KENNAMETAL INC
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
KMT$23.00-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0000055242-24-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000055242-24-000067
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 75 current paragraphs.
34 unchanged; 37 reworded; 4 added; 14 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
The recent labor union strike at a large, U.S. aerospace OEM has the potential to negatively affect our business as well as our customers in the Aerospace & Defense end market. To date, the strike has not significantly affected the Company's business activities or results of operations.
Current report
GROSS PROFIT Gross profit for the three months ended September 30, 2024 was $151.0 million, a decrease of $11.9 million from $162.9 million in the prior year quarter. The decrease was primarily due to lower sales and production volumes within the Metal Cutting segment, higher wages and general inflation, and certain manufacturing costs within the Infrastructure segment, including temporary plant shutdowns for maintenance and process improvements. These factors were partially offset by lower raw material costs, a net benefit of $4 million consisting of insurance recoveries of $5 million received during the quarter, offset by charges of $1 million related to the tornado that struck the Rogers, Arkansas facility late in fiscal 2024, and higher sales volumes within the Infrastructure segment.
Current report
On a regional basis, sales in the Americas decreased primarily due to Transportation and General Engineering. Sales decreased in EMEA as a result of General Engineering and Transportation. Sales in Asia Pacific increased primarily due to Transportation.
Current report
On a regional basis, sales in the Americas were negatively affected by lower mining activity, including a customer mine closure, project order timing and temporary plant shutdowns. Sales in EMEA increased in General Engineering and Aerospace & Defense from order timing and execution of our strategic initiatives. Sales in Asia Pacific increased due to higher demand in General Engineering, partially offset by underground mining.
Removed paragraphs (14)
Previous report
SALES
Previous report
Sales for the nine months ended March 31, 2024 were $1,503.6 million, a decrease of $24.4 million, or 2 percent, from $1,527.9 million in the prior year period. The decrease in sales was driven by an organic sales decline of 2 percent.
Previous report
Gross profit for the nine months ended March 31, 2024 was $455.8 million, a decrease of $15.0 million from $470.8 million in the prior year period. The decrease was primarily due to lower sales and production volumes, higher wages and general inflation and the unfavorable timing of pricing compared to raw material costs in the Infrastructure segment. These factors were partially offset by higher pricing in the Metal Cutting segment and restructuring savings. Gross profit margin for the nine months ended March 31, 2024 was 30.3 percent, as compared to 30.8 percent in the prior year period.
Previous report
PROVISION FOR INCOME TAXES The effective income tax rates for the three months ended March 31, 2024 and 2023 were 27.4 percent and 24.4 percent, respectively. The year-over-year change is primarily due to geographical mix, partially offset by discrete tax benefits recorded in the current year quarter related to provision to return adjustments.
Previous report
As of March 31, 2024, we have $6.8 million of net deferred tax assets in China. Included in this amount is $3.3 million related to net operating losses that can be used to offset future taxable income in China. Certain of these loss carryforwards will expire if they are not used within a specified timeframe. At this time, we consider it more likely than not that we will have sufficient taxable income in China in the future that will allow us to realize these deferred tax assets not currently offset by the valuation allowance. However, it is possible that some or all these tax attributes could ultimately expire unused. Therefore, if we are unable to generate sufficient taxable income in China from our operations, a valuation allowance to reduce the net deferred tax assets may be required, which would increase income tax expense in the period in which the valuation allowance is recorded.
Previous report
On a regional basis, sales in the Americas decreased primarily due to challenges in Transportation and Energy and unfavorable foreign currency. Sales were flat in EMEA where execution on our strategic initiatives was offset by lower economic activity. Sales in Asia Pacific decreased due to lower economic activity in China and unfavorable foreign currency.
Previous report
For the nine months ended March 31, 2024, Metal Cutting sales increased 1 percent compared to the prior year period. This was driven by organic sales growth of 1 percent. Aerospace & Defense end market sales increased in the Americas and EMEA as a result of our focused execution on our strategic initiatives, the effects of which were partially offset by a decline in Asia Pacific due to lower economic activity in China. Sales in the General Engineering end market were flat compared to the prior year period as increases in the Americas were offset by a decrease in Asia Pacific and EMEA due to lower economic activity. Energy end market sales decreased in Asia Pacific and the Americas, the effects of which were partially offset by an increase of sales in EMEA. Transportation end market sales increased in EMEA due to improving hybrid/electric vehicle business, partially offset by declines in the Americas and Asia Pacific as a result of slowing customer demand.
Previous report
On a regional basis, sales in the Americas increased primarily due to General Engineering and Aerospace & Defense. Growth in EMEA reflects execution on our strategic initiatives and favorable foreign currency. Sales in Asia Pacific decreased due to lower economic activity in China and unfavorable foreign currency.
