Attached files
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| 8-K - 8-K - KAMAN Corp | form8-kxq32013earningsrele.htm |
Exhibit 99.1
 | |
NEWS RELEASE | |
Kaman Corporation | |
1332 Blue Hills Avenue Bloomfield, CT USA | |
P 860.243.7100 www.kaman.com | |
KAMAN REPORTS 2013 THIRD QUARTER RESULTS
Third Quarter 2013 Highlights:
•Net sales of $424 million;
•Diluted earnings per share from continuing operations of $0.68;
•Aerospace delivers strong operating margin performance of 18.3%
•Distribution operating margin of 5.4%, a 30 basis point sequential improvement
BLOOMFIELD, Connecticut (October 28, 2013) - Kaman Corp. (NYSE:KAMN) today reported financial results for the third quarter ended September 27, 2013.
Table 1. Summary of Financial Results from continuing operations | |||||||||||||
In thousands except per share amounts | For the three months ended | ||||||||||||
September 27, 2013 | September 28, 2012 | $ Change | |||||||||||
Net sales: | |||||||||||||
Distribution | $ | 272,951 | $ | 258,282 | $ | 14,669 | |||||||
Aerospace | 150,712 | 151,285 | (573 | ) | |||||||||
Net sales | $ | 423,663 | $ | 409,567 | $ | 14,096 | |||||||
Operating income: | |||||||||||||
Industrial Distribution | $ | 14,675 | $ | 12,925 | $ | 1,750 | |||||||
Aerospace | 27,638 | 24,410 | 3,228 | ||||||||||
Net (loss) gain on sale of assets | — | (53 | ) | 53 | |||||||||
Corporate expense | (10,892 | ) | (12,419 | ) | 1,527 | ||||||||
Operating income | $ | 31,421 | $ | 24,863 | $ | 6,558 | |||||||
Diluted earnings per share from continuing operations | $ | 0.68 | $ | 0.55 | $ | 0.13 | |||||||
Diluted earnings per share from discontinued operations | — | 0.01 | (0.01 | ) | |||||||||
Diluted earnings per share from disposal of discontinued operations | 0.02 | — | 0.02 | ||||||||||
Diluted earnings per share | $ | 0.70 | $ | 0.56 | $ | 0.14 | |||||||
Neal J. Keating, Chairman, President and Chief Executive Officer, stated, “Broad based strength across Aerospace and improved profit performance at Distribution led to very strong results for our third quarter.
Distribution delivered an operating profit margin of 5.4% in the third quarter, a 30 basis point sequential improvement from 5.1% in the second quarter. While this was slightly below our expectations, due to
lower organic growth rates than we had anticipated, we are pleased with the sequential improvement in a challenging industrial environment. During the quarter we saw several encouraging signs, including achieving positive organic growth rates in September for the first time in the past four quarters, and are well positioned to capitalize as organic sales continue to improve.
Aerospace continues to deliver strong operating profit margins. For the third quarter operating profit was 18.3%, up from 17.8% in the second quarter and 16.1% in the prior year. We benefited from the contributions of our various SH-2G helicopter programs and direct commercial sales of the JPF to foreign governments. The increase in operating margin was achieved due to favorable product mix, demonstrating the benefits of the diversity of our portfolio.
Overall, we are very pleased with our results through nine months of the year and believe it highlights the strength of our product diversification and our commitment to improved operational performance across the company."
Distribution Segment
Sales increased 5.7% in the third quarter of 2013 to $273.0 million compared to $258.3 million a year ago. Acquisitions contributed $17.8 million in sales in the quarter (sales from acquisitions are classified as organic beginning with the thirteenth month following the acquisition). Organic sales per sales day* improved sequentially; however, they decreased 1.2% from the third quarter of 2012. (See Table 3 for additional details regarding the Segment's sales per sales day performance.)
