PITTSBURGH, April 25, 2017
/PRNewswire/ -- Kennametal Inc. (NYSE: KMT) today reported
results for its fiscal 2017 third quarter ended March 31,
2017, with earnings per diluted share (EPS) of $0.48, compared with the prior year quarter
earnings per diluted share of $0.20.
Adjusted EPS were $0.60 in the
current quarter compared with adjusted EPS of $0.37 in the prior year quarter. Operating margin
was 11.0 percent compared to 5.5 percent in the same quarter last
year, while adjusted operating margin was 12.8 percent in the
current period and 7.8 percent in the prior year period.
The current period reported results included restructuring and
related charges of $0.12 per share.
The prior year quarter reported results included restructuring and
related charges of $0.18 per share, a
net gain on divestiture of $0.03 per
share and a tax impact of $0.02 per
share related to prior year second quarter asset impairment
charges.
"This quarter's results exceeded our expectations by almost
every metric," commented Ron De Feo,
Kennametal President and CEO. "Simply stated, revenue grew and
costs declined, reflecting continuing progress with the work we
began nine months ago. Revenue grew 6 percent, of which 5
percent was organic growth, and every region grew. The Widia
segment posted quarterly profit for the first time with an adjusted
operating margin of 2.3 percent. The Industrial and
Infrastructure segments posted adjusted operating margins of 15.1
percent and 12.3 percent, respectively. These are strong
numbers, and we are pleased to see the improvements in both sales
and margins this quarter."
De Feo continued, "Very little of this progress reflects the
structural benefits from the modernization and End-to-End
initiatives that we have planned, nor the benefits from the ongoing
product and process simplification initiatives. The results of
those programs will accrue to the Company over the next two to
three years. This is a time of real change at Kennametal and
we are excited to continue the work of improving the Company."
This earnings release contains non-GAAP financial measures.
Reconciliations of all non-GAAP financial measures are set forth in
the tables attached to this earnings release, and corresponding
descriptions are contained in the Company's report on Form 8-K, to
which this news release is attached.
Fiscal 2017 Third Quarter Key Developments
- Sales were $529 million, compared
with $498 million in the same quarter
last year. Sales increased by 6 percent, driven by 5 percent
organic growth and a 2 percent increase due to more business days,
partially offset by a 1 percent unfavorable currency exchange
impact.
- Pre-tax restructuring and related charges were $10 million, or $0.12 per share, and pre-tax benefits were
approximately $30 million, or
$0.32 per share in the quarter. In
the same quarter last year, pre-tax restructuring and related
charges were $14 million, or
$0.18 per share, and pre-tax benefits
were approximately $10 million, or
$0.11 per share.
- Operating income was $58 million,
compared to $27 million in the same
quarter last year. Adjusted operating income was $68 million, compared to $39 million in the prior year quarter. The
increase in adjusted operating income reflects incremental
restructuring benefits, organic sales growth, higher absorption and
productivity and favorable mix, partially offset by higher
performance-based compensation and the negative effects of higher
raw material costs. Adjusted operating margin was 12.8 percent in
the current period and 7.8 percent in the prior year period.
- The reported effective tax rate (ETR) was 19.0 percent and the
adjusted ETR was 15.3 percent. The difference between reported and
adjusted ETRs is attributable to restructuring and related charges.
For the third quarter of fiscal 2016, the reported ETR was 24.7
percent and the adjusted ETR was 9.9 percent. The increase in the
adjusted effective tax rate was driven primarily by a favorable
impact in the prior year quarter related to a U.S. provision to
return adjustment that did not repeat in the current year,
partially offset by earnings in the U.S. that cannot be tax
affected in the current year due to a full valuation allowance on
our domestic deferred tax assets.
- EPS were $0.48, compared with
$0.20 in the prior year quarter.
Adjusted EPS were $0.60 in the
current quarter and $0.37 in the
prior year quarter.
- Year-to-date free operating cash flow was negative $10 million compared to positive $67 million in the same period last year. The
decrease in free operating cash flow was primarily attributable to
an increase in primary working capital, higher restructuring
payments and capital expenditures, partially offset by higher cash
earnings and lower tax and pension payments.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) were $82 million, compared
with $56 million in the prior year
quarter. Adjusted EBITDA were $91
million in the current quarter and $67 million in the prior year quarter.
