Earnings Roundup: Global Industrial, Columbus McKinnon, Kennametal & Parker Hannifin

We're in the midst of another fiscal earnings reporting period, with many well-known industrial distributors and suppliers posting their latest quarterly performance this past week. Here's a roundup of the key figures posted by Systemax's Industrial group (Global Industrial), Kennametal, Columbus McKinnon, Parker Hannifin, General Cable, Rexnord and NN Inc.

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We're in the midst of another fiscal earnings reporting period, with many well-known industrial distributors and suppliers posting their latest quarterly performance this past week. Here's a roundup of the key figures posted by Systemax's Industrial group (Global Industrial), Kennametal, Columbus McKinnon, Parker Hannifin, General Cable, Rexnord and NN Inc.

Global Industrial

Port Washington, NY-based industrial conglomerate Systemax reported its 2017 second quarter fiscal results on Tuesday, which showed another strong quarter for sales growth and a major jump in profit at its industrial products division, which is predominantly led by Global Industrial — No. 24 on Industrial Distribution's 2016 Big 50 List.

Sytemax — which includes reported Q2 total sales of $313 million, up 5.1 percent year-over-year, while average daily sales jump 8.4 percent. Sequentially, Q2 sales improved 3.5 percent from Q1. Q2's gross margin of 29.2 percent improved 2.4 percentage points year-over-year and improved 5.8 points from Q1. Q2 operating profit of $22.8 million was nearly triple that of $7.9 million a year earlier and almost double Q1's $12.1 million. Total profit of $13.8 million was a major improvement from a $7.4 million loss a year earlier and Q1's profit of $10.3 million.

At the Industrial Products Group, Q2 sales of $202.7 million increased 11.5 percent year-over-year, with average daily sales up by that same amount. Sequentially, Q2 sales improved 6.6 percent from Q1. Q2's gross margin of 36.2 percent improved 3.7 percentage points year over year and improved 8.1 points from Q1. Operating profit of $23.1 million dwarfed the $8.8 million of a year earlier and nearly doubled the $12.9 million of Q1.

It was the first time that the Industrial Products Group surpassed $200 million in sales in a quarter in its history.

Here is how sales and operating profit have fared Systemax's Industrial Products Group over the past six quarters:

Fiscal Quarter Total Sales Operating Profit
Q2 2017 $202.7 million $23.1 million
Q1 2017 $190.2 million $12.9 million
Q4 2016 $175.8 million $9.8 million
Q3 2016 $187.4 million $8.5 million
Q2 2016 $181.8 million $8.8 million
Q1 2016 $170.6 million $8.1 million

For the full year 2016, Global Industrial comprised 97.7 percent of the Systemax's Industrial Group total sales.

Kennametal

Metalworking and metal cutting tool manufacturer Kennametal reported its 2017 Q4 and full year fiscals on Tuesday. The company posted total Q4 sales of $565 million, up 8.4 percent year-over-year, with organic sales up approximately 12 percent — its best organic growth since Q4 2012. Kennametal had a Q4 total profit of $25.6 million, compared to a loss of $66.1 million a year earlier.

By business segment in Q4:

  • Industrial sales of $300.3 million increased 5.2 percent year-over-year, with organic sales up approximately 10 percent. Operating profit of $20.7 million decreased $9.8 million. The company said the profit decrease was driven primarily by higher performance-based compensation, a LIFO inventory charge, lower productivity and unfavorable currency exchange, partially offset by incremental restructuring benefits and organic sales growth. 
  • Infrastructure sales of $217.2 million increased 12.8 percent year-over-year, while operating profit of $17.6 million compared with a net loss of $3.9 million a year earlier.
  • Widia sales of $47.5 million increased 10.3 percent year-over-year, while a net loss of $1.8 million compared with a net loss of $1 million a year earlier.

For the full year, Kennametal total 2017 sales of $2.06 billion were down 1.9 percent year-over-year, with organic sales up approximately 4 percent. Profit of $52 million compared with a loss of $223.9 million in 2016.

"Fiscal year 2017 has been a year of substantial change at Kennametal on many levels. After re-organizing the company to allow positive transformation, we focused on simplifying the company, improving sales execution and cost reduction," said Kennametal chairman Ron De Foe. "We have made significant achievements in each of these areas. Furthermore, our cost reduction achievements were significant and we believe that we are well-positioned to improve further as we move steadily forward with our multi-year plans."

Columbus McKinnon

Material handling products manufacturer Columbus McKinnon reported its 2018 first quarter fiscal results on Tuesday.

The company's total sales of $203.7 million spiked 36.7 percent year-over-year — largely thanks to the recent $240 million acquisition of STAHL CraneSystems — whille sales were up 10.9 percent sequentially from Q1. Organic sales increased approximately 8 percent in Q2 on higher volume.

Columbus McKinnon's Q2 total profit of $11.7 million was up from $6.4 million a year earlier and a healthy sequential rebound from a $4.7 million loss in Q4.

"Fiscal 2018 started out strong," company president and CEO Mark Morelli said. "In North America, we saw organic volume growth as our channel partners stepped up inventory levels to address improved demand from the construction, utility, steel and entertainment industries. We are making very good progress with the integration of the Stahl acquisition and achieving targeted synergies. STAHL was a strong contributor in the quarter, addressing pent-up demand for midstream and downstream oil & gas projects."

Parker Hannifin

Cleveland-based motion control products manufacturer Parker Hannifin posted Q4 total sales of $3.5 billion, up 18.2 percent-year-over-year and up 12.1 percent sequentially from Q3. The company said Q4 2017 organic sales increased approximately 6 percent. Profit of $293.3 million compared with $241.9 million a year earlier and $238.8 million in Q3.

For the full year, Parker Hannifin's 2017 total sales of $5.9 billion increased 5.9 percent from 2016, while 2017 profit of $983.4 million increased 21.9 percent.

By business segment in Q4:

  • Diversified Industrial
    • North America sales increased 32 percent year-over-year to $1.7 billion, with operating profit of $261.5 million up 18.2 percent
    • International sales increased 12 percent year-over-year to $1.2 billion, with operating profit of $161.5 million up 36.1 percent
  • Aerospace Systems sales of $602.8 million were flat, with operating profit of $111.7 million up 14.6 percent.

General Cable

Highland Heights, KY-based General Cable posted 2017 Q2 sales of $943.1 million, down 7.6 percent year-over-year. The company had a net loss of $70.8 million, compared to a $29.8 profit a year earlier. General Cable's Q2 North America sales grew 5.5 percent year-over-year, while sales in Europe fell 6.6 percent. Latin America sales declined 12 percent and Africa/Asia Pacific sales fell 77.8 percent.

Rexnord

Milwaukee-based Rexnord posted 2018 Q1 sales of $487.7 million, up 3.4 percent year-over-year, with organic sales up approximately 3.0 percent. Total profit of $26.5 million increased 9.5 percent.

NN Inc.

Johnson City, TN-based bearings maker NN Inc. posted 2017 Q2 sales of $225.9 million, up 5.4 percent year-over-year. The company took a net loss of $21.5 million, compared to a $2 million profit a year earlier.

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