Just about everything has a bearing on the business of Kaydon Corporation. The company custom designs, engineers, and manufactures bearings and bearing systems, slip rings, filtration products, and seals. Kaydon operates through three segments: Friction Control Products (anti-friction and split roller bearings, and specialty balls), Velocity Control Products (industrial shock absorbers, velocity controls, gas springs, and rotary dampers), and Other Industrial Products, including metal alloys, machine tool parts, presses, dies, and benders. Kaydon's products are used in a range of performance-critical applications by customers in aerospace to alternative energy and industrial markets.
Despite the breadth of its product portfolio and customer base, Kaydon has been bruised by the economic recession's impact on demand from end industrial markets in recent years. While its revenues from 2010 to 2011 remained static, Kaydon's net income declined by 12% from $56 million to $49 million. Throughout 2011 the company suffered from an overall decline in sales within the wind energy and military markets.
Over the years, a large component of the company's growth strategy has involved the investment in developing products related to wind energy production. While sales generated by its wind energy products leveled off in 2011 -- wind energy shipments only totaled $54 million, compared to $96 million in 2010 and $103 million in 2009 -- Kaydon will continue to expand operations related to the industry and sees a bright future in 2012 and beyond. Several of the company's operating units sell to business units of General Electric, which accounted for 10% and 17% of total sales in 2011 and 2010, respectively.
To boost its Velocity Control Products segment (about a quarter of consolidated sales), Kaydon in mid-2012 acquired Fabreeka Group Holdings for about $54 million. Massachusetts-based Fabreeka supplies engineered vibration-isolation and shock-control products, such as isolation pads, isolation mounts, and highly engineered vibration products. Markets serviced by Fabreeka include test and measurement, industrial machinery, manufacturing, precision equipment, aerospace, and defense. This segment previously received a much needed boost with the 2011 acquisition of HAHN-Gasfedern, a Germany-based manufacturer of industrial gas and tension springs and dampers.
Janus Capital Management LLC owns about 13% of the company. – less