Segment Developments for the Fiscal 2017 Third
Quarter
- Industrial segment sales of $289
million increased 6 percent from $274
million in the prior year quarter, reflecting organic growth
of 5 percent and a 3 percent increase due to more business days,
partially offset by 2 percent unfavorable currency exchange.
Excluding the impact of currency exchange, sales increased
approximately 18 percent in energy, 9 percent in general
engineering, 6 percent in aerospace and defense and 3 percent in
transportation. General engineering sales benefited from growth in
the indirect channel, due in part to the strengthening of oil and
gas in the U.S. and growth in the China automotive market. Oil and gas in the
Americas likewise contributed to overall growth in energy, coupled
with increases in power generation globally. Transportation
experienced growth in Asia with
tiered suppliers and truck OEMs which was tempered slightly by
lower project sales in the Americas. Conditions continue to be
favorable in the aerospace sector, with engine growth being
supplemented by increasing demand related to frames. On a segment
regional basis excluding the impact of currency exchange, sales
increased 17 percent in Asia, 6
percent in Europe and 4 percent in
the Americas.
- Industrial segment operating income was $39 million compared to $26 million in the prior year. Adjusted operating
income was $44 million compared to
$31 million in the prior year
quarter, driven primarily by incremental restructuring benefits,
organic sales growth and higher absorption and productivity,
partially offset by higher performance-based compensation and
unfavorable mix. Industrial adjusted operating margin was 15.1
percent compared with 11.2 percent in the prior year.
- Widia segment sales of $46
million increased 10 percent from $42
million in the prior year quarter, driven by organic growth
of 9 percent and a 1 percent increase due to more business days. On
a segment regional basis excluding the impact of currency exchange,
sales increased 14 percent in Asia, 11 percent in the Americas and 3 percent
in Europe.
- Widia segment operating income was $1
million compared to a loss of $2
million in the prior year. Adjusted operating income was
$1 million compared to adjusted
operating loss of less than $1
million in the prior year quarter, primarily driven by
organic growth and incremental restructuring benefits. Widia
adjusted operating income margin was 2.3 percent compared with
adjusted operating loss margin of 1.0 percent in the prior
year.
- Infrastructure segment sales of $193
million increased 6 percent from $181
million in the prior year quarter, driven by organic growth
of 4 percent and a 2 percent increase due to more business days.
Excluding the impact of currency exchange, sales increased by
approximately 22 percent in energy, 3 percent in earthworks and 1
percent in general engineering. Key energy markets, particularly in
North America, showed strong
growth during the quarter with average quarterly land U.S. rig
counts up 37 percent year-over-year. On a segment regional basis
excluding the impact of currency exchange, sales increased 12
percent in Asia and 6 percent in
the Americas, while Europe
remained flat.
- Infrastructure segment operating income was $20 million compared to $4
million in the same quarter of the prior year. Adjusted
operating income was $24 million
compared to $10 million in the prior
year quarter. The change in adjusted operating results was
primarily due to incremental restructuring benefits, higher
absorption and productivity and favorable mix, partially offset by
higher raw material costs. Infrastructure adjusted operating income
margin was 12.3 percent compared with 5.2 percent in the prior
year.
Fiscal 2017 Year-to-Date Key Developments
- Sales were $1,493 million,
compared to $1,577 million in the
same period last year. Sales decreased by 5 percent, driven by
divestiture impact of 5 percent and 1 percent unfavorable currency
exchange impact, partially offset by 1 percent organic growth.
- Operating income was $73 million,
compared to operating loss of $200
million in the same period last year. Adjusted operating
income was $126 million in the
current period, compared to $79
million in the prior year. Adjusted operating income
increased due to incremental restructuring benefits, better
absorption and productivity and lower raw material costs, partially
offset by unfavorable mix and higher employment-related costs.
Adjusted operating margin was 8.4 percent, compared to 5.3 percent
in the prior year.
