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 LATROBE, Pa., April 21 /PRNewswire/ -- Kennametal Inc. (NYSE: KMT) reported today that net income for the third quarter ended March 31, 1992 was $5.4 million, or $0.50 per share, as compared with $5.9 million, or $0.56 per share in the same quarter last year.
 Net income for the third quarter of last year included a nonrecurring pretax charge of $4.6 million, or $0.26 per share, relating to patent litigation. Excluding this charge, net income for the third quarter of last year was $8.7 million, or $0.82 per share. Sales for the March 1992 quarter were $153 million, down three percent from $158 million last year.
 For the nine months ended March 31, 1992, net income was $10.2 million, or $0.95 per share, as compared with $19.2 million, or $1.82 per share, for the same period last year. Excluding the nonrecurring charge mentioned above, net income for last year was $21.9 million, or $2.08 per share. Sales through nine months of fiscal 1992 were $443 million, down four percent from $462 million last year.
 Robert L. McGeehan, President and Chief Executive Officer, said that earnings for the March 1992 quarter were adversely affected by lower sales of metalworking products, higher raw material costs, and lower production levels in most of the company's manufacturing operations. While sales of metalworking products improved from the December 1991 quarter, sales for the March 1992 quarter decreased five percent from last year as the result of generally weaker economic conditions and less metalcutting activity.
 For the March 1992 quarter, sales of metalworking products in the United States decreased slightly from last year. Sales of metalcutting inserts and toolholding products decreased while sales of specialty carbide products and industrial tools and supplies continued to grow. Excluding foreign currency effects, international metalworking sales decreased 11 percent from last year primarily because of lower sales in Europe and Canada. Sales in Asia-Pacific markets continued to grow.
 Sales of coal and construction tools increased two percent from last year as strong international demand for construction tools was substantially offset by lower sales of snowplow blades in the United States. Sales of coal tools increased slightly from last year.
 In reviewing the financial results, McGeehan noted that the gross margin was 39.9 percent, down from 43.7 percent last year. The gross margin was adversely affected by higher raw material costs, lower production levels, and a less favorable sales mix. Kennametal's production levels were about 15 percent below last year as inventories were reduced $5.3 million, or four percent, during the March 1992 quarter. Operating expenses decreased three percent from last year as a result of previous cost reduction actions and ongoing cost containment efforts. Kennametal's average total employment decreased seven percent from last year.
 In looking to the fourth quarter of fiscal 1992, McGeehan stated that sales are expected to again fall below last year's level. Given the slow economic recovery, sales of metalworking products should remain about the same as the March 1992 quarter while coal and construction tools should continue to grow. He added that Kennametal's financial condition remains strong and the company continues to focus on long-range strategies and serving customers more efficiently.
 Financial Highlights
 Consolidated financial highlights for Kennametal Inc. for the quarter and nine months ended March 31, 1992 are shown in the following tables (in thousands, except per share amounts). All fiscal year 1992 data are subject to year-end (June 30) adjustment and audit by independent public accountants.
 Quarter Nine Months
 Ended March 31, Ended March 31,
 1992 1991 1992 1991
 Net sales $152,857 $157,849 $443,359 $462,133
 Cost of goods sold 91,910 88,849 269,931 265,605
 Research and development
 expense 3,068 3,469 10,061 10,857
 Marketing expense 34,488 34,919 103,034 101,510
 General & adminis-
 trative expense 11,044 11,791 34,050 35,200
 Interest expense 2,716 2,923 7,875 9,107
 Amortization of
 intangibles 829 982 2,651 3,065
 Patent litigation - 4,550 - 4,550
 Other income
 (expense) 374 465 (165) 1,328
 Provisions for
 income taxes 3,800 4,900 5,400 14,400
 Net income $ 5,376 $ 5,931 $ 10,192 $ 19,167
 Average shares
 outstanding 10,739 10,543 10,707 10,527
 Earnings per share $ 0.50 $ 0.56 $ 0.95 $ 1.82
 Dividends per share$ 0.29 $ 0.29 $ 0.87 $ 0.87
 Quarter Nine Months
 Ended March 31, Ended March 31,
 1992 1991 1992 1991
 Sales by Product
 Metalworking $125,777 $132,181 $360,274 $384,499
 Coal and construction 20,943 20,476 65,331 62,804
 Metallurgical 5,583 5,192 14,451 14,830
 Other 554 - 3,303 -
 Sales by Geographic
 Within the U.S. $110,678 $111,876 $325,435 $328,826
 Export & foreign 42,179 45,973 117,924 133,307
 March 31, June 30,
 1992 1991
 Cash & equivalents $ 10,933 $ 11,288
 Accounts receivable,
 net of allowances 94,301 96,760
 Inventories 119,046 119,767
 Total current assets 224,280 227,815
 Net property, plant & equipment 197,927 193,830
 Other assets 54,789 54,549
 Total assets $476,996 $476,194
 Liabilities & Shareholders' Equity:
 Short-term debt $ 39,032 $ 57,597
 Accounts payable 44,774 47,021
 Other current liabilities 30,830 34,766
 Total current liabilities 114,636 139,384
 Term debt, less current portion 96,592 73,113
 Deferred income taxes & other 17,674 20,162
 Shareholders' equity 248,094 243,535
 Total liabilities &
 shareholders' equity $476,996 $476,194
 -0- 4/21/92
 /CONTACT: Ron Szymanski of Kennametal, 412-539-4617/
 (KMT) CO: Kennametal Incorporated ST: Pennsylvania IN: MNG SU: ERN

JT -- PG006 -- 0432 04/21/92 09:24 EDT
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Date:Apr 21, 1992

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