that he
had served as Vice President and
Treasurer.
John A. DiBiaggio Dr. DiBiaggio, 62, has been a Director
since 1984. He is President and Chief
Executive Officer of Tufts University.
Prior to that he was President and Chief
Executive Officer of Michigan State
University.
Edythe J. Gaines Dr. Gaines, 72, has been a Director
since 1982. She is a retired
Commissioner of the Public Utility
Control Authority of the State of
Connecticut.
Robert M. Garneau Mr. Garneau, 50, has been Senior Vice
President and Controller since 1990 and
was also designated Chief Financial
Officer in April, 1992. Prior to that he
had served as Vice President and
Controller.
Huntington Hardisty Admiral Hardisty (USN-Ret.), 65, has
been a Director since 1991. He retired
from the U.S. Navy in 1991 having served
as Commander-in-Chief for the U.S. Navy
Pacific Command since 1988, and
presently acts as a consultant to
private industry.
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Charles H. Kaman Mr. Kaman, 75, has been Chief Executive
Officer and Chairman of the Board of
Directors since 1945. He was also
President from 1945 to 1990.
C. William Kaman II Mr. Kaman, 43, has been a Director
since 1992. He has held various
positions with Kaman Music Corporation,
a subsidiary of the Corporation, since
1974, serving as President of Kaman
Music since 1986. Mr. Kaman is the son
of Charles H. Kaman, Chairman and Chief
Executive Officer of the Corporation.
Walter R. Kozlow Mr. Kozlow, 59, has held various
positions with Kaman Aerospace
Corporation, a subsidiary of the
Corporation, since 1960. He has been
President of Kaman Aerospace since 1986.
Hartzel Z. Lebed Mr. Lebed, 67, has been a Director since
1982. He is the retired President of
CIGNA Corporation and is a Director of
Shawmut National Trust Company.
Harvey S. Levenson Mr. Levenson, 54, has been a Director
since 1989. He has been President
and Chief Operating Officer since April,
1990. Prior to that he had served as
Senior Vice President and Chief
Financial Officer. He is also a
director of Connecticut Natural Gas
Corporation and Security-Connecticut
Corporation.
Walter H. Monteith, Jr. Mr. Monteith, 64, has been a Director
since 1987. He is the retired Chairman
of Southern New England Telecommuni-
cations Corporation. Mr. Monteith is
also a director of Shawmut Bank.
John S. Murtha Mr. Murtha, 81, has been a Director
since 1948. He is counsel to and a
former senior partner of the law firm of
Murtha, Cullina, Richter and Pinney.
Page 15
<PAGE>
<PAGE>
Robert L. Newell Mr. Newell, 72, has been a Director
since 1976. He is the retired Chairman
of Hartford National Corporation, now
a part of Shawmut Bank.
Patrick L. Renehan Mr. Renehan, 61, has been a Vice
President of Kaman Diversified
Technologies Corporation, a subsidiary
of the Corporation, since 1987. Prior to
that he served as a Vice President of
Kaman Aerospace Corporation.
Wanda L. Rogers Mrs. Rogers, 62, has been a Director
since 1991. She is Chief Executive
Officer of Rogers Helicopters, Inc.
She is also Chairman of the Board of
Clovis Community Bank.
Richard E.W. Smith Mr. Smith, 60, was appointed a Vice
President of the Corporation in 1989.
He has been President of Kaman
Diversified Technologies Corporation,
a subsidiary of the Corporation, since
1990 and prior to that he served as Vice
President of Kaman Sciences Corporation,
a subsidiary of the Corporation.
Each Director and Executive Officer has been elected for a
term of one year and until his or her successor is elected. The
terms of all such Directors and Executive Officers are expected
to expire as of the Annual Meeting of the Shareholders and
Directors of the Corporation to be held on April 18, 1995.
ITEM 11. EXECUTIVE COMPENSATION
A) GENERAL. The following tables provide certain information
relating to the compensation of the Corporation's Chief Executive
Officer, its four other most highly compensated executive
officers and its directors.
Page 16
<PAGE>
<PAGE>
B) SUMMARY COMPENSATION TABLE.
<TABLE>
Annual Compensation Long Term Compensation
------------------- ----------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All
Name and Other AWARDS Other
Principal Salary Bonus Annual RSA Options LTIP Comp.
Position Year ($) ($) Comp. ($)(1)(#Shares)Payments ($)(2)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C. H. Kaman 1994 660,000 ------- ------ ------ ------ --- 55,261
Chairman and 1993 660,000 218,000 73,004(3) ------ ------ --- 69,768
Chief 1992 660,000 290,000 ------ ------ ------ --- 57,956
Executive
Officer
H.S.Levenson 1994 400,000 ------- ------ ------ ------ --- 10,743
President 1993 400,000 108,000 ------ 38,000 12,000 --- 18,603
and Chief 1992 400,000 144,000 ------ 49,375 ------ --- 10,664
Operating
Officer
W.R.Kozlow 1994 216,000 60,000 ------ ------ ------ --- 8,636
President, 1993 216,000 50,000 ------ 28,500 9,000 --- 10,446
Kaman 1992 210,000 60,000 ------ 29,625 ------ --- 6,271
Aerospace
Corporation
R.M.Garneau 1994 200,000 60,000 ------ ------ ------ --- 4,845
Senior Vice 1993 190,000 45,000 ------ 28,500 9,000 --- 5,931
President 1992 172,000 50,000 ------ 29,625 ------ --- 4,761
and Chief
Financial
Officer
P.L.Renehan 1994 210,000 45,000 ------ ------ ------ --- 8,214
Vice 1993 205,000 40,000 ------ 28,500 9,000 --- 8,799
President 1992 198,000 50,000 ------ 24,688 ------ --- 6,479
Kaman
Diversified
Technologies
Corporation
</TABLE>
Page 17
<PAGE>
<PAGE>
1. As of December 31, 1994, aggregate restricted stock holdings
and their year end values were: C.H. Kaman, none; H.S. Levenson,
18,200 shares valued at $200,200; W.R. Kozlow, 6,000 shares
valued at $66,000; R.M.Garneau, 6,000 shares valued at $66,000;
P.L. Renehan, 5,400 shares valued at $59,400. Restrictions lapse
at the rate of 20% per year for all awards, beginning one year
after the grant date. Awards reported in this column are as
follows: H.S. Levenson, 4,000 shares in 1993 and 5,000 shares in
1992; W.R. Kozlow, 3,000 shares each in 1993, and 1992; R. M.
Garneau, 3,000 shares each in 1993 and 1992; P. L. Renehan, 3,000
shares in 1993, and 2,500 shares in 1992. Dividends are paid on
the restricted stock.
2. Amounts reported in this column consist of: C. H. Kaman,
$53,000 - Officer 162 Insurance Program, $2,261 - medical expense
reimbursement program ("MERP"); H.S. Levenson, $3,322 - Senior
executive life insurance program ("Executive Life"), $4,524 -
Officer 162 Insurance Program, $1,875 - employer matching
contributions to the Kaman Corporation Thrift and Retirement Plan
(the "Thrift Plan employer match"), $1,022 - MERP; W. R. Kozlow,
$4,131 - Executive Life, $1,875 - Thrift Plan employer match,
$1,238 - MERP; $1,392 - Discretionary cash-out of certain stock
options under Stock Incentive Plan; R. M. Garneau, $1,654 -
Executive Life, $851 - Officer 162 Insurance Program, $1,875 -
Thrift Plan employer match, $465 - MERP; P. L. Renehan, $5,219 -
Executive Life, $1,875 - Thrift Plan employer match, $1,120 -
MERP.
3. The Corporation maintains a program pursuant to which it pays
for tax and estate planning services provided to executive
officers by third parties, up to certain limits. $62,164 of the
figure reported in this column relates to payments for such
services on behalf of Mr. Kaman.
Page 18
<PAGE>
<PAGE>
C) OPTION/SAR GRANTS IN THE LAST FISCAL YEAR:
<TABLE>
- ---------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
- ---------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options/
SARs
Options/ Granted to
SARs Employees Exercise or
Granted in Fiscal Base Price Expiration
Name (#) Year ($/Sh) Date 5%($) 10%($)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. H. Kaman none --- --- --- --- ---
H.S. Levenson none --- --- --- --- ---
W. R. Kozlow none --- --- --- --- ---
R. M. Garneau none --- --- --- --- ---
P. L. Renehan none --- --- --- --- ---
</TABLE>
D) AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR, AND
FISCAL YEAR-END OPTION/SAR VALUES.
<TABLE>
- -------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised in-the-money
options/SARs options/SARs
at FY-end (#) at FY-end ($)
Shares
acquired on Value exercisable/ exercisable/
Name Exercise(#) realized unexercisable unexercisable
(a) (b) (c) (d) (e)
- -------------------------------------------------------------------
<S> <C> <C> <C> <C>
C. H. Kaman None --- 45,000/-0- 143,125/0
H. S. Levenson None --- 29,400/12,800 89,400/24,600
W. R. Kozlow None --- 18,400/9,000 52,150/16,500
R. M. Garneau None --- 11,600/9,000 34,000/16,500
P. L. Renehan None --- 11,700/8,700 34,200/15,500
</TABLE>
Page 19
<PAGE>
<PAGE>
E) LONG TERM INCENTIVE PLAN AWARDS: No long term incentive plan
awards were made to any named executive officer in the last
fiscal year.
F) PENSION AND OTHER DEFINED BENEFIT DISCLOSURE. The following
table shows estimated annual benefits payable at normal
retirement age to participants in the Corporation's Pension Plan
at various compensation and years of service levels using the
benefit formula applicable to Kaman Corporation. Pension
benefits are calculated based on 60 percent of the average of the
highest five consecutive years of "covered compensation" out of
the final ten years of employment less 50 percent of the primary
social security benefit, reduced proportionately for years of
service less than 30 years:
<TABLE>
PENSION PLAN TABLE
Years of Service
Remuneration* 15 20 25 30 35
- -----------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
125,000 34,059 45,639 56,538 68,118 68,118
150,000 41,559 55,689 68,988 83,118 83,118
175,000 49,059 65,739 81,438 98,118 98,118
200,000 56,559 75,789 93,888 113,118 113,118
225,000 64,059 85,839 106,338 128,118 128,118
250,000 71,559 95,889 118,788 143,118 143,118
300,000 86,559 115,989 143,688 173,118 173,118
350,000 101,559 136,089 168,588 203,118 203,118
400,000 116,559 156,189 193,488 233,118 233,118
450,000 131,559 176,289 218,388 263,118 263,118
500,000 146,559 196,389 243,288 293,118 293,118
750,000 221,559 296,889 367,788 443,118 443,118
1,000,000 296,559 397,389 492,288 593,118 593,118
1,250,000 371,559 497,889 616,788 743,118 743,118
1,500,000 446,559 598,389 741,288 893,118 893,118
*Remuneration: Average of the highest five consecutive years of
"Covered Compensation" out of the final ten years of service.
</TABLE>
"Covered Compensation" means "W-2 earnings" or "base
earnings", if greater, as defined in the Pension Plan. W-2
earnings for pension purposes consist of salary (including 401(k)
and Section 125 Plan contributions but not deferrals under a
non-qualified Deferred Compensation Plan), bonus and taxable
income attributable to restricted stock awards. Salary and bonus
amounts for the named Executive Officers for 1994 are as shown on
Page 20
<PAGE>
<PAGE>
the Summary Compensation Table. Compensation deferred under the
Corporation's non-qualified deferred compensation plan is
included in Covered Compensation here because it is covered by
the Corporation's unfunded supplemental employees' retirement
plan for the participants in that plan.
