|
Pennsylvania
|
|
25-0900168
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
600 Grant Street
|
|
|
Suite 5100
|
|
|
Pittsburgh, Pennsylvania
|
|
15219-2706
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Capital Stock, par value $1.25 per share
|
KMT
|
New York Stock Exchange
|
Preferred Stock Purchase Rights
|
|
New York Stock Exchange
|
Large accelerated filer [X]
|
|
|
|
Accelerated filer [ ]
|
|
|
Non-accelerated filer [ ]
|
|
Smaller reporting company [ ]
|
|
|
||
Emerging growth company [ ]
|
|
|
|
|
|
|
|
Item No.
|
Page
|
|
|
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|
|
|
1
|
||
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|
1A.
|
||
|
|
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1B.
|
||
|
|
|
2.
|
||
|
|
|
3.
|
||
|
|
|
4.
|
||
|
|
|
|
|
|
5.
|
||
|
|
|
6.
|
||
|
|
|
7.
|
||
|
|
|
7A.
|
||
|
|
|
8.
|
||
|
|
|
9.
|
||
|
|
|
9A.
|
||
|
|
|
9B.
|
||
|
|
|
|
|
|
10.
|
||
|
|
|
11.
|
||
|
|
|
12.
|
||
|
|
|
13.
|
||
|
|
|
14.
|
||
|
|
|
|
|
|
|
|
|
15.
|
||
|
|
|
16.
|
||
|
|
|
•
|
Continued development and refining of our channel strategy;
|
•
|
Introduced new products across our business aimed at improving customer productivity and performance, including Harvi
TM
Ultra 8X, our new tangential milling system, KennaFlow hydraulic frac seats and Road King
TM
Xtreme; and
|
•
|
Announced a new distribution agreement with Gardner Denver for KennaFlow valve seats
|
•
|
Substantially completed our previous phase (FY19 Restructuring Actions) of simplification/modernization restructuring initiative, and
|
•
|
Announced FY20 and FY21 Restructuring Actions, which are expected to reduce structural costs, improve operational efficiency and position the Company for long-term profitable growth
|
◦
|
Restructurings and proposed facility closures in fiscal 2020 are currently estimated to deliver annualized savings of $35 million to $40 million and $55 million to $65 million in pre-tax charges;
|
◦
|
Fiscal 2021 proposed restructuring and facility closures expected to deliver annualized savings of $25 million to $30 million and pre-tax charges of $60 million to $75 million through fiscal 2020 and 2021
|
|
|
|
|
Primary Segment
|
||
Location
|
|
Owned/Leased
|
Principal Products
|
IND
(1)
|
WID
(2)
|
INF
(3)
|
United States:
|
|
|
|
|
|
|
Gurley, Alabama
|
Owned
|
Metallurgical Powders
|
|
|
X
|
|
Huntsville, Alabama
|
Owned
|
Metallurgical Powders
|
|
|
X
|
|
Rogers, Arkansas
|
Owned/Leased
|
Carbide Products, Pelletizing Die Plates and Downhole Drilling Carbide Components
|
|
|
X
|
|
Goshen, Indiana
|
Leased
|
Powders; Welding Rods, Wires and Machines
|
|
|
X
|
|
New Albany, Indiana
|
Leased
|
High Wear Coating for Steel Parts
|
|
|
X
|
|
Greenfield, Massachusetts
|
Owned
|
High-Speed Steel Taps
|
|
X
|
|
|
Traverse City, Michigan
|
Owned
|
Wear Parts
|
|
|
X
|
|
Fallon, Nevada
|
Owned
|
Metallurgical Powders
|
|
|
X
|
|
Asheboro, North Carolina
|
Owned
|
Carbide Round Tools
|
X
|
|
|
|
Henderson, North Carolina
|
Owned
|
Metallurgical Powders
|
|
|
X
|
|
Roanoke Rapids, North Carolina
|
Owned
|
Metalworking Inserts
|
X
|
|
|
|
Cleveland, Ohio
|
Leased
|
Distribution
|
X
|
|
|
|
Orwell, Ohio
|
Owned
|
Metalworking Inserts
|
X
|
|
|
|
Solon, Ohio
|
Owned
|
Metalworking Toolholders
|
X
|
|
|
|
Whitehouse, Ohio
|
Owned/Leased
|
Metalworking Inserts and Round Tools
|
X
|
|
|
|
Bedford, Pennsylvania
|
Owned/Leased
|
Mining and Construction Tools, Wear Parts and Distribution
|
|
|
X
|
|
Irwin, Pennsylvania
|
Owned
|
Carbide Wear Parts
|
|
|
X
|
|
New Castle, Pennsylvania
|
Owned/Leased
|
Specialty Metals and Alloys
|
|
|
X
|
|
Johnson City, Tennessee
|
Owned
|
Metalworking Inserts
|
X
|
|
|
|
La Vergne, Tennessee
|
Owned
|
Metalworking Inserts
|
X
|
|
|
|
New Market, Virginia
|
Owned
|
Metalworking Toolholders
|
X
|
|
|
|
International:
|
|
|
|
|
|
|
La Paz, Bolivia
|
Owned
|
Tungsten Concentrate
|
|
|
X
|
|
Indaiatuba, Brazil
|
Leased
|
Metalworking Carbide Drills and Toolholders
|
X
|
|
|
|
Belleville, Canada
|
Owned
|
Casting Components, Coatings and Powder Metallurgy Components
|
|
|
X
|
|
Victoria, Canada
|
Owned
|
Wear Parts
|
|
|
X
|
|
Fengpu, China
|
Owned
|
Intermetallic Composite Ceramic Powders and Parts
|
|
|
X
|
|
Shanghai, China
|
Owned
|
Powders, Welding Rods and Wires and Cast Components
|
|
|
X
|
|
Shanghai, China
|
Owned
|
Distribution
|
X
|
|
|
|
Tianjin, China
|
Owned
|
Metalworking Inserts, Carbide Round Tools and Metallurgical Powders
|
X
|
|
X
|
|
|
|
|
Primary Segment
|
||
Location
|
|
Owned/Leased
|
Principal Products
|
IND
(1)
|
WID
(2)
|
INF
(3)
|
Xuzhou, China
|
Leased
|
Mining Tools
|
|
|
X
|
|
Ebermannstadt, Germany
|
Owned
|
Metalworking Inserts
|
X
|
|
|
|
Essen, Germany
|
Owned/Leased
|
Metalworking Inserts
|
X
|
|
|
|
Königsee, Germany
|
Leased
|
Metalworking Carbide Drills
|
X
|
|
|
|
Lichtenau, Germany
|
Owned
|
Metalworking Toolholders
|
X
|
|
|
|
Mistelgau, Germany
|
Owned
|
Wear Parts and Metallurgical Powders
|
|
|
X
|
|
Nabburg, Germany
|
Owned
|
Metalworking Toolholders and Metalworking Round Tools, Drills and Mills
|
X
|
|
|
|
Neunkirchen, Germany
|
Owned
|
Distribution
|
X
|
|
|
|
Schongau, Germany
|
Owned
|
Ceramic Vaporizer Boats
|
|
|
X
|
|
Vohenstrauss, Germany
|
Owned
|
Metalworking Carbide Drills
|
X
|
|
|
|
Bangalore, India
|
Owned
|
Metalworking Inserts, Toolholders and Wear Parts
|
X
|
X
|
X
|
|
Shlomi, Israel
|
Owned
|
High-Speed Steel and Carbide Round Tools
|
|
X
|
|
|
Zory, Poland
|
Leased
|
Mining and Construction Conicals
|
|
|
X
|
|
Boksburg, South Africa
|
Leased
|
Mining and Construction Conicals
|
|
|
X
|
|
Barcelona, Spain
|
Leased
|
Metalworking Cutting Tools
|
X
|
|
|
|
Kingswinford, United Kingdom
|
Leased
|
Distribution
|
X
|
|
|
|
Newport, United Kingdom
|
Owned
|
Intermetallic Composite Powders
|
|
|
X
|
(1)
|
Industrial segment
|
(2)
|
Widia segment
|
(3)
|
Infrastructure segment
|
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
||||||||||||
Kennametal
|
$
|
100.00
|
|
$
|
75.11
|
|
$
|
50.33
|
|
$
|
87.29
|
|
$
|
85.46
|
|
$
|
89.97
|
|
Peer Group Index
|
100.00
|
|
84.61
|
|
77.54
|
|
108.15
|
|
122.82
|
|
140.28
|
|
||||||
S&P Midcap 400
|
100.00
|
|
106.40
|
|
107.81
|
|
127.83
|
|
145.09
|
|
147.07
|
|
||||||
S&P 400 Capital Goods
|
100.00
|
|
96.52
|
|
97.33
|
|
125.90
|
|
139.42
|
|
156.12
|
|
||||||
S&P Global 1200 Industrials
|
100.00
|
|
98.68
|
|
99.98
|
|
124.38
|
|
132.75
|
|
141.75
|
|
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, 2019
|
1,100
|
|
|
$
|
37.59
|
|
|
—
|
|
|
10,100,100
|
|
May 1 through May 31, 2019
|
2,258
|
|
|
33.71
|
|
|
—
|
|
|
10,100,100
|
|
|
June 1 through June 30, 2019
|
471
|
|
|
36.99
|
|
|
—
|
|
|
10,100,100
|
|
|
Total
|
3,829
|
|
|
$
|
35.22
|
|
|
—
|
|
|
|
(1)
|
During the fourth quarter of 2019, 1,673 shares were purchased on the open market on behalf of Kennametal to fund the Company’s dividend reinvestment program. Employees also delivered 2,156 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 common stock outside of the Company's dividend reinvestment program.
|
|
|
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||
OPERATING RESULTS (in thousands)
|
|
|
|
||||||||||||||
Sales
|
|
$
|
2,375,234
|
|
$
|
2,367,853
|
|
$
|
2,058,368
|
|
$
|
2,098,436
|
|
$
|
2,647,195
|
|
|
Cost of goods sold
|
(1
|
)
|
1,543,738
|
|
1,547,734
|
|
1,413,453
|
|
1,492,697
|
|
1,853,458
|
|
|||||
Operating expense
|
(1
|
)
|
474,151
|
|
503,252
|
|
468,568
|
|
496,792
|
|
557,718
|
|
|||||
Restructuring and asset impairment charges
|
(2
|
)
|
14,084
|
|
11,907
|
|
65,018
|
|
143,810
|
|
582,235
|
|
|||||
Loss on divestiture
|
|
—
|
|
—
|
|
—
|
|
131,463
|
|
—
|
|
||||||
Interest expense
|
|
32,994
|
|
30,081
|
|
28,842
|
|
27,752
|
|
31,466
|
|
||||||
Provision (benefit) for income taxes
|
|
63,359
|
|
69,981
|
|
29,895
|
|
25,313
|
|
(16,654
|
)
|
||||||
Income (loss) from continuing operations attributable to Kennametal
|
|
241,925
|
|
200,180
|
|
49,138
|
|
(225,968
|
)
|
(373,896
|
)
|
||||||
Net income (loss) attributable to Kennametal
|
|
241,925
|
|
200,180
|
|
49,138
|
|
(225,968
|
)
|
(373,896
|
)
|
||||||
FINANCIAL POSITION (in thousands)
|
|
|
|
|
|
|
|||||||||||
Working capital
|
|
$
|
729,101
|
|
$
|
659,635
|
|
$
|
652,423
|
|
$
|
648,066
|
|
$
|
775,802
|
|
|
Total assets
|
|
2,656,269
|
|
2,925,737
|
|
2,415,496
|
|
2,362,783
|
|
2,843,655
|
|
||||||
Long-term debt, including capital leases, excluding current maturities
|
|
592,474
|
|
591,505
|
|
694,991
|
|
693,548
|
|
730,011
|
|
||||||
Total debt, including capital leases and notes payable
|
|
592,631
|
|
991,705
|
|
695,916
|
|
695,443
|
|
745,713
|
|
||||||
Total Kennametal shareholders' equity
|
|
1,335,172
|
|
1,194,325
|
|
1,017,294
|
|
964,323
|
|
1,345,807
|
|
||||||
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
|
|
|
|||||||||||||||
Basic earnings (loss) from continuing operations
|
(3
|
)
|
$
|
2.94
|
|
$
|
2.45
|
|
$
|
0.61
|
|
$
|
(2.83
|
)
|
$
|
(4.71
|
)
|
Basic earnings (loss)
|
(3
|
)
|
2.94
|
|
2.45
|
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
|||||
Diluted earnings (loss) from continuing operations
|
(3
|
)
|
2.90
|
|
2.42
|
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
|||||
Diluted earnings (loss)
|
(3
|
)
|
2.90
|
|
2.42
|
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
|||||
Dividends
|
|
0.80
|
|
0.80
|
|
0.80
|
|
0.80
|
|
0.72
|
|
||||||
Book value (at June 30)
|
|
16.17
|
|
14.63
|
|
12.61
|
|
12.10
|
|
16.96
|
|
||||||
Market Price (at June 30)
|
|
36.99
|
|
35.90
|
|
37.42
|
|
22.11
|
|
34.12
|
|
||||||
OTHER DATA (in thousands, except number of employees)
|
|
|
|
||||||||||||||
Capital expenditures
|
|
$
|
212,343
|
|
$
|
171,004
|
|
$
|
118,018
|
|
$
|
110,697
|
|
$
|
100,939
|
|
|
Number of employees (at June 30)
|
|
10,395
|
|
10,491
|
|
10,744
|
|
11,178
|
|
12,718
|
|
||||||
Basic weighted average shares outstanding
|
82,379
|
|
81,544
|
|
80,351
|
|
79,835
|
|
79,342
|
|
|||||||
Diluted weighted average shares outstanding
|
83,291
|
|
82,754
|
|
81,169
|
|
79,835
|
|
79,342
|
|
|||||||
KEY RATIOS
|
|
|
|
|
|
|
|||||||||||
Sales growth (decline)
|
(4
|
)
|
0.3
|
%
|
15.0
|
%
|
(1.9
|
)%
|
(20.7
|
)%
|
(6.7
|
)%
|
|||||
Gross profit margin
|
|
35.0
|
|
34.6
|
|
31.3
|
|
28.9
|
|
30.0
|
|
||||||
Operating margin
|
(5
|
)
|
13.8
|
|
12.3
|
|
4.6
|
%
|
(2.7
|
)%
|
(14.1
|
)%
|
(1)
|
Amounts were restated to reflect retrospective application for adoption of ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" on July 1, 2018. Cost of goods sold was increased by $12.2 million, $12.8 million, $10.3 million and $12.3 million for 2018, 2017, 2016 and 2015, respectively. Operating expense was increased by $5.1 million, $5.4 million, $1.8 million and $2.8 million for 2018, 2017, 2016 and 2015, respectively.
