Kennametal Announces Fiscal 2017 Second Quarter Results

• Industrial segment sales of $267 million remained relatively flat compared to $269 million in the prior year quarter, reflecting organic growth of 4 percent, offset by a 2 percent decrease due to fewer business days, 1 percent unfavorable currency exchange and 1 percent due to divestiture. Excluding the impact of currency exchange and divestiture, sales increased approximately 6 percent in general engineering and 4 percent in aerospace and defense, offset partially by sales decreases of approximately 5 percent in energy and 2 percent in transportation. General engineering sales grew in Americas and Asia, benefiting from stability in the indirect channel stock levels, while EMEA general engineering activity was flat. Globally, conditions remain favorable in the aerospace sector.  The transportation market was mixed with more projects and favorable conditions contributing to higher sales in Asia, which were more than offset by less favorable conditions in Europe and the Americas. On a segment regional basis excluding the impact of currency exchange and divestiture, sales increased 7 percent in Asia and 4 percent in the Americas, offset partially by a decrease of 2 percent in Europe.
• Industrial segment operating income was $18 million compared to $12 million in the prior year. Adjusted operating income was $24 million compared to $23 million in the prior year quarter, driven primarily by incremental restructuring benefits, higher absorption and productivity and organic sales growth, partially offset by higher employment-related costs and unfavorable mix. Industrial adjusted operating margin was 9.0 percent compared with 8.8 percent in the prior year.
• Widia segment sales of $43 million increased 1 percent from $42 million in the prior year quarter, driven by organic growth of 5 percent, offset partially by a 3 percent decrease due to fewer business days and 1 percent unfavorable currency exchange. On a segment regional basis excluding the impact of currency exchange, sales increased 19 percent in Asia, offset partially by decreases of 4 percent in the Americas and 2 percent in Europe.
• Widia segment operating loss was $3 million compared to $5 million in the prior year. Adjusted operating loss was $1 million compared to $2 million in the prior year quarter, primarily driven by incremental restructuring benefits. Widia adjusted operating loss margin was 1.5 percent compared with 3.8 percent in the prior year.
• Infrastructure segment sales of $177 million decreased 17 percent from $213 million in the prior year quarter, driven by divestiture impact of 14 percent, a 2 percent decrease due to fewer business days and 1 percent unfavorable currency exchange. Excluding the impact of currency exchange and divestiture, sales decreased by approximately 10 percent in earthworks and 5 percent in general engineering, offset partially by an increase of 6 percent in energy. Key energy markets, particularly in North America, began to stabilize in the period. During the quarter, average quarterly U.S. rig counts were still down year-over-year by over 20 percent, but have increased from the lows experienced in the June quarter of fiscal 2016. Sales in the current period associated with oil & gas in Americas have increased year-over-year by approximately 13 percent. Conditions in underground mining in North America continued to be challenging with sales down approximately 24 percent. On a segment regional basis excluding the impact of divestiture and currency exchange, sales decreased 8 percent in Europe and 7 percent in Asia, while sales in the Americas remained flat.
• Infrastructure segment operating income was $10 million compared to operating loss of $238 million in the same quarter of the prior year. Adjusted operating income was $14 million compared to adjusted operating loss of $2 million in the prior year quarter. The change in adjusted operating results was primarily due to lower raw material costs, higher absorption and productivity and incremental restructuring benefits, partially offset by unfavorable mix. Infrastructure adjusted operating income margin was 7.9 percent compared with adjusted operating loss margin of 1.1 percent in the prior year.

Fiscal 2017 First Half Key Developments

• Sales were $965 million, compared to $1,079 million in the same period last year. Sales decreased by 11 percent, driven by divestiture impact of 8 percent, 1 percent unfavorable currency exchange impact, 1 percent decrease due to fewer business days and 1 percent organic decline.
• Operating income was $15 million, compared to operating loss of $227 million in the same period last year. Adjusted operating income was $58 million in the current period, compared to adjusted operating income of $40 million in the prior year. Adjusted operating income increased due to incremental restructuring benefits, lower raw material costs and better absorption and productivity, partially offset by unfavorable mix, lower organic sales and higher employment-related costs. Adjusted operating margin was 6.0 percent, compared to 4.0 percent in the prior year.
• LPS was $0.18 in the current year period, compared with $2.20 the prior year period. Adjusted EPS were $0.35 in the current year period and $0.31 in the prior year period.

