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Kennametal Reports Net Income of $73.6 Million
LATROBE, Pa.-- Kennametal Inc. today reported fiscal 2004 fourth-quarter earnings per share of 81 cents compared with adjusted earnings of 45 cents in 2003. Reported results in last year's fourth quarter were a loss of 14 cents per diluted share due to special items totaling 59 cents per share.For fiscal 2004, reported earnings per share of $2.02 compare with earnings of 51 cents last year. Excluding special items in each period, EPS of $2.15 were 52% above the prior year's $1.41.Kennametal operates a plant in Orwell, Ohio."We were delighted to deliver excellent sales growth and operating leverage in 2004," says Kennametal Chairman, President and Chief Executive Officer Markos I. Tambakeras. "Of particular note, Q4 included the highest quarterly sales, and the lowest primary working capital to sales ratio in the company's history. These results were driven by broad-based strong performances by all business units, and across most end markets."In addition to our strong earnings performance, we continue to generate good cash flow and strengthen our balance sheet," Tambakeras continues. "Free operating cash flow of $125 million contributed to an 870 basis point reduction in debt to capital, which ended the year at 33%."Highlights of fiscal 2004 include:Sales of $2 billion were up 12% on a 5% improvement from organic sales, 2% incremental sales from acquisitions and a 5% benefit from foreign currency exchange rates.Reported net income totaled $73.6 million versus $18.1 million last year. Excluding special items in both periods, net income improved 57% to $78.3 million versus $49.9 million last year.Looking ahead, global industrial economic indicators support expectations of additional growth through fiscal 2005 in North America and rest-of-world markets, and a return to modest growth in the first quarter for our European markets."In 2005, we will leverage further the 6 processes of the Kennametal Value Business System, our strong geographic and end-market balance and superior technology, to continue to outperform our markets," says Tambakeras. "We will remain focused on growing market share and offsetting challenges such as high raw material costs by consistently finding new ways to add value for our customers and to continue to benefit from the skills and commitment of our employees."Sales for the first quarter of fiscal 2005 are expected to grow 9% to 11%. Reported earnings per share is expected to be 50 cents to 60 cents. For the full year, sales are expected to grow 7% to 9%. Reported EPS are expected to be $2.65 to $2.85, up 25% to 35%.Kennametal anticipates net cash flow provided by operating activities of approximately $180 to $220 million in fiscal 2005. Purchases of property, plant and equipment, net of proceeds from disposals of property, plant and equipment are expected to be approximately $70 to $80 million. Adjusting net cash flow provided by operating activities for the above items, Kennametal expects to generate between $110 and $140 million of free operating cash flow for fiscal 2005.Kennametal Inc. provides customers a broad range of technologically advanced tools, tooling systems and engineering services. The company employs about 13,500 worldwide.Visit Kennametal Inc.: www.kennametal.com"