Segment operating income for the third quarter of 2013 was $14.7 million, or 5.4%, compared to $12.9 million, or 5.0%, in the third quarter of 2012. Operating profit margin increased due to the contribution from the acquisitions we completed in 2012 and 2013, reduced incentive compensation and cost savings from our first quarter restructuring. These increases were offset by lower purchase volume incentives due to the reduced sales noted above and losses on mining contracts at our Mexico operations.
Aerospace Segment
Sales were $150.7 million, a decrease of $0.6 million from sales of $151.3 million in the third quarter of 2012. Sales increased $26.3 million related to higher shipments of our JPF to foreign customers and the recognition of revenue under the SH-2G(I) contract with New Zealand. These increases were offset by a decrease of $26.9 million due to lower JPF shipments to the United States Government ("USG").
Operating income for the third quarter of 2013 was $27.6 million, compared to operating income of $24.4 million in the third quarter of 2012. The operating margin in this year's third quarter was 18.3%, compared to 16.1% in the prior year. The improvement is due to gross profit attributable to the revenue recognized under the SH-2G(I) program and higher commercial and military bearing product sales.
Outlook
We are updating our full-year outlook based on our current expectations for the remainder of the year. At Aerospace, we have revised our sales range to $615 million to $620 million from $620 million to $635 million, which reflects routine shifts in the timing of deliveries. The operating margin outlook has been raised to a range of 16.8% to 17.0% from 16.2% to 16.5%, reflecting stronger than expected year to date performance and product mix.
At Distribution, growth rates are not improving as quickly as previously anticipated. As a result we are lowering our sales outlook for the year to $1,070 million to $1,080 million from $1,100 million to $1,115 million. As a result of this lower sales volume and its impact on our rebate income and our ability to leverage our expenses, along with continued uncertainty in Mexico, we expect earnings will be less than previously anticipated in the fourth quarter, resulting in a full year operating margin range of 4.2% to 4.3% rather than our previous outlook of 4.7% to 4.9%.
We now expect corporate expenses to come in at approximately $46.5 million, which is lower than our original estimate of $49 million, and project our full year tax rate will be approximately 34.5%, as compared to our previously reported estimate of 35.0%, reflecting a lower statutory rate in the United Kingdom and favorable items from the filing of our 2012 tax return. We have maintained our outlook for free cash flow for the year.
Our updated outlook is as follows:
• | Distribution: |
◦ | Sales of $1,070 million to $1,080 million |
◦ | Operating margins of 4.2% to 4.3% |
• | Aerospace: |
◦ | Sales of $615 million to $620 million |
◦ | Operating margins of 16.8% to 17.0% |
• | Interest expense of approximately $13 million |
• | Corporate expenses of approximately $46.5 million |
• | Estimated annualized tax rate of approximately 34.5% |
• | Capital expenditures of $40 million to $45 million |
• | Free cash flow* in the range of $15 million to $20 million |
2013 Outlook | |||||||
In millions | |||||||
Free Cash Flow*: | |||||||
Cash flows from operations | $ | 55.0 | to | $ | 65.0 | ||
Expenditures for property, plant and equipment | (40.0 | ) | to | (45.0 | ) | ||
Free Cash Flow | $ | 15.0 | to | $ | 20.0 | ||
Chief Financial Officer, Robert D. Starr, commented, "Third quarter results reflect improved performance at both Distribution and Aerospace. Our expectations for the balance of the year are for continued sales growth at Distribution, albeit at a moderated rate from our previous outlook. Accordingly, we have lowered our operating profit outlook for this segment to 4.2% to 4.3% reflecting the impact of lower anticipated sales on our purchase volume incentives and our ability to leverage operating expenses. We expect Aerospace to continue to deliver strong operating profit performance over the remainder of the year and are raising our full year expectations. We delivered strong cash flow results generating approximately $30 million of free cash flow in the third quarter and are maintaining our outlook for free cash flow for the year."
Please see the MD&A section of the Company's SEC Form 10-Q filed concurrent with the issuance of this release for greater detail on our results and various company programs.
