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Pennsylvania
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25-0900168
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(State or other jurisdiction of incorporation or organization)
|
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(I.R.S. Employer Identification No.)
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600 Grant Street
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|
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Suite 5100
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Pittsburgh, Pennsylvania
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15219-2706
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(Address of Principal Executive Offices)
|
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(Zip Code)
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Title of each class
|
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Name of each exchange on which registered
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Capital Stock, par value $1.25 per share
|
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New York Stock Exchange
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Preferred Stock Purchase Rights
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New York Stock Exchange
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Large accelerated filer [X]
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Accelerated filer [ ]
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Non-accelerated filer [ ] (Do not check if smaller reporting company)
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Smaller reporting company [ ]
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Emerging growth company [ ]
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Item No.
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Page
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1
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||
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1A.
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1B.
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||
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2.
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3.
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4.
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5.
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6.
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7.
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7A.
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8.
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9.
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||
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9A.
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9B.
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10.
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11.
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12.
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13.
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14.
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15.
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16.
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||
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•
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Transitioned approximately 4,100 customers to date from the direct to indirect channel to both improve customer service and refocus our direct sales force on larger accounts
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•
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Implementing customer classification and customer relationship management (CRM) software to improve sales efficiency
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•
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Reorganized the Infrastructure business around strategic business units
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•
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Reduced the number of stock keeping units by 8 percent and powder formulations and coatings by 48 percent and 30 percent, respectively, to reduce manufacturing and supply chain complexity
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•
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Implemented minimum order quantities and economic order quantities to improve manufacturing efficiency
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•
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Reduced run-rate employment costs by approximately $80 million by reducing employment levels across all levels of our organization
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•
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Launched modernization and End-to-End process improvement programs for our manufacturing facilities, which we anticipate will generate $200 million to $300 million of additional annual savings in the next two to three years
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Location
|
|
Owned/Leased
|
Principal Products
|
Primary Segment
|
United States:
|
|
|
|
|
Gurley, Alabama
|
Owned
|
Metallurgical Powders
|
Infrastructure
|
|
Huntsville, Alabama
|
Owned
|
Metallurgical Powders
|
Infrastructure
|
|
Madison, Alabama
|
Owned
|
Tungsten Heavy Alloy
|
Infrastructure
|
|
Rogers, Arkansas
|
Owned/Leased
|
Carbide Products, Pelletizing Die Plates and Downhole Drilling Carbide Components
|
Infrastructure
|
|
Rockford, Illinois
|
Owned
|
Indexable Tooling
|
Industrial
|
|
Goshen, Indiana
|
Leased
|
Powders; Welding Rods, Wires and Machines
|
Infrastructure
|
|
New Albany, Indiana
|
Leased
|
High Wear Coating for Steel Parts
|
Infrastructure
|
|
Greenfield, Massachusetts
|
Owned
|
High-Speed Steel Taps
|
Widia
|
|
Traverse City, Michigan
|
Owned
|
Wear Parts
|
Infrastructure
|
|
Fallon, Nevada
|
Owned
|
Metallurgical Powders
|
Infrastructure
|
|
Asheboro, North Carolina
|
Owned
|
Carbide Round Tools
|
Industrial
|
|
Henderson, North Carolina
|
Owned
|
Metallurgical Powders
|
Infrastructure
|
|
Roanoke Rapids, North Carolina
|
Owned
|
Metalworking Inserts
|
Industrial
|
|
Cleveland, Ohio
|
Leased
|
Distribution
|
Industrial
|
|
Orwell, Ohio
|
Owned
|
Metalworking Inserts
|
Industrial
|
|
Solon, Ohio
|
Owned
|
Metalworking Toolholders
|
Industrial
|
|
Whitehouse, Ohio
|
Owned
|
Metalworking Inserts and Round Tools
|
Industrial
|
|
Bedford, Pennsylvania
|
Owned/Leased
|
Mining and Construction Tools, Wear Parts and Distribution
|
Infrastructure
|
|
Irwin, Pennsylvania
|
Owned
|
Carbide Wear Parts
|
Infrastructure
|
|
New Castle, Pennsylvania
|
Owned/Leased
|
Specialty Metals and Alloys
|
Infrastructure
|
|
Johnson City, Tennessee
|
Owned
|
Metalworking Inserts
|
Industrial
|
|
La Vergne, Tennessee
|
Owned
|
Metalworking Inserts
|
Industrial
|
|
New Market, Virginia
|
Owned
|
Metalworking Toolholders
|
Industrial
|
|
International:
|
|
|
|
|
La Paz, Bolivia
|
Owned
|
Tungsten Concentrate
|
Infrastructure
|
|
Indaiatuba, Brazil
|
Leased
|
Metalworking Carbide Drills and Toolholders
|
Industrial
|
|
Belleville, Canada
|
Owned
|
Casting Components, Coatings and Powder Metallurgy Components
|
Infrastructure
|
|
Victoria, Canada
|
Owned
|
Wear Parts
|
Infrastructure
|
|
Fengpu, China
|
Owned
|
Intermetallic Composite Ceramic Powders and Parts
|
Infrastructure
|
|
Shanghai, China
|
Owned
|
Powders, Welding Rods and Wires and Casting Components
|
Infrastructure
|
|
Shanghai, China
|
Owned
|
Distribution
|
Industrial
|
|
Tianjin, China
|
Owned
|
Metalworking Inserts and Carbide Round Tools
|
Industrial
|
|
Xuzhou, China
|
Leased
|
Mining Tools
|
Infrastructure
|
|
Ebermannstadt, Germany
|
Owned
|
Metalworking Inserts
|
Industrial
|
|
Essen, Germany
|
Owned
|
Metalworking Inserts, Metallurgical Powders and Wear Parts
|
Industrial
|
|
Königsee, Germany
|
Leased
|
Metalworking Carbide Drills
|
Industrial
|
|
Lichtenau, Germany
|
Owned
|
Metalworking Toolholders
|
Industrial
|
Quarter ended
|
|
September 30
|
|
|
December 31
|
|
|
March 31
|
|
|
June 30
|
|
||||
Fiscal 2017
|
|
|
|
|
|
|
|
|
||||||||
High
|
|
$
|
29.35
|
|
|
$
|
35.66
|
|
|
$
|
39.94
|
|
|
$
|
43.09
|
|
Low
|
|
20.40
|
|
|
26.79
|
|
|
31.28
|
|
|
36.14
|
|
||||
Dividends
|
|
0.20
|
|
|
0.20
|
|
|
0.20
|
|
|
0.20
|
|
||||
Fiscal 2016
|
|
|
|
|
|
|
|
|
||||||||
High
|
|
$
|
34.61
|
|
|
$
|
29.45
|
|
|
$
|
23.61
|
|
|
$
|
26.24
|
|
Low
|
|
23.77
|
|
|
17.71
|
|
|
15.11
|
|
|
20.98
|
|
||||
Dividends
|
|
0.20
|
|
|
0.20
|
|
|
0.20
|
|
|
0.20
|
|
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
||||||||||||
Kennametal
|
$
|
100.00
|
|
$
|
119.09
|
|
$
|
144.21
|
|
$
|
108.31
|
|
$
|
72.58
|
|
$
|
125.87
|
|
New Peer Group Index
|
100.00
|
|
119.24
|
|
156.74
|
|
132.62
|
|
121.53
|
|
169.52
|
|
||||||
Old Peer Group Index
|
100.00
|
|
116.52
|
|
149.79
|
|
129.46
|
|
119.70
|
|
166.71
|
|
||||||
S&P Midcap 400
|
100.00
|
|
125.18
|
|
156.78
|
|
166.81
|
|
169.03
|
|
200.41
|
|
||||||
S&P 400 Capital Goods
|
100.00
|
|
134.53
|
|
178.41
|
|
172.21
|
|
173.65
|
|
224.62
|
|
||||||
S&P Global 1200 Industrials
|
100.00
|
|
121.24
|
|
153.58
|
|
151.56
|
|
153.55
|
|
191.02
|
|
Period
|
Total Number
of Shares Purchased
(1)
|
|
|
Average Price
Paid per Share
|
|
|
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs
(2)
|
|
|
April 1 through April 30, 2017
|
316
|
|
|
$
|
41.58
|
|
|
—
|
|
|
10,100,100
|
|
May 1 through May 31, 2017
|
6,443
|
|
|
40.56
|
|
|
—
|
|
|
10,100,100
|
|
|
June 1 through June 30, 2017
|
1,257
|
|
|
41.03
|
|
|
—
|
|
|
10,100,100
|
|
|
Total
|
8,016
|
|
|
$
|
40.68
|
|
|
—
|
|
|
|
(1)
|
During the fourth quarter of 2017, 1,462 shares were purchased on the open market on behalf of Kennametal to fund the Company’s dividend reinvestment program. Also, during the current period employees delivered 6,554 shares of restricted stock to Kennametal, upon vesting, to satisfy tax withholding requirements.
|
(2)
|
On July 25, 2013, the Company publicly announced an open-ended, amended repurchase program for up to 17 million shares of its outstanding capital stock outside of the Company's dividend reinvestment program.
|
|
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||
OPERATING RESULTS (in thousands)
|
|
|
|
||||||||||||||
Sales
|
|
$
|
2,058,368
|
|
$
|
2,098,436
|
|
$
|
2,647,195
|
|
$
|
2,837,190
|
|
$
|
2,589,373
|
|
|
Cost of goods sold
|
|
1,400,661
|
|
1,482,369
|
|
1,841,202
|
|
1,940,187
|
|
1,744,369
|
|
||||||
Operating expense
|
|
463,167
|
|
494,975
|
|
554,895
|
|
589,768
|
|
527,850
|
|
||||||
Restructuring and asset impairment charges
|
(1
|
)
|
65,018
|
|
143,810
|
|
582,235
|
|
17,608
|
|
—
|
|
|||||
Loss on divestiture
|
(2
|
)
|
—
|
|
131,463
|
|
—
|
|
—
|
|
—
|
|
|||||
Interest expense
|
|
28,842
|
|
27,752
|
|
31,466
|
|
32,451
|
|
27,472
|
|
||||||
Provision (benefit) for income taxes
|
|
29,895
|
|
25,313
|
|
(16,654
|
)
|
66,611
|
|
59,693
|
|
||||||
Income (loss) from continuing operations attributable to Kennametal
|
|
49,138
|
|
(225,968
|
)
|
(373,896
|
)
|
158,366
|
|
203,265
|
|
||||||
Net income (loss) attributable to Kennametal
|
|
49,138
|
|
(225,968
|
)
|
(373,896
|
)
|
158,366
|
|
203,265
|
|
||||||
FINANCIAL POSITION (in thousands)
|
|
|
|
|
|
|
|||||||||||
Working capital
|
|
$
|
652,423
|
|
$
|
648,066
|
|
$
|
775,802
|
|
$
|
962,440
|
|
$
|
1,031,880
|
|
|
Total assets
|
(3
|
)
|
2,415,496
|
|
2,362,783
|
|
2,843,655
|
|
3,860,726
|
|
3,292,192
|
|
|||||
Long-term debt, including capital leases, excluding current maturities
|
(3
|
)
|
694,991
|
|
693,548
|
|
730,011
|
|
974,306
|
|
694,779
|
|
|||||
Total debt, including capital leases and notes payable
|
(3
|
)
|
695,916
|
|
695,443
|
|
745,713
|
|
1,054,423
|
|
739,098
|
|
|||||
Total Kennametal shareholders' equity
|
|
1,017,294
|
|
964,323
|
|
1,345,807
|
|
1,929,256
|
|
1,781,826
|
|
||||||
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
|
|
|
|||||||||||||||
Basic earnings (loss) from continuing operations
|
(4
|
)
|
$
|
0.61
|
|
$
|
(2.83
|
)
|
$
|
(4.71
|
)
|
$
|
2.01
|
|
$
|
2.56
|
|
Basic earnings (loss)
|
(4
|
)
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
2.01
|
|
2.56
|
|
|||||
Diluted earnings (loss) from continuing operations
|
(4
|
)
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
1.99
|
|
2.52
|
|
|||||
Diluted earnings (loss)
|
(4
|
)
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
1.99
|
|
2.52
|
|
|||||
Dividends
|
|
0.80
|
|
0.80
|
|
0.72
|
|
0.72
|
|
0.64
|
|
||||||
Book value (at June 30)
|
|
12.61
|
|
12.10
|
|
16.96
|
|
24.52
|
|
22.89
|
|
||||||
Market Price (at June 30)
|
|
37.42
|
|
22.11
|
|
34.12
|
|
46.28
|
|
38.83
|
|
||||||
OTHER DATA (in thousands, except number of employees)
|
|
|
|
||||||||||||||
Capital expenditures
|
|
$
|
118,018
|
|
$
|
110,697
|
|
$
|
100,939
|
|
$
|
117,376
|
|
$
|
82,835
|
|
|
Number of employees (at June 30)
|
|
10,744
|
|
11,178
|
|
12,718
|
|
13,521
|
|
12,648
|
|
||||||
Basic weighted average shares outstanding
|
80,351
|
|
79,835
|
|
79,342
|
|
78,678
|
|
79,463
|
|
|||||||
Diluted weighted average shares outstanding
|
81,169
|
|
79,835
|
|
79,342
|
|
79,667
|
|
80,612
|
|
|||||||
KEY RATIOS
|
|
|
|
|
|
|
|||||||||||
Sales (decline) growth
|
(5
|
)
|
(1.9
|
)%
|
(20.7
|
)%
|
(6.7
|
)%
|
9.6
|
%
|
(5.4
|
)%
|
|||||
Gross profit margin
|
|
32.0
|
|
29.4
|
|
30.4
|
|
31.6
|
|
32.6
|
|
||||||
Operating margin
|
(6
|
)
|
5.5
|
|
(8.3
|
)
|
(13.5
|
)
|
9.3
|
|
11.4
|
|
(1)
|
In 2017 & 2014, all charges were related to restructuring. In 2016, the charges related to intangible asset impairment charges of
$108.5 million
, restructuring charges of
$30.0 million
& fixed asset disposal charges of
$5.4 million
. In 2015, the charges related to intangible asset impairment charges of $541.7 million & restructuring charges of $40.5 million.
|
(2)
|
In 2016, the charge related to the loss on divestiture of non-core businesses.
|
(3)
|
Comparative prior periods restated to reflect adoption of FASB guidance on debt issuance costs. Debt issuance costs of
$4.7 million
,
$6.0 million
, $5.9 million, $7.4 million & $8.8 million are reported as direct reductions of the carrying amounts of debt liabilities in the balance sheet as of
June 30, 2017
,
2016
, 2015, 2014 & 2013, respectively.
|
(4)
|
2017 included restructuring & related charges of
$0.89
& Australia deferred tax valuation allowance of
$0.02
. 2016 included U.S. deferred tax valuation allowance of
$1.02
, divestiture & related charges of
$1.39
, intangible asset impairment charges of
$0.96
, restructuring & related charges of
$0.50
, fixed asset disposal charges of
$0.05
& operations of divested businesses of
$0.02
. 2015 included intangible asset impairment charges of $6.13 & restructuring & related charges of $0.56.
|
(5)
|
Divestiture impact of sales decline was
negative 4 percent
&
negative 5 percent
in
2017
&
2016
, respectively.
|
(6)
|
Included restructuring & related charges of
$76.2 million
,
$53.5 million
& $58.1 million in 2017, 2016 & 2015, respectively. Included intangible asset impairment charges of
$108.5 million
& $541.7 million in 2016 & 2015, respectively.
