UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 11, 2019
Kennametal Inc.
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania | 1-5318 | 25-0900168 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
600 Grant Street Suite 5100 Pittsburgh, Pennsylvania | 15219-2706 | |||
(Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (412) 248-8000
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
Capital Stock, par value $1.25 per share | KMT | New York Stock Exchange |
Preferred Stock Purchase Rights | New York Stock Exchange | |
Item 2.05 Costs Associated with Exit or Disposal Activities.
On July 11, 2019, Kennametal Inc. ("Kennametal") announced the initiation of restructuring actions in Germany associated with simplification/modernization. Incremental to restructuring actions previously announced, the actions are expected to reduce structural costs and are currently estimated to achieve $25 million to $30 million of annualized savings by completion in fiscal 2022. Kennametal is expected to incur pre-tax charges of $60 million to $75 million through fiscal 2020 and 2021 for these actions, which are anticipated to be primarily cash expenditures.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
KENNAMETAL INC. | |||||||||
Date: | July 11, 2019 | By: | /s/ Damon J. Audia | ||||||
Damon J. Audia | |||||||||
Vice President and Chief Financial Officer | |||||||||
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Exhibit 99.1
FOR IMMEDIATE RELEASE:
DATE: July 11, 2019
Investor Relations | Media Relations |
CONTACT: Kelly Boyer | CONTACT: Lori Lecker |
PHONE: 412-248-8287 | PHONE: 412-248-8224 |
KENNAMETAL INITIATES RESTRUCTURING ACTIONS
• | Announces intent to close its Essen and Lichtenau manufacturing facilities and its Neunkirchen distribution center, all in Germany |
• | Company also announces decision to close its manufacturing facility in Irwin, PA |
• | Restructurings are part of ongoing simplification/modernization initiative to reduce global complexity, increase efficiency and improve customer service |
• | Actions advance the Company toward its fiscal 2021 financial targets |
PITTSBURGH, July 11, 2019 – Kennametal Inc. (NYSE: KMT) today announced several restructuring actions that would facilitate a simplified and leaner structure, while further positioning the Company for long-term profitable growth.
As part of its ongoing simplification/modernization initiative, the Company is optimizing its operations globally, including footprint rationalization. The Company’s proposal is to close its manufacturing facilities in Essen and Lichtenau as well as its distribution center in Neunkirchen, all in Germany. Additionally, the Company announced its decision to close its manufacturing facility in Irwin, PA.
“The proposed measures are difficult but necessary to achieve structural improvements, further improve operational efficiency and continue to drive value for shareholders,” said President and Chief Executive Officer, Christopher Rossi. “We recognize the effect on our employees and will work closely with their representatives to support them throughout this transition.”
These restructuring actions advance the Company toward the fiscal 2021 financial targets announced at its most recent Investor Day. They are also part of the previously announced goal of reducing plants through simplification/modernization, with additional plants currently under evaluation.
The proposed restructurings are expected to be executed over the next two years. Facility closures in fiscal 2020 are part of the current restructuring action, which in total are expected to deliver estimated annualized savings of $35 - $40 million and $55 - $65 million in pre-tax charges.
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Fiscal 2021 closures would result in further structural cost reductions with estimated annualized savings of $25 - $30 million. Most of these savings will be achieved in fiscal 2021 with full run rate savings being realized in fiscal 2022. The Company is expected to incur pre-tax charges of $60 - $75 million through fiscal 2020 and 2021 for this restructuring. These charges are primarily cash with the majority being spent in fiscal 2021.
Under the proposed measures, the Company would consolidate its Essen and Lichtenau operations, including both Kennametal and WIDIA branded products, into other lower-cost Kennametal Industrial facilities. The Irwin operations would be consolidated primarily into the newly modernized Infrastructure plant in Rogers, AR.
Kennametal also proposed plans to outsource the distribution operations in its Neunkirchen and Essen facilities to a third-party logistics specialist.
The closure plans are contingent on the negotiations with the relevant employee representatives.
The Company will continue to maintain a strong presence in Germany, including planned modernization investments in other Kennametal locations in the country.
About Kennametal
With over 80 years as an industrial technology leader, Kennametal Inc. delivers productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 10,000 employees are helping customers in more than 60 countries stay competitive. Kennametal generated nearly $2.4 billion in revenues in fiscal 2018. Learn more at www.kennametal.com.
Follow @Kennametal: Twitter, Instagram, Facebook, LinkedIn and YouTube.
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