Current Compensation covered by the Pension Plan for any
named executive whose Covered Compensation differs by more than
10% from the compensation disclosed for that executive in the
Summary Compensation Table: Mr. Levenson, $543,618; Mr. Kozlow,
$250,185; Mr. Garneau, $230,034; Mr. Renehan, $238,682.
Federal law imposes certain limitations on annual pension
benefits under the Pension Plan. For the named executive
officers, the excess will be paid under the Corporation's
unfunded supplemental employees' retirement plan.
The Executive Officers named in Item 11(b) are participants
in the plan and as of January 1, 1995, had the number of years of
credited service indicated: Mr. Kaman - 49 years; Mr. Levenson -
12 years; Mr. Kozlow - 35 years; Mr. Garneau - 13 years; and Mr.
Renehan - 11 years.
Benefits are computed generally in accordance with the
benefit formula described above.
G) COMPENSATION OF DIRECTORS. Non-officer members of the Board
of Directors of the Corporation receive an annual retainer of
$14,000 and a fee of $750 for attending each meeting of the Board
and each meeting of a Committee of the Board, except that the
Chairman of the Audit Committee receives $850 for attending each
meeting of that Committee. These fees may be received on a
deferred basis.
H) EMPLOYMENT CONTRACTS AND TERMINATION, SEVERANCE AND CHANGE
OF CONTROL ARRANGEMENTS. Except as described in connection with
the Corporation's Pension Plan and the Corporation's non-
qualified Deferred Compensation Plan, the Corporation has no
employment contract, plan or arrangement with respect to any
named executive which relates to employment termination for any
reason, including resignation, retirement or otherwise, or a
change in control of the Corporation or a change in any such
executive officer's responsibilities following a change of
control, which exceeds or could exceed $100,000.
I) Not Applicable.
J) COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS.
Page 21
<PAGE>
<PAGE>
1) The following persons served as members of the Personnel
and Compensation Committee of the Corporation's Board of
Directors during the last fiscal year: Dr. Gaines, Mr. Carlucci,
Mr. Murtha, Mr. Newell and Mr. Monteith. None of these
individuals was an officer or employee of the Corporation or any
of its subsidiaries during the last fiscal year. Mr. Murtha was
Secretary of the Corporation in years prior to April 1989 and his
relationship with the Corporation is further disclosed in Item 13
of this report.
2) During the last fiscal year no executive officer of the
Corporation served as a director of or as a member of the
compensation committee (or other board committee performing
equivalent functions) of another entity, one of whose executive
officers served as a director of, or on the Personnel and
Compensation Committee of the Corporation.
K) Not Applicable.
L) Not Applicable.
Page 22
<PAGE>
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
Following is information about persons known to the Corporation
to be beneficial owners of more than five percent (5%) of the
Corporation's voting securities. Ownership is direct unless
otherwise noted.
<TABLE>
- -----------------------------------------------------------------
Class of Number of Shares
Common Name and Address Owned as of
Percentage
Stock Beneficial Owner February 1, 1995 of Class
- -----------------------------------------------------------------
<S> <C> <C> <C>
Class B Charles H. Kaman 258,375(1) 38.69%
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002
Class B Newgate Associates, Ltd. 199,802 29.91%
c/o John T. Del Negro
CityPlace I
185 Asylum Street
Hartford, CT 06103
Class B Robert D. Moses 48,729(2) 7.30%
Farmington Woods
Avon, CT 06001
Class B Glenn M. Messemer 33,500 5.02%
Kaman Corporation
Blue Hills Avenue
Bloomfield, CT 06002
(1) Excludes 1,471 shares held by Mrs. Kaman. Excludes
199,802 shares reported separately above and held by
Newgate Associates Limited Partnership, a limited
partnership in which Mr. Kaman serves as general
partner.
(2) Includes 15,192 shares held by Mr. Moses and
33,537 shares held by Paulson and Company as follows:
11,481 shares for the benefit of Mr. Moses, and
22,056 shares held for a partnership controlled by Mr.
Moses.
</TABLE>
Page 23
<PAGE>
<PAGE>
(b) SECURITY OWNERSHIP OF MANAGEMENT. The following is
information concerning beneficial ownership of the Corporation's stock by
each Director of the Corporation, each Executive Officer of the Corporation
named in the Summary Compensation Table, and all Directors and Executive
Officers of the Corporation as a group. Ownership is direct unless
otherwise noted.
<TABLE>
Class of Number of Shares Owned Percentage
Name Common Stock as of February 1, 1995 of Class
- --------------------------------------------------------------------
<S> <C> <C> <C>
Frank C. Carlucci Class A 3,000(1) *
John A. DiBiaggio -- -- --
Edythe J. Gaines Class A 1,983 *
Robert M. Garneau Class A 29,608(2) *
Class B 2,160 *
Huntington Hardisty -- -- --
Charles H. Kaman Class A 383,040(3) 2.18%
Class B 258,375(4) 38.69%
C. William Kaman, II Class A 105,414(5) *
Class B 7,567(6) 1.13%
Walter R. Kozlow Class A 51,696(7) *
Class B 296 *
Hartzel Z. Lebed Class A 7,355(8) *
Harvey S. Levenson Class A 76,300(9) *
Class B 19,500(10) 2.92%
Walter H. Monteith, Jr. Class A 200 *
John S. Murtha Class A 48,618(11) *
Class B 432 *
Robert L. Newell Class A 2,880 *
Patrick L. Renehan Class A 33,552(12) *
Wanda L. Rogers Class A 1,000 --
All Directors and Class A 799,337(13) 4.56%
Executive Officers
as a group ** Class B 300,273 44.96%
</TABLE>
Page 24
<PAGE>
<PAGE>
(1) Held jointly with Mrs. Carlucci.
(2) Includes 11,600 shares subject to exercisable portion of
stock options.
(3) Excludes the following: 24,132 shares held by Mrs. Kaman;
7,796 shares held by Fidelco Guide Dog Foundation, Inc., a
charitable foundation of which Mr. Kaman is President and
Director, in which shares Mr. Kaman disclaims beneficial
ownership; 184,434 shares held by Newgate Associates
Limited Partnership, a limited partnership of which Mr.
Kaman is the general partner; and 60,000 shares held by
the Charles H. Kaman Charitable Foundation, a private
charitable foundation. Included are 45,000 shares subject
to exercisable portion of stock options.
(4) Excludes the following: 1,471 shares held by Mrs. Kaman and
199,802 shares held by Newgate Associates Limited
Partnership, a limited partnership of which Mr. Kaman is the
general partner.
(5) Includes 13,000 shares subject to exercisable portion of
stock options; and excludes 73,190 shares held by Mr. Kaman
as Trustee, in which shares Mr. Kaman disclaims any
beneficial ownership.
(6) Excludes 4,800 shares held by Mr. Kaman as Trustee in which
shares Mr. Kaman disclaims any beneficial ownership.
(7) Includes 18,400 shares subject to exercisable portion of
stock options.
(8) Includes 7,330 shares held jointly with Mrs. Lebed, excludes
480 shares held by Mrs. Lebed.
(9) Includes 2,400 shares subject to exercisable portion of
stock options.
(10)Excludes 500 shares held by Mrs. Levenson.
(11)Held by Fleet National Bank pursuant to a revocable trust.
Excludes 7,980 shares held by Fleet National Bank pursuant
to a revocable trust for the benefit of Mrs. Murtha.
(12)Includes 11,700 shares subject to exercisable portion of
stock options; and includes 1,275 shares held jointly with
Mrs. Renehan.
(13)Includes 131,300 shares subject to exercisable portion of
stock options.
* Less than one percent.
** Excludes 24,612 Class A shares and 1,971 Class B shares held
by spouses of certain Directors and Executive Officers.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1994, the Corporation obtained legal services from the
Hartford, Connecticut law firm of Murtha, Cullina, Richter and Pinney of
which Mr. Murtha, a Director of the Corporation, is counsel. Also
during 1994, the Corporation obtained design and promotional services in
the amount of $78,344.50 from Steven W. Kaman and Polykonn Corporation,
a corporation controlled by him. Steven W. Kaman is the son of Charles
H. Kaman, Chairman and Chief Executive Officer of the Corporation.
Page 25
<PAGE>
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) FINANCIAL STATEMENTS.
See Item 8 concerning financial statements appearing as
Exhibit 13 to this Report and concerning the Financial Data
Schedule appearing as Exhibit 27 to this Report.
(a)(2) FINANCIAL STATEMENT SCHEDULES.
An index to the financial statement schedules immediately
precedes such schedules.
(a)(3) EXHIBITS.
An index to the exhibits filed or incorporated by reference
immediately precedes such exhibits.
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the last quarter of
the year ended December 31, 1994, which year is covered by
this report.
Page 26
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Bloomfield, State of Connecticut, on this
3rd day of March, 1995.
KAMAN CORPORATION
(Registrant)
By Charles H. Kaman, Chairman
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature: Title: Date:
- --------------------------------------------------------------------
Charles H. Kaman Chairman, Chief Executive March 8, 1995
Officer and Director
(Chief Executive Officer)
Harvey S. Levenson President and Director March 8, 1995
(Chief Operating Officer)
Robert M. Garneau Senior Vice President March 8, 1995
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Harvey S. Levenson March 8, 1995
Attorney-in-Fact for:
Frank C. Carlucci Director
John A. DiBiaggio Director
Edythe J. Gaines Director
Huntington Hardisty Director
C. William Kaman, II Director
Hartzel Z. Lebed Director
Walter H. Monteith, Jr. Director
John S. Murtha Director
Robert L. Newell Director
Wanda L. Rogers Director
Page 27
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
Index to Financial Statement Schedules
Report of Independent Auditors
Financial Statement Schedules:
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
Schedule X - Supplemental Income Statement Information
Page 28
<PAGE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Certified Public Accountants
CityPlace II
Hartford, Connecticut 06103
The Board of Directors and Shareholders
Kaman Corporation:
Under date of January 25, 1995, we reported on the consolidated
balance sheets of Kaman Corporation and subsidiaries as of
December 31, 1994 and 1993 and the related consolidated
statements of earnings, changes in shareholders' equity and cash
flows for each of the years in the three-year period ended
December 31, 1994, as contained in the 1994 annual report to
shareholders. These consolidated financial statements and our
report thereon are included in the annual report on Form 10-K for
1994. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related
financial statement schedules as listed in the accompanying
index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statement schedules
based on our audits.
In our opinion, such schedules, when considered in relation to
the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set
forth therein.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
January 25, 1995
Page 29
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)
<TABLE>
YEAR ENDED DECEMBER 31, 1992
Additions
---------
BALANCE CHARGED TO BALANCE
JANUARY 1, COSTS AND DECEMBER 31,
DESCRIPTION 1992 EXPENSES OTHERS DEDUCTIONS 1992
<S> <C> <C> <C> <C> <C>
Allowance for
doubtful
accounts $1,198 $1,076 $----- $1,040(A) $1,234
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $7,465 $1,265 $----- $----- $8,730
====== ====== ====== ====== ======
YEAR ENDED DECEMBER 31, 1993
Additions
---------
BALANCE CHARGED TO BALANCE
JANUARY 1, COSTS AND DECEMBER 31,
DESCRIPTION 1993 EXPENSES OTHERS DEDUCTIONS 1993
Allowance for
doubtful
accounts $1,234 $1,141 $----- $ 799(A) $1,576
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $8,730 $1,268 $----- $----- $9,998
====== ====== ====== ====== ======
YEAR ENDED DECEMBER 31, 1994
Additions
---------
BALANCE CHARGED TO BALANCE
JANUARY 1, COSTS AND DECEMBER 31,
DESCRIPTION 1994 EXPENSES OTHERS DEDUCTIONS 1994
Allowance for
doubtful
accounts $1,576 $1,198 $----- $1,109(A) $1,665
====== ====== ====== ====== ======
Accumulated
amortization
of goodwill $9,998 $1,318 $----- $7,772(B) $3,544
====== ====== ====== ====== ======
</TABLE>
(A) Write-off of bad debts, net of recoveries
(B) Write-off of accumulated amortization of goodwill related to the
write-down of goodwill in Raymond Engineering Inc.
