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Kennametal Announces Fourth Quarter and Full Year Results for Fiscal 2007
-- Quarter earnings per diluted share (EPS) of $1.57 -- Second consecutive quarter of record adjusted EPS -- Record quarter sales -- Fiscal 2007 reported EPS of $4.44; adjusted EPS of $4.56 -- Record fiscal year sales and adjusted EPS
LATROBE, Pa., July 25, 2007 /PRNewswire-FirstCall via COMTEX News Network/ --
Kennametal Inc. (NYSE: KMT) today reported fiscal 2007 fourth quarter EPS of $1.57. This represents a decrease of 62 percent from the prior year quarter reported EPS of $4.11, and a 26 percent increase compared with prior year adjusted EPS of $1.25. Prior year quarter EPS special items totaled $2.86 per share and related primarily to the gain on the sale of J&L Industrial Supply (J&L) of $3.31 per share.
Fiscal 2007 reported EPS decreased 31 percent to $4.44, compared with prior year reported EPS of $6.48. Fiscal 2007 adjusted EPS were $4.56, compared with prior year adjusted EPS of $3.95, an increase of 15 percent.
Carlos M. Cardoso, Kennametal's President and Chief Executive Officer said, "Once again, we demonstrated our ability to deliver solid sales growth and strong performance in EBIT margin, EPS and ROIC. During fiscal year 2007, we completed five acquisitions: Sintec, Camco, Federal Signal's cutting tool business, International Specialty Alloys and Kenci. We have strategically redeployed our cash to acquire businesses that both complement our existing portfolio and offer additional opportunities for sales growth and margin expansion."
Cardoso added, "We attribute our successes to the strength of our operations, as well as to our proven strategy of balancing our business mix, geographic presence and end markets. As always, we continue to implement our strategy under the disciplines of the Kennametal Value Business System, our management operating system that serves as the foundation of our company. As we move forward, we will further capitalize on our strengths and opportunities to drive our operating and financial performance to even higher levels."
Reconciliation of all non-GAAP financial measures is set forth in the attached tables.
Highlights of Fiscal 2007 Fourth Quarter
-- Sales for the quarter were $657 million, compared with $612 million in
the same quarter last year. Sales grew 6 percent on an organic basis
and also benefited 3 percent from favorable foreign currency effects.
This growth was partially offset by the net impact of acquisitions and
divestitures of 2 percent, primarily the divestiture of J&L, which was
completed on May 31, 2006. J&L contributed sales of $47 million in the
June quarter last year.
-- Income from continuing operations was $62 million, compared with $176
million in the prior year quarter, a decrease of 65 percent due
primarily to the prior year gain on the sale of J&L. Excluding special
items from the previous year, income from continuing operations grew 29
percent over the prior year quarter. The current year quarter results
benefited from organic sales growth, a reduction in operating expenses
and lower securitization fees. Amortization expense increased
primarily as a result of recent acquisitions.
-- The effective tax rate for the June quarter was 27 percent, compared
with 41 percent in the prior year quarter. The current year rate
benefited from increased earnings from the company's pan-European
business strategy, while certain special items unfavorably impacted the
prior year rate.
-- Reported EPS decreased 62 percent to $1.57, compared with prior year
quarter reported EPS of $4.11. Reported EPS increased 26 percent,
compared with prior year quarter adjusted EPS of $1.25. A
reconciliation follows:
Earnings Per Diluted Share Reconciliation
Fourth Quarter FY 2007 Fourth Quarter FY 2006
Reported EPS $1.57 Reported EPS $4.11
No special items Gain on sale of J&L
and transaction
-related charges (3.24)
Loss on sale of
Electronics 0.39
Tax impact of cash
repatriation under
AJCA 0.28
CPG goodwill
impairment and
transaction-related
charges, net of
tax benefit (0.06)
Loss on sale of
Presto 0.04
Favorable resolution
of tax contingencies (0.27)
$1.57 Adjusted EPS $1.25
-- Cash flow from operating activities grew to $199 million in fiscal
2007, compared with $19 million in the prior year. Free operating cash
flow (FOCF) was an inflow of $110 million for fiscal 2007, compared
with an outflow of $58 million in the prior year. Included in the
current year FOCF were first quarter income tax payments of $86
million, primarily related to the gain on the sale of J&L and cash
repatriated in 2006 under the American Jobs Creation Act. FOCF in the
prior year included $110 million of repayments related to the company's
accounts receivable securitization program and $73 million of pension
funding. Adjusted FOCF, excluding the effects of these items,
increased 58 percent to $197 million, compared with $125 million in
fiscal 2006.