- EPS was $0.30 in the current year
period, compared with loss per diluted share (LPS) of $2.00 the prior year period. Adjusted EPS were
$0.95 in the current year period and
$0.68 in the prior year period.
Restructuring Programs
Restructuring programs are currently expected to produce
combined annual ongoing pre-tax permanent savings of $165-$180 million. In total, pre-tax charges for
these initiatives are expected to be approximately $165-$195 million.
Restructuring and
related charges and savings (pre-tax)
|
|
|
Estimated
Charges
|
Current Quarter
Charges
|
Charges To
Date
|
Estimated
Annualized Savings
|
Approximate
Current Quarter Savings
|
Expected
Completion Date
|
Headcount reduction
initiatives
|
$60M-$70M
|
$5M
|
$42M
|
$90M
|
$13M
|
12/31/2017
|
Other
|
$105M-$125M
|
$5M
|
$83M
|
$75M-$90M
|
$17M
|
12/31/2018
|
Total
|
$165M-$195M
|
$10M
|
$125M
|
$165M-$180M
|
$30M
|
|
Outlook
The Company now expects consolidated adjusted EPS for the full
fiscal year to be in the range of $1.50 and $1.60 per
share, an increase from previous outlook of $1.20 to $1.50 per
share. The improvement is driven primarily by expectations of sales
being at or near the higher end of the most recent announced
guidance for fiscal 2017. The Company now expects free operating
cash flow to be in the range of $60 to $80
million, a decrease from the previous outlook of
$90 to $110 million. This decrease is
due primarily to our expectation that more working capital will be
required to meet higher demand trends in most of our end
markets.
Dividend Declared
Kennametal also announced that its board of directors declared a
quarterly cash dividend of $0.20 per share. The dividend is payable
May 31, 2017 to shareholders of
record as of the close of business on May
16, 2017.
The company will discuss its fiscal 2017 third quarter results
in a live webcast at 8:30 a.m. Eastern
Time, Wednesday, April 26,
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
May 26, 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 11,000 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
March
31,
|
Nine Months
Ended
March
31,
|
(in thousands,
except per share amounts)
|
2017
|
|
2016
|
2017
|
|
2016
|
Sales
|
$
|
528,630
|
|
|
$
|
497,837
|
|
$
|
1,493,343
|
|
|
$
|
1,577,212
|
|
Cost of goods
sold
|
342,365
|
|
|
340,484
|
|
1,015,926
|
|
|
1,127,828
|
|
Gross profit
|
186,265
|
|
|
157,353
|
|
477,417
|
|
|
449,384
|
|
Operating
expense
|
116,939
|
|
|
121,004
|
|
347,808
|
|
|
373,827
|
|
Restructuring and
asset impairment charges
|
7,169
|
|
|
7,142
|
|
44,230
|
|
|
128,498
|
|
Loss on
divestiture
|
—
|
|
|
(2,557)
|
|
—
|
|
|
130,750
|
|
Amortization of
intangibles
|
4,245
|
|
|
4,429
|
|
12,665
|
|
|
16,315
|
|
Operating income
(loss)
|
57,912
|
|
|
27,335
|
|
72,714
|
|
|
(200,006)
|
|
Interest
expense
|
7,331
|
|
|
7,113
|
|
21,475
|
|
|
20,895
|
|
Other expense
(income), net
|
1,626
|
|
|
(1,938)
|
|
2,470
|
|
|
(1,582)
|
|
Income (loss) before
income taxes
|
48,955
|
|
|
22,160
|
|
48,769
|
|
|
(219,319)
|
|
Provision (benefit)
for income taxes
|
9,301
|
|
|
5,465
|
|
22,401
|
|
|
(61,499)
|
|
Net income
(loss)
|
39,654
|
|
|
16,695
|
|
26,368
|
|
|
(157,820)
|
|
Less: Net income
attributable to noncontrolling interests
|
764
|
|
|
695
|
|
1,873
|
|
|
1,634
|
|
Net income (loss)