Page 30
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
SCHEDULE IX -- SHORT-TERM BORROWINGS
(Dollars in Thousands)
<TABLE>
YEAR ENDED DECEMBER 31, 1992
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1992 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C>
Notes Payable
- -- Bank $7,668 5.0% $34,857 $16,734 4.4%
======== ======== ======= ======= ====
YEAR ENDED DECEMBER 31, 1993
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1993 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $31,161 3.6% $62,880 $43,158 3.5%
======== ======== ======= ======= ====
YEAR ENDED DECEMBER 31, 1994
Maximum Average Weighted
Amount Amount Average
Category of Weighted Out- Out- Interest
Aggregate Balance Average standing standing Rate
Short-Term Dec. 31, Interest During the During the During
Borrowings 1994 Rate Year Year the Year
- ---------- -------- -------- ---------- ---------- --------
Notes Payable
- -- Bank $52,659 5.9% $81,053 $45,546 5.0%
======== ======== ======= ======= ====
</TABLE>
Page 31
<PAGE>
<PAGE>
KAMAN CORPORATION AND SUBSIDIARIES
Schedule X -- Supplemental Income Statement Information
(Dollars in Thousands)
<TABLE>
Charged to Costs
ITEM and Expenses
- ---- ----------------
Year Ended December 31, 1992
<S> <C>
Maintenance and repairs $ 9,041
=======
Year Ended December 31, 1993
Maintenance and repairs $ 8,650
=======
Year Ended December 31, 1994
Maintenance and repairs $10,482
=======
</TABLE>
Depreciation and amortization of intangible assets, preoperating
costs and similar deferrals; taxes, other than payroll and income
taxes; royalties and advertising costs were not included above
since they were not of a significant amount.
Page 32
<PAGE>
<PAGE>
KAMAN CORPORATION
INDEX TO EXHIBITS
Exhibit 3a The Amended and Restated by reference
Certificate of Incorporation
of the Corporation, as amended,
including the form of amendment
designating the Corporation's
Series 2 Preferred Stock has been
filed as Exhibits 2.1 and 2.2 to the
Corporation's Form 8-A (Document
No. 0-1093 filed on September 27, 1993),
and is incorporated in this report
by reference.
Exhibit 3b The By-Laws of the Corporation by reference
were filed as Exhibit 3(b) to
the Corporation's Annual Report
on Form 10-K for 1990 (Document
No. 0-1093, filed with the
Securities and Exchange Commission
on March 14, 1991).
Exhibit 4a Indenture between the Corporation by reference
and Manufacturers Hanover Trust
Company, as Indenture Trustee,
with respect to the
Corporation's 6% Convertible
Subordinated Debentures, has
been filed as Exhibit 4.1 to
Registration Statement No. 33 -
11599 on Form S-2 of the
Corporation filed with the
Securities and Exchange
Commission on January 29, 1987
and is incorporated in this
report by reference.
Page 33
<PAGE>
<PAGE>
Exhibit 4b The Revolving Credit Agreement by reference
between the Corporation and The
Shawmut Bank Connecticut, as
agent, dated as of July 15, 1994
was previously filed as an Exhibit
to the Corporation's Quarterly
Report on Form 10-Q for the period
ending June 30, 1994 (Document
No. 0-1093 filed with the Securities
and Exchange Commission on August 11,
1994) and is incorporated in this
report by reference.
Exhibit 4c The Revolving Credit Agreement by reference
between the Corporation and The
Bank of Nova Scotia, as agent,
dated as of July 15, 1994
has been filed as an Exhibit
to Form 10-Q filed for
the quarter ended June 30,
1994 (Document No. 0-1093 filed
with the Securities and Exchange
Commission on August 11, 1994)and
is incorporated in this report by
reference.
Exhibit 4d Deposit Agreement dated as of by reference
October 15, 1993 between the
Corporation and Chemical Bank as
Depositary and Holder of Depositary
Shares has been filed as
Exhibit (c)(1) to Schedule 13E-4
(Document No. 5-34114 filed with the
Securities and Exchange Commission
on September 15, 1993) and is
incorporated in this report by
reference.
Exhibit 4e The Corporation is party to certain by reference
long-term debt obligations, such
as real estate mortgages, copies
of which it agrees to furnish to
the Commission upon request.
Page 34
<PAGE>
<PAGE>
Exhibit 10a The 1983 Stock Incentive Plan by reference
(formerly known as the 1983
Stock Option Plan) has been
filed as Exhibit 10b(iii) to the
Corporation's Annual Report on
Form 10-K for 1988 (Document No.
0-1093 filed with the Securities
and Exchange Commission on
March 22, 1989) and is incorporated
in this report by reference.
Exhibit 10b The Kaman Corporation 1993 Stock by reference
Incentive Plan has been filed as
Exhibit 10(b) to the Corporation's
Annual Report on Form 10-K for 1993
(Document No. 0-1093 filed with the
Securities and Exchange Commission on
March 11, 1994) and is incorporated
herein by reference.
Exhibit 10c The Kaman Corporation Employees by reference
Stock Purchase Plan as amended has
been filed as Exhibit 10(c) to the
Corporation's Annual Report on Form 10-K
for 1993 (Document No. 0-1093 filed with
the Securities and Exchange Commission on
March 11, 1994) and is incorporated
herein by reference.
Exhibit 11 Statement regarding computation Attached
of per share earnings.
Exhibit 13 Portions of the Corporation's Attached
1994 Annual Report to
Shareholders as required by
Item 8.
Exhibit 21 Subsidiaries. Attached
Exhibit 23 Consent of Independent Auditors. Attached
Exhibit 24 Power of attorney under which Attached
this report has been signed on
behalf of certain directors.
Exhibit 27 Financial Data Schedule Attached
Page 35
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 11
KAMAN CORPORATION AND SUBSIDIARIES
EARNINGS PER COMMON SHARE COMPUTATION
(In Thousands Except Per Share Amounts)
<TABLE>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Primary:
Net earnings (loss) applicable
to common stock $(16,897) $(29,497) $17,376
======== ======= =======
Weighted average number of common
shares outstanding 18,175 18,133 18,172
Weighted average shares issuable on
exercise of dilutive stock options * * 111
------- ------- -------
Total 18,175 18,133 18,283
======= ======= =======
Net earnings (loss) per
common share-primary $ (.93) $ (1.63) $ .95
======= ======= =======
Fully diluted:
Net earnings(loss)applicable
to common stock $(16,897) $(29,497) $17,376
Elimination of interest expense on
6% subordinated convertible
debentures (net after taxes) * * 3,414
Elimination of preferred stock
dividend requirement * * ---
------- ------- ------
Net earnings(loss)(as adjusted) $(16,897) $(29,497) $20,790
======= ======= =======
Weighted average number of shares
outstanding including shares
issuable on stock option exercises 18,175 18,133 18,283
Shares issuable on conversion of 6%
subordinated convertible debentures * * 4,067
Shares issuable on conversion of
Series 2 preferred stock * * -
Additional shares using ending market
price instead of average market on
treasury method use of stock
option proceeds * * 16
------- ------- -------
Total 18,175 18,133 22,366
======= ======= =======
Net earnings (loss) per
common share-fully diluted $ ( .93) $ (1.63) $ .93
======= ======= =======
*Anti-dilutive and accordingly not included in the computation.
</TABLE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Revenues for 1994 were $820.8 million compared to $794.1 million
in 1993, and $784.7 million in 1992. During 1994, the
corporation's Distribution businesses benefitted from healthy
growth in the domestic economy, however it was another year in
which conditions in the defense market adversely affected the
corporation's overall performance. In the fourth quarter of 1994,
the corporation recorded a pre-tax charge of $44.0 million
representing a write-down of the corporation's investment in
Raymond Engineering, a Diversified Technologies subsidiary which
has now been merged into Kaman Aerospace, another Kaman
subsidiary.
Diversified Technologies segment revenues were down 9% in 1994,
and 5% in both 1993 and 1992. The defense portion of Diversified
Technologies' business (80% in 1994) has been affected for some
time now by shifts in U.S. defense planning and spending
priorities and federal budget constraints which continue to
result in declining defense expenditures. During 1994, another
aspect of change in defense market emphasis emerged.
Specifically, the federal government and the Department of
Defense appear to be undertaking a serious effort to implement
the concept of defense acquisition reform. This reform effort,
described in a 1994 Department of Defense paper, calls for the
Department to meet its needs, wherever possible, through the use
of commercially developed state-of-the-art technology products
and performance based procurement standards rather than
traditional military specifications ("mil spec") standards. In
part, this acquisition reform effort provides an avenue for
addressing certain inefficiencies of the mil spec process. In
many instances, mil spec has become overly bureaucratic, complex,
and time consuming, often resulting in needless expenditure of
taxpayer dollars. It is anticipated that, in time, acquisition
reform which emphasizes procurement of commercially developed
technology products can save money by shortening product
development time and avoiding costly delays and budget overruns,
consequences which are typical of many mil spec development
programs.
The trend toward defense acquisition of commercial products, and
management's expectation that defense spending will probably
continue to decline in future periods have influenced
management's assessment of the forecasted operations of Raymond
Engineering, a Kaman subsidiary which maintains several mil spec
type product lines. Management believes that these product lines
Page 1
<PAGE>
<PAGE>
are in need of varying levels of investment (some more
substantial than others) in order to be competitively positioned
in the technologically evolving marketplace. Management has
evaluated the long term prospects for these programs, and has
determined that it will undertake investment in further
development of products which demonstrate the most potential for
success in future periods, while forgoing investment in other
products which are unable to demonstrate such potential.
Therefore, Raymond Engineering's operations are being downsized
to focus on product areas which are expected to be most
successful and it has been merged into Kaman Aerospace, another
Kaman company, in order to achieve reduced overheads and
enhanced operational efficiency.
As a result, the corporation took a fourth quarter pre-tax charge
of $44.0 million to write-down its investment in Raymond
Engineering. Management's best estimate of Raymond Engineering's
forecasted future operations, including interest expense, is that
they do not support the recoverability of its goodwill balance
and a certain amount of facilities and equipment, which has
resulted in a write-down of approximately $25.5 million for
these items. In addition, inventories whose cost is not expected
to be recovered have been written down to estimated net
realizable value during the fourth quarter. The remainder of the
charge relates to personnel reductions and other expenses
associated with downsizing Raymond Engineering's business. The
majority of work force reductions involve management and
administrative staff whose functions are redundant to the merged
organization. Severance payments of approximately $2.5 million
are to be made in accordance with Raymond Engineering's written
severance pay policy and, in certain cases, individually
negotiated agreements. Other expenses include contract close-out
costs of $6.5 million and related expenses of $4.0 million which
will not benefit the continuing activities of the merged
organization.