-- Adjusted return on invested capital (ROIC) was 11.3 percent, compared
with 11.4 percent in the prior year.
-- Kennametal acquired Purity Metal Holdings, Inc. and its wholly owned
subsidiary, International Specialty Alloys, Inc. (ISA). ISA
manufactures high-purity specialty metal products for the aerospace,
defense and specialty alloy industries, and enhances the company's
advanced materials segment.
-- Kennametal also acquired the remaining ownership interest in its
Spanish affiliate, Kenci, S.A., which is the company's sales and
service company operating in Spain and Portugal. This acquisition adds
to Kennametal's metalworking segment.
Highlights of Fiscal 2007
-- Sales were $2.4 billion, compared with $2.3 billion in the prior year
period. Sales grew 6 percent on an organic basis and 3 percent due to
favorable foreign currency effects. This growth was partially offset
by the net impact of acquisitions and divestitures of 7 percent,
primarily the J&L divestiture. J&L contributed sales of $251 million
in the prior year.
-- Income from continuing operations was $177 million, compared with $272
million in the prior year, a decrease of 35 percent due primarily to
the prior year gain on the sale of J&L. Excluding special items in
both periods, income from continuing operations increased 16 percent
compared with the prior year. The current year results benefited from
organic sales growth and a reduction in operating expenses.
Amortization expense increased due primarily to recent acquisitions.
Additionally, the current year results benefited from lower interest
expense and lower securitization fees.
-- The effective tax rate was 28 percent, compared with the prior year
rate of 39 percent. The current year rate benefited from increased
earnings from the company's pan-European business strategy, as well as
the extension of the research, development and experimental tax credit.
In addition, certain special items unfavorably impacted the prior year
rate.
-- Reported EPS of $4.44 decreased 31 percent compared with prior year
reported EPS of $6.48. Adjusted EPS of $4.56 increased 15 percent
compared with prior year adjusted EPS of $3.95. A reconciliation
follows:
Earnings Per Diluted Share Reconciliation
Year ended June 30, 2007 Year ended June 30, 2006
Reported EPS $4.44 Reported EPS $6.48
Electronics impairment Gain on sale of J&L
and divestiture-related and transaction-related
charges 0.08 charges (3.24)
Loss on divestiture of CPG
and transaction-related Loss on sale of
charges 0.01 Electronics 0.39
Adjustment on J&L divestiture Tax impact of cash
and transaction-related repatriation under
charges 0.03 AJCA 0.28
CPG goodwill
impairment and
transaction-related
charges, net of tax
benefit 0.07
Loss on sale of
Presto 0.24
Favorable resolution
of tax contingencies (0.27)
Adjusted EPS $4.56 Adjusted EPS $3.95
-- Kennametal expanded its advanced materials segment with the
acquisitions of the Sintec Group, which manufactures ceramic engineered
components used in the aerospace, general engineering, metallizing and
medical markets; the Camco Group, which manufactures specialized saw
tips and supplies for the forestry and woodworking industry; and Purity
Metal Holdings, Inc. and its wholly-owned subsidiary, ISA.