|
(2)
|
In 2019, 2018 and 2017, all charges were related to restructuring. In 2016, the charges related to intangible asset impairment of $108.5 million, restructuring charges of $30.0 million and fixed asset disposal charges of $5.4 million. In 2015, the charges related to intangible asset impairment of $541.7 million and restructuring charges of $40.5 million.
|
(3)
|
2019 included restructuring and related charges of
$0.17
, a net benefit from tax reform of
$0.11
, a charge related to changes in the indefinite reinvestment assertion on certain foreign subsidiaries' undistributed earnings of
$0.07
and
$0.01
of benefit from the release of the valuation allowance on Australian deferred tax assets. 2018 included restructuring and related charges of $0.16, effect of an out of period adjustment to the provision for income taxes of $0.06 and net effect of tax reform of $0.01. 2017 included restructuring and related charges of $0.89 and Australia deferred tax valuation allowance of $0.02. 2016 included U.S. deferred tax valuation allowance of $1.02, divestiture and related charges of $1.39, intangible asset impairment charges of $0.96, restructuring and related charges of $0.50, fixed asset disposal charges of $0.05 and operations of divested businesses of $0.02. 2015 included intangible asset impairment charges of $6.13 and restructuring and related charges of $0.56.
|
(4)
|
Divestiture effect of sales decline was negative 4 percent and negative 5 percent in
2017
and
2016
, respectively.
|
(5)
|
Included restructuring and related charges of
$16.9 million
,
$15.9 million
, $76.2 million, $53.5 million and $58.1 million in 2019, 2018, 2017, 2016 and 2015, respectively; intangible asset impairment of $108.5 million and $541.7 million in 2016 and 2015, respectively; and divestiture and related charges of $131.5 million in 2016.
|
|
2019
|
|
(in percentages)
|
As Reported
|
Constant Currency
|
End market sales growth (decline):
|
|
|
Aerospace and defense
|
12%
|
16%
|
Energy
|
4
|
5
|
General engineering
|
3
|
7
|
Earthworks
|
(6)
|
(3)
|
Transportation
|
(9)
|
(5)
|
Regional sales growth (decline):
|
|
|
Americas
|
4%
|
5%
|
Asia Pacific
|
(2)
|
2
|
Europe, the Middle East and Africa (EMEA)
|
(4)
|
2
|
(in thousands)
|
2019
|
|
2018
|
||||
Sales:
|
|
|
|
||||
Industrial
|
$
|
1,274,499
|
|
|
$
|
1,292,098
|
|
Widia
|
197,522
|
|
|
198,568
|
|
||
Infrastructure
|
903,213
|
|
|
877,187
|
|
||
Total sales
|
$
|
2,375,234
|
|
|
$
|
2,367,853
|
|
Operating income (loss):
|
|
|
|
||||
Industrial
|
$
|
220,696
|
|
|
$
|
176,978
|
|
Widia
|
2,882
|
|
|
2,919
|
|
||
Infrastructure
|
108,480
|
|
|
112,998
|
|
||
Corporate
|
(3,208
|
)
|
|
(2,596
|
)
|
||
Total operating income
|
328,850
|
|
|
290,299
|
|
||
Interest expense
|
32,994
|
|
|
30,081
|
|
||
Other income, net
|
(15,379
|
)
|
|
(14,823
|
)
|
||
Income from continuing operations before income taxes
|
$
|
311,235
|
|
|
$
|
275,041
|
|
(in thousands)
|
2019
|
|
2018
|
||||
Sales
|
$
|
1,274,499
|
|
|
$
|
1,292,098
|
|
Operating income
|
220,696
|
|
|
176,978
|
|
||
Operating margin
|
17.3
|
%
|
|
13.7
|
%
|
(in percentages)
|
2019
|
Organic sales growth
|
2%
|
Foreign currency exchange impact
|
(3)
|
Business days impact
|
—
|
Sales decline
|
(1)%
|
|
2019
|
||
(in percentages)
|
As Reported
|
|
Constant Currency
|
End market sales growth (decline):
|
|
|
|
Aerospace and defense
|
12%
|
|
16%
|
General engineering
|
2
|
|
5
|
Energy
|
(2)
|
|
1
|
Transportation
|
(9)
|
|
(5)
|
Regional sales growth (decline):
|
|
|
|
Americas
|
4%
|
|
7%
|
EMEA
|
(5)
|
|
1
|
Asia Pacific
|
(5)
|
|
(1)
|
(in thousands)
|
2019
|
|
2018
|
||||
Sales
|
$
|
197,522
|
|
|
$
|
198,568
|
|
Operating income
|
2,882
|
|
|
2,919
|
|
||
Operating margin
|
1.5
|
%
|
|
1.5
|
%
|
(in percentages)
|
2019
|
Organic sales growth
|
3%
|
Foreign currency exchange impact
|
(4)
|
Business days impact
|
—
|
Sales decline
|
(1)%
|
|
2019
|
||
(in percentages)
|
As Reported
|
|
Constant Currency
|
Regional sales growth (decline):
|
|
|
|
EMEA
|
—%
|
|
7%
|
Americas
|
(1)
|
|
—
|
Asia Pacific
|
(1)
|
|
5
|
(in thousands)
|
2019
|
|
2018
|
||||
Sales
|
$
|
903,213
|
|
|
$
|
877,187
|
|
Operating income
|
108,480
|
|
|
112,998
|
|
||
Operating margin
|
12.0
|
%
|
|
12.9
|
%
|
|
2019
|
||
(in percentages)
|
As Reported
|
|
Constant Currency
|
End market sales growth (decline):
|
|
|
|
General engineering
|
10%
|
|
12%
|
Energy
|
6
|
|
7
|
Earthworks
|
(6)
|
|
(3)
|
Regional sales growth (decline):
|
|
|
|
Americas
|
4%
|
|
5%
|
Asia Pacific
|
2
|
|
6
|
EMEA
|
(1)
|
|
5
|
(in thousands)
|
|
2019
|
|
2018
|
||||
Corporate expense
|
|
$
|
(3,208
|
)
|
|
$
|
(2,596
|
)
|
Contractual Obligations
|
|
|
|
Total
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Thereafter
|
|||||||||||
Long-term debt, including current maturities
|
|
(1
|
)
|
|
$
|
713,450
|
|
|
$
|
25,500
|
|
|
$
|
347,125
|
|
|
$
|
27,750
|
|
|
$
|
313,075
|
|
Notes payable
|
|
(2
|
)
|
|
196
|
|
|
196
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension benefit payments
|
|
|
|
(3)
|
|
51,516
|
|
|
104,535
|
|
|
109,198
|
|
|
(3)
|
||||||||
Postretirement benefit payments
|
|
|
|
(3)
|
|
1,418
|
|
|
2,535
|
|
|
2,177
|
|
|
(3)
|
||||||||
Operating leases
|
|
|
|
60,077
|
|
|
17,074
|
|
|
18,905
|
|
|
6,930
|
|
|
17,168
|
|
||||||
Purchase obligations
|
|
(4
|
)
|
|
254,450
|
|
|
139,444
|
|
|
99,976
|
|
|
15,030
|
|
|
—
|
|
|||||
Unrecognized tax benefits
|
|
(5
|
)
|
|
9,701
|
|
|
608
|
|
|
2,694
|
|
|
5,376
|
|
|
1,023
|
|
|||||
Total
|
|
|
|
|
|
$
|
235,756
|
|
|
$
|
575,770
|
|
|
$
|
166,461
|
|
|
|
|
(1)
|
Long-term debt includes interest obligations of $114.3 million and excludes debt issuance costs of
$5.5 million
. Interest obligations were determined assuming interest rates as of
June 30, 2019
remain constant.
|
(2)
|
Notes payable includes interest obligations of an immaterial amount. Interest obligations were determined assuming interest rates as of
June 30, 2019
remain constant.
|
(3)
|
Annual payments are expected to continue into the foreseeable future at the amounts noted in the table.
|
(4)
|
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, 2019
remain constant.
