Core Insights - The manufacturing industry in China has undergone significant changes, with advancements in speed and quality compared to ten years ago, leading to Chinese customers taking the lead in many niche markets [2] - Kennametal, a global leader in tooling and wear solutions, showcased innovative products at the CIMT2025 exhibition, highlighting the company's commitment to market application, product development, and manufacturing [2] Group 1: Product Innovations - Kennametal's new product line includes various types of cutting tools, emphasizing cost reduction and efficiency to meet evolving market demands [3] - The KENGold coating technology is a standout feature, enhancing tool performance through a multi-layer structure that improves wear resistance and thermal protection [3] - The CVD material KCP25C demonstrates exceptional performance in steel turning applications, effectively preventing wear and increasing production efficiency [3] Group 2: Milling Tools - The HARVI II TE solid carbide end mill features a unique design that significantly improves metal removal rate (MRR) and chip removal capability, extending tool life [4] - The HARVI IV 8-flute high-performance multifunctional end mill is designed for challenging milling applications, with an innovative internal cooling design that enhances MRR and feed rates [4] Group 3: Drilling Tools - The high-performance HPR and HPX solid carbide drill bits are designed for high-speed, high-feed drilling applications, making them ideal for automotive and aerospace sectors [5] - The HPR drill bit features a long diameter ratio of up to 12xD and includes internal cooling, while the HPX drill bit offers excellent self-centering capabilities, reducing thrust and ensuring precise cutting [5] Group 4: Market Positioning - The launch of these new products reflects Kennametal's strong capabilities in technology research and development, aimed at meeting diverse market needs and driving industry growth [6] - Kennametal aims to solidify its leading position in the tooling and wear solutions sector, providing efficient and high-quality products to enhance productivity across various industries [6]

Company Overview - Kennametal Inc. is an industrial technology leader with over 85 years of experience, focusing on materials science, tooling, and wear-resistant solutions [1] - The company serves customers in various sectors including aerospace and defense, earthworks, energy, general engineering, and transportation [1] - Kennametal employs approximately 8,400 individuals across nearly 100 countries [1] Financial Performance - In fiscal year 2024, Kennametal generated revenues of $2 billion [1] Upcoming Events - Kennametal will host its third quarter fiscal year 2025 earnings call on May 7, 2025, at 9:30 am ET [1] - The press release and presentation will be available on the company's website before market on the same day [1] - The conference call will be broadcast via real-time audio on Kennametal's investor relations website [3]

Core Viewpoint - Kennametal Inc. (KMT) has underperformed in operational performance due to business weaknesses and high operational expenses, leading to disappointing investor sentiment [1]. Business Performance - The Metal Cutting segment has experienced a 4% year-over-year revenue decline in the second quarter of fiscal 2025, attributed to decreased demand in the transportation end market [2]. - The Infrastructure segment also faced challenges, with organic revenues declining 4% year-over-year in the same quarter due to reduced industrial activity and lower customer capital investment [3]. Revenue Expectations - KMT anticipates revenues for fiscal 2025 to be between $1.95 billion and $2.0 billion, indicating a year-over-year decrease of approximately 3.5% at the midpoint [4]. Stock Performance - Over the past six months, KMT's stock has declined by 11.5%, compared to a 5.3% decline in the industry [7]. Operating Expenses - The company's operating expenses rose by 1.8% year-over-year in the second quarter of fiscal 2025, with operating expenses as a percentage of total revenues increasing by 100 basis points to 22.7% [7]. - The Metal Cutting segment's operating margin decreased by 10 basis points due to higher wages, inflation, and manufacturing costs [8]. Foreign Exchange Impact - KMT's global operations expose it to foreign exchange risks, which negatively impacted the Metal Cutting segment's revenues by 1% in the first half of fiscal 2025 [8]. Earnings Estimates - The Zacks Consensus Estimate for KMT's fiscal 2025 earnings has decreased from $1.44 per share to $1.17, with four downward revisions and no upward revisions [9]. - The consensus estimate for fiscal 2026 earnings has also declined from $1.60 per share to $1.37, reflecting similar downward revisions [9].

Company Overview - Kennametal Inc. is an industrial technology leader with over 85 years of experience, providing productivity solutions through materials science, tooling, and wear-resistant solutions [5] - The company serves customers in various sectors including aerospace, defense, earthworks, energy, general engineering, and transportation, employing approximately 8,400 people in nearly 100 countries [5] - Kennametal generated $2 billion in revenues in fiscal 2024 [5] Recognition and Awards - Mandy Lv, Senior Analyst Logistics at Kennametal, has been recognized as a 2025 Women MAKE Award Honoree by The Manufacturing Institute, joining 130 other women honorees from various companies [2][3] - This award highlights women in science, technology, engineering, and production careers who demonstrate leadership within their organizations [2] Contributions and Initiatives - Mandy Lv's expertise in customs compliance and international logistics, along with her leadership in Lean initiatives, has led to significant productivity improvements within Kennametal [3] - She established a Six Sigma Green Belt program at her local facility, certifying several employees in value stream mapping, setup reduction, and total productive maintenance [3] - Lv is also an advocate for mental health awareness, volunteering her counseling services since 2020 and leading her site's employee club to enhance employee engagement [4] Industry Context - The Manufacturing Institute focuses on building a resilient manufacturing workforce, addressing workforce challenges, and promoting community prosperity [6] - As a nonprofit affiliate of the National Association of Manufacturers, the Institute provides solutions to manufacturers to enhance competitiveness in the industry [6]

