Hartford Business Journal

HARTFORDBUSINESS.COM | JANUARY 23, 2023 11 TOTAL PROJECT SIZE: 27,000 SF Helping Ideas Take Flight... TAC AIR HANGAR V BRADLEY AIRPORT WINDSOR LOCKS, CT For this project, PDS served in a Design Build role to complete a new 27,000 square foot addition & full office renovation for TAC Air in Windsor Locks, CT. Having worked with TAC Air on numerous projects for over a decade, PDS is no stranger to building hangars. Standing over 44ft tall, this pre-engineered addition is complete with 10 ft. brick veneer, a 180 ft. x 29 ft. exterior rolling door, and a Simple Saver insulation system. The office renovation was complete with all new finishes including a porcelain reception desk, beautiful millwork, windows, ceilings, lights, paint and tile flooring. PDS has always emphasized building long lasting relationships in order to serve our client's needs. SPOTLIGHT ON: HANGAR & OFFICE 107 Old Windsor Road, Bloomfield, CT 06002 | 860.242.8586 | pdsec.com THINK • PLAN • BUILD next generation of fuzes. Kaman recently announced it will consolidate fuze production at its Middletown facility and close its other fuze facility in Orlando by the end of 2024, which will create about $12 million to $15 million in annual cost savings. Walsh said the fuze program gener- ated almost one-third of the compa- ny's annual profit. It's also shuttering production of its K-MAX helicopters, which haven't been a huge revenue driver, Walsh said. Kaman over the past 30 years has designed and produced 60 K-MAX helicopters, which are used for heavy-lift efforts in fire- fighting, forestry, construction and emergency response. Walsh said the company has only sold three or four K-MAX units annu- ally over the past several years, and the variation on order potential has been challenging to navigate. "As our investors know, it's not a very profitable helicopter — it's hard to predict when we're actually going to be able to sell one and the market is very narrow," Walsh said. Ending K-MAX production will lead to layoffs, but Kaman declined to provide specifics. Kaman also declined to disclose its current Connecticut employee count, or potential local staffing impacts from the fuze production consolidation. The company had 1,075 employees statewide and nearly Kaman is developing the KARGO UAV (shown above), an unmanned aerial vehicle that can lift loads of up to 800 pounds. PHOTO | CONTRIBUTED 3,000 employees overall as of September 2022, according to Hart- ford Business Journal's Book of Lists. "The next question, though, is what's next?" Walsh said. "The holy grail of any great publicly traded company is to be consistent and predictable, but when you're dealing with variation it makes it very challenging." Part of the answer to what's next could be the KARGO UAV, an unmanned aerial vehicle that can lift loads of up to 800 pounds. Last year, the U.S. Marine Corps. contracted Kaman to build a scale prototype of the unmanned aerial vehicle that could be used to carry supplies hundreds of miles to troops, or for humanitarian efforts, among other uses. Kaman has partnered with and invested $10 million in Pitts- burgh-based autonomous aircraft tech- nology maker Near Earth Autonomy on the software for the KARGO UAV. "In a very short amount of time we've gone from concept, to half- scale model flying, to full-scale mock-up," Walsh said. "We have a full-scale prototype that's almost done and should be flying in January or February." Walsh said the KARGO UAV has potential across a plethora of U.S. military and commercial markets. "Strategically, what we've done is get out of the older programs that were relatively unprofitable to win more profitable and complicated programs that have higher margins," said Walsh, adding that the company will disclose more information about its 2023 transformation efforts in the first quarter of this year. "We really feel our strength and our future is going to be in the unmanned space." Larry Solow, managing director at investment firm CJS Securities who covers Kaman Corp. as an analyst, said he sees similar upside in the new technology. "The unmanned helicopter has the potential to significantly expand the market for autonomous lifting and far outpace sales of the legacy K-MAX heavy-lift cargo helicopter," which has accumulated more than $750 million in sales during its lifetime, Solow wrote in a recent research report. Solow said his outlook for Kaman in 2023 assumes no additional joint programmable fuze sales as that program comes to a close. But new initiatives like a focus on the KARGO UAV should help mitigate that loss, he said. "These new products are expected to gradually fill the hole left by the ongoing declines in the joint program- mable fuze program," Solow wrote.

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