Kennametal Announces Fiscal 2017 Second Quarter Results

 

The current period reported results included restructuring and related charges of $0.13 per share and a discrete tax charge of $0.02 per share. The prior year quarter reported results included loss on divestiture of $1.20 per share, goodwill and other intangible asset impairment charges of $0.98 per share, restructuring and related charges of $0.08 per share and operations of divested businesses of $0.02 per share.PITTSBURGH, Feb. 1, 2017 /PRNewswire/ -- Kennametal Inc. (NYSE: KMT) today reported results for its fiscal 2017 second quarter ended December 31, 2016, with earnings per diluted share (EPS) of $0.09, compared with the prior year quarter loss per diluted share (LPS) of $2.12. Adjusted earnings per diluted share (EPS) were $0.24 in the current quarter compared with adjusted EPS of $0.16 in the prior year quarter.

"The second quarter results reflect positive performance from our growth and cost reduction initiatives," commented Ron De Feo, Kennametal President and CEO. "Total company organic sales in the quarter grew 2 percent, marking the first quarterly consolidated organic growth in over two years. Organically, Industrial grew 4 percent, Widia 5 percent, and Infrastructure was flat versus prior year. Adjusted gross profit margin increased 260 basis points and adjusted operating expense decreased 90 basis points, resulting in adjusted operating margin improving 350 basis points. We are pleased to see these improvements during a quarter where end markets were still relatively quiet."

De Feo continued, "There is much work to do however as we strive to simplify, modernize and energize this company. The progress we are making in lowering employment costs is generally on track and evident now in our run rates. We are at the beginning stages of product line simplification, and the End-to-End initiatives by product line are accelerating as we examine all our value streams for simplification and efficiency."

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 Second Quarter Key Developments

  • Sales were $488 million, compared with $524 million in the same quarter last year. Sales decreased by 7 percent, reflecting a 6 percent decline due to divestiture, a 2 percent decrease due to fewer business days and a 1 percent unfavorable currency exchange impact, offset partially by 2 percent organic growth.
  • Pre-tax restructuring and related charges were $12 million, or $0.13 per share, and pre-tax benefits were approximately $24 million, or $0.25 per share in the quarter. In the same quarter last year, pre-tax restructuring and related charges were $9 million, or $0.08 per share, and pre-tax benefits were approximately $8 million, or $0.08 per share.
  • Operating income was $24 million, compared to operating loss of $234 million in the same quarter last year. Adjusted operating income was $36 million, compared to $18 million in the prior year quarter. The increase in adjusted operating income reflects incremental restructuring benefits, higher absorption and productivity, the positive effects of lower raw material costs and sales volume growth, partially offset by the negative impacts of unfavorable price and mix. Adjusted operating margin was 7.3 percent in the current period and 3.8 percent in the prior year period.
  • The reported effective tax rate (ETR) was 50.9 percent and the adjusted ETR was 28.0 percent. The difference between reported and adjusted ETRs includes restructuring and related charges and a discrete tax charge associated with recording a valuation allowance with regards to deferred tax assets in Australia. For the second quarter of fiscal 2016, the reported ETR was 29.7 percent (benefit on a loss) and the adjusted ETR was 11.8 percent (benefit on income). The increase in the adjusted effective tax rate was driven primarily by losses in the U.S. that cannot be tax affected in the current year, jurisdictional mix of earnings and the effect of the R&D legislation enacted in the prior year.
  • EPS were $0.09, compared with LPS of $2.12 in the prior year quarter. Adjusted EPS were $0.24 in the current quarter and $0.16 in the prior year quarter.
  • Year-to-date free operating cash flow was negative $20 million compared to positive $48 million in the same period last year. The decrease in free operating cash flow was primarily attributable to comparatively lower reductions in primary working capital, lower cash earnings and higher capital expenditures, partially offset by lower tax and pension payments.
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) were $49 million, compared with loss before interest, taxes, depreciation and amortization of $203 million in the prior year quarter. Adjusted EBITDA were $61 million in the current quarter and $49 million in the prior year quarter.

Segment Developments for the Fiscal 2017 Second Quarter

  • 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.

