Image Source: Zacks Investment Research Escalating Costs: Rising operating expenses pose a concern for KMT. In the first nine months of fiscal 2024 (ended March 2024), the company's operating expenses increased year over year due to higher compensation expenses. The impact of these expenditures is evident in the rise of operating expenses as a percentage of total revenues, which climbed 40 basis points to reach 21.8%. In the same period, the company's operating margin decreased 170 basis points due to headw ...

PITTSBURGH, June 11, 2024 /PRNewswire/ -- Kennametal Inc. (NYSE: KMT) ("the Company") announced today that it has resumed operations at its facility in Rogers, AR, following a previous shutdown due to damage from a tornado on May 26. The Company continues to assess the financial effects of the storm and is working with its insurance carrier. About Kennametal SOURCE Kennametal Inc. "The restart of our Rogers facility is a testament to the great teamwork of our local team and the tremendous support and coordi ...

PITTSBURGH, May 28, 2024 /PRNewswire/ -- Kennametal Inc. (NYSE: KMT) ("the Company") announced today that its production facility in Rogers, AR, sustained damage early Sunday morning from a tornado that also affected the larger Rogers community. At the time of the storm, the facility was shut down for the holiday weekend and no employees were onsite. The extent of the damage is currently being assessed. "Our thoughts are with our employees and everyone in the community affected by this storm," said Sanjay C ...

PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the period [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements show Q3 FY24 sales at $515.8 million and net income at $19.0 million Condensed Consolidated Statements of Income (Unaudited) | (in thousands, except per share) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Nine Months Ended March 31, 2024 | Nine Months Ended March 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $515,794 | $536,036 | $1,503,591 | $1,527,949 | | **Gross profit** | $153,262 | $167,914 | $455,757 | $470,772 | | **Operating income** | $35,227 | $52,471 | $108,824 | $136,487 | | **Net income attributable to Kennametal** | $18,976 | $31,937 | $72,141 | $82,032 | | **Diluted earnings per share** | $0.24 | $0.39 | $0.90 | $1.01 | Condensed Consolidated Balance Sheets (Unaudited) | (in thousands) | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | | **Total current assets** | $999,937 | $1,026,789 | | **Total assets** | $2,518,645 | $2,547,234 | | **Total current liabilities** | $413,245 | $433,975 | | **Total liabilities** | $1,212,751 | $1,233,066 | | **Total Kennametal Shareholders' Equity** | $1,264,559 | $1,275,447 | Condensed Consolidated Statements of Cash Flow (Unaudited) | (in thousands) | Nine Months Ended March 31, 2024 | Nine Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Net cash flow provided by operating activities** | $163,460 | $126,182 | | **Net cash flow used in investing activities** | ($86,111) | ($66,214) | | **Net cash flow used in financing activities** | ($88,659) | ($50,013) | | **Net (decrease) increase in cash and cash equivalents** | ($13,902) | $7,888 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes disclose a restructuring program, segment sales performance, and $91.5 million returned to shareholders - A restructuring program initiated in June 2023 incurred **$18.6 million** in charges through March 31, 2024, with **$6.5 million** in Q3 FY24[32](index=32&type=chunk)[33](index=33&type=chunk) - The company paid **$47.7 million** in dividends and repurchased **$43.8 million** of capital stock during the nine months ended March 31, 2024[57](index=57&type=chunk) - An immaterial business combination in Q2 FY24 for **$6.5 million** resulted in **$3.6 million** goodwill in the Metal Cutting segment[62](index=62&type=chunk) Segment Sales and Operating Income (Q3 FY24 vs Q3 FY23) | Segment (in thousands) | Q3 2024 Sales | Q3 2023 Sales | Q3 2024 Operating Income | Q3 2023 Operating Income | | :--- | :--- | :--- | :--- | :--- | | **Metal Cutting** | $326,561 | $333,507 | $30,809 | $43,765 | | **Infrastructure** | $189,233 | $202,529 | $5,140 | $9,658 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A details Q3 FY24 sales decline, operating income pressure, and a restructuring program targeting $35 million in annualized savings - Q3 FY24 sales of **$515.8 million** decreased **4%** year-over-year due to **2% organic decline**, **1% fewer business days**, and **1% unfavorable currency**[71](index=71&type=chunk) - Q3 FY24 operating income decreased to **$35.2 million** from **$52.5 million** due to lower volumes, **~$6 million** restructuring charges, inflation, and **~$2 million** unfavorable currency[72](index=72&type=chunk) - A restructuring program targets **~$35 million** in annualized pre-tax savings by end of FY2024, with **$18.6 million** in charges recorded through March 31, 2024[83](index=83&type=chunk) - The company returned **$91.5 million** to shareholders in the first nine months of FY2024, including **$43.8 million** in share repurchases and **$47.7 million** in dividends[77](index=77&type=chunk) [Results of Continuing Operations](index=23&type=section&id=RESULTS%20OF%20CONTINUING%20OPERATIONS) Q3 FY24 sales decreased 4% to $515.8 million, with gross profit margin contracting to 29.7% and the effective tax rate increasing to 27.4% - Gross profit margin for Q3 FY24 was **29.7%**, down from **31.3%** due to lower volumes, inflation, and unfavorable raw material cost timing in Infrastructure[79](index=79&type=chunk) - The effective tax rate for Q3 FY24 was **27.4%**, up from **24.4%** YoY, while the nine-month rate was **15.5%**, down from **23.9%** YoY[87](index=87&type=chunk)[88](index=88&type=chunk) End Market Sales Growth (Decline) - Q3 FY24 vs Q3 FY23 (Constant Currency) | End Market | Constant Currency Growth (Decline) | | :--- | :--- | | Aerospace & Defense | 10% | | Transportation | 0% | | General Engineering | (2)% | | Earthworks | (5)% | | Energy | (14)% | [Business Segment Review](index=24&type=section&id=BUSINESS%20SEGMENT%20REVIEW) This section reviews Metal Cutting and Infrastructure segments, detailing sales and operating margin declines for both in Q3 FY24 Metal Cutting Performance (Q3 FY24) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Sales | $326.6M | -2% | | Organic Sales Growth | 0% | - | | Operating Income | $30.8M | -29.7% | | Operating Margin | 9.4% | from 13.1% | Infrastructure Performance (Q3 FY24) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Sales | $189.2M | -7% | | Organic Sales Decline | (5)% | - | | Operating Income | $5.1M | -47.6% | | Operating Margin | 2.7% | from 4.8% | [Liquidity and Capital Resources](index=30&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Strong liquidity with $163.5 million cash from operations, $92.1 million cash, and $692.5 million credit facility availability - Operating cash flow for the nine months ended March 31, 2024, was **$163.5 million**, up from **$126.2 million**, driven by favorable working capital changes[108](index=108&type=chunk)[116](index=116&type=chunk) - As of March 31, 2024, the company held **$92.1 million** in cash, **$608.1 million** in total debt, and **$692.5 million** available under its **$700 million** credit facility[111](index=111&type=chunk)[113](index=113&type=chunk) - A new **$200 million**, three-year share repurchase program was authorized on February 2, 2024, following **$44 million** in repurchases during the nine months to March 31, 2024[114](index=114&type=chunk)[115](index=115&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposures since June 30, 2023 - The company reports no material changes to its market risk exposures since June 30, 2023[139](index=139&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2024, with no material changes to internal control over financial reporting - The CEO and CFO concluded the company's disclosure controls and procedures were effective as of March 31, 2024[140](index=140&type=chunk) - No material changes occurred to internal control over financial reporting during the most recent fiscal quarter[141](index=141&type=chunk) [Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan during the quarter ended March 31, 2024 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan in the quarter ended March 31, 2024[142](index=142&type=chunk) PART II - OTHER INFORMATION This section covers legal proceedings, equity security transactions, and exhibits filed with the report [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, none of which are deemed material to its financial condition - The company is not party to any legal proceedings deemed material to its financial condition[144](index=144&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased 616,409 shares in Q3 FY24 and authorized a new $200 million share repurchase program - A new **$200 million**, three-year share repurchase program was authorized on February 2, 2024, with **$221.9 million** remaining available as of March 31, 2024[145](index=145&type=chunk) Issuer Purchases of Equity Securities (Q3 FY2024) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Jan 2024 | 6,051 | $25.19 | — | | Feb 2024 | 366,779 | $24.34 | 365,000 | | Mar 2024 | 243,579 | $25.06 | 243,500 | | **Total** | **616,409** | **$24.63** | **608,500** | [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL Interactive Data Files - The filing includes required CEO/CFO certifications and XBRL data files as exhibits[147](index=147&type=chunk)[148](index=148&type=chunk)

