Kennametal Inc., Pittsburgh, Pennsylvania, USA, has announced its fourth quarter and full fiscal year results for 2019. In the fourth quarter 2019, the company reported sales of $604 million, down 7% from $646 million in the same quarter 2018. Full-year sales were reported at $2,375 million, up 3% from $2,368 million for the full year 2018.
According to the company, the decrease in sales in the fourth quarter 2019 was driven by unfavourable currency exchange, organic decline and fewer business days. The slight growth in sales for the full fiscal year 2019 was offset by unfavourable currency exchange of 3%.
Operating income for the quarter was $85 million, compared with $94 million in the fourth quarter 2018. Adjusted operating income was said to be $95 million, compared with $99 million Q4 2018. Net income attributable to Kennametal was $61.9 million, down from $68.5 million in the same period 2018.
For the full year 2019, operating income was reported to be $329 million, compared with $290 million in the previous year. Adjusted operating income was $346 million, compared with $306 million in the previous year. According to the company, adjusted operating income increased primarily due to organic sales growth, incremental simplification and modernisation benefits, favourable mix and lower compensation expense, partially offset by unfavourable volume-related labour and fixed cost absorption in certain facilities, higher raw material costs and unfavourable currency exchange.
“We posted strong margin improvement in fiscal 2019 on moderate organic sales growth, reflecting increasing progress on our simplification/modernisation initiatives,” stated Christopher Rossi, President and Chief Executive Officer of Kennametal. “A key milestone of those initiatives was the recent announcement of the intended closure of four of our facilities, which will drive further structural benefits and improve operational efficiency. We also continued to gain traction on our growth initiatives in general engineering and aerospace, with aerospace growing by double digits for the sixth consecutive quarter.”
Rossi continued, “Against this backdrop of year-over-year progress, we saw increased softening in most of our end-markets late in the year, which put pressure on our fourth-quarter results. Our expectation is that this challenging macro environment will continue into the first half of fiscal 2020. Nevertheless, we will stay focused on the things we can control and execute our plan to improve long-term profitability.”