Previous report
For the nine months ended March 31, 2024, Metal Cutting operating income was $88.5 million compared to $98.6 million in the prior year period. The decrease in operating income was primarily due to lower sales and production volumes, higher wages and general inflation, and restructuring charges of $7.7 million. These factors were partially offset by higher pricing and restructuring savings of approximately $11 million.
Previous report
On a regional basis, sales in the Americas were negatively affected by declines in the U.S. oil and gas markets and industrial activity year over year and order timing. Sales in EMEA increased as a result of the General Engineering end market. Sales in Asia Pacific decreased due to a decline in underground mining activity.
Previous report
For the nine months ended March 31, 2024, Infrastructure sales decreased by 6 percent from the prior year period. The decrease in sales was driven by an organic sales decline of 5 percent and an unfavorable business days effect of 1 percent. Sales growth in the Aerospace & Defense end market reflects an increase in defense related activity in EMEA and an increase in the Americas. General Engineering end market sales decreased in the Americas, partially offset by an increase in sales in Asia Pacific and EMEA. Energy end market sales decreased in the Americas primarily due to U.S. oil and gas activities as land rig counts decreased year over year, partially offset by focused execution on our strategic initiatives in EMEA. Earthworks end market sales decreased primarily due to construction in the Americas and underground mining in Asia Pacific.
Previous report
On a regional basis, sales in EMEA increased due to defense related activity in EMEA. Sales in Asia Pacific decreased primarily due to underground mining. Sales in the Americas declined primarily due to the General Engineering and Energy end markets, and to a lesser extent, from the Earthworks end market.
Previous report
For the nine months ended March 31, 2024, Infrastructure operating income was $22.0 million compared to $40.5 million in the prior year period. The decrease in operating income was primarily due to lower sales and production volumes, the unfavorable timing of pricing compared to raw material costs, higher wages and general inflation and restructuring charges of approximately $3 million. These factors were partially offset by restructuring savings of approximately $3 million.
Previous report
On February 2, 2024, the Board of Directors of the Company authorized an additional $200 million, three-year share repurchase program. The Company expects to fund repurchases through cash generated from operations.
Reworded paragraphs (37)
Previous wording
Kennametal Inc. was founded based on a tungsten carbide technology breakthrough in 1938. The Company was incorporated in Pennsylvania in 1943 as a manufacturer of tungsten carbide metal cutting tooling and was listed on the New York Stock Exchange (NYSE) in 1967. With more than 80 years of materials expertise, the Company is a global industrial technology leader, helping customers across the Aerospace & Defense, Earthworks, Energy, General Engineering and Transportation industries manufacture with precision and efficiency. This expertise includes the development and application of tungsten carbides, ceramics, super-hard materials and solutions used in metal cutting and extreme wear applications to keep customers up and running longer against conditions such as corrosion and high temperatures.
Current wording
Kennametal Inc. was founded based on a tungsten carbide technology breakthrough in 1938. The Company was incorporated in Pennsylvania in 1943 as a manufacturer of tungsten carbide metal cutting tooling and was listed on the New York Stock Exchange (NYSE) in 1967. With more than 85 years of materials expertise, the Company is a global industrial technology leader, helping customers across the Aerospace & Defense, Earthworks, Energy, General Engineering and Transportation industries manufacture with precision and efficiency. This expertise includes the development and application of tungsten carbides, ceramics, super-hard materials and solutions used in metal cutting and extreme wear applications to keep customers up and running longer against conditions such as corrosion and high temperatures.
Previous wording
Our sales of $515.8 million for the three months ended March 31, 2024 decreased 4 percent from $536.0 in the prior year quarter, reflecting an organic sales decline of 2 percent, an unfavorable business days effect of 1 percent and an unfavorable currency exchange effect of 1 percent.
Current wording
Our sales of $481.9 million for the three months ended September 30, 2024 decreased 2 percent from $492.5 million in the prior year quarter, reflecting an organic sales decline of 2 percent and an unfavorable currency exchange effect of 1 percent, partially offset by a favorable business days effect of 1 percent.
Previous wording
Operating income for the three months ended March 31, 2024 was $35.2 million compared to $52.5 million in the prior year quarter. The year-over-year decrease of $17.2 million was primarily due to lower sales and production volumes, restructuring charges of approximately $6 million, higher wages and general inflation, unfavorable foreign currency exchange of approximately $2 million and the unfavorable timing of pricing compared to raw material costs in the Infrastructure segment. These factors were partially offset by higher pricing in the Metal Cutting segment and restructuring savings of approximately $6 million.
Current wording
Operating income for the three months ended September 30, 2024 was $36.0 million compared to $45.1 million in the prior year quarter. The year-over-year decrease of $9.1 million was primarily due to lower sales and production volumes within the Metal Cutting segment, higher wages and general inflation, and certain manufacturing costs within the Infrastructure segment, including temporary plant shutdowns for maintenance and process improvements. These factors were partially offset by lower raw material costs, incremental year-over-year restructuring savings of approximately $5 million, a net benefit of $4 million consisting of insurance recoveries of $5 million received during the quarter, offset by charges of $1 million related to the tornado that struck the Rogers, Arkansas facility late in fiscal 2024, lower restructuring charges of approximately $3 million compared to the prior year quarter and higher sales volumes within the Infrastructure segment.