Included divestiture & related charges of
$131.5 million
in 2016.
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
|
$
|
1,126,309
|
|
|
$
|
1,098,439
|
|
|
$
|
1,269,786
|
|
Operating income
|
|
82,842
|
|
|
90,324
|
|
|
165,434
|
|
Sales growth (decline), in percentages
|
|
2017
|
|
2016
|
||
Organic
|
|
5
|
%
|
|
(7
|
)%
|
Currency exchange
|
|
(2
|
)
|
|
(6
|
)
|
Divestiture
|
|
—
|
|
|
—
|
|
Business days
|
|
—
|
|
|
—
|
|
Total
|
|
3
|
%
|
|
(13
|
)%
|
By region
(1)
:
|
|
|
|
|
||
Asia
|
|
11
|
%
|
|
(9
|
)%
|
Americas
|
|
5
|
|
|
(11
|
)
|
Europe
|
|
2
|
|
|
(2
|
)
|
By end market
(1)
:
|
|
|
|
|
||
General engineering
|
|
7
|
%
|
|
(8
|
)%
|
Aerospace and defense
|
|
6
|
|
|
1
|
|
Energy
|
|
5
|
|
|
(27
|
)
|
Transportation
|
|
2
|
|
|
(4
|
)
|
(1)
|
Excluding the impact of currency exchange and divestiture
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
|
$
|
177,662
|
|
|
$
|
170,723
|
|
|
$
|
191,958
|
|
Operating loss
|
|
(9,606
|
)
|
|
(9,081
|
)
|
|
(4,540
|
)
|
Sales growth (decline), in percentages
|
|
2017
|
|
2016
|
||
Organic
|
|
6
|
%
|
|
(6
|
)%
|
Business days
|
|
(2
|
)
|
|
—
|
|
Currency exchange
|
|
—
|
|
|
(5
|
)
|
Divestiture
|
|
—
|
|
|
—
|
|
Total
|
|
4
|
%
|
|
(11
|
)%
|
By region
(2)
:
|
|
|
|
|
||
Asia
|
|
12
|
%
|
|
(11
|
)%
|
Americas
|
|
4
|
|
|
(11
|
)
|
Europe
|
|
(2
|
)
|
|
4
|
|
By end market
(2)
:
|
|
|
|
|
||
General Engineering
|
|
6
|
%
|
|
(6
|
)%
|
(2)
|
Excluding the impact of currency exchange
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
|
$
|
754,397
|
|
|
$
|
829,274
|
|
|
$
|
1,185,451
|
|
Operating income (loss)
|
|
40,011
|
|
|
(246,306
|
)
|
|
(509,381
|
)
|
Sales growth (decline), in percentages
|
|
2017
|
|
2016
|
||
Divestiture
|
|
(9
|
)%
|
|
(11
|
)%
|
Currency exchange
|
|
(1
|
)
|
|
(3
|
)
|
Organic
|
|
1
|
|
|
(16
|
)
|
Business days
|
|
—
|
|
|
—
|
|
Total
|
|
(9
|
)%
|
|
(30
|
)%
|
By region
(1)
:
|
|
|
|
|
||
Americas
|
|
3
|
%
|
|
(25
|
)%
|
Asia
|
|
2
|
|
|
(10
|
)
|
Europe
|
|
(6
|
)
|
|
(1
|
)
|
By end market
(1)
:
|
|
|
|
|
||
Energy
|
|
11
|
%
|
|
(28
|
)%
|
General Engineering
|
|
6
|
|
|
(21
|
)
|
Earthworks
|
|
(6
|
)
|
|
(15
|
)
|
(1)
|
Excluding the impact of divestiture and currency exchange
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Corporate unallocated expense
|
|
$
|
(303
|
)
|
|
$
|
(9,880
|
)
|
|
$
|
(9,336
|
)
|
Contractual Obligations
|
|
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
|||||||||||
Long-term debt
|
|
(3
|
)
|
|
$
|
789,925
|
|
|
$
|
22,225
|
|
|
$
|
444,450
|
|
|
$
|
323,250
|
|
|
$
|
—
|
|
Notes payable
|
|
(4
|
)
|
|
835
|
|
|
835
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension benefit payments
|
|
|
|
(5)
|
|
47,497
|
|
|
99,002
|
|
|
103,498
|
|
|
(5)
|
||||||||
Postretirement benefit payments
|
|
|
|
(5)
|
|
1,876
|
|
|
3,430
|
|
|
3,067
|
|
|
(5)
|
||||||||
Capital leases
|
|
(6
|
)
|
|
199
|
|
|
199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
|
|
|
76,686
|
|
|
19,340
|
|
|
26,332
|
|
|
15,725
|
|
|
15,289
|
|
||||||
Purchase obligations
|
|
(7
|
)
|
|
180,043
|
|
|
85,139
|
|
|
57,313
|
|
|
37,591
|
|
|
—
|
|
|||||
Unrecognized tax benefits
|
|
(8
|
)
|
|
3,232
|
|
|
596
|
|
|
2,221
|
|
|
—
|
|
|
415
|
|
|||||
Total
|
|
|
|
|
|
$
|
177,707
|
|
|
$
|
632,748
|
|
|
$
|
483,131
|
|
|
|
|
(3)
|
Long-term debt includes interest obligations of $89.9 million and excludes debt issuance costs of
$4.7 million
. Interest obligations were determined assuming interest rates as of
June 30, 2017
remain constant.
|
(4)
|
Notes payable includes interest obligations of $0.1 million. Interest obligations were determined assuming interest rates as of
June 30, 2017
remain constant.
|
(5)
|
Annual payments are expected to continue into the foreseeable future at the amounts noted in the table.
|
(6)
|
Capital leases include interest obligations of an immaterial amount.
|
(7)
|
Purchase obligations consist of purchase commitments for materials, supplies and machinery and equipment as part of the ordinary conduct of business. Purchase obligations with variable price provisions were determined assuming market prices as of
June 30, 2017
remain constant.
|
(8)
|
Unrecognized tax benefits are positions taken or expected to be taken on an income tax return that may result in additional payments to tax authorities. These amounts include interest of $0.5 million and penalty of $0.1 million accrued related to such positions as of
June 30, 2017
. Positions for which we are not able to reasonably estimate the timing of potential future payments are included in the ‘Thereafter’ column. If a tax authority agrees with the tax position taken or expected to be taken or the applicable statute of limitations expires, then additional payments will not be necessary.
|
Other Commercial Commitments
|
|
Total
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
Thereafter
|
||||||||||
Standby letters of credit
|
|
$
|
4,176
|
|
|
$
|
1,326
|
|
|
$
|
2,850
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Guarantees
|
|
20,845
|
|
|
14,535
|
|
|
1,173
|
|
|
234
|
|
|
4,903
|
|
|||||
Total
|
|
$
|
25,021
|
|
|
$
|
15,861
|
|
|
$
|
4,023
|
|
|
$
|
234
|
|
|
$
|
4,903
|
|
Year ended June 30, 2017
|
|
Sales Growth (Decline)
|
|
Foreign Currency Exchange Impact
|
|
Divestiture Impact
|
|
Business Days Impact
|
|
Organic Sales Growth
|
Industrial
|
|
3%
|
|
(2)%
|
|
—%
|
|
—%
|
|
5%
|
Widia
|
|
4%
|
|
—%
|
|
—%
|
|
(2)%
|
|
6%
|
Infrastructure
|
|
(9)%
|
|
(1)%
|
|
(9)%
|
|
—%
|
|
1%
|
Total Kennametal
|
|
(2)%
|
|
(2)%
|
|
(4)%
|
|
—%
|
|
4%
|
Year ended June 30, 2016
|
|
Sales Decline
|
|
Foreign Currency Exchange Impact
|
|
Divestiture Impact
|
|
Business Days Impact
|
|
Organic Sales Decline
|
Industrial
|
|
(13)%
|
|
(6)%
|
|
—%
|
|
—%
|
|
(7)%
|
Widia
|
|
(11)%
|
|
(5)%
|
|
—%
|
|
—%
|
|
(6)%
|
Infrastructure
|
|
(30)%
|
|
(3)%
|
|
(11)%
|
|
—%
|
|
(16)%
|
Total Kennametal
|
|
(21)%
|
|
(5)%
|
|
(5)%
|
|
—%
|
|
(11)%
|
Total Kennametal, three months ended June 30,
|
|
Sales Growth (Decline)
|
|
Foreign Currency Exchange Impact
|
|
Divestiture Impact
|
|
Business Days Impact
|
|
Organic Sales Growth (Decline)
|
2017
|
|
8%
|
|
(2)%
|
|
—%
|
|
(2)%
|
|
12%
|
2016
|
|
(18)%
|
|
(1)%
|
|
(9)%
|
|
1%
|
|
(9)%
|
Year ended June 30 (in thousands, except per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales
|
$
|
2,058,368
|
|
|
$
|
2,098,436
|
|
|
$
|
2,647,195
|
|
Cost of goods sold
|
1,400,661
|
|
|
1,482,369
|
|
|
1,841,202
|
|
|||
Gross profit
|
657,707
|
|
|
616,067
|
|
|
805,993
|
|
|||
Operating expense
|
463,167
|
|
|
494,975
|
|
|
554,895
|
|
|||
Restructuring and asset impairment charges (Notes 2 and 15)
|
65,018
|
|
|
143,810
|
|
|
582,235
|
|
|||
Loss on divestiture (Note 4)
|
—
|
|
|
131,463
|
|
|
—
|
|
|||
Amortization of intangibles
|
16,578
|
|
|
20,762
|
|
|
26,686
|
|
|||
Operating income (loss)
|
112,944
|
|
|
(174,943
|
)
|
|
(357,823
|
)
|
|||
Interest expense
|
28,842
|
|
|
27,752
|
|
|
31,466
|
|
|||
Other expense (income), net
|
2,227
|
|
|
(4,124
|
)
|
|
(1,674
|
)
|
|||
Income (loss) before income taxes
|
81,875
|
|
|
(198,571
|
)
|
|
(387,615
|
)
|
|||
Provision (benefit) for income taxes
|
29,895
|
|
|
25,313
|
|
|
(16,654
|
)
|
|||
Net income (loss)
|
51,980
|
|
|
(223,884
|
)
|
|
(370,961
|
)
|
|||
Less: Net income attributable to noncontrolling interests
|
2,842
|
|
|
2,084
|
|
|
2,935
|
|
|||
Net income (loss) attributable to Kennametal
|
$
|
49,138
|
|
|
$
|
(225,968
|
)
|
|
$
|
(373,896
|
)
|
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
|
|
|
|||||||||
Basic earnings (loss) per share
|
$
|
0.61
|
|
|
$
|
(2.83
|
)
|
|
$
|
(4.71
|
)
|
Diluted earnings (loss) per share
|
$
|
0.61
|
|
|
$
|
(2.83
|
)
|
|
$
|
(4.71
|
)
|
Dividends per share
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.72
|
|
Basic weighted average shares outstanding
|
80,351
|
|
|
79,835
|
|
|
79,342
|
|
|||
Diluted weighted average shares outstanding
|
81,169
|
|
|
79,835
|
|
|
79,342
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
|
$
|
51,980
|
|
|
$
|
(223,884
|
)
|
|
$
|
(370,961
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Unrealized (loss) gain on derivatives designated and qualified as cash flow hedges
|
|
(471
|
)
|
|
(150
|
)
|
|
6,652
|
|
|||
Reclassification of unrealized loss (gain) on expired derivatives designated and qualified as cash flow hedges
|
|
1,557
|
|
|
(1,563
|
)
|
|
(2,873
|
)
|
|||
Unrecognized net pension and other postretirement benefit gain (loss)
|
|
15,559
|
|
|
(78,295
|
)
|
|
(47,982
|
)
|
|||
Reclassification of net pension and other postretirement benefit loss
|
|
7,566
|
|
|
4,925
|
|
|
2,931
|
|
|||
Foreign currency translation adjustments
|
|
5,888
|
|
|
(52,695
|
)
|
|
(139,465
|
)
|
|||
Reclassification of foreign currency translation adjustment loss realized upon sale
|
|
—
|
|
|
15,088
|
|
|
—
|
|
|||
Total other comprehensive income (loss), net of tax
|
|
30,099
|
|
|
(112,690
|
)
|
|
(180,737
|
)
|
|||
Total comprehensive income (loss)
|
|
82,079
|
|
|
(336,574
|
)
|
|
(551,698
|
)
|
|||
Less: comprehensive income (loss) attributable to noncontrolling interests
|
|
4,124
|
|
|
896
|
|
|
(410
|
)
|
|||
Comprehensive income (loss) attributable to Kennametal Shareholders
|
|
$
|
77,955
|
|
|
$
|
(337,470
|
)
|
|
$
|
(551,288
|
)
|
As of June 30 (in thousands, except per share data)
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
190,629
|
|
|
$
|
161,579
|
|
Accounts receivable, less allowance for doubtful accounts of $13,693 and $12,724 respectively
|
380,425
|
|
|
370,916
|
|
||
Inventories (Note 7)
|
487,681
|
|
|
458,830
|
|
||
Deferred income taxes (Notes 2 and 12)
|
—
|
|
|
26,713
|
|
||
Other current assets
|
55,166
|
|
|
57,303
|
|
||
Total current assets
|
1,113,901
|
|
|
1,075,341
|
|
||
Property, plant and equipment:
|
|
|
|
||||
Land and buildings
|
350,002
|
|
|
353,789
|
|
||
Machinery and equipment
|
1,577,776
|
|
|
1,511,462
|
|
||
Less accumulated depreciation
|
(1,183,390
|
)
|
|
(1,134,611
|
)
|
||
Property, plant and equipment, net
|
744,388
|
|
|
730,640
|
|
||
Other assets:
|
|
|
|
||||
Assets held for sale (Note 15)
|
6,980
|
|
|
—
|
|
||
Goodwill (Notes 2 and 8)
|
301,367
|
|
|
298,487
|
|
||
Other intangible assets, less accumulated amortization of $129,981 and $114,093, respectively (Notes 2 and 8)
|
190,527
|
|
|
207,208
|
|
||
Deferred income taxes (Notes 2 and 12)
|
28,349
|
|
|
14,459
|
|
||
Other
|
29,984
|
|
|
36,648
|
|
||
Total other assets
|
557,207
|
|
|
556,802
|
|
||
Total assets
|
$
|
2,415,496
|
|
|
$
|
2,362,783
|
|
LIABILITIES
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt and capital leases (Note 10)
|
$
|