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

$50M

$7M

$37M

$72M

$10M

6/30/2017

Other

$105M-$125M

$5M

$78M

$75M-$90M

$14M

12/31/2018

Total

$155M-$175M

$12M

$115M

$147M-$162M

$24M

 
                       

 

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

   

(233,956)

 

14,802

   

(227,343)

 

Interest expense

7,151

   

6,803

 

14,144

   

13,782

 

Other expense (income), net

726

   

(732)

 

844

   

353

 

Income (loss) before income taxes

16,136

   

(240,027)

 

(186)

   

(241,478)

 

Provision (benefit) for income taxes

8,221

   

(71,216)

 

13,100

   

(66,964)

 

Net income (loss)

7,915

   

(168,811)

 

(13,286)

   

(174,514)

 

Less: Net income attributable to noncontrolling interests

653

   

416

 

1,108

   

939

 

Net income (loss) attributable to Kennametal

$

7,262

   

$

(169,227)

 

$

(14,394)

   

$

(175,453)

 

PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS

     

Basic earnings (loss) per share

$

0.09

   

$

(2.12)

 

$

(0.18)

   

$

(2.20)

 

Diluted earnings (loss) per share

$

0.09

   

$

(2.12)

 

$

(0.18)

   

$

(2.20)

 

Dividends per share

$

0.20

   

$

0.20

 

$

0.40

   

$

0.40

 

Basic weighted average shares outstanding

80,206

   

79,840

 

80,131

   

79,784

 

Diluted weighted average shares outstanding

81,026

   

79,840

 

80,131

   

79,784

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

(in thousands)

December 31, 2016

 

June 30, 2016

 

 ASSETS

     

Cash and cash equivalents

$

102,001

   

$

161,579

 

Accounts receivable, net

339,479

   

370,916

 

Inventories

449,890

   

458,830

 

Other current assets

80,375

   

84,016

 

Total current assets

971,745

   

1,075,341

 

Property, plant and equipment, net

725,133

   

730,640

 

Goodwill and other intangible assets, net

489,219

   

505,695

 

Other assets

68,684

   

51,107

 

Total assets

$

2,254,781

   

$

2,362,783

 

 

 LIABILITIES

     

Current maturities of long-term debt and capital leases, including notes payable

$

2,263

   

$

1,895

 

Accounts payable

168,880

   

182,039

 

Other current liabilities

219,008

   

243,341

 

Total current liabilities

390,151

   

427,275

 

Long-term debt and capital leases

694,329

   

693,548

 

Other liabilities

235,620

   

246,159

 

Total liabilities

1,320,100

   

1,366,982

 

KENNAMETAL SHAREHOLDERS' EQUITY

902,806

   

964,323

 

NONCONTROLLING INTERESTS

31,875

   

31,478

 

Total liabilities and equity

$

2,254,781

   

$

2,362,783

 

 

SEGMENT DATA (UNAUDITED)

Three Months Ended 
December 31,

Six Months Ended 
December 31,

(in thousands)

2016

 

2015

2016

 

2015

Outside Sales:

           

Industrial (1)

$

267,492

   

$

268,578

 

$

536,536

   

$

538,770

 

Widia (1)

42,874

   

42,305

 

83,888

   

85,447

 

Infrastructure

177,207

   

213,138

 

344,289

   

455,159

 

Total outside sales

$

487,573

   

$

524,021

 

$

964,713

   

$

1,079,376

 

Sales By Geographic Region:

           

North America

$

223,679

   

$

233,647

 

$

438,890

   

$

486,797

 

Western Europe

118,348

   

145,842

 

238,329

   

301,563

 

Rest of World

145,546

   

144,532

 

287,494

   

291,016

 

Total sales by geographic region

$

487,573

   

$

524,021

 

$

964,713

   

$

1,079,376

 

Operating Income (Loss):

           

Industrial (1)

$

18,067

   

$

12,025

 

$

23,603

   

$

33,483

 

Widia (1)

(2,666)

   

(4,665)

 

(8,403)

   

(6,374)

 

Infrastructure

10,274

   

(237,738)

 

2,687

   

(246,166)

 

Corporate (2)