Kennametal Inc. (KMT) reported third-quarter fiscal 2024 (ended Mar 31, 2024) adjusted earnings of 30 cents per share, which missed the Zacks Consensus Estimate of 31 cents. The bottom line decreased 23.1% from the year-ago figure.Revenue DetailsKennametal’s revenues were $515.8 million, which decreased 3.8% from the year-ago quarter’s figure. Organic sales declined 2% year over year. Business days had a negative impact of 1%. Currency exchange negatively affected sales by 1%.KMT’s revenues missed the Zacks ...

PITTSBURGH, May 9, 2024 /PRNewswire/ --  Kennametal Inc. (NYSE: KMT) announced today that they will attend the KeyBanc 2024 Industrials and Basic Materials Conference in Boston. Details of the conference are as follows: When:        May 29, 2024 Attendees:  Patrick Watson, Vice President and Chief Financial Officer Franklin Cardenas, Vice President Kennametal Inc., President Infrastructure Michael Pici, Vice President, Investor Relations About KennametalWith over 80 years as an indus ...

Financial Data and Key Metrics Changes - Adjusted EPS decreased to $0.30 compared to $0.39 in the prior year quarter [6] - Free operating cash flow year to date was $84 million, up from $60 million in the prior year [6][12] - Sales decreased 4% year-over-year with an organic decline of 2%, fewer workdays of 1%, and unfavorable currency exchange of 1% [8][29] Business Line Data and Key Metrics Changes - Aerospace and Defense sales increased 10% year-over-year, while Metal Cutting and Infrastructure grew 13% [5][34] - Reported Metal Cutting sales were down 2% compared to the prior year quarter, with flat organic sales [9] - Infrastructure sales were down 7% year-over-year due to negative organic sales of 5% [10] Market Data and Key Metrics Changes - Transportation was flat at 0% this quarter, with strength in EMEA offset by a decline in the Americas [5][34] - General Engineering declined 2% year-over-year due to lower industrial production in EMEA and the Americas [5] - Energy declined 14%, primarily in oil and gas, due to a 20% decline in U.S. land-based rig counts [5][34] Company Strategy and Development Direction - The company aims for above-market growth through innovation, best-in-class customer service, and commercial excellence [17] - Margin expansion is targeted through operational excellence and applying lean principles [17] - A balanced capital allocation strategy is emphasized, including share repurchase programs [24] Management's Comments on Operating Environment and Future Outlook - Management noted that macro conditions remain a headwind in the short term, but long-term growth drivers are intact [39] - The company is focused on improving margins and driving share gain throughout the economic cycle [39] - The outlook for FY24 sales is narrowed to between $2.03 billion and $2.05 billion, with adjusted EPS outlook of $1.40 to $1.55 [13] Other Important Information - The adjusted effective tax rate increased year-over-year to 26.5% due to unfavorable geographical mix [33] - The company continues to execute its share repurchase program, with $15 million of shares bought back in the quarter [31][37] - The leadership transition is set with Sanjay Chowbey taking over as CEO effective June 1st [14][43] Q&A Session Summary Question: Can you walk through the major end markets and any changes in underlying trends? - Aerospace and Defense continues to improve, but is dependent on production issues stabilizing for a major OEM [21] - Energy is expected to be flat, with rig counts anticipated to increase slightly [21] - Mining activity was lower than expected due to lower coal demand in the U.S. and a slower recovery in China [22] Question: Can you provide insights on free operating cash flow development? - The strongest quarters for cash flow are Q3 and Q4, with expectations for continued strong performance [24] Question: How do new product contributions relate to growth? - The modernization has allowed for quicker release of new products, which is a major driver for share gain [56][78] Question: What is the outlook for Aerospace and Defense build rates? - Demand remains solid, but there are short-term constraints due to supply chain issues [75] Question: What are the expectations for seasonality heading into the next fiscal year? - Normal seasonality is expected, with sales typically down about 8% to 10% from Q4 to Q1 [82]

For the quarter ended March 2024, Kennametal (KMT) reported revenue of $515.79 million, down 3.8% over the same period last year. EPS came in at $0.30, compared to $0.39 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $522.04 million, representing a surprise of -1.20%. The company delivered an EPS surprise of -3.23%, with the consensus EPS estimate being $0.31.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how ...