attributable to Kennametal
|
$
|
38,890
|
|
|
$
|
16,000
|
|
$
|
24,495
|
|
|
$
|
(159,454)
|
|
PER SHARE DATA
ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
|
|
|
|
Basic earnings (loss)
per share
|
$
|
0.48
|
|
|
$
|
0.20
|
|
$
|
0.31
|
|
|
$
|
(2.00)
|
|
Diluted earnings
(loss) per share
|
$
|
0.48
|
|
|
$
|
0.20
|
|
$
|
0.30
|
|
|
$
|
(2.00)
|
|
Dividends per
share
|
$
|
0.20
|
|
|
$
|
0.20
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
Basic weighted
average shares outstanding
|
80,398
|
|
|
79,871
|
|
80,219
|
|
|
79,814
|
|
Diluted weighted
average shares outstanding
|
81,381
|
|
|
80,224
|
|
80,965
|
|
|
79,814
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
(in
thousands)
|
March 31,
2017
|
|
June 30,
2016
|
ASSETS
|
|
|
|
Cash and cash
equivalents
|
$
|
100,817
|
|
|
$
|
161,579
|
|
Accounts receivable,
net
|
376,956
|
|
|
370,916
|
|
Inventories
|
490,212
|
|
|
458,830
|
|
Other current
assets
|
75,061
|
|
|
84,016
|
|
Total current
assets
|
1,043,046
|
|
|
1,075,341
|
|
Property, plant and
equipment, net
|
728,775
|
|
|
730,640
|
|
Goodwill and other
intangible assets, net
|
487,384
|
|
|
505,695
|
|
Other
assets
|
75,534
|
|
|
51,107
|
|
Total
assets
|
$
|
2,334,739
|
|
|
$
|
2,362,783
|
|
LIABILITIES
|
|
|
|
Current maturities of
long-term debt and capital leases, including
notes
payable
|
$
|
1,591
|
|
|
$
|
1,895
|
|
Accounts
payable
|
190,841
|
|
|
182,039
|
|
Other current
liabilities
|
234,367
|
|
|
243,341
|
|
Total current
liabilities
|
426,799
|
|
|
427,275
|
|
Long-term debt and
capital leases
|
694,631
|
|
|
693,548
|
|
Other
liabilities
|
233,738
|
|
|
246,159
|
|
Total
liabilities
|
1,355,168
|
|
|
1,366,982
|
|
KENNAMETAL
SHAREHOLDERS' EQUITY
|
945,962
|
|
|
964,323
|
|
NONCONTROLLING
INTERESTS
|
33,609
|
|
|
31,478
|
|
Total liabilities
and equity
|
$
|
2,334,739
|
|
|
$
|
2,362,783
|
|
SEGMENT DATA
(UNAUDITED)
|
Three Months
Ended
March
31,
|
Nine Months
Ended
March
31,
|
(in
thousands)
|
2017
|
|
2016
|
2017
|
|
2016
|
Outside
Sales:
|
|
|
|
|
|
|
Industrial
(1)
|
$
|
289,455
|
|
|
$
|
274,123
|
|
$
|
825,990
|
|
|
$
|
812,892
|
|
Widia
(1)
|
46,297
|
|
|
42,249
|
|
130,186
|
|
|
127,696
|
|
Infrastructure
|
192,878
|
|
|
181,465
|
|
537,167
|
|
|
636,624
|
|
Total outside
sales
|
$
|
528,630
|
|
|
$
|
497,837
|
|
$
|
1,493,343
|
|
|
$
|
1,577,212
|
|
Sales By
Geographic Region:
|
|
|
|
|
|
|
North
America
|
$
|
245,558
|
|
|
$
|
232,183
|
|
$
|
684,448
|
|
|
$
|
718,979
|
|
Western
Europe
|
128,675
|
|
|
130,914
|
|
367,004
|
|
|
432,477
|
|
Rest of
World
|
154,397
|
|
|
134,740
|
|
441,891
|
|
|
425,756
|
|
Total sales by
geographic region
|
$
|
528,630
|
|
|
$
|
497,837
|
|
$
|
1,493,343
|
|
|
$
|
1,577,212
|
|
Operating Income
(Loss):
|
|
|
|
|
|
|
Industrial
(1)
|
$
|
38,535
|
|
|
$
|
26,371
|
|
$
|
62,138
|
|
|
$
|
59,855
|
|
Widia
(1)
|
606
|
|
|
(1,679)
|
|
(7,797)
|
|
|
(8,053)
|
|
Infrastructure
|
19,770
|
|
|
3,748
|
|
22,457
|
|
|
(242,417)
|
|
Corporate
(2)
|
(999)
|
|
|
(1,105)
|
|
(4,084)
|
|
|
(9,391)
|
|
Total operating
income (loss)
|
$
|
57,912
|
|
|
$
|
27,335
|
|
$
|
72,714
|
|
|
$
|
(200,006)
|
|
(1)
|
Amounts for the three
and nine months ended March 31, 2016 have been restated to
reflect the change in reportable operating segments
|
(2)
|
Represents