Without regard to acquisition reform, management continues to
believe that advanced technology defense programs are likely to
fare better than other types of programs in a defense environment
which has shifted to greater emphasis on more cost effective
advanced technology "smart" weapons that are intended to limit
loss of life and unnecessary destruction of property. The
corporation has significant expertise in this area, having
performed a multitude of government contracts for advanced
technology programs over the years. Management believes that the
corporation is well positioned to compete in a defense
environment that emphasizes these types of products and systems,
as well as advanced technology services such as computer software
development, intelligence analysis, and research and development.
Even so, management recognizes that as the government continues
to focus on advanced technology programs in an environment where
overall defense expenditures are declining, competition for these
types of government contracts can be expected to increase.
Page 2
<PAGE>
<PAGE>
The shift in defense market emphasis to advanced technology
programs and defense spending reductions continue to foster an
environment in which military hardware programs remain more
vulnerable to risk of program termination, contract cancellation,
or lack of funding. The corporation has felt the effects of these
risks, principally with respect to its SH-2 helicopter. The
corporation finished its contract to retrofit certain SH-2Fs to
the SH-2G configuration in 1994. Management does not believe that
the U.S. Navy will presently have further requirements for
retrofits of this helicopter for its own use since the Navy is
reducing the size of its fleet. At the present time, there are
two squadrons of SH-2 helicopters (i.e., a total of sixteen
helicopters) serving in the Naval reserves and no helicopters in
active Naval service. The corporation expects to continue to
provide logistics and spare parts support for the SH-2, but at
lower levels than in the past. There is some potential that in
the event the Navy provides these retired ships to foreign
military services, an opportunity might exist for use of the SH-2
for those purposes. This potential is evidenced by the fact that
during 1994, the Egyptian government signed a letter of agreement
with the U.S. Navy for the acquisition of ten (10) SH-2G
helicopters. The corporation is in the process of negotiating
its contract with the U.S. Navy to perform the retrofit work
which is expected to have a value of $100 million over a three
(3) year period.
With respect to commercial work of the Diversified Technologies
segment, management has been successful in developing a variety
of markets. The corporation continues to perform work on a number
of commercial airframe manufacturing programs. However, the level
of commercial air travel and lack of profitability in the
domestic aircraft industry have caused a slowdown in aircraft
production rates which is continuing to affect the segment's
subcontract work. Although the corporation received a stop work
order late in 1993 with respect to its manufacture of thrust
reverser fixed structures for the GE CF6 engines, the corporation
was able to continue to perform that work for Martin Marietta in
1994.
An important achievement in the segment's commercial
diversification is the K-MAX (Registered Trademark) helicopter, a
medium to heavy lift 'aerial truck' with operating
characteristics that distinguish it from other helicopters for
use in logging, fire fighting, reforestation, utility power line
work, and other applications. A substantial portion of the
corporation's research and development expenditures during the
last three years have been devoted to this product. The
helicopter received FAA Type Certification (Part 27) on August
30, 1994 and type approval by Transport Canada in November, 1994.
Receipt of other foreign type approvals is anticipated for 1995.
The first production lot of five (5) helicopters were completed
Page 3
<PAGE>
<PAGE>
and deliveries were made to initial customers prior to year end
under a special lease program that allows the corporation to
maintain active involvement in the product's introduction to the
marketplace. The next production lot is expected to consist of
six (6) helicopters for sale to strategically located customers
in the United States and abroad. Deliveries are already scheduled
for Canada and Switzerland. Management believes that this program
is an important part of the corporation's defense conversion
effort, however, sales and profitability will take some time to
achieve and in the shorter term the program is not expected to
materially offset the effects of reduced defense spending.
Distribution segment revenues increased by 13% in 1994, 7% in
1993, and 6% in 1992. Industrial Distribution sales (about 75% of
this segment's business in 1994) are made to nearly every sector
of U.S. industry so demand for its products tends to be
influenced by industrial production levels. Sales for 1994
benefitted from healthy domestic economic growth, although
revenue increases were even stronger than the general rate of
growth. Management believes that this increase is due, in part,
to initiatives undertaken to address the needs of customers that
desire to reduce their vendor base and expand "partnering"
relationships with suppliers. Industrial Distribution's efforts
include value added services in the advanced technology areas of
electrical and electronic systems, materials handling and
precision positioning systems. These measures, in combination
with enhanced operating efficiencies attained during the past few
years, resulted in increased market share for the industrial
distribution business in 1994. Music Distribution sales increased
significantly during 1994, largely as a result of further
development of international markets for the company's products.
The corporation had an operating loss of $8.8 million and a net
loss of $13.2 million for 1994, due to the fourth quarter pre-tax
charge. In 1993, the corporation had an operating loss of $37.2
million and a net loss of $28.8 million, due to the restructuring
charge of $69.5 million taken in the third quarter of that year.
The Diversified Technologies segment had an operating loss of
$17.2 million for 1994 compared to an operating loss of $41.3
million for 1993. The Distribution segment had operating income
of $19.6 million for 1994 compared to $16.5 million for 1993,
with the increase attributable largely to increased sales in the
Industrial Distribution business. These results also reflect the
fact that the overall mix of the corporation's activities is in
the process of shifting to businesses with somewhat lower profit
margins and an increase of 14.8% for Diversified Technologies
research and development expenditures in 1994.
The third quarter 1993 charge reflects restructuring and other
non-recurring costs in connection with the corporation's plan to
reduce the size of its defense and commercial aircraft
manufacturing business and implement defense conversion
Page 4
<PAGE>
<PAGE>
initiatives. About sixty percent (60%) of the charge represents
the write-off of costs incurred for development, retooling and
start-up for defense conversion initiatives, notably the K-MAX
helicopter. The balance relates to personnel and facility
reductions, contract close-out and related expenses associated
with downsizing the defense and commercial aircraft manufacturing
business. Implementation of the plan proceeded during 1994 and
will continue during 1995.
The corporation had an operating loss of $37.2 million and a net
loss of $28.8 million for 1993 compared to operating income of
$36.5 million and net earnings of $17.4 million for the year
ended December 31, 1992. Diversified Technologies had an
operating loss of $41.3 million for 1993 compared to an operating
profit of $31.0 million for the previous year. The Distribution
segment had operating profits of $16.5 million for 1993 compared
to $15.2 million for 1992. The Diversified Technologies segment
results were primarily attributable to the charge for
restructuring and other costs, reductions in defense spending,
research and development expenditures which increased by 3% for
1993 and 27% in 1992, and the ongoing shift in its business mix
to products and services with somewhat lower profit margins. The
Distribution segment's performance was primarily the result of
increased sales and internal initiatives to increase the
efficiency of operations.
The fully diluted earnings per share figure for 1994 and
1993 do not reflect the potential conversion of the 6%
convertible subordinated debentures, potential conversion of the
corporation's new Series 2 preferred stock (issued in the fourth
quarter of 1993) or the exercise of stock options, since their
effect was anti-dilutive. Fully diluted earnings per share
figures for 1992 include the potential conversion of the
debentures and exercises since they were dilutive.
Interest expense decreased 33% for 1994 compared to 1993 and was
relatively flat in 1993 compared to 1992. The corporation had
slightly higher average bank borrowings during 1994, however,
total debt and interest expense was significantly lower in 1994
as a result of the exchange of Series 2 preferred stock for the
majority of the outstanding 6% convertible subordinated
debentures during the fourth quarter of 1993. Interest expense in
1993 was also affected by the aforementioned exchange.
The corporation had other income in 1993 principally due to the
gain realized upon the exchange of the debentures.
The corporation recorded an income tax benefit on its loss before
income taxes at an overall rate of 7.1% for 1994, due primarily
to a state income tax refund. The fourth quarter 1994 charge
would have probably resulted in a higher income tax benefit,
except for the fact that a substantial portion of the goodwill
Page 5
<PAGE>
<PAGE>
balance is non-deductible. The corporation recorded an income tax
benefit of 28.9% for 1993 (due primarily to the 1993
restructuring charge), while the consolidated effective income
tax rate was 40.1% for 1992.
Effective January 1, 1993, the corporation adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income
Taxes. The cumulative effect of this change in accounting for
income taxes determined as of January 1, 1993 was immaterial to
the consolidated statements of earnings. On that date, the
corporation also adopted Statement of Financial Accounting
Standards No. 106 concerning rules for certain post-retirement
benefits. Retirees are generally responsible for the cost of
their post-retirement benefits, therefore, adoption of this
statement did not result in any material adjustment to or
disclosure in the consolidated financial statements. Finally, on
January 1, 1993, the corporation adopted Statement of Financial
Accounting Standards No. 112 concerning accounting for certain
post-employment benefits. Adoption of this statement did not
result in any material adjustment to or disclosure in the
consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
The corporation's cash flow from operations has generally been
sufficient to finance a significant portion of its working
capital and other capital requirements.
For general borrowing purposes, the corporation has maintained
revolving credit agreements involving several banks located in
the United States, Canada, and Europe. In July 1994, the
corporation entered into amended and restated revolving credit
agreements which replaced the previous agreements and increased
the corporation's maximum unsecured line of credit from $145
million to $200 million. The agreements each have a term of five
years and contain provisions permitting the term to be extended
for additional one-year periods upon concurrence of the parties.
The agreements also contain various covenants, including debt to
capitalization and consolidated net worth requirements. There
were no borrowings under these agreements during 1994 or 1993.
The corporation also maintains other short-term credit
arrangements with various banks. As of December 31, 1994, these
borrowings were at $52.7 million. For the year ended December 31,
1994, average bank borrowings against these short-term
arrangements were $45.5 million compared to $43.2 million for
1993.
In June, 1994, the corporation's board of directors authorized a
renewal ('the 1994 program') of the stock repurchase program
which was authorized in 1992 (`the 1992 program'). Under the 1994
program, the corporation may repurchase up to 700,000 Class A
Page 6
<PAGE>
<PAGE>
shares in addition to the shares remaining authorized under the
1992 program. As of December 31, 1994, a total of 188,000 Class A
shares had been repurchased pursuant to the 1994 program. The
primary purpose of the stock repurchase program is to meet the
needs of the Employees Stock Purchase Plan and Stock Incentive
Plan.
During the third quarter of 1993, the corporation made an offer
pursuant to which holders of its 6% convertible subordinated
debentures might exchange them for the corporation's newly
created Series 2 preferred stock. The purpose of the offer was to
increase the corporation's equity capital while reducing its
indebtedness. On October 22, 1993 the corporation issued $57.2
million of preferred stock (representing 285,837 shares of
preferred stock or 1,143,348 depositary shares) in exchange for
$61.8 million of debentures (66.73% of the amount actually
tendered). The preferred stock is convertible to Class A common
stock at a price of $12.56 per share and has a 6.5% cumulative
dividend rate. The corporation recorded a net gain of $3 million
as a result of the exchange. While the transaction was favorable
to the corporation from a debt to equity standpoint, it resulted
in further dilution of outstanding common stock in the event of
conversion of the preferred stock and some dilution of the
earnings that would otherwise be available for common
shareholders.
Management believes that the corporation's cash flow from
operations and available unused bank lines of credit under its
revolving credit agreements will be sufficient to finance its
working capital and other capital requirements for the
foreseeable future.