A conference call has been scheduled for tomorrow, October 29, 2013, at 8:30 AM ET. Listeners may access the call live by telephone at (877) 546-5018 and from outside the U.S. at (857) 244-7550; (passcode: 65229397); or, via the Internet at www.kaman.com. A replay will also be available two hours after the call and can be accessed at (888) 286-8010 or (617) 801-6888 using the passcode: 86373168. In its discussion, management may include certain non-GAAP measures related to company performance. If so, a reconciliation of that information to GAAP, if not provided in this release, will be provided in the exhibits to the conference call and will be available through the Internet link provided above.
Table 2. Summary of Segment Information (in thousands) | |||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||
September 27, 2013 | September 28, 2012 | September 27, 2013 | September 28, 2012 | ||||||||||||
Net sales: | |||||||||||||||
Distribution | $ | 272,951 | $ | 258,282 | $ | 800,352 | $ | 763,779 | |||||||
Aerospace | 150,712 | 151,285 | 443,111 | 429,733 | |||||||||||
Net sales | $ | 423,663 | $ | 409,567 | $ | 1,243,463 | $ | 1,193,512 | |||||||
Operating income: | |||||||||||||||
Distribution | $ | 14,675 | $ | 12,925 | $ | 32,974 | $ | 39,405 | |||||||
Aerospace | 27,638 | 24,410 | 77,227 | 66,469 | |||||||||||
Net gain (loss) on sale of assets | — | (53 | ) | (100 | ) | (21 | ) | ||||||||
Corporate expense | (10,892 | ) | (12,419 | ) | (33,896 | ) | (36,256 | ) | |||||||
Operating income | $ | 31,421 | $ | 24,863 | $ | 76,205 | $ | 69,597 | |||||||
Non-GAAP Measure Disclosure
Management believes that the non-GAAP (Generally Accepted Accounting Principles) measures indicated by an asterisk (*) used in this release or in other disclosures provide important perspectives into the Company's ongoing business performance. The Company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define the measures differently. We define the non-GAAP measures used in this report and other disclosures as follows:
Organic Sales per Sales Day - Organic sales per sales day is defined as GAAP net sales of the Distribution segment less sales derived from acquisitions, divided by the number of sales days in a given period. Sales days are essentially days that the Company's branch locations are open for business and exclude weekends and holidays. Sales days are provided as part of this release. Management believes organic sales per sales day provides an important perspective on how net sales may be impacted by the number of days the segment is open for business and provides a basis for comparing periods in which the number of sales days differ.
The following table illustrates the calculation of organic sales per sales day using “Net sales: Distribution” from the “Segment and Geographic Information” footnote in the “Notes to Condensed Consolidated Financial Statements” from the Company's Form 10-Q filed with the Securities and Exchange Commission on October 28, 2013. Sales from acquisitions are classified as organic beginning with the thirteenth month following the acquisition. Prior period information is adjusted to reflect acquisition sales for that period as organic sales when calculating organic sales per sales day.
Table 3. Distribution - Organic Sales Per Sales Day (in thousands, except days) | |||||||||||||||
For the three months ended | For the nine months ended | ||||||||||||||
September 27, 2013 | September 28, 2012 | September 27, 2013 | September 28, 2012 | ||||||||||||
Net sales: Distribution | $ | 272,951 | $ | 258,282 | $ | 800,352 | $ | 763,779 | |||||||
Acquisition related sales | 17,785 | — | 66,158 | — | |||||||||||
Organic sales | $ | 255,166 | $ | 258,282 | $ | 734,194 | $ | 763,779 | |||||||
Sales days | 63 | 63 | 190 | 191 | |||||||||||
Organic sales per sales day | $ | 4,050 | $ | 4,100 | $ | 3,864 | $ | 3,999 | |||||||
% change | (1.2 | )% | 10.5 | % | (3.4 | )% | 9.4 | % | |||||||
Free Cash Flow - Free cash flow is defined as GAAP “Net cash provided by (used in) operating activities” less “Expenditures for property, plant & equipment.” Management believes free cash flow provides an important perspective on the cash available for dividends to shareholders, debt repayment, and acquisitions after making capital investments required to support ongoing business operations and long-term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow internally to assess both business performance and overall liquidity. The following table illustrates the calculation of free cash flow using “Net cash provided by (used in) operating activities” and “Expenditures for property, plant & equipment”, GAAP measures from the Condensed Consolidated Statements of Cash Flows.