unallocated corporate expenses
|
In addition to reported results under generally accepted
accounting principles in the United
States of America (GAAP), the following financial highlight
tables include, where appropriate, a reconciliation of adjusted
results including: sales; gross profit and margin; operating
expense; operating expense as a percentage of sales; operating
income (loss) and margin; net income (loss); diluted EPS (LPS);
effective tax rate; Industrial sales, operating income and margin;
Widia sales, operating income (loss) and margin; Infrastructure
sales, operating income and margin; free operating cash flow and
E(L)BITDA and margin (which are non-GAAP financial measures), to
the most directly comparable GAAP measures. For those adjustments
that are presented 'net of tax', the tax effect of the adjustment
can be derived by calculating the difference between the pre-tax
and the post-tax adjustments presented. The tax effect on
adjustments is calculated by preparing an overall tax calculation
including the adjustments and then a tax calculation excluding the
adjustments. The difference between these calculations results is
the tax impact of the adjustments.
Management believes that investors should have available the
same information that management uses to assess operating
performance, determine compensation and assess the capital
structure of the company. These non-GAAP measures should not be
considered in isolation or as a substitute for the most comparable
GAAP measures. Investors are cautioned that non-GAAP financial
measures utilized by the company may not be comparable to non-GAAP
financial measures used by other companies. Reconciliations of all
non-GAAP financial measures are set forth in the attached tables
and descriptions of certain non-GAAP financial measures are
contained in our report on Form 8-K to which this release is
attached.
THREE MONTHS ENDED
MARCH 31, 2017 (UNAUDITED)
|
|
(in thousands,
except
percents and per share data)
|
Sales
|
Gross
profit
|
Operating
expense
|
Operating
income
|
Effective
tax
rate
|
Net
income(3)
|
Diluted
EPS
|
Reported
results
|
$
|
528,630
|
|
$
|
186,265
|
|
$
|
116,939
|
|
$
|
57,912
|
|
19.0
|
%
|
$
|
38,890
|
|
$
|
0.48
|
|
Reported
margins
|
|
35.2
|
%
|
22.1
|
%
|
11.0
|
%
|
|
|
|
Restructuring and
related
charges
|
—
|
|
1,644
|
|
(809)
|
|
9,623
|
|
(3.7)
|
|
9,961
|
|
0.12
|
|
Adjusted
results
|
$
|
528,630
|
|
$
|
187,909
|
|
$
|
116,130
|
|
$
|
67,535
|
|
15.3
|
%
|
$
|
48,851
|
|
$
|
0.60
|
|
Adjusted
margins
|
|
35.5
|
%
|
22.0
|
%
|
12.8
|
%
|
|
|
|
(3) Represents amounts
attributable to Kennametal Shareholders.
|
|
Industrial
|
Widia
|
Infrastructure
|
(in thousands,
except percents)
|
Sales
|
Operating
income
|
Sales
|
Operating
income
|
Sales
|
Operating
income
|
Reported
results
|
$
|
289,455
|
|
$
|
38,535
|
|
$
|
46,297
|
|
$
|
606
|
|
$
|
192,878
|
|
$
|
19,770
|
|
Reported operating
margin
|
|
13.3
|
%
|
|
1.3
|
%
|
|
10.3
|
%
|
Restructuring and
related
charges(4)
|
—
|
|
5,142
|
|
—
|
|
466
|
|
—
|
|
3,974
|
|
Adjusted
results
|
$
|
289,455
|
|
$
|
43,677
|
|
$
|
46,297
|
|
$
|
1,072
|
|
$
|
192,878
|
|
$
|
23,744
|
|
Adjusted operating
margin
|
|
15.1
|
%
|
|
2.3
|
%
|
|
12.3
|
%
|
(4) Excludes pre-tax
restructuring related charges recorded in Corporate of
$41.