190
|
|
|
$
|
732
|
|
Notes payable to banks (Note 11)
|
735
|
|
|
1,163
|
|
||
Accounts payable
|
215,722
|
|
|
182,039
|
|
||
Accrued income taxes
|
6,202
|
|
|
16,602
|
|
||
Accrued vacation pay
|
18,108
|
|
|
24,709
|
|
||
Accrued payroll
|
67,574
|
|
|
49,761
|
|
||
Other current liabilities (Note 9)
|
152,947
|
|
|
152,269
|
|
||
Total current liabilities
|
461,478
|
|
|
427,275
|
|
||
Long-term debt and capital leases, less current maturities (Note 10)
|
694,991
|
|
|
693,548
|
|
||
Deferred income taxes (Notes 2 and 12)
|
14,883
|
|
|
17,126
|
|
||
Accrued postretirement benefits (Note 13)
|
16,906
|
|
|
18,876
|
|
||
Accrued pension benefits (Note 13)
|
143,954
|
|
|
182,597
|
|
||
Accrued income taxes
|
2,636
|
|
|
3,100
|
|
||
Other liabilities
|
27,995
|
|
|
24,460
|
|
||
Total liabilities
|
1,362,843
|
|
|
1,366,982
|
|
||
Commitments and contingencies (Note 19)
|
|
|
|
||||
EQUITY
|
|
|
|
||||
Kennametal Shareholders’ Equity:
|
|
|
|
||||
Preferred stock, no par value; 5,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Capital stock, $1.25 par value; 120,000 shares authorized; 80,665 and 79,694 shares issued, respectively
|
100,832
|
|
|
99,618
|
|
||
Additional paid-in capital
|
474,547
|
|
|
436,617
|
|
||
Retained earnings
|
765,607
|
|
|
780,597
|
|
||
Accumulated other comprehensive loss (Note 14)
|
(323,692
|
)
|
|
(352,509
|
)
|
||
Total Kennametal Shareholders’ Equity
|
1,017,294
|
|
|
964,323
|
|
||
Noncontrolling interests
|
35,359
|
|
|
31,478
|
|
||
Total equity
|
1,052,653
|
|
|
995,801
|
|
||
Total liabilities and equity
|
$
|
2,415,496
|
|
|
$
|
2,362,783
|
|
Year ended June 30 (in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
51,980
|
|
|
$
|
(223,884
|
)
|
|
$
|
(370,961
|
)
|
Adjustments for non-cash items:
|
|
|
|
|
|
||||||
Depreciation
|
91,078
|
|
|
96,704
|
|
|
104,978
|
|
|||
Amortization
|
16,578
|
|
|
20,762
|
|
|
26,686
|
|
|||
Stock-based compensation expense
|
21,065
|
|
|
18,129
|
|
|
16,827
|
|
|||
Restructuring and asset impairment charges (Notes 2 and 15)
|
1,802
|
|
|
118,779
|
|
|
548,028
|
|
|||
Loss on divestiture (Note 4)
|
—
|
|
|
131,124
|
|
|
—
|
|
|||
Deferred income tax provision
|
6,267
|
|
|
8,328
|
|
|
(48,575
|
)
|
|||
Other
|
94
|
|
|
(6,113
|
)
|
|
2,098
|
|
|||
Changes in certain assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(7,606
|
)
|
|
32,661
|
|
|
46,552
|
|
|||
Inventories
|
(24,300
|
)
|
|
69,552
|
|
|
70,874
|
|
|||
Accounts payable and accrued liabilities
|
51,418
|
|
|
(2,180
|
)
|
|
(8,218
|
)
|
|||
Accrued income taxes
|
6,873
|
|
|
(25,247
|
)
|
|
(10,163
|
)
|
|||
Accrued pension and postretirement benefits
|
(27,818
|
)
|
|
(15,013
|
)
|
|
4,863
|
|
|||
Other
|
4,771
|
|
|
(4,280
|
)
|
|
(31,552
|
)
|
|||
Net cash flow provided by operating activities
|
192,202
|
|
|
219,322
|
|
|
351,437
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(118,018
|
)
|
|
(110,697
|
)
|
|
(100,939
|
)
|
|||
Disposals of property, plant and equipment
|
5,023
|
|
|
5,978
|
|
|
16,122
|
|
|||
Proceeds from divestiture (Note 4)
|
—
|
|
|
56,127
|
|
|
—
|
|
|||
Other
|
247
|
|
|
659
|
|
|
263
|
|
|||
Net cash flow used for investing activities
|
(112,748
|
)
|
|
(47,933
|
)
|
|
(84,554
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net decrease in notes payable
|
(317
|
)
|
|
(6,288
|
)
|
|
(63,647
|
)
|
|||
Net increase in short-term revolving and other lines of credit
|
—
|
|
|
—
|
|
|
200
|
|
|||
Term debt borrowings
|
25,298
|
|
|
50,070
|
|
|
89,712
|
|
|||
Term debt repayments
|
(25,899
|
)
|
|
(94,577
|
)
|
|
(308,736
|
)
|
|||
Purchase of capital stock
|
(241
|
)
|
|
(295
|
)
|
|
(318
|
)
|
|||
Dividend reinvestment and the effect of employee benefit and stock plans
|
21,455
|
|
|
4,519
|
|
|
13,844
|
|
|||
Cash dividends paid to Shareholders
|
(64,128
|
)
|
|
(63,717
|
)
|
|
(56,979
|
)
|
|||
Other
|
(6,317
|
)
|
|
(181
|
)
|
|
(7,039
|
)
|
|||
Net cash flow used for financing activities
|
(50,149
|
)
|
|
(110,469
|
)
|
|
(332,963
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(255
|
)
|
|
(4,835
|
)
|
|
(6,355
|
)
|
|||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
29,050
|
|
|
56,085
|
|
|
(72,435
|
)
|
|||
Cash and cash equivalents, beginning of year
|
161,579
|
|
|
105,494
|
|
|
177,929
|
|
|||
Cash and cash equivalents, end of year
|
$
|
190,629
|
|
|
$
|
161,579
|
|
|
$
|
105,494
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
Year ended June 30 (in thousands)
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|||
CAPITAL STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
79,694
|
|
|
$
|
99,618
|
|
|
79,375
|
|
|
$
|
99,219
|
|
|
78,672
|
|
|
$
|
98,340
|
|
Dividend reinvestment
|
7
|
|
|
9
|
|
|
12
|
|
|
15
|
|
|
7
|
|
|
9
|
|
|||
Capital stock issued under employee benefit and stock plans
|
971
|
|
|
1,214
|
|
|
319
|
|
|
399
|
|
|
703
|
|
|
879
|
|
|||
Purchase of capital stock
|
(7
|
)
|
|
(9
|
)
|
|
(12
|
)
|
|
(15
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|||
Balance at end of year
|
80,665
|
|
|
100,832
|
|
|
79,694
|
|
|
99,618
|
|
|
79,375
|
|
|
99,219
|
|
|||
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
436,617
|
|
|
|
|
419,829
|
|
|
|
|
395,890
|
|
||||||
Dividend reinvestment
|
|
|
235
|
|
|
|
|
279
|
|
|
|
|
311
|
|
||||||
Capital stock issued under employee benefit and stock plans
|
|
|
37,930
|
|
|
|
|
14,271
|
|
|
|
|
23,939
|
|
||||||
Sale of subsidiary stock to noncontrolling interests
|
|
|
—
|
|
|
|
|
2,517
|
|
|
|
|
—
|
|
||||||
Purchase of capital stock
|
|
|
(235
|
)
|
|
|
|
(279
|
)
|
|
|
|
(311
|
)
|
||||||
Balance at end of year
|
|
|
474,547
|
|
|
|
|
436,617
|
|
|
|
|
419,829
|
|
||||||
RETAINED EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
780,597
|
|
|
|
|
1,070,282
|
|
|
|
|
1,501,157
|
|
||||||
Net income (loss)
|
|
|
49,138
|
|
|
|
|
(225,968
|
)
|
|
|
|
(373,896
|
)
|
||||||
Cash dividends paid to Shareholders
|
|
|
(64,128
|
)
|
|
|
|
(63,717
|
)
|
|
|
|
(56,979
|
)
|
||||||
Balance at end of year
|
|
|
765,607
|
|
|
|
|
780,597
|
|
|
|
|
1,070,282
|
|
||||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
(352,509
|
)
|
|
|
|
(243,523
|
)
|
|
|
|
(66,131
|
)
|
||||||
Unrealized (loss) gain on derivatives designated and qualified as cash flow hedges
|
|
|
(471
|
)
|
|
|
|
(150
|
)
|
|
|
|
6,652
|
|
||||||
Reclassification of unrealized loss (gain) on expired derivatives designated and qualified as cash flow hedges
|
|
|
1,557
|
|
|
|
|
(1,563
|
)
|
|
|
|
(2,873
|
)
|
||||||
Unrecognized net pension and other postretirement benefit gain (loss)
|
|
|
15,559
|
|
|
|
|
(78,295
|
)
|
|
|
|
(47,982
|
)
|
||||||
Reclassification of net pension and other postretirement benefit loss
|
|
|
7,566
|
|
|
|
|
4,925
|
|
|
|
|
2,931
|
|
||||||
Foreign currency translation adjustments
|
|
|
4,606
|
|
|
|
|
(51,508
|
)
|
|
|
|
(136,120
|
)
|
||||||
Reclassification of foreign currency translation adjustment loss realized upon sale
|
|
|
—
|
|
|
|
|
15,088
|
|
|
|
|
—
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
|
28,817
|
|
|
|
|
(111,503
|
)
|
|
|
|
(177,392
|
)
|
||||||
Sale of subsidiary stock to noncontrolling interests
|
|
|
—
|
|
|
|
|
2,517
|
|
|
|
|
—
|
|
||||||
Balance at end of year
|
|
|
(323,692
|
)
|
|
|
|
(352,509
|
)
|
|
|
|
(243,523
|
)
|
||||||
NONCONTROLLING INTERESTS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
31,478
|
|
|
|
|
29,628
|
|
|
|
|
32,352
|
|
||||||
Net income
|
|
|
2,842
|
|
|
|
|
2,084
|
|
|
|
|
2,935
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
|
1,282
|
|
|
|
|
(1,188
|
)
|
|
|
|
(3,345
|
)
|
||||||
Sale of subsidiary stock to noncontrolling interests
|
|
|
—
|
|
|
|
|
2,566
|
|
|
|
|
—
|
|
||||||
Cash dividends paid to noncontrolling interests
|
|
|
(243
|
)
|
|
|
|
(1,612
|
)
|
|
|
|
(2,314
|
)
|
||||||
Balance at end of year
|
|
|
35,359
|
|
|
|
|
31,478
|
|
|
|
|
29,628
|
|
||||||
Total equity, June 30
|
|
|
$
|
1,052,653
|
|
|
|
|
$
|
995,801
|
|
|
|
|
$
|
1,375,435
|
|
Year ended June 30 (in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
27,529
|
|
|
$
|
26,250
|
|
|
$
|
30,984
|
|
Income taxes
|
16,755
|
|
|
43,733
|
|
|
40,295
|
|
|||
|
|
|
|
|
|
||||||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
||||||
Changes in accounts payable related to purchases of property, plant and equipment
|
(3,900
|
)
|
|
1,000
|
|
|
(9,900
|
)
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
359
|
|
|
$
|
—
|
|
|
$
|
359
|
|
Total assets at fair value
|
$
|
—
|
|
|
$
|
359
|
|
|
$
|
—
|
|
|
$
|
359
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
910
|
|
|
$
|
—
|
|
|
$
|
910
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
910
|
|
|
$
|
—
|
|
|
$
|
910
|
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
334
|
|
|
$
|
—
|
|
|
$
|
334
|
|
Total assets at fair value
|
$
|
—
|
|
|
$
|
334
|
|
|
$
|
—
|
|
|
$
|
334
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
763
|
|
|
$
|
—
|
|
|
$
|
763
|
|
Contingent consideration
|
—
|
|
|
—
|
|
|
6,600
|
|
|
6,600
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
763
|
|
|
$
|
6,600
|
|
|
$
|
7,363
|
|
(in thousands)
|
2017
|
|
2016
|
||||
Derivatives designated as hedging instruments
|
|
|
|
||||
Other current assets - range forward contracts
|
$
|
1
|
|
|
$
|
323
|
|
Other current liabilities - range forward contracts
|
(671
|
)
|
|
—
|
|
||
Other liabilities - range forward contracts
|
(101
|
)
|
|
—
|
|
||
Total derivatives designated as hedging instruments
|
(771
|
)
|
|
323
|
|
||
Derivatives not designated as hedging instruments
|
|
|
|
||||
Other current assets - currency forward contracts
|
358
|
|
|
11
|
|
||
Other current liabilities - currency forward contracts
|
(138
|
)
|
|
(763
|
)
|
||
Total derivatives not designated as hedging instruments
|
220
|
|
|
(752
|
)
|
||
Total derivatives
|
$
|
(551
|
)
|
|
$
|
(429
|
)
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Other expense (income), net - currency forward contracts
|
$
|
(873
|
)
|
|
$
|
719
|
|
|
$
|
(1,026
|
)
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
(Losses) gains recognized in other comprehensive loss (income), net
|
$
|
(471
|
)
|
|
$
|
(297
|
)
|
|
$
|
6,651
|
|
Losses (gains) reclassified from accumulated other comprehensive loss into other expense (income), net
|
$
|
1,557
|
|
|
$
|
381
|
|
|
$
|
(250
|
)
|
Instrument
|
Notional (EUR in thousands)
(2)
|
Notional (USD in thousands)
(2)
|
Maturity
|
||||
Foreign currency-denominated intercompany loan payable
|
€
|
26,526
|
|
$
|
30,273
|
|
June 26, 2022
|
Foreign currency-denominated intercompany loan payable
|
8,632
|
|
9,851
|
|
November 20, 2018
|
||
Foreign currency-denominated intercompany loan payable
