Kennametal Inc. (NYSE:KMT PRI) Q1 2017 Earnings Conference Call Transcript

Oct 27, 2016 • 08:30 am ET

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Kennametal Inc. (NYSE:KMT PRI) Q1 2017 Earnings Conference Call Transcript

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Presentation
Operator
operator

Good morning. I would like to welcome everyone to Kennametal's first quarter fiscal year 2017 financial results conference call and webcast. All lines have been placed on mute to prevent any background noise. (Operator Instructions)

After the speakers remarks, there will be a question-and-answer session. Please note that this event is being recorded.I would now like to turn the conference over to Kelly Boyer, Vice President of Investor Relations. Please go ahead.

Executive
Kelly Boyer

Thank you, Denise. Welcome, everyone, and thank you for joining us to review Kennametal's first quarter fiscal year 2017 results. We issued our quarterly earnings press release yesterday evening and it's posted on our website at www.kennametal.com. This call is being broadcast live on our website, and a recording of the call would be available for replay through November 27.

I'm Kelly Boyer, Vice President of Investor Relations. Joining me on the call today are Ron DeFeo, President and Chief Executive Officer; Jan Kees van Gaalen, Vice President and Chief Financial Officer; Marty Fusco, Vice President Finance and Corporate Controller; Chuck Byrnes, President Industrial Business Segment; Pete Dragich, President Infrastructure Business Segment; and Alexander Broetz, President WIDIA Business Segment.

Ron and Jan Kees will discuss the September quarter operating and financial performance, as well as our outlook for our fiscal year 2017, and will be referring to the slide deck posted on our website. After their prepared remarks, we'll be happy to answer your questions.

At this time, please direct your attention to our forward-looking disclosure statement. Today's discussion will contain comments that constitute forward-looking statements and involve a number of assumptions, risks and uncertainties that could cause the company's actual results to differ materially from those expressed in or implied by those statements. These risk factors and uncertainties are detailed in Kennametal's SEC filings.

Also, we will be discussing non-GAAP financial measures on the call today. Reconciliations to GAAP financial measures that we believe are most directly comparable can be found on our Form 8-K on our website.With that, I would now like to turn the call over to Ron.

Executive
Ron DeFeo

Thank you, Kelly, and we appreciate your interest in Kennametal today. Let me begin on page two of the slides that were posted on our website. Overall, I think we're making solid progress.

Results for our first fiscal year quarter were in line with expectations, with the exception of the tax rate, which I know investors appreciate can vary due to jurisdictional mix and statutory profitability by geography.

To achieve our goals, we have to grow again. We have to lower our costs and we must modernize this company. And we need to do this in today's challenging markets. We're making some hard choices, which will improve the company. Restructuring costs and the charges associated with that are a necessary part of this, and as you can see, contributed to a loss per share of $0.27 in Q1 versus last year's loss per share of $0.08.

The vast majority of the pre-tax $32-million charge was from the head