Kennametal Inc. Reports Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended December 31, 2013; Revises Earnings Guidance for the Fiscal 2014; Declares Quarterly Cash Dividend, Payable on February 26, 2014
Jan 30 14
Kennametal Inc. reported unaudited consolidated earnings results for the second quarter and six months ended December 31, 2013. For the quarter, the company reported sales of $689,936,000 compared to sales of $633,144,000 for the same period a year ago. Operating income was $49,716,000 compared to $66,469,000 last year. Income from continuing operations before income taxes was $40,823,000 compared to $58,844,000 last year. Net income was $24,167,000 compared to $43,309,000 last year. Net income attributable to the company $24,209,000 or $0.30 per diluted share compared to $42,142,000 or $0.52 per diluted share last year. Adjusted sales were $645,111,000. Adjusted operating income was $61,648,000. Adjusted net income was $41,537,000 for the quarter period. Adjusted diluted EPS was $0.52. The decrease in adjusted operating income primarily reflects higher employment and related costs, partially offset by favorable effects of organic growth and lower raw material costs.
For the six months, the company reported sales of $1,309,743,000 compared to sales of $1,262,603,000 for the same period a year ago. Operating income was $108,545,000 compared to $130,850,000 last year. Income from continuing operations before income taxes was $91,961,000 compared to $118,170,000 last year. Net income was $62,725,000 compared to $90,355,000 last year. Net income attributable to the company $62,046,000 or $0.36 per diluted share compared to $88,532,000 or $0.32 per diluted share last year. Net cash flow from operating activities was $84,617,000 compared to $54,235,000 last year. Purchases of property, plant and equipment was $48,804,000 compared to $34,372,000 last year. Free operating cash flow was $36,257,000 compared to $20,567,000 last year. Adjusted return on invested capital (ROIC) was 8.1% as of December 31, 2013. Adjusted sales were $1,264,918,000. Adjusted operating income was $121,575,000. Adjusted net income was $80,148,000 for the quarter period. Adjusted diluted EPS was $1.01. Net capital expenditures were $48 million and $34 million for the six months ended December 31, 2013 and 2012, respectively. Sales increased by 4%, driven by 4% growth related to the TMB acquisition and 1% organic growth, partially offset by a 1% decline due to fewer business days.
The company announced that its board of directors declared a quarterly cash dividend of $0.18 per share. The dividend is payable on February 26, 2014 to shareowners of record as of the close of business on February 11, 2014.
The company expects fiscal 2014 total sales growth in the range of 12% to 13%. Organic sales growth is projected to range from 2% to 4%. Previously, the company had forecast total sales growth ranging from 5% to 7%, with organic sales growth ranging from 4%to 6%. Based on the revision, the company has reduced its EPS guidance for fiscal 2014 to range from $2.60 to $2.75, compared with previous expectation of $2.90 to $3.05. These ranges exclude the impact of the TMB acquisition and related items. Regarding the TMB acquisition, the company expects that it will be dilutive to earnings per share in the range of $0.32 to $0.36 per share for fiscal 2014. Depreciation and amortization related to fixed and intangible asset step-up and acquisition-related charges of $0.09 to $0.13. The company now expects to generate cash flow from operations between $280 million and $310 million for fiscal 2014, based on anticipated capital expenditures of approximately $130 million to $140 million, the company expects to generate between $150 million and $170 million of free operating cash flow for the full fiscal year.