Kennametal(US:KMT)2024-11-06 11:52Sales Performance - Sales for the first quarter of fiscal 2025 were $482 million, a decrease of 2% from $492 million in the prior year quarter, reflecting an organic sales decline of 2% and an unfavorable currency exchange effect of 1%[2] - Total sales for the quarter were $481,948 thousand, a decline of 2.7% from $492,476 thousand in the prior year[18] - Metal Cutting segment sales were $297 million, a decrease of 4% from $308 million in the prior year quarter, while Infrastructure segment sales increased by 0.4% to $185 million[6] - Metal Cutting segment sales were $296,900 thousand, down from $308,229 thousand, indicating a decrease of 3.9% year-over-year[24] - Infrastructure segment sales increased slightly to $185,048 thousand from $184,247 thousand, showing a growth of 0.4%[24] - Organic sales growth for Metal Cutting declined by 4%, while Infrastructure saw a growth of 1%, resulting in a total decline of 2%[31] - The foreign currency exchange effect contributed to a 2% decline in Metal Cutting sales and a 1% decline overall[31] - The business days effect positively impacted total sales by 1%[31] Financial Performance - Operating income was $36 million, representing a margin of 7.5%, compared to $45 million and a margin of 9.2% in the prior year quarter[4] - Net income for the three months ended September 30, 2024, was $23,466 thousand, down from $30,369 thousand in the same period of 2023, representing a decrease of 22.5%[16] - Operating income decreased to $36,027 thousand for the quarter, down 20.2% from $45,118 thousand in the same quarter of 2023[18] - The company reported an adjusted operating margin of 7.6% for the quarter, compared to 9.9% in the same quarter of the previous year[22] - The effective tax rate for the quarter was 25.2%, up from 21.0% in the prior year quarter, primarily due to prior year adjustments and geographical mix[4] Earnings and Cash Flow - Earnings per diluted share (EPS) were $0.28, down from $0.37 in the prior year quarter, while adjusted EPS was $0.29 compared to $0.41 in the prior year quarter[1] - Year-to-date net cash flow from operating activities was $46 million, up from $26 million in the prior year period, with free operating cash flow of $21 million compared to negative $3 million in the prior year[4] - Free Operating Cash Flow (FOCF) for the three months ended September 30, 2024, was $21,091 thousand, compared to a negative FOCF of $(3,040) thousand in the prior year[28] - Management considers FOCF an important indicator of cash generating capability for dividends, debt repayment, and strategic initiatives[27] Shareholder Returns - The company returned approximately $31 million to shareholders, including $15 million in share repurchases and $16 million in dividends[1] - The company paid cash dividends of $15,582 thousand to shareholders during the quarter, slightly down from $15,935 thousand in the previous year[16] Future Outlook - The outlook for the second quarter of fiscal 2025 anticipates sales between $480 million and $500 million, with adjusted EPS expected to be between $0.20 and $0.30[5] - Annual sales are expected to be between $2.0 billion and $2.1 billion, with adjusted EPS projected to be between $1.30 and $1.70[5] Restructuring and Cost Management - The company achieved incremental year-over-year restructuring savings of approximately $5 million, contributing to an annualized run rate pretax savings of approximately $35 million[2] - Restructuring and related charges amounted to $2,539 thousand for Metal and $1,155 thousand for Infrastructure[26] Assets and Liabilities - Total assets increased to $2,521,929 thousand as of September 30, 2024, compared to $2,503,758 thousand on June 30, 2024, reflecting a growth of 0.73%[14] - Total current liabilities decreased to $398,386 thousand from $415,961 thousand, a reduction of 4.2%[14] - Cash and cash equivalents at the end of the period were $119,588 thousand, a decrease from $127,971 thousand at the beginning of the period, reflecting a decline of 6.5%[16] Capital Expenditures - Capital expenditures for the period were $24,748 thousand, down from $31,799 thousand in the previous year[28]