|
(5)
|
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 $0.7 million and penalty of $0.1 million accrued related to such positions as of
June 30, 2019
. 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
|
|
2020
|
|
2021-2022
|
|
2023-2024
|
|
Thereafter
|
||||||||||
Standby letters of credit
|
|
$
|
4,097
|
|
|
$
|
2,665
|
|
|
$
|
1,432
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Guarantees
|
|
29,708
|
|
|
19,004
|
|
|
2,026
|
|
|
—
|
|
|
8,678
|
|
|||||
Total
|
|
$
|
33,805
|
|
|
$
|
21,669
|
|
|
$
|
3,458
|
|
|
$
|
—
|
|
|
$
|
8,678
|
|
Year ended June 30, 2019
|
|
Industrial
|
|
Widia
|
|
Infrastructure
|
|
Total
|
Organic sales growth
|
|
2%
|
|
3%
|
|
5%
|
|
3%
|
Foreign currency exchange impact
(6)
|
|
(3)
|
|
(4)
|
|
(2)
|
|
(3)
|
Business days impact
(7)
|
|
—
|
|
—
|
|
—
|
|
—
|
Sales (decline) growth
|
|
(1)%
|
|
(1)%
|
|
3%
|
|
—%
|
Industrial
|
|
|
|
|
|
|
|
|
Year ended June 30, 2019
|
|
General engineering
|
|
Transportation
|
|
Aerospace and defense
|
|
Energy
|
Constant currency end market sales growth (decline)
|
|
5%
|
|
(5)%
|
|
16%
|
|
1%
|
Foreign currency exchange impact
(6)
|
|
(3)
|
|
(4)
|
|
(4)
|
|
(3)
|
End market sales growth (decline)
(8)
|
|
2%
|
|
(9)%
|
|
12%
|
|
(2)%
|
Infrastructure
|
|
|
|
|
|
|
Year ended June 30, 2019
|
|
Energy
|
|
Earthworks
|
|
General engineering
|
Constant currency end market sales growth (decline)
|
|
7%
|
|
(3)%
|
|
12%
|
Foreign currency exchange impact
(6)
|
|
(1)
|
|
(3)
|
|
(2)
|
End market sales growth (decline)
(8)
|
|
6%
|
|
(6)%
|
|
10%
|
Total
|
|
|
|
|
|
|
|
|
|
|
Year ended June 30, 2019
|
|
General engineering
|
|
Transportation
|
|
Aerospace and defense
|
|
Energy
|
|
Earthworks
|
Constant currency end market sales growth (decline)
|
|
7%
|
|
(5)%
|
|
16%
|
|
5%
|
|
(3)%
|
Foreign currency exchange impact
(6)
|
|
(4)
|
|
(4)
|
|
(4)
|
|
(1)
|
|
(3)
|
End market sales growth (decline)
(8)
|
|
3%
|
|
(9)%
|
|
12%
|
|
4%
|
|
(6)%
|
|
|
Year Ended June 30, 2019
|
||||
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
Industrial
|
|
|
|
|
|
|
Constant currency regional sales growth (decline)
|
|
7%
|
|
1%
|
|
(1)%
|
Foreign currency exchange impact
(6)
|
|
(3)
|
|
(6)
|
|
(4)
|
Regional sales growth (decline)
(9)
|
|
4%
|
|
(5)%
|
|
(5)%
|
|
|
|
|
|
|
|
Widia
|
|
|
|
|
|
|
Constant currency regional sales growth
|
|
—%
|
|
7%
|
|
5%
|
Foreign currency exchange impact
(6)
|
|
(1)
|
|
(7)
|
|
(6)
|
Regional sales decline
(9)
|
|
(1)%
|
|
—%
|
|
(1)%
|
|
|
|
|
|
|
|
Infrastructure
|
|
|
|
|
|
|
Constant currency regional sales growth
|
|
5%
|
|
5%
|
|
6%
|
Foreign currency exchange impact
(6)
|
|
(1)
|
|
(6)
|
|
(4)
|
Regional sales growth (decline)
(9)
|
|
4%
|
|
(1)%
|
|
2%
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
Constant currency regional sales growth
|
|
5%
|
|
2%
|
|
2%
|
Foreign currency exchange impact
(6)
|
|
(1)
|
|
(6)
|
|
(4)
|
Regional sales growth (decline)
(9)
|
|
4%
|
|
(4)%
|
|
(2)%
|
Year ended June 30 (in thousands, except per share data)
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
$
|
2,375,234
|
|
|
$
|
2,367,853
|
|
|
$
|
2,058,368
|
|
Cost of goods sold
|
1,543,738
|
|
|
1,547,730
|
|
|
1,413,452
|
|
|||
Gross profit
|
831,496
|
|
|
820,123
|
|
|
644,916
|
|
|||
Operating expense
|
474,151
|
|
|
503,249
|
|
|
468,568
|
|
|||
Restructuring and asset impairment charges (Note 14)
|
14,084
|
|
|
11,907
|
|
|
65,018
|
|
|||
Amortization of intangibles
|
14,411
|
|
|
14,668
|
|
|
16,578
|
|
|||
Operating income
|
328,850
|
|
|
290,299
|
|
|
94,752
|
|
|||
Interest expense
|
32,994
|
|
|
30,081
|
|
|
28,842
|
|
|||
Other income, net
|
(15,379
|
)
|
|
(14,823
|
)
|
|
(15,965
|
)
|
|||
Income before income taxes
|
311,235
|
|
|
275,041
|
|
|
81,875
|
|
|||
Provision for income taxes (Note 11)
|
63,359
|
|
|
69,981
|
|
|
29,895
|
|
|||
Net income
|
247,876
|
|
|
205,060
|
|
|
51,980
|
|
|||
Less: Net income attributable to noncontrolling interests
|
5,951
|
|
|
4,880
|
|
|
2,842
|
|
|||
Net income attributable to Kennametal
|
$
|
241,925
|
|
|
$
|
200,180
|
|
|
$
|
49,138
|
|
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
|
|
|
|||||||||
Basic earnings per share
|
$
|
2.94
|
|
|
$
|
2.45
|
|
|
$
|
0.61
|
|
Diluted earnings per share
|
$
|
2.90
|
|
|
$
|
2.42
|
|
|
$
|
0.61
|
|
Dividends per share
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
Basic weighted average shares outstanding
|
82,379
|
|
|
81,544
|
|
|
80,351
|
|
|||
Diluted weighted average shares outstanding
|
83,291
|
|
|
82,754
|
|
|
81,169
|
|
Year ended June 30 (in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
|
$
|
247,876
|
|
|
$
|
205,060
|
|
|
$
|
51,980
|
|
Other comprehensive (loss) income, net of tax
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on derivatives designated and qualified as cash flow hedges
|
|
197
|
|
|
(922
|
)
|
|
(471
|
)
|
|||
Reclassification of unrealized loss on expired derivatives designated and qualified as cash flow hedges
|
|
1,348
|
|
|
3,747
|
|
|
1,557
|
|
|||
Unrecognized net pension and other postretirement benefit (loss) gain
|
|
(39,639
|
)
|
|
(5,991
|
)
|
|
15,559
|
|
|||
Reclassification of net pension and other postretirement benefit loss
|
|
5,124
|
|
|
7,274
|
|
|
7,566
|
|
|||
Foreign currency translation adjustments
|
|
(20,785
|
)
|
|
(1,490
|
)
|
|
5,888
|
|
|||
Total other comprehensive (loss) income, net of tax
|
|
(53,755
|
)
|
|
2,618
|
|
|
30,099
|
|
|||
Total comprehensive income
|
|
194,121
|
|
|
207,678
|
|
|
82,079
|
|
|||
Less: comprehensive income attributable to noncontrolling interests
|
|
5,414
|
|
|
4,131
|
|
|
4,124
|
|
|||
Comprehensive income attributable to Kennametal Shareholders
|
|
$
|
188,707
|
|
|
$
|
203,547
|
|
|
$
|
77,955
|
|
As of June 30 (in thousands, except per share data)
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
182,015
|
|
|
$
|
556,153
|
|
Accounts receivable, less allowance for doubtful accounts of $10,083 and $11,807 respectively
|
379,855
|
|
|
401,290
|
|
||
Inventories (Note 6)
|
571,576
|
|
|
525,466
|
|
||
Other current assets
|
57,381
|
|
|
63,257
|
|
||
Total current assets
|
1,190,827
|
|
|
1,546,166
|
|
||
Property, plant and equipment:
|
|
|
|
||||
Land and buildings
|
351,142
|
|
|
351,953
|
|
||
Machinery and equipment
|
1,804,871
|
|
|
1,702,243
|
|
||
Less accumulated depreciation
|
(1,221,118
|
)
|
|
(1,229,983
|
)
|
||
Property, plant and equipment, net
|
934,895
|
|
|
824,213
|
|
||
Other assets:
|
|
|
|
||||
Goodwill (Notes 2 and 7)
|
300,011
|
|
|
301,802
|
|
||
Other intangible assets, less accumulated amortization of $158,507 and $145,334, respectively (Notes 2 and 7)
|
160,998
|
|
|
176,468
|
|
||
Deferred income taxes (Note 11)
|
20,507
|
|
|
17,015
|
|
||
Long-term prepaid pension benefit (Note 12)
|
31,581
|
|
|
42,543
|
|
||
Other
|
17,450
|
|
|
17,530
|
|
||
Total other assets
|
530,547
|
|
|
555,358
|
|
||
Total assets
|
$
|
2,656,269
|
|
|
$
|
2,925,737
|
|
LIABILITIES
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt (Note 9)
|
$
|
—
|
|
|
$
|
399,266
|
|
Notes payable to banks (Note 10)
|
157
|
|
|
934
|
|
||
Accounts payable
|
212,908
|
|
|
221,903
|
|
||
Accrued income taxes
|
29,223
|
|
|
18,603
|
|
||
Accrued vacation pay
|
17,422
|
|
|
18,078
|
|
||
Accrued payroll
|
59,194
|
|
|
77,161
|
|
||
Other current liabilities (Note 8)
|
142,822
|
|
|
150,586
|
|
||
Total current liabilities
|
461,726
|
|
|
886,531
|
|
||
Long-term debt, less current maturities (Note 9)
|
592,474
|
|
|
591,505
|
|
||
Deferred income taxes (Note 11)
|
23,322
|
|
|
26,991
|
|
||
Accrued postretirement benefits (Note 12)
|
11,174
|
|
|
13,725
|
|
||
Accrued pension benefits (Note 12)
|
162,829
|
|
|
145,797
|
|
||
Accrued income taxes
|
9,038
|
|
|
6,249
|
|
||
Other liabilities
|
21,002
|
|
|
24,612
|
|
||
Total liabilities
|
1,281,565
|
|
|
1,695,410
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
||||
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; 82,421 and 81,646 shares issued, respectively
|
103,026
|
|
|
102,058
|
|
||
Additional paid-in capital
|
528,827
|
|
|
511,909
|
|
||
Retained earnings
|
1,076,862
|
|
|
900,683
|
|
||
Accumulated other comprehensive loss (Note 13)
|
(373,543
|
)
|
|
(320,325
|
)
|
||
Total Kennametal Shareholders’ Equity
|
1,335,172
|
|
|
1,194,325
|
|
||
Noncontrolling interests
|
39,532
|
|
|
36,002
|
|
||
Total equity
|
1,374,704
|
|
|
1,230,327
|
|
||
Total liabilities and equity
|
$
|
2,656,269
|
|
|
$
|
2,925,737
|
|
Year ended June 30 (in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
247,876
|
|
|
$
|
205,060
|
|
|
$
|
51,980
|
|
Adjustments for non-cash items:
|
|
|
|
|
|
||||||
Depreciation
|
97,641
|
|
|
94,012
|
|
|
91,078
|
|
|||
Amortization
|
14,411
|
|
|
14,668
|
|
|
16,578
|
|
|||
Stock-based compensation expense
|
22,845
|
|
|
20,830
|
|
|
21,065
|
|
|||
Restructuring and asset impairment charges (Notes 2 and 14)
|
(203
|
)
|
|
(248
|
)
|
|
1,802
|
|
|||
Deferred income tax provision
|
2,806
|
|
|
22,915
|
|
|
6,267
|
|
|||
Other
|
2,654
|
|
|
4,651
|
|
|
94
|
|
|||
Changes in certain assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
17,323
|
|
|
(22,201
|
)
|
|
(7,606
|
)
|
|||
Inventories
|
(53,387
|
)
|
|
(37,230
|
)
|
|
(24,300
|
)
|
|||
Accounts payable and accrued liabilities
|
(49,378
|
)
|
|
(5,046
|
)
|
|
54,554
|
|
|||
