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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Kennametal Inc | NYSE:KMT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.38 | 1.57% | 24.54 | 24.625 | 24.15 | 24.55 | 872,676 | 22:58:40 |
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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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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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1A.
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1B.
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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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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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Transitioning customers from the direct to indirect channel to both improve customer service and refocus our direct sales force on larger accounts, enabling our commercial team to grow sales on an account basis
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•
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Continued development and refining of our channel strategy
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•
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Implementing customer classification and customer relationship management (CRM) software for sales planning and strategy
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•
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Reducing the number of stock keeping units, powder formulations, grades and coatings to reduce manufacturing and supply chain complexity
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•
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Enforcing our established minimum order quantities and economic order quantities to improve manufacturing efficiency
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•
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Initiated Industrial segment headcount reduction actions expected to deliver annualized pre-tax savings of approximately $10 million within the first half of fiscal 2019
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•
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Completed our legacy restructuring programs in fiscal 2018, achieving ongoing annualized savings of approximately $165 million
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•
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Multi-year modernization program for our manufacturing facilities still in early stages
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•
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Modernization of Rogers, Arkansas facility, largely complete
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Primary Segment
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Location
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Owned/Leased
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Principal Products
|
IND
(1)
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WID
(2)
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INF
(3)
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United States:
|
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Gurley, Alabama
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Owned
|
Metallurgical Powders
|
|
|
X
|
|
Huntsville, Alabama
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Owned
|
Metallurgical Powders
|
|
|
X
|
|
Madison, Alabama
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Owned
|
Tungsten Heavy Alloy
|
|
|
X
|
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Rogers, Arkansas
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Owned/Leased
|
Carbide Products, Pelletizing Die Plates and Downhole Drilling Carbide Components
|
|
|
X
|
|
Rockford, Illinois
|
Owned
|
Indexable Tooling
|
X
|
|
|
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Goshen, Indiana
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Leased
|
Powders; Welding Rods, Wires and Machines
|
|
|
X
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New Albany, Indiana
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Leased
|
High Wear Coating for Steel Parts
|
|
|
X
|
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Greenfield, Massachusetts
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Owned
|
High-Speed Steel Taps
|
|
X
|
|
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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
|
|
|
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Orwell, Ohio
|
Owned
|
Metalworking Inserts
|
X
|
|
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Solon, Ohio
|
Owned
|
Metalworking Toolholders
|
X
|
|
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Whitehouse, Ohio
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Owned
|
Metalworking Inserts and Round Tools
|
X
|
|
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Bedford, Pennsylvania
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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
|
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Johnson City, Tennessee
|
Owned
|
Metalworking Inserts
|
X
|
|
|
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La Vergne, Tennessee
|
Owned
|
Metalworking Inserts
|
X
|
|
|
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New Market, Virginia
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Owned
|
Metalworking Toolholders
|
X
|
|
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International:
|
|
|
|
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La Paz, Bolivia
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Owned
|
Tungsten Concentrate
|
|
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X
|
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Indaiatuba, Brazil
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Leased
|
Metalworking Carbide Drills and Toolholders
|
X
|
|
|
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Belleville, Canada
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Owned
|
Casting Components, Coatings and Powder Metallurgy Components
|
|
|
X
|
|
Victoria, Canada
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Owned
|
Wear Parts
|
|
|
X
|
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Fengpu, China
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Owned
|
Intermetallic Composite Ceramic Powders and Parts
|
|
|
X
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Shanghai, China
|
Owned
|
Powders, Welding Rods and Wires and Casting Components
|
|
|
X
|
|
Shanghai, China
|
Owned
|
Distribution
|
X
|
|
|
|
Tianjin, China
|
Owned
|
Metalworking Inserts, Carbide Round Tools and Metallurgical Powders
|
X
|
|
X
|
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Xuzhou, China
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Leased
|
Mining Tools
|
|
|
X
|
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Ebermannstadt, Germany
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Owned
|
Metalworking Inserts
|
X
|
|
|
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Essen, Germany
|
Owned
|
Metalworking Inserts
|
X
|
|
|
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Königsee, Germany
|
Leased
|
Metalworking Carbide Drills
|
X
|
|
|
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Lichtenau, Germany
|
Owned
|
Metalworking Toolholders
|
X
|
|
|
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Mistelgau, Germany
|
Owned
|
Wear Parts and Metallurgical Powders
|
|
|
X
|
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Nabburg, Germany
|
Owned
|
Metalworking Toolholders and Metalworking Round Tools, Drills and Mills
|
X
|
|
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Neunkirchen, Germany
|
Owned
|
Distribution
|
X
|
|
|
(1)
|
Industrial segment
|
(2)
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Widia segment
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(3)
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Infrastructure segment
|
Quarter ended
|
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September 30
|
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December 31
|
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March 31
|
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June 30
|
|
||||
Fiscal 2018
|
|
|
|
|
|
|
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||||||||
High
|
|
$
|
40.78
|
|
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$
|
49.31
|
|
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$
|
52.52
|
|
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$
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41.51
|
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Low
|
|
32.23
|
|
|
39.89
|
|
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39.40
|
|
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34.37
|
|
||||
Dividends
|
|
0.20
|
|
|
0.20
|
|
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0.20
|
|
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0.20
|
|
||||
Fiscal 2017
|
|
|
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||||||||
High
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$
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29.35
|
|
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$
|
35.66
|
|
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$
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39.94
|
|
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$
|
43.09
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Low
|
|
20.40
|
|
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26.79
|
|
|
31.28
|
|
|
36.14
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||||
Dividends
|
|
0.20
|
|
|
0.20
|
|
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0.20
|
|
|
0.20
|
|
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018
|
||||||||||||
Kennametal
|
$
|
100.00
|
|
$
|
121.09
|
|
$
|
90.95
|
|
$
|
60.95
|
|
$
|
105.70
|
|
$
|
103.48
|
|
Peer Group Index
|
100.00
|
|
131.45
|
|
111.23
|
|
101.92
|
|
142.17
|
|
161.46
|
|
||||||
S&P Midcap 400
|
100.00
|
|
125.24
|
|
133.25
|
|
135.02
|
|
160.09
|
|
181.71
|
|
||||||
S&P 400 Capital Goods
|
100.00
|
|
132.62
|
|
128.00
|
|
129.08
|
|
166.96
|
|
184.90
|
|
||||||
S&P Global 1200 Industrials
|
100.00
|
|
126.67
|
|
125.00
|
|
126.65
|
|
157.56
|
|
168.15
|
|
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, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
10,100,100
|
|
May 1 through May 31, 2018
|
2,049
|
|
|
38.04
|
|
|
—
|
|
|
10,100,100
|
|
|
June 1 through June 30, 2018
|
39
|
|
|
37.28
|
|
|
—
|
|
|
10,100,100
|
|
|
Total
|
2,088
|
|
|
$
|
38.03
|
|
|
—
|
|
|
|
(1)
|
During the fourth quarter of 2018, 1,391 shares were purchased on the open market on behalf of Kennametal to fund the Company’s dividend reinvestment program. Employees also delivered 697 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.
|
|
|
2018
|
2017
|
2016
|
2015
|
2014
|
|||||||||||
OPERATING RESULTS (in thousands)
|
|
|
|
||||||||||||||
Sales
|
|
$
|
2,367,853
|
|
$
|
2,058,368
|
|
$
|
2,098,436
|
|
$
|
2,647,195
|
|
$
|
2,837,190
|
|
|
Cost of goods sold
|
|
1,535,561
|
|
1,400,661
|
|
1,482,369
|
|
1,841,202
|
|
1,940,187
|
|
||||||
Operating expense
|
|
498,152
|
|
463,167
|
|
494,975
|
|
554,895
|
|
589,768
|
|
||||||
Restructuring and asset impairment charges
|
(1
|
)
|
11,907
|
|
65,018
|
|
143,810
|
|
582,235
|
|
17,608
|
|
|||||
Loss on divestiture
|
|
—
|
|
—
|
|
131,463
|
|
—
|
|
—
|
|
||||||
Interest expense
|
|
30,081
|
|
28,842
|
|
27,752
|
|
31,466
|
|
32,451
|
|
||||||
Provision (benefit) for income taxes
|
|
69,981
|
|
29,895
|
|
25,313
|
|
(16,654
|
)
|
66,611
|
|
||||||
Income (loss) from continuing operations attributable to Kennametal
|
|
200,180
|
|
49,138
|
|
(225,968
|
)
|
(373,896
|
)
|
158,366
|
|
||||||
Net income (loss) attributable to Kennametal
|
|
200,180
|
|
49,138
|
|
(225,968
|
)
|
(373,896
|
)
|
158,366
|
|
||||||
FINANCIAL POSITION (in thousands)
|
|
|
|
|
|
|
|||||||||||
Working capital
|
|
$
|
659,635
|
|
$
|
652,423
|
|
$
|
648,066
|
|
$
|
775,802
|
|
$
|
962,440
|
|
|
Total assets
|
|
2,925,737
|
|
2,415,496
|
|
2,362,783
|
|
2,843,655
|
|
3,860,726
|
|
||||||
Long-term debt, including capital leases, excluding current maturities
|
|
591,505
|
|
694,991
|
|
693,548
|
|
730,011
|
|
974,306
|
|
||||||
Total debt, including capital leases and notes payable
|
|
991,705
|
|
695,916
|
|
695,443
|
|
745,713
|
|
1,054,423
|
|
||||||
Total Kennametal shareholders' equity
|
|
1,194,325
|
|
1,017,294
|
|
964,323
|
|
1,345,807
|
|
1,929,256
|
|
||||||
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
|
|
|
|||||||||||||||
Basic earnings (loss) from continuing operations
|
(2
|
)
|
$
|
2.45
|
|
$
|
0.61
|
|
$
|
(2.83
|
)
|
$
|
(4.71
|
)
|
$
|
2.01
|
|
Basic earnings (loss)
|
(2
|
)
|
2.45
|
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
2.01
|
|
|||||
Diluted earnings (loss) from continuing operations
|
(2
|
)
|
2.42
|
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
1.99
|
|
|||||
Diluted earnings (loss)
|
(2
|
)
|
2.42
|
|
0.61
|
|
(2.83
|
)
|
(4.71
|
)
|
1.99
|
|
|||||
Dividends
|
|
0.80
|
|
0.80
|
|
0.80
|
|
0.72
|
|
0.72
|
|
||||||
Book value (at June 30)
|
|
14.63
|
|
12.61
|
|
12.10
|
|
16.96
|
|
24.52
|
|
||||||
Market Price (at June 30)
|
|
35.90
|
|
37.42
|
|
22.11
|
|
34.12
|
|
46.28
|
|
||||||
OTHER DATA (in thousands, except number of employees)
|
|
|
|
||||||||||||||
Capital expenditures
|
|
$
|
171,004
|
|
$
|
118,018
|
|
$
|
110,697
|
|
$
|
100,939
|
|
$
|
117,376
|
|
|
Number of employees (at June 30)
|
|
10,491
|
|
10,744
|
|
11,178
|
|
12,718
|
|
13,521
|
|
||||||
Basic weighted average shares outstanding
|
81,544
|
|
80,351
|
|
79,835
|
|
79,342
|
|
78,678
|
|
|||||||
Diluted weighted average shares outstanding
|
82,754
|
|
81,169
|
|
79,835
|
|
79,342
|
|
79,667
|
|
|||||||
KEY RATIOS
|
|
|
|
|
|
|
|||||||||||
Sales growth (decline)
|
(3
|
)
|
15.0
|
%
|
(1.9
|
)%
|
(20.7
|
)%
|
(6.7
|
)%
|
9.6
|
%
|
|||||
Gross profit margin
|
|
35.1
|
|
32.0
|
|
29.4
|
|
30.4
|
|
31.6
|
|
||||||
Operating margin
|
(4
|
)
|
13.0
|
|
5.5
|
|
(8.3
|
)
|
(13.5
|
)
|
9.3
|
|
(1)
|
In 2018, 2017 and 2014, 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.
|
(2)
|
2018 included restructuring and related charges of
$0.16
, impact of an out of period adjustment to the provision for income taxes of
$0.06
and net impact 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.
|
(3)
|
Divestiture impact of sales decline was
negative 4 percent
and negative 5 percent in
2017
and
2016
, respectively.
|
(4)
|
Included restructuring and related charges of
$15.9 million
,
$76.2 million
, $53.5 million and $58.1 million in 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.
|
End Market Sales Growth (Decline):
|
As Reported
|
|
Constant Currency
|
||||||||
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
||||
Energy
|
19
|
%
|
|
2
|
%
|
|
17
|
%
|
|
9
|
%
|
General engineering
|
15
|
|
|
2
|
|
|
11
|
|
|
6
|
|
Aerospace and defense
|
15
|
|
|
2
|
|
|
11
|
|
|
4
|
|
Transportation
|
13
|
|
|
(1
|
)
|
|
8
|
|
|
2
|
|
Earthworks
|
10
|
|
|
(10
|
)
|
|
7
|
|
|
(4
|
)
|
Regional Sales Growth (Decline):
|
As Reported
|
|
Constant Currency
|
||||||||
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
||||
Asia Pacific
|
19
|
%
|
|
4
|
%
|
|
15
|
%
|
|
8
|
%
|
Europe, the Middle East and Africa (EMEA)
|
16
|
|
|
(9
|
)
|
|
7
|
|
|
—
|
|
Americas
|
13
|
|
|
—
|
|
|
13
|
|
|
4
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Sales:
|
|
|
|
|
|
||||||
Industrial
|
$
|
1,292,098
|
|
|
$
|
1,126,309
|
|
|
$
|
1,098,439
|
|
Widia
|
198,568
|
|
|
177,662
|
|
|
170,723
|
|
|||
Infrastructure
|
877,187
|
|
|
754,397
|
|
|
829,274
|
|
|||
Total sales
|
$
|
2,367,853
|
|
|
$
|
2,058,368
|
|
|
$
|
2,098,436
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
||||||
Industrial
|
$
|
187,495
|
|
|
$
|
82,842
|
|
|
$
|
90,324
|
|
Widia
|
4,441
|
|
|
(9,606
|
)
|
|
(9,081
|
)
|
|||
Infrastructure
|
119,701
|
|
|
40,011
|
|
|
(246,306
|
)
|
|||
Corporate
|
(4,072
|
)
|
|
(303
|
)
|
|
(9,880
|
)
|
|||
Total operating income (loss)
|
$
|
307,565
|
|
|
$
|
112,944
|
|
|
$
|
(174,943
|
)
|
|
|
|
|
|
|
||||||
Interest expense
|
$
|
30,081
|
|
|
$
|
28,842
|
|
|
$
|
27,752
|
|
Other expense (income), net
|
2,443
|
|
|
2,227
|
|
|
(4,124
|
)
|
|||
Income (loss) before income taxes
|
$
|
275,041
|
|
|
$
|
81,875
|
|
|
$
|
(198,571
|
)
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
1,292,098
|
|
|
$
|
1,126,309
|
|
|
$
|
1,098,439
|
|
Operating income
|
|
187,495
|
|
|
82,842
|
|
|
90,324
|
|
|||
Operating margin
|
|
14.5
|
%
|
|
7.4
|
%
|
|
8.2
|
%
|
(in percentages)
|
|
2018
|
|
2017
|
||
Organic sales growth
|
|
11
|
%
|
|
5
|
%
|
Foreign currency exchange impact
|
|
5
|
|
|
(2
|
)
|
Business days impact
|
|
(1
|
)
|
|
—
|
|
Sales growth
|
|
15
|
%
|
|
3
|
%
|
Regional sales growth (decline):
|
|
As Reported
|
|
Constant Currency
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
EMEA
|
|
17
|
%
|
|
(1
|
)%
|
|
8
|
%
|
|
2
|
%
|
Asia Pacific
|
|
16
|
|
|
9
|
|
|
12
|
|
|
11
|
|
Americas
|
|
12
|
|
|
3
|
|
|
12
|
|
|
5
|
|
End market sales growth (decline):
|
|
As Reported
|
|
Constant Currency
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Energy
|
|
15
|
%
|
|
2
|
%
|
|
11
|
%
|
|
5
|
%
|
General engineering
|
|
15
|
|
|
5
|
|
|
10
|
|
|
7
|
|
Aerospace and defense
|
|
14
|
|
|
4
|
|
|
11
|
|
|
6
|
|
Transportation
|
|
13
|
|
|
(1
|
)
|
|
8
|
|
|
2
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
198,568
|
|
|
$
|
177,662
|
|
|
$
|
170,723
|
|
Operating income (loss)
|
|
4,441
|
|
|
(9,606
|
)
|
|
(9,081
|
)
|
|||
Operating margin
|
|
2.2
|
%
|
|
(5.4
|
)%
|
|
(5.3
|
)%
|
(in percentages)
|
|
2018
|
|
2017
|
||
Organic sales growth
|
|
9
|
%
|
|
6
|
%
|
Foreign currency exchange impact
|
|
3
|
|
|
—
|
|
Business days impact
|
|
—
|
|
|
(2
|
)
|
Sales growth
|
|
12
|
%
|
|
4
|
%
|
Regional sales growth (decline):
|
|
As Reported
|
|
Constant Currency
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
EMEA
|
|
20
|
%
|
|
(3
|
)%
|
|
14
|
%
|
|
(2
|
)%
|
Asia Pacific
|
|
18
|
|
|
11
|
|
|
15
|
|
|
12
|
|
Americas
|
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
|
$
|
877,187
|
|
|
$
|
754,397
|
|
|
$
|
829,274
|
|
Operating income (loss)
|
|
119,701
|
|
|
40,011
|
|
|
(246,306
|
)
|
|||
Operating margin
|
|
13.6
|
%
|
|
5.3
|
%
|
|
(29.7
|
)%
|
(in percentages)
|
|
2018
|
|
2017
|
||
Organic sales growth
|
|
15
|
%
|
|
1
|
%
|
Foreign currency exchange impact
|
|
2
|
|
|
(1
|
)
|
Business days impact
|
|
(1
|
)
|
|
—
|
|
Divestiture impact
|
|
—
|
|
|
(9
|
)
|
Sales growth
|
|
16
|
%
|
|
(9
|
)%
|
Regional sales growth (decline):
|
|
As Reported
|
|
Constant Currency
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Asia Pacific
|
|
24
|
%
|
|
(5
|
)%
|
|
20
|
%
|
|
2
|
%
|
Americas
|
|
16
|
|
|
(3
|
)
|
|
16
|
|
|
3
|
|
EMEA
|
|
10
|
|
|
(30
|
)
|
|
1
|
|
|
(6
|
)
|
End market sales growth (decline):
|
|
As Reported
|
|
Constant Currency
|
||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Energy
|
|
20
|
%
|
|
2
|
%
|
|
19
|
%
|
|
11
|
%
|
General Engineering
|
|
19
|
|
|
(7
|
)
|
|
16
|
|
|
6
|
|
Earthworks
|
|
10
|
|
|
(12
|
)
|
|
7
|
|
|
(6
|
)
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Corporate expense
|
|
$
|
(4,072
|
)
|
|
$
|
(303
|
)
|
|
$
|
(9,880
|
)
|
Contractual Obligations
|
|
|
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
Thereafter
|
|||||||||||
Long-term debt, including current maturities
|
|
(1
|
)
|
|
$
|
1,124,781
|
|
|
$
|
425,500
|
|
|
$
|
51,000
|
|
|
$
|
335,500
|
|
|
$
|
312,781
|
|
Notes payable
|
|
(2
|
)
|
|
1,063
|
|
|
1,063
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension benefit payments
|
|
|
|
(3)
|
|
49,273
|
|
|
101,971
|
|
|
106,352
|
|
|
(3)
|
||||||||
Postretirement benefit payments
|
|
|
|
(3)
|
|
1,631
|
|
|
2,984
|
|
|
2,676
|
|
|
(3)
|
||||||||
Operating leases
|
|
|
|
65,285
|
|
|
17,606
|
|
|
22,985
|
|
|
9,466
|
|
|
15,228
|
|
||||||
Purchase obligations
|
|
(4
|
)
|
|
343,076
|
|
|
170,497
|
|
|
143,464
|
|
|
29,115
|
|
|
—
|
|
|||||
Unrecognized tax benefits
|
|
(5
|
)
|
|
7,032
|
|
|
3,890
|
|
|
1,034
|
|
|
—
|
|
|
2,108
|
|
|||||
Total
|
|
|
|
|
|
$
|
669,460
|
|
|
$
|
323,438
|
|
|
$
|
483,109
|
|
|
|
|
(1)
|
Long-term debt includes interest obligations of $125.9 million and excludes debt issuance costs of
$6.8 million
. Interest obligations were determined assuming interest rates as of
June 30, 2018
remain constant.
|
(2)
|
Notes payable includes interest obligations of $0.1 million. Interest obligations were determined assuming interest rates as of
June 30, 2018
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, 2018
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 $1.1 million and penalty of $0.1 million accrued related to such positions as of
June 30, 2018
. 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
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
Thereafter
|
||||||||||
Standby letters of credit
|
|
$
|
4,190
|
|
|
$
|
2,608
|
|
|
$
|
1,582
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Guarantees
|
|
10,844
|
|
|
5,262
|
|
|
1,473
|
|
|
—
|
|
|
4,109
|
|
|||||
Total
|
|
$
|
15,034
|
|
|
$
|
7,870
|
|
|
$
|
3,055
|
|
|
$
|
—
|
|
|
$
|
4,109
|
|
Year ended June 30, 2018
|
|
Industrial
|
|
Widia
|
|
Infrastructure
|
|
Total
|
Organic sales growth
|
|
11%
|
|
9%
|
|
15%
|
|
12%
|
Foreign currency exchange impact
(6)
|
|
5
|
|
3
|
|
2
|
|
4
|
Business days impact
(7)
|
|
(1)
|
|
—
|
|
(1)
|
|
(1)
|
Sales growth
|
|
15%
|
|
12%
|
|
16%
|
|
15%
|
Year ended June 30, 2017
|
|
Industrial
|
|
Widia
|
|
Infrastructure
|
|
Total
|
Organic sales growth
|
|
5%
|
|
6%
|
|
1%
|
|
4%
|
Foreign currency exchange impact
(6)
|
|
(2)
|
|
—
|
|
(1)
|
|
(2)
|
Business days impact
(7)
|
|
—
|
|
(2)
|
|
—
|
|
—
|
Divestiture impact
(8)
|
|
—
|
|
—
|
|
(9)
|
|
(4)
|
Sales growth (decline)
|
|
3%
|
|
4%
|
|
(9)%
|
|
(2)%
|
Industrial
|
|
|
|
|
|
|
|
|
Year ended June 30, 2018
|
|
General engineering
|
|
Transportation
|
|
Aerospace and defense
|
|
Energy
|
Constant currency end market sales growth
|
|
10%
|
|
8%
|
|
11%
|
|
11%
|
Foreign currency exchange impact
(6)
|
|
5
|
|
5
|
|
3
|
|
4
|
End market sales growth
(9)
|
|
15%
|
|
13%
|
|
14%
|
|
15%
|
Infrastructure
|
|
|
|
|
|
|
Year ended June 30, 2018
|
|
Energy
|
|
Earthworks
|
|
General engineering
|
Constant currency end market sales growth
|
|
19%
|
|
7%
|
|
16%
|
Foreign currency exchange impact
(6)
|
|
1
|
|
3
|
|
3
|
End market sales growth
(9)
|
|
20%
|
|
10%
|
|
19%
|
Total
|
|
|
|
|
|
|
|
|
|
|
Year ended June 30, 2018
|
|
General engineering
|
|
Transportation
|
|
Aerospace and defense
|
|
Energy
|
|
Earthworks
|
Constant currency end market sales growth
|
|
11%
|
|
8%
|
|
11%
|
|
17%
|
|
7%
|
Foreign currency exchange impact
(6)
|
|
4
|
|
5
|
|
4
|
|
2
|
|
3
|
End market sales growth
(9)
|
|
15%
|
|
13%
|
|
15%
|
|
19%
|
|
10%
|
Industrial
|
|
|
|
|
|
|
|
|
Year ended June 30, 2017
|
|
General engineering
|
|
Transportation
|
|
Aerospace and defense
|
|
Energy
|
Constant currency end market sales growth
|
|
7%
|
|
2%
|
|
6%
|
|
5%
|
Foreign currency exchange impact
(6)
|
|
(2)
|
|
(3)
|
|
(2)
|
|
(3)
|
End market sales growth (decline)
(9)
|
|
5%
|
|
(1)%
|
|
4%
|
|
2%
|
Infrastructure
|
|
|
|
|
|
|
Year ended June 30, 2017
|
|
Energy
|
|
Earthworks
|
|
General engineering
|
Constant currency end market sales growth (decline)
|
|
11%
|
|
(6)%
|
|
6%
|
Foreign currency exchange impact
(6)
|
|
(1)
|
|
—
|
|
(1)
|
Divestiture impact
(8)
|
|
(8)
|
|
(6)
|
|
(12)
|
End market sales growth (decline)
(9)
|
|
2%
|
|
(12)%
|
|
(7)%
|
Total
|
|
|
|
|
|
|
|
|
|
|
Year ended June 30, 2017
|
|
General engineering
|
|
Transportation
|
|
Aerospace and defense
|
|
Energy
|
|
Earthworks
|
Constant currency end market sales growth (decline)
|
|
6%
|
|
2%
|
|
4%
|
|
9%
|
|
(4)%
|
Foreign currency exchange impact
(6)
|
|
(1)
|
|
(3)
|
|
(2)
|
|
(1)
|
|
—
|
Divestiture impact
(8)
|
|
(3)
|
|
—
|
|
—
|
|
(6)
|
|
(6)
|
End market sales growth (decline)
(9)
|
|
2%
|
|
(1)%
|
|
2%
|
|
2%
|
|
(10)%
|
Industrial
|
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
||||||||
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
Constant currency regional sales
growth (decline)
|
|
12%
|
|
8%
|
|
12%
|
|
5%
|
|
2%
|
|
11%
|
Foreign currency exchange impact
(6)
|
|
—
|
|
9
|
|
4
|
|
(1)
|
|
(3)
|
|
(2)
|
Divestiture impact
(8)
|
|
—
|
|
—
|
|
—
|
|
(1)
|
|
—
|
|
—
|
Regional sales growth (decline)
(10)
|
|
12%
|
|
17%
|
|
16%
|
|
3%
|
|
(1)%
|
|
9%
|
Widia
|
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
||||||||
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
Constant currency regional sales
growth (decline) |
|
4%
|
|
14%
|
|
15%
|
|
4%
|
|
(2)%
|
|
12%
|
Foreign currency exchange impact
(6)
|
|
—
|
|
6
|
|
3
|
|
—
|
|
(1)
|
|
(1)
|
Regional sales growth (decline)
(10)
|
|
4%
|
|
20%
|
|
18%
|
|
4%
|
|
(3)%
|
|
11%
|
Infrastructure
|
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
||||||||
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
Constant currency regional sales
growth (decline) |
|
16%
|
|
1%
|
|
20%
|
|
3%
|
|
(6)%
|
|
2%
|
Foreign currency exchange impact
(6)
|
|
—
|
|
9
|
|
4
|
|
—
|
|
—
|
|
(4)
|
Divestiture impact
(8)
|
|
—
|
|
—
|
|
—
|
|
(6)
|
|
(24)
|
|
(3)
|
Regional sales growth (decline)
(10)
|
|
16%
|
|
10%
|
|
24%
|
|
(3)%
|
|
(30)%
|
|
(5)%
|
Total
|
|
Year Ended June 30, 2018
|
|
Year Ended June 30, 2017
|
||||||||
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
|
Americas
|
|
EMEA
|
|
Asia Pacific
|
Constant currency regional sales
growth (decline) |
|
13%
|
|
7%
|
|
15%
|
|
4%
|
|
—%
|
|
8%
|
Foreign currency exchange impact
(6)
|
|
—
|
|
9
|
|
4
|
|
—
|
|
(2)
|
|
(3)
|
Divestiture impact
(8)
|
|
—
|
|
—
|
|
—
|
|
(4)
|
|
(7)
|
|
(1)
|
Regional sales growth (decline)
(10)
|
|
13%
|
|
16%
|
|
19%
|
|
—%
|
|
(9)%
|
|
4%
|
Year ended June 30 (in thousands, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Sales
|
$
|
2,367,853
|
|
|
$
|
2,058,368
|
|
|
$
|
2,098,436
|
|
Cost of goods sold
|
1,535,561
|
|
|
1,400,661
|
|
|
1,482,369
|
|
|||
Gross profit
|
832,292
|
|
|
657,707
|
|
|
616,067
|
|
|||
Operating expense
|
498,152
|
|
|
463,167
|
|
|
494,975
|
|
|||
Restructuring and asset impairment charges (Notes 2 and 15)
|
11,907
|
|
|
65,018
|
|
|
143,810
|
|
|||
Loss on divestiture (Note 4)
|
—
|
|
|
—
|
|
|
131,463
|
|
|||
Amortization of intangibles
|
14,668
|
|
|
16,578
|
|
|
20,762
|
|
|||
Operating income (loss)
|
307,565
|
|
|
112,944
|
|
|
(174,943
|
)
|
|||
Interest expense
|
30,081
|
|
|
28,842
|
|
|
27,752
|
|
|||
Other expense (income), net
|
2,443
|
|
|
2,227
|
|
|
(4,124
|
)
|
|||
Income (loss) before income taxes
|
275,041
|
|
|
81,875
|
|
|
(198,571
|
)
|
|||
Provision for income taxes (Note 12)
|
69,981
|
|
|
29,895
|
|
|
25,313
|
|
|||
Net income (loss)
|
205,060
|
|
|
51,980
|
|
|
(223,884
|
)
|
|||
Less: Net income attributable to noncontrolling interests
|
4,880
|
|
|
2,842
|
|
|
2,084
|
|
|||
Net income (loss) attributable to Kennametal
|
$
|
200,180
|
|
|
$
|
49,138
|
|
|
$
|
(225,968
|
)
|
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
|
|
|
|||||||||
Basic earnings (loss) per share
|
$
|
2.45
|
|
|
$
|
0.61
|
|
|
$
|
(2.83
|
)
|
Diluted earnings (loss) per share
|
$
|
2.42
|
|
|
$
|
0.61
|
|
|
$
|
(2.83
|
)
|
Dividends per share
|
$
|
0.80
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
Basic weighted average shares outstanding
|
81,544
|
|
|
80,351
|
|
|
79,835
|
|
|||
Diluted weighted average shares outstanding
|
82,754
|
|
|
81,169
|
|
|
79,835
|
|
Year ended June 30 (in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
|
$
|
205,060
|
|
|
$
|
51,980
|
|
|
$
|
(223,884
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Unrealized loss on derivatives designated and qualified as cash flow hedges
|
|
(922
|
)
|
|
(471
|
)
|
|
(150
|
)
|
|||
Reclassification of unrealized loss (gain) on expired derivatives designated and qualified as cash flow hedges
|
|
3,747
|
|
|
1,557
|
|
|
(1,563
|
)
|
|||
Unrecognized net pension and other postretirement benefit (loss) gain
|
|
(5,991
|
)
|
|
15,559
|
|
|
(78,295
|
)
|
|||
Reclassification of net pension and other postretirement benefit loss
|
|
7,274
|
|
|
7,566
|
|
|
4,925
|
|
|||
Foreign currency translation adjustments
|
|
(1,490
|
)
|
|
5,888
|
|
|
(52,695
|
)
|
|||
Reclassification of foreign currency translation adjustment loss realized upon sale
|
|
—
|
|
|
—
|
|
|
15,088
|
|
|||
Total other comprehensive income (loss), net of tax
|
|
2,618
|
|
|
30,099
|
|
|
(112,690
|
)
|
|||
Total comprehensive income (loss)
|
|
207,678
|
|
|
82,079
|
|
|
(336,574
|
)
|
|||
Less: comprehensive income attributable to noncontrolling interests
|
|
4,131
|
|
|
4,124
|
|
|
896
|
|
|||
Comprehensive income (loss) attributable to Kennametal Shareholders
|
|
$
|
203,547
|
|
|
$
|
77,955
|
|
|
$
|
(337,470
|
)
|
As of June 30 (in thousands, except per share data)
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
556,153
|
|
|
$
|
190,629
|
|
Accounts receivable, less allowance for doubtful accounts of $11,807 and $13,693 respectively
|
401,290
|
|
|
380,425
|
|
||
Inventories (Note 7)
|
525,466
|
|
|
487,681
|
|
||
Other current assets
|
63,257
|
|
|
55,166
|
|
||
Total current assets
|
1,546,166
|
|
|
1,113,901
|
|
||
Property, plant and equipment:
|
|
|
|
||||
Land and buildings
|
351,953
|
|
|
350,002
|
|
||
Machinery and equipment
|
1,702,243
|
|
|
1,577,776
|
|
||
Less accumulated depreciation
|
(1,229,983
|
)
|
|
(1,183,390
|
)
|
||
Property, plant and equipment, net
|
824,213
|
|
|
744,388
|
|
||
Other assets:
|
|
|
|
||||
Assets held for sale (Note 15)
|
—
|
|
|
6,980
|
|
||
Goodwill (Notes 2 and 8)
|
301,802
|
|
|
301,367
|
|
||
Other intangible assets, less accumulated amortization of $145,334 and $129,981, respectively (Notes 2 and 8)
|
176,468
|
|
|
190,527
|
|
||
Deferred income taxes (Note 12)
|
17,015
|
|
|
28,349
|
|
||
Long-term prepaid pension benefit (Note 13)
|
42,543
|
|
|
17,208
|
|
||
Other
|
17,530
|
|
|
12,776
|
|
||
Total other assets
|
555,358
|
|
|
557,207
|
|
||
Total assets
|
$
|
2,925,737
|
|
|
$
|
2,415,496
|
|
LIABILITIES
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt and capital leases (Note 10)
|
$
|
399,266
|
|
|
$
|
190
|
|
Notes payable to banks (Note 11)
|
934
|
|
|
735
|
|
||
Accounts payable
|
221,903
|
|
|
215,722
|
|
||
Accrued income taxes
|
18,603
|
|
|
6,202
|
|
||
Accrued vacation pay
|
18,078
|
|
|
18,108
|
|
||
Accrued payroll
|
77,161
|
|
|
67,574
|
|
||
Other current liabilities (Note 9)
|
150,586
|
|
|
152,947
|
|
||
Total current liabilities
|
886,531
|
|
|
461,478
|
|
||
Long-term debt and capital leases, less current maturities (Note 10)
|
591,505
|
|
|
694,991
|
|
||
Deferred income taxes (Note 12)
|
26,991
|
|
|
14,883
|
|
||
Accrued postretirement benefits (Note 13)
|
13,725
|
|
|
16,906
|
|
||
Accrued pension benefits (Note 13)
|
145,797
|
|
|
143,954
|
|
||
Accrued income taxes
|
6,249
|
|
|
2,636
|
|
||
Other liabilities
|
24,612
|
|
|
27,995
|
|
||
Total liabilities
|
1,695,410
|
|
|
1,362,843
|
|
||
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; 81,646 and 80,665 shares issued, respectively
|
102,058
|
|
|
100,832
|
|
||
Additional paid-in capital
|
511,909
|
|
|
474,547
|
|
||
Retained earnings
|
900,683
|
|
|
765,607
|
|
||
Accumulated other comprehensive loss (Note 14)
|
(320,325
|
)
|
|
(323,692
|
)
|
||
Total Kennametal Shareholders’ Equity
|
1,194,325
|
|
|
1,017,294
|
|
||
Noncontrolling interests
|
36,002
|
|
|
35,359
|
|
||
Total equity
|
1,230,327
|
|
|
1,052,653
|
|
||
Total liabilities and equity
|
$
|
2,925,737
|
|
|
$
|
2,415,496
|
|
Year ended June 30 (in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
205,060
|
|
|
$
|
51,980
|
|
|
$
|
(223,884
|
)
|
Adjustments for non-cash items:
|
|
|
|
|
|
||||||
Depreciation
|
94,012
|
|
|
91,078
|
|
|
96,704
|
|
|||
Amortization
|
14,668
|
|
|
16,578
|
|
|
20,762
|
|
|||
Stock-based compensation expense
|
20,830
|
|
|
21,065
|
|
|
18,129
|
|
|||
Restructuring and asset impairment charges (Notes 2 and 15)
|
(248
|
)
|
|
1,802
|
|
|
118,779
|
|
|||
Loss on divestiture (Note 4)
|
—
|
|
|
—
|
|
|
131,124
|
|
|||
Deferred income tax provision
|
22,915
|
|
|
6,267
|
|
|
8,328
|
|
|||
Other
|
4,651
|
|
|
94
|
|
|
(6,113
|
)
|
|||
Changes in certain assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(22,201
|
)
|
|
(7,606
|
)
|
|
32,661
|
|
|||
Inventories
|
(37,230
|
)
|
|
(24,300
|
)
|
|
69,552
|
|
|||
Accounts payable and accrued liabilities
|
(5,046
|
)
|
|
54,554
|
|
|
991
|
|
|||
Accrued income taxes
|
11,093
|
|
|
6,873
|
|
|
(25,247
|
)
|
|||
Accrued pension and postretirement benefits
|
(26,759
|
)
|
|
(27,818
|
)
|
|
(15,013
|
)
|
|||
Other
|
(4,441
|
)
|
|
4,771
|
|
|
(4,280
|
)
|
|||
Net cash flow provided by operating activities
|
277,304
|
|
|
195,338
|
|
|
222,493
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(171,004
|
)
|
|
(118,018
|
)
|
|
(110,697
|
)
|
|||
Disposals of property, plant and equipment
|
14,358
|
|
|
5,023
|
|
|
5,978
|
|
|||
Proceeds from divestiture (Note 4)
|
—
|
|
|
—
|
|
|
56,127
|
|
|||
Other
|
(225
|
)
|
|
247
|
|
|
659
|
|
|||
Net cash flow used for investing activities
|
(156,871
|
)
|
|
(112,748
|
)
|
|
(47,933
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net increase (decrease) in notes payable
|
495
|
|
|
(317
|
)
|
|
(6,288
|
)
|
|||
Term debt borrowings
|
295,863
|
|
|
25,298
|
|
|
50,070
|
|
|||
Term debt repayments
|
(190
|
)
|
|
(25,899
|
)
|
|
(94,577
|
)
|
|||
Purchase of capital stock
|
(217
|
)
|
|
(241
|
)
|
|
(295
|
)
|
|||
The effect of employee benefit and stock plans and dividend reinvestment
|
17,975
|
|
|
18,319
|
|
|
1,348
|
|
|||
Cash dividends paid to Shareholders
|
(65,104
|
)
|
|
(64,128
|
)
|
|
(63,717
|
)
|
|||
Other
|
(1,625
|
)
|
|
(6,317
|
)
|
|
(181
|
)
|
|||
Net cash flow provided by (used for) financing activities
|
247,197
|
|
|
(53,285
|
)
|
|
(113,640
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(2,106
|
)
|
|
(255
|
)
|
|
(4,835
|
)
|
|||
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
||||||
Net increase in cash and cash equivalents
|
365,524
|
|
|
29,050
|
|
|
56,085
|
|
|||
Cash and cash equivalents, beginning of year
|
190,629
|
|
|
161,579
|
|
|
105,494
|
|
|||
Cash and cash equivalents, end of year
|
$
|
556,153
|
|
|
$
|
190,629
|
|
|
$
|
161,579
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
Year ended June 30 (in thousands)
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|||
CAPITAL STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
80,665
|
|
|
$
|
100,832
|
|
|
79,694
|
|
|
$
|
99,618
|
|
|
79,375
|
|
|
$
|
99,219
|
|
Dividend reinvestment
|
5
|
|
|
7
|
|
|
7
|
|
|
9
|
|
|
12
|
|
|
15
|
|
|||
Capital stock issued under employee benefit and stock plans
|
981
|
|
|
1,226
|
|
|
971
|
|
|
1,214
|
|
|
319
|
|
|
399
|
|
|||
Purchase of capital stock
|
(5
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|
(12
|
)
|
|
(15
|
)
|
|||
Balance at end of year
|
81,646
|
|
|
102,058
|
|
|
80,665
|
|
|
100,832
|
|
|
79,694
|
|
|
99,618
|
|
|||
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
474,547
|
|
|
|
|
436,617
|
|
|
|
|
419,829
|
|
||||||
Dividend reinvestment
|
|
|
210
|
|
|
|
|
235
|
|
|
|
|
279
|
|
||||||
Capital stock issued under employee benefit and stock plans
|
|
|
37,362
|
|
|
|
|
37,930
|
|
|
|
|
14,271
|
|
||||||
Sale of subsidiary stock to noncontrolling interests
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2,517
|
|
||||||
Purchase of capital stock
|
|
|
(210
|
)
|
|
|
|
(235
|
)
|
|
|
|
(279
|
)
|
||||||
Balance at end of year
|
|
|
511,909
|
|
|
|
|
474,547
|
|
|
|
|
436,617
|
|
||||||
RETAINED EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
765,607
|
|
|
|
|
780,597
|
|
|
|
|
1,070,282
|
|
||||||
Net income (loss)
|
|
|
200,180
|
|
|
|
|
49,138
|
|
|
|
|
(225,968
|
)
|
||||||
Cash dividends
|
|
|
(65,104
|
)
|
|
|
|
(64,128
|
)
|
|
|
|
(63,717
|
)
|
||||||
Balance at end of year
|
|
|
900,683
|
|
|
|
|
765,607
|
|
|
|
|
780,597
|
|
||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
(323,692
|
)
|
|
|
|
(352,509
|
)
|
|
|
|
(243,523
|
)
|
||||||
Unrealized loss on derivatives designated and qualified as cash flow hedges
|
|
|
(922
|
)
|
|
|
|
(471
|
)
|
|
|
|
(150
|
)
|
||||||
Reclassification of unrealized loss (gain) on expired derivatives designated and qualified as cash flow hedges
|
|
|
3,747
|
|
|
|
|
1,557
|
|
|
|
|
(1,563
|
)
|
||||||
Unrecognized net pension and other postretirement benefit (loss) gain
|
|
|
(5,991
|
)
|
|
|
|
15,559
|
|
|
|
|
(78,295
|
)
|
||||||
Reclassification of net pension and other postretirement benefit loss
|
|
|
7,274
|
|
|
|
|
7,566
|
|
|
|
|
4,925
|
|
||||||
Foreign currency translation adjustments
|
|
|
(741
|
)
|
|
|
|
4,606
|
|
|
|
|
(51,508
|
)
|
||||||
Reclassification of foreign currency translation adjustment loss realized upon sale
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
15,088
|
|
||||||
Other comprehensive income (loss), net of tax
|
|
|
3,367
|
|
|
|
|
28,817
|
|
|
|
|
(111,503
|
)
|
||||||
Sale of subsidiary stock to noncontrolling interests
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2,517
|
|
||||||
Balance at end of year
|
|
|
(320,325
|
)
|
|
|
|
(323,692
|
)
|
|
|
|
(352,509
|
)
|
||||||
NONCONTROLLING INTERESTS
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at beginning of year
|
|
|
35,359
|
|
|
|
|
31,478
|
|
|
|
|
29,628
|
|
||||||
Net income
|
|
|
4,880
|
|
|
|
|
2,842
|
|
|
|
|
2,084
|
|
||||||
Other comprehensive (loss) income, net of tax
|
|
|
(749
|
)
|
|
|
|
1,282
|
|
|
|
|
(1,188
|
)
|
||||||
Sale of subsidiary stock to noncontrolling interests
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2,566
|
|
||||||
Additions to noncontrolling interests
|
|
|
591
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Cash dividends
|
|
|
(4,079
|
)
|
|
|
|
(243
|
)
|
|
|
|
(1,612
|
)
|
||||||
Balance at end of year
|
|
|
36,002
|
|
|
|
|
35,359
|
|
|
|
|
31,478
|
|
||||||
Total equity, June 30
|
|
|
$
|
1,230,327
|
|
|
|
|
$
|
1,052,653
|
|
|
|
|
$
|
995,801
|
|
Year ended June 30 (in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Income taxes
|
$
|
35,974
|
|
|
$
|
16,755
|
|
|
$
|
43,733
|
|
Interest
|
27,887
|
|
|
27,529
|
|
|
26,250
|
|
|||
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
||||||
Changes in accounts payable related to purchases of property, plant and equipment
|
9,500
|
|
|
(3,900
|
)
|
|
1,000
|
|
(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)
|
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)
|
2018
|
|
2017
|
||||
Derivatives designated as hedging instruments
|
|
|
|
||||
Other current assets - range forward contracts
|
$
|
799
|
|
|
$
|
1
|
|
Other current liabilities - range forward contracts
|
(5
|
)
|
|
(671
|
)
|
||
Other assets - range forward contracts
|
27
|
|
|
—
|
|
||
Other liabilities - range forward contracts
|
—
|
|
|
(101
|
)
|
||
Total derivatives designated as hedging instruments
|
821
|
|
|
(771
|
)
|
||
Derivatives not designated as hedging instruments
|
|
|
|
||||
Other current assets - currency forward contracts
|
839
|
|
|
358
|
|
||
Other current liabilities - currency forward contracts
|
(202
|
)
|
|
(138
|
)
|
||
Total derivatives not designated as hedging instruments
|
637
|
|
|
220
|
|
||
Total derivatives
|
$
|
1,458
|
|
|
$
|
(551
|
)
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Other expense (income), net - currency forward contracts
|
$
|
(122
|
)
|
|
$
|
(873
|
)
|
|
$
|
719
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Losses recognized in other comprehensive income (loss), net
|
$
|
(922
|
)
|
|
$
|
(471
|
)
|
|
$
|
(297
|
)
|
Losses reclassified from accumulated other comprehensive loss into other expense (income), net
|
$
|
3,001
|
|
|
$
|
1,557
|
|
|
$
|
381
|
|
Instrument
|
Notional (EUR in thousands)
(2)
|
Notional (USD in thousands)
(2)
|
Maturity
|
||||
Foreign currency-denominated intercompany loan payable
|
€
|
27,325
|
|
$
|
31,819
|
|
June 26, 2022
|
Foreign currency-denominated intercompany loan payable
|
8,707
|
|
10,139
|
|
November 20, 2018
|
||
Foreign currency-denominated intercompany loan payable
|
2,014
|
|
2,345
|
|
October 11, 2019
|
(in thousands)
|
2018
|
|
2017
|
||||
Finished goods
|
$
|
279,240
|
|
|
$
|
290,817
|
|
Work in process and powder blends
|
232,973
|
|
|
166,857
|
|
||
Raw materials
|
96,859
|
|
|
87,627
|
|
||
Inventories at current cost
|
609,072
|
|
|
545,301
|
|
||
Less: LIFO valuation
|
(83,606
|
)
|
|
(57,620
|
)
|
||
Total inventories
|
$
|
525,466
|
|
|
$
|
487,681
|
|
(in thousands)
|
Industrial
|
|
Widia
|
|
Infrastructure
|
|
Total
|
||||||||
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
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
|
Estimated
Useful Life
(in years)
|
|
June 30, 2018
|
|
|
June 30, 2017
|
||||||||||||
(in thousands)
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|||||||||
Contract-based
|
3 to 15
|
|
$
|
7,061
|
|
|
$
|
(7,036
|
)
|
|
|
$
|
7,064
|
|
|
$
|
(7,014
|
)
|
Technology-based and other
|
4 to 20
|
|
46,666
|
|
|
(30,923
|
)
|
|
|
46,461
|
|
|
(29,061
|
)
|
||||
Customer-related
|
10 to 21
|
|
206,162
|
|
|
(85,301
|
)
|
|
|
205,502
|
|
|
(74,669
|
)
|
||||
Unpatented technology
|
10 to 30
|
|
31,854
|
|
|
(13,096
|
)
|
|
|
31,754
|
|
|
(10,589
|
)
|
||||
Trademarks
|
5 to 20
|
|
12,450
|
|
|
(8,978
|
)
|
|
|
12,401
|
|
|
(8,648
|
)
|
||||
Trademarks
|
Indefinite
|
|
17,609
|
|
|
—
|
|
|
|
17,326
|
|
|
—
|
|
||||
Total
|
|
|
$
|
321,802
|
|
|
$
|
(145,334
|
)
|
|
|
$
|
320,508
|
|
|
$
|
(129,981
|
)
|
(in thousands)
|
|
2018
|
|
2017
|
||||
Accrued employee benefits
|
|
$
|
48,889
|
|
|
$
|
39,478
|
|
Accrued restructuring (Note 15)
|
|
17,469
|
|
|
27,294
|
|
||
Payroll, state and local taxes
|
|
10,146
|
|
|
9,943
|
|
||
Accrued legal and professional fees
|
|
9,291
|
|
|
10,741
|
|
||
Accrued interest
|
|
7,898
|
|
|
7,048
|
|
||
Other
|
|
56,893
|
|
|
58,443
|
|
||
Total other current liabilities
|
|
$
|
150,586
|
|
|
$
|
152,947
|
|
(in thousands)
|
2018
|
|
2017
|
||||
2.650% Senior Unsecured Notes due fiscal 2020, net of discount of $0.1 million for 2018 and $0.2 million for 2017
|
$
|
399,898
|
|
|
$
|
399,823
|
|
3.875% Senior Unsecured Notes due fiscal 2022, net of discount of $0.1 million for 2018 and $0.2 million for 2017
|
299,868
|
|
|
299,831
|
|
||
4.625% Senior Unsecured Notes due fiscal 2028, net of discount of $2.2 million for 2018
|
297,813
|
|
|
—
|
|
||
Capital leases with terms expiring through 2018 at 3.9% in 2017
|
—
|
|
|
190
|
|
||
Total debt and capital leases
|
997,579
|
|
|
699,844
|
|
||
Less unamortized debt issuance costs
|
(6,808
|
)
|
|
(4,663
|
)
|
||
Less current maturities:
|
|
|
|
||||
Long-term debt
|
(399,266
|
)
|
|
—
|
|
||
Capital leases
|
—
|
|
|
(190
|
)
|
||
Total long-term debt
|
$
|
591,505
|
|
|
$
|
694,991
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
||||||
United States
|
$
|
57,109
|
|
|
$
|
(23,055
|
)
|
|
$
|
(228,667
|
)
|
International
|
217,932
|
|
|
104,930
|
|
|
30,096
|
|
|||
Total income (loss) before income taxes
|
$
|
275,041
|
|
|
$
|
81,875
|
|
|
$
|
(198,571
|
)
|
Current income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
3,755
|
|
|
$
|
(1,455
|
)
|
|
$
|
(15,039
|
)
|
State
|
(816
|
)
|
|
172
|
|
|
454
|
|
|||
International
|
44,127
|
|
|
24,911
|
|
|
31,570
|
|
|||
Total current income taxes
|
47,066
|
|
|
23,628
|
|
|
16,985
|
|
|||
Deferred income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
1,121
|
|
|
$
|
298
|
|
|
$
|
6,786
|
|
State
|
3,552
|
|
|
(867
|
)
|
|
8,407
|
|
|||
International
|
18,242
|
|
|
6,836
|
|
|
(6,865
|
)
|
|||
Total deferred income taxes:
|
22,915
|
|
|
6,267
|
|
|
8,328
|
|
|||
Provision for income taxes
|
$
|
69,981
|
|
|
$
|
29,895
|
|
|
$
|
25,313
|
|
Effective tax rate
|
25.4
|
%
|
|
36.5
|
%
|
|
(12.7
|
)%
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Income taxes at U.S. statutory rate
|
$
|
77,286
|
|
|
$
|
28,656
|
|
|
$
|
(69,500
|
)
|
State income taxes, net of federal tax benefits
|
2,975
|
|
|
(306
|
)
|
|
859
|
|
|||
U.S. income taxes provided on international income
|
1,010
|
|
|
10,273
|
|
|
2,364
|
|
|||
Combined tax effects of international income
|
(9,333
|
)
|
|
(11,530
|
)
|
|
(25,469
|
)
|
|||
Impact of goodwill impairment charges
|
—
|
|
|
—
|
|
|
6,439
|
|
|||
Impact of divestiture
|
—
|
|
|
—
|
|
|
27,790
|
|
|||
Change in valuation allowance and other uncertain tax positions
|
(90,817
|
)
|
|
5,163
|
|
|
84,530
|
|
|||
Impact of domestic production activities deduction
|
—
|
|
|
—
|
|
|
(2,072
|
)
|
|||
Research and development credit
|
(3,141
|
)
|
|
(1,895
|
)
|
|
(4,351
|
)
|
|||
Change in permanent reinvestment assertion
|
—
|
|
|
—
|
|
|
3,659
|
|
|||
Combined effects of tax reform
|
86,044
|
|
|
—
|
|
|
—
|
|
|||
Adjustment to deferred tax charges on intra-entity transfers
|
5,297
|
|
|
—
|
|
|
—
|
|
|||
Other
|
660
|
|
|
(466
|
)
|
|
1,064
|
|
|||
Provision for income taxes
|
$
|
69,981
|
|
|
$
|
29,895
|
|
|
$
|
25,313
|
|
(in thousands)
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss (NOL) carryforwards
|
$
|
39,884
|
|
|
$
|
81,920
|
|
Inventory valuation and reserves
|
10,023
|
|
|
20,428
|
|
||
Pension benefits
|
15,750
|
|
|
24,824
|
|
||
Other postretirement benefits
|
3,996
|
|
|
5,959
|
|
||
Accrued employee benefits
|
15,697
|
|
|
18,409
|
|
||
Other accrued liabilities
|
9,386
|
|
|
8,609
|
|
||
Hedging activities
|
1,477
|
|
|
5,409
|
|
||
Tax credits and other carryforwards
|
644
|
|
|
37,603
|
|
||
Intangible assets
|
—
|
|
|
14,947
|
|
||
Total
|
96,857
|
|
|
218,108
|
|
||
Valuation allowance
|
(21,629
|
)
|
|
(116,770
|
)
|
||
Total deferred tax assets
|
$
|
75,228
|
|
|
$
|
101,338
|
|
Deferred tax liabilities:
|
|
|
|
||||
Tax depreciation in excess of book
|
$
|
77,106
|
|
|
$
|
83,258
|
|
Intangible assets
|
537
|
|
|
—
|
|
||
Other
|
7,561
|
|
|
4,614
|
|
||
Total deferred tax liabilities
|
$
|
85,204
|
|
|
$
|
87,872
|
|
Total net deferred tax assets
|
$
|
(9,976
|
)
|
|
$
|
13,466
|
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Balance at beginning of year
|
|
$
|
2,632
|
|
|
$
|
3,106
|
|
|
$
|
14,619
|
|
Increases for tax positions of prior years
|
|
3,409
|
|
|
—
|
|
|
1,197
|
|
|||
Decreases related to settlement with taxing authority
|
|
—
|
|
|
(231
|
)
|
|
(11,942
|
)
|
|||
Decreases related to lapse of statute of limitations
|
|
(289
|
)
|
|
(184
|
)
|
|
(667
|
)
|
|||
Foreign currency translation
|
|
23
|
|
|
(59
|
)
|
|
(101
|
)
|
|||
Balance at end of year
|
|
$
|
5,775
|
|
|
$
|
2,632
|
|
|
$
|
3,106
|
|
(in thousands)
|
2018
|
|
2017
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
941,094
|
|
|
$
|
1,005,368
|
|
Service cost
|
1,635
|
|
|
2,908
|
|
||
Interest cost
|
30,751
|
|
|
31,113
|
|
||
Participant contributions
|
3
|
|
|
8
|
|
||
Actuarial gains
|
(24,501
|
)
|
|
(19,660
|
)
|
||
Benefits and expenses paid
|
(47,212
|
)
|
|
(70,257
|
)
|
||
Currency translation adjustments
|
3,876
|
|
|
(1,045
|
)
|
||
Special termination benefits
|
—
|
|
|
98
|
|
||
Plan settlements
|
(2,935
|
)
|
|
(7,439
|
)
|
||
Benefit obligation, end of year
|
$
|
902,711
|
|
|
$
|
941,094
|
|
Change in plans' assets:
|
|
|
|
||||
Fair value of plans' assets, beginning of year
|
$
|
808,635
|
|
|
$
|
821,675
|
|
Actual return on plans' assets
|
24,931
|
|
|
56,818
|
|
||
Company contributions
|
7,999
|
|
|
11,960
|
|
||
Participant contributions
|
3
|
|
|
8
|
|
||
Plan settlements
|
(2,935
|
)
|
|
(7,439
|
)
|
||
Benefits and expenses paid
|
(47,212
|
)
|
|
(70,257
|
)
|
||
Currency translation adjustments
|
1,337
|
|
|
(4,130
|
)
|
||
Fair value of plans' assets, end of year
|
$
|
792,758
|
|
|
$
|
808,635
|
|
Funded status of plans
|
$
|
(109,953
|
)
|
|
$
|
(132,459
|
)
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
||||
Long-term prepaid benefit
|
$
|
42,543
|
|
|
$
|
17,208
|
|
Short-term accrued benefit obligation
|
(6,699
|
)
|
|
(5,713
|
)
|
||
Accrued pension benefits
|
(145,797
|
)
|
|
(143,954
|
)
|
||
Net amount recognized
|
$
|
(109,953
|
)
|
|
$
|
(132,459
|
)
|
(in thousands)
|
2018
|
|
2017
|
||||
Unrecognized net actuarial losses
|
$
|
247,230
|
|
|
$
|
246,428
|
|
Unrecognized net prior service credits
|
723
|
|
|
580
|
|
||
Unrecognized transition obligations
|
539
|
|
|
622
|
|
||
Total
|
$
|
248,492
|
|
|
$
|
247,630
|
|
(in thousands)
|
2018
|
|
2017
|
||||
Projected benefit obligation
|
$
|
152,485
|
|
|
$
|
156,816
|
|
Accumulated benefit obligation
|
151,871
|
|
|
156,590
|
|
||
Fair value of plan assets
|
—
|
|
|
7,083
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Service cost
|
$
|
1,635
|
|
|
$
|
2,908
|
|
|
$
|
4,640
|
|
Interest cost
|
30,751
|
|
|
31,113
|
|
|
37,726
|
|
|||
Expected return on plans' assets
|
(56,579
|
)
|
|
(58,781
|
)
|
|
(58,523
|
)
|
|||
Amortization of transition obligation
|
94
|
|
|
89
|
|
|
80
|
|
|||
Amortization of prior service cost
|
48
|
|
|
(452
|
)
|
|
(417
|
)
|
|||
Special termination benefit charge
|
—
|
|
|
98
|
|
|
334
|
|
|||
Settlement loss
|
626
|
|
|
379
|
|
|
227
|
|
|||
Recognition of actuarial losses
|
6,907
|
|
|
8,356
|
|
|
7,286
|
|
|||
Net periodic pension income
|
$
|
(16,518
|
)
|
|
$
|
(16,290
|
)
|
|
$
|
(8,647
|
)
|
(in thousands)
|
2018
|
|
2017
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation, beginning of year
|
$
|
18,160
|
|
|
$
|
20,542
|
|
Interest cost
|
629
|
|
|
673
|
|
||
Actuarial losses
|
(323
|
)
|
|
(747
|
)
|
||
Benefits paid
|
(2,208
|
)
|
|
(2,308
|
)
|
||
Plan amendments
|
(935
|
)
|
|
—
|
|
||
Benefit obligation, end of year
|
$
|
15,323
|
|
|
$
|
18,160
|
|
Funded status of plan
|
$
|
(15,323
|
)
|
|
$
|
(18,160
|
)
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
||||
Short-term accrued benefit obligation
|
$
|
(1,598
|
)
|
|
$
|
(1,254
|
)
|
Accrued postretirement benefits
|
(13,725
|
)
|
|
(16,906
|
)
|
||
Net amount recognized
|
$
|
(15,323
|
)
|
|
$
|
(18,160
|
)
|
(in thousands)
|
2018
|
|
2017
|
||||
Unrecognized net actuarial losses
|
$
|
4,662
|
|
|
$
|
5,266
|
|
Unrecognized net prior service credits
|
(1,041
|
)
|
|
(128
|
)
|
||
Total
|
$
|
3,621
|
|
|
$
|
5,138
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Interest cost
|
629
|
|
|
673
|
|
|
840
|
|
|||
Amortization of prior service credit
|
(22
|
)
|
|
(22
|
)
|
|
(22
|
)
|
|||
Recognition of actuarial loss
|
280
|
|
|
355
|
|
|
324
|
|
|||
Net periodic other postretirement benefit cost
|
$
|
887
|
|
|
$
|
1,006
|
|
|
$
|
1,142
|
|
|
2018
|
|
2017
|
|
2016
|
||
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%
|
|
2018
|
|
2017
|
|
2016
|
|||
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%
|
|
Rate of return on plans assets:
|
|
|
|
|
|
|||
U.S. plans
|
7.3
|
%
|
|
7.5
|
%
|
|
7.5
|
%
|
International plans
|
5.3
|
%
|
|
5.3-5.5%
|
|
|
5.3-5.5%
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Health care costs trend rate assumed for next year
|
7.5
|
%
|
|
8.0
|
%
|
|
8.5
|
%
|
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
|
|
(in thousands)
|
1% Increase
|
|
1% Decrease
|
||||
Effect on total service and interest cost components
|
$
|
27
|
|
|
$
|
(24
|
)
|
Effect on other postretirement obligation
|
492
|
|
|
(437
|
)
|
|
2018
|
|
2017
|
|
Target %
|
|||
Equity
|
28
|
%
|
|
27
|
%
|
|
24
|
%
|
Fixed Income
|
62
|
|
|
63
|
|
|
69
|
|
Other
|
11
|
|
|
10
|
|
|
7
|
|
(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
|
|
(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
|
|
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 (loss)
|
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 (loss) 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
|
)
|
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 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 loss before
reclassifications |
—
|
|
(1,188
|
)
|
—
|
|
(1,188
|
)
|
||||
Net current period other comprehensive loss
|
—
|
|
(1,188
|
)
|
—
|
|
(1,188
|
)
|
||||
AOCL, June 30, 2016
|
$
|
—
|
|
$
|
(3,446
|
)
|
$
|
—
|
|
$
|
(3,446
|
)
|
|
Year Ended June 30,
|
|
||||||||
Details about AOCL components
(in thousands) |
2018
|
2017
|
2016
|
Affected line item in the Income Statement
|
||||||
Gains and losses on cash flow hedges:
|
|
|
|
|
||||||
Forward starting interest rate swaps
|
$
|
2,265
|
|
$
|
2,180
|
|
$
|
2,099
|
|
Interest expense
|
Currency exchange contracts
|
2,243
|
|
(623
|
)
|
(4,645
|
)
|
Other expense (income), net
|
|||
Total before tax
|
4,508
|
|
1,557
|
|
(2,546
|
)
|
|
|||
Tax impact
|
(761
|
)
|
—
|
|
983
|
|
Provision for income taxes
|
|||
Net of tax
|
$
|
3,747
|
|
$
|
1,557
|
|
$
|
(1,563
|
)
|
|
|
|
|
|
|
||||||
Postretirement benefit plans:
|
|
|
|
|
||||||
Amortization of transition obligations
|
$
|
94
|
|
$
|
89
|
|
$
|
80
|
|
See Note 13 for further details
|
Amortization of prior service credit
|
26
|
|
(474
|
)
|
(439
|
)
|
See Note 13 for further details
|
|||
Recognition of actuarial losses
|
7,187
|
|
8,711
|
|
7,610
|
|
See Note 13 for further details
|
|||
Total before tax
|
7,307
|
|
8,326
|
|
7,251
|
|
|
|||
Tax impact
|
(33
|
)
|
(760
|
)
|
(2,326
|
)
|
Provision for income taxes
|
|||
Net of tax
|
$
|
7,274
|
|
$
|
7,566
|
|
$
|
4,925
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
||||||
Released due to divestiture
|
$
|
—
|
|
$
|
—
|
|
$
|
15,088
|
|
Loss on divestiture
|
Total before taxes
|
—
|
|
—
|
|
15,088
|
|
|
|||
Tax impact
|
—
|
|
—
|
|
—
|
|
Provision 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
|
$
|
(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)
|
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)
|
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
|
|
(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
|
|
|
|
2016
|
|
Risk-free interest rate
|
|
1.4
|
%
|
Expected life (years)
(4)
|
|
4.5
|
|
Expected volatility
(5)
|
|
31.7
|
%
|
Expected dividend yield
|
|
2.1
|
%
|
|
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Life (years)
|
|
Aggregate
Intrinsic value
(in thousands)
|
|||||
Options outstanding, June 30, 2017
|
1,726,791
|
|
|
$
|
34.08
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(625,503
|
)
|
|
35.54
|
|
|
|
|
|
|||
Lapsed and forfeited
|
(111,296
|
)
|
|
34.68
|
|
|
|
|
|
|||
Options outstanding, June 30, 2018
|
989,992
|
|
|
$
|
33.08
|
|
|
5.1
|
|
$
|
5,170
|
|
Options vested and expected to vest, June 30, 2018
|
989,992
|
|
|
$
|
33.08
|
|
|
5.1
|
|
$
|
5,170
|
|
Options exercisable, June 30, 2018
|
812,159
|
|
|
$
|
33.97
|
|
|
4.6
|
|
$
|
3,851
|
|
|
Performance
Vesting
Stock
Units
|
|
Performance
Vesting
Weighted
Average Fair
Value
|
|
Time Vesting
Stock Units
|
|
Time Vesting
Weighted
Average Fair
Value
|
||||||
Unvested, June 30, 2017
|
280,250
|
|
|
$
|
27.62
|
|
|
1,153,444
|
|
|
$
|
27.66
|
|
Granted
|
158,397
|
|
|
38.81
|
|
|
434,391
|
|
|
37.87
|
|
||
Vested
|
(10,031
|
)
|
|
42.83
|
|
|
(421,625
|
)
|
|
30.29
|
|
||
Performance metric adjustments, net
|
16,766
|
|
|
25.88
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(36,085
|
)
|
|
30.91
|
|
|
(82,535
|
)
|
|
30.81
|
|
||
Unvested, June 30, 2018
|
409,297
|
|
|
$
|
31.22
|
|
|
1,083,675
|
|
|
$
|
30.47
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Sales:
|
|
|
|
|
|
||||||
Industrial
|
$
|
1,292,098
|
|
|
$
|
1,126,309
|
|
|
$
|
1,098,439
|
|
Widia
|
198,568
|
|
|
177,662
|
|
|
170,723
|
|
|||
Infrastructure
|
877,187
|
|
|
754,397
|
|
|
829,274
|
|
|||
Total sales
|
$
|
2,367,853
|
|
|
$
|
2,058,368
|
|
|
$
|
2,098,436
|
|
|
|
|
|
|
|
||||||
Operating income (loss):
|
|
|
|
|
|
||||||
Industrial
|
$
|
187,495
|
|
|
$
|
82,842
|
|
|
$
|
90,324
|
|
Widia
|
4,441
|
|
|
(9,606
|
)
|
|
(9,081
|
)
|
|||
Infrastructure
|
119,701
|
|
|
40,011
|
|
|
(246,306
|
)
|
|||
Corporate
|
(4,072
|
)
|
|
(303
|
)
|
|
(9,880
|
)
|
|||
Total operating income (loss)
|
$
|
307,565
|
|
|
$
|
112,944
|
|
|
$
|
(174,943
|
)
|
|
|
|
|
|
|
||||||
Interest expense
|
$
|
30,081
|
|
|
$
|
28,842
|
|
|
$
|
27,752
|
|
Other expense (income), net
|
2,443
|
|
|
2,227
|
|
|
(4,124
|
)
|
|||
Income (loss) before income taxes
|
$
|
275,041
|
|
|
$
|
81,875
|
|
|
$
|
(198,571
|
)
|
|
|
|
|
|
|
||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
Industrial
|
$
|
57,261
|
|
|
$
|
54,269
|
|
|
$
|
52,523
|
|
Widia
|
9,483
|
|
|
10,728
|
|
|
10,419
|
|
|||
Infrastructure
|
41,916
|
|
|
42,596
|
|
|
54,459
|
|
|||
Corporate
|
20
|
|
|
63
|
|
|
65
|
|
|||
Total depreciation and amortization
|
$
|
108,680
|
|
|
$
|
107,656
|
|
|
$
|
117,466
|
|
|
|
|
|
|
|
||||||
Total assets:
|
|
|
|
|
|
||||||
Industrial
|
$
|
1,169,610
|
|
|
$
|
1,103,686
|
|
|
$
|
1,019,887
|
|
Widia
|
193,971
|
|
|
191,626
|
|
|
195,339
|
|
|||
Infrastructure
|
864,402
|
|
|
813,747
|
|
|
849,447
|
|
|||
Corporate
|
697,754
|
|
|
306,437
|
|
|
298,110
|
|
|||
Total assets
|
$
|
2,925,737
|
|
|
$
|
2,415,496
|
|
|
$
|
2,362,783
|
|
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
|
|
||||||
Industrial
|
$
|
112,124
|
|
|
$
|
70,281
|
|
|
$
|
66,467
|
|
Widia
|
17,445
|
|
|
17,853
|
|
|
14,093
|
|
|||
Infrastructure
|
41,435
|
|
|
29,884
|
|
|
30,137
|
|
|||
Total capital expenditures
|
$
|
171,004
|
|
|
$
|
118,018
|
|
|
$
|
110,697
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Sales:
|
|
|
|
|
|
||||||
United States
(6)
|
$
|
970,003
|
|
|
$
|
868,466
|
|
|
$
|
866,197
|
|
Germany
|
331,893
|
|
|
282,347
|
|
|
334,366
|
|
|||
China
|
271,343
|
|
|
220,561
|
|
|
210,124
|
|
|||
Canada
(6)
|
102,139
|
|
|
85,488
|
|
|
87,014
|
|
|||
India
|
102,120
|
|
|
84,769
|
|
|
77,934
|
|
|||
Italy
|
69,049
|
|
|
59,967
|
|
|
69,821
|
|
|||
France
|
62,982
|
|
|
56,231
|
|
|
56,264
|
|
|||
United Kingdom
|
45,714
|
|
|
39,731
|
|
|
50,723
|
|
|||
Other
(7)
|
412,610
|
|
|
360,808
|
|
|
345,993
|
|
|||
Total sales
|
$
|
2,367,853
|
|
|
$
|
2,058,368
|
|
|
$
|
2,098,436
|
|
|
|
|
|
|
|
||||||
Total long-lived assets:
|
|
|
|
|
|
||||||
United States
|
$
|
456,678
|
|
|
$
|
423,543
|
|
|
$
|
424,970
|
|
Germany
|
188,673
|
|
|
157,323
|
|
|
143,855
|
|
|||
China
|
67,462
|
|
|
60,908
|
|
|
62,614
|
|
|||
India
|
31,984
|
|
|
28,569
|
|
|
23,797
|
|
|||
Israel
|
25,831
|
|
|
26,627
|
|
|
23,083
|
|
|||
Canada
|
19,396
|
|
|
19,576
|
|
|
18,587
|
|
|||
Other
|
34,189
|
|
|
34,822
|
|
|
33,734
|
|
|||
Total long-lived assets
(8)
:
|
$
|
824,213
|
|
|
$
|
751,368
|
|
|
$
|
730,640
|
|
|
2018
|
|
2017
|
|
2016
|
|||
End markets:
|
|
|
|
|
|
|||
General engineering
|
41
|
%
|
|
39
|
%
|
|
38
|
%
|
Transportation
|
20
|
|
|
20
|
|
|
21
|
|
Energy
|
17
|
|
|
18
|
|
|
17
|
|
Earthworks
|
14
|
|
|
15
|
|
|
16
|
|
Aerospace and defense
|
8
|
|
|
8
|
|
|
8
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
For the quarter ended (in thousands, except per share data)
|
September 30
|
|
December 31
|
|
March 31
|
|
June 30
|
||||||||
2018
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
542,454
|
|
|
$
|
571,345
|
|
|
$
|
607,936
|
|
|
$
|
646,119
|
|
Gross profit
|
184,993
|
|
|
192,545
|
|
|
219,461
|
|
|
235,294
|
|
||||
Net income attributable to Kennametal
|
39,183
|
|
|
41,601
|
|
|
50,866
|
|
|
68,528
|
|
||||
Basic earnings per share attributable to Kennametal
(9)
|
|
|
|
|
|
|
|
||||||||
Net income
|
0.48
|
|
|
0.51
|
|
|
0.62
|
|
|
0.84
|
|
||||
Diluted earnings per share attributable to Kennametal
(9)
|
|
|
|
|
|
|
|
||||||||
Net income
|
0.48
|
|
|
0.50
|
|
|
0.61
|
|
|
0.83
|
|
||||
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
|
|
(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 10, 2018
|
|
|
|
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 10, 2018
|
|
|
|
|
|
/s/ JAN KEES VAN GAALEN
Jan Kees van Gaalen
|
|
Vice President and Chief Financial Officer
|
|
August 10, 2018
|
|
|
|
|
|
/s/ PATRICK S. WATSON
Patrick S. Watson
|
|
Vice President Finance and Corporate Controller
|
|
August 10, 2018
|
|
|
|
||
/s/ LAWRENCE W. STRANGHOENER
Lawrence W. Stranghoener
|
|
Chairman of the Board
|
|
August 10, 2018
|
|
|
|
|
|
/s/ JOSEPH ALVARADO
Joseph Alvarado
|
|
Director
|
|
August 10, 2018
|
|
|
|
|
|
/s/ CINDY L. DAVIS
Cindy L. Davis
|
|
Director
|
|
August 10, 2018
|
|
|
|
|
|
/s/ RONALD M. DE FEO
Ronald M. De Feo
|
|
Director
|
|
August 10, 2018
|
|
|
|
||
/s/ WILLIAM J. HARVEY
William J. Harvey
|
|
Director
|
|
August 10, 2018
|
|
|
|
||
/s/ WILLIAM M. LAMBERT
William M. Lambert
|
|
Director
|
|
August 10, 2018
|
|
|
|
|
|
/s/ LORRAINE MARTIN
Lorraine Martin
|
|
Director
|
|
August 10, 2018
|
|
|
|
||
/s/ TIMOTHY R. MCLEVISH
Timothy R. McLevish
|
|
Director
|
|
August 10, 2018
|
|
|
|
|
|
/s/ SAGAR A. PATEL
Sagar A. Patel
|
|
Director
|
|
August 10, 2018
|
|
|
|
||
/s/ STEVEN H. WUNNING
Steven H. Wunning
|
|
Director
|
|
August 10, 2018
|
FINANCIAL STATEMENT SCHEDULE
|
Page
|
3
|
|
|
Articles of Incorporation and Bylaws
|
|
|
3.1
|
|
|
|
Exhibit 3.(i) of the Form 8-K filed October 30, 2014 (File No. 001-05318) is incorporated herein by reference.
|
|
3.2
|
|
|
|
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
|
|
|
|
Exhibit 4.1 of the Form 8-K filed June 20, 2002 (File No. 001-05318) is incorporated herein by reference.
|
|
4.2
|
|
|
|
Exhibit 4.2 of the Form 8-K filed June 20, 2002 (File No. 001-05318) is incorporated herein by reference.
|
|
4.3
|
|
|
|
Exhibit 4.1 of the Form 8-K filed February 14, 2012 (File No. 001-05318) is incorporated herein by reference.
|
|
4.4
|
|
|
|
Exhibit 4.2 of the Form 8-K filed February 14, 2012 (File No. 001-05318) is incorporated herein by reference.
|
|
4.5
|
|
|
|
Exhibit 4.4 of the Form 8-K filed November 7, 2012 (File No. 001-05318) is incorporated herein by reference.
|
|
4.6
|
|
|
|
Exhibit 4.1 of the Form 8-K filed June 7, 2018 (File No. 001-05318) is incorporated herein by reference.
|
|
|
|
|
|
|
|
10
|
|
|
Material Contracts
|
|
|
10.1*
|
|
|
|
Exhibit 10.1 of the December 31, 2008 Form 10-Q filed February 4, 2009 (File No. 001-05318) is incorporated herein by reference.
|
|
10.2*
|
|
|
|
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.
|
|
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.
|
|
10.11*
|
|
|
|
Exhibit 10.2 of the Form 8-K filed June 23, 2015 (File No. 001-05318) is incorporated herein by reference.
|
|
10.12*
|
|
|
|
Filed herewith.
|
|
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.
|
(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
|
||||||||||||||
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
|
)
|
|
(7)
|
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
|
)
|
|
(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
|
|
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