-- Kennametal also added to its metalworking segment with the acquisitions
of Federal Signal Corporation's cutting tool business, which produces,
markets and services super hard polycrystalline diamond and cubic boron
nitride cutting tools, tool holding systems and certain specialized
turning tools; and the remaining ownership interest in the company's
Spanish affiliate, Kenci, S.A.
Business Segment Highlights for the Fiscal 2007 Fourth Quarter
Metalworking Solutions & Services Group (MSSG) continued to deliver top- line growth in the June quarter, led by year-over-year expansion in the distribution, aerospace and machine tool markets, and the effects of acquisitions. The European market continued to be favorable. Asia Pacific and India delivered strong growth, while the North American market declined slightly.
In the June quarter, MSSG sales were higher by 15 percent as a result of 5 percent organic growth, 6 percent net impact of acquisitions and divestiture and 4 percent favorable foreign currency effects. Europe sales increased 9 percent. Asia Pacific and India sales grew by 31 percent and 8 percent, respectively. North America sales decreased by 2 percent.
MSSG operating income increased by 17 percent, and the operating margin increased over the same quarter last year. The current quarter results benefited from top-line growth and ongoing cost containment. The prior year quarter results included a loss on the sale of Presto of $1 million.
Advanced Materials Solutions Group (AMSG) also continued to deliver top- line growth in the June quarter, driven by favorable international market conditions and the effects of acquisitions. Strong growth in the energy and mining markets continued to contribute to AMSG's results.
AMSG sales grew 18 percent as a result of 8 percent organic growth, 9 percent impact of acquisitions and 1 percent favorable foreign currency effects. Energy product sales were up 17 percent, mining and construction product sales were higher by 4 percent, and engineered product sales increased 1 percent.
AMSG operating income was up 11 percent driven by top-line growth while the operating margin was lower than the prior year due primarily to higher raw material costs in the current quarter.
Outlook
Worldwide market conditions support Kennametal's expectations of continued top-line growth during fiscal 2008. Based on global economic indicators, the company believes that the moderation in the North American market will continue to persist in the near term. The company also believes that the European market will continue to be favorable, and that business conditions will continue to be robust in developing economies. While there remain some uncertainties and risks related to the macro-economic environment, fundamental drivers for global demand appear to be stable.
The company anticipates that many of its end markets will continue to operate at favorable levels for the fiscal year, with moderating growth rates for some regions and market sectors.
Kennametal expects sales growth in the range of 8 to 10 percent for fiscal 2008, continuing the trend of consistently outpacing worldwide industrial production rates by two to three times.
The company expects fiscal 2008 EPS to be in the range of $5.30 to $5.50, excluding the effect of a non-cash tax charge that will be recorded in the September quarter of fiscal 2008. This charge is estimated to be in the range of $5 million to $6 million, or $0.12 to $0.15 per share, to reflect the impact of a German tax reform bill enacted on July 6, 2007. The fiscal 2008 guidance midpoint represents 18 percent growth, compared with fiscal 2007 adjusted EPS. Consistent with historical seasonal patterns, the company expects approximately 65 percent of the forecasted EPS to be realized in the second half.
In the first quarter of fiscal 2008, Kennametal expects sales growth to be in the range of 9 to 10 percent, and EPS to be in the range of $0.95 to $1.00, excluding the effect of the non-cash tax charge related to the recently enacted German tax reform bill.
Kennametal anticipates cash flow from operating activities of approximately $275 million to $285 million for fiscal 2008. Based on anticipated capital expenditures of $140 million, the company expects to generate between $135 million to $145 million of FOCF for fiscal 2008.
Dividend Declared
Kennametal announced today that its Board of Directors declared a regular quarterly cash dividend of $0.21 per share. The dividend is payable August 22, 2007 to shareowners of record as of the close of business on August 7, 2007.
Kennametal advises shareowners to note monthly order trends, for which the company makes a disclosure ten business days after the conclusion of each month. This information is available on the Investor Relations section of Kennametal's corporate web site at http://www.kennametal.com.