|
THREE MONTHS ENDED
MARCH 31, 2016 (UNAUDITED)
|
|
(in thousands,
except
percents and per share data)
|
Sales
|
Gross
profit
|
Operating
expense
|
Operating
income
|
Effective tax
rate
|
Net
income(3)
|
Diluted
EPS
|
Reported
results
|
$
|
497,837
|
|
$
|
157,353
|
|
$
|
121,004
|
|
$
|
27,335
|
|
24.7
|
%
|
$
|
16,000
|
|
$
|
0.20
|
|
Reported
margins
|
|
31.6
|
%
|
24.3
|
%
|
5.5
|
%
|
|
|
|
Restructuring and
related
charges
|
—
|
|
1,456
|
|
(5,400)
|
|
13,998
|
|
(4.9)
|
|
14,242
|
|
0.18
|
|
Tax effect of prior
asset
impairment charges
|
—
|
|
—
|
|
—
|
|
—
|
|
(5.8)
|
|
1,251
|
|
0.02
|
|
Loss on
divestiture
|
—
|
|
—
|
|
—
|
|
(2,557)
|
|
(4.1)
|
|
(1,902)
|
|
(0.03)
|
|
Adjusted
results
|
$
|
497,837
|
|
$
|
158,809
|
|
$
|
115,604
|
|
$
|
38,776
|
|
9.9
|
%
|
$
|
29,591
|
|
$
|
0.37
|
|
Adjusted
margins
|
|
31.9
|
%
|
23.2
|
%
|
7.8
|
%
|
|
|
|
|
Industrial
(1)
|
Widia
(1)
|
Infrastructure
|
(in thousands,
except percents)
|
Sales
|
Operating
income
|
Sales
|
Operating
loss
|
Sales
|
Operating
income
|
Reported
results
|
$
|
274,123
|
|
$
|
26,371
|
|
$
|
42,249
|
|
$
|
(1,679)
|
|
$
|
181,465
|
|
$
|
3,748
|
|
Reported operating
margin
|
|
9.6
|
%
|
|
(4.0)%
|
|
|
2.1
|
%
|
Restructuring and
related
charges
|
—
|
|
8,091
|
|
—
|
|
1,255
|
|
—
|
|
4,652
|
|
Loss on
divestiture
|
—
|
|
(3,677)
|
|
—
|
|
—
|
|
—
|
|
1,117
|
|
Adjusted
results
|
$
|
274,123
|
|
$
|
30,785
|
|
$
|
42,249
|
|
$
|
(424)
|
|
$
|
181,465
|
|
$
|
9,517
|
|
Adjusted operating
margin
|
|
11.2
|
%
|
|
(1.0)%
|
|
|
5.2
|
%
|
NINE MONTHS ENDED
MARCH 31, 2017 (UNAUDITED)
|
|
(in thousands,
except percents)
|
Sales
|
Operating
income
|
Net
income(3)
|
Diluted
EPS
|
Reported
results
|
$
|
1,493,343
|
|
$
|
72,714
|
|
$
|
24,495
|
|
$
|
0.30
|
|
Reported operating
margin
|
|
4.9
|
%
|
|
|
Restructuring and
related charges
|
—
|
|
53,064
|
|
51,469
|
|
0.63
|
|
Australia deferred tax
valuation allowance
|
—
|
|
—
|
|
1,288
|
|
0.02
|
|
Adjusted
results
|
$
|
1,493,343
|
|
$
|
125,778
|
|
$
|
77,252
|
|
$
|
0.95
|
|
Adjusted operating
margin
|
|
8.4
|
%
|
|
|
NINE MONTHS ENDED
MARCH 31, 2016 (UNAUDITED)
|
|
(in thousands,
except percents)
|
Sales
|
Operating
(loss)
income
|
Net
(loss)
income(3)
|
Diluted
(LPS)
EPS
|
Reported
results
|
$
|
1,577,212
|
|
$
|
(200,006)
|
|
$
|
(159,454)
|
|
$
|
(2.00)
|
|
Reported operating
margin
|
|
(12.7)
|
%
|
|
|
Restructuring and
related charges