Previous wording
Operating margin for the three months ended March 31, 2024 was 6.8 percent compared to 9.8 percent in the prior year quarter. The Metal Cutting and Infrastructure segments had operating margins of 9.4 percent and 2.7 percent, respectively, for the three months ended March 31, 2024.
Current wording
Operating margin for the three months ended September 30, 2024 was 7.5 percent compared to 9.2 percent in the prior year quarter. The Metal Cutting and Infrastructure segments had operating margins of 8.0 percent and 6.9 percent, respectively, for the three months ended September 30, 2024.
Previous wording
Russia's invasion of Ukraine in February 2022 resulted in the imposition of economic sanctions on Russia by the United States, Canada, the European Union and other countries. We have experienced increased costs for energy and raw materials and other supply chain issues due, in part, to the negative impact of the conflict on the global economy. During the March quarter of 2022, the Company ceased operations in Russia and subsequently decided to liquidate its legal entity in Russia, which is currently expected to be completed during fiscal 2025. Similarly, the conflict in Gaza that began in October 2023 could negatively impact the Company's financial condition or results of operations. To date, the conflict in Gaza has not significantly affected the Company's business activities or results of operations.
Current wording
Russia's invasion of Ukraine in February 2022 resulted in the imposition of economic sanctions on Russia by the United States, Canada, the European Union and other countries. We have experienced increased costs for energy and raw materials and other supply chain issues due, in part, to the negative impact of the conflict on the global economy. During the March quarter of 2022, the Company ceased operations in Russia and subsequently decided to liquidate its legal entity in Russia, which is currently expected to be completed during fiscal 2025. Similarly, the conflict in the Middle East that began in October 2023 could negatively impact the Company's financial condition or results of operations. To date, the conflict in the Middle East has not significantly affected the Company's business activities or results of operations.
Previous wording
For the three months ended March 31, 2024, earnings per diluted share (EPS) was $0.24 compared to EPS of $0.39 in the prior year quarter. EPS for the three months ended March 31, 2024 was unfavorably affected by restructuring and related charges of $0.06 per share.
Current wording
For the three months ended September 30, 2024, earnings per diluted share (EPS) was $0.28 compared to EPS of $0.37 in the prior year quarter. EPS for the three months ended September 30, 2024 was unfavorably affected by restructuring and related charges of $0.01 per share.
Previous wording
Net cash flow provided by operating activities was $163.5 million during the nine months ended March 31, 2024 compared to $126.2 million during the prior year period. Capital expenditures were $84.2 million and $71.1 million during the nine months ended March 31, 2024 and 2023, respectively. During the nine months ended March 31, 2024, the Company returned $91.5 million to shareholders through $43.8 million in share repurchases and $47.7 million in dividends. The Company has a long history of consistently paying dividends to shareholders since its listing on the New York Stock Exchange in 1967.
Current wording
Net cash flow provided by operating activities was $45.7 million during the three months ended September 30, 2024 compared to $25.7 million during the prior year period. Capital expenditures were $24.7 million and $31.8 million during the three months ended September 30, 2024 and 2023, respectively. During the three months ended September 30, 2024, the Company returned $31 million to shareholders through $15 million in share repurchases and $16 million in dividends. The Company has a long history of consistently paying dividends to shareholders since its listing on the New York Stock Exchange in 1967.
Previous wording
Sales for the three months ended March 31, 2024 were $515.8 million, a decrease of $20.2 million, or 4 percent, from $536.0 million in the prior year quarter, reflecting an organic sales decline of 2 percent, an unfavorable business days effect of 1 percent and an unfavorable currency exchange effect of 1 percent.
Current wording
SALES Sales for the three months ended September 30, 2024 were $481.9 million, a decrease of $10.5 million, or 2 percent, from $492.5 million in the prior year quarter, reflecting an organic sales decline of 2 percent and an unfavorable currency exchange effect of 1 percent, partially offset by a favorable business days effect of 1 percent.
Previous wording
GROSS PROFIT Gross profit for the three months ended March 31, 2024 was $153.3 million, a decrease of $14.7 million from $167.9 million in the prior year quarter. The decrease was primarily due to lower sales and production volumes, higher wages and general inflation and the unfavorable timing of pricing compared to raw material costs in the Infrastructure segment. These factors were partially offset by higher pricing in the Metal Cutting segment and restructuring savings. Gross profit margin for the three months ended March 31, 2024 was 29.7 percent, as compared to 31.3 percent in the prior year quarter.
