QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Item No. | Page No. | |||||||
1. | ||||||||
Three months ended September 30, 2020 and 2019 | ||||||||
Three months ended September 30, 2020 and 2019 | ||||||||
September 30, 2020 and June 30, 2020 | ||||||||
Three months ended September 30, 2020 and 2019 | ||||||||
2. | ||||||||
3. | ||||||||
4. | ||||||||
1. | ||||||||
2. | ||||||||
6. | ||||||||
Three Months Ended September 30, | |||||||||||
(in thousands, except per share amounts) | 2020 | 2019 | |||||||||
Sales | $ | $ | |||||||||
Cost of goods sold | |||||||||||
Gross profit | |||||||||||
Operating expense | |||||||||||
Restructuring and asset impairment charges (Note 6) | |||||||||||
Amortization of intangibles | |||||||||||
Operating (loss) income | ( | ||||||||||
Interest expense | |||||||||||
Other income, net | ( | ( | |||||||||
(Loss) income before income taxes | ( | ||||||||||
(Benefit) provision for income taxes | ( | ||||||||||
Net (loss) income | ( | ||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||
Net (loss) income attributable to Kennametal | $ | ( | $ | ||||||||
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS | |||||||||||
Basic (loss) earnings per share | $ | ( | $ | ||||||||
Diluted (loss) earnings per share | $ | ( | $ | ||||||||
Basic weighted average shares outstanding | |||||||||||
Diluted weighted average shares outstanding |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Net (loss) income | $ | ( | |||||||||
Other comprehensive income (loss), net of tax | |||||||||||
Unrealized gain on derivatives designated and qualified as cash flow hedges | |||||||||||
Reclassification of unrealized loss on derivatives designated and qualified as cash flow hedges | |||||||||||
Unrecognized net pension and other postretirement benefit (loss) gain | ( | ||||||||||
Reclassification of net pension and other postretirement benefit loss | |||||||||||
Foreign currency translation adjustments | ( | ||||||||||
Total other comprehensive income (loss), net of tax | ( | ||||||||||
Total comprehensive income (loss) | ( | ||||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests | ( | ||||||||||
Comprehensive income (loss) attributable to Kennametal Shareholders | $ | ( |
(in thousands, except per share data) | September 30, 2020 | June 30, 2020 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, less allowance for doubtful accounts of $ | |||||||||||
Inventories (Note 9) | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment: | |||||||||||
Land and buildings | |||||||||||
Machinery and equipment | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | |||||||||||
Other assets: | |||||||||||
Goodwill (Note 16) | |||||||||||
Other intangible assets, less accumulated amortization of $ | |||||||||||
Operating lease right-of-use assets | |||||||||||
Deferred income taxes | |||||||||||
Other | |||||||||||
Total other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES | |||||||||||
Current liabilities: | |||||||||||
Revolving and other lines of credit and notes payable (Note 10) | |||||||||||
Current operating lease liabilities | |||||||||||
Accounts payable | |||||||||||
Accrued income taxes | |||||||||||
Accrued expenses | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, less current maturities (Note 10) | |||||||||||
Operating lease liabilities | |||||||||||
Deferred income taxes | |||||||||||
Accrued pension and postretirement benefits | |||||||||||
Accrued income taxes | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
EQUITY (Note 14) | |||||||||||
Kennametal Shareholders’ Equity: | |||||||||||
Preferred stock, | |||||||||||
Capital stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total Kennametal Shareholders’ Equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
OPERATING ACTIVITIES | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments for non-cash items: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Restructuring and asset impairment charges (Note 6) | |||||||||||
Deferred income tax (benefit) provision | ( | ||||||||||
Other | |||||||||||
Changes in certain assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventories | |||||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Accrued income taxes | ( | ( | |||||||||
