Kennametal sales decline 7 percent
Kennametal reported sales of $488 million for its fiscal 2017 second quarter, 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.
Net income of $7.2 million, or 9 cents per share, compared to a loss of $169.2 million, or a loss of $2.12 per share, in the same period last year.
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.
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.
"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," said Ron De Feo, Kennametal president and CEO.
He added, "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."