Current wording
Gross profit margin for the three months ended September 30, 2024 was 31.3 percent, as compared to 33.1 percent in the prior year quarter.
Previous wording
OPERATING EXPENSE Operating expense for the three months ended March 31, 2024 was $108.7 million compared to $113.3 million for the three months ended March 31, 2023. Operating expense for the nine months ended March 31, 2024 was $327.7 million compared to $327.3 million for the nine months ended March 31, 2023.
Current wording
OPERATING EXPENSE Operating expense for the three months ended September 30, 2024 was $111.7 million compared to $111.6 million for the three months ended September 30, 2023.
Previous wording
Research and development expenses included in operating expense totaled $11.3 million and $11.3 million for the three months ended March 31, 2024 and 2023, respectively, and $33.3 million and $32.6 million for the nine months ended March 31, 2024 and 2023, respectively.
Current wording
Research and development expenses included in operating expense totaled $11.1 million and $11.0 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
RESTRUCTURING AND OTHER CHARGES, NET In the June quarter of fiscal 2023, we announced an initiative to streamline our cost structure while continuing to invest in our high-return commercial and operational excellence initiatives. During the three months ended March 31, 2024, we achieved restructuring savings of approximately $6 million from this action. This action is currently expected to deliver annualized run rate pre-tax savings of approximately $35 million by the end of fiscal 2024. Total restructuring and related charges for this program of $18.6 million, compared to a target of approximately $25 million, were recorded through March 31, 2024, consisting of $13.7 million in Metal Cutting and $4.9 million in Infrastructure. The majority of the remaining charges are expected to be recognized in fiscal 2024. We recorded restructuring and related charges of $6.5 million for the three months ended March 31, 2024, which consisted of $4.5 million in Metal Cutting and $2.0 million in Infrastructure.
Current wording
RESTRUCTURING AND OTHER CHARGES, NET In the June quarter of fiscal 2023, we announced an initiative to streamline our cost structure. Total restructuring and related charges for this program of $20.7 million, compared to a target of approximately $25 million, were recorded through September 30, 2024, consisting of $15.4 million in Metal Cutting and $5.3 million in Infrastructure. The majority of the remaining charges are expected to be recognized in fiscal 2025. This action has delivered annualized run rate pre-tax savings of approximately $35 million.
Previous wording
We recorded restructuring and related charges of $11.2 million for the nine months ended March 31, 2024, which consisted of $7.7 million in Metal Cutting and $3.5 million in Infrastructure. Also included in other charges, net during the nine months ended March 31, 2024 is a net benefit of $0.6 million primarily due to the sale of property.
Current wording
We recorded restructuring and related charges of $0.6 million for the three months ended September 30, 2024, which consisted of $0.6 million in Metal Cutting and an immaterial amount in Infrastructure.
Previous wording
INTEREST EXPENSE Interest expense for the three months ended March 31, 2024 decreased to $6.8 million compared to $7.7 million for the three months ended March 31, 2023. Interest expense for the nine months ended March 31, 2024 decreased to $20.2 million compared to $21.4 million for the nine months ended March 31, 2023.
Current wording
INTEREST EXPENSE Interest expense for the three months ended September 30, 2024 decreased to $6.3 million compared to $6.6 million for the three months ended September 30, 2023.
Previous wording
OTHER (INCOME) EXPENSE, NET Other income, net for the three months ended March 31, 2024 was $0.1 million compared to other expense, net of $1.0 million during the three months ended March 31, 2023. Other income, net for the nine months ended March 31, 2024 was $0.7 million compared to other expense, net of $2.6 million during the nine months ended March 31, 2023.
Current wording
OTHER (INCOME) EXPENSE, NET Other income, net for the three months ended September 30, 2024 was $1.7 million compared to other expense, net of $0.1 million during the three months ended September 30, 2023. The increase in other income was primarily due to favorable foreign currency exchange and higher interest income, partially offset by net periodic pension expense, including a settlement charge of $0.8 million due to the wind-up of the Canadian defined benefit pension plans during the three months ended September 30, 2024.
Previous wording
The effective income tax rates for the nine months ended March 31, 2024 and 2023 were 15.5 percent and 23.9 percent, respectively. The year-over-year change is primarily due to adjustments for the nine months ended March 31, 2024 that include a $7.8 million benefit related to a tax rate change enacted in Switzerland, a $6.2 million benefit associated with a change in unrecognized tax benefits and a $2.9 million charge to settle tax litigation in Italy, coupled with a $2.2 million benefit in the nine months ended March 31, 2023 to adjust a deferred tax asset associated with tax reform in Switzerland and geographical mix.
Current wording
PROVISION FOR INCOME TAXESThe effective income tax rates for the three months ended September 30, 2024 and 2023 were 25.2 percent and 21.0 percent, respectively. The year-over-year change is primarily due to prior year adjustments including a $6.2 million benefit associated with a change in unrecognized tax benefits which was partially offset by a $3.1 million charge to settle tax litigation in Italy. The three months ended September 30, 2024 also includes a benefit of $1.4 million for interest received to resolve an income tax dispute in India and geographical mix.