Kennametal (KMT) came out with quarterly earnings of $0.30 per share, missing the Zacks Consensus Estimate of $0.31 per share. This compares to earnings of $0.39 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.23%. A quarter ago, it was expected that this engineered products maker would post earnings of $0.25 per share when it actually produced earnings of $0.30, delivering a surprise of 20%.Over the last four quarters, the ...

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Kennametal reported Q3 FY2024 sales and EPS declines due to market softness, while achieving strong year-to-date cash flow and productivity gains - Sales decreased by **4%**, reflecting a **2%** organic decline, a **1%** unfavorable business days effect, and a **1%** unfavorable currency exchange effect[6](index=6&type=chunk) - Performance was affected by market softness in the energy end market and a slow recovery in China[4](index=4&type=chunk) - The company is on track to deliver approximately **$35 million** in annualized savings in fiscal 2024 as part of its **$100 million** productivity target by the end of fiscal 2027[5](index=5&type=chunk)[7](index=7&type=chunk) Q3 FY2024 Financial Performance | Metric | Q3 FY2024 | Q3 FY2023 | Change | | :--- | :--- | :--- | :--- | | Sales | $516 million | $536 million | -4% | | EPS (Diluted) | $0.24 | $0.39 | -38.5% | | Adjusted EPS | $0.30 | $0.39 | -23.1% | | Operating Income | $35 million | $52 million | -32.4% | | Operating Margin | 6.8% | 9.8% | -3.0 p.p. | | Adjusted Operating Margin | 8.1% | 9.8% | -1.7 p.p. | Year-to-Date Cash Flow | Cash Flow Metric (YTD) | FY2024 | FY2023 | | :--- | :--- | :--- | | Cash from Operations | $163 million | $126 million | | Free Operating Cash Flow | $84 million | $60 million | [Segment Performance](index=3&type=section&id=Segment%20Performance) Both Metal Cutting and Infrastructure segments experienced Q3 sales and operating margin declines due to lower volumes and cost pressures [Metal Cutting](index=3&type=section&id=Metal%20Cutting) Metal Cutting sales decreased by 2% to $327 million, with operating income and margin declining due to lower volumes and restructuring - The **2%** sales decrease was driven by a **1%** unfavorable currency exchange effect and a **1%** unfavorable business days effect, with organic sales remaining flat[15](index=15&type=chunk) Metal Cutting Segment Performance | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Sales | $327 million | $334 million | | Operating Income | $31 million | $44 million | | Operating Margin | 9.4% | 13.1% | | Adjusted Operating Income | $35 million | $44 million | | Adjusted Operating Margin | 10.8% | 13.1% | [Infrastructure](index=3&type=section&id=Infrastructure) Infrastructure sales decreased by 7% to $189 million, with operating income and margin declining due to lower volumes and cost timing - The **7%** sales decrease was driven by a **5%** organic sales decline, a **1%** unfavorable currency exchange effect, and a **1%** unfavorable business days effect[16](index=16&type=chunk) Infrastructure Segment Performance | Metric | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Sales | $189 million | $203 million | | Operating Income | $5 million | $10 million | | Operating Margin | 2.7% | 4.8% | | Adjusted Operating Income | $7 million | $10 million | | Adjusted Operating Margin | 3.8% | 4.8% | [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) Kennametal returned $31 million to shareholders in Q3 via dividends and share repurchases, and authorized a new $200 million buyback program - Returned approximately **$31 million** to shareholders in Q3, consisting of **$15 million** in share repurchases and **$16 million** in dividends[7](index=7&type=chunk) - Repurchased **609 thousand shares** for **$15 million** during the quarter, with **$178 million** used under the existing **$200 million** program inception-to-date[12](index=12&type=chunk) - The Board authorized an additional **$200 million**, three-year share repurchase program in February 2024[12](index=12&type=chunk) - A quarterly cash dividend of **$0.20 per share** was declared, payable on May 28, 2024[17](index=17&type=chunk) [Fiscal 2024 Full-Year Outlook](index=2&type=section&id=Fiscal%202024%20Full-Year%20Outlook) Kennametal