Page 7
<PAGE>
<PAGE>
SELECTED QUARTERLY FINANCIAL DATA
(In thousands except per share amounts)
<TABLE>
FIRST SECOND THIRD FOURTH TOTAL
QUARTER QUARTER QUARTER QUARTER YEAR
- ----------------------------------------------------------------
Net sales:
<S> <C> <C> <C> <C> <C>
1994...........$197,583 $208,625 $198,933 $214,041 $819,182
1993........... 197,598 194,553 202,488 197,871 792,510
Gross profit:
1994...........$ 52,351 $ 53,034 $ 52,183 $ 51,444 $209,012
1993........... 53,301 52,128 48,845 49,999 204,273
Net earnings (loss):
1994...........$ 4,240 $ 4,596 $ 4,901 $(26,918) $(13,181)
1993........... 4,012 4,779 (42,499) 4,913 (28,795)
Per common share--primary:
1994........... $.18 $.20 $.22 $(1.53) $(.93)
1993........... .22 .26 (2.36) .23 (1.63)
Per common share--fully diluted:
1994........... $.18 $.20 $.22 $(1.53) $(.93)
1993........... .22 .25 (2.36) .23 (1.63)
</TABLE>
Gross profit for 1994 and 1993 excludes the effect of
restructuring, impairment and other costs.
The conversion of the convertible subordinated debentures (and to
the extent applicable the Series 2 preferred stock) along with
the exercise of the stock options were not assumed in the net
loss per common share--primary and fully diluted calculations for
the fourth quarter of and year 1994 and third quarter of and year
1993 because they had an anti-dilutive effect. As a result, the
quarterly per common share amounts when added together do not
equal the total for the year 1993.
Page 8
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
Kaman Corporation and Subsidiaries
December 31, 1994 and 1993
(In thousands except share and per share amounts)
<TABLE>
1994 1993
- ---------------------------------------------------------------------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash.......................................... $ 3,711 $ 3,845
Accounts receivable........................... 146,411 165,615
Inventories................................... 160,224 130,451
Deferred income taxes......................... 21,041 11,929
Other current assets.......................... 7,625 4,761
- ---------------------------------------------------------------------
Total current assets....................... 339,012 316,601
- ---------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, NET............... 84,621 81,711
GOODWILL, NET.................................... 8,486 29,438
OTHER ASSETS..................................... 10,830 12,446
- ---------------------------------------------------------------------
$442,949 $440,196
=====================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable................................. $ 52,659 $ 31,161
Current portion of long-term debt............. 659 704
Accounts payable--trade....................... 54,561 51,246
Accrued salaries and wages.................... 9,609 6,338
Accrued vacations............................. 6,350 6,454
Accrued restructuring and other costs......... 27,650 32,500
Other accruals and payables................... 40,416 35,023
Income taxes payable.......................... 978 3,339
- ---------------------------------------------------------------------
Total current liabilities.................. 192,882 166,765
- ---------------------------------------------------------------------
</TABLE>
Page 9
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
Kaman Corporation and Subsidiaries
December 31, 1994 and 1993
(In thousands except share and per share amounts)
(continued)
<TABLE>
<S> <C> <C>
1994 1993
- --------------------------------------------------------------------------
DEFERRED CREDITS...................................... 8,880 7,141
LONG-TERM DEBT, EXCLUDING CURRENT PORTION............. 37,433 37,977
SHAREHOLDERS' EQUITY:
Capital stock, $1 par value per share:
Preferred stock, authorized 700,000 shares:
Series 2 preferred stock, 6-1/2% cumulative convertible
(stated at liquidation preference of $200 per share)
authorized 500,000 shares, issued 285,837 shares
in 1994 and 1993.................................. 57,167 57,167
Common stock:
Class A, authorized 48,500,000 shares, nonvoting;
$.10 per common share dividend preference; issued
17,600,381 shares in 1994 and 1993................ 17,600 17,600
Class B, authorized 1,500,000 shares, voting;
issued 667,814 shares in 1994 and 1993............ 668 668
Additional paid-in capital........................... 17,853 18,459
Retained earnings.................................... 112,592 137,490
Unamortized restricted stock awards.................. (744) (968)
Equity adjustment from foreign currency translation. (444) (158)
- --------------------------------------------------------------------------
204,692 230,258
Less 95,479 shares and 174,407 shares of Class A
common stock in 1994 and 1993, respectively,
held in treasury, at cost........................... (938) (1,945)
- --------------------------------------------------------------------------
Total shareholders' equity...................... 203,754 228,313
- --------------------------------------------------------------------------
$442,949 $440,196
==========================================================================
See accompanying notes to consolidated financial statements.
</TABLE>
Page 10
<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
Kaman Corporation and Subsidiaries
Years ended December 31, 1994, 1993 and 1992
(In thousands except per share amounts)
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- --------------------------------------------------------------------------
REVENUES:
Net sales...................................$819,182 $792,510 $782,850
Other....................................... 1,592 1,582 1,882
- --------------------------------------------------------------------------
820,774 794,092 784,732
- --------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of sales............................... 611,762 588,237 583,638
Selling, general and administrative expense. 173,853 173,581 164,603
Interest expense............................ 4,694 6,976 7,086
Restructuring, impairment and other costs... 44,000 69,500 --
Other expense (income)...................... 646 (3,728) 401
- --------------------------------------------------------------------------
834,955 834,566 755,728
- --------------------------------------------------------------------------
EARNINGS (LOSS) BEFORE INCOME TAXES........... (14,181) (40,474) 29,004
INCOME TAXES (BENEFIT)........................ (1,000) (11,679) 11,628
- --------------------------------------------------------------------------
NET EARNINGS (LOSS)...........................$(13,181) $(28,795) $17,376
- --------------------------------------------------------------------------
PREFERRED STOCK DIVIDEND REQUIREMENT..........$ (3,716) $ (702) $ ---
- --------------------------------------------------------------------------
EARNINGS (LOSS) APPLICABLE TO COMMON STOCK....$(16,897) $(29,497) $17,376
- --------------------------------------------------------------------------
PER SHARE:
Net earnings (loss) per common share:
Primary................................... $(.93) $(1.63) $.95
Fully diluted............................. (.93) (1.63) .93
Dividends declared:
Series 2 preferred stock.................. 13.00 1.37 --
Common stock.............................. .44 .44 .44
- --------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
Page 11
<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Kaman Corporation and Subsidiaries
Years ended December 31, 1994, 1993 and 1992
(In thousands except share amounts)
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- --------------------------------------------------------------------------
SERIES 2 PREFERRED STOCK:
Balance--beginning of year..................$ 57,167 $ -- $ --
Shares issued............................... -- 57,167 --
- --------------------------------------------------------------------------
Balance--end of year........................ 57,167 57,167 --
- --------------------------------------------------------------------------
CLASS A COMMON STOCK.......................... 17,600 17,600 17,600
- --------------------------------------------------------------------------
CLASS B COMMON STOCK.......................... 668 668 668
- --------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL:
Balance--beginning of year.................. 18,459 19,343 19,686
Employee stock plans........................ (611) (409) (329)
Restricted stock awards..................... 5 (75) (14)
Exps. relating to issuance of preferred stock -- (400) --
- ---------------------------------------------------------------------------
Balance--end of year........................ 17,853 18,459 19,343
- ---------------------------------------------------------------------------
RETAINED EARNINGS:
Balance--beginning of year.................. 137,490 174,607 165,218
Net earnings (loss)......................... (13,181) (28,795) 17,376
Dividends declared:
Preferred stock........................... (3,716) (392) --
Common stock.............................. (8,001) (7,930) (7,987)
- ---------------------------------------------------------------------------
Balance--end of year........................ 112,592 137,490 174,607
- ---------------------------------------------------------------------------
UNAMORTIZED RESTRICTED STOCK AWARDS:
Balance--beginning of year.................. (968) (1,008) (1,003)
Stock awards issued......................... (119) (323) (356)
Amortization of stock awards................ 343 363 351
- ---------------------------------------------------------------------------
Balance--end of year........................ (744) (968) (1,008)
- ---------------------------------------------------------------------------
</TABLE>
Page 12
<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Kaman Corporation and Subsidiaries
Years ended December 31, 1994, 1993 and 1992
(In thousands except share amounts)
(Continued)
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- --------------------------------------------------------------------------
EQUITY ADJUSTMENT FROM FOREIGN
CURRENCY TRANSLATION:
Balance--beginning of year.................. (158) 52 33
Translation adjustment...................... (286) (210) 19
- ---------------------------------------------------------------------------
Balance--end of year........................ (444) (158) 52
- ---------------------------------------------------------------------------
TREASURY STOCK:
Balance--beginning of year.................. (1,945) (1,727) (52)
Shares acquired in 1994--193,399;
1993--315,961; 1992--444,280.............. (1,847) (3,520) (4,382)
Shares reissued under various stock plans... 2,854 3,302 2,707
- ---------------------------------------------------------------------------
Balance--end of year........................ (938) (1,945) (1,727)
- ---------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY....................$203,754 $228,313 $209,535
- ---------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
Page 13
<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Kaman Corporation and Subsidiaries
Years ended December 31, 1994, 1993 and 1992
(In thousands)
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- --------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss).........................$(13,181) $(28,795) $ 17,376
Adjustments to reconcile net earnings (loss)
to cash provided by (used in)
operating activities:
Depreciation and amortization............. 13,053 13,456 13,373
Net gain on exchange of debentures........ -- (3,037) --
Restructuring, impairment and other costs. 44,000 69,500 --
Deferred income taxes..................... (7,062) (19,679) (4,500)
Other, net................................ 1,999 937 1,009
Changes in current assets and liabilities:
Accounts receivable..................... 19,204 13,058 (8,304)
Inventories............................. (44,273) (22,155) (8,388)
Other current assets.................... (2,864) (229) (638)
Accounts payable--trade................. 3,315 (8,063) 7,934
Accrued expenses and payables........... 892 (7,614) (4,398)
Income taxes payable.................... (2,361) (248) 622
- ---------------------------------------------------------------------------
Cash provided by (used in)
operating activities................ 12,722 7,131 14,086
- ---------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, plant
and equipment and other assets............ 195 1,014 515
Expenditures for property, plant
and equipment............................. (21,581) (20,428) (10,562)
Other, net.................................. (482) 689 (299)
- ---------------------------------------------------------------------------
Cash provided by (used in)
investing activities................ (21,868) (18,725) (10,346)
- ---------------------------------------------------------------------------
</TABLE>
Page 14
<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Kaman Corporation and Subsidiaries
Years ended December 31, 1994, 1993 and 1992
(In thousands)
(Continued)
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- --------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in notes payable.................... 21,498 23,493 7,331
Changes in current portion of long-term debt (45) (59) (390)
Reduction of long-term debt................. (834) (1,108) (1,164)
Proceeds from exercise of employee stock plans 2,128 2,500 2,008
Purchases of treasury stock................. (1,847) (3,520) (4,382)
Dividends paid--Series 2 preferred stock.... (3,716) (392) --
Dividends paid--common stock................ (8,001) (7,930) (7,987)
Other, net.................................. (171) -- --
- ---------------------------------------------------------------------------
Cash provided by (used in)
financing activities................ 9,012 12,984 (4,584)
- ---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH............... (134) 1,390 (844)
CASH AT BEGINNING OF YEAR..................... 3,845 2,455 3,299
- ---------------------------------------------------------------------------
CASH AT END OF YEAR...........................$ 3,711 $ 3,845 $ 2,455
- ---------------------------------------------------------------------------
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
On October 22, 1993, the corporation exchanged $61,804 of its 6%
convertible subordinated debentures for $57,167 of its new Series 2
preferred stock.