Previous wording
For the three months ended March 31, 2024, Metal Cutting sales decreased 2 percent compared to the prior year quarter. This was driven by flat organic sales growth, an unfavorable foreign currency effect of 1 percent and an unfavorable business days effect of 1 percent. Aerospace & Defense end market sales increased in the Americas and EMEA as a result of focused execution on our strategic initiatives, the effects of which were partially offset by a decline in Asia Pacific due to lower economic activity in China. Sales in the General Engineering end market declined in EMEA due to lower economic activity, partially offset by sales increases in the Americas and Asia Pacific as manufacturing activity continues to recover as underlying economic activity expands. Energy end market sales declined in the Americas and Asia Pacific due to slower oil and gas markets and delays in wind energy projects, respectively, and were flat in EMEA compared to the prior year quarter. Transportation end market sales were flat compared to the prior year quarter with increases in EMEA and Asia Pacific stemming from improving hybrid/electric vehicle business, offset by a decline in the Americas as a result of slowing customer demand.
Current wording
For the three months ended September 30, 2024, Metal Cutting sales decreased 4 percent compared to the prior year quarter. This was driven by an organic sales decline of 4 percent and an unfavorable currency exchange effect of 2 percent, partially offset by a favorable business days effect of 2 percent. Aerospace & Defense end market sales increased in EMEA and the Americas as a result of our focused execution on our growth initiatives, the effects of which were partially offset by a decline in Asia Pacific due to lower economic activity in China and certain production challenges at our OEM customers. Energy end market sales were flat, excluding the unfavorable foreign currency effect, due to a decline in wind energy in Asia Pacific, offset by strength in EMEA. Transportation end market sales decreased in EMEA and the Americas as a result of lower volumes and project activity, partially offset by an increase in Asia Pacific due to the execution on our growth initiatives. Sales in the General Engineering end market declined in EMEA and the Americas due to lower economic activity and project timing, partially offset by a sales increase in Asia Pacific.
Previous wording
For the three months ended March 31, 2024, Metal Cutting operating income was $30.8 million compared to $43.8 million in the prior year quarter. The decrease in operating income was primarily due to lower sales and production volumes, restructuring charges of approximately $4 million, unfavorable foreign currency exchange of approximately $2 million, higher wages and general inflation and a gain of approximately $1 million on a property sale in the prior year quarter that did not repeat. These factors were partially offset by higher pricing and restructuring savings of approximately $5 million.
Current wording
For the three months ended September 30, 2024, Metal Cutting operating income was $23.8 million compared to $32.1 million in the prior year quarter. The decrease in operating income was primarily due tolower sales and production volumes, higher wages and general inflation, and unfavorable foreign currency exchange of approximately $2 million. These factors were partially offset by lower raw material costs, incremental year-over-year restructuring savings of approximately $4 million, lower restructuring charges of approximately $2 million compared to the prior year quarter and pricing.
Previous wording
For the three months ended March 31, 2024, Infrastructure sales decreased by 7 percent from the prior year quarter. The decrease in sales was driven by an organic sales decline of 5 percent, an unfavorable foreign currency exchange effect of 1 percent and an unfavorable business days effect of 1 percent. Sales in the General Engineering end market decreased in the Americas due to declines in industrial activity year over year and ore inventory sales in the prior year that did not repeat, partially offset by ceramics growth in EMEA and Asia Pacific. Earthworks end market sales decreased primarily due to underground mining in Asia Pacific, and to a lesser extent, lower sales of snowplow blades in the Americas due to a milder winter. Energy end market sales decreased primarily due to U.S. oil and gas activities as land rig counts decreased year over year. Aerospace & Defense end market sales increased due to the execution of our growth initiatives.
Current wording
For the three months ended September 30, 2024, Infrastructure sales increased 0.4 percent from the prior year quarter reflecting organic sales growth of 1 percent, partially offset by an unfavorable business days effect of 1 percent. Aerospace & Defense sales increased due to project timing and the execution of our growth initiatives. Energy end market sales increased primarily due to project timing, partially offset by lower U.S. oil and gas activities as land rig counts decreased year-over-year. Sales in the General Engineering end market increased in EMEA and Asia Pacific due to higher demand compared to a soft prior year quarter, offset by a decrease in the Americas stemming from temporary plant shutdowns. Earthworks end market sales decreased due to lower mining activity, including a customer mine closure in the Americas and lower mining activity in Asia, and project order timing.
Previous wording
For the three months ended March 31, 2024, Infrastructure operating income was $5.1 million compared to $9.7 million in the prior year quarter. The decrease in operating income was primarily due to lower sales volumes, restructuring charges of approximately $2 million, higher wages and general inflation and the unfavorable timing of pricing compared to raw material costs. These factors were partially offset by restructuring savings of approximately $1 million.