Table 4. Free Cash Flow (in thousands) | ||||||||||||
For the Nine Months Ended | For the Six Months Ended | For the Three Months Ended | ||||||||||
September 27, 2013 | June 28, 2013 | September 27, 2013 | ||||||||||
Net cash provided by (used in) operating activities | $ | 24,824 | $ | (13,407 | ) | $ | 38,231 | |||||
Expenditures for property, plant & equipment | (30,118 | ) | (21,267 | ) | (8,851 | ) | ||||||
Free Cash Flow | $ | (5,294 | ) | $ | (34,674 | ) | $ | 29,380 | ||||
Debt to Capitalization Ratio - Debt to capitalization ratio is calculated by dividing debt by capitalization. Debt is defined as GAAP “Notes payable” plus “Current portion of long-term debt” plus “Long-term debt, excluding current portion.” Capitalization is defined as Debt plus GAAP “Total shareholders' equity”. Management believes that debt to capitalization is a measurement of financial leverage and provides an insight into the financial structure of the Company and its financial strength. The following table illustrates the calculation of debt to capitalization using GAAP measures from the condensed consolidated balance sheets included in this release.
Table 5. Debt to Capitalization (in thousands) | ||||||||
September 27, 2013 | December 31, 2012 | |||||||
Notes payable | $ | — | $ | 21 | ||||
Current portion of long-term debt | 10,000 | 10,000 | ||||||
Long-term debt, excluding current portion | 276,682 | 249,585 | ||||||
Debt | 286,682 | 259,606 | ||||||
Total shareholders' equity | 463,338 | 420,193 | ||||||
Capitalization | $ | 750,020 | $ | 679,799 | ||||
Debt to capitalization | 38.2 | % | 38.2 | % | ||||
About Kaman Corporation
Kaman Corporation, founded in 1945 by aviation pioneer Charles H. Kaman, and headquartered in Bloomfield, Connecticut conducts business in the aerospace and industrial distribution markets. The company produces and/or markets widely used proprietary aircraft bearings and components; complex metallic and composite aerostructures for commercial, military and general aviation fixed and rotary wing aircraft; aerostructure engineering design analysis and FAA certification services; safe and arm solutions for missile and bomb systems for the U.S. and allied militaries; subcontract helicopter work; and support for the company's SH-2G Super Seasprite maritime helicopters and K-MAX medium-to-heavy lift helicopters. The company is a leading distributor of industrial parts, and operates more than 200 customer service locations and five distribution centers across North America. Kaman offers more than four million items including bearings, mechanical power transmission, electrical, material handling, motion control, fluid power, automation and MRO supplies to customers in virtually every industry. Additionally, Kaman provides engineering, design and support for automation, electrical, linear, hydraulic and pneumatic systems as well as belting and rubber fabrication, customized mechanical services, hose assemblies, repair, fluid analysis and motor management.
FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements also may be included in other publicly available documents issued by the Company and in oral statements made by our officers and representatives from time to time. These forward-looking statements are intended to provide management's current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid. They can be identified by the use of words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and other words of similar meaning in connection with a discussion of future operating or financial performance. Examples of forward looking statements include, among others, statements relating to future sales, earnings, cash flows, results of operations, uses of cash and other measures of financial performance.
Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that may cause the Company's actual results and financial condition to differ materially from those expressed or implied in the forward-looking statements. Such risks, uncertainties and other factors include, among others: (i) changes in domestic and foreign economic and competitive conditions in markets served by the Company, particularly the defense, commercial aviation and industrial production markets; (ii) changes in government and customer priorities and requirements (including cost-cutting initiatives, government and customer shut-downs, the potential deferral of awards, terminations or reductions of expenditures to respond to the priorities of Congress and the Administration, or budgetary cuts resulting from Congressional actions or automatic sequestration under the Budget Control Act of 2011, as modified by the enactment of the Taxpayer Relief Act of 2012); (iii) changes in geopolitical conditions in countries where the Company does or intends to do business; (iv) the successful conclusion of competitions for government programs and thereafter contract negotiations with government authorities, both foreign and domestic; (v) the existence of standard government contract provisions permitting renegotiation of terms and termination for the convenience of the government; (vi) the conclusion to government inquiries or investigations regarding government programs, including the resolution of the Wichita matter; (vii) risks and uncertainties associated with the successful implementation and ramp up of significant new programs; (viii) potential difficulties associated with variable acceptance test results, given sensitive production materials and extreme test parameters; (ix) the receipt and successful execution of production orders for the JPF U.S. government contract, including the exercise of all contract options and receipt of orders from allied militaries, as all have been assumed in connection with goodwill impairment evaluations; (x) the continued support of the existing K-MAX® helicopter fleet, including sale of existing K-MAX® spare parts inventory; (xi) the accuracy of current cost estimates associated with environmental remediation activities, including activities at the Bloomfield, Moosup and New Hartford, CT facilities and our U.K. facilities; (xii) the profitable integration of acquired businesses into the Company's operations; (xiii) changes in supplier sales or vendor incentive policies; (xiv) the effects of price increases or decreases; (xv) the effects of pension regulations, pension plan assumptions, pension plan asset performance and future contributions; (xvi) future levels of indebtedness and capital expenditures; (xvii) the continued availability of raw materials and other commodities in adequate supplies and the effect of increased costs for such items; (xviii) the effects of currency exchange rates and foreign competition on future operations; (xix) changes in laws and regulations, taxes, interest rates, inflation rates and general business conditions; (xx) future repurchases and/or issuances of common stock; and (xxi) other risks and uncertainties set forth in our Annual Report on Form 10-K for the year ended December 31, 2012.
Any forward-looking information provided in this report should be considered with these factors in mind. We assume no obligation to update any forward-looking statements contained in this report.
###
Contact: Eric Remington
V.P., Investor Relations
(860) 243-6334
Eric.Remington@kaman.com
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands except per share amounts) (unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 27, 2013 | September 28, 2012 | September 27, 2013 | September 28, 2012 | |||||||||||||
Net sales | $ | 423,663 | $ | 409,567 | $ | 1,243,463 | $ | 1,193,512 | ||||||||
Cost of sales | 304,806 | 295,498 | 893,083 | 861,011 | ||||||||||||
