Kennametal posts $388 million loss for 2Q
Kennametal reported a 2 percent decline in sales for its fiscal second quarter, to $676 million, compared with $690 million in the same quarter last year.
The company posted a net loss of $388 million, or $4.89 per share, compared with income of $24 million, or 30 cents per share, in the second quarter last year.
Kennametal said its second-quarter results include a non-cash pre-tax goodwill impairment charge of $377 million as a result of the recent abrupt change in the global energy market.
Sales decreased by 2 percent, reflecting decreases of 4 percent due to unfavorable currency exchange and a 2 percent organic decline, offset partially by a 3 percent increase from acquisition and a 1 percent increase due to more business days.
"While the current weakness in our end markets adversely affected our results, and the nature and magnitude of the impairment charge is disappointing, they also illustrate many opportunities for improving our operations and business portfolio," said president and chief executive officer Don Nolan.
He added that the company is taking additional actions to further reduce its manufacturing footprint and administrative overhead with a newly announced restructuring initiative. These actions are expected to result in $40 million to $50 million of annualized savings and will incur $90 million to $100 million of pre-tax charges as they are implemented over the next 12 to 24 months.
"As attractive as our future may be, Kennametal also faces some serious challenges given that we have underperformed and missed investor expectations. It's clear we have some immediate work to do to deliver better performance by driving organic sales growth, getting our portfolio right and aligning our cost structure accordingly," Nolan said.
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Joyce Lansdale and Vallen. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and David Kahle, as well as interviews with numerous product and distribution industry experts.