Accrued income taxes
|
9,013
|
|
|
11,093
|
|
|
6,873
|
|
|||
Accrued pension and postretirement benefits
|
(8,186
|
)
|
|
(26,759
|
)
|
|
(27,818
|
)
|
|||
Other
|
(2,896
|
)
|
|
(4,441
|
)
|
|
4,771
|
|
|||
Net cash flow provided by operating activities
|
300,519
|
|
|
277,304
|
|
|
195,338
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(212,343
|
)
|
|
(171,004
|
)
|
|
(118,018
|
)
|
|||
Disposals of property, plant and equipment
|
11,243
|
|
|
14,358
|
|
|
5,023
|
|
|||
Other
|
(381
|
)
|
|
(225
|
)
|
|
247
|
|
|||
Net cash flow used for investing activities
|
(201,481
|
)
|
|
(156,871
|
)
|
|
(112,748
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net (decrease) increase in notes payable
|
(715
|
)
|
|
495
|
|
|
(317
|
)
|
|||
Net decrease in short-term revolving and other lines of credit
|
(174
|
)
|
|
—
|
|
|
—
|
|
|||
Term debt borrowings
|
—
|
|
|
295,863
|
|
|
25,298
|
|
|||
Term debt repayments
|
(400,000
|
)
|
|
(190
|
)
|
|
(25,899
|
)
|
|||
Purchase of capital stock
|
(214
|
)
|
|
(217
|
)
|
|
(241
|
)
|
|||
The effect of employee benefit and stock plans and dividend reinvestment
|
(4,744
|
)
|
|
17,975
|
|
|
18,319
|
|
|||
Cash dividends paid to Shareholders
|
(65,746
|
)
|
|
(65,104
|
)
|
|
(64,128
|
)
|
|||
Other
|
161
|
|
|
(1,625
|
)
|
|
(6,317
|
)
|
|||
Net cash flow (used for) provided by financing activities
|
(471,432
|
)
|
|
247,197
|
|
|
(53,285
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,744
|
)
|
|
(2,106
|
)
|
|
(255
|
)
|
|||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(374,138
|
)
|
|
365,524
|
|
|
29,050
|
|
|||
Cash and cash equivalents, beginning of year
|
556,153
|
|
|
190,629
|
|
|
161,579
|
|
|||
Cash and cash equivalents, end of year
|
$
|
182,015
|
|
|
$
|
556,153
|
|
|
$
|
190,629
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
Year ended June 30 (in thousands)
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|||
CAPITAL STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
81,646
|
|
|
$
|
102,058
|
|
|
80,665
|
|
|
$
|
100,832
|
|
|
79,694
|
|
|
$
|
99,618
|
|
Dividend reinvestment
|
6
|
|
|
7
|
|
|
5
|
|
|
7
|
|
|
7
|
|
|
9
|
|
|||
Capital stock issued under employee benefit and stock plans
|
775
|
|
|
968
|
|
|
981
|
|
|
1,226
|
|
|
971
|
|
|
1,214
|
|
|||
Purchase of capital stock
|
(6
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|||
Balance at end of year
|
82,421
|
|
|
103,026
|
|
|
81,646
|
|
|
102,058
|
|
|
80,665
|
|
|
100,832
|
|
|||
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
511,909
|
|
|
|
|
474,547
|
|
|
|
|
436,617
|
|
||||||
Dividend reinvestment
|
|
|
207
|
|
|
|
|
210
|
|
|
|
|
235
|
|
||||||
Capital stock issued under employee benefit and stock plans
|
|
|
16,918
|
|
|
|
|
37,362
|
|
|
|
|
37,930
|
|
||||||
Purchase of capital stock
|
|
|
(207
|
)
|
|
|
|
(210
|
)
|
|
|
|
(235
|
)
|
||||||
Balance at end of year
|
|
|
528,827
|
|
|
|
|
511,909
|
|
|
|
|
474,547
|
|
||||||
RETAINED EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
900,683
|
|
|
|
|
765,607
|
|
|
|
|
780,597
|
|
||||||
Net income
|
|
|
241,925
|
|
|
|
|
200,180
|
|
|
|
|
49,138
|
|
||||||
Cash dividends
|
|
|
(65,746
|
)
|
|
|
|
(65,104
|
)
|
|
|
|
(64,128
|
)
|
||||||
Balance at end of year
|
|
|
1,076,862
|
|
|
|
|
900,683
|
|
|
|
|
765,607
|
|
||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
(320,325
|
)
|
|
|
|
(323,692
|
)
|
|
|
|
(352,509
|
)
|
||||||
Unrealized gain (loss) on derivatives designated and qualified as cash flow hedges
|
|
|
197
|
|
|
|
|
(922
|
)
|
|
|
|
(471
|
)
|
||||||
Reclassification of unrealized loss on expired derivatives designated and qualified as cash flow hedges
|
|
|
1,348
|
|
|
|
|
3,747
|
|
|
|
|
1,557
|
|
||||||
Unrecognized net pension and other postretirement benefit (loss) gain
|
|
|
(39,639
|
)
|
|
|
|
(5,991
|
)
|
|
|
|
15,559
|
|
||||||
Reclassification of net pension and other postretirement benefit loss
|
|
|
5,124
|
|
|
|
|
7,274
|
|
|
|
|
7,566
|
|
||||||
Foreign currency translation adjustments
|
|
|
(20,248
|
)
|
|
|
|
(741
|
)
|
|
|
|
4,606
|
|
||||||
Other comprehensive (loss) income, net of tax
|
|
|
(53,218
|
)
|
|
|
|
3,367
|
|
|
|
|
28,817
|
|
||||||
Balance at end of year
|
|
|
(373,543
|
)
|
|
|
|
(320,325
|
)
|
|
|
|
(323,692
|
)
|
||||||
NONCONTROLLING INTERESTS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
36,002
|
|
|
|
|
35,359
|
|
|
|
|
31,478
|
|
||||||
Net income
|
|
|
5,951
|
|
|
|
|
4,880
|
|
|
|
|
2,842
|
|
||||||
Other comprehensive (loss) income, net of tax
|
|
|
(537
|
)
|
|
|
|
(749
|
)
|
|
|
|
1,282
|
|
||||||
Additions to noncontrolling interests
|
|
|
443
|
|
|
|
|
591
|
|
|
|
|
—
|
|
||||||
Cash dividends
|
|
|
(2,327
|
)
|
|
|
|
(4,079
|
)
|
|
|
|
(243
|
)
|
||||||
Balance at end of year
|
|
|
39,532
|
|
|
|
|
36,002
|
|
|
|
|
35,359
|
|
||||||
Total equity, June 30
|
|
|
$
|
1,374,704
|
|
|
|
|
$
|
1,230,327
|
|
|
|
|
$
|
1,052,653
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
|||
Weighted-average shares outstanding during period
|
82,379
|
|
|
81,544
|
|
|
80,351
|
|
Add: Unexercised stock options and unvested restricted stock units
|
912
|
|
|
1,210
|
|
|
818
|
|
Number of shares on which diluted earnings per share is calculated
|
83,291
|
|
|
82,754
|
|
|
81,169
|
|
Unexercised stock options with an exercise price greater than the average market price and restricted stock units not included in the computation because they were anti-dilutive
|
427
|
|
|
381
|
|
|
1,412
|
|
Year ended June 30 (in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Income taxes
|
$
|
51,540
|
|
|
$
|
35,974
|
|
|
$
|
16,755
|
|
Interest
|
30,265
|
|
|
27,887
|
|
|
27,529
|
|
|||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
||||||
Changes in accounts payable related to purchases of property, plant and equipment
|
15,500
|
|
|
9,500
|
|
|
(3,900
|
)
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
152
|
|
|
$
|
—
|
|
|
$
|
152
|
|
Total assets at fair value
|
$
|
—
|
|
|
$
|
152
|
|
|
$
|
—
|
|
|
$
|
152
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
55
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
55
|
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
1,665
|
|
|
$
|
—
|
|
|
$
|
1,665
|
|
Total assets at fair value
|
$
|
—
|
|
|
$
|
1,665
|
|
|
$
|
—
|
|
|
$
|
1,665
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivatives
(1)
|
$
|
—
|
|
|
$
|
207
|
|
|
$
|
—
|
|
|
$
|
207
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
207
|
|
|
$
|
—
|
|
|
$
|
207
|
|
(in thousands)
|
2019
|
|
2018
|
||||
Derivatives designated as hedging instruments
|
|
|
|
||||
Other current assets - range forward contracts
|
$
|
145
|
|
|
$
|
799
|
|
Other current liabilities - range forward contracts
|
—
|
|
|
(5
|
)
|
||
Other assets - range forward contracts
|
—
|
|
|
27
|
|
||
Total derivatives designated as hedging instruments
|
145
|
|
|
821
|
|
||
Derivatives not designated as hedging instruments
|
|
|
|
||||
Other current assets - currency forward contracts
|
8
|
|
|
839
|
|
||
Other current liabilities - currency forward contracts
|
(56
|
)
|
|
(202
|
)
|
||
Total derivatives not designated as hedging instruments
|
(48
|
)
|
|
637
|
|
||
Total derivatives
|
$
|
97
|
|
|
$
|
1,458
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Other income, net - currency forward contracts
|
$
|
108
|
|
|
$
|
(122
|
)
|
|
$
|
(873
|
)
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Gains (losses) recognized in other comprehensive (loss) income, net
|
$
|
921
|
|
|
$
|
(922
|
)
|
|
$
|
(471
|
)
|
Losses reclassified from accumulated other comprehensive loss into other income, net
|
$
|
1,004
|
|
|
$
|
3,001
|
|
|
$
|
1,557
|
|
Instrument
|
Notional (EUR in thousands)
(2)
|
Notional (USD in thousands)
(2)
|
Maturity
|
||
Foreign currency-denominated intercompany loan payable
|
28,125
|
|
32,024
|
|
June 26, 2022
|
(in thousands)
|
2019
|
|
2018
|
||||
Finished goods
|
$
|
311,684
|
|
|
$
|
279,240
|
|
Work in process and powder blends
|
246,414
|
|
|
232,973
|
|
||
Raw materials
|
95,620
|
|
|
96,859
|
|
||
Inventories at current cost
|
653,718
|
|
|
609,072
|
|
||
Less: LIFO valuation
|
(82,142
|
)
|
|
(83,606
|
)
|
||
Total inventories
|
$
|
571,576
|
|
|
$
|
525,466
|
|
(in thousands)
|
Industrial
|
|
Widia
|
|
Infrastructure
|
|
Total
|
||||||||
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
|
|
|
|
|
|
|
|
|
|
||||||||
Activity for 2018:
|
|
|
|
|
|
|
|
||||||||
Change in gross goodwill due to translation
|
764
|
|
|
(329
|
)
|
|
—
|
|
|
435
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
411,458
|
|
|
41,186
|
|
|
633,211
|
|
|
1,085,855
|
|
||||
Accumulated impairment losses
|
(137,204
|
)
|
|
(13,638
|
)
|
|
(633,211
|
)
|
|
(784,053
|
)
|
||||
Balance as of June 30, 2018
|
$
|
274,254
|
|
|
$
|
27,548
|
|
|
$
|
—
|
|
|
$
|
301,802
|
|
|
|
|
|
|
|
|
|
||||||||
Activity for 2019:
|
|
|
|
|
|
|
|
||||||||
Change in gross goodwill due to translation
|
(1,546
|
)
|
|
(245
|
)
|
|
—
|
|
|
(1,791
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross goodwill
|
409,912
|
|
|
40,941
|
|
|
633,211
|
|
|
1,084,064
|
|
||||
Accumulated impairment losses
|
(137,204
|
)
|
|
(13,638
|
)
|
|
(633,211
|
)
|
|
(784,053
|
)
|
||||
Balance as of June 30, 2019
|
$
|
272,708
|
|
|
$
|
27,303
|
|
|
$
|
—
|
|
|
$
|
300,011
|
|
|
Estimated
Useful Life
(in years)
|
|
June 30, 2019
|
|
|
June 30, 2018
|
||||||||||||
(in thousands)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|||||||||
Contract-based
|
3 to 15
|
|
$
|
7,062
|
|
|
$
|
(7,062
|
)
|
|
|
$
|
7,061
|
|
|
$
|
(7,036
|
)
|
Technology-based and other
|
4 to 20
|
|
46,228
|
|
|
(31,890
|
)
|
|
|
46,666
|
|
|
(30,923
|
)
|
||||
Customer-related
|
10 to 21
|
|
205,213
|
|
|
(94,711
|
)
|
|
|
206,162
|
|
|
(85,301
|
)
|
||||
Unpatented technology
|
10 to 30
|
|
31,702
|
|
|
(15,492
|
)
|
|
|
31,854
|
|
|
(13,096
|
)
|
||||
Trademarks
|
5 to 20
|
|
14,755
|
|
|
(9,352
|
)
|
|
|
12,450
|
|
|
(8,978
|
)
|
||||
Trademarks
|
Indefinite
|
|
14,545
|
|
|
—
|
|
|
|
17,609
|
|
|
—
|
|
||||
Total
|
|
|
$
|
319,505
|
|
|
$
|
(158,507
|
)
|
|
|
$
|
321,802
|
|
|
$
|
(145,334
|
)
|
(in thousands)
|
|
2019
|
|
2018
|
||||
Accrued employee benefits
|
|
$
|
36,268
|
|
|
$
|
48,889
|
|
Accrued restructuring (Note 14)
|
|
19,212
|
|
|
17,469
|
|
||
Accrued legal and professional fees
|
|
13,481
|
|
|
9,291
|
|
||
Payroll, state and local taxes
|
|
7,971
|
|
|
10,146
|
|
||
Accrued interest
|
|
5,205
|
|
|
7,898
|
|
||
Other
|
|
60,685
|
|
|
56,893
|
|
||
Total other current liabilities
|
|
$
|
142,822
|
|
|
$
|
150,586
|
|
(in thousands)
|
2019
|
|
2018
|
||||
2.650% Senior Unsecured Notes due fiscal 2020, net of discount of $0.1 million for 2018
|
$
|
—
|
|
|
$
|
399,898
|
|
3.875% Senior Unsecured Notes due fiscal 2022, net of discount of $0.1 million for 2019 and 2018
|
299,903
|
|
|
299,868
|
|
||
4.625% Senior Unsecured Notes due fiscal 2028, net of discount of $2.0 million for 2019 and $2.2 million for 2018
|
298,046
|
|
|
297,813
|
|
||
Total debt
|
597,949
|
|
|
997,579
|
|
||
Less unamortized debt issuance costs
|
(5,475
|
)
|
|
(6,808
|
)
|
||
Less current maturities:
|
|
|
|
||||
Long-term debt
|
—
|
|
|
(399,266
|
)
|
||
Total long-term debt
|
$
|
592,474
|
|
|
$
|
591,505
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
60,756
|
|
|
$
|
57,109
|
|
|
$
|
(23,055
|
)
|
International
|
250,479
|
|
|
217,932
|
|
|
104,930
|
|
|||
Total income before income taxes
|
$
|
311,235
|
|
|
$
|
275,041
|
|
|
$
|
81,875
|
|
Current income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
5,679
|
|
|
$
|
3,755
|
|
|
$
|
(1,455
|
)
|
State
|
321
|
|
|
(816
|
)
|
|
172
|
|
|||
International
|
54,553
|
|
|
44,127
|
|
|
24,911
|
|
|||
Total current income taxes
|
60,553
|
|
|
47,066
|
|
|
23,628
|
|
|||
Deferred income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
(3,606
|
)
|
|
$
|
1,121
|
|
|
$
|
298
|
|
State
|
45
|
|
|
3,552
|
|
|
(867
|
)
|
|||
International
|
6,367
|
|
|
18,242
|
|
|
6,836
|
|
|||
Total deferred income taxes:
|
2,806
|
|
|
22,915
|
|
|
6,267
|
|
|||
Provision for income taxes
|
$
|
63,359
|
|
|
$
|
69,981
|
|
|
$
|
29,895
|
|
Effective tax rate
|
20.4
|
%
|
|
25.4
|
%
|
|
36.5
|
%
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Income taxes at U.S. statutory rate
|
$
|
65,359
|
|
|
$
|
77,286
|
|
|
$
|
28,656
|
|
State income taxes, net of federal tax benefit
|
289
|
|
|
2,975
|
|
|
(306
|
)
|
|||
U.S. income taxes provided on international income
|
7,347
|
|
|
1,010
|
|
|
10,273
|
|
|||
Combined tax effects of international income
|
162
|
|
|
(9,333
|
)
|
|
(11,530
|
)
|
|||
Change in valuation allowance and other uncertain tax positions
|
(1,473
|
)
|
|
(90,817
|
)
|
|
5,163
|
|
|||
U.S. research and development credit
|
(3,911
|
)
|
|
(3,141
|
)
|
|
(1,895
|
)
|
|||
Change in permanent reinvestment assertion
|
6,093
|
|
|
—
|
|
|
—
|
|
|||
Combined effects of U.S. tax reform
|
(9,280
|
)
|
|
86,044
|
|
|
—
|
|
|||
Adjustment to deferred tax charges on intra-entity transfers
|
—
|
|
|
5,297
|
|
|
—
|
|
|||
Other
|
(1,227
|
)
|
|
660
|
|
|
(466
|
)
|
|||
Provision for income taxes
|
$
|
63,359
|
|
|
$
|
69,981
|
|
|
$
|
29,895
|
|
(in thousands)
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss (NOL) carryforwards
|
$
|
28,886
|
|
|
$
|
39,884
|
|
Inventory valuation and reserves
|
8,230
|
|
|
10,023
|
|
||
Pension benefits
|
21,445
|
|
|
15,750
|
|
||
Other postretirement benefits
|
4,752
|
|
|
3,996
|
|
||
Accrued employee benefits
|
16,029
|
|
|
15,697
|
|
||
Other accrued liabilities
|
7,758
|
|
|
9,386
|
|
||
Tax credits and other carryforwards
|
4,733
|
|
|
644
|
|
||
Total
|
91,833
|
|
|
95,380
|
|
||
Valuation allowance
|
(14,614
|
)
|
|
(21,629
|
)
|
||
Total deferred tax assets
|
$
|
77,219
|
|
|
$
|
73,751
|
|
Deferred tax liabilities:
|
|
|
|
||||
Tax depreciation in excess of book
|
$
|
74,645
|
|
|
$
|
77,106
|
|
Intangible assets
|
4,259
|
|
|
537
|
|
||
Other
|
1,130
|
|
|
6,084
|
|
||
Total deferred tax liabilities
|
$
|
80,034
|
|
|
$
|
83,727
|
|
Total net deferred tax liabilities
|
$
|
(2,815
|
)
|
|
$
|
(9,976
|
)
|
(in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at beginning of year
|
|
$
|
5,775
|
|
|
$
|
2,632
|
|
|
$
|
3,106
|
|
Increases for tax positions of prior years
|
|
7,384
|
|
|
3,409
|
|
|
—
|
|
|||
Decreases related to settlement with taxing authority
|
|
(3,765
|
)
|
|
—
|
|
|
(231
|
)
|
|||
Decreases related to lapse of statute of limitations
|
|
(324
|
)
|
|
(289
|
)
|
|
(184
|
)
|
|||
Foreign currency translation
|
|
(118
|
)
|
|
23
|
|
|
(59
|
)
|
|||
Balance at end of year
|
|
$
|
8,952
|
|
|
$
|
5,775
|
|
|
$
|
2,632
|
|
(in thousands)
|
2019
|
|
2018
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
902,711
|
|
|
$
|
941,094
|
|
Service cost
|
1,627
|
|
|
1,635
|
|
||
Interest cost
|
31,901
|
|
|
30,751
|
|
||
Participant contributions
|
—
|
|
|
3
|
|
||
Actuarial losses (gains)
|
64,648
|
|
|
(24,501
|
)
|
||
Benefits and expenses paid
|
(49,510
|
)
|
|
(47,212
|
)
|
||
Currency translation adjustments
|
(6,208
|
)
|
|
3,876
|
|
||
Plan amendments
|
1,465
|
|
|
—
|
|
||
New plans
|
18,107
|
|
|
—
|
|
||
Plan settlements
|
—
|
|
|
(2,935
|
)
|
||
Benefit obligation, end of year
|
$
|
964,741
|
|
|
$
|
902,711
|
|
Change in plans' assets:
|
|
|
|
||||
Fair value of plans' assets, beginning of year
|
$
|
792,758
|
|
|
$
|
808,635
|
|
Actual return on plans' assets
|
68,981
|
|
|
24,931
|
|
||
Company contributions
|
7,905
|
|
|
7,999
|
|
||
Participant contributions
|
—
|
|
|
3
|
|
||
New plans
|
9,480
|
|
|
—
|
|
||
Plan settlements
|
—
|
|
|
(2,935
|
)
|
||
Benefits and expenses paid
|
(49,510
|
)
|
|
(47,212
|
)
|
||
Currency translation adjustments
|
(3,745
|
)
|
|
1,337
|
|
||
Fair value of plans' assets, end of year
|
$
|
825,869
|
|
|
$
|
792,758
|
|
Funded status of plans
|
$
|
(138,872
|
)
|
|
$
|
(109,953
|
)
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
||||
Long-term prepaid benefit
|
$
|
31,581
|
|
|
$
|
42,543
|
|
Short-term accrued benefit obligation
|
(7,624
|
)
|
|
(6,699
|
)
|
||
Accrued pension benefits
|
(162,829
|
)
|
|
(145,797
|
)
|
||
Net amount recognized
|
$
|
(138,872
|
)
|
|
$
|
(109,953
|
)
|
(in thousands)
|
2019
|
|
2018
|
||||
Unrecognized net actuarial losses
|
$
|
292,992
|
|
|
$
|
247,230
|
|
Unrecognized net prior service costs
|
2,229
|
|
|
723
|
|
||
Unrecognized transition obligations
|
432
|
|
|
539
|
|
||
Total
|
$
|
295,653
|
|
|
$
|
248,492
|
|
(in thousands)
|
2019
|
|
2018
|
||||
Projected benefit obligation
|
$
|
179,921
|
|
|
$
|
152,485
|
|
Accumulated benefit obligation
|
178,039
|
|
|
151,871
|
|
||
Fair value of plan assets
|
9,480
|
|
|
—
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Service cost
|
$
|
1,627
|
|
|
$
|
1,635
|
|
|
$
|
2,908
|
|
Interest cost
|
31,901
|
|
|
30,751
|
|
|
31,113
|
|
|||
Expected return on plans' assets
|
(53,789
|
)
|
|
(56,579
|
)
|
|
(58,781
|
)
|
|||
Amortization of transition obligation
|
91
|
|
|
94
|
|
|
89
|
|
|||
Amortization of prior service cost
|
(19
|
)
|
|
48
|
|
|
(452
|
)
|
|||
Special termination benefit charge
|
—
|
|
|
—
|
|
|
98
|
|
|||
Settlement loss
|
—
|
|
|
626
|
|
|
379
|
|
|||
Recognition of actuarial losses
|
6,723
|
|
|
6,907
|
|
|
8,356
|
|
|||
Net periodic pension income
|
$
|
(13,466
|
)
|
|
$
|
(16,518
|
)
|
|
$
|
(16,290
|
)
|
(in thousands)
|
2019
|
|
2018
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
15,323
|
|
|
$
|
18,160
|
|
Interest cost
|
613
|
|
|
629
|
|
||
Actuarial losses
|
(264
|
)
|
|
(323
|
)
|
||
Benefits paid
|
(1,505
|
)
|
|
(2,208
|
)
|
||
Plan amendments
|
(1,525
|
)
|
|
(935
|
)
|
||
Benefit obligation, end of year
|
$
|
12,642
|
|
|
$
|
15,323
|
|
Funded status of plan
|
$
|
(12,642
|
)
|
|
$
|
(15,323
|
)
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
||||
Short-term accrued benefit obligation
|
$
|
(1,468
|
)
|
|
$
|
(1,598
|
)
|
Accrued postretirement benefits
|
(11,174
|
)
|
|
(13,725
|
)
|
||
Net amount recognized
|
$
|
(12,642
|
)
|
|
$
|
(15,323
|
)
|
(in thousands)
|
2019
|
|
2018
|
||||
Unrecognized net actuarial losses
|
$
|
4,150
|
|
|
$
|
4,662
|
|
Unrecognized net prior service credits
|
(2,476
|
)
|
|
(1,041
|
)
|
||
Total
|
$
|
1,674
|
|
|
$
|
3,621
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Interest cost
|
$
|
613
|
|
|
$
|
629
|
|
|
$
|
673
|
|
Amortization of prior service credit
|
(90
|
)
|
|
(22
|
)
|
|
(22
|
)
|
|||
Recognition of actuarial loss
|
248
|
|
|
280
|
|
|
355
|
|
|||
Net periodic other postretirement benefit cost
|
$
|
771
|
|
|
$
|
887
|
|
|
$
|
1,006
|
|
|
2019
|
|
2018
|
|
2017
|
Discount Rate:
|
|
|
|
|
|
U.S. plans
|
2.7-3.6%
|
|
4.0-4.3%
|
|
3.3-3.9%
|
International plans
|
0.4-2.9%
|
|
1.8-3.3%
|
|
2.0-3.3%
|
Rates of future salary increases:
|
|
|
|
|
|
U.S. plans
|
4.0%
|
|
4.0%
|
|
4.0%
|
International plans
|
1.8-3.0%
|
|
2.5-3.0%
|
|
2.5-3.0%
|
|
2019
|
|
2018
|
|
2017
|
Discount Rate:
|
|
|
|
|
|
U.S. plans
|
4.0-4.3%
|
|
3.3-3.9%
|
|
2.4-3.7%
|
International plans
|
1.8-3.3%
|
|
2.0-3.3%
|
|
0.9-3.2%
|
Rates of future salary increases:
|
|
|
|
|
|
U.S. plans
|
4.0%
|
|
4.0%
|
|
3.0-4.0%
|
International plans
|
2.5-3.0%
|
|
2.5-3.0%
|
|
2.5-3.0%
|
Rate of return on plans assets:
|
|
|
|
|
|
U.S. plans
|
7.0%
|
|
7.3%
|
|
7.5%
|
International plans
|
5.0-5.3%
|
|
5.3%
|
|
5.3-5.5%
|
|
2019
|
|
2018
|
|
2017
|
|||
Health care costs trend rate assumed for next year
|
7.0
|
%
|
|
7.5
|
%
|
|
8.0
|
%
|
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
|
|
|
2027
|
|
|
2019
|
|
2018
|
|
Target %
|
|||
Equity
|
23
|
%
|
|
28
|
%
|
|
23
|
%
|
Fixed Income
|
67
|
|
|
62
|
|
|
70
|
|
Other
|
10
|
|
|
11
|
|
|
7
|
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
(3)
|
|
Total
|
||||||||||
Common / collective trusts
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Value funds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
66,950
|
|
|
$
|
66,950
|
|
Growth funds
|
—
|
|
|
—
|
|
|
—
|
|
|
38,119
|
|
|
38,119
|
|
|||||
Balanced funds
|
—
|
|
|
—
|
|
|
—
|
|
|
10,921
|
|
|
10,921
|
|
|||||
Corporate fixed income securities
|
—
|
|
|
407,008
|
|
|
—
|
|
|
—
|
|
|
407,008
|
|
|||||
Common stock
|
74,448
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,448
|
|
|||||
Government securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
—
|
|
|
61,770
|
|
|
—
|
|
|
—
|
|
|
61,770
|
|
|||||
Foreign government securities
|
—
|
|
|
48,011
|
|
|
—
|
|
|
—
|
|
|
48,011
|
|
|||||
Other fixed income securities
|
—
|
|
|
32,971
|
|
|
—
|
|
|
—
|
|
|
32,971
|
|
|||||
Other
|
3,888
|
|
|
81,783
|
|
|
—
|
|
|
—
|
|
|
85,671
|
|
|||||
Total investments
|
$
|
78,336
|
|
|
$
|
631,543
|
|
|
$
|
—
|
|
|
$
|
115,990
|
|
|
$
|
825,869
|
|
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
(3)
|
|
Total
|
||||||||||
Common / collective trusts
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Value funds
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
74,070
|
|
|
$
|
74,070
|
|
Growth funds
|
—
|
|
|
—
|
|
|
—
|
|
|
49,438
|
|
|
49,438
|
|
|||||
Balanced funds
|
—
|
|
|
—
|
|
|
—
|
|
|
11,854
|
|
|
11,854
|
|
|||||
Corporate fixed income securities
|
—
|
|
|
350,394
|
|
|
—
|
|
|
—
|
|
|
350,394
|
|
|||||
Common stock
|
83,361
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,361
|
|
|||||
Government securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government securities
|
—
|
|
|
62,381
|
|
|
—
|
|
|
—
|
|
|
62,381
|
|
|||||
Foreign government securities
|
—
|
|
|
46,286
|
|
|
—
|
|
|
—
|
|
|
46,286
|
|
|||||
Other fixed income securities
|
—
|
|
|
31,630
|
|
|
—
|
|
|
—
|
|
|
31,630
|
|
|||||
Other
|
3,898
|
|
|
79,446
|
|
|
—
|
|
|
—
|
|
|
83,344
|
|
|||||
Total investments
|
$
|
87,259
|
|
|
$
|
570,137
|
|
|
$
|
—
|
|
|
$
|
135,362
|
|
|
$
|
792,758
|
|
Attributable to Kennametal:
|
Postretirement benefit plans
|
Currency translation adjustment
|
Derivatives
|
Total
|
||||||||
Balance, June 30, 2018
|
$
|
(187,755
|
)
|
$
|
(127,347
|
)
|
$
|
(5,223
|
)
|
$
|
(320,325
|
)
|
Other comprehensive loss before reclassifications
|
(39,639
|
)
|
(20,248
|
)
|
197
|
|
(59,690
|
)
|
||||
Amounts Reclassified from AOCL
|
5,124
|
|
—
|
|
1,348
|
|
6,472
|
|
||||
Net current period other comprehensive loss
|
(34,515
|
)
|
(20,248
|
)
|
1,545
|
|
(53,218
|
)
|
||||
AOCL, June 30, 2019
|
$
|
(222,270
|
)
|
$
|
(147,595
|
)
|
$
|
(3,678
|
)
|
$
|
(373,543
|
)
|
|
|
|
|
|
||||||||
Attributable to noncontrolling interests:
|
|
|
|
|
||||||||
Balance, June 30, 2018
|
$
|
—
|
|
$
|
(2,913
|
)
|
$
|
—
|
|
$
|
(2,913
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
(537
|
)
|
—
|
|
(537
|
)
|
||||
Net current period other comprehensive loss
|
—
|
|
(537
|
)
|
—
|
|
(537
|
)
|
||||
AOCL, June 30, 2019
|
$
|
—
|
|
$
|
(3,450
|
)
|
$
|
—
|
|
$
|
(3,450
|
)
|
Attributable to Kennametal:
|
Postretirement benefit plans
|
Currency translation adjustment
|
Derivatives
|
Total
|
||||||||
Balance, June 30, 2017
|
$
|
(189,038
|
)
|
$
|
(126,606
|
)
|
$
|
(8,048
|
)
|
$
|
(323,692
|
)
|
Other comprehensive loss before reclassifications
|
(5,991
|
)
|
(741
|
)
|
(922
|
)
|
(7,654
|
)
|
||||
Amounts Reclassified from AOCL
|
7,274
|
|
—
|
|
3,747
|
|
11,021
|
|
||||
Net current period other comprehensive
income
|
1,283
|
|
(741
|
)
|
2,825
|
|
3,367
|
|
||||
AOCL, June 30, 2018
|
$
|
(187,755
|
)
|
$
|
(127,347
|
)
|
$
|
(5,223
|
)
|
$
|
(320,325
|
)
|
|
|
|
|
|
||||||||
Attributable to noncontrolling interests:
|
|
|
|
|
||||||||
Balance, June 30, 2017
|
$
|
—
|
|
$
|
(2,164
|
)
|
$
|
—
|
|
$
|
(2,164
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
(749
|
)
|
—
|
|
(749
|
)
|
||||
Net current period other comprehensive
loss
|
—
|
|
(749
|
)
|
—
|
|
(749
|
)
|
||||
AOCL, June 30, 2018
|
$
|
—
|
|
$
|
(2,913
|
)
|
$
|
—
|
|
$
|
(2,913
|
)
|
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 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 income
|
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 income before
reclassifications |
—
|
|
1,282
|
|
—
|
|
1,282
|
|
||||
Net current period other comprehensive income
|
—
|
|
1,282
|
|
—
|
|
1,282
|
|
||||
AOCL, June 30, 2017
|
$
|
—
|
|
$
|
(2,164
|
)
|
$
|
—
|
|
$
|
(2,164
|
)
|
|
Year Ended June 30,
|
|
||||||||
Details about AOCL components
(in thousands) |
2019
|
2018
|
2017
|
Affected line item in the Income Statement
|
||||||
Gains and losses on cash flow hedges:
|
|
|
|
|
||||||
Forward starting interest rate swaps
|
$
|
2,352
|
|
$
|
2,265
|
|
$
|
2,180
|
|
Interest expense
|
Currency exchange contracts
|
(567
|
)
|
2,243
|
|
(623
|
)
|
Other income, net
|
|||
Total before tax
|
1,785
|
|
4,508
|
|
1,557
|
|
|
|||
Tax impact
|
(437
|
)
|
(761
|
)
|
—
|
|
Provision for income taxes
|
|||
Net of tax
|
$
|
1,348
|
|
$
|
3,747
|
|
$
|
1,557
|
|
|
|
|
|
|
|
||||||
Postretirement benefit plans:
|
|
|
|
|
||||||
Amortization of transition obligations
|
$
|
91
|
|
$
|
94
|
|
$
|
89
|
|
Other income, net
|
Amortization of prior service credit
|
(109
|
)
|
26
|
|
(474
|
)
|
Other income, net
|
|||
Recognition of actuarial losses
|
6,971
|
|
7,187
|
|
8,711
|
|
Other income, net
|
|||
Total before tax
|
6,953
|
|
7,307
|
|
8,326
|
|
|
|||
Tax impact
|
(1,829
|
)
|
(33
|
)
|
(760
|
)
|
Provision for income taxes
|
|||
Net of tax
|
$
|
5,124
|
|
$
|
7,274
|
|
$
|
7,566
|
|
|
(in thousands)
|
Pre-tax
|
Tax impact
|
Net of tax
|
||||||
Unrealized gain on derivatives designated and qualified as cash flow hedges
|
$
|
261
|
|
$
|
(64
|
)
|
$
|
197
|
|
Reclassification of unrealized loss on expired derivatives designated and qualified as cash flow hedges
|
1,785
|
|
(437
|
)
|
1,348
|
|
|||
Unrecognized net pension and other postretirement benefit loss
|
(52,087
|
)
|
12,448
|
|
(39,639
|
)
|
|||
Reclassification of net pension and other postretirement benefit loss
|
6,953
|
|
(1,829
|
)
|
5,124
|
|
|||
Foreign currency translation adjustments
|
(20,881
|
)
|
96
|
|
(20,785
|
)
|
|||
Other comprehensive income
|
$
|
(63,969
|
)
|
$
|
10,214
|
|
$
|
(53,755
|
)
|
(in thousands)
|
Pre-tax
|
Tax impact
|
Net of tax
|
||||||
Unrealized loss on derivatives designated and qualified as cash flow hedges
|
$
|
(928
|
)
|
$
|
6
|
|
$
|
(922
|
)
|
Reclassification of unrealized loss on expired derivatives designated and qualified as cash flow hedges
|
4,508
|
|
(761
|
)
|
3,747
|
|
|||
Unrecognized net pension and other postretirement benefit loss
|
(8,043
|
)
|
2,052
|
|
(5,991
|
)
|
|||
Reclassification of net pension and other postretirement benefit loss
|
7,307
|
|
(33
|
)
|
7,274
|
|
|||
Foreign currency translation adjustments
|
(1,593
|
)
|
103
|
|
(1,490
|
)
|
|||
Other comprehensive income
|
$
|
1,251
|
|
$
|
1,367
|
|
$
|
2,618
|
|
(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)
|
June 30, 2018
|
|
Expense
|
|
Asset Write-Down
|
|
Translation
|
|
Cash Expenditures
|
|
June 30, 2019
|
||||||||||||
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
$
|
7,967
|
|
|
$
|
8,957
|
|
|
$
|
—
|
|
|
$
|
(176
|
)
|
|
$
|
(7,885
|
)
|
|
$
|
8,863
|
|
Facilities
|
—
|
|
|
3,488
|
|
|
(3,488
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
(103
|
)
|
|
—
|
|
|
(1
|
)
|
|
139
|
|
|
35
|
|
||||||
Total Industrial
|
7,967
|
|
|
12,342
|
|
|
(3,488
|
)
|
|
(177
|
)
|
|
(7,746
|
)
|
|
8,898
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Widia
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
2,087
|
|
|
2,185
|
|
|
—
|
|
|
(43
|
)
|
|
(1,923
|
)
|
|
2,306
|
|
||||||
Facilities
|
—
|
|
|
401
|
|
|
(401
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
15
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
34
|
|
|
24
|
|
||||||
Total Widia
|
2,102
|
|
|
2,561
|
|
|
(401
|
)
|
|
(43
|
)
|
|
(1,889
|
)
|
|
2,330
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Infrastructure
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
7,558
|
|
|
3,977
|
|
|
—
|
|
|
(78
|
)
|
|
(3,501
|
)
|
|
7,956
|
|
||||||
Facilities
|
—
|
|
|
708
|
|
|
(708
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
12
|
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
62
|
|
|
28
|
|
||||||
Total Infrastructure
|
7,570
|
|
|
4,639
|
|
|
(708
|
)
|
|
(78
|
)
|
|
(3,439
|
)
|
|
7,984
|
|
||||||
Total
|
$
|
17,639
|
|
|
$
|
19,542
|
|
|
$
|
(4,597
|
)
|
|
$
|
(298
|
)
|
|
$
|
(13,074
|
)
|
|
$
|
19,212
|
|
(in thousands)
|
June 30, 2017
|
|
Expense
|
|
Asset Write-Down
|
|
Translation
|
|
Cash Expenditures
|
|
June 30, 2018
|
||||||||||||
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
$
|
17,639
|
|
|
$
|
9,734
|
|
|
$
|
—
|
|
|
$
|
868
|
|
|
$
|
(20,274
|
)
|
|
$
|
7,967
|
|
Facilities
|
—
|
|
|
3,084
|
|
|
(3,084
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
94
|
|
|
(85
|
)
|
|
—
|
|
|
1
|
|
|
(10
|
)
|
|
—
|
|
||||||
Total Industrial
|
17,733
|
|
|
12,733
|
|
|
(3,084
|
)
|
|
869
|
|
|
(20,284
|
)
|
|
7,967
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Widia
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
2,434
|
|
|
475
|
|
|
—
|
|
|
42
|
|
|
(864
|
)
|
|
2,087
|
|
||||||
Facilities
|
—
|
|
|
747
|
|
|
(747
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
19
|
|
|
15
|
|
||||||
Total Widia
|
2,434
|
|
|
1,218
|
|
|
(747
|
)
|
|
42
|
|
|
(845
|
)
|
|
2,102
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Infrastructure
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Severance
|
9,573
|
|
|
2,053
|
|
|
—
|
|
|
183
|
|
|
(4,251
|
)
|
|
7,558
|
|
||||||
Facilities
|
21
|
|
|
433
|
|
|
(433
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
||||||
Other
|
45
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
12
|
|
||||||
Total Infrastructure
|
9,639
|
|
|
2,468
|
|
|
(433
|
)
|
|
183
|
|
|
(4,287
|
)
|
|
7,570
|
|
||||||
Total
|
$
|
29,806
|
|
|
$
|
16,419
|
|
|
$
|
(4,264
|
)
|
|
$
|
1,094
|
|
|
$
|
(25,416
|
)
|
|
$
|
17,639
|
|
|
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Life (years)
|
|
Aggregate
Intrinsic value
(in thousands)
|
|||||
Options outstanding, June 30, 2018
|
989,992
|
|
|
$
|
33.08
|
|
|
|
|
|
|
|
Exercised
|
(188,528
|
)
|
|
28.47
|
|
|
|
|
|
|||
Lapsed and forfeited
|
(19,791
|
)
|
|
44.20
|
|
|
|
|
|
|||
Options outstanding, June 30, 2019
|
781,673
|
|
|
$
|
33.92
|
|
|
3.5
|
|
$
|
4,158
|
|
Options vested and expected to vest, June 30, 2019
|
781,673
|
|
|
$
|
33.92
|
|
|
3.5
|
|
$
|
4,158
|
|
Options exercisable, June 30, 2019
|
781,673
|
|
|
$
|
33.92
|
|
|
3.5
|
|
$
|
4,158
|
|
|
Performance
Vesting
Stock
Units
|
|
Performance
Vesting
Weighted
Average Fair
Value
|
|
Time Vesting
Stock Units
|
|
Time Vesting
Weighted
Average Fair
Value
|
||||||
Unvested, June 30, 2018
|
409,297
|
|
|
$
|
31.22
|
|
|
1,083,675
|
|
|
$
|
30.47
|
|
Granted
|
161,066
|
|
|
40.10
|
|
|
544,297
|
|
|
38.91
|
|
||
Vested
|
(141,394
|
)
|
|
27.77
|
|
|
(646,155
|
)
|
|
28.73
|
|
||
Performance metric adjustments, net
|
41,196
|
|
|
29.69
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(64,935
|
)
|
|
32.60
|
|
|
(54,890
|
)
|
|
34.67
|
|
||
Unvested, June 30, 2019
|
405,230
|
|
|
$
|
35.58
|
|
|
926,927
|
|
|
$
|
36.43
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Sales:
|
|
|
|
|
|
||||||
Industrial
|
$
|
1,274,499
|
|
|
$
|
1,292,098
|
|
|
$
|
1,126,309
|
|
Widia
|
197,522
|
|
|
198,568
|
|
|
177,662
|
|
|||
Infrastructure
|
903,213
|
|
|
877,187
|
|
|
754,397
|
|
|||
Total sales
|
$
|
2,375,234
|
|
|
$
|
2,367,853
|
|
|
$
|
2,058,368
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
||||||
Industrial
|
$
|
220,696
|
|
|
$
|
176,978
|
|
|
$
|
73,053
|
|
Widia
|
2,882
|
|
|
2,919
|
|
|
(6,800
|
)
|
|||
Infrastructure
|
108,480
|
|
|
112,998
|
|
|
28,063
|
|
|||
Corporate
|
(3,208
|
)
|
|
(2,596
|
)
|
|
436
|
|
|||
Total operating income
|
$
|
328,850
|
|
|
$
|
290,299
|
|
|
$
|
94,752
|
|
|
|
|
|
|
|
||||||
Interest expense
|
$
|
32,994
|
|
|
$
|
30,081
|
|
|
$
|
28,842
|
|
Other income, net
|
(15,379
|
)
|
|
(14,823
|
)
|
|
(15,965
|
)
|
|||
Income from continuing operations before income taxes
|
$
|
311,235
|
|
|
$
|
275,041
|
|
|
$
|
81,875
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Industrial
|
$
|
58,373
|
|
|
$
|
57,261
|
|
|
$
|
54,269
|
|
Widia
|
9,390
|
|
|
9,483
|
|
|
10,728
|
|
|||
Infrastructure
|
44,284
|
|
|
41,916
|
|
|
42,596
|
|
|||
Corporate
|
5
|
|
|
20
|
|
|
63
|
|
|||
Total depreciation and amortization
|
$
|
112,052
|
|
|
$
|
108,680
|
|
|
$
|
107,656
|
|
|
|
|
|
|
|
||||||
Total assets:
|
|
|
|
|
|
||||||
Industrial
|
$
|
1,245,624
|
|
|
$
|
1,169,610
|
|
|
$
|
1,103,686
|
|
Widia
|
216,633
|
|
|
193,971
|
|
|
191,626
|
|
|||
Infrastructure
|
883,566
|
|
|
864,402
|
|
|
813,747
|
|
|||
Corporate
|
310,446
|
|
|
697,754
|
|
|
306,437
|
|
|||
Total assets
|
$
|
2,656,269
|
|
|
$
|
2,925,737
|
|
|
$
|
2,415,496
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Industrial
|
$
|
145,485
|
|
|
$
|
112,124
|
|
|
$
|
70,281
|
|
Widia
|
22,162
|
|
|
17,445
|
|
|
17,853
|
|
|||
Infrastructure
|
44,696
|
|
|
41,435
|
|
|
29,884
|
|
|||
Total capital expenditures
|
$
|
212,343
|
|
|
$
|
171,004
|
|
|
$
|
118,018
|
|
(in thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Sales:
|
|
|
|
|
|
||||||
United States
|
$
|
1,014,189
|
|
|
$
|
970,003
|
|
|
$
|
868,466
|
|
Germany
|
314,035
|
|
|
331,893
|
|
|
282,347
|
|
|||
China
|
247,858
|
|
|
271,343
|
|
|
220,561
|
|
|||
India
|
113,287
|
|
|
102,120
|
|
|
84,769
|
|
|||
Canada
|
108,261
|
|
|
102,139
|
|
|
85,488
|
|
|||
Italy
|
68,585
|
|
|
69,049
|
|
|
59,967
|
|
|||
France
|
59,899
|
|
|
62,982
|
|
|
56,231
|
|
|||
United Kingdom
|
44,384
|
|
|
45,714
|
|
|
39,731
|
|
|||
Other
(4)
|
404,736
|
|
|
412,610
|
|
|
360,808
|
|
|||
Total sales
|
$
|
2,375,234
|
|
|
$
|
2,367,853
|
|
|
$
|
2,058,368
|
|
|
|
|
|
|
|
||||||
Total long-lived assets:
|
|
|
|
|
|
||||||
United States
|
$
|
525,713
|
|
|
$
|
456,678
|
|
|
$
|
423,543
|
|
Germany
|
201,714
|
|
|
188,673
|
|
|
157,323
|
|
|||
China
|
78,410
|
|
|
67,462
|
|
|
60,908
|
|
|||
India
|
44,643
|
|
|
31,984
|
|
|
28,569
|
|
|||
Israel
|
24,042
|
|
|
25,831
|
|
|
26,627
|
|
|||
Canada
|
20,435
|
|
|
19,396
|
|
|
19,576
|
|
|||
Other
|
39,938
|
|
|
34,189
|
|
|
34,822
|
|
|||
Total long-lived assets
(5)
|
$
|
934,895
|
|
|
$
|
824,213
|
|
|
$
|
751,368
|
|
For the quarter ended (in thousands, except per share data)
|
September 30
|
|
December 31
|
|
March 31
|
|
June 30
|
||||||||
2019
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
586,687
|
|
|
$
|
587,394
|
|
|
$
|
597,204
|
|
|
$
|
603,949
|
|
Gross profit
|
211,092
|
|
|
198,598
|
|
|
208,086
|
|
|
213,719
|
|
||||
Net income attributable to Kennametal
|
56,699
|
|
|
54,698
|
|
|
68,550
|
|
|
61,978
|
|
||||
Basic earnings per share attributable to Kennametal
(6)
|
|
|
|
|
|
|
|
||||||||
Net income
|
0.69
|
|
|
0.66
|
|
|
0.83
|
|
|
0.75
|
|
||||
Diluted earnings per share attributable to Kennametal
(6)
|
|
|
|
|
|
|
|
||||||||
Net income
|
0.68
|
|
|
0.66
|
|
|
0.82
|
|
|
0.74
|
|
||||
2018
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
542,454
|
|
|
$
|
571,345
|
|
|
$
|
607,936
|
|
|
$
|
646,119
|
|
Gross profit
|
181,949
|
|
|
189,501
|
|
|
216,417
|
|
|
232,256
|
|
||||
Net income attributable to Kennametal
|
39,183
|
|
|
41,601
|
|
|
50,866
|
|
|
68,528
|
|
||||
Basic earnings per share attributable to Kennametal
(6)
|
|
|
|
|
|
|
|
||||||||
Net income
|
0.48
|
|
|
0.51
|
|
|
0.62
|
|
|
0.84
|
|
||||
Diluted earnings per share attributable to Kennametal
(6)
|
|
|
|
|
|
|
|
||||||||
Net income
|
0.48
|
|
|
0.50
|
|
|
0.61
|
|
|
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 13, 2019
|
|
|
|
By:
|
|
/s/ Patrick S. Watson
|
|
|
|
|
|
|
Patrick S. Watson
|
|
|
|
|
|
|
Vice President Finance and Corporate Controller
|
|
|
|
|
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
||
/s/ CHRISTOPHER ROSSI
Christopher Rossi
|
|
President and Chief Executive Officer
|
|
August 13, 2019
|
|
|
|
|
|
/s/ DAMON J. AUDIA
Damon J. Audia
|
|
Vice President and Chief Financial Officer
|
|
August 13, 2019
|
|
|
|
|
|
/s/ PATRICK S. WATSON
Patrick S. Watson
|
|
Vice President Finance and Corporate Controller
|
|
August 13, 2019
|
|
|
|
||
/s/ LAWRENCE W. STRANGHOENER
Lawrence W. Stranghoener
|
|
Chairman of the Board
|
|
August 13, 2019
|
|
|
|
|
|
/s/ JOSEPH ALVARADO
Joseph Alvarado
|
|
Director
|
|
August 13, 2019
|
|
|
|
|
|
/s/ CINDY L. DAVIS
Cindy L. Davis
|
|
Director
|
|
August 13, 2019
|
|
|
|
|
|
/s/ WILLIAM J. HARVEY
William J. Harvey
|
|
Director
|
|
August 13, 2019
|
|
|
|
||
/s/ WILLIAM M. LAMBERT
William M. Lambert
|
|
Director
|
|
August 13, 2019
|
|
|
|
|
|
/s/ LORRAINE M. MARTIN
Lorraine M. Martin
|
|
Director
|
|
August 13, 2019
|
|
|
|
||
/s/ TIMOTHY R. MCLEVISH
Timothy R. McLevish
|
|
Director
|
|
August 13, 2019
|
|
|
|
|
|
/s/ SAGAR A. PATEL
Sagar A. Patel
|
|
Director
|
|
August 13, 2019
|
|
|
|
||
/s/ STEVEN H. WUNNING
Steven H. Wunning
|
|
Director
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|
August 13, 2019
|
FINANCIAL STATEMENT SCHEDULE
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Page
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3
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Articles of Incorporation and Bylaws
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3.1
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Exhibit 3.(i) of the Form 8-K filed October 30, 2014 (File No. 001-05318) is incorporated herein by reference.
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3.2
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Exhibit 10.1 of the Form 8-K filed July 28, 2016 (File No. 001-05318) is incorporated herein by reference.
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4
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Instruments Defining the Rights of Security Holders, Including Indentures
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||
4.1
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Exhibit 4.1 of the Form 8-K filed June 20, 2002 (File No. 001-05318) is incorporated herein by reference.
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4.2
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Exhibit 4.2 of the Form 8-K filed June 20, 2002 (File No. 001-05318) is incorporated herein by reference.
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4.3
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Exhibit 4.1 of the Form 8-K filed February 14, 2012 (File No. 001-05318) is incorporated herein by reference.
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4.4
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Exhibit 4.2 of the Form 8-K filed February 14, 2012 (File No. 001-05318) is incorporated herein by reference.
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4.5
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Exhibit 4.4 of the Form 8-K filed November 7, 2012 (File No. 001-05318) is incorporated herein by reference.
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4.6
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|
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Exhibit 4.1 of the Form 8-K filed June 7, 2018 (File No. 001-05318) is incorporated herein by reference.
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4.7
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Filed herewith.
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10
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Material Contracts
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10.1*
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|
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Exhibit 10.1 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
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10.2*
|
|
|
|
Exhibit 10.2 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
|
10.3*
|
|
|
|
Exhibit 10.3 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
|
10.4*
|
|
|
|
Appendix A to the 2008 Proxy Statement filed September 8, 2008 (File No. 001-05318) is incorporated herein by reference.
|
|
10.5*
|
|
|
|
Exhibit 10.2 of the Form 8-K filed March 22, 2005 (File No. 001-05318) is incorporated herein by reference.
|
|
10.6*
|
|
|
|
Filed herewith.
|
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10.7*
|
|
|
|
Exhibit 10.8 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
10.8*
|
|
|
|
Exhibit 10.2 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
|
10.9*
|
|
|
|
Exhibit 10.1 of the Form 8-K filed June 23, 2015 (File No. 001-05318) is incorporated herein by reference.
|
|
10.10*
|
|
|
|
Exhibit 10.9 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
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10.11*
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|
|
|
Exhibit 10.2 of the Form 8-K filed June 23, 2015 (File No. 001-05318) is incorporated herein by reference.
|
|
10.12*
|
|
|
|
Exhibit 10.12 of the Form 10-K filed August 10, 2018 (File No. 001-05318) is incorporated herein by reference.
|
|
10.13*
|
|
|
|
Exhibit 10.5 of Form 10-Q filed February 8, 2011 (File No. 001-05318) is incorporated herein by reference.
|
|
10.14*
|
|
|
|
Exhibit 10.6 of Form 10-Q filed February 8, 2011 (File No. 001-05318) is incorporated herein by reference
|
|
10.15*
|
|
|
|
Exhibit 10.1 of Form 8-K filed May 13, 2011 (File No. 001-05318) is incorporated herein by reference.
|
|
10.16*
|
|
|
|
Filed herewith.
|
|
10.17*
|
|
|
|
Exhibit 10.3 to Form 8-K filed February 5, 2016 (File No. 001-05318) is incorporated herein by reference
|
|
10.18*
|
|
|
|
Exhibit 10.2 to Form 8-K filed February 5, 2016 (File No. 001-05318) is incorporated herein by reference
|
|
10.19*
|
|
|
|
Exhibit 10.40 of the Form 10-K filed August 11, 2016 (File No. 001-05318) is incorporated herein by reference.
|
|
10.20*
|
|
|
|
Exhibit 10.41 of the Form 10-K filed August 11, 2016 (File No. 001-05318) is incorporated herein by reference.
|
|
10.21*
|
|
|
|
Appendix A of the 2013 Proxy Statement filed September 17, 2013 (File No. 001-05318) is incorporated herein by reference.
|
|
10.22*
|
|
|
|
Exhibit 10.39 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
|
10.23*
|
|
|
|
Exhibit 10.41 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
|
10.24*
|
|
|
|
Exhibit 10.42 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
|
10.25*
|
|
|
|
Exhibit 10.43 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
|
10.26*
|
|
|
|
Exhibit 10.45 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
|
10.27*
|
|
|
|
Exhibit 10.46 of Form 10-K filed August 13, 2014 (File No. 001-05318) is incorporated herein by reference.
|
|
10.28*
|
|
|
|
Exhibit 10.1 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
|
10.29*
|
|
|
|
Exhibit 10.3 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
10.30*
|
|
|
|
Exhibit 10.4 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
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10.31*
|
|
|
|
Exhibit 10.5 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
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10.32*
|
|
|
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Exhibit 10.6 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
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10.33*
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|
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Exhibit 10.8 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
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10.34*
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|
|
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Exhibit 10.9 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
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10.35*
|
|
|
|
Exhibit 10.10 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
|
|
10.36*
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|
|
|
Exhibit 10.12 to the Form 8-K dated February 2, 2015 (File No. 001-05318) is incorporated herein by reference.
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10.37*
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|
|
Exhibit 10.1 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
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10.38*
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|
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Exhibit 10.3 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
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10.39*
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|
|
|
Exhibit 10.5 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
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10.40*
|
|
|
|
Exhibit 10.6 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
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10.41*
|
|
|
|
Exhibit 10.7 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
|
10.42*
|
|
|
|
Exhibit 10.9 to the Form 8-K dated July 30, 2015, (File No. 001-05318) is incorporated herein by reference.
|
|
10.43*
|
|
|
|
Appendix C of 2016 Proxy Statement filed September 13, 2016 (File No. 001-05318) is incorporated by reference herein.
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|
10.44*
|
|
|
|
Exhibit 10.1 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
|
10.45*
|
|
|
|
Exhibit 10.2 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
|
10.46*
|
|
|
|
Exhibit 10.4 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
|
10.47*
|
|
|
|
Exhibit 10.5 of the Form 10-Q filed November 7, 2016 (File No. 001-05318) is incorporated by reference herein.
|
|
10.48*
|
|
|
|
Exhibit 10.1 of the Form 10-Q filed February 8, 2017 (File No. 001-05318) is incorporated by reference herein.
|
101.DEF
|
|
|
XBRL Taxonomy Definition Linkbase
|
|
Filed herewith.
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
Filed herewith.
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
Filed herewith.
|
(In thousands)
For the year ended June 30
|
|
Balance at
Beginning
of Year
|
|
Charges to
Costs and
Expenses
|
|
|
Charged to
Other
Comprehensive Income (Loss)
|
|
|
Recoveries
|
|
Other
Adjustments
|
|
|
Deductions
from
Reserves
|
|
Balance at
End of
Year
|
||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Allowance for
doubtful accounts
|
|
$
|
11,807
|
|
|
$
|
2,366
|
|
|
|
$
|
—
|
|
|
|
$
|
111
|
|
|
$
|
(248
|
)
|
|
(1)
|
$
|
(3,953
|
)
|
(2)
|
$
|
10,083
|
|
Reserve for excess and obsolete inventory
|
|
31,257
|
|
|
12,343
|
|
|
|
—
|
|
|
|
—
|
|
|
(484
|
)
|
|
(1)
|
(5,721
|
)
|
(3)
|
37,395
|
|
|||||||
Deferred tax asset valuation allowance
|
|
21,629
|
|
|
(5,597
|
)
|
|
|
—
|
|
|
|
—
|
|
|
(1,418
|
)
|
|
(1)
|
—
|
|
|
14,614
|
|
|||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Allowance for
doubtful accounts
|
|
$
|
13,693
|
|
|
$
|
1,831
|
|
|
|
$
|
—
|
|
|
|
$
|
559
|
|
|
$
|
(135
|
)
|
|
(1)
|
$
|
(4,141
|
)
|
(2)
|
$
|
11,807
|
|
Reserve for excess and obsolete inventory
|
|
32,114
|
|
|
9,067
|
|
|
|
—
|
|
|
|
—
|
|
|
108
|
|
|
(1)
|
(10,032
|
)
|
(3)
|
31,257
|
|
|||||||
Deferred tax asset valuation allowance
|
|
116,770
|
|
|
(94,641
|
)
|
|
(5)
|
511
|
|
|
|
—
|
|
|
(1,011
|
)
|
|
(1)
|
—
|
|
|
21,629
|
|
|||||||
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
|
)
|
|
(4)
|
—
|
|
|
116,770
|
|
|
ROIC
|
|
||
|
FY20
|
FY21
|
FY22
|
Payout Multiple Range
|
Maximum
|
18.2%
|
18.2%
|
18.2%
|
160%
|
Target
|
13.0%
|
13.0%
|
13.0%
|
100%
|
Threshold
|
9.1%
|
9.1%
|
9.1%
|
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)
|
125%
|
•
|
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
|
Acuity Brands, Inc.
|
NYSE: AYI
|
AECOM Technology Corporation
|
NYSE: ACM
|
AGCO Corporation
|
NYSE: AGCO
|
Axon Enterprise, Inc.
|
Nasdaq: AAXN
|
Carlisle Companies Incorporated
|
NYSE: CSL
|
Colfax Corporation
|
NYSE: CFX
|
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
|
Fluor Corporation
|
NYSE: FLR
|
GATX Corp.
|
NYSE: GMT
|
Graco Inc.
|
NYSE: GGG
|
Granite Construction Incorporated
|
NYSE: GVA
|
Hubbell Inc.
|
NYSE: HUB.B
|
IDEX Corporation
|
NYSE: IEX
|
ITT Corporation
|
NYSE: ITT
|
Lennox International, Inc.
|
NYSE: LII
|
Lincoln Electric Holdings Inc.
|
Nasdaq: LECO
|
MasTec, Inc.
|
NYSE: MTZ
|
MSC Industrial Direct Co. Inc.
|
NYSE: MSM
|
Nordson Corporation
|
Nasdaq: NDSN
|
NOW Inc.
|
NYSE: DNOW
|
nVent Electric plc
|
NYSE: NVT
|
Oshkosh Corporation
|
NYSE: OSK
|
Regal Beloit Corporation
|
NYSE: RBC
|
Residio Technologies Incorporated
|
NYSE: REZI
|
Teledyne Technologies Inc.
|
NYSE: TDY
|
Terex Corp.
|
NYSE: TEX
|
The Timken Company
|
NYSE: TKR
|
The Toro Company
|
NYSE: TTC
|
Trex Company, Inc.
|
NYSE: TREX
|
Trinity Industries Inc.
|
NYSE: TRN
|
Valmont Industries, Inc.
|
NYSE: VMI
|
Watsco Inc.
|
NYSE: WSO
|
Woodward, Inc.
|
Nasdaq: WWD
|
•
|
that the TPP be amended to remove language describing the Board’s ability to declare a discretionary contribution effective as of the fiscal year starting July 1, 2019 for the reasons presented to the Committee at the meeting; and
|
•
|
that the Plan be amended so as to remove all references to the TPP discretionary contribution as a component piece of the “make whole” formula so as to eliminate the risk of confusing Plan participants regarding the basis for calculating the “make whole” contributions, if any, to which they may be entitled; and
|
•
|
that the ERISA Committee be authorized and directed to adopt such TPP and/or Plan amendments as it determines to be necessary or appropriate to implement the actions taken by the Committee.
|
•
|
Eliminating all references to the TPP discretionary contribution as a component piece of the “make whole” formula under the Plan; and
|
•
|
Making such other related and/or conforming changes hereinafter described which the undersigned ERISA Committee member charged with reviewing and approving the amendment language determined were necessary or appropriate to reflect the foregoing changes.
|
•
|
Section 5.1(b)(i) of the Adoption Agreement is amended and restated
|
(A)
|
An amount equal to
[insert number] % of the Participant’s
|
(B)
|
[X]
An amount determined by the Employer in its sole discretion.
|
(C)
|
Contributions for each Participant shall be limited to
|
(D)
|
[X]
Other:
|
(E)
|
Not Applicable [Proceed to Section 6.01]
|
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 13, 2019
|
|
/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)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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)
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a)
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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
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b)
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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.
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Date:
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August 13, 2019
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/s/ Damon J. Audia
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Damon J. Audia
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Vice President and Chief Financial Officer
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1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Corporation.
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