|
2,036
|
|
2,324
|
|
October 11, 2017
|
(in thousands)
|
2017
|
|
2016
|
||||
Finished goods
|
$
|
290,817
|
|
|
$
|
284,054
|
|
Work in process and powder blends
|
166,857
|
|
|
166,274
|
|
||
Raw materials
|
87,627
|
|
|
68,472
|
|
||
Inventories at current cost
|
545,301
|
|
|
518,800
|
|
||
Less: LIFO valuation
|
(57,620
|
)
|
|
(59,970
|
)
|
||
Total inventories
|
$
|
487,681
|
|
|
$
|
458,830
|
|
(in thousands)
|
Industrial
|
|
Widia
|
|
Infrastructure
|
|
Total
|
||||||||
Gross goodwill
|
$
|
414,298
|
|
|
$
|
41,073
|
|
|
$
|
640,360
|
|
|
$
|
1,095,731
|
|
Accumulated impairment losses
|
(137,204
|
)
|
|
(13,638
|
)
|
|
(527,500
|
)
|
|
(678,342
|
)
|
||||
Balance as of June 30, 2015
|
$
|
277,094
|
|
|
$
|
27,435
|
|
|
$
|
112,860
|
|
|
$
|
417,389
|
|
|
|
|
|
|
|
|
|
||||||||
Activity for 2016:
|
|
|
|
|
|
|
|
||||||||
Divestiture
|
(1,075
|
)
|
|
—
|
|
|
(6,461
|
)
|
|
(7,536
|
)
|
||||
Translation
|
(4,518
|
)
|
|
(449
|
)
|
|
(688
|
)
|
|
(5,655
|
)
|
||||
Change in gross goodwill
|
(5,593
|
)
|
|
(449
|
)
|
|
(7,149
|
)
|
|
(13,191
|
)
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
(105,711
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
408,705
|
|
|
40,624
|
|
|
633,211
|
|
|
1,082,540
|
|
||||
Accumulated impairment losses
|
(137,204
|
)
|
|
(13,638
|
)
|
|
(633,211
|
)
|
|
(784,053
|
)
|
||||
Balance as of June 30, 2016
|
$
|
271,501
|
|
|
$
|
26,986
|
|
|
$
|
—
|
|
|
$
|
298,487
|
|
|
|
|
|
|
|
|
|
||||||||
Activity for 2017:
|
|
|
|
|
|
|
|
||||||||
Change in gross goodwill due to translation
|
1,989
|
|
|
891
|
|
|
—
|
|
|
2,880
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
410,694
|
|
|
41,515
|
|
|
633,211
|
|
|
1,085,420
|
|
||||
Accumulated impairment losses
|
(137,204
|
)
|
|
(13,638
|
)
|
|
(633,211
|
)
|
|
(784,053
|
)
|
||||
Balance as of June 30, 2017
|
$
|
273,490
|
|
|
$
|
27,877
|
|
|
$
|
—
|
|
|
$
|
301,367
|
|
|
Estimated
Useful Life
(in years)
|
|
June 30, 2017
|
|
|
June 30, 2016
|
||||||||||||
(in thousands)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|||||||||
Contract-based
|
3 to 15
|
|
$
|
7,064
|
|
|
$
|
(7,014
|
)
|
|
|
$
|
7,152
|
|
|
$
|
(6,886
|
)
|
Technology-based and other
|
4 to 20
|
|
46,461
|
|
|
(29,061
|
)
|
|
|
47,323
|
|
|
(27,011
|
)
|
||||
Customer-related
|
10 to 21
|
|
205,502
|
|
|
(74,669
|
)
|
|
|
205,471
|
|
|
(66,938
|
)
|
||||
Unpatented technology
|
10 to 30
|
|
31,754
|
|
|
(10,589
|
)
|
|
|
31,837
|
|
|
(4,614
|
)
|
||||
Trademarks
|
5 to 20
|
|
12,401
|
|
|
(8,648
|
)
|
|
|
12,668
|
|
|
(8,644
|
)
|
||||
Trademarks
|
Indefinite
|
|
17,326
|
|
|
—
|
|
|
|
16,850
|
|
|
—
|
|
||||
Total
|
|
|
$
|
320,508
|
|
|
$
|
(129,981
|
)
|
|
|
$
|
321,301
|
|
|
$
|
(114,093
|
)
|
(in thousands)
|
|
2017
|
|
2016
|
||||
Accrued employee benefits
|
|
$
|
39,478
|
|
|
$
|
33,754
|
|
Accrued restructuring (Note 15)
|
|
27,294
|
|
|
15,703
|
|
||
Payroll, state and local taxes
|
|
9,943
|
|
|
12,983
|
|
||
Accrued legal and professional fees
|
|
10,741
|
|
|
12,112
|
|
||
Accrued interest
|
|
7,048
|
|
|
7,079
|
|
||
Other
|
|
58,443
|
|
|
70,638
|
|
||
Total other current liabilities
|
|
$
|
152,947
|
|
|
$
|
152,269
|
|
(in thousands)
|
2017
|
|
2016
|
||||
2.65% Senior Unsecured Notes due 2019 net of discount of $0.2 million for 2017 and $0.3 million for 2016
|
$
|
399,823
|
|
|
$
|
399,748
|
|
3.875% Senior Unsecured Notes due 2022 net of discount of $0.2 million for 2017 and 2016
|
299,831
|
|
|
299,794
|
|
||
Capital leases with terms expiring through 2018 at 3.9% in 2017 and 2016
|
190
|
|
|
748
|
|
||
Total debt and capital leases
|
699,844
|
|
|
700,290
|
|
||
Less unamortized debt issuance costs
|
(4,663
|
)
|
|
(6,010
|
)
|
||
Less current maturities of capital leases
|
(190
|
)
|
|
(732
|
)
|
||
Total long-term debt
|
$
|
694,991
|
|
|
$
|
693,548
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
(23,055
|
)
|
|
$
|
(228,667
|
)
|
|
$
|
(323,299
|
)
|
International
|
104,930
|
|
|
30,096
|
|
|
(64,316
|
)
|
|||
Total income (loss) before income taxes
|
$
|
81,875
|
|
|
$
|
(198,571
|
)
|
|
$
|
(387,615
|
)
|
Current income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
(1,455
|
)
|
|
$
|
(15,039
|
)
|
|
$
|
(9,328
|
)
|
State
|
172
|
|
|
454
|
|
|
816
|
|
|||
International
|
24,911
|
|
|
31,570
|
|
|
40,433
|
|
|||
Total current income taxes
|
23,628
|
|
|
16,985
|
|
|
31,921
|
|
|||
Deferred income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
298
|
|
|
$
|
6,786
|
|
|
$
|
(38,943
|
)
|
State
|
(867
|
)
|
|
8,407
|
|
|
(8,680
|
)
|
|||
International
|
6,836
|
|
|
(6,865
|
)
|
|
(952
|
)
|
|||
Total deferred income taxes:
|
6,267
|
|
|
8,328
|
|
|
(48,575
|
)
|
|||
Provision (benefit) for income taxes
|
$
|
29,895
|
|
|
$
|
25,313
|
|
|
$
|
(16,654
|
)
|
Effective tax rate
|
36.5
|
%
|
|
(12.7
|
)%
|
|
4.3
|
%
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Income taxes at U.S. statutory rate
|
$
|
28,656
|
|
|
$
|
(69,500
|
)
|
|
$
|
(135,665
|
)
|
State income taxes, net of federal tax benefits
|
(306
|
)
|
|
859
|
|
|
(1,748
|
)
|
|||
U.S. income taxes provided on international income
|
10,273
|
|
|
2,364
|
|
|
3,679
|
|
|||
Combined tax effects of international income
|
(11,530
|
)
|
|
(25,469
|
)
|
|
(21,560
|
)
|
|||
Impact of goodwill impairment charges
|
—
|
|
|
6,439
|
|
|
134,657
|
|
|||
Impact of divestiture
|
—
|
|
|
27,790
|
|
|
—
|
|
|||
Change in valuation allowance and other uncertain tax positions
|
5,163
|
|
|
84,530
|
|
|
1,530
|
|
|||
Impact of domestic production activities deduction
|
—
|
|
|
(2,072
|
)
|
|
—
|
|
|||
Research and development credit
|
(1,895
|
)
|
|
(4,351
|
)
|
|
(3,087
|
)
|
|||
Change in permanent reinvestment assertion
|
—
|
|
|
3,659
|
|
|
2,945
|
|
|||
Other
|
(466
|
)
|
|
1,064
|
|
|
2,595
|
|
|||
Provision (benefit) for income taxes
|
$
|
29,895
|
|
|
$
|
25,313
|
|
|
$
|
(16,654
|
)
|
(in thousands)
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss (NOL) carryforwards
|
$
|
85,659
|
|
|
$
|
77,198
|
|
Inventory valuation and reserves
|
20,428
|
|
|
18,865
|
|
||
Pension benefits
|
24,824
|
|
|
42,432
|
|
||
Other postretirement benefits
|
5,959
|
|
|
7,111
|
|
||
Accrued employee benefits
|
11,234
|
|
|
17,069
|
|
||
Other accrued liabilities
|
8,609
|
|
|
9,229
|
|
||
Hedging activities
|
5,409
|
|
|
5,507
|
|
||
Tax credits and other carryforwards
|
41,039
|
|
|
30,733
|
|
||
Intangible assets
|
14,947
|
|
|
21,575
|
|
||
Total
|
218,108
|
|
|
229,719
|
|
||
Valuation allowance
|
(116,770
|
)
|
|
(122,699
|
)
|
||
Total deferred tax assets
|
$
|
101,338
|
|
|
$
|
107,020
|
|
Deferred tax liabilities:
|
|
|
|
||||
Tax depreciation in excess of book
|
$
|
83,258
|
|
|
$
|
83,412
|
|
Other
|
4,614
|
|
|
149
|
|
||
Total deferred tax liabilities
|
$
|
87,872
|
|
|
$
|
83,561
|
|
Total net deferred tax assets
|
$
|
13,466
|
|
|
$
|
23,459
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
|
$
|
3,106
|
|
|
$
|
14,619
|
|
|
$
|
20,366
|
|
Increases for tax positions of prior years
|
|
—
|
|
|
1,197
|
|
|
—
|
|
|||
Decreases for tax positions of prior years
|
|
—
|
|
|
—
|
|
|
(3,188
|
)
|
|||
Decreases related to settlement with taxing authority
|
|
(231
|
)
|
|
(11,942
|
)
|
|
(348
|
)
|
|||
Decreases related to lapse of statute of limitations
|
|
(184
|
)
|
|
(667
|
)
|
|
(398
|
)
|
|||
Foreign currency translation
|
|
(59
|
)
|
|
(101
|
)
|
|
(1,813
|
)
|
|||
Balance at end of year
|
|
$
|
2,632
|
|
|
$
|
3,106
|
|
|
$
|
14,619
|
|
(in thousands)
|
2017
|
|
2016
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
1,005,368
|
|
|
$
|
954,454
|
|
Service cost
|
2,908
|
|
|
4,640
|
|
||
Interest cost
|
31,113
|
|
|
37,726
|
|
||
Participant contributions
|
8
|
|
|
6
|
|
||
Actuarial (gains) losses
|
(19,660
|
)
|
|
86,425
|
|
||
Benefits and expenses paid
|
(70,257
|
)
|
|
(45,074
|
)
|
||
Currency translation adjustments
|
(1,045
|
)
|
|
(19,283
|
)
|
||
Plan amendments
|
—
|
|
|
696
|
|
||
Special termination benefits
|
98
|
|
|
334
|
|
||
Plan settlements
|
(7,439
|
)
|
|
(7,991
|
)
|
||
Plan curtailments
|
—
|
|
|
(6,565
|
)
|
||
Benefit obligation, end of year
|
$
|
941,094
|
|
|
$
|
1,005,368
|
|
Change in plans' assets:
|
|
|
|
||||
Fair value of plans' assets, beginning of year
|
$
|
821,675
|
|
|
$
|
827,337
|
|
Actual return on plans' assets
|
56,818
|
|
|
50,637
|
|
||
Company contributions
|
11,960
|
|
|
15,876
|
|
||
Participant contributions
|
8
|
|
|
6
|
|
||
Plan settlements
|
(7,439
|
)
|
|
(7,991
|
)
|
||
Benefits and expenses paid
|
(70,257
|
)
|
|
(45,074
|
)
|
||
Currency translation adjustments
|
(4,130
|
)
|
|
(19,116
|
)
|
||
Fair value of plans' assets, end of year
|
$
|
808,635
|
|
|
$
|
821,675
|
|
Funded status of plans
|
$
|
(132,459
|
)
|
|
$
|
(183,693
|
)
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
||||
Long-term prepaid benefit
|
$
|
17,208
|
|
|
$
|
8,941
|
|
Short-term accrued benefit obligation
|
(5,713
|
)
|
|
(10,037
|
)
|
||
Accrued pension benefits
|
(143,954
|
)
|
|
(182,597
|
)
|
||
Net amount recognized
|
$
|
(132,459
|
)
|
|
$
|
(183,693
|
)
|
(in thousands)
|
2017
|
|
2016
|
||||
Unrecognized net actuarial losses
|
$
|
246,428
|
|
|
$
|
272,802
|
|
Unrecognized net prior service credits
|
580
|
|
|
155
|
|
||
Unrecognized transition obligations
|
622
|
|
|
740
|
|
||
Total
|
$
|
247,630
|
|
|
$
|
273,697
|
|
(in thousands)
|
2017
|
|
2016
|
||||
Projected benefit obligation
|
$
|
156,816
|
|
|
$
|
877,146
|
|
Accumulated benefit obligation
|
156,590
|
|
|
875,233
|
|
||
Fair value of plan assets
|
7,083
|
|
|
684,512
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Service cost
|
$
|
2,908
|
|
|
$
|
4,640
|
|
|
$
|
5,474
|
|
Interest cost
|
31,113
|
|
|
37,726
|
|
|
39,007
|
|
|||
Expected return on plans' assets
|
(58,781
|
)
|
|
(58,523
|
)
|
|
(59,698
|
)
|
|||
Amortization of transition obligation
|
89
|
|
|
80
|
|
|
78
|
|
|||
Amortization of prior service cost
|
(452
|
)
|
|
(417
|
)
|
|
(361
|
)
|
|||
Special termination benefit charge
|
98
|
|
|
334
|
|
|
459
|
|
|||
Curtailment loss
|
—
|
|
|
—
|
|
|
358
|
|
|||
Settlement loss
|
379
|
|
|
227
|
|
|
261
|
|
|||
Recognition of actuarial losses
|
8,356
|
|
|
7,286
|
|
|
3,671
|
|
|||
Net periodic pension income
|
$
|
(16,290
|
)
|
|
$
|
(8,647
|
)
|
|
$
|
(10,751
|
)
|
(in thousands)
|
2017
|
|
2016
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
20,542
|
|
|
$
|
21,205
|
|
Interest cost
|
673
|
|
|
840
|
|
||
Actuarial losses
|
(747
|
)
|
|
722
|
|
||
Benefits paid
|
(2,308
|
)
|
|
(2,225
|
)
|
||
Benefit obligation, end of year
|
$
|
18,160
|
|
|
$
|
20,542
|
|
Funded status of plan
|
$
|
(18,160
|
)
|
|
$
|
(20,542
|
)
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