See accompanying notes to consolidated financial statements.
Page 15
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1994, 1993, and 1992
(In thousands except share and per share amounts)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION The accompanying consolidated
financial statements include the accounts of the parent
corporation and its subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
LONG-TERM CONTRACTS--REVENUE RECOGNITION Certain sales are made
under fixed price and cost reimbursement type contracts.
Estimated profits under such contracts are recorded concurrently
with costs incurred thereon on the basis of percentage of
completion. Any anticipated total contract losses are charged to
operations during the period the loss is first indicated. Profits
and losses accrued include the cumulative effect of changes in
prior periods' price and cost estimates.
INVENTORIES Inventory of merchandise for resale is stated at
cost (using the average costing method) or market, whichever is
lower. Contracts and work in process and finished goods are
valued at production cost represented by material, labor and
overhead, including general and administrative expenses where
applicable. Contracts and work in process and finished goods are
not recorded in excess of net realizable values.
PROPERTY, PLANT AND EQUIPMENT Depreciation of property, plant
and equipment is computed primarily on a straight-line basis over
the estimated useful lives of the assets. At the time of
retirement or disposal, the acquisition cost of the asset and
related accumulated depreciation are eliminated and any gain or
loss is credited or charged against income.
Maintenance and repair items are charged against income as
incurred, whereas renewals and betterments are capitalized and
depreciated.
GOODWILL Amortization of goodwill is calculated on a
straight-line method over its estimated useful life but not in
excess of forty years. Such amortization amounted to $1,318 in
1994, $1,268 in 1993 and $1,265 in 1992.
At each balance sheet date, the corporation evaluates the
carrying value of goodwill based upon its assessment of the
forecasted future operations (including interest expense) and
other factors for each subsidiary having a material goodwill
Page 16
<PAGE>
<PAGE>
balance. Based upon management's most recent analysis, the
corporation wrote-down goodwill relating to its investment in
Raymond Engineering in the amount of $20,500 during the fourth
quarter of 1994.
Accumulated amortization, excluding the write-down, amounted to
$3,544 at December 31, 1994.
RESEARCH AND DEVELOPMENT Research and development costs not
specifically covered by contracts are charged against income as
incurred. Such costs amounted to $21,062 in 1994, $18,350 in 1993
and $17,778 in 1992.
INCOME TAXES The corporation adopted Statement of Financial
Accounting Standards No. 109 (SFAS 109), Accounting for Income
Taxes, effective January 1, 1993. Under the asset and liability
method prescribed by SFAS 109, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to temporary differences between the financial
statement carrying amounts of assets and liabilities and their
respective tax bases using enacted tax rates expected to apply in
the years in which temporary differences are expected to be
recovered or settled. Prior to adopting SFAS 109, deferred income
taxes were recorded for differences in the recognition of items
of income and expense for financial and tax reporting purposes
using the tax rates applicable in the year of the calculation.
RESTRUCTURING, IMPAIRMENT AND OTHER COSTS
The corporation recorded pre-tax charges in 1994 and 1993, both
reflecting its strategy for addressing trends in U.S. defense
planning and spending priorities. Specifically, in 1994 the
corporation recorded charges of $44.0 million before taxes ($32.1
million after taxes or $1.76 per common share); in 1993, the
charge was $69.5 million before taxes ($45.5 million after taxes
or $2.52 per common share).
The 1994 fourth quarter charge of $44.0 million represents a
write-down of the corporation's investment in Raymond
Engineering, a diversified technologies subsidiary, in
anticipation of a reduction in the size of its operation and
certain of its product lines, and its merger into Kaman
Aerospace, another Kaman subsidiary. When fully implemented, the
consolidation is expected, on an overall basis, to result in
reduced overheads and enhanced administrative and operational
efficiency. This will assist the merged organization in
positioning itself to compete more effectively in a defense
environment which seems increasingly likely to favor the use of
commercial technology products where possible. Approximately
seventy percent (70%) of the charge represents the write-down of
impaired assets, including goodwill, facilities and equipment,
and inventories. A variety of factors have contributed to the
Page 17
<PAGE>
<PAGE>
impairment of Raymond's assets. These include defense spending
reductions, changes in defense planning and spending priorities,
and more recently, technological evolution in certain product
areas where Raymond has done business. In order for Raymond to
compete in these product areas in the future, varying levels of
investment in technological development would be required. In the
fourth quarter of 1994, the corporation determined that it was
not economically feasible to make such investments in those
products which are unable to demonstrate potential for success.
Consequently, the corporation's best estimate of Raymond's
forecasted future operations, including interest expense, is that
they do not support the recoverability of goodwill and a certain
amount of facilities and equipment, which has resulted in the
write-down of approximately $25,500 for these items. In addition,
inventories whose cost is not expected to be recovered have been
written down to estimated net realizable value during the fourth
quarter. The remainder of the charge relates to personnel
reductions and other expenses associated with downsizing
Raymond's business. The majority of work force reductions involve
management and administrative employees whose functions are
redundant to the merged organization. Severance payments of
approximately $2,500 are to be made in accordance with Raymond's
written severance pay policy and, in certain cases, individually
negotiated agreements. Other expenses include contract close-out
costs of $6,500 and related expenses of $4,000 which will not
benefit the continuing activities of the merged organization.
The 1993 third quarter charge of $69.5 million represented
restructuring and other costs in connection with its plan to
reduce the size of its defense and commercial aircraft
manufacturing business and develop defense conversion
initiatives. About sixty percent (60%) of the charge represents
the write-off of costs for development, retooling, and start-up
of the conversion initiatives, notably K-MAX (Registered
Trademark). The balance relates to personnel and facility
reductions, contract close-out and related expenses associated
with the downsizing of the defense and commercial manufacturing
businesses.
EXCHANGE OF CONVERTIBLE SUBORDINATED DEBENTURES
On October 22, 1993, pursuant to an exchange offer to all
debentureholders, the corporation exchanged $57,167 of its new
6-1/2% cumulative convertible Series 2 preferred stock
(convertible into Class A common stock at $12.56 per share) for
$61,804 of its 6% convertible subordinated debentures. The
pre-tax gain on the exchange of the debentures was $3,037 net of
expenses of approximately $1,600. Additional issuance expenses of
$400 were charged directly to additional paid-in capital.
Page 18
<PAGE>
<PAGE>
ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
<TABLE>
<S> <C> <C>
December 31,
1994 1993
- ---------------------------------------------------------------
Trade receivables, net of allowance
for doubtful accounts of $1,665
in 1994, $1,576 in 1993..................$ 66,477 $ 57,568
U.S. Government contracts:
Billed................................... 36,407 42,235
Recoverable costs and accrued
profit--not billed..................... 19,585 34,072
Commercial contracts:
Billed................................... 12,004 11,781
Recoverable costs and accrued
profit--not billed..................... 11,938 19,959
- ---------------------------------------------------------------
Total..................................$146,411 $165,615
===============================================================
</TABLE>
Recoverable costs and accrued profit--not billed represent costs
incurred on contracts, including contract retentions, which will
become billable upon future deliveries or completion of
engineering and service type contracts. Management estimates that
approximately $8,298 of such costs and accrued profits at
December 31, 1994 will be collected after one year.
INVENTORIES
Inventories are comprised as follows:
<TABLE>
<S> <C> <C>
December 31,
1994 1993
- ---------------------------------------------------------------
Merchandise for resale.................... $ 96,918 $ 91,495
Contracts in process:
U.S. Government......................... 10,834 9,122
Commercial.............................. 2,376 5,356
Other work in process (including
certain general stock material
and parts).............................. 32,814 24,478
Finished goods............................ 17,282 --
- ---------------------------------------------------------------
Total................................... $160,224 $130,451
===============================================================
</TABLE>
Progress payments of approximately $2,683 and $7,100 were netted
against contracts in process at December 31, 1994 and 1993,
respectively.
Page 19
<PAGE>
<PAGE>
Finished goods inventory consists of five K-MAX (Registered
Trademark) helicopters being used by initial customers under a
special lease program.
The aggregate amounts of general and administrative costs
allocated to inventories during 1994, 1993 and 1992 were $50,437,
$57,654 and $54,277 respectively.
The estimated amounts of general and administrative costs
remaining in inventories at December 31, 1994 and 1993 amount to
$8,066 and $5,141, respectively, and are based on the ratio of
such allocated costs to total costs incurred.
PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment are recorded at cost and summarized
as follows:
<TABLE>
<S> <C> <C>
December 31,
1994 1993
- ---------------------------------------------------------------
Land.......................................$ 8,521 $ 8,744
Buildings.................................. 57,383 55,047
Leasehold improvements..................... 13,123 13,214
Machinery, office furniture and
equipment................................ 104,376 98,765
- ---------------------------------------------------------------
Total.................................... 183,403 175,770
Less accumulated depreciation
and amortization......................... 98,782 94,059
- ---------------------------------------------------------------
Property, plant and equipment,
net......................................$ 84,621 $ 81,711
===============================================================
</TABLE>
CREDIT ARRANGEMENTS--
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
SHORT-TERM BORROWINGS The corporation has arrangements with
several banks to borrow funds on a short-term basis with interest
at current market rates. There were borrowings of $52,659
outstanding under these arrangements at December 31, 1994.
Page 20
<PAGE>
<PAGE>
LONG-TERM DEBT The corporation has long-term debt as follows:
<TABLE>
<S> <C> <C>
December 31,
1994 1993
- ---------------------------------------------------------------
Unsecured notes:
Revolving credit agreements...............$ -- $ --
Convertible subordinated
debentures.............................. 33,191 33,191
Other obligations........................... 4,901 5,490
- ---------------------------------------------------------------
Total..................................... 38,092 38,681
Less current portion........................ 659 704
- ---------------------------------------------------------------
Total excluding current portion...........$37,433 $37,977
===============================================================
</TABLE>
REVOLVING CREDIT AGREEMENTS The corporation has two revolving
credit agreements involving several domestic and foreign lenders.
The agreements provide an aggregate maximum commitment of
$200,000 and each agreement expires in 1999. Interest under
both agreements is payable at various market rates.
CONVERTIBLE SUBORDINATED DEBENTURES The corporation issued
$95,000 of its 6% convertible subordinated debentures during
1987. The debentures are convertible into shares of the Class A
common stock of Kaman Corporation at any time on or before
March 15, 2012 at a conversion price of $23.36 per share at the
option of the holder unless previously redeemed by the
Corporation. Pursuant to a sinking fund requirement beginning
March 15, 1997, the corporation will redeem 5% of the outstanding
principal amount of the debentures annually. The debentures are
subordinated to the claims of senior debt holders and general
creditors. The corporation exchanged $61,804 of these debentures
for its new Series 2 preferred stock on October 22, 1993. The
remaining debentures have a fair value of $24,561 at December 31,
1994 based upon current market prices.
OTHER OBLIGATIONS These obligations consist primarily of notes
issued by the corporation to industrial and economic development
authorities in connection with the issuance of their bonds in
similar amounts. The proceeds were used by the corporation to
finance certain of its building construction within the regions
of the authorities. These obligations are secured by mortgages
and generally have interest rates and payment terms more
favorable than conventional financing.
