Industrial distributors and manufacturers are reporting their 2022 third-quarter earnings and revised end-of-year financial outlooks. In this earnings roundup, MDM looks at 3Q reports from Pittsburgh-based tooling supplier Kennametal, Beloit, Wisconsin-based electric motors manufacturer Regal Rexnord, and Berwyn, Pennsylvania-based electronic instruments and electromechanical devices manufacturer AMETEK. We also look at fiscal 2023 second-quarter earnings from Buffalo, New York-based material handling products manufacturer Columbus McKinnon.
Kennametal FY 1Q Sales Rise 2% to $495M
Kennametal on Oct. 31 reported that fiscal 2023 1Q sales reached $495 million, a 2% jump over the same period last year. The increase reflected organic growth of 9%, which was partially offset by an unfavorable currency exchange effect of 7%, the company said.
Operating income for the quarter was $49 million, or 9.8% of sales, compared to $55 million, or 11.3% of sales, in the same quarter last year. Kennametal said the decrease was due in part to favorable pricing, higher sales volumes and favorable product mix, which were more than offset by higher raw material costs of approximately $17 million, higher costs, foreign currency exchange headwinds of approximately $6 million and approximately $5 million from temporary supply chain disruptions.
“Our first quarter fiscal 2023 results were in line with expectations, delivering constant currency sales growth in all our end markets and regions from continued execution on our Commercial Excellence initiatives and improvement in customer demand,” said Christopher Rossi, President and CEO. “Looking ahead, despite macroeconomic uncertainties, we see demand in line with normal seasonal patterns through this fiscal year. Regardless of the exact path the economy takes, however, we remain confident in our proven ability to advance our strategic initiatives and secure market leading positions.”
Columbus McKinnon Reports Record Operating Income
For its fiscal 2Q 2023, Columbus McKinnon reported record operating income of $27.4 million, while revenue for the quarter was $232 million, up 8.5% on a constant currency basis versus the same quarter last year. For the quarter, net sales increased $8.1 million, or 3.6%, over last year, the company said.
The acquisition of the Garvey Corporation — a deal that closed in December 2021 — contributed $9 million in sales, which helped to offset unfavorable foreign currency translation of $11 million, or 4.9% of total sales, the company said.. In the U.S., price improved $7.6 million, or 5.8%, which offset the $4.5 million, or 3.4% decline in volume.
“We produced another solid quarter as we execute our strategy to drive growth and improve our cost structure to deliver stronger earnings power and cash generation,” said David Wilson, President and CEO of Columbus McKinnon. “We demonstrated progress toward our long-term objectives as we achieved record operating income and record adjusted EBITDA margin in the period. We had strong cash generation in the quarter as well, enabling us to continue to reduce debt and increase our financial flexibility. Importantly, we are leveraging secular tailwinds as our intelligent motion solutions address the trends in automation, productivity and supply chain regionalization.”
Regal Rexnord 3Q Sales Up 48%
On Oct. 31, Regal Rexnord reported that 3Q sales increased 48% over the prior-year quarter and were up 8% on an organic basis.
The company reported strong figures in each segment, including Motion Control Solutions, which had net sales of $592.7 million, an increase of 185.5%, or 3.6% on an organic basis. Climate Solutions net sales were $279.2 million, an increase of 4.0%, or 4.9% on an organic basis, the company said. Commercial Systems net sales were $289.9 million, an increase of 7.9%, or 11.5% on an organic basis. Industrial Systems net sales were $163.5 million, an increase of 10.5%, or 14.7% on an organic basis, the company said.
“I am extremely pleased with our 3Q performance,” CEO Louis Pinkham said. “Our Regal Rexnord team continued to focus on executing what’s under our control, while navigating against headwinds posed by ongoing supply chain challenges and high inflation. By leveraging an 80/20 mindset and acting with urgency to serve our customers, the team delivered 8% organic sales growth, which includes strong price realization plus share gains. As we highlighted at our September investor day, we’re gaining traction with our many outgrowth initiatives, including starting to deliver a robust pipeline of mix-positive new products focused on improving energy-efficiency, plus raising service levels, and making significant digital and e-commerce investments. I am also proud of our team’s performance continuing to raise our adjusted EBITDA margin, aided by 80/20, lean, and our acquisition synergies.”
Regal Rexnord announced Oct. 27 that it reached a deal to acquire Altra Industrial Motion Corp., a Massachusetts-based manufacturer of automation equipment and power transmission components, for approximately $5 billion.
AMETEK 3Q Sales Reach ‘Record’ $1.55B
AMETEK on Nov. 1 reported record 3Q sales of $1.55 billion, an 8% increase over 3Q 2021, with organic sales growth of 11%. Operating income increased 14% to a record $384.5 million, while operating margins were 24.8%, up 140 basis points from prior-year-quarter margins, the company said.
Electronic Instruments Group sales in 3Q were $1.05 billion, up 7% from the same quarter last year. Electromechanical Group sales were a record $497.7 million, up 8% from the same quarter in 2021, the company said.
“AMETEK’s results for the third quarter were excellent,” commented David A. Zapico, AMETEK Chairman and CEO. “Continued strong sales and orders growth combined with outstanding execution drove robust margin expansion and record earnings which exceeded our estimates. Our highly differentiated businesses and flexible operating structure enabled us to manage through an increasingly dynamic macro environment and deliver record results. Given this performance, we are again raising our sales and earnings guidance for the full year.”
The company also reported two new acquisitions. AMETEK said it acquired Navitar, Inc. and RTDS Technologies Inc. for a combined $430 million. Through these deals, AMETEK said it expects to acquire approximately $100 million in annual sales.