||||
Short-term accrued benefit obligation
|
$
|
(1,254
|
)
|
|
$
|
(1,666
|
)
|
Accrued postretirement benefits
|
(16,906
|
)
|
|
(18,876
|
)
|
||
Net amount recognized
|
$
|
(18,160
|
)
|
|
$
|
(20,542
|
)
|
(in thousands)
|
2017
|
|
2016
|
||||
Unrecognized net actuarial losses
|
$
|
5,266
|
|
|
$
|
6,368
|
|
Unrecognized net prior service credits
|
(128
|
)
|
|
(150
|
)
|
||
Total
|
$
|
5,138
|
|
|
$
|
6,218
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45
|
|
Interest cost
|
673
|
|
|
840
|
|
|
934
|
|
|||
Amortization of prior service credit
|
(22
|
)
|
|
(22
|
)
|
|
(59
|
)
|
|||
Recognition of actuarial loss
|
355
|
|
|
324
|
|
|
492
|
|
|||
Curtailment gain
|
—
|
|
|
—
|
|
|
(221
|
)
|
|||
Net periodic other postretirement benefit cost
|
$
|
1,006
|
|
|
$
|
1,142
|
|
|
$
|
1,191
|
|
|
2017
|
|
2016
|
|
2015
|
|
Discount Rate:
|
|
|
|
|
|
|
U.S. plans
|
3.3-3.9%
|
|
|
2.4-3.7%
|
|
3.2-4.5%
|
International plans
|
2.0-3.3%
|
|
|
0.9-3.2%
|
|
2.3-3.8%
|
Rates of future salary increases:
|
|
|
|
|
|
|
U.S. plans
|
4.0
|
%
|
|
3.0-4.0%
|
|
3.0-4.0%
|
International plans
|
2.5-3.0%
|
|
|
2.5-3.0%
|
|
2.5-3.0%
|
|
2017
|
|
2016
|
|
2015
|
|||
Discount Rate:
|
|
|
|
|
|
|||
U.S. plans
|
2.4-3.7%
|
|
|
3.2-4.5%
|
|
|
4.4
|
%
|
International plans
|
0.9-3.2%
|
|
|
2.3-3.8%
|
|
|
2.9-4.3%
|
|
Rates of future salary increases:
|
|
|
|
|
|
|||
U.S. plans
|
3.0-4.0%
|
|
|
3.0-4.0%
|
|
|
3.0-5.0%
|
|
International plans
|
2.5-3.0%
|
|
|
2.5-3.0%
|
|
|
2.5-3.0%
|
|
Rate of return on plans assets:
|
|
|
|
|
|
|||
U.S. plans
|
7.5
|
%
|
|
7.5
|
%
|
|
7.5
|
%
|
International plans
|
5.3-5.5%
|
|
|
5.3-5.5%
|
|
|
5.0-6.0%
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Health care costs trend rate assumed for next year
|
8.0
|
%
|
|
8.5
|
%
|
|
7.3
|
%
|
Rate to which the cost trend rate gradually declines
|
5.0
|
%
|
|
5.0
|
%
|
|
5.0
|
%
|
Year that the rate reaches the rate at which it is assumed to remain
|
2027
|
|
|
2027
|
|
|
2024
|
|
(in thousands)
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total service and interest cost components
|
$
|
30
|
|
|
$
|
(27
|
)
|
Effect on other postretirement obligation
|
735
|
|
|
(655
|
)
|
|
2017
|
|
2016
|
|
Target %
|
|||
Equity
|
27
|
%
|
|
23
|
%
|
|
22.5
|
%
|
Fixed Income
|
63
|
%
|
|
67
|
%
|
|
70.0
|
%
|
Other
|
10
|
%
|
|
10
|
%
|
|
7.5
|
%
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
(3)
|
|
Total
|
||||||||||
Common / collective trusts
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Value funds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
76,186
|
|
|
$
|
76,186
|
|
Growth funds
|
—
|
|
|
—
|
|
|
—
|
|
|
43,880
|
|
|
43,880
|
|
|||||
Balanced funds
|
—
|
|
|
—
|
|
|
—
|
|
|
12,421
|
|
|
12,421
|
|
|||||
Corporate fixed income securities
|
—
|
|
|
365,723
|
|
|
—
|
|
|
—
|
|
|
365,723
|
|
|||||
Common stock
|
85,138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85,138
|
|
|||||
Government securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
—
|
|
|
72,817
|
|
|
—
|
|
|
—
|
|
|
72,817
|
|
|||||
Foreign government securities
|
—
|
|
|
45,359
|
|
|
—
|
|
|
—
|
|
|
45,359
|
|
|||||
Other fixed income securities
|
—
|
|
|
25,761
|
|
|
—
|
|
|
—
|
|
|
25,761
|
|
|||||
Other
|
3,313
|
|
|
78,037
|
|
|
—
|
|
|
—
|
|
|
81,350
|
|
|||||
Total investments
|
$
|
88,451
|
|
|
$
|
587,697
|
|
|
$
|
—
|
|
|
$
|
132,487
|
|
|
$
|
808,635
|
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
(3)
|
|
Total
|
||||||||||
Common / collective trusts
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Value funds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68,731
|
|
|
$
|
68,731
|
|
Growth funds
|
—
|
|
|
—
|
|
|
—
|
|
|
38,126
|
|
|
38,126
|
|
|||||
Balanced funds
|
—
|
|
|
—
|
|
|
—
|
|
|
8,581
|
|
|
8,581
|
|
|||||
Corporate fixed income securities
|
—
|
|
|
395,102
|
|
|
—
|
|
|
—
|
|
|
395,102
|
|
|||||
Common stock
|
74,163
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,163
|
|
|||||
Government securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
—
|
|
|
79,275
|
|
|
—
|
|
|
—
|
|
|
79,275
|
|
|||||
Foreign government securities
|
—
|
|
|
43,729
|
|
|
—
|
|
|
—
|
|
|
43,729
|
|
|||||
Other fixed income securities
|
—
|
|
|
31,503
|
|
|
—
|
|
|
—
|
|
|
31,503
|
|
|||||
Other
|
3,029
|
|
|
79,436
|
|
|
—
|
|
|
—
|
|
|
82,465
|
|
|||||
Total investments
|
$
|
77,192
|
|
|
$
|
629,045
|
|
|
$
|
—
|
|
|
115,438
|
|
|
$
|
821,675
|
|
Attributable to Kennametal:
|
Postretirement benefit plans
|
Currency translation adjustment
|
Derivatives
|
Total
|
||||||||
Balance, June 30, 2016
|
$
|
(212,163
|
)
|
$
|
(131,212
|
)
|
$
|
(9,134
|
)
|
$
|
(352,509
|
)
|
Other comprehensive (loss) income before reclassifications
|
15,559
|
|
4,606
|
|
(471
|
)
|
19,694
|
|
||||
Amounts Reclassified from AOCL
|
7,566
|
|
—
|
|
1,557
|
|
9,123
|
|
||||
Net current period other comprehensive loss
|
23,125
|
|
4,606
|
|
1,086
|
|
28,817
|
|
||||
AOCL, June 30, 2017
|
$
|
(189,038
|
)
|
$
|
(126,606
|
)
|
$
|
(8,048
|
)
|
$
|
(323,692
|
)
|
|
|
|
|
|
||||||||
Attributable to noncontrolling interests:
|
|
|
|
|
||||||||
Balance, June 30, 2016
|
$
|
—
|
|
$
|
(3,446
|
)
|
$
|
—
|
|
$
|
(3,446
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
1,282
|
|
—
|
|
1,282
|
|
||||
Net current period other comprehensive loss
|
—
|
|
1,282
|
|
—
|
|
1,282
|
|
||||
AOCL, June 30, 2017
|
$
|
—
|
|
$
|
(2,164
|
)
|
$
|
—
|
|
$
|
(2,164
|
)
|
Attributable to Kennametal:
|
Postretirement benefit plans
|
Currency translation adjustment
|
Derivatives
|
Total
|
||||||||
Balance, June 30, 2015
|
$
|
(138,793
|
)
|
$
|
(97,309
|
)
|
$
|
(7,421
|
)
|
$
|
(243,523
|
)
|
Other comprehensive (loss) income before reclassifications
|
(78,295
|
)
|
(51,508
|
)
|
(150
|
)
|
(129,953
|
)
|
||||
Amounts Reclassified from AOCL
|
4,925
|
|
15,088
|
|
(1,563
|
)
|
18,450
|
|
||||
Net current period other comprehensive loss
|
(73,370
|
)
|
(36,420
|
)
|
(1,713
|
)
|
(111,503
|
)
|
||||
Sale of subsidiary stock to noncontrolling interest
|
—
|
|
2,517
|
|
—
|
|
$
|
2,517
|
|
|||
AOCL, June 30, 2016
|
$
|
(212,163
|
)
|
$
|
(131,212
|
)
|
$
|
(9,134
|
)
|
$
|
(352,509
|
)
|
|
|
|
|
|
||||||||
Attributable to noncontrolling interests:
|
|
|
|
|
||||||||
Balance, June 30, 2015
|
$
|
—
|
|
$
|
(2,258
|
)
|
$
|
—
|
|
$
|
(2,258
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
(1,188
|
)
|
—
|
|
(1,188
|
)
|
||||
Net current period other comprehensive loss
|
—
|
|
(1,188
|
)
|
—
|
|
(1,188
|
)
|
||||
AOCL, June 30, 2016
|
$
|
—
|
|
$
|
(3,446
|
)
|
$
|
—
|
|
$
|
(3,446
|
)
|
Attributable to Kennametal:
|
Postretirement benefit plans
|
Currency translation adjustment
|
Derivatives
|
Total
|
||||||||
Balance, June 30, 2014
|
$
|
(93,742
|
)
|
$
|
38,811
|
|
$
|
(11,200
|
)
|
$
|
(66,131
|
)
|
Other comprehensive income (loss) before reclassifications
|
(47,982
|
)
|
(136,120
|
)
|
6,652
|
|
(177,450
|
)
|
||||
Amounts Reclassified from AOCL
|
2,931
|
|
—
|
|
(2,873
|
)
|
58
|
|
||||
Net current period other comprehensive loss
|
(45,051
|
)
|
(136,120
|
)
|
3,779
|
|
(177,392
|
)
|
||||
AOCL, June 30, 2015
|
$
|
(138,793
|
)
|
$
|
(97,309
|
)
|
$
|
(7,421
|
)
|
$
|
(243,523
|
)
|
|
|
|
|
|
||||||||
Attributable to noncontrolling interests:
|
|
|
|
|
||||||||
Balance, June 30, 2014
|
$
|
—
|
|
$
|
1,087
|
|
$
|
—
|
|
$
|
1,087
|
|
Other comprehensive loss before
reclassifications |
—
|
|
(3,345
|
)
|
—
|
|
(3,345
|
)
|
||||
Net current period other comprehensive loss
|
—
|
|
(3,345
|
)
|
—
|
|
(3,345
|
)
|
||||
AOCL, June 30, 2015
|
$
|
—
|
|
$
|
(2,258
|
)
|
$
|
—
|
|
$
|
(2,258
|
)
|
|
Year Ended June 30,
|
|
||||||||
Details about AOCL components
(in thousands) |
2017
|
2016
|
2015
|
Affected line item in the Income Statement
|
||||||
Gains and losses on cash flow hedges:
|
|
|
|
|
||||||
Forward starting interest rate swaps
|
$
|
2,180
|
|
$
|
2,099
|
|
$
|
2,021
|
|
Interest expense
|
Currency exchange contracts
|
(623
|
)
|
(4,645
|
)
|
(6,700
|
)
|
Other expense (income), net
|
|||
Total before tax
|
1,557
|
|
(2,546
|
)
|
(4,679
|
)
|
|
|||
Tax impact
|
—
|
|
983
|
|
1,806
|
|
Provision (benefit) for income taxes
|
|||
Net of tax
|
$
|
1,557
|
|
$
|
(1,563
|
)
|
$
|
(2,873
|
)
|
|
|
|
|
|
|
||||||
Postretirement benefit plans:
|
|
|
|
|
||||||
Amortization of transition obligations
|
$
|
89
|
|
$
|
80
|
|
$
|
78
|
|
See Note 13 for further details
|
Amortization of prior service credit
|
(474
|
)
|
(439
|
)
|
(420
|
)
|
See Note 13 for further details
|
|||
Recognition of actuarial losses
|
8,711
|
|
7,610
|
|
4,163
|
|
See Note 13 for further details
|
|||
Total before tax
|
8,326
|
|
7,251
|
|
3,821
|
|
|
|||
Tax impact
|
(760
|
)
|
(2,326
|
)
|
(890
|
)
|
Provision (benefit) for income taxes
|
|||
Net of tax
|
$
|
7,566
|
|
$
|
4,925
|
|
$
|
2,931
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
||||||
Released due to divestiture
|
$
|
—
|
|
$
|
15,088
|
|
$
|
—
|
|
Loss on divestiture
|
Total before taxes
|
—
|
|
15,088
|
|
—
|
|
|
|||
Tax impact
|
—
|
|
—
|
|
—
|
|
Provision (benefit) for income taxes
|
|||
Net of tax
|
$
|
—
|
|
$
|
15,088
|
|
$
|
—
|
|
|
(in thousands)
|
Pre-tax
|
Tax impact
|
Net of tax
|
||||||
Unrealized loss on derivatives designated and qualified as cash flow hedges
|
$
|
(471
|
)
|
$
|
—
|
|
$
|
(471
|
)
|
Reclassification of unrealized loss on expired derivatives designated and qualified as cash flow hedges
|
1,557
|
|
—
|
|
1,557
|
|
|||
Unrecognized net pension and other postretirement benefit gain
|
18,656
|
|
(3,097
|
)
|
15,559
|
|
|||
Reclassification of net pension and other postretirement benefit loss
|
8,326
|
|
(760
|
)
|
7,566
|
|
|||
Foreign currency translation adjustments
|
6,266
|
|
(378
|
)
|
5,888
|
|
|||
Other comprehensive income
|
$
|
34,334
|
|
$
|
(4,235
|
)
|
$
|
30,099
|
|
(in thousands)
|
Pre-tax
|
Tax impact
|
Net of tax
|
||||||
Unrealized loss on derivatives designated and qualified as cash flow hedges
|
$
|
(244
|
)
|
$
|
94
|
|
$
|
(150
|
)
|
Reclassification of unrealized gain on expired derivatives designated and qualified as cash flow hedges
|
(2,546
|
)
|
983
|
|
(1,563
|
)
|
|||
Unrecognized net pension and other postretirement benefit loss
|
(84,266
|
)
|
5,971
|
|
(78,295
|
)
|
|||
Reclassification of net pension and other postretirement benefit loss
|
7,251
|
|
(2,326
|
)
|
4,925
|
|
|||
Foreign currency translation adjustments
|
(52,699
|
)
|
4
|
|
(52,695
|
)
|
|||
Reclassification of foreign currency translation adjustment loss realized upon sale
|
15,088
|
|
—
|
|
15,088
|
|
|||
Other comprehensive loss
|
$
|
(117,416
|
)
|
$
|
4,726
|
|
$
|
(112,690
|
)
|
(in thousands)
|
Pre-tax
|
Tax impact
|
Net of tax
|
||||||