Page 21
<PAGE>
<PAGE>
LONG-TERM DEBT ANNUAL MATURITIES The aggregate amounts of annual
maturities of long-term debt for each of the next five years are
approximately as follows:
<TABLE>
<S> <C>
1995.............................$ 659
1996............................. 709
1997............................. 2,373
1998............................. 2,350
1999............................. 2,248
</TABLE>
RESTRICTIVE COVENANTS The most restrictive of the covenants
contained in the loan agreements require the corporation to have
operating income, as defined, at least equal to 250% of interest
expense, consolidated total indebtedness to total capitalization
to be less than 45% and consolidated net worth at least equal to
$200,000 at December 31, 1994.
INTEREST PAYMENTS Cash payments for interest were $4,572, $8,092
and $7,103 for 1994, 1993 and 1992, respectively.
INCOME TAXES
The corporation adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes, effective
January 1, 1993. The cumulative effect of this change in
accounting for income taxes determined as of January 1, 1993 was
immaterial to the consolidated statements of earnings.
The components of income taxes are as follows:
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- ----------------------------------------------------------------
Current:
Federal........................... $ 6,362 $ 6,250 $12,401
State............................. (300) 1,750 3,727
- ----------------------------------------------------------------
6,062 8,000 16,128
- ----------------------------------------------------------------
Deferred:
Federal........................... (5,762) (17,929) (3,500)
State............................. (1,300) (1,750) (1,000)
- ----------------------------------------------------------------
(7,062) (19,679) (4,500)
- ----------------------------------------------------------------
Total............................. $(1,000) $(11,679) $11,628
================================================================
</TABLE>
Page 22
<PAGE>
<PAGE>
Deferred income taxes are recorded for differences in the
recognition of certain items of income and expense for financial
and tax reporting purposes. The sources of these differences and
the tax effect of each are as follows:
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- ----------------------------------------------------------------
Depreciation and
amortization...................... $(2,319) $(1,402) $(1,328)
Long-term contracts................. (170) 2,619 (2,742)
Restructuring,
impairment and other costs........ 600 (20,650) --
Inventory........................... (3,418) 1,304 250
Deferred employee benefits.......... (835) (1,698) (169)
Other items......................... (920) 148 (511)
- ----------------------------------------------------------------
Total............................. $(7,062) $(19,679) $(4,500)
================================================================
</TABLE>
The components of the deferred tax assets and deferred tax
liabilities are presented below:
<TABLE>
<S> <C> <C>
December 31,
1994 1993
- ---------------------------------------------------------------
Deferred tax assets:
Long-term contracts...................... $1,908 $1,739
Deferred employee benefits............... 7,093 6,258
Restructuring, impairment and
other costs............................ 20,050 20,650
Inventory................................ 2,121 --
Accrued liabilities and other items...... 6,678 5,378
- ---------------------------------------------------------------
Total deferred tax assets.............. 37,850 34,025
- ---------------------------------------------------------------
Deferred tax liabilities:
Depreciation and amortization............ (6,319) (8,638)
Inventory................................ -- (1,297)
Other items.............................. (3,040) (2,661)
- ---------------------------------------------------------------
Total deferred tax liabilities......... (9,359) (12,596)
- ---------------------------------------------------------------
Net deferred tax asset................. $28,491 $21,429
===============================================================
</TABLE>
No valuation allowance has been recorded because the corporation
believes that these deferred tax assets will, more likely than
not, be realized. This determination is based largely upon the
corporation's historical earnings trend as well as its ability to
carryback reversing items within three years to offset taxes
paid. In addition, the corporation has the ability to offset
deferred tax assets against deferred tax liabilities created for
such items as depreciation and amortization.
Page 23
<PAGE>
<PAGE>
The provisions for federal income taxes approximate the amounts
computed by applying the U.S. federal income tax rate to earnings
(loss) before income taxes after giving effect to state income
taxes. The federal tax provision has been reduced by $4,600 in
1994 as a result of the non-deductible portion of the write-down
of goodwill. The federal tax benefit in 1993 has been reduced
$1,800 to provide for prior years' tax examinations. Cash
payments for income taxes were $8,255, $7,988 and $15,708 in
1994, 1993 and 1992, respectively.
PENSION PLAN
The corporation has a non-contributory defined benefit pension
plan covering all of its full-time employees. Benefits under this
plan are based upon an employee's years of service and
compensation levels during employment and there is an offset
provision for social security benefits. It is the corporation's
policy to fund pension costs accrued. Plan assets are invested in
a diversified portfolio consisting of equity and fixed income
securities (including $8,388 of Class A common stock of Kaman
Corporation at December 31, 1994).
The pension plan costs were computed using the projected unit
credit actuarial cost method and include the following
components:
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- ----------------------------------------------------------------
Service cost for benefits earned
during the year....................$ 9,636 $ 8,661 $ 8,249
Interest cost on projected benefit
obligation......................... 16,558 15,900 14,747
Actual return on plan assets......... (1,848) (21,498) (13,991)
Net amortization and deferral........(17,543) 2,200 (3,929)
- ----------------------------------------------------------------
Net pension cost.....................$ 6,803 $ 5,263 $ 5,076
================================================================
</TABLE>
Page 24
<PAGE>
<PAGE>
The funded status of the pension plan is as follows:
<TABLE>
<S> <C> <C>
December 31,
1994 1993
- ---------------------------------------------------------------
Actuarial present value of
accumulated benefit obligation:
Vested benefits..........................$200,745 $192,753
Non-vested benefits...................... 2,153 2,572
- ---------------------------------------------------------------
Total..................................$202,898 $195,325
===============================================================
Actuarial present value of
projected benefit obligation.............$233,312 $224,870
Plan assets at fair value.................. 226,054 228,439
- ---------------------------------------------------------------
Excess (deficiency) of assets over
projected benefit obligation............. (7,258) 3,569
Unrecognized prior service cost............ (621) 350
Unrecognized net loss...................... 18,503 9,466
Unrecognized net transition asset.......... (12,976) (14,829)
- ---------------------------------------------------------------
Accrued pension cost.......................$ 2,352 $ 1,444
===============================================================
</TABLE>
The actuarial assumptions used in determining the funded status
of the pension plan are as follows:
<TABLE>
<S> <C> <C>
December 31,
1994 1993
- ---------------------------------------------------------------
Discount rate...................................... 8% 7 1/2%
Average rate of increase in compensation levels.... 5% 4 1/2%
</TABLE>
The expected long-term rates of return on plan assets used to
compute the net periodic pension costs were 9% for 1994 and
9 1/4% for 1993.
COMMITMENTS AND CONTINGENCIES
Rent commitments under various leases for office space,
warehouse, land and buildings expire at varying dates from
January 1995 to December 2008. Certain annual rentals are subject
to renegotiation, with certain leases renewable for varying
periods. Lease periods for machinery and equipment vary from 1 to
7 years.
Substantially all real estate taxes, insurance and maintenance
expenses are obligations of the corporation. It is expected that
in the normal course of business, leases that expire will be
renewed or replaced by leases on other properties.
Page 25
<PAGE>
<PAGE>
The following future minimum rental payments are required under
operating leases that have initial or remaining noncancellable
lease terms in excess of one year as of December 31, 1994:
<TABLE>
<S> <C>
1995...................$10,091
1996................... 6,704
1997................... 4,700
1998................... 3,207
1999................... 2,528
Later years............ 4,426
- ------------------------------
Total..................$31,656
==============================
</TABLE>
Lease expense for all operating leases, including leases with
terms of less than one year, amounted to $14,150, $15,172 and
$15,221 for 1994, 1993 and 1992, respectively.
From time to time, the corporation is subject to various claims
and suits arising out of the ordinary course of business,
including commercial, employment and environmental matters. While
the ultimate result of all such matters is not presently
determinable, based upon its current knowledge, management does
not expect that their resolution will have a material adverse
effect on the corporation's consolidated financial position.
COMPUTATION OF EARNINGS (LOSS)
PER COMMON SHARE
The primary earnings (loss) per common share computation is based
on the weighted average number of shares of common stock
outstanding in 1994, 1993 and 1992 and includes the common stock
equivalency of options granted to employees under the stock
incentive plan. The fully diluted earnings per share computation
also assumes that the 6% convertible subordinated debentures were
converted at their date of issuance with the resultant reduction
in interest costs net of tax and the additional dilutive effect
of the stock options.
Subsequent to the exchange of debentures for Series 2 preferred
stock on October 22, 1993, the corporation added the preferred
stock dividend requirement to its net loss to arrive at net loss
applicable to common stock to calculate its loss per common
share--primary for 1994 and 1993. In addition, in order to
determine the fully diluted loss per common share, it is assumed
that the Series 2 preferred stock would be converted into
Class A common stock from its date of issuance and the preferred
stock dividend requirement eliminated.
Due to the net loss during 1994 and 1993, however, the dilutive
effect from conversion of the outstanding 6% convertible
subordinated debentures and the Series 2 preferred stock is
anti-dilutive and accordingly not included in the computation.
Page 26
<PAGE>
<PAGE>
EMPLOYEES STOCK PURCHASE PLAN
The Kaman Corporation Employees Stock Purchase Plan allows
employees to purchase Class A common stock of the corporation,
through payroll deductions, at 85% of the market value of shares
at the time of purchase. The plan provides for the grant of
rights to employees to purchase a maximum of 1,500,000 shares of
Class A common stock of the corporation commencing July 1, 1989.
There are no charges or credits to income in connection with the
plan. During 1994, 248,223 shares were issued to employees at
prices ranging from $7.54 to $8.61 per share. During 1993,
241,808 shares were issued to employees at prices ranging from
$7.86 to $9.78 per share. During 1992, 226,296 shares were issued
to employees at prices ranging from $7.33 to $8.82 per share.
Effective November 1, 1993, the maximum number of shares
available for issuance under the Plan was replenished to
1,500,000 shares. At December 31, 1994, there were approximately
1,209,000 shares available for offering under the plan.
STOCK INCENTIVE PLAN
On September 20, 1993, the corporation adopted the 1993 Stock
Incentive Plan--to be effective November 1, 1993. The 1993 Plan
includes a continuation and extension of the stock incentive
program of the corporation set forth in the 1983 Stock Incentive
Plan which terminated on October 31, 1993.
The 1993 Plan provides for the grant of non-statutory stock
options, incentive stock options, restricted stock awards and
stock appreciation rights primarily to officers and other key
employees. The corporation has designated 962,199 shares of its
Class A common stock for this plan, including 2,199 shares
previously reserved under the 1983 plan.
Stock options are generally granted at prices not less than the
fair market value at the date of grant. Options granted under the
plan generally expire ten years from the date of grant and are
exercisable on a cumulative basis with respect to 20% of the
optioned shares on each of the five anniversaries from the date
of grant. Restricted stock awards are generally granted with
restrictions that lapse at the rate of 20% per year and are
amortized accordingly. These awards are subject to forfeiture if
a recipient separates from service with the corporation. Stock
appreciation rights generally expire ten years from the date of
grant and are exercisable on a cumulative basis with respect to
20% of the rights on each of the five anniversaries from the date
of grant.
At December 31, 1994, there were outstanding options issued under
the plan for the purchase of 864,589 shares at prices ranging
from $7.50 to $13.83 per share. As of that date options covering
Page 27
<PAGE>
<PAGE>
522,519 shares were exercisable at $7.50 to $13.83 per share.
Options for 12,104, 37,929 and 16,550 shares were exercised
during 1994, 1993 and 1992, respectively, at prices ranging from
$7.50 to $9.88 per share. Restricted stock awards were made for
12,000 shares at $9.94 per share in 1994, 34,000 shares at $9.50
per share in 1993 and 36,000 shares at $9.88 per share in 1992.