(1,662)

   

(3,578)

 

(3,085)

   

(8,286)

 

Total operating income (loss)

$

24,013

   

$

(233,956)

 

$

14,802

   

$

(227,343)

 

 

(1)  

Amounts for the three and six months ended December 31, 2015 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 operating loss and margin; Infrastructure sales, operating income (loss) 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 DECEMBER 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

$

487,573

 

$

147,623

 

$

111,004

 

$

24,013

 

50.9

%

$

7,262

 

$

0.09

 

Reported margins

 

30.3

%

22.8

%

4.9

%

     

Restructuring and related charges

 

2,405

 

(922)

 

11,783

 

(14.9)

 

10,904

 

0.13

 

Australia deferred tax valuation allowance

 

 

 

 

(8.0)

 

1,288

 

0.02

 

Adjusted results

$

487,573

 

$

150,028

 

$

110,082

 

$

35,796

 

28.0

%

$

19,454

 

$

0.24

 

Adjusted margins

 

30.8

%

22.6

%

7.3

%

     

 

 

(3) 

Represents amounts attributable to Kennametal Shareholders.

 

Industrial

Widia

Infrastructure

(in thousands, except percents)

Sales

Operating income

Sales

Operating loss

Sales

Operating income

Reported results

$

267,492

 

$

18,067

 

$

42,874

 

$

(2,666)

 

$

177,207

 

$

10,274

 

Reported operating margin

 

6.8

%

 

(6.2)

%

 

5.8

%

Restructuring and related charges

 

5,998

 

 

2,013

 

 

3,766

 

Adjusted results

$

267,492

 

$

24,065

 

$

42,874

 

$

(653)

 

$

177,207

 

$

14,040

 

Adjusted operating margin

 

9.0

%

 

(1.5)

%

 

7.9

%

 

THREE MONTHS ENDED DECEMBER 31, 2015 (UNAUDITED)

 

(in thousands, except percents and per share data)

Sales

Gross profit

Operating expense

Operating (loss)  income

Effective tax rate

Net (loss) income(3)

Diluted (LPS) EPS

Reported results

$

524,021

 

$

140,806

 

$

123,580

 

$

(233,956)

 

29.7

%

$

(169,227)

 

$

(2.12)

 

Reported margins

 

26.9

%

23.6

%

(44.6)

%

     

Restructuring and related charges (4)

 

1,676

 

(3,405)

 

8,862

 

 

6,393

 

0.08

 

Goodwill and other intangible asset impairment charges

 

 

 

108,456

 

(25.0)

 

78,239

 

0.98

 

Loss on divestiture

 

 

 

133,307

 

(17.8)

 

96,167

 

1.20

 

Operations of divested businesses

(31,306)

 

(3,731)

 

(4,453)

 

1,830

 

1.3

 

1,104

 

0.02

 

Adjusted results

$

492,715

 

$

138,751

 

$

115,722

 

$

18,499

 

(11.8)

%

$

12,676

 

$

0.16

 

Adjusted margins

 

28.2

%

23.5

%

3.8

%

     

 

(4) 

Includes pre-tax restructuring-related charges recorded in corporate of $2,281.

 

 

Industrial (1)

Widia (1)

Infrastructure

(in thousands, except percents)

Sales

Operating income

Sales

Operating loss

Sales

Operating loss

Reported results

$

268,578

 

$

12,025

 

$

42,305

 

$

(4,665)

 

$

213,138

 

$

(237,738)

 

Reported operating margin

 

4.5

%

 

(11.0)

%

 

(111.5)

%

Restructuring and related charges (5)

 

4,041

 

 

726

 

 

1,814

 

Goodwill and other intangible asset impairment charges

 

 

 

2,345

 

 

106,111

 

Loss on divestiture

 

7,258

 

 

 

 

126,049

 

Operations of divested businesses

(1,563)

 

78

 

 

 

(29,743)

 

1,752

 

Adjusted results

$

267,015

 

$

23,402

 

$

42,305

 

$

(1,594)

 

$

183,395

 

$

(2,012)

 

Adjusted operating margin

 

8.8

%

 

(3.8)

%

 

(1.1)

%

 

(5) 

Excludes pre-tax restructuring-related charges recorded in corporate of $2,281.