|
—
|
|
37,970
|
|
31,978
|
|
0.42
|
|
Goodwill and other
intangible asset impairment
charges
|
—
|
|
108,456
|
|
81,487
|
|
1.02
|
|
Loss on divestiture
and related charges
|
—
|
|
130,750
|
|
98,448
|
|
1.22
|
|
Operations of divested
businesses
|
(82,512)
|
|
1,912
|
|
1,358
|
|
0.02
|
|
Adjusted
results
|
$
|
1,494,700
|
|
$
|
79,082
|
|
$
|
53,817
|
|
$
|
0.68
|
|
Adjusted operating
margin
|
|
5.3
|
%
|
|
|
FREE OPERATING
CASH FLOW (UNAUDITED)
|
Three Months
Ended
March
31,
|
Nine Months
Ended
March
31,
|
|
(in
thousands)
|
2017
|
|
2016
|
2017
|
|
2016
|
Net cash flow from
operating activities
|
$
|
33,443
|
|
|
$
|
40,870
|
|
$
|
80,021
|
|
|
$
|
145,414
|
|
Purchases of
property, plant and equipment
|
(23,522)
|
|
|
(22,110)
|
|
(94,095)
|
|
|
(83,285)
|
|
Proceeds from
disposals of property, plant and equipment
|
343
|
|
|
700
|
|
3,852
|
|
|
5,102
|
|
Free operating cash
flow
|
$
|
10,264
|
|
|
$
|
19,460
|
|
$
|
(10,222)
|
|
|
$
|
67,231
|
|
EBITDA
(UNAUDITED)
|
Three Months
Ended
March
31,
|
Nine Months
Ended
March
31,
|
|
(in
thousands)
|
2017
|
|
2016
|
2017
|
|
2016
|
Net income (loss)
attributable to Kennametal
|
$
|
38,890
|
|
|
$
|
16,000
|
|
$
|
24,495
|
|
|
$
|
(159,454)
|
|
Add back:
|
|
|
|
|
|
|
Interest
expense
|
7,331
|
|
|
7,113
|
|
21,475
|
|
|
20,895
|
|
Interest
income
|
(306)
|
|
|
(310)
|
|
(759)
|
|
|
(1,112)
|
|
Provision
(benefit) for income taxes
|
9,301
|
|
|
5,465
|
|
22,401
|
|
|
(61,499)
|
|
Depreciation
|
22,375
|
|
|
22,868
|
|
68,369
|
|
|
73,297
|
|
Amortization
of intangibles
|
4,245
|
|
|
4,429
|
|
12,665
|
|
|
16,315
|
|
E(L)BITDA
|
$
|
81,836
|
|
|
$
|
55,565
|
|
$
|
148,646
|
|
|
$
|
(111,558)
|
|
Margin
|
15.5
|
%
|
|
11.2
|
%
|
10.0
|
%
|
|
(7.1)
|
%
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
Restructuring and
related charges
|
9,623
|
|
|
13,998
|
|
53,064
|
|
|
37,970
|
|
Goodwill and other
intangible asset impairment charges
|
—
|
|
|
—
|
|
—
|
|
|
108,456
|
|
Operations of divested
businesses
|
—
|
|
|
—
|
|
—
|
|
|
1,912
|
|
Loss on divestiture
and related charges
|
—
|
|
|
(2,557)
|
|
—
|
|
|
130,750
|
|
Adjusted
EBITDA
|
$
|
91,459
|
|
|
$
|
67,006
|
|
$
|
201,710
|
|
|
$
|
167,530
|
|
Adjusted
margin
|
17.3
|
%
|
|
13.5
|
%
|
13.5
|
%
|
|
11.2
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/kennametal-announces-fiscal-2017-third-quarter-results-300445479.html
SOURCE Kennametal Inc.