At December 31, 1994, there were 87,800 shares remaining subject
to restrictions pursuant to these awards. No stock appreciation
rights have been issued under the plan.
SEGMENT INFORMATION
The corporation serves government, industrial and commercial
markets through two industry segments--Diversified Technologies
and Distribution.
Through its diversified technologies operations, the corporation
provides a range of technical professional services involving
either advanced information technologies or high technology
science and engineering to government and industrial customers;
advanced technology products such as electromagnetic motors,
safety and fusing systems; sliding bearings, and non-contact
measuring systems for military and industrial customers;
commercial airframe subcontracting programs, and manufacturing
work along with spare parts and logistics for the SH-2 helicopter
for the U.S. Navy. The K-MAX (Registered Trademark) helicopter
program, a significant commercial effort for the corporation, is
included in the Diversified Technologies segment. The Diversified
Technologies' segment operating loss for 1994 reflects the effect
of the $44.0 million fourth quarter charge associated with the
write-down of the investment in Raymond Engineering, its merger
into Kaman Aero space, and the downsizing of Raymond's business.
In addition, the Diversified Technologies' segment operating loss
for 1993 includes the impact of the $69,500 charge for
restructuring and other costs accrued in the third quarter to
address various downsizing and product conversion efforts.
Through its distribution operations, the corporation supplies
nearly every sector of industry with industrial replacement parts
(including bearings, power transmission equipment, fluid power,
linear motion, and materials handling items) as well as
industrial engineering and systems services. Operations are
conducted from approximately 150 service centers located in 29
states and British Columbia, Canada. Music operations manufacture
and distribute musical instruments and accessories in the United
States and abroad through domestic, Canadian and U.K. based
offices.
Page 28
<PAGE>
<PAGE>
Summarized financial information by business segment is as
follows:
<TABLE>
<S> <C> <C> <C>
1994 1993 1992
- ----------------------------------------------------------------
Net sales:
Diversified Technologies..........$310,279 $341,621 $359,432
Distribution...................... 508,903 450,889 423,418
- ----------------------------------------------------------------
$819,182 $792,510 $782,850
================================================================
Operating profit (loss):
Diversified Technologies..........$(17,226) $(41,346) $31,009
Distribution...................... 19,558 16,521 15,205
- ----------------------------------------------------------------
2,332 (24,825) 46,214
- ----------------------------------------------------------------
Interest, corporate and other
income/expense, net............... 16,513 15,649 17,210
- ----------------------------------------------------------------
Earnings (loss) before income taxes.$(14,181) $(40,474) $29,004
================================================================
Identifiable assets:
Diversified Technologies..........$236,239 $252,450 $268,353
Distribution...................... 198,145 177,608 165,623
Corporate......................... 8,565 10,138 9,469
- ----------------------------------------------------------------
$442,949 $440,196 $443,445
================================================================
Capital expenditures:
Diversified Technologies..........$ 17,396 $ 13,678 $ 6,698
Distribution...................... 3,732 6,207 3,578
Corporate......................... 453 543 286
- ----------------------------------------------------------------
$ 21,581 $ 20,428 $ 10,562
================================================================
Depreciation and amortization:
Diversified Technologies..........$ 9,307 $ 9,439 $ 8,998
Distribution...................... 2,946 3,197 3,616
Corporate......................... 800 820 759
- ----------------------------------------------------------------
$ 13,053 $ 13,456 $ 13,373
================================================================
</TABLE>
Operating profit (loss) is total revenues less cost of sales and
selling, general and administrative expense (including
restructuring, impairment and other costs in 1994 and 1993) other
than general corporate expense.
Identifiable assets are year-end assets at their respective net
carrying value segregated as to industry segment and corporate
use. Corporate assets are principally cash and net property,
plant and equipment.
Net sales by the Diversified Technologies segment made under
contracts with U.S. Government agencies account for $249,854 in
1994, $279,530 in 1993 and $260,823 in 1992.
Page 29
<PAGE>
REPORT OF INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
Certified Public Accountants
CityPlace II
Hartford, Connecticut 06103
THE BOARD OF DIRECTORS AND SHAREHOLDERS
KAMAN CORPORATION:
We have audited the accompanying consolidated balance sheets of
Kaman Corporation and subsidiaries as of December 31, 1994 and
1993, and the related consolidated statements of earnings,
changes in shareholders' equity and cash flows for each of the
years in the three year period ended December 31, 1994. These
consolidated financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion
on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Kaman Corporation and subsidiaries at December 31,
1994 and 1993 and the results of their operations and their cash
flows for each of the years in the three year period ended
December 31, 1994 in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
January 25, 1995
Page 30
<PAGE>
<PAGE>
FIVE-YEAR SELECTED FINANCIAL DATA
Kaman Corporation and Subsidiaries
(In thousands except per share amounts, shareholders and employees)
<TABLE>
<S> <C> <C> <C> <C> <C>
1994 1993 1992 1991 1990
- ---------------------------------------------------------------------------
OPERATIONS:
Revenues....................$820,774 $794,092 $784,732 $780,357 $826,583
Cost of sales............... 611,762 588,237 583,638 582,641 623,042
Selling, general and
administrative expense.... 173,853 173,581 164,603 160,824 159,775
Restructuring, impairment
and other costs........... 44,000 69,500 -- -- ---
Operating income (loss)..... (8,841) (37,226) 36,491 36,892 43,766
Interest expense............ 4,694 6,976 7,086 8,191 11,268
Other expense (income)...... 646 (3,728) 401 359 (280)
Earnings (loss) before
income taxes.............. (14,181) (40,474) 29,004 28,342 32,778
Income taxes (benefit)...... (1,000) (11,679) 11,628 11,375 13,553
Net earnings (loss)......... (13,181) (28,795) 17,376 16,967 19,225
FINANCIAL POSITION:
Current assets..............$339,012 $316,601 $334,581 $309,970 $327,030
Current liabilities......... 192,882 166,765 122,015 110,916 116,710
Working capital............. 146,130 149,836 212,566 199,054 210,320
Property, plant and
equipment, net............ 84,621 81,711 73,262 75,233 79,128
Total assets................ 442,949 440,196 443,445 421,866 443,739
Long-term debt.............. 37,433 37,977 100,889 102,053 123,207
Shareholders' equity........ 203,754 228,313 209,535 202,150 193,104
PER SHARE AMOUNTS:
Net earnings (loss) per
common share--primary..... $(.93) $(1.63) $.95 $.93 $1.06
Net earnings(loss)per
common share--fully
diluted................... (.93) (1.63) .93 .91 1.01
Dividends declared--
Series 2 preferred stock.. 13.00 1.37 -- -- --
Dividends declared--
common stock.............. .440 .440 .440 .440 .440
Shareholders' equity--
common stock.............. 8.07 9.46 11.58 11.07 10.61
Market price range.......... 11 1/8 12 1/8 10 3/4 9 5/8 9 1/2
8 1/2 8 5/8 7 7/8 7 3/8 6 1/4
GENERAL STATISTICS:
Shareholders................ 7,198 6,920 6,994 7,139 6,809
Employees................... 5,239 5,363 5,424 5,544 6,085
==========================================================================
Note: The per common share amounts have been adjusted to reflect the
eight-for-five common stock split in 1987 and the three-for-two common
stock split in 1985.
</TABLE>
Page 31
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 21
KAMAN CORPORATION
SUBSIDIARIES
Following is a list of the Corporation's subsidiaries, each of
which is wholly owned by the Corporation either directly or
through another subsidiary. Second-tier subsidiaries are listed
under the name of the parent subsidiary.
Name State of Incorporation
- -----------------------------------------------------------------
Registrant: KAMAN CORPORATION Connecticut
Subsidiaries:
Kaman Diversified Technologies Corporation Connecticut
Kaman Aerospace Corporation Delaware
Kamatics Corporation Connecticut
Kaman Aerospace International Corporation Connecticut
Kaman X Corporation Connecticut
Kaman Sciences Corporation Delaware
Kaman Instrumentation Corporation Connecticut
Kaman Electromagnetics Corporation Massachusetts
AirKaman of Jacksonville, Inc. Connecticut
Advanced Energetic Materials Corporation
of America* Delaware
Kaman Technologie GmbH Germany
Kaman Industrial Technologies Corporation Connecticut
Kaman Industrial Technologies, Ltd. Canada
Kaman Music Corporation Connecticut
KMI Europe, Inc. Delaware
Kaman U.K. Limited Great Britain
Trace Elliot Limited Great Britain
B & J Music Ltd. Canada
* Fifty percent (50%) of voting stock owned by Kaman Corporation
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Certified Public Accountants
CityPlace II
Hartford, Connecticut 06103
The Board of Directors and Shareholders
Kaman Corporation:
We consent to incorporation by reference in the Registration
Statements (Nos. 33-51483 and 33-51485) on Form S-8 of Kaman
Corporation of our reports dated January 25, 1995, relating to
the consolidated balance sheets of Kaman Corporation and
subsidiaries as of December 31, 1994 and 1993 and the related
consolidated statements of earnings, changes in shareholders'
equity and cash flows and related schedules for each of the years
in the three-year period ended December 31, 1994 which reports
appear or are incorporated by reference in the December 31, 1994
annual report on Form 10-K of Kaman Corporation.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
March 8, 1995
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned
does hereby appoint and constitute Charles H. Kaman and Harvey S.
Levenson and each of them as his or her agent and
attorney-in-fact to execute in his or her name, place and stead
(whether on behalf of the undersigned individually or as an
officer or director of Kaman Corporation or otherwise) the Annual
Report on Form 10-K of Kaman Corporation respecting its fiscal
year ended December 31, 1994 and any and all amendments thereto
and to file such Form 10-K and any such amendment thereto with
the Securities and Exchange Commission. Each of the said
attorneys shall have the power to act hereunder with or without
the other.
IN WITNESS WHEREOF, the undersigned have executed this
instrument this 14th day of February, 1995.
Frank C. Carlucci Hartzel Z. Lebed
John A. DiBiaggio Harvey S. Levenson
Edythe J. Gaines Walter H. Monteith, Jr.
Huntington Hardisty John S. Murtha
Charles H. Kaman Robert L. Newell
C. William Kaman, II Wanda L. Rogers
<PAGE>
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S 1994 ANNUAL REPORT TO SHAREHOLDERS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
**********************
</LEGEND>
<CIK> 0000054381
<NAME> KAMAN CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<CASH> 3,711
<SECURITIES> 0
<RECEIVABLES> 148,076
<ALLOWANCES> (1,665)
<INVENTORY> 160,224
<CURRENT-ASSETS> 339,012
<PP&E> 183,403
<DEPRECIATION> (98,782)
<TOTAL-ASSETS> 442,949
<CURRENT-LIABILITIES> 192,882
<BONDS> 37,433
<COMMON> 18,268
0
57,167
<OTHER-SE> 128,319
<TOTAL-LIABILITY-AND-EQUITY> 442,949
<SALES> 819,182
<TOTAL-REVENUES> 820,774
<CGS> 611,762
<TOTAL-COSTS> 829,615
<OTHER-EXPENSES> 646
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,694
<INCOME-PRETAX> (14,181)
<INCOME-TAX> (1,000)
<INCOME-CONTINUING> (13,181)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,181)
<EPS-PRIMARY> (.93)
<EPS-DILUTED> (.93)
<PAGE>
</TABLE>
