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KENNAMETAL ANNOUNCES THIRD QUARTER 1993 EARNINGS

 LATROBE, Pa., April 22 /PRNewswire/ -- Kennametal Inc. (NYSE: KMT) reported today that net income for the third quarter ended March 31, 1993, was $7.3 million, or $0.68 per share, up 36 percent from $5.4 million, or $0.50 per share in the same quarter last year. Sales for the quarter were $154 million, or about the same as last year.
 For the nine months ended March 31, 1993, net income was $12.4 million, or $1.15 per share, as compared with $10.2 million, or $.95 per share, for the same period last year. The nine months results include nonrecurring gains of $1.0 million, or $0.10 per share, in the 1993 second quarter and $0.3 million, or $0.03 per share in the second quarter of last year.
 Robert L. McGeehan, president and chief executive officer, said that earnings for the March 1993 quarter were favorably affected by an increase in domestic sales of metalworking products, increased manufacturing efficiencies, and lower raw material costs. Worldwide sales of metalworking products were flat with those of last year primarily because of lower sales of industrial supply products, unfavorable foreign currency translation effects of the stronger U.S. dollar, and sales volume declines in Europe.
 For the March 1993 quarter, sales of metalcutting inserts and toolholding devices in the United States increased 4 percent from last year with price increases accounting for approximately half of the rise. Total sales of industrial supply products decreased slightly from last year because of prior product rationalization efforts. Sales of industrial supplies through full service supply programs and mail order catalogs continued to grow. Excluding foreign currency translation effects, international metalworking sales decreased 7 percent from last year primarily because of lower sales volume in Europe. Sales in Canada improved slightly while sales in Asia-Pacific markets were about the same as last year.
 Sales of mining and construction tools increased 7 percent from last year as a result of continued strong demand for highway construction tools throughout the world, strong domestic demand for mining tools, and increased sales of snowplow blades in the U.S. Domestic sales of mining tools set a quarterly record while sales of metallurgical products decreased slightly from last year.
 In reviewing the financial results, McGeehan noted that the gross profit margin was 42 percent, up from 40 percent last year. The gross margin benefited from a favorable sales mix, increased manufacturing efficiencies, and lower raw material costs. Operating expenses increased 3 percent from last year primarily because of increased selling and marketing efforts and one-time costs associated with consolidation of certain warehouse facilities. In addition, the effective tax rate was reduced to an annualized rate of 38.5 percent to account for certain anticipated foreign tax effects. McGeehan added that Kennametal continues to focus on increasing customer service capabilities, research and development activities, and cost containment.
 In looking forward to the fourth quarter of fiscal 1993, McGeehan expects consolidated sales to be slightly ahead of last year's level. He expects sales of metalworking products to continue to benefit from full service supply programs, catalog sales, and continued improvement in the U.S. economy. However, international sales are expected to remain weak in Europe as the German and French economies continue to decline. He added that sales of construction tools should continue to increase from highway construction and renovation projects throughout the world.
 KENNAMETAL INC.
 Financial Highlights
 Consolidated financial highlights for Kennametal Inc. (NYSE: KMT) for the quarter and nine months ended March 31, 1993 and 1992, are shown in the following tables (in thousands, except per share amounts). All fiscal year 1993 data are subject to year-end (June 30) adjustment and audit by independent public accountants.
 Quarter Nine Months
 Ended March 31, Ended March 31,
 1993 1992 1993 1992
 Net sales $153,691 $152,857 $443,218 $443,359
 Cost of goods sold 88,748 91,910 264,725 269,931
 Research & development
 expense 3,698 3,068 11,255 10,061
 Selling & marketing
 expense 36,348 34,488 107,804 103,034
 General & adminis-
 trative expense 10,082 11,044 31,617 34,050
 Interest expense 2,420 2,716 7,238 7,875
 Amortization of
 intangibles 949 829 2,606 2,651
 Patent litigation -- -- (1,738) --
 Other (income) expense (287) (374) (525) 165
 Provisions for
 income taxes 4,400 3,800 7,800 5,400
 Net income $ 7,333 $ 5,376 $ 12,436 $ 10,192
 Average shares
 outstanding 10,858 10,739 10,835 10,707
 Earnings per share $ 0.68 $ 0.50 $ 1.15 $ 0.95
 Dividends per share $ 0.29 $ 0.29 $ 0.87 $ 0.87
 Quarter Nine Months
 Ended March 31, Ended March 31,
 1993 1992 1993 1992
 Sales by Product Class:
 Metalworking $125,922 $125,777 $355,180 $360,274
 Mining & construction 22,415 20,943 72,519 65,331
 Metallurgical 5,354 5,583 15,519 14,451
 Other -- 554 -- 3,303
 Sales by Geographic Area:
 Within the U.S. $114,211 $110,678 $323,359 $325,435
 Export & foreign 39,480 42,179 119,859 117,924
 March 31, June 30,
 1993 1992
 Assets:
 Cash & equivalents $ 3,949 $ 9,007
 Accounts receivable, net of
 allowances 92,060 90,985
 Inventories 114,788 118,248
 Total current assets 210,797 218,240
 Net property, plant & equipment 195,313 200,502
 Other assets 48,511 53,425
 Total assets $454,621 $472,167
 Liabilities & Shareholders' Equity:
 Short-term debt $ 31,574 $ 32,683
 Accounts payable 32,984 43,864
 Other current liabilities 32,041 33,589
 Total current liabilities 96,599 110,136
 Term debt, less current portion 93,395 95,271
 Deferred income taxes & other 14,357 15,249
 Shareholders' equity 250,270 251,511
 Total liabilities &
 shareholders' equity $454,621 $472,167
 /delval/
 -0- 4/22/93
 /CONTACT: Mike Mussog of Kennametal Inc., 412-539-4617/
 (KMT)


CO: Kennametal Inc. ST: Pennsylvania IN: MNG SU: ERN

KC -- PG002 -- 9201 04/22/93 09:00 EDT
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Date:Apr 22, 1993
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