Fourth quarter and full year results for fiscal 2007 will be discussed in a live Internet broadcast at 10:00 a.m. Eastern time today. This event will be broadcast live on the company's website, http://www.kennametal.com. Once on the homepage, click "Corporate," and then "Investor Relations." The replay of this event will also be available on the company's website through August 22, 2007.
This release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. You can identify forward- looking statements by the fact they use words such as "should," "anticipate," "estimate," "approximate," "expect," "may," "will," "project," "intend," "plan," "believe" and other words of similar meaning and expression in connection with any discussion of future operating or financial performance. These statements are likely to relate to, among other things, our strategy, goals, plans and projections regarding our financial position, results of operations, market position, and product development, all of which are based on current expectations that involve inherent risks and uncertainties, including factors that could delay, divert or change any of them in future periods. It is not possible to predict or identify all factors; however, they may include the following: global and regional economic conditions; energy costs; risks associated with the availability and costs of raw materials; commodity prices; risks associated with integrating recent acquisitions, as well as any future acquisitions, and achieving the expected savings and synergies; risks relating to business divestitures; competition; demands on management resources; risks associated with international markets, such as currency exchange rates and social and political environments or instability; future terrorist attacks or acts of war; labor relations; demand for and market acceptance of new and existing products; and risks associated with the implementation of restructuring plans, cost-reduction initiatives and environmental remediation matters. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We provide additional information about many of the specific risks our Company faces in the "Risk Factors" Section of our Annual Report on Form 10-K, as well as in our other securities filings. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.
Kennametal Inc. (NYSE: KMT) is a leading global supplier of tooling, engineered components and advanced materials consumed in production processes. The company improves customers' competitiveness by providing superior economic returns through the delivery of application knowledge and advanced technology to master the toughest of materials application demands. Companies producing everything from airframes to coal, from medical implants to oil wells and from turbochargers to motorcycle parts recognize Kennametal for extraordinary contributions to their value chains. Customers buy approximately $2.4 billion annually of Kennametal products and services - delivered by our 13,500 talented employees in over 60 countries - with approximately 50 percent of these revenues coming from outside the United States. Visit us at http://www.kennametal.com [KMT-E]
FINANCIAL HIGHLIGHTS
Consolidated Statements of Income (Unaudited):
(in thousands, except Three Months Ended Year Ended
per share amounts) June 30, June 30,
2007 2006 2007 2006
Sales $657,477 $612,167 $2,385,493 $2,329,628
Cost of goods sold(a) 421,934 388,133 1,543,931 1,497,462
Gross profit 235,543 224,034 841,562 832,166
Operating expense 142,328 146,316 554,634 579,907
Asset impairment
charge - - 5,970 -
(Gain) loss on
divestitures - (230,578) 1,686 (229,886)
Amortization of
intangibles 4,149 1,428 9,852 5,626
Operating income 89,066 306,868 269,420 476,519
Interest expense 7,513 7,478 29,141 31,019
Other income, net (3,783) (307) (9,217) (2,219)
Income from continuing
operations before
income taxes and
minority interest 85,336 299,697 249,496 447,719
Provision for income
taxes 23,014 123,536 70,469 172,902
Minority interest
expense 229 525 2,185 2,566
Income from continuing
operations 62,093 175,636 176,842 272,251
Loss from discontinued
operations(b) - (11,440) (2,599) (15,968)
Net income $62,093 $164,196 $174,243 $256,283
Basic earnings (loss)
per share:
Continuing operations $1.61 $4.52 $4.61 $7.08
Discontinued
operations(b) - (0.30) (0.07) (0.41)
$1.61 $4.22 $4.54 $6.67
Diluted earnings (loss)
per share:
Continuing operations $1.57 $4.40 $4.50 $6.88
Discontinued
operations(b) - (0.29) (0.06) (0.40)
$1.57 $4.11 $4.44 $6.48
Dividends per share $0.21 $0.19 $0.82 $0.76
Basic weighted average
shares outstanding 38,618 38,888 38,394 38,432
Diluted weighted
average shares
outstanding 39,489 39,923 39,273 39,551
(a) For the three months ended June 30, 2006, cost of goods sold includes
a benefit of $1,961 from the divestitures of J&L and Presto. For the
year ended June 30, 2006, cost of goods sold includes a charge of
$7,329 related to the divestiture of Presto.
