Kenner plans to close four manufacturing plants

According to the US Business Times, as part of the company's efforts to adjust and shrink the "manufacturing footprint", Kennametal Chairman, President and CEO Carlos Cardoso held the company's second-quarter operating results at the end of January. The conference said that the company plans to close four manufacturing plants.
Kenner’s net income data shows that the company’s second-quarter profit was down 61% from the second quarter of the previous fiscal year. In the quarter ended December 31, 2009, Kenner’s profit was $6 million (7 cents per share), while the previous fiscal year’s profit was $15.7 million (EPS). 22 cents). Sales revenue in the second quarter also fell to $442.9 million, compared with $546.1 million in the same fiscal year.
However, the company's profitability still exceeds the assessment of Wall Street analysts. According to a survey of 13 analysts at Zacks Investment Research, their earnings estimates for Kenner are 5 cents per share.
Cardoso said at the press conference that the improvement in operating results in the second quarter showed that Kenner's adjustment measures are succeeding. In the next 6 to 9 months, the company will take further adjustment actions. The company expects that once these actions are implemented, annual operating costs of $30 million to $35 million will be saved, although company executives are expected to generate some pre-tax costs associated with these adjustments.
Kenner will not disclose which plants will be closed for the time being. Joey Chandler, the company's vice president of corporate relations, said that two of the plants to be shut down were in Europe, and when the two plants were closed, their production capacity would be transferred to other European plants.
Cardoso said that since Kenner announced the corporate restructuring plan in April 2008, it has closed nine factories and divested seven other plants. He believes that in order to adjust and reconfigure resources for Kenner, the decision to take these actions "is difficult, but necessary."
Cardoso said that with the planned closure of the four factories, Kenner has closed and stripped a total of 20 manufacturing plants. Frank Simpkins, vice president and chief financial officer, said the company's global salary levels and number of employees have fallen by 20%.
In the first fiscal quarter of fiscal 2010, the company reported a loss of $9.8 million (12 cents per share), compared with a profit of $35.5 million ($47 per share) in the first fiscal quarter of fiscal 2009. Minute). Since Kenner announced the reduction of 1,200 employees last year, the company has been shrinking its business; last March, all employees had unpaid leave for a week; company executives also cut their pay.
Kenner expects global industrial activity and demand to continue to moderately improve in the last two quarters of the fiscal year. As a result, the company increased its financial target guidance for the current fiscal year from 50 to 70 cents per share to 65 to 75 cents (excluding corporate adjustment fees). The company expects sales to fall 8% to 10% from the previous fiscal year. The company also expects third-quarter sales to increase by 5% to 10% over the same period last year. At the press conference, the company also announced a quarterly cash dividend of 12 cents per share.
Cardoso said that the company is moderately optimistic about the continued economic recovery, but there is still uncertainty. He said he has seen encouraging signs that Kenner's mature market is recovering and emerging markets are growing strongly.
 

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