Q3 2024 Kennametal Inc Earnings Call Transcript
Key Points
- Aerospace and defense sales increased by 10% year over year, showing strong market performance and successful execution of growth initiatives.
- Free operating cash flow improved significantly, rising to $84 million from $60 million in the prior year, driven by better working capital management.
- The company continued its share repurchase program, buying back $15 million of shares this quarter, demonstrating confidence in its long-term strategy.
- Restructuring savings contributed approximately $6 million in the Metal Coatings segment, aiding in margin improvement.
- Introduced a new universal turning grade with Ken gold technology, enhancing product offerings and potentially driving future growth.
- Overall sales decreased by 4% year over year, with organic sales decline and unfavorable currency exchange impacting performance.
- Adjusted EBITDA and operating margins declined due to lower sales volumes, higher wages, general inflation, and unfavorable foreign exchange.
- Energy sector sales declined by 14%, primarily due to a decrease in U.S. land-based rig counts and delays in wind energy projects in Asia.
- Infrastructure segment's adjusted operating margins decreased by 100 basis points year over year, mainly due to lower sales volumes and higher operational costs.
- The company faces ongoing macroeconomic headwinds and market uncertainties that could affect future performance.
Good morning. I would like to welcome everyone to Kennametal's third quarter fiscal 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Mr. Michael Pici, Vice President of Investor Relations.
Please go ahead.
Thank you, operator, and welcome, everyone, and thank you for joining us to review Kennametal's Third Quarter Fiscal 2024 results this morning, we issued our earnings press release and posted our presentation slides on our website. We will be referring to that slide deck throughout today's call. I am Michael Pizzi, Vice President of Investor Relations. Joining me on the call today are Christopher Rossi, President and Chief Executive Officer; Pat Watson, Vice President and Chief Financial Officer; Sanjay Chowbey, Vice President and President of metal cutting and Franklin Cardenas, Vice President and President of Infrastructure. After Kris impact prepared remarks, we will open the line for
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