(b) Loss from discontinued operations reflects divested results of
Electronics - AMSG and CPG - MSSG.
FINANCIAL HIGHLIGHTS (Continued)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited):
(in thousands) June 30, June 30,
2007 2006
ASSETS
Cash and cash equivalents $50,433 $233,976
Accounts receivable, net 466,690 386,714
Inventories 403,613 334,949
Current assets of discontinued operations
held for sale - 24,280
Other current assets 95,766 106,938
Total current assets 1,016,502 1,086,857
Property, plant and equipment, net 614,019 530,379
Goodwill and intangible assets, net 834,290 618,423
Assets of discontinued operations held for sale - 11,285
Other assets 139,111 188,328
Total $2,603,922 $2,435,272
LIABILITIES
Current maturities of long-term debt and
capital leases, including notes payable $5,430 $2,214
Accounts payable 189,301 124,907
Current liabilities of discontinued
operations held for sale - 3,065
Other current liabilities 290,201 332,013
Total current liabilities 484,932 462,199
Long-term debt and capital leases 361,399 409,508
Other liabilities 255,500 253,574
Total liabilities 1,101,831 1,125,281
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES 17,624 14,626
SHAREOWNERS' EQUITY 1,484,467 1,295,365
Total $2,603,922 $2,435,272
SEGMENT DATA (Unaudited):
(in thousands) Three Months Ended Year Ended
June 30, June 30,
2007 2006 2007 2006
Outside Sales:
Metalworking Solutions
and Services Group $430,630 $373,839 $1,577,234 $1,401,777
Advanced Materials
Solutions Group 226,847 191,758 808,259 676,556
J&L Industrial Supply - 46,570 - 251,295
Total outside sales $657,477 $612,167 $2,385,493 $2,329,628
Sales By Geographic Region:
United States $306,848 $322,903 $1,134,752 $1,239,449
International 350,629 289,264 1,250,741 1,090,179
Total sales by
geographic region $657,477 $612,167 $2,385,493 $2,329,628
Operating Income (Loss):
Metalworking Solutions
and Services Group $ 69,729 $59,390 $ 221,387 $197,525
Advanced Materials
Solutions Group 37,974 34,061 131,323 121,058
J&L Industrial Supply - 238,284 - 260,894
Corporate and
eliminations(c) (18,637) (24,867) (83,290) (102,958)
Total operating income $89,066 $306,868 $269,420 $476,519
(c) Includes corporate functional shared services and intercompany
eliminations.
FINANCIAL HIGHLIGHTS (Continued)
In addition to reported results under generally accepted accounting principles in the United States of America (GAAP), the following financial highlight tables also include, where appropriate, a reconciliation of gross profit, operating expense, operating income, income from continuing operations, net income and diluted earnings per share (which are GAAP financial measures), in each case excluding special items, as well as adjusted free operating cash flow and adjusted return on invested capital (which are non-GAAP financial measures), to the most directly comparable GAAP measures. Management believes that the investor should have available the same information that management uses to assess operating performance, determine compensation, and assess the capital structure of the Company. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Investors are cautioned that non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies.
There were no special items for the three months ended June 30, 2007.