Accrued pension and postretirement benefits | ( | ( | |||||||||
Other | ( | ||||||||||
Net cash flow provided by operating activities | |||||||||||
INVESTING ACTIVITIES | |||||||||||
Purchases of property, plant and equipment | ( | ( | |||||||||
Disposals of property, plant and equipment | |||||||||||
Other | |||||||||||
Net cash flow used for investing activities | ( | ( | |||||||||
FINANCING ACTIVITIES | |||||||||||
Net increase in notes payable | |||||||||||
Net decrease in revolving and other lines of credit | ( | ||||||||||
Purchase of capital stock | ( | ( | |||||||||
The effect of employee benefit and stock plans and dividend reinvestment | ( | ( | |||||||||
Cash dividends paid to Shareholders | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash flow used for financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
CASH AND CASH EQUIVALENTS | |||||||||||
Net decrease in cash and cash equivalents | ( | ( | |||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | |||||||||||
Supplemental disclosure of non-cash information: | |||||||||||
Changes in accounts payable related to purchases of property, plant and equipment | ( | ||||||||||
Changes in notes payable related to purchases of property, plant and equipment | — |
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Derivatives (1) | $ | — | $ | $ | — | $ | |||||||||||||||||
Total assets at fair value | $ | — | $ | $ | — | $ | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivatives (1) | $ | — | $ | $ | — | $ | |||||||||||||||||
Total liabilities at fair value | $ | — | $ | $ | — | $ |
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Derivatives (1) | $ | — | $ | $ | — | $ | |||||||||||||||||
Total assets at fair value | $ | — | $ | $ | — | $ | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivatives (1) | $ | — | $ | $ | — | $ | |||||||||||||||||
Total liabilities at fair value | $ | — | $ | $ | — | $ |
(in thousands) | September 30, 2020 | June 30, 2020 | |||||||||
Derivatives designated as hedging instruments | |||||||||||
Other current assets - range forward contracts | $ | $ | |||||||||
Other assets - forward starting interest rate swap contracts | |||||||||||
Other liabilities - forward starting interest rate swap contracts | ( | ( | |||||||||
Total derivatives designated as hedging instruments | ( | ( | |||||||||
Derivatives not designated as hedging instruments | |||||||||||
Other current assets - currency forward contracts | |||||||||||
Other current liabilities - currency forward contracts | ( | ( | |||||||||
Total derivatives not designated as hedging instruments | ( | ( | |||||||||
Total derivatives | $ | ( | $ | ( |
Three Months Ended September 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | ||||||||||||
Other income, net - currency forward contracts | $ | $ |
Three Months Ended September 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | ||||||||||||
Gains recognized in other comprehensive income (loss), net | $ | $ | ||||||||||||
Losses reclassified from accumulated other comprehensive loss into cost of goods sold and other income, net | $ | $ |
(in thousands) | June 30, 2020 | Expense | Asset Write-Down | Translation | Cash Expenditures | September 30, 2020 | |||||||||||||||||||||||||||||
Severance | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||
Facilities | ( | ||||||||||||||||||||||||||||||||||
Other | ( | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | $ | ( | $ |
Options | Weighted Average Exercise Price | Weighted Average Remaining Life (years) | Aggregate Intrinsic value (in thousands) | ||||||||||||||||||||
Options outstanding, June 30, 2020 | $ | ||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Lapsed or forfeited | ( | ||||||||||||||||||||||
Options outstanding, September 30, 2020 | $ | $ | |||||||||||||||||||||
Options vested, September 30, 2020 | $ | $ | |||||||||||||||||||||
Options exercisable, September 30, 2020 | $ | $ |
Performance Vesting Stock Units | Performance Vesting Weighted Average Fair Value | Time Vesting Stock Units | Time Vesting Weighted Average Fair Value | ||||||||||||||||||||
Unvested, June 30, 2020 | $ | $ | |||||||||||||||||||||
Granted | |||||||||||||||||||||||
Vested | ( | ( | |||||||||||||||||||||
Performance metric adjustments, net | