Kennametal Inc. (NYSE:KMT) Q2 2015 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 10:00 am ET


Kennametal Inc. (NYSE:KMT) Q2 2015 Earnings Conference Call - Final Transcript


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Good morning. I would like to welcome everyone to Kennametal's Second Quarter Fiscal Year 2015 Earnings Call. (Operator Instructions) Please note that this event is being recorded. I would now like to turn the conference over to Quynh McGuire, Director of Investor Relations.

Quynh McGuire

Thank you, Denise. Welcome, everyone. Thank you for joining us to review Kennametal's second quarter fiscal 2015 results. We issued a quarterly earnings press release earlier today. You may access this announcement via our website at with our practice in prior quarterly conference calls, we've invited various members of the media to listen to this call. It's also being broadcast live on our website, and a recording of this call will be available on our site for replay through March 1, 2015.I'm Quynh McGuire, Director of Investor Relations for Kennametal.

Joining me today for our call are Chairman of the Board, Bill Newlin; President and Chief Executive Officer, Don Nolan; Vice President and Chief Financial Officer, Frank Simpkins; and Vice President, Finance and Corporate Controller, Marty Fusco. Don and Frank will discuss the December quarter's financial performance. After their remarks, we'll be happy to answer your questions.

At this time, I'd like to direct your attention to our forward-looking disclosure statement. The discussion we'll have today contains comments that may constitute forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995.Such forward-looking statements involve a number of assumptions, risks and uncertainties that could cause (Forward-Looking Cautionary Statements) I'll now turn the call over to Don.

Donald A. Nolan

Thank you, Quynh. Hello, everyone. Thanks for joining us today. First, let me say how excited I'm to be here. Kennametal is a company with a rich 77-year history, a well-respected global brand, a sound business model and most importantly, a loyal customer base. I joined Kennametal because it's a great organization with enormous potential. As attractive as our future may be, Kennametal also faces some serious challenges. We have missed investor expectations the last several quarters.

We've underperformed versus our internal targets as well as versus some of our peers. So this morning, I'm going to focus on the new game plan, immediate steps we're taking to address the challenges we face and ultimately drive organic growth. Then I'll touch on our current quarter results, and lastly, I'll share our outlook on the second half for the year.

Looking at where we are today, we can do better, and we understand that we must do better. So we're developing a new game plan. I'm in the process of reviewing all the strategies for our business.

Our priorities are clear. First, we need to enable and drive organic growth. Second, we need to get our cost structure right. We need to get our portfolio right. We need to improve efficiencies, like working capital management, to deliver better free cash flow. And lastly, we need to drive an accountable, customer-focused culture.

We're moving on immediate actions to streamline our cost structure. Those of you that are familiar with my background