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Kaman Corp (KAMN) Reports Solid Fourth Quarter and Full Year 2023 Results

  • Net Sales: Q4 net sales increased to $203.1 million, with full-year sales reaching $775.9 million.

  • Operating Income: Q4 operating income stood at $12.0 million, contributing to the full-year total of $49.1 million.

  • Net Earnings: Q4 net earnings reported at $2.0 million, with a full-year net earnings of $7.9 million.

  • Adjusted EBITDA: Q4 Adjusted EBITDA reached $25.6 million, while the full-year Adjusted EBITDA was $106.7 million.

  • Diluted EPS: Q4 diluted earnings per share (EPS) was $0.07, with an adjusted EPS of $0.12. Full-year diluted EPS was $0.28, with an adjusted EPS of $0.49.

  • Merger Agreement: Kaman entered into a merger agreement with Arcline Investment Management, L.P., with a transaction value of approximately $1.8 billion.

On February 22, 2024, Kaman Corp (NYSE:KAMN) released its 8-K filing, announcing its financial results for the fourth quarter and the full year of 2023. The company, which operates in the aerospace and defense, industrial, and medical markets, showcased a year of solid financial performance with significant growth in net sales and adjusted EBITDA.

Kaman Corp (KAMN) Reports Solid Fourth Quarter and Full Year 2023 Results
Kaman Corp (KAMN) Reports Solid Fourth Quarter and Full Year 2023 Results

Financial Performance Overview

Kaman Corp's fourth quarter net sales rose to $203.1 million, a notable increase from the $183.0 million reported in the third quarter of 2023 and the $197.1 million from the same quarter the previous year. The full-year net sales climbed to $775.9 million from $687.9 million in 2022, marking a year-over-year improvement.

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The company's operating income for the fourth quarter was reported at $12.0 million, contributing to the full-year operating income of $49.1 million. Net earnings for the quarter were $2.0 million, a significant recovery from the net loss of $55.9 million in the same quarter of the previous year. The full-year net earnings turned positive at $7.9 million, compared to a net loss of $48.6 million in 2022.

Adjusted EBITDA for the fourth quarter reached $25.6 million, with an Adjusted EBITDA margin of 12.6%. For the full year, Adjusted EBITDA was $106.7 million, achieving an Adjusted EBITDA margin of 13.7%. Diluted earnings per share (EPS) for the fourth quarter was $0.07, with an adjusted EPS of $0.12. The full-year diluted EPS was $0.28, with an adjusted EPS of $0.49.

Segment Performance and Merger Announcement

The Engineered Products segment continued to perform strongly, with the fourth quarter operating income and Adjusted EBITDA remaining robust. The Precision Products segment saw an improvement in the fourth quarter compared to the third quarter of 2023, with a decrease in operating loss and an increase in Adjusted EBITDA. The Structures segment, however, experienced a decrease in operating income and Adjusted EBITDA compared to the previous quarter.

In a significant corporate development, Kaman announced a merger agreement with Arcline Investment Management, L.P., wherein Arcline will acquire Kaman in an all-cash transaction valued at approximately $1.8 billion. This transaction is expected to close in the first half of 2024, subject to customary closing conditions and regulatory approvals.

Conclusion and Forward Outlook

While Kaman Corp is not conducting a conference call for the fourth quarter due to the pending acquisition and is not providing a financial outlook for fiscal year 2024, the company's 2023 results demonstrate a strong financial position. The merger with Arcline represents a significant milestone and could potentially open new avenues for growth and value creation.

Investors and stakeholders in the aerospace and defense industry will be closely monitoring the progress of the merger and its impact on Kaman's future operations and financial performance.

For a detailed analysis of Kaman Corp's financial results and segment performance, interested parties are encouraged to review the full 8-K filing.

Explore the complete 8-K earnings release (here) from Kaman Corp for further details.

This article first appeared on GuruFocus.