US-based Kennametal Inc. has reported fiscal 2005 fourth quarter earnings per diluted share (EPS) at a record level of $0.98, up 21% from the prior year’s fourth quarter and above the original guidance of $0.90–0.95. There were no special items in either of the quarters compared.
For fiscal 2005, adjusted EPS was $3.25, also a record, and compares with a prior-year adjusted EPS of $2.15. That represents a 51% increase.
Sales for the fourth quarter were $619 million, as against $542 million in FY04’s final quarter. Full-year sales were $2.3 billion, 17% higher than last year’s $2.0 billion. Both the quarterly and full-year sales figures were record levels for the company.
Kennametal chairman, president, and CEO Markos I. Tambakeras elaborated: “Each of our three business groups, Metalworking Solutions and Services, Advanced Materials Solutions, and J&L; Industrial Supply, performed at record levels in both sales and earnings. Market penetration, pricing, and the underlying strength of our served end-markets all contributed to our performance.”
Tambakeras went on to note that Kennametal’s FY05 results were a function of the successful implementation of a corporate transformation strategy involving rapid expansion of the advanced materials and engineered components portfolio, among other factors. Rising raw material prices were overcome this year, but they will continue to present a challenge for pricing strategies in FY06.
Other highlights of the 2005 fiscal year for Kennametal included a 62% rise in net income, from $74 million to $119 million; free operating cash flow for the year of $118 million; and the acquisition of Extrude Hone for approximately $134 million, an addition to the company’s Advanced Materials Solutions segment.
Economic indicators project continued growth through fiscal 2006 in North America and the rest-of-the world markets, but modest growth at best in European markets in which the affiliated companies of Kennametal in Europe operate.