 

SIX MONTHS ENDED DECEMBER 31, 2016 (UNAUDITED)

 

(in thousands, except percents)

Sales

Operating income

Net (loss) 
income(3)

Diluted (LPS) EPS

Reported results

$

964,713

 

$

14,802

 

$

(14,394)

 

$

(0.18)

 

Reported operating margin

 

1.5

%

   

Restructuring and related charges

 

43,441

 

41,507

 

0.52

 

Australia deferred tax valuation allowance

 

 

1,288

 

0.01

 

Adjusted results

$

964,713

 

$

58,243

 

$

28,401

 

$

0.35

 

Adjusted operating margin

 

6.0

%

   

 

 

 

SIX MONTHS ENDED DECEMBER 31, 2015 (UNAUDITED)

 

(in thousands, except percents)

Sales

Operating (loss) income

Net (loss) 
income(3)

Diluted (LPS) EPS

Reported results

$

1,079,376

 

$

(227,343)

 

$

(175,453)

 

$

(2.20)

 

Reported operating margin

 

(21.1)

%

   

Restructuring and related charges

 

23,974

 

17,736

 

0.22

 

Goodwill and other intangible asset impairment charges

 

108,456

 

80,236

 

1.01

 

Loss on divestiture and related charges

 

133,307

 

100,349

 

1.26

 

Operations of divested businesses

(82,512)

 

1,912

 

1,358

 

0.02

 

Adjusted results

$

996,864

 

$

40,306

 

$

24,226

 

$

0.31

 

Adjusted operating margin

 

4.0

%

   

 

 

FREE OPERATING CASH FLOW (UNAUDITED)

Three Months Ended 
December 31,

Six Months Ended 
December 31,

 

(in thousands)

2016

 

2015

2016

 

2015

Net cash flow from operating activities

$

24,718

   

$

65,837

 

$

46,578

   

$

104,544

 

Purchases of property, plant and equipment

(28,309)

   

(23,958)

 

(70,573)

   

(61,175)

 

Proceeds from disposals of property, plant and equipment

2,371

   

2,469

 

3,509

   

4,402

 

Free operating cash flow

$

(1,220)

   

$

44,348

 

$

(20,486)

   

$

47,771

 

 

 

 

EBITDA (UNAUDITED)

Three Months Ended 
December 31,

Six Months Ended 
December 31,

 

(in thousands)

2016

 

2015

2016

 

2015

Net income (loss) attributable to Kennametal

$

7,262

   

$

(169,227)

 

$

(14,394)

   

$

(175,453)

 

Add back:

           

  Interest expense

7,151

   

6,803

 

14,144

   

13,782

 

  Interest income

(206)

   

(327)

 

(453)

   

(802)

 

  Provision (benefit) for income taxes

8,221

   

(71,216)

 

13,100

   

(66,964)

 

  Depreciation

22,827

   

25,117

 

45,994

   

50,429

 

  Amortization of intangibles

4,150

   

5,638

 

8,421

   

11,886

 

E(L)BITDA

$

49,405

   

$

(203,212)

 

$

66,812

   

$

(167,122)

 

Margin

10.1

%

 

(38.8)

%

6.9

%

 

(15.5)

%

             

Adjustments:

           

Restructuring and related charges

11,783

   

8,862

 

43,441

   

23,974

 

Goodwill and other intangible asset impairment charges

   

108,456

 

   

108,456

 

Operations of divested businesses

   

1,830

 

   

1,912

 

Loss on divestiture and related charges

   

133,307

 

   

133,307

 

Adjusted EBITDA

$

61,188

   

$

49,243

 

$

110,253

   

$

100,527

 

Adjusted margin

12.5

%

 

10.0

%

11.4

%

 

10.1

%

 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kennametal-announces-fiscal-2017-second-quarter-results-300400662.html

SOURCE Kennametal Inc.

Investor Relations CONTACT: Kelly Boyer, PHONE: 412-248-8287; Corporate Relations - Media CONTACT: Christina Sutter, PHONE: 724-539-5708