RECONCILIATION TO GAAP - THREE MONTHS ENDED JUNE 30, 2006 (Unaudited)
(in thousands, except Income from
per share amounts) Gross Operating Operating Continuing Net Diluted
Profit Expense Income Operations Income EPS
2006 Reported
Results $224,034 $146,316 $306,868 $175,636 $164,196 $4.11
Gain on sale
of J&L (1,935) - (233,949) (132,009) (132,009)(3.31)
J&L transaction
-related charges - (4,510) 4,510 2,796 2,796 0.07
Loss on divestiture
of Electronics - - - - 15,366 0.39
Tax impact of cash
repatriation
under AJCA - - - 11,176 11,176 0.28
CPG goodwill
impairment and
transaction-related
charges - - - - (2,192)(0.06)
Loss on sale of Presto (26) - 1,410 1,410 1,410 0.04
Favorable resolution
of tax contingencies - - - (10,873) (10,873)(0.27)
2006 Results,
excl. special
items $222,073 $141,806 $78,839 $48,136 $49,870 $1.25
RECONCILIATION TO GAAP - YEAR ENDED JUNE 30, 2007 (Unaudited)
Income from
(in thousands, except Gross Operating Operating Continuing Net Diluted
per share amounts) Profit Expense Income Operations Income EPS
2007 Reported
Results $841,562 $554,634 $269,420 $176,842 $174,243 $4.44
Electronics
impairment and
divestiture-related
charges - - - - 3,213 0.08
Loss on sale of CPG
and transaction
-related charges - - - - 368 0.01
Adjustment on J&L
divestiture and
transaction-related
charges - (333) 2,019 1,252 1,252 0.03
2007 Results,
excl. special
items $841,562 $554,301 $271,439 $178,094 $179,076 $4.56
FINANCIAL HIGHLIGHTS (Continued)
RECONCILIATION TO GAAP - YEAR ENDED JUNE 30, 2006 (Unaudited)
Income from
(in thousands, except Gross Operating Operating Continuing Net Diluted
per share amounts) Profit Expense Income Operations Income EPS
2006 Reported
Results $832,166 $579,907 $476,519 $272,251 $256,283 $6.48
Gain on sale of
J&L (1,935) - (233,949) (132,001)(132,001)(3.34)
J&L transaction
-related charges - (6,381) 6,381 3,956 3,956 0.10
Loss on divestiture
of Electronics - - - - 15,366 0.39
Tax impact of
cash repatriation
under AJCA - - - 11,176 11,176 0.28
CPG goodwill impairment
and transaction
-related charges - - - - 2,838 0.07
Loss on sale of
Presto 7,329 - 9,457 9,457 9,457 0.24
Favorable resolution
of tax contingencies - - - (10,873) (10,873)(0.27)
2006 Results, excl.
special items $837,560 $573,526 $258,408 $153,966 $156,202 $3.95
RECONCILIATION OF ADJUSTED FREE OPERATING CASH FLOW (Unaudited):
Year Ended
June 30,
(in thousands) 2007 2006
Net cash flow provided by operating activities $199,006 $19,053
Purchases of property, plant and equipment (92,001) (79,593)
Proceeds from disposals of property, plant
and equipment 3,455 2,961
Free operating cash flow 110,460 (57,579)
Adjustments:
Repayments of accounts receivable
securitization program - 109,786
Pension funding - 72,956
Income taxes paid (refunded) during first
quarter 86,236 (572)
Adjusted free operating cash flow $196,696 $124,591
FINANCIAL HIGHLIGHTS (Continued)
RETURN ON INVESTED CAPITAL (Unaudited):
June 30, 2007 (in thousands, except percents)
Invested
Capital 6/30/2007 3/31/2007 12/31/2006 9/30/2006 6/30/2006 Average
Debt $366,829 $371,521 $376,472 $409,592 $411,722 $387,227
Minority
interest 17,624 16,896 15,807 15,177 14,626 16,026
Shareowners'
equity 1,484,467 1,431,235 1,369,748 1,319,599 1,295,365 1,380,083
Total $1,868,920 $1,819,652 $1,762,027 $1,744,368 $1,721,713 $1,783,336