Company Overview - Kennametal Inc. is an industrial technology leader with over 85 years of experience, focusing on materials science, tooling, and wear-resistant solutions [1] - The company serves various sectors including aerospace and defense, earthworks, energy, general engineering, and transportation, helping customers manufacture with precision and efficiency [1] - Kennametal employs approximately 8,400 individuals across nearly 100 countries [1] Financial Performance - In fiscal 2024, Kennametal generated revenues of $2 billion [1] Upcoming Events - Kennametal will attend the J.P. Morgan Industrials Conference in New York City on March 12, 2025 [1] - Key attendees from Kennametal include Sanjay Chowbey (President and CEO), Patrick Watson (Vice President and CFO), and Michael Pici (Vice President, Investor Relations) [1]

Company Overview - Kennametal Inc. is an industrial technology leader with over 85 years of experience [1] - The company focuses on delivering productivity through materials science, tooling, and wear-resistant solutions [1] - Kennametal serves customers in various sectors including aerospace and defense, earthworks, energy, general engineering, and transportation [1] - Approximately 8,400 employees work in nearly 100 countries to help customers maintain competitiveness [1] Financial Performance - Kennametal generated $2 billion in revenues in fiscal 2024 [1] Upcoming Events - Kennametal will attend the Loop Capital Conference in New York City on March 11, 2025 [1] - Key attendees from the company include Patrick Watson, Vice President and Chief Financial Officer, and Michael Pici, Vice President of Investor Relations [1]

Core Viewpoint - The analyst gives a hold rating for Kennametal (NYSE: KMT) due to the lack of near-term recovery catalysts and anticipated continued weakness in its core Metal Cutting segment [1]. Industry Summary - There is ongoing weakness in industrial demand, which is impacting Kennametal's performance [1]. - Rising input costs are contributing to the challenges faced by the company [1]. - The performance in the Metal Cutting segment is weaker than expected, indicating potential difficulties ahead [1].

Financial Performance - Sales for the three months ended December 31, 2024, were $482.1 million, a decrease of 2.6% compared to $495.3 million in the same period of 2023[14]. - Gross profit for the six months ended December 31, 2024, was $296.0 million, down 2.0% from $302.5 million in the same period of 2023[14]. - Net income attributable to Kennametal for the three months ended December 31, 2024, was $17.9 million, a decrease of 22.3% from $23.1 million in the same period of 2023[14]. - Basic earnings per share for the six months ended December 31, 2024, were $0.51, down from $0.67 in the same period of 2023[14]. - The company reported a total comprehensive loss income attributable to Kennametal shareholders of $(31.6) million for the three months ended December 31, 2024[15]. - The total comprehensive loss for the three months ended December 31, 2024, was $51.3 million, compared to a comprehensive income of $30.9 million in the same period of 2023[65]. - The company reported a net income of $42,503 thousand for the six months ended December 31, 2024, compared to $54,697 thousand for the same period in 2023, a decrease of about 22.2%[61]. - Net income for the three months ended December 31, 2024, was $19,037 thousand, down from $24,328 thousand for the same period in 2023, representing a decrease of about 21.8%[60]. Assets and Liabilities - Total current assets as of December 31, 2024, were $968.8 million, a decrease from $1,002.6 million as of June 30, 2024[16]. - Total liabilities as of December 31, 2024, were $1,175.7 million, down from $1,215.2 million as of June 30, 2024[16]. - As of December 31, 2024, total assets at fair value were $1,476,000, with $1,476,000 classified under Level 2, and total liabilities at fair value were $27,000, all classified under Level 2[24]. - Total equity as of December 31, 2024, decreased to $1,260,101 thousand from $1,328,104 thousand as of December 31, 2023, reflecting a decline of approximately 5.1%[61]. - Total Kennametal shareholders' equity was $1,220.0 million at December 31, 2024, a decrease of $29.9 million from $1,249.9 million at June 30, 2024[130]. Cash Flow - Net cash flow provided by operating activities for the six months ended December 31, 2024, was $100.9 million, compared to $88.3 million in the same period of 2023[17]. - Cash flow provided by operating activities included net income and non-cash items amounting to an inflow of $118.7 million for the six months ended December 31, 2024[121]. - Cash flow used in investing activities was $36.6 million for the six months ended December 31, 2024, compared to $56.4 million for the prior year period[123]. - Cash flow used in financing activities was $68.0 million for the six months ended December 31, 2024, compared to $46.5 million in the prior year period[125]. Segment Performance - Metal Cutting segment sales decreased to $297.8 million in Q2 2024 from $311.4 million in Q2 2023, representing a decline of 4.3%[69]. - Infrastructure segment sales increased slightly to $184.3 million in Q2 2024 from $183.9 million in Q2 2023, showing a growth of 0.2%[69]. - Operating income for the Metal Cutting segment decreased to $16.6 million in Q2 2024 from $25.5 million in Q2 2023, a decline of 34.9%[69]. - Operating income for the Infrastructure segment increased to $15.6 million in Q2 2024 from $3.2 million in Q2 2023, a significant increase of 383.5%[69]. - Aerospace & Defense end market sales in the Metal Cutting segment increased by 7% for the three months ended December 31, 2024, while Transportation end market sales decreased by 9%[98]. Restructuring and Charges - Total restructuring and related charges recorded through December 31, 2024, amounted to $22.0 million, with $16.6 million in Metal Cutting and $5.5 million in Infrastructure[33]. - The company expects to incur pre-tax charges of approximately $25 million related to restructuring actions, including $10 million for cash-related facilities charges and $10 million for severance-related cash expenditures[37]. - For the three months ended December 31, 2024, the company recorded restructuring charges of $1.4 million, consisting of $1.2 million in Metal Cutting and $0.2 million in Infrastructure[38]. Shareholder Returns - Cash dividends paid were $15,566 thousand for the three months ended December 31, 2024, compared to $15,909 thousand for the same period in 2023, indicating a reduction of approximately 2.2%[60]. - Cash dividends for the six months ended December 31, 2024, were $31,148 thousand, consistent with the previous year's $31,844 thousand, showing a slight decrease of approximately 2.2%[61]. - The company repurchased $15 million of common stock during the three months ended December 31, 2024, and $30 million during the six months ended December 31, 2024, under a $200 million share repurchase program[119]. Legal and Compliance - The company is facing a lawsuit seeking more than $330 million in damages, which may impact future financial performance[67]. - The company is currently involved in legal proceedings that may arise in the ordinary course of business, but believes the ultimate liability will not materially affect its financial position[144]. - There were no changes in the company's internal control over financial reporting that materially affected its financial reporting during the most recent fiscal quarter[140]. Market Conditions - The company has not experienced any material changes to market risk exposures since June 30, 2024[138]. - The foreign currency exchange effect contributed to a 1% decline in constant currency regional sales for Asia Pacific during the three months ended December 31, 2024[137].