Restructuring Programs

Restructuring programs are currently expected to produce combined annual ongoing pre-tax permanent savings of $145-$160 million. In total, pre-tax charges for these initiatives are expected to be approximately $155-$175 million.

Outlook

The company still expects consolidated adjusted EPS for the full fiscal year to be in the range of $1.20 and $1.50 per share and free operating cash flow to be in the range of $90 to $110 million, consistent with previous guidance.

Mr. De Feo commented, "Factory modernization is underway. This is a multi-year program that will likely take time to manifest in the quarterly numbers. In addition, we may accelerate some capital expenditures, which will put pressure on short-term free cash flow. But these are all very positive decisions, as we believe that they will result in excellent project returns. We will be monitoring revenue run rates as the business has shown more rapid improvements than initially expected," De Feo continued, "meaning we may not be able to modernize fast enough to keep up with demand in select locations, causing us to keep direct hourly employment in certain circumstances somewhat higher than previously anticipated. But this is a good problem to have overall. We are particularly pleased to see the Infrastructure results which reflect the substantial improvements we have been making."

Dividend Declared

Kennametal also announced that its board of directors declared a quarterly cash dividend of $0.20 per share. The dividend is payable February 28, 2017 to shareholders of record as of the close of business on February 14, 2017.

The company will discuss its fiscal 2017 second quarter results in a live webcast at 8:30 a.m. Eastern Time, Thursday, February 2, 2017. This event will be broadcast live on the company's website, www.kennametal.com. To access the webcast, select "About Us", "Investor Relations" and then "Events." A recorded replay of this event also will be available on the company's website through March 2, 2017.

Certain statements in this release may be forward-looking in nature, or "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. For example, statements about Kennametal's outlook for earnings, sales volumes, and cash flow for fiscal year 2017 and our expectations regarding future growth and financial performance are forward-looking statements. Any forward looking statements are based on current knowledge, expectations and estimates that involve inherent risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, our actual results could vary materially from our current expectations. There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements. They include: economic recession; our ability to achieve all anticipated benefits of restructuring initiatives; our foreign operations and international markets, such as currency exchange rates, different regulatory environments, trade barriers, exchange controls, and social and political instability; changes in the regulatory environment in which we operate, including environmental, health and safety regulations; potential for future goodwill and other intangible asset impairment charges; our ability to protect and defend our intellectual property; continuity of information technology infrastructure; competition; our ability to retain our management and employees; demands on management resources; availability and cost of the raw materials we use to manufacture our products; product liability claims; integrating acquisitions and achieving the expected savings and synergies; global or regional catastrophic events; demand for and market acceptance of our products; business divestitures;  energy costs; commodity prices; labor relations; and implementation of environmental remediation matters. Many of these risks and other risks are more fully described in Kennametal's latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.

About Kennametal

At the forefront of advanced materials innovation for more than 75 years, Kennametal Inc. is a global industrial technology leader delivering productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 12,000 employees are helping customers in more than 60 countries stay competitive. Kennametal generated nearly $2.1 billion in revenues in fiscal 2016. Learn more at www.kennametal.com.

FINANCIAL HIGHLIGHTS CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
	Three Months Ended December 31,							Six Months Ended December 31,
(in thousands, except per share amounts)	2016				2015			2016				2015
Sales	$	487,573			$	524,021		$	964,713			$	1,079,376
Cost of goods sold	339,950				383,215			673,560				787,345
Gross profit	147,623				140,806			291,153				292,031
Operating expense	111,004				123,580			230,869				252,824
Restructuring and asset impairment charges	8,456				112,237			37,061				121,357
Loss on divestiture	—				133,307			—				133,307
Amortization of intangibles	4,150				5,638			8,421				11,886
Operating income (loss)	24,013 Werbung Mehr Nachrichten zur Kennametal Inc Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 02:00 - PR Newswire FirstGroup Plc - Transaction in Own Shares 02:00 - PR Newswire BlackRock Throgmorton Trust Plc - Total Voting Rights 24.04.24 - ARIVA.DE Redaktion Dow Jones tritt auf der Stelle (38.500 Pkt.) SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59