Unrealized gain on derivatives designated and qualified as cash flow hedges
|
$
|
10,834
|
|
$
|
(4,182
|
)
|
$
|
6,652
|
|
Reclassification of unrealized gain on expired derivatives designated and qualified as cash flow hedges
|
(4,679
|
)
|
1,806
|
|
(2,873
|
)
|
|||
Unrecognized net pension and other postretirement benefit loss
|
(76,029
|
)
|
28,047
|
|
(47,982
|
)
|
|||
Reclassification of net pension and other postretirement benefit loss
|
3,821
|
|
(890
|
)
|
2,931
|
|
|||
Foreign currency translation adjustments
|
(147,172
|
)
|
7,707
|
|
(139,465
|
)
|
|||
Other comprehensive loss
|
$
|
(213,225
|
)
|
$
|
32,488
|
|
$
|
(180,737
|
)
|
(in thousands)
|
June 30, 2016
|
|
Expense
|
|
Asset Write-Down
|
|
Translation
|
|
Cash Expenditures
|
|
June 30, 2017
|
||||||||||||
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
$
|
8,180
|
|
|
$
|
39,214
|
|
|
$
|
—
|
|
|
$
|
229
|
|
|
$
|
(29,984
|
)
|
|
$
|
17,639
|
|
Facilities
|
—
|
|
|
237
|
|
|
(237
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
809
|
|
|
162
|
|
|
—
|
|
|
(8
|
)
|
|
(869
|
)
|
|
94
|
|
||||||
Total Industrial
|
8,989
|
|
|
39,613
|
|
|
(237
|
)
|
|
221
|
|
|
(30,853
|
)
|
|
17,733
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Widia
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
909
|
|
|
6,325
|
|
|
—
|
|
|
37
|
|
|
(4,837
|
)
|
|
2,434
|
|
||||||
Facilities
|
—
|
|
|
10
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
90
|
|
|
26
|
|
|
—
|
|
|
(1
|
)
|
|
(115
|
)
|
|
—
|
|
||||||
Total Widia
|
999
|
|
|
6,361
|
|
|
(10
|
)
|
|
36
|
|
|
(4,952
|
)
|
|
2,434
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Infrastructure
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
5,301
|
|
|
17,710
|
|
|
—
|
|
|
103
|
|
|
(13,541
|
)
|
|
9,573
|
|
||||||
Facilities
|
33
|
|
|
1,849
|
|
|
(1,849
|
)
|
|
—
|
|
|
(12
|
)
|
|
21
|
|
||||||
Other
|
381
|
|
|
73
|
|
|
—
|
|
|
(4
|
)
|
|
(405
|
)
|
|
45
|
|
||||||
Total Infrastructure
|
5,715
|
|
|
19,632
|
|
|
(1,849
|
)
|
|
99
|
|
|
(13,958
|
)
|
|
9,639
|
|
||||||
Total
|
$
|
15,703
|
|
|
$
|
65,606
|
|
|
$
|
(2,096
|
)
|
|
$
|
356
|
|
|
$
|
(49,763
|
)
|
|
$
|
29,806
|
|
(in thousands)
|
June 30, 2015
|
|
Expense
|
|
Asset Write-Down
|
|
Other
(4)
|
|
Translation
|
|
Cash Expenditures
|
|
June 30, 2016
|
||||||||||||||
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Severance
|
$
|
12,110
|
|
|
$
|
15,590
|
|
|
$
|
—
|
|
|
$
|
(312
|
)
|
|
$
|
(126
|
)
|
|
$
|
(19,082
|
)
|
|
$
|
8,180
|
|
Facilities
|
—
|
|
|
297
|
|
|
(702
|
)
|
|
—
|
|
|
—
|
|
|
405
|
|
|
—
|
|
|||||||
Other
|
25
|
|
|
267
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
521
|
|
|
809
|
|
|||||||
Total Industrial
|
12,135
|
|
|
16,154
|
|
|
(702
|
)
|
|
(312
|
)
|
|
(130
|
)
|
|
(18,156
|
)
|
|
8,989
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Widia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Severance
|
1,346
|
|
|
1,732
|
|
|
—
|
|
|
(35
|
)
|
|
(14
|
)
|
|
(2,120
|
)
|
|
909
|
|
|||||||
Facilities
|
—
|
|
|
33
|
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|||||||
Other
|
3
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
58
|
|
|
90
|
|
|||||||
Total Widia
|
1,349
|
|
|
1,795
|
|
|
(78
|
)
|
|
(35
|
)
|
|
(15
|
)
|
|
(2,017
|
)
|
|
999
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Infrastructure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Severance
|
7,173
|
|
|
7,424
|
|
|
—
|
|
|
(201
|
)
|
|
(60
|
)
|
|
(9,035
|
)
|
|
5,301
|
|
|||||||
Facilities
|
131
|
|
|
4,515
|
|
|
(3,914
|
)
|
|
—
|
|
|
—
|
|
|
(699
|
)
|
|
33
|
|
|||||||
Other
|
—
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
256
|
|
|
381
|
|
|||||||
Total Infrastructure
|
7,304
|
|
|
12,066
|
|
|
(3,914
|
)
|
|
(201
|
)
|
|
(62
|
)
|
|
(9,478
|
)
|
|
5,715
|
|
|||||||
Total
|
$
|
20,788
|
|
|
$
|
30,015
|
|
|
$
|
(4,694
|
)
|
|
$
|
(548
|
)
|
|
$
|
(207
|
)
|
|
$
|
(29,651
|
)
|
|
$
|
15,703
|
|
|
|
2016
|
|
2015
|
||
Risk-free interest rate
|
|
1.4
|
%
|
|
1.5
|
%
|
Expected life (years)
(5)
|
|
4.5
|
|
|
4.5
|
|
Expected volatility
(6)
|
|
31.7
|
%
|
|
32.5
|
%
|
Expected dividend yield
|
|
2.1
|
%
|
|
1.7
|
%
|
|
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Life (years)
|
|
Aggregate
Intrinsic value
(in thousands)
|
|||||
Options outstanding, June 30, 2016
|
2,547,809
|
|
|
$
|
33.72
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(637,769
|
)
|
|
33.44
|
|
|
|
|
|
|||
Lapsed and forfeited
|
(183,249
|
)
|
|
31.29
|
|
|
|
|
|
|||
Options outstanding, June 30, 2017
|
1,726,791
|
|
|
$
|
34.08
|
|
|
4.7
|
|
$
|
9,296
|
|
Options vested and expected to vest, June 30, 2017
|
1,713,555
|
|
|
$
|
34.12
|
|
|
4.6
|
|
$
|
9,173
|
|
Options exercisable, June 30, 2017
|
1,260,230
|
|
|
$
|
35.76
|
|
|
3.4
|
|
$
|
5,231
|
|
|
Performance
Vesting
Stock
Units
|
|
Performance
Vesting
Weighted
Average Fair
Value
|
|
Time Vesting
Stock Units
|
|
Time Vesting
Weighted
Average Fair
Value
|
||||||
Unvested, June 30, 2016
|
115,467
|
|
|
$
|
36.96
|
|
|
1,014,744
|
|
|
$
|
31.97
|
|
Granted
|
235,241
|
|
|
26.35
|
|
|
610,998
|
|
|
25.46
|
|
||
Vested
|
(17,124
|
)
|
|
45.24
|
|
|
(393,518
|
)
|
|
35.37
|
|
||
Performance metric not achieved
|
(35,980
|
)
|
|
26.35
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(17,354
|
)
|
|
35.31
|
|
|
(78,780
|
)
|
|
27.42
|
|
||
Unvested, June 30, 2017
|
280,250
|
|
|
$
|
27.62
|
|
|
1,153,444
|
|
|
$
|
27.66
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales:
|
|
|
|
|
|
||||||
Industrial
(7)
|
$
|
1,126,309
|
|
|
$
|
1,098,439
|
|
|
$
|
1,269,786
|
|
Widia
(7)
|
177,662
|
|
|
170,723
|
|
|
191,958
|
|
|||
Infrastructure
|
754,397
|
|
|
829,274
|
|
|
1,185,451
|
|
|||
Total sales
|
$
|
2,058,368
|
|
|
$
|
2,098,436
|
|
|
$
|
2,647,195
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
||||||
Industrial
(7)
|
$
|
82,842
|
|
|
$
|
90,324
|
|
|
$
|
165,434
|
|
Widia
(7)
|
(9,606
|
)
|
|
(9,081
|
)
|
|
(4,540
|
)
|
|||
Infrastructure
|
40,011
|
|
|
(246,306
|
)
|
|
(509,381
|
)
|
|||
Corporate
|
(303
|
)
|
|
(9,880
|
)
|
|
(9,336
|
)
|
|||
Total operating income (loss)
|
$
|
112,944
|
|
|
$
|
(174,943
|
)
|
|
$
|
(357,823
|
)
|
|
|
|
|
|
|
||||||
Interest expense
|
$
|
28,842
|
|
|
$
|
27,752
|
|
|
$
|
31,466
|
|
Other expense (income), net
|
2,227
|
|
|
(4,124
|
)
|
|
(1,674
|
)
|
|||
Income (loss) before income taxes
|
$
|
81,875
|
|
|
$
|
(198,571
|
)
|
|
$
|
(387,615
|
)
|
|
|
|
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Industrial
(7)
|
$
|
54,269
|
|
|
$
|
52,523
|
|
|
$
|
54,237
|
|
Widia
(7)
|
10,728
|
|
|
10,419
|
|
|
9,951
|
|
|||
Infrastructure
|
42,596
|
|
|
54,459
|
|
|
67,413
|
|
|||
Corporate
|
63
|
|
|
65
|
|
|
63
|
|
|||
Total depreciation and amortization
|
$
|
107,656
|
|
|
$
|
117,466
|
|
|
$
|
131,664
|
|
|
|
|
|
|
|
||||||
Total assets:
|
|
|
|
|
|
||||||
Industrial
(7)
|
$
|
1,103,686
|
|
|
$
|
1,019,887
|
|
|
$
|
1,059,278
|
|
Widia
(7)
|
191,626
|
|
|
195,339
|
|
|
199,992
|
|
|||
Infrastructure
|
813,747
|
|
|
849,447
|
|
|
1,279,608
|
|
|||
Corporate
(8)
|
306,437
|
|
|
298,110
|
|
|
304,777
|
|
|||
Total assets
|
$
|
2,415,496
|
|
|
$
|
2,362,783
|
|
|
$
|
2,843,655
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Industrial
(7)
|
$
|
70,281
|
|
|
$
|
66,467
|
|
|
$
|
55,301
|
|
Widia
(7)
|
17,853
|
|
|
14,093
|
|
|
9,196
|
|
|||
Infrastructure
|
29,884
|
|
|
30,137
|
|
|
36,442
|
|
|||
Total capital expenditures
|
$
|
118,018
|
|
|
$
|
110,697
|
|
|
$
|
100,939
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Sales:
|
|
|
|
|
|
||||||
United States
|
$
|
897,326
|
|
|
$
|
897,399
|
|
|
$
|
1,176,622
|
|
Germany
|
282,347
|
|
|
334,366
|
|
|
442,009
|
|
|||
China
|
220,561
|
|
|
210,124
|
|
|
246,953
|
|
|||
India
|
84,769
|
|
|
77,934
|
|
|
85,193
|
|
|||
Italy
|
59,967
|
|
|
69,821
|
|
|
85,530
|
|
|||
Canada
|
56,628
|
|
|
55,812
|
|
|
73,912
|
|
|||
France
|
56,231
|
|
|
56,264
|
|
|
59,772
|
|
|||
United Kingdom
|
39,731
|
|
|
50,723
|
|
|
70,600
|
|
|||
Other
|
360,808
|
|
|
345,993
|
|
|
406,604
|
|
|||
Total sales
|
$
|
2,058,368
|
|
|
$
|
2,098,436
|
|
|
$
|
2,647,195
|
|
|
|
|
|
|
|
||||||
Total assets:
|
|
|
|
|
|
||||||
United States
(8)
|
$
|
1,075,444
|
|
|
$
|
1,069,320
|
|
|
$
|
1,332,720
|
|
Germany
|
347,226
|
|
|
327,679
|
|
|
394,491
|
|
|||
China
|
239,908
|
|
|
233,200
|
|
|
274,774
|
|
|||
Switzerland
|
197,783
|
|
|
189,498
|
|
|
194,139
|
|
|||
India
|
98,602
|
|
|
91,544
|
|
|
97,463
|
|
|||
Canada
|
58,337
|
|
|
57,174
|
|
|
60,492
|
|
|||
Italy
|
48,990
|
|
|
50,352
|
|
|
94,978
|
|
|||
United Kingdom
|
48,729
|
|
|
48,507
|
|
|
71,342
|
|
|||
Other
|
300,477
|
|
|
295,509
|
|
|
323,256
|
|
|||
Total assets:
|
$
|
2,415,496
|
|
|
$
|
2,362,783
|
|
|
$
|
2,843,655
|
|
|
2017
|
|
2016
|
|
2015
|
|||
End markets:
|
|
|
|
|
|
|||
General engineering
|
39
|
%
|
|
38
|
%
|
|
36
|
%
|
Transportation
|
20
|
|
|
21
|
|
|
21
|
|
Energy
|
18
|
|
|
17
|
|
|
19
|
|
Earthworks
|
15
|
|
|
16
|
|
|
17
|
|
Aerospace and defense
|
8
|
|
|
8
|
|
|
7
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
For the quarter ended (in thousands, except per share data)
|
September 30
|
|
December 31
|
|
March 31
|
|
June 30
|
||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
477,140
|
|
|
$
|
487,573
|
|
|
$
|
528,630
|
|
|
$
|
565,025
|
|
Gross profit
|
143,530
|
|
|
147,623
|
|
|
186,265
|
|
|
180,289
|
|
||||
Net (loss) income attributable to Kennametal
|
(21,656
|
)
|
|
7,262
|
|
|
38,890
|
|
|
24,643
|
|
||||
Basic (loss) earnings per share attributable to Kennametal
(9)
|
|
|
|
|
|
|
|
||||||||
Net income
|
(0.27
|
)
|
|
0.09
|
|
|
0.48
|
|
|
0.31
|
|
||||
Diluted (loss) earnings per share attributable to Kennametal
(9)
|
|
|
|
|
|
|
|
||||||||
Net income
|
(0.27
|
)
|
|
0.09
|
|
|
0.48
|
|
|
0.30
|
|
||||
2016
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
555,354
|
|
|
$
|
524,021
|
|
|
$
|
497,837
|
|
|
$
|
521,224
|
|
Gross profit
|
151,224
|
|
|
140,806
|
|
|
157,353
|
|
|
166,684
|
|
||||
Net (loss) income attributable to Kennametal
|
(6,226
|
)
|
|
(169,227
|
)
|
|
16,000
|
|
|
(66,515
|
)
|
||||
Basic (loss) earnings per share attributable to Kennametal
(9)
|
|
|
|
|
|
|
|
||||||||
Net income
|
(0.08
|
)
|
|
(2.12
|
)
|
|
0.20
|
|
|
(0.83
|
)
|
||||
Diluted (loss) earnings per share attributable to Kennametal
(9)
|
|
|
|
|
|
|
|
||||||||
Net income
|
(0.08
|
)
|
|
(2.12
|
)
|
|
0.20
|
|
|
(0.83
|
)
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Management’s Report on Internal Control over Financial Reporting
|
(c)
|
Attestation Report of the Independent Registered Public Accounting Firm
|
(d)
|
Changes in Internal Control over Financial Reporting
|
|
|
|
|
|
|
|
|
|
|
|
KENNAMETAL INC.
