Kennametal posts loss for 1Q
Kennametal said its 2016 fiscal first quarter sales were $555 million, compared with $695 million in the same quarter last year.
Sales decreased by 20 percent, reflecting a 13 percent organic decline due to weakening in served end markets and a 7 percent unfavorable currency exchange impact.
The company posted a loss of $5.7 million, compared to net income of $39.5 million in the same period last year.
Kennametal also announced that it has signed a definitive agreement to sell several non-core businesses related to certain castings, steel-plate fabrication and deburring for an aggregate price of approximately $70 million in cash. Transaction proceeds are expected to be used for debt reduction.
"We remain focused on what we can control and continue to execute our strategy to concentrate on our core businesses and deliver benefits from realigning our cost structure, adjusting our footprint and simplifying our portfolio," said Don Nolan Kennametal president and CEO. "We are on track to achieve our restructuring goals and made a significant step in our portfolio alignment announcing that we have entered into an agreement to sell several non-core businesses representing approximately $220 million in annual revenue. This transaction is expected to be accretive to our operating margin upon closing."
Kennametal adjusted its forecast for the fiscal year as a result of a downturn in its served markets. The company now expects fiscal 2016 total sales to decline in the range of 10 to 14 percent and organic sales to decline in the range of 6 to 10 percent. Previously, the decline in total sales was projected to be in the range of 7 to 9 percent, with a decline in organic sales of 1 to 3 percent.
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