Current wording
For the three months ended September 30, 2024, Infrastructure operating income was $12.7 million compared to $13.6 million in the prior year quarter. The decrease in operating income was primarily due to certain manufacturing costs, including temporary plant shutdowns for maintenance and process improvements, and higher wages and general inflation. These factors were partially offset by a net benefit of $4 million consisting of insurance recoveries of $5 million received during the quarter, offset by charges of $1 million related to the tornado that struck the Rogers, Arkansas facility late in fiscal 2024, the favorable timing of pricing compared to raw material costs, incremental year-over-year restructuring savings of approximately $1 million, lower restructuring charges of approximately $1 million compared to the prior year quarter and higher sales volumes.
Previous wording
For the three months ended March 31, 2024, Corporate expense decreased by $0.2 million from the prior year quarter. For the nine months ended March 31, 2024, Corporate expense decreased by $1.0 million from the prior year period.
Current wording
For the three months ended September 30, 2024, Corporate expense decreased by $0.1 million from the prior year quarter.
Previous wording
Cash flow from operations is the primary source of funding for our capital expenditures. For the nine months ended March 31, 2024, cash flow provided by operating activities was $163.5 million.
Current wording
Cash flow from operations is the primary source of funding for our capital expenditures. For the three months ended September 30, 2024, cash flow provided by operating activities was $45.7 million.
Previous wording
During fiscal 2022, we entered into the Sixth Amended and Restated Credit Agreement dated as of June 14, 2022 (the Credit Agreement). The Credit Agreement is a five-year, multi-currency, revolving credit facility, which we use to augment cash from operations and as an additional source of funds. The Credit Agreement provides for revolving credit loans of up to $700.0 million for working capital, capital expenditures and general corporate purposes. The Credit Agreement allows for borrowings in U.S. dollars, euros, Canadian dollars, pounds sterling and Japanese yen. Interest payable under the Credit Agreement is based upon the type of borrowing under the facility and may be (1) Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Tokyo Interbank Offered Rate (TIBOR), Secured Overnight Financing Rate (SOFR), and Canadian Dollar Offered Rate (CDOR) for any borrowings in euros, pounds sterling, yen, U.S. dollars and Canadian dollars, respectively, plus an applicable margin, (2) the greater of the prime rate or the Federal Funds effective rate plus an applicable margin, or (3) fixed as negotiated by us. The Credit Agreement matures in June 2027.
Current wording
During fiscal 2022, we entered into the Sixth Amended and Restated Credit Agreement dated as of June 14, 2022 (the Credit Agreement). The Credit Agreement is a five-year, multi-currency, revolving credit facility, which we use to augment cash from operations and as an additional source of funds. The Credit Agreement provides for revolving credit loans of up to $700.0 million for working capital, capital expenditures and general corporate purposes. The Credit Agreement allows for borrowings in U.S. dollars, euros, pounds sterling and Japanese yen. Interest payable under the Credit Agreement is based upon the type of borrowing under the facility and may be (1) Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Tokyo Interbank Offered Rate (TIBOR), and Secured Overnight Financing Rate (SOFR) for any borrowings in euros, pounds sterling, yen, and U.S. dollars, respectively, plus an applicable margin, (2) the greater of the prime rate or the Federal Funds effective rate plus an applicable margin, or (3) fixed as negotiated by us. The Credit Agreement matures in June 2027.
Previous wording
As of March 31, 2024, we were in compliance with all the covenants of the Credit Agreement, and there were $7.5 million of borrowings outstanding and $692.5 million of additional availability. There were no borrowings outstanding as of June 30, 2023.
Current wording
As of September 30, 2024, we were in compliance with all the covenants of the Credit Agreement, and there were no borrowings outstanding and $700.0 million of additional availability. There were no borrowings outstanding as of June 30, 2024.
Previous wording
At March 31, 2024, cash and cash equivalents were $92.1 million. Total Kennametal shareholders' equity was $1,264.6 million and total debt was $608.1 million. Our current senior credit ratings are at investment grade levels. We believe that our current financial position, liquidity and credit ratings provide us access to the capital markets. We believe that we have sufficient resources available to meet cash requirements for the next 12 months. We continue to closely monitor our liquidity position and the condition of the capital markets, as well as the counterparty risk of our credit providers. There have been no material changes in our contractual obligations and commitments since June 30, 2023.
Current wording
At September 30, 2024, cash and cash equivalents were $119.6 million. Total Kennametal shareholders' equity was $1,277.2 million and total debt was $597.6 million. Our current senior credit ratings are at investment grade levels. We believe that our current financial position, liquidity and credit ratings provide us access to the capital markets. We believe that we have sufficient resources available to meet cash requirements for the next 12 months. We continue to closely monitor our liquidity position and the condition of the capital markets, as well as the counterparty risk of our credit providers. There have been no material changes in our contractual obligations and commitments since June 30, 2024.