Core Viewpoint - Kennametal Inc. reported a decline in earnings and revenues for the second quarter of fiscal 2025, with adjusted earnings per share matching estimates but showing a significant year-over-year decrease Revenue Details - Revenues for Kennametal were $482.1 million, a decrease of 2.7% from the previous year, and missed the Zacks Consensus Estimate of $484 million [2] - Organic sales declined by 6% year over year, although business days positively impacted revenues by 3% [2] - American operations saw a revenue decrease of 1.5% to $235.3 million, while Europe, the Middle East, and Africa revenues fell by 4.9% to $145.5 million; Asia Pacific revenues decreased by 2.1% to $101.3 million [3] - The Metal Cutting segment reported revenues of $298 million, down 4% year over year, with organic revenues declining by 7% [3] - The Infrastructure segment's revenues were flat at $184 million, with organic revenues decreasing by 4% [4] Margin Profile - Cost of goods sold decreased by 5.3% year over year to $337 million, while gross profit increased by 3.9% to $145 million, resulting in a gross margin increase of 190 basis points to 30.1% [5] - Operating income rose by 11.2% year over year to $31.7 million, with an operating margin increase of 90 basis points to 6.6% [5] - Interest expenses were reported at $6.2 million, down 9.7% from the previous year [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the fiscal second quarter were $121.2 million, down from $128 million in the previous quarter [7] - Long-term debt was reported at $596.4 million, slightly up from $596 million year over year [7] - Net cash generated from operating activities in the first six months of fiscal 2025 was $101 million, compared to $88 million in the same period last year [8] - Free operating cash flow increased to $57.3 million from $36 million in the previous fiscal year [8] Dividend Update - The board of directors approved a quarterly cash dividend of 20 cents per share, payable on February 25, 2025, to shareholders of record as of February 11, 2025 [11] Guidance - Kennametal updated its fiscal 2025 outlook, now expecting sales between $1.95 billion and $2.0 billion, down from the previous estimate of $2.0 billion to $2.1 billion [12] - Adjusted earnings per share are anticipated to be in the range of $1.05 to $1.30, revised from $1.30 to $1.70 [12] - Free operating cash flow is expected to exceed 125% of net income (adjusted), with capital spending projected at approximately $100 million [12]

FY25 Second Quarter Earnings Call Presentation February 5, 2025 Q2 FY25 EARNINGS Safe Harbor Statement Certain statements in this release may be forward-looking in nature, or "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. For example, statements about Kennametal's outlook for sales, adjusted operating incom ...