Kennametal(KMT) - 2025 Q2 - Quarterly Report

Financial Performance - Sales for the three months ended December 31, 2024, were $482.1 million, a decrease of 2.6$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$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$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$19,037 thousand, down from $24,328 thousand for the same period in 2023, representing a decrease of about 21.8$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$31,148 thousand, consistent with the previous year's $31,844 thousand, showing a slight decrease of approximately 2.2$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].