Previous wording
Share Repurchase Program In July 2021, the Board of Directors of the Company approved a share repurchase program authorizing the Company to purchase up to $200 million of the Company's common stock over a three-year period. During the nine months ended March 31, 2024, the Company repurchased $44 million of Kennametal common stock. Inception-to-date the Company has repurchased $178 million of Kennametal common stock under the existing $200 million three-year program.
Current wording
Share Repurchase Program In February 2024, the Board of Directors of the Company authorized the Company to purchase up to $200 million of the Company's common stock over a three-year period. During the three months ended September 30, 2024, the Company repurchased 600 thousand shares of Kennametal common stock for $15 million under its $200 million, three-year share repurchase program.
Previous wording
Dividends During the nine months ended March 31, 2024, the Company paid a total of $47.7 million in dividends to Kennametal Shareholders.
Current wording
Dividends During the three months ended September 30, 2024, the Company paid a total of $15.6 million in dividends to Kennametal Shareholders.
Previous wording
During the nine months ended March 31, 2024, cash flow provided by operating activities was $163.5 million, compared to $126.2 million for the prior year period. Cash flow provided by operating activities for the current year period consisted of net income and non-cash items amounting to an inflow of $212.2 million and changes in certain assets and liabilities netting to an outflow of $48.8 million. Contributing to the changes in certain assets and liabilities were a decrease in accounts payable and accrued liabilities of $26.0 million, a decrease in accrued income taxes of $17.5 million and a decrease in accrued pension and postretirement benefits of $8.5 million. Partially offsetting these cash outflows was a decrease in inventories of $7.0 million and a decrease in accounts receivable of $3.9 million.
Current wording
During the three months ended September 30, 2024, cash flow provided by operating activities was $45.7 million, compared to $25.7 million for the prior year period. Cash flow provided by operating activities for the current year period consisted of net income and non-cash items amounting to an inflow of $61.1 million and changes in certain assets and liabilities netting to an outflow of $15.3 million. Contributing to the changes in certain assets and liabilities were a decrease in accounts payable and accrued liabilities of $22.3 million and an increase in inventories of $17.5 million. Partially offsetting these cash outflows was a decrease in accounts receivable of $26.6 million.
Previous wording
During the nine months ended March 31, 2023, cash flow provided by operating activities was $126.2 million and consisted of net income and non-cash items amounting to an inflow of $204.4 million and changes in certain assets and liabilities netting to an outflow of $78.2 million. Contributing to the changes in certain assets and liabilities were a decrease in accounts payable and accrued liabilities of $46.3 million, an increase in inventories of $17.3 million, an increase in accounts receivable of $16.4 million and a decrease in accrued pension and postretirement benefits of $7.0 million.
Current wording
During the three months ended September 30, 2023, cash flow provided by operating activities was $25.7 million and consisted of net income and non-cash items amounting to an inflow of $81.2 million and changes in certain assets and liabilities netting to an outflow of $55.5 million. Contributing to the changes in certain assets and liabilities were a decrease in accounts payable and accrued liabilities of $32.6 million, an increase in inventories of $20.3 million, and a decrease in accrued income taxes of $11.7 million. Offsetting these cash outflows was a decrease in accounts receivable of $17.9 million.
Previous wording
Cash flow used in investing activities was $86.1 million for the nine months ended March 31, 2024, compared to $66.2 million for the prior year period. During the current year period, cash flow used in investing activities included capital expenditures of $84.2 million, which consisted primarily of equipment upgrades, the acquisition of a business for $4.0 million and an investment in a strategic partnership, partially offset by disposals of property, plant, and equipment of $5.3 million.
Current wording
Cash flow used in investing activities was $20.0 million for the three months ended September 30, 2024, compared to $28.7 million for the prior year period. During the current year period, cash flow used in investing activities included capital expenditures of $24.7 million, which consisted primarily of equipment upgrades, partially offset by proceeds from insurance recoveries of $4.7 million.
Previous wording
Cash flow used in investing activities was $66.2 million for the nine months ended March 31, 2023 and included capital expenditures of $71.1 million, which consisted primarily of equipment upgrades, partially offset by disposals of property, plant, and equipment of $4.8 million.
Current wording
Cash flow used in investing activities was $28.7 million for the three months ended September 30, 2023 and primarily included capital expenditures of $31.8 million, which consisted primarily of equipment upgrades, partially offset by disposals of property, plant, and equipment of $3.0 million.
Previous wording
Cash flow used in financing activities was $88.7 million for the nine months ended March 31, 2024 compared to $50.0 million in the prior year period. During the current year period, cash flow used in financing activities primarily included $47.7 million of cash dividends paid to Kennametal Shareholders, $43.8 million in common shares repurchased and $7.9 million of the effect of employee benefit and stock plans and dividend reinvestment, partially offset by borrowings of $7.5 million under the Credit Agreement and $4.1 million in notes payable.