tightened its FY2024 outlook, projecting sales of $2.030-$2.050 billion and adjusted EPS of $1.40-$1.55, with strong free cash flow - The company expects pricing actions to cover raw material costs, wages, and general inflation[14](index=14&type=chunk) - Primary working capital as a percent of sales is expected to be maintained at approximately **32%** throughout the year[14](index=14&type=chunk) Fiscal 2024 Full-Year Outlook | Outlook Metric | Expected Value | | :--- | :--- | | Sales | $2.030 - $2.050 billion | | Adjusted EPS | $1.40 - $1.55 | | Interest Expense | ~$28 million | | Adjusted ETR | ~21% | | Capital Spending | $100 - $110 million | | Free Operating Cash Flow | > 125% of adjusted net income | [Financial Statements](index=5&type=section&id=Financial%20Statements) Unaudited financial statements detail Q3 FY2024 net income of $19.0 million, with total assets at $2.52 billion and liabilities at $1.21 billion [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q3 FY2024 sales were $515.8 million, resulting in $19.0 million net income and $0.24 diluted EPS, with nine-month sales at $1.50 billion Q3 FY2024 vs Q3 FY2023 (Three Months Ended March 31) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Sales | $515,794 | $536,036 | | Gross Profit | $153,262 | $167,914 | | Operating Income | $35,227 | $52,471 | | Net Income Attributable to Kennametal | $18,976 | $31,937 | | Diluted EPS | $0.24 | $0.39 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets were $2.52 billion, with total liabilities at $1.21 billion and long-term debt at $595.8 million Balance Sheet Highlights (as of March 31, 2024) | (in thousands) | March 31, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Total Current Assets | $999,937 | $1,026,789 | | Total Assets | $2,518,645 | $2,547,234 | | Total Current Liabilities | $413,245 | $433,975 | | Long-term Debt | $595,778 | $595,172 | | Total Liabilities | $1,212,751 | $1,233,066 | | Kennametal Shareholders' Equity | $1,264,559 | $1,275,447 | [Non-GAAP Reconciliations](index=7&type=section&id=Non-GAAP%20Reconciliations) Non-GAAP reconciliations provide adjusted Q3 FY2024 operating income of $41.7 million and EPS of $0.30, defining FOCF and organic sales growth - Management presents non-GAAP measures like adjusted operating income, adjusted EPS, FOCF, and organic sales growth to provide useful information on operational performance, consistent with how management assesses the business[26](index=26&type=chunk) - For Q3 FY2024, GAAP results were adjusted for **$6.5 million** in pre-tax restructuring and related charges[28](index=28&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Q3 reported operating income of $35.2 million was adjusted to $41.7 million, and EPS of $0.24 to $0.30, due to restructuring charges Q3 FY2024 GAAP to Non-GAAP Reconciliation | (in thousands, except per share data) | Reported (GAAP) | Adjustments | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Operating Income | $35,227 | $6,465 | $41,692 | | Operating Margin | 6.8% | | 8.1% | | Net Income | $18,976 | $4,957 | $23,933 | | Diluted EPS | $0.24 | $0.06 | $0.30 | [Free Operating Cash Flow (FOCF)](index=8&type=section&id=Free%20Operating%20Cash%20Flow%20(FOCF)) FOCF, defined as operating cash flow less capital expenditures plus asset disposals, increased to $84.5 million for the nine months ended March 31, 2024 YTD Free Operating Cash Flow (Nine Months Ended March 31) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash flow provided by operating activities | $163,460 | $126,182 | | Purchases of property, plant and equipment | ($84,240) | ($71,083) | | Disposals of property, plant and equipment | $5,270 | $4,774 | | **Free operating cash flow** | **$84,490** | **$59,873** | [Organic Sales Growth (Decline)](index=8&type=section&id=Organic%20Sales%20Growth%20(Decline)) Organic sales, a non-GAAP measure, declined by 2% in Q3, with flat Metal Cutting and a 5% decline in Infrastructure segments Q3 FY2024 Sales Decline Breakdown | Effect | Metal Cutting | Infrastructure | Total | | :--- | :--- | :--- | :--- | | Organic sales decline | 0% | (5)% | (2)% | | Foreign currency exchange effect | (1)% | (1)% | (1)% | | Business days effect | (1)% | (1)% | (1)% | | **Total Sales decline** | **(2)%** | **(7)%** | **(4)%** |