Three Months Ended
Interest
Expense
6/30/2007 3/31/2007 12/31/2006 9/30/2006 Total
Interest
expense $7,513 $6,915 $7,286 $7,427 $29,141
Securitization
fees 5 5 6 22 38
Total
interest
expense $7,518 $6,920 $7,292 $7,449 $29,179
Income tax
benefit 8,258
Total interest
expense, net
of tax $20,921
Total
Income 6/30/2007 3/31/2007 12/31/2006 9/30/2006 Total
Net Income,
as
reported $62,093 $51,738 $30,051 $30,361 $174,243
Adjustment
on J&L
divestiture
and
transaction-
related
charges - - - 1,252 1,252
Electronics
impairment
and
transaction
-related
charges - - 3,213 - 3,213
Loss on sale
of CPG and
transaction
-related
charges - - - 368 368
Minority
interest
expense 229 757 642 557 2,185
Total Income,
excluding
special
items $62,322 $52,495 $33,906 $32,538 $181,261
Total interest
expense,
net of
tax 20,921
$202,182
Average
invested
capital $1,783,336
Adjusted
Return on
Invested
Capital 11.3%
Return on invested capital calculated utilizing net income, as reported
is as follows:
Net income, as reported $174,243
Total interest expense, net of tax 20,921
$195,164
Average invested capital $1,783,336
Return on Invested Capital 10.9%
FINANCIAL HIGHLIGHTS (Continued)
RETURN ON INVESTED CAPITAL (Unaudited):
June 30, 2006 (in thousands, except percents)
Invested
Capital 6/30/2006 3/31/2006 12/31/2005 9/30/2005 6/30/2005 Average
Debt $411,722 $365,906 $410,045 $415,250 $437,374 $408,060
Accounts
receivable
securitized - 106,106 100,295 100,445 109,786 83,326
Minority
interest 14,626 18,054 16,918 18,117 17,460 17,035
Shareowners'
equity 1,295,365 1,115,110 1,045,974 1,009,394 972,862 1,087,741
Total $1,721,713 $1,605,176 $1,573,232 $1,543,206 $1,537,482 $1,596,162
Interest Expense Three Months Ended
6/30/2006 3/31/2006 12/31/2005 9/30/2005 Total
Interest
expense $7,478 $7,728 $7,984 $7,829 $31,019
Securitization
fees 1,288 1,241 1,170 1,065 4,764
Total interest
expense $8,766 $8,969 $9,154 $8,894 $35,783
Income tax
benefit 13,311
Total interest
expense, net of
tax $22,472
Total Income 6/30/2006 3/31/2006 12/31/2005 9/30/2005 Total
Net income,
as reported $164,196 $32,903 $31,087 $28,097 $256,283
Gain on sale
of J&L (132,001) - - - (132,001)
J&L transaction-
related
charges 2,796 1,160 - - 3,956
Loss on
divestiture
of Electronics 15,366 - - - 15,366
Tax impact of
cash repatriation
under AJCA 11,176 - - - 11,176
CPG goodwill
impairment and
transaction-related
charges (2,192) 5,030 - - 2,838
Loss on sale of
Presto 1,410 8,047 - - 9,457
Favorable
resolution of
tax
contingencies (10,873) - - - (10,873)
Minority
interest
expense 525 782 511 748 2,566
Total income,
excluding special
items $50,403 $47,922 $31,598 $28,845 $158,768
Total interest
expense, net of
tax 22,472
$181,240
Average invested capital $1,596,162
Adjusted Return on Invested Capital 11.4%
Return on invested capital calculated utilizing net income, as reported
is as follows:
Net income, as reported $256,283
Total interest expense, net of tax 22,472
$278,755
Average invested capital $1,596,162
Return on Invested Capital 17.5%
SOURCE Kennametal Inc.
Investor Relations: Quynh McGuire, +1-724-539-6559, or Media Relations: Joy Chandler, +1-724-539-4618, both of Kennametal Inc.
http://www.kennametal.com
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