Kaman has warned it will report a loss for the third quarter, ended 30 September, largely due to cost overruns on its troubled SH-2G(A) Super Seasprite naval helicopter programme for Australia. The US company expects to report $9-11 million in additional losses associated with final completion of the programme, begun in 1997.
At the beginning of July, Kaman reported a remaining accrued loss of $13.5 million on the $750 million contract, including $3.1 million recorded in the second quarter to cover the cost of further testing of the SH-2G(A)’s Northrop Grumman-supplied integrated tactical avionics system (ITAS). Delays in development and testing of the ITAS software have been responsible for most of the losses.
Kaman says delivery of the first fully operational aircraft is now targeted for the first quarter of next year. This is a further slip from the “late 2005” date stated in the company’s second-quarter results. Kaman says the Australian government has funded certain additions to the ITAS testing that will extend the schedule.
The first of the 11 helicopters was delivered in 2001, but without the full ITAS software, and production was completed in 2002. In late 2002 an effort was launched to deliver the full-capability aircraft by late 2004, but so far only nine of the helicopters have been provisionally accepted by the Royal Australian Navy.
Kaman says its expected third-quarter loss will also reflect $5 million in additional expenses related to market-driven stock appreciation rights. The rights were granted to principal executives from 1997 to 2003 and are driven by changes in the market value of shares.
Source: Flight International