|
||
Date: August 14, 2017
|
|
|
|
By:
|
|
/s/ Patrick S. Watson
|
|
|
|
|
|
|
Patrick S. Watson
|
|
|
|
|
|
|
Vice President Finance and Corporate Controller
|
|
|
|
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
||
/s/ RONALD M. DE FEO
Ronald M. De Feo
|
|
Executive Chairman
|
|
August 14, 2017
|
|
|
|
||
/s/ CHRISTOPHER ROSSI
Christopher Rossi
|
|
President and Chief Executive Officer
|
|
August 14, 2017
|
|
|
|
|
|
/s/ JAN KEES VAN GAALEN
Jan Kees van Gaalen
|
|
Vice President and Chief Financial Officer
|
|
August 14, 2017
|
|
|
|
|
|
/s/ PATRICK S. WATSON
Patrick S. Watson
|
|
Vice President Finance and Corporate Controller
|
|
August 14, 2017
|
|
|
|
||
/s/ LAWRENCE W. STRANGHOENER
Lawrence W. Stranghoener
|
|
Lead Director
|
|
August 14, 2017
|
|
|
|
|
|
/s/ CINDY L. DAVIS
Cindy L. Davis
|
|
Director
|
|
August 14, 2017
|
|
|
|
|
|
/s/ PHILIP A. DUR
Philip A. Dur
|
|
Director
|
|
August 14, 2017
|
|
|
|
||
/s/ WILLIAM J. HARVEY
William J. Harvey
|
|
Director
|
|
August 14, 2017
|
|
|
|
||
/s/ WILLIAM M. LAMBERT
William M. Lambert
|
|
Director
|
|
August 14, 2017
|
|
|
|
||
/s/ TIMOTHY R. MCLEVISH
Timothy R. McLevish
|
|
Director
|
|
August 14, 2017
|
|
|
|
|
|
/s/ SAGAR A. PATEL
Sagar A. Patel
|
|
Director
|
|
August 14, 2017
|
|
|
|
||
/s/ STEVEN H. WUNNING
Steven H. Wunning
|
|
Director
|
|
August 14, 2017
|
2
|
|
|
Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
|
|
|
2.1
|
|
|
Share Sale and Purchase Agreement relating to Deloro Stellite Holdings 1 Limited dated 2012
|
|
Exhibit 2.1 of the Form 10-Q filed February 8, 2012 (File No. 001-05318) is incorporated herein by reference.
|
2.2
|
|
|
Warranty Agreement relating to Deloro Stellite Holdings 1 Limited dated January 13, 2012
|
|
Exhibit 2.2 of the Form 10-Q filed February 8, 2012 (File No. 001-05318) is incorporated herein by reference.
|
2.3
|
|
|
Tax Deed Covenant relating to Deloro Stellite Holdings 1 Limited dated March 1, 2012
|
|
Exhibit 2.1 of the Form 10-Q filed May 9, 2012 (File No. 001-05318) is incorporated herein by reference.
|
2.4
|
|
|
Purchase Agreement relating to the Tungsten Materials Business of Allegheny Technologies Incorporated dated as of September 13, 2013
|
|
Exhibit 2.1 of the Form 10-Q filed November 7, 2013 (File No. 001-05318) is incorporated herein by reference.
|
|
|
|
|
|
|
3
|
|
|
Articles of Incorporation and Bylaws
|
|
|
3.1
|
|
|
Articles of Incorporation of Kennametal Inc., as amended and restated through October 28, 2014
|
|
Exhibit 3.(i) of the Form 8-K filed October 30, 2014 (File No. 001-05318) is incorporated herein by reference.
|
3.2
|
|
|
By-Laws of Kennametal Inc., as amended and restated through July 26, 2016
|
|
Exhibit 10.1 of the Form 8-K filed July 28, 2016 (File No. 001-05318) is incorporated herein by reference.
|
|
|
|
|
|
|
4
|
|
|
Instruments Defining the Rights of Security Holders, Including Indentures
|
|
|
4.1
|
|
|
Indenture, dated as of June 19, 2002, by and between the Registrant and Bank One Trust Company, N.A., as trustee
|
|
Exhibit 4.1 of the Form 8-K filed June 20, 2002 (File No. 001-05318) is incorporated herein by reference.
|
4.2
|
|
|
First Supplemental Indenture, dated as of June 19, 2002, by and between the Registrant and Bank One Trust Company, N.A., as trustee
|
|
Exhibit 4.2 of the Form 8-K filed June 20, 2002 (File No. 001-05318) is incorporated herein by reference.
|
4.3
|
|
|
Indenture dated February 14, 2012 between Kennametal Inc. and U.S. Bank National Association
|
|
Exhibit 4.1 of the Form 8-K filed February 14, 2012 (File No. 001-05318) is incorporated herein by reference.
|
4.4
|
|
|
First Supplemental Indenture dated February 14, 2012 between Kennametal Inc. and U.S. Bank National Association (including Form of 3.875% Note due 2022)
|
|
Exhibit 4.2 of the Form 8-K filed February 14, 2012 (File No. 001-05318) is incorporated herein by reference.
|
4.5
|
|
|
Second Supplemental Indenture dated November 7, 2012 between Kennametal Inc. and U.S. Bank National Association (including Form of 2.65% Note due 2019)
|
|
Exhibit 4.4 of the Form 8-K filed November 7, 2012 (File No. 001-05318) is incorporated herein by reference.
|
|
|
|
|
|
|
10
|
|
|
Material Contracts
|
|
|
10.1*
|
|
|
Kennametal Inc. Management Performance Bonus Plan
|
|
Appendix A to the 2011 Proxy Statement filed September 12, 2011 (File No. 001-05318) is incorporated herein by reference.
|
10.2*
|
|
|
Deferred Fee Plan for Outside Directors, as amended and restated effective December 30, 2008
|
|
Exhibit 10.1 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
10.3*
|
|
|
Executive Deferred Compensation Trust Agreement
|
|
Exhibit 10.5 of the June 30, 1988 Form 10-K (File No. 001-05318) is incorporated herein by reference.
|
10.4*
|
|
|
Directors Stock Incentive Plan, as amended and restated effective December 30, 2008
|
|
Exhibit 10.2 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
10.5*
|
|
|
Performance Bonus Stock Plan of 1995, as amended and restated effective December 30, 2008
|
|
Exhibit 10.3 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
10.6*
|
|
|
Kennametal Inc. Stock and Incentive Plan of 2002 (as amended on October 21, 2008)
|
|
Appendix A to the 2008 Proxy Statement filed September 8, 2008 (File No. 001-05318) is incorporated herein by reference.
|
10.7*
|
|
|
Forms of Award Agreements under the Kennametal Inc. Stock and Incentive Plan of 2002, as amended
|
|
Exhibit 10.18 of the June 30, 2004 Form 10-K filed September 10, 2004 (File No. 001-05318) is incorporated herein by reference.
|
10.8*
|
|
|
Form of Kennametal Inc. Restricted Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2002, as amended)
|
|
Exhibit 10.1 of the September 30, 2009 Form 10-Q filed November 5, 2009 (File No. 001-05318) is incorporated herein by reference.
|
10.9*
|
|
|
Form of Kennametal Inc. Performance Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2002, as amended)
|
|
Exhibit 10.1 of Form 10-Q filed November 5, 2010 (File No. 001-05318) is incorporated herein by reference.
|
10.10*
|
|
|
Form of Officer’s Employment Agreement with Ronald M. De Feo
|
|
Exhibit 10.1 to Form 8-K filed February 5, 2016 (File No. 001-05318) is incorporated herein by reference.
|
10.11*
|
|
|
Form of Officer's Employment Agreement with certain Named Executive Officers
|
|
Exhibit 10.16 of the Form 10-K filed August 13, 2015 (File No. 001-05318) is incorporated herein by reference.
|
10.12*
|
|
|
Schedule of Named Executive Officers who have entered into the Form of Officer's Employment Agreement as set forth in Exhibit 10.11
|
|
Exhibit 10.17 of the Form 10-K filed August 13, 2015 (File No. 001-05318) is incorporated herein by reference.
|
10.13*
|
|
|
Form of Indemnification Agreement for Named Executive Officers
|
|
Exhibit 10.2 of the Form 8-K filed March 22, 2005 (File No. 001-05318) is incorporated herein by reference.
|
10.14*
|
|
|
Schedule of Named Executive Officers who have entered into the Form of Indemnification Agreement as set forth in Exhibit 10.13
|
|
Filed herewith.
|
10.15*
|
|
|
Form of Employment Agreement with Donald A. Nolan
|
|
Exhibit 10.1 of the Form 8-K filed November 17, 2015 (File No. 001-05318) is incorporated herein by reference.
|
10.16*
|
|
|
Kennametal Inc. Executive Retirement Plan (for Designated Others) (as amended effective December 30, 2008)
|
|
Exhibit 10.8 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
10.17*
|
|
|
Amendment No. 1 to Kennametal Inc. Executive Retirement Plan (dated January 27, 2015)
|
|
Exhibit 10.2 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
10.18*
|
|
|
Amendment No. 2 to Kennametal Inc. Executive Retirement Plan (dated June 18, 2015)
|
|
Exhibit 10.1 of the Form 8-K filed June 23, 2015 (File No. 001-05318) is incorporated herein by reference.
|
10.19*
|
|
|
Kennametal Inc. Supplemental Executive Retirement Plan (as amended effective December 30, 2008)
|
|
Exhibit 10.9 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
10.20*
|
|
|
Amendment No. 1 to the Kennametal Inc. Supplemental Executive Retirement Plan (as amended effective December 30, 2008) (dated June 18, 2015)
|
|
Exhibit 10.2 of the Form 8-K filed June 23, 2015 (File No. 001-05318) is incorporated herein by reference.
|
10.21*
|
|
|
Description of Compensation Payable to Non-Employee Directors
|
|
Exhibit 10.23 of the Form 10-K filed August 11, 2016 (File No. 001-05318) is incorporated herein by reference.
|
10.22
|
|
|
Third Amended and Restated Credit Agreement dated as of June 25, 2010 among Kennametal Inc., Kennametal Europe GmbH, Bank of America, N.A., London Branch (as Euro Swingline Lender), PNC Bank, National Association and JPMorgan Chase Bank, N.A. (as Co-Syndication Agents), Citizens Bank of Pennsylvania and Bank of Tokyo- Mitsubishi UFJ Trust Company (as Co-Documentation Agents), Bank of America, N.A. (as the Administrative Agent), and the following lenders: Bank of America, N.A., PNC Bank, National Association, JPMorgan Chase Bank, N.A., Bank of Tokyo-Mitsubishi UFJ Trust Company, Citizens Bank of Pennsylvania, Mizuho Corporate Bank, Ltd., Comerica Bank, Commerzbank AG New York and Grand Cayman Branches, HSBC Bank USA, National Association, Intesa Sanpaolo S.p.A New York Branch, U.S. Bank National Association, First Commonwealth Bank and TriState Capital Bank
|
|
Exhibit 10.1 of Form 8-K filed June 30, 2010 (File No. 001-05318) is incorporated herein by reference.
|
10.23
|
|
|
Amendment No. 1, dated as of October 21, 2011, to the Third Amended and Restated Credit Agreement by and among Kennametal Inc., Kennametal Europe GmbH, Bank of America, N.A., Bank of America, N.A., London Branch, PNC Bank, National Association, JPMorgan Chase Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citizens Bank of Pennsylvania, Mizuho Corporate Bank, Ltd., HSBC Bank USA, N.A., U.S. Bank National Association, Comerica Bank, Commerzbank AG New York and Grand Cayman Branches,The Huntington National Bank, First Commonwealth Bank and Intesa Sanpaolo S.p.A
|
|
Exhibit 10.1 of Form 8-K filed October 27, 2011 (File No. 001-05318) is incorporated herein by reference.
|
10.24
|
|
|
Amendment No. 2, dated as of April 5, 2013, to the Third Amended and Restated Credit Agreement by and among Kennametal Inc., Kennametal Europe GmbH, Bank of America, N.A., Bank of America, N.A., London Branch, PNC Bank, National Association, JPMorgan Chase Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citizens Bank of Pennsylvania, Mizuho Corporate Bank, Ltd., HSBC Bank USA, N.A., U.S. Bank National Association, Commerzbank AG New York and Grand Cayman Branches,The Huntington National Bank, Compass Bank and First Commonwealth Bank.
|
|
Exhibit 10.1 of Form 8-K filed April 11, 2013 (File No. 001-05318) is incorporated herein by reference.
|
10.25
|
|
|
Form of Third Amended and Restated Guarantee (in connection with the Third Amended and Restated Credit Agreement)
|
|
Exhibit 10.26 of Form 10-K filed August 12, 2010 (File No. 001-05318) is incorporated herein by reference.
|
10.26
|
|
|
Fourth Amended and Restated Credit Agreement dated as of April 15, 2016 among Kennametal Inc. and Kennametal Europe GmbH (the “Borrowers”), the several banks and other financial institutions or entities from time to time parties to the Agreement (“Lenders”), Bank of America, N.A., London Branch (as Euro Swingline Lender), PNC Bank, National Association and JPMorgan Chase Bank, N.A. (as Co-Syndication Agents), Citizens Bank of Pennsylvania, The Bank of Tokyo-Mitsubishi UFJ Trust Company and Mizuho Bank, Ltd. (as Co-Documentation Agents), Bank of America, N.A. (as the Administrative Agent).
|
|
Exhibit 10.1 of Form 8-K filed April 19, 2016 (File No. 001-05318) is incorporated herein by reference.
|
10.27*
|
|
|
Stock and Incentive Plan of 2010
|
|
Exhibit A of the 2010 Proxy Statement filed September 13, 2010 (File No. 001-05318) is incorporated herein by reference.
|
10.28*
|
|
|
Form of Kennametal Inc. Performance Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2010)
|
|
Exhibit 10.2 of Form 10-Q filed February 8, 2011 (File No. 001-05318) is incorporated herein by reference.
|
10.29*
|
|
|
Form of Kennametal Inc. Restricted Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2010)
|
|
Exhibit 10.3 of Form 10-Q filed February 8, 2011 (File No. 001-05318) is incorporated herein by reference.
|
10.30*
|
|
|
Form of Kennametal Inc. Restricted Unit Award for Non-Employee Directors (granted under the Kennametal Inc. Stock and Incentive Plan of 2010)
|
|
Exhibit 10.4 of Form 10-Q filed February 8, 2011 (File No. 001-05318) is incorporated herein by reference.
|
10.31*
|
|
|
Form of Kennametal Inc. Nonstatutory Stock Option Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2010)
|
|
Exhibit 10.5 of Form 10-Q filed February 8, 2011 (File No. 001-05318) is incorporated herein by reference.