Current wording
Cash flow used in financing activities was $36.4 million for the three months ended September 30, 2024 compared to $6.1 million in the prior year period. During the current year period, cash flow used in financing activities primarily included $15.6 million of cash dividends paid to Kennametal Shareholders, $15.0 million in common shares repurchased and $5.8 million of the effect of employee benefit and stock plans and dividend reinvestment.
Previous wording
Cash flow used in financing activities was $50.0 million for the nine months ended March 31, 2023 and primarily included $48.5 million of cash dividends paid to Kennametal Shareholders, $37.6 million in common shares repurchased and $6.0 million of the effect of employee benefit and stock plans and dividend reinvestment, partially offset by $43.6 million from the borrowings under the Credit Agreement.
Current wording
Cash flow used in financing activities was $6.1 million for the three months ended September 30, 2023 and primarily included $15.9 million of cash dividends paid to Kennametal Shareholders, $13.7 million in common shares repurchased, and $7.0 million of the effect of employee benefit and stock plans and dividend reinvestment, partially offset by $23.4 million of borrowings under the Credit Agreement and an increase in notes payable of $7.2 million.
Previous wording
Working capital was $586.7 million at March 31, 2024, a decrease of $6.1 million from $592.8 million at June 30, 2023. The decrease in working capital was primarily driven by a decrease in cash and cash equivalents of $13.9 million, an increase in borrowings under the Credit Agreement and notes payable of $11.6 million and a decrease in inventories of $10.0 million, partially offset by a decrease in accrued income taxes of $11.5 million, a decrease in accounts payable of $10.6 million and a decrease of accrued expenses of $10.4 million. Currency exchange rate effects decreased working capital by a total of approximately $5 million.
Current wording
Working capital was $605.5 million at September 30, 2024, an increase of $18.9 million from $586.6 million at June 30, 2024. The increase in working capital was primarily driven by an increase in inventories of $28.8 million, a decrease in other current liabilities of $18.2 million, and a decrease of accrued expenses of $9.4 million, partially offset by a decrease of accounts receivable of $20.3 million, an increase in accounts payable of $10.4 million and a decrease in cash and cash equivalents of $8.4 million. Currency exchange rate effects increased working capital by a total of approximately $16 million.
Previous wording
Property, plant and equipment, net decreased $21.4 million from $969.1 million at June 30, 2023 to $947.7 million at March 31, 2024, primarily due to depreciation expense of $91.1 million and unfavorable currency effects of $2.4 million, partially offset by net capital additions of $79.0 million.
Current wording
Property, plant and equipment, net increased $4.1 million from $938.1 million at June 30, 2024 to $942.1 million at September 30, 2024, primarily due to net capital additions of $24.7 million and currency exchange effects of $13 million, partially offset by depreciation expense of $30.8 million.
Previous wording
At March 31, 2024, other assets were $571.0 million, an increase of $19.6 million from $551.4 million at June 30, 2023. The increase was primarily due to an increase in other assets of $14.3 million which includes an investment in a strategic partnership, an increase of deferred income taxes of $6.3 million and an increase in operating lease right-of-use assets of $5.1 million, partially offset by amortization of intangibles of $8.7 million. Currency exchange rate effects decreased other assets by a total of approximately $3 million.
Current wording
At September 30, 2024, total other assets were $575.9 million, an increase of $12.8 million from $563.1 million at June 30, 2024. The increase was primarily due to an increase in goodwill of $5.8 million and an increase of deferred income taxes of $3.3 million, partially offset by amortization of intangibles of $2.7 million. Currency exchange rate effects increased total other assets by approximately $14 million, the effects of which are included in the aforementioned changes.
Previous wording
Kennametal Shareholders' equity was $1,264.6 million at March 31, 2024, a decrease of $10.9 million from $1,275.4 million at June 30, 2023. The decrease was primarily due to cash dividends paid to Kennametal Stakeholders of $47.7 million, the repurchase of capital stock of $43.8 million primarily under the share repurchase program and other comprehensive loss attributable to Kennametal of $4.2 million, partially offset by net income attributable to Kennametal of $72.1 million and capital stock issued under employee benefit and stock plans of $12.6 million.
Current wording
Kennametal Shareholders' equity was $1,277.2 million at September 30, 2024, an increase of $27.3 million from $1,249.9 million at June 30, 2024. The increase was primarily due to other comprehensive income attributable to Kennametal of $33.6 million, net income attributable to Kennametal of $22.1 million and capital stock issued under employee benefit and stock plans of $2.1 million, partially offset by cash dividends paid to Kennametal Shareholders of $15.6 million, and the repurchase of capital stock of $15.0 million primarily under the share repurchase program.