Kennametal Set To Undertake Several Restructuring Actions - Quick Facts

(RTTNews) - Kennametal Inc. (KMT) announced Thursday several restructuring actions that would facilitate a simplified and leaner structure, while further positioning the Company for long-term profitable growth.

As part of its ongoing simplification/modernization initiative, the Company is optimizing its operations globally, including footprint rationalization. The Company's proposal is to close its manufacturing facilities in Essen and Lichtenau as well as its distribution center in Neunkirchen, all in Germany.

Additionally, the Company announced its decision to close its manufacturing facility in Irwin, Pennsylvania. It also proposed plans to outsource the distribution operations in its Neunkirchen and Essen facilities to a third-party logistics specialist.

These restructuring actions are part of the previously announced goal of reducing plants through simplification/modernization, with additional plants currently under evaluation. The closure plans are contingent on the negotiations with the relevant employee representatives.

The proposed restructurings are expected to be executed over the next two years. Facility closures in fiscal 2020 are part of the current restructuring action, which in total are expected to deliver estimated annualized savings of $35 million to $40 million and $55 million to $65 million in pre-tax charges.

Fiscal 2021 closures would result in further structural cost reductions with estimated annualized savings of $25 million to $30 million.

The Company is expected to incur pre-tax charges of $60 million to $75 million through fiscal 2020 and 2021 for this restructuring.