|
10.32*
|
|
|
Form of Kennametal Inc. Nonstatutory Stock Option Award for Non-Employee Directors (granted under the Kennametal Inc. Stock and Incentive Plan of 2010)
|
|
Exhibit 10.6 of Form 10-Q filed February 8, 2011 (File No. 001-05318) is incorporated herein by reference
|
10.33*
|
|
|
Form of Performance Unit Award (granted under Kennametal Inc. Stock and Incentive Plan 2010)
|
|
Exhibit 10.2 of Form 10-Q filed November 8, 2011 (File No. 001-05318) is incorporated herein by reference
|
10.34*
|
|
|
Form of Officer’s Employment Agreement with certain Named Executive Officers
|
|
Exhibit 10.1 of Form 8-K filed May 13, 2011 (File No. 001-05318) is incorporated herein by reference.
|
10.35*
|
|
|
Schedule of Executive Officers who have entered into the Form of Officer's Employment Agreement as set forth in Exhibit 10.34
|
|
Filed herewith.
|
10.36*
|
|
|
Form of Kennametal Inc. Restricted Unit Award - President and CEO (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.3 to Form 8-K filed February 5, 2016 (File No. 001-05318) is incorporated herein by reference
|
10.37*
|
|
|
Form of Kennametal Inc. Nonstatutory Stock Option Award - President and CEO (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.2 to Form 8-K filed February 5, 2016 (File No. 001-05318) is incorporated herein by reference
|
10.38*
|
|
|
Form of Kennametal Inc. Restricted Unit Award - President and CEO (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.40 of the Form 10-K filed August 11, 2016 (File No. 001-05318) is incorporated herein by reference.
|
10.39*
|
|
|
Form of Kennametal Inc. Performance Unit Award - President and CEO (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.41 of the Form 10-K filed August 11, 2016 (File No. 001-05318) is incorporated herein by reference.
|
10.40*
|
|
|
Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013)
|
|
Appendix A of the 2013 Proxy Statement filed September 17, 2013 (File No. 001-05318) is incorporated herein by reference.
|
10.41*
|
|
|
Form of Kennametal Inc. Performance Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.38 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
10.42*
|
|
|
Form of Kennametal Inc. Restricted Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.39 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
10.62*
|
|
|
Form of Kennametal Inc. Restricted Unit Award - Alternate Form (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.5 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
10.63*
|
|
|
Form of Kennametal Inc. Cash Settled Share-Based Award for China-based Employees (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.6 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
10.64*
|
|
|
Form of Kennametal Inc. Nonstatutory Stock Option Award (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.7 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
10.65*
|
|
|
Form of Kennametal Inc. Nonstatutory Stock Option Award - Alternate Form (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.9 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
10.66*
|
|
|
Form of Kennametal Inc. Stock Appreciation Right Award for China-based Employees (granted under Amendment No. 1 to the Kennametal Inc. Stock and Incentive Plan of 2010 (As Amended and Restated October 22, 2013))
|
|
Exhibit 10.10 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
10.67*
|
|
|
Kennametal Inc. 2016 Stock and Incentive Plan
|
|
Appendix C of 2016 Proxy Statement filed September 13, 2016 (File No. 001-05318) is incorporated by reference herein.
|
10.68*
|
|
|
Form of Kennametal Inc. Performance Unit Award (granted under Kennametal Inc. Stock and Incentive Plan of 2010, as amended and restated on October 22, 2013, and amended on January 27, 2015)
|
|
Exhibit 10.1 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
10.69*
|
|
|
Form of Kennametal Performance Unit Award (for President and CEO) (granted under Kennametal Inc. Stock and Incentive Plan of 2010, as amended and restated on October 22, 2013, and amended on January 27, 2015)
|
|
Exhibit 10.2 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
10.70*
|
|
|
Form of Kennametal Inc. Restricted Unit Award (granted under the Kennametal Inc. 2016 Stock and Incentive Plan)
|
|
Exhibit 10.4 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
10.71*
|
|
|
Form of Kennametal Inc. Cash Settled Share-Based Award for China-Based Employees (granted under the Kennametal Inc. 2016 Stock and Incentive Plan)
|
|
Exhibit 10.5 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
10.72*
|
|
|
Form of Kennametal Inc. Restricted Stock Unit Award (three year cliff vest) (granted under the Kennametal Inc. 2016 Stock and Incentive Plan)
|
|
Exhibit 10.1 of the Form 10-Q filed February 8, 2017 (File No. 001-05318) is incorporated by reference herein.
|
10.73*
|
|
|
Form of Letter Agreement with Mr. De Feo dated August 1, 2017
|
|
Exhibit 10.1 of the Form 8-K filed June 29, 2017 (File No. 001-05318) is incorporated by reference herein.
|
10.74*
|
|
|
Form of Updated Kennametal Inc. Restricted Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2016)
|
|
Filed herewith.
|
10.75*
|
|
|
Form of Kennametal Inc. Restricted Unit Award for Non-Employee Directors (granted under the Kennametal Inc. Stock and Incentive Plan of 2016)
|
|
Filed herewith.
|
10.76*
|
|
|
Form of Kennametal Inc. Form of Kennametal Inc. Cash-Settled Restricted Unit Award for China-based Employees (granted under the Kennametal Inc. Stock and Incentive Plan of 2016)
|
|
Filed herewith.
|
10.77*
|
|
|
Form of Kennametal Inc. Performance Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2016)
|
|
Filed herewith.
|
10.78*
|
|
|
Form of Kennametal Inc. Retention Restricted Unit Award (granted under the Kennametal Inc. Stock and Incentive Plan of 2016)
|
|
Filed herewith.
|
10.79*
|
|
|
Form of Officer’s Employment Agreement with President and CEO Christopher Rossi
|
|
Filed herewith.
|
10.80*
|
|
|
Form of Executive Chairman Employment Agreement with Ronald M. De Feo
|
|
Exhibit 10.1 of the Form 8-K filed June 29, 2017 (File No. 001-05318) is incorporated herein by reference.
|
|
|
|
|
|
|
21
|
|
|
Subsidiaries of the Registrant
|
|
Filed herewith.
|
|
|
|
|
|
|
23
|
|
|
Consent of Independent Registered Public Accounting Firm
|
|
Filed herewith.
|
|
|
|
|
|
|
31
|
|
|
Certifications
|
|
|
31.1
|
|
|
Certification executed by Ronald M. De Feo, Executive Chairman of Kennametal Inc.
|
|
Filed herewith.
|
(In thousands)
For the year ended June 30
|
|
Balance at
Beginning
of Year
|
|
|
Charges to
Costs and
Expenses
|
|
|
|
Charged to
Other
Comprehensive
(Loss) Income
|
|
|
|
Recoveries
|
|
|
Other
Adjustments
|
|
|
|
Deductions
from
Reserves
|
|
|
Balance at
End of
Year
|
|
|||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Allowance for
doubtful accounts
|
|
$
|
12,724
|
|
|
$
|
3,589
|
|
|
|
$
|
—
|
|
|
|
$
|
45
|
|
|
$
|
(24
|
)
|
|
(1)
|
$
|
(2,641
|
)
|
(2)
|
$
|
13,693
|
|
Reserve for excess and obsolete inventory
|
|
36,713
|
|
|
9,603
|
|
|
|
—
|
|
|
|
—
|
|
|
328
|
|
|
(1)
|
(14,530
|
)
|
(3)
|
32,114
|
|
|||||||
Deferred tax asset valuation allowance
|
|
122,699
|
|
|
2,361
|
|
|
|
(5,805
|
)
|
|
|
—
|
|
|
(2,485
|
)
|
|
(6)
|
—
|
|
|
116,770
|
|
|||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Allowance for
doubtful accounts
|
|
$
|
13,560
|
|
|
$
|
4,827
|
|
|
|
$
|
—
|
|
|
|
$
|
31
|
|
|
$
|
(601
|
)
|
|
(4)
|
$
|
(5,093
|
)
|
(2)
|
$
|
12,724
|
|
Reserve for excess and obsolete inventory
|
|
45,020
|
|
|
5,393
|
|
|
|
—
|
|
|
|
—
|
|
|
(3,372
|
)
|
|
(4)
|
(10,328
|
)
|
(3)
|
36,713
|
|
|||||||
Deferred tax asset valuation allowance
|
|
16,771
|
|
|
85,361
|
|
|
(5)
|
24,666
|
|
|
(5)
|
—
|
|
|
(4,099
|
)
|
|
(4)
|
—
|
|
|
122,699
|
|
|||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Allowance for
doubtful accounts
|
|
$
|
14,027
|
|
|
$
|
3,602
|
|
|
|
$
|
—
|
|
|
|
$
|
40
|
|
|
$
|
(1,095
|
)
|
|
(1)
|
$
|
(3,014
|
)
|
(2)
|
$
|
13,560
|
|
Reserve for excess and obsolete inventory
|
|
52,737
|
|
|
8,666
|
|
|
|
—
|
|
|
|
—
|
|
|
(5,613
|
)
|
|
(1)
|
(10,770
|
)
|
(3)
|
45,020
|
|
|||||||
Deferred tax asset valuation allowance
|
|
17,860
|
|
|
1,846
|
|
|
|
—
|
|
|
|
—
|
|
|
(2,935
|
)
|
|
(1)
|
—
|
|
|
16,771
|
|
1.
|
Each Stock Unit represents the right to receive one Share of the Company’s Capital Stock, par value $1.25
|
|
ROIC
|
|
||
|
FY18
|
FY19
|
FY20
|
Payout Multiple Range
|
Maximum
|
15.7%
|
16.8%
|
16.8%
|
150%
|
Target
|
11.2%
|
12.0%
|
12.0%
|
100%
|
Threshold
|
7.8%
|
8.4%
|
8.4%
|
50%
|
If the Company’s TSR rank
against the Peer Group is:
|
Relative TSR Vesting Multiple
(% of ROIC Earned Stock Units)
|
at or below the 25th percentile (Threshold)
|
80%
|
at the 50th percentile (Target)
|
100%
|
at the 75th percentile or more (Maximum)
|
120%
|
•
|
If the Company or a member of the Peer Group splits its stock, such company’s TSR will be adjusted for the stock split
|
•
|
If a member of the Peer Group is acquired by another company, the acquired Peer Group company will be removed from the Peer Group for the entire Performance Period
|
•
|
If a member of the Peer Group sells, spins
‐
off, or disposes of a portion of its business representing more than 50% of such Company’s total assets during the Performance Period, such Company will be removed from the Peer Group
|
•
|
If a member of the Peer Group acquires another company, the acquiring Peer Group company will remain in the Peer Group for the Performance Period
|
•
|
If a member of the Peer Group is delisted on all major stock exchanges, such delisted company will be removed from the Peer Group for the entire Performance Period
|
•
|
Members of the Peer Group that file for bankruptcy, liquidation or similar reorganization during the Performance Period will remain in the Peer Group, positioned below the lowest performing nonbankrupt member of the Peer Group
|
Company Name
|
Exchange: Ticker
|
AECOM Technology Corporation
|
NYSE: ACM
|
AGCO Corporation
|
NYSE: AGCO
|
AO Smith Corp.
|
NYSE: AOS
|
Carlisle Companies Incorporated
|
NYSE: CSL
|
Crane Co.
|
NYSE: CR
|
Curtiss-Wright Corporation
|
NYSE: CW
|
Donaldson Company, Inc.
|
NYSE: DCI
|
Dycom Industries, Inc.
|
NYSE: DY
|
EMCOR Group Inc.
|
NYSE: EME
|
Enersys
|
NYSE: ENS
|
Esterline Technologies Corp.
|
NYSE: ESL
|
GATX Corp.
|
NYSE: GMT
|
Graco Inc.
|
NYSE: GGG
|
Granite Construction Incorporated
|
NYSE: GVA
|
Hubbell Inc.
|
NYSE: HUB.B
|
Huntington Ingalls Industries, Inc.
|
NYSE: HII
|
IDEX Corporation
|
NYSE: IEX
|
ITT Corporation
|
NYSE: ITT
|
KBR, Inc.
|
NYSE: KBR
|
KLX Inc.
|
NasdaqGS: KLXI
|
Lennox International, Inc.
|
NYSE: LII
|
Lincoln Electric Holdings Inc.
|
NasdaqGS: LECO
|
MSC Industrial Direct Co. Inc.
|
NYSE: MSM
|
Nordson Corporation
|
NasdaqGS: NDSN
|
NOW Inc.
|
NYSE: DNOW
|
Orbital ATK, Inc.
|
NYSE: OA
|
Oshkosh Corporation
|
NYSE: OSK
|
Regal Beloit Corporation
|
NYSE: RBC
|
Teledyne Technologies Inc.
|
NYSE: TDY
|
Terex Corp.
|
NYSE: TEX
|
The Timken Company
|
NYSE: TKR
|
The Toro Company
|
NYSE: TTC
|
Trinity Industries Inc.
|
NYSE: TRN
|
Valmont Industries, Inc.
|
NYSE: VMI
|
Watsco Inc.
|
NYSE: WSO
|
Westinghouse Air Brake Technologies Corporation
|
NYSE: WAB
|
Woodward, Inc.
|
NasdaqGS: WWD
|
1.
|
(a)
Subject to the terms and conditions set forth herein, Kennametal hereby agrees to employ Employee as President and Chief Executive Officer as of the date hereof, and Employee hereby accepts such employment and agrees to devote his full time and attention to the business and affairs of Kennametal, in such capacity or capacities and to perform to the best of his ability such services as shall be determined from time to time by the Board of Directors of Kennametal until the termination of his employment hereunder.
|
4.
|
(a)
In the event that Employee’s employment is involuntarily terminated by Kennametal prior to a Change-in-Control (as hereinafter defined) and other than for Cause, Employee will receive, as severance pay, in addition to all amounts due him at the Date of Termination (as hereinafter defined), the continuance of the Employee’s base salary (at the rate in effect on the Date of Termination and subject to applicable deductions and withholdings) for twenty-four (24) months following the Date of Termination. Any severance pay will be paid
in substantially equal installments, no less frequently than monthly, in accordance with Kennametal’s established payroll policies and practices as in effect on the Date of Termination beginning on the first normal pay date thereafter or, if later, the date the Employee's release becomes effective and irrevocable (with an aggregate initial installment representing the total amount due as if severance payments commenced on the normal pay date immediately following the Employee's Date of Termination). Notwithstanding the foregoing, Kennametal may discontinue any such severance payments if Kennametal reasonably determines that Employee has violated any provision of this Agreement.
|
9.
|
(a)
Employee acknowledges and agrees that in the course of his employment by Kennametal, Employee may work with, add to, create or acquire trade secrets and confidential information ("Confidential Information") which could include, in whole or in part, information:
|
1.
|
I have reviewed this annual report on Form 10-K of Kennametal Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 14, 2017
|
|
/s/ Ronald M. De Feo
|
|
|
|
Ronald M. De Feo
Executive Chairman
|
1.
|
I have reviewed this annual report on Form 10-K of Kennametal Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 14, 2017
|
|
/s/ Christopher Rossi
|
|
|
|
Christopher Rossi
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Kennametal Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
August 14, 2017
|
|
/s/ Jan Kees van Gaalen
|
|
|
|
Jan Kees van Gaalen
|
|
|
|
Vice President and Chief Financial Officer
|
1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Corporation.
|