Gross profit | 118,857 | 114,069 | 350,380 | 332,501 | ||||||||||||
Selling, general and administrative expenses | 87,436 | 89,153 | 274,075 | 262,883 | ||||||||||||
Net loss on sale of assets | — | 53 | 100 | 21 | ||||||||||||
Operating income | 31,421 | 24,863 | 76,205 | 69,597 | ||||||||||||
Interest expense, net | 3,113 | 2,922 | 9,344 | 8,622 | ||||||||||||
Other expense (income), net | (21 | ) | (64 | ) | 368 | (288 | ) | |||||||||
Earnings from continuing operations before income taxes | 28,329 | 22,005 | 66,493 | 61,263 | ||||||||||||
Income tax expense | 9,634 | 7,221 | 22,752 | 21,269 | ||||||||||||
Earnings from continuing operations | 18,695 | 14,784 | 43,741 | 39,994 | ||||||||||||
Earnings from discontinued operations, net of taxes | 64 | 198 | 64 | 870 | ||||||||||||
Gain on disposal of discontinued operations, net of taxes | 420 | — | 420 | — | ||||||||||||
Total earnings from discontinued operations, net of taxes | 484 | 198 | 484 | 870 | ||||||||||||
Net earnings | $ | 19,179 | $ | 14,982 | $ | 44,225 | $ | 40,864 | ||||||||
Earnings per share: | ||||||||||||||||
Basic earnings per share from continuing operations | $ | 0.70 | $ | 0.56 | $ | 1.64 | $ | 1.52 | ||||||||
Basic earnings per share from discontinued operations | — | 0.01 | — | 0.03 | ||||||||||||
Basic earnings per share from disposal of discontinued operations | 0.02 | — | 0.02 | — | ||||||||||||
Basic earnings per share | $ | 0.72 | $ | 0.57 | $ | 1.66 | $ | 1.55 | ||||||||
Diluted earnings per share from continuing operations | $ | 0.68 | $ | 0.55 | $ | 1.61 | $ | 1.51 | ||||||||
Diluted earnings per share from discontinued operations | — | 0.01 | — | 0.03 | ||||||||||||
Diluted earnings per share from disposal of discontinued operations | 0.02 | — | 0.02 | — | ||||||||||||
Diluted earnings per share | $ | 0.70 | $ | 0.56 | $ | 1.63 | $ | 1.54 | ||||||||
Average shares outstanding: | ||||||||||||||||
Basic | 26,770 | 26,455 | 26,721 | 26,380 | ||||||||||||
Diluted | 27,233 | 26,623 | 27,062 | 26,540 | ||||||||||||
Dividends declared per share | $ | 0.16 | $ | 0.16 | $ | 0.48 | $ | 0.48 | ||||||||
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts) (unaudited)
September 27, 2013 | December 31, 2012 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 11,052 | $ | 16,593 | ||||
Accounts receivable, net | 216,223 | 180,798 | ||||||
Inventories | 384,940 | 367,385 | ||||||
Deferred income taxes | 29,874 | 25,835 | ||||||
Other current assets | 31,442 | 27,434 | ||||||
Total current assets | 673,531 | 618,045 | ||||||
Property, plant and equipment, net of accumulated depreciation of $163,646 and $149,696, respectively | 141,633 | 128,669 | ||||||
Goodwill | 203,960 | 192,046 | ||||||
Other intangible assets, net | 90,959 | 92,913 | ||||||
Deferred income taxes | 31,555 | 42,905 | ||||||
Other assets | 22,526 | 22,415 | ||||||
Total assets | $ | 1,164,164 | $ | 1,096,993 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities: | ||||||||
Notes payable | $ | — | $ | 21 | ||||
Current portion of long-term debt | 10,000 | 10,000 | ||||||
Accounts payable – trade | 113,938 | 113,143 | ||||||
Accrued salaries and wages | 36,409 | 35,869 | ||||||
Current portion of amount due to Commonwealth of Australia | — | 6,659 | ||||||
Advances on contracts | 17,963 | 1,900 | ||||||
Other accruals and payables | 56,755 | 53,468 | ||||||
Income taxes payable | 658 | 2,892 | ||||||
Total current liabilities | 235,723 | 223,952 | ||||||
Long-term debt, excluding current portion | 276,682 | 249,585 | ||||||
Deferred income taxes | 4,292 | 5,150 | ||||||
Underfunded pension | 137,650 | 148,703 | ||||||
Other long-term liabilities | 46,479 | 49,410 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity: | ||||||||
Preferred stock, $1 par value, 200,000 shares authorized; none outstanding | — | — | ||||||
Common stock, $1 par value, 50,000,000 shares authorized; voting; 27,099,238 and 26,881,257 shares issued, respectively | 27,099 | 26,881 | ||||||
Additional paid-in capital | 130,348 | 122,522 | ||||||
Retained earnings | 430,864 | 399,473 | ||||||
Accumulated other comprehensive income (loss) | (117,250 | ) | (121,590 | ) | ||||
Less 318,825 and 277,473 shares of common stock, respectively, held in treasury, at cost | (7,723 | ) | (7,093 | ) | ||||
Total shareholders’ equity | 463,338 | 420,193 | ||||||
Total liabilities and shareholders’ equity | $ | 1,164,164 | $ | 1,096,993 | ||||
KAMAN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands) (unaudited)
For the Nine Months Ended | ||||||||
September 27, 2013 | September 28, 2012 | |||||||
Cash flows from operating activities: | ||||||||
Earnings from continuing operations | $ | 43,741 | $ | 39,994 | ||||
Adjustments to reconcile earnings from continuing operations to net cash provided by (used in) operating activities of continuing operations: | ||||||||
Depreciation and amortization | 23,720 | 20,427 | ||||||
Accretion of convertible notes discount | 1,366 | 1,296 | ||||||
Provision for doubtful accounts | 1,100 | 174 | ||||||
Net loss on sale of assets | 100 | 21 | ||||||
Net loss (gain) on derivative instruments | 130 | (287 | ) | |||||
Stock compensation expense | 4,056 | 4,809 | ||||||
Excess tax (benefit) from share-based compensation arrangements | (350 | ) | (720 | ) | ||||
Deferred income taxes | 2,619 | (10 | ) | |||||
Changes in assets and liabilities, excluding effects of acquisitions/divestitures: | ||||||||
Accounts receivable | (33,354 | ) | (6,094 | ) | ||||
Inventories | (14,269 | ) | (15,704 | ) | ||||
Income tax refunds receivable | (3,099 | ) | 527 | |||||
Other current assets | (1,371 | ) | 5,779 | |||||
Accounts payable - trade | (4,814 | ) | (556 | ) | ||||
Accrued contract losses | (565 | ) | (1,349 | ) | ||||
Advances on contracts | 16,063 | (138 | ) | |||||
Other accruals and payables | (1,762 | ) | (10,369 | ) | ||||
Income taxes payable | (2,263 | ) | (328 | ) | ||||
Pension liabilities | (5,208 | ) | (1,843 | ) | ||||
Other long-term liabilities | (1,016 | ) | 1,471 | |||||
Net cash provided by operating activities of continuing operations | 24,824 | 37,100 | ||||||
Net cash provided by operating activities of discontinued operations | 484 | 977 | ||||||
Net cash provided by operating activities | 25,308 | 38,077 | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from sale of assets | 111 | 337 | ||||||
Expenditures for property, plant & equipment | (30,118 | ) | (19,560 | ) | ||||
Acquisition of businesses | (19,934 | ) | (83,390 | ) | ||||
Other, net | (642 | ) | (407 | ) | ||||
Cash used in investing activities of continuing operations | (50,583 | ) | (103,020 | ) | ||||
Cash used in investing activities of discontinued operations | — | (5 | ) | |||||
Cash used in investing activities | (50,583 | ) | (103,025 | ) | ||||
Cash flows from financing activities: | ||||||||
Net borrowings under revolving credit agreements | 30,116 | 72,190 | ||||||
Debt repayment | (5,000 | ) | (3,750 | ) | ||||
Net change in book overdraft | 3,617 | 1,707 | ||||||
Proceeds from exercise of employee stock awards | 4,002 | 5,730 | ||||||
Purchase of treasury shares | (644 | ) | (733 | ) | ||||
Dividends paid | (12,806 | ) | (12,637 | ) | ||||
Other | (51 | ) | (50 | ) | ||||
Windfall tax benefit | 350 | 720 | ||||||
Cash provided by financing activities of continuing operations | 19,584 | 63,177 | ||||||
Cash used in financing activities of discontinued operations | — | (807 | ) | |||||
Cash provided by financing activities | 19,584 | 62,370 | ||||||
Net decrease in cash and cash equivalents | (5,691 | ) | (2,578 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 150 | (166 | ) | |||||
Cash and cash equivalents at beginning of period | 16,593 | 14,985 | ||||||
Cash and cash equivalents at end of period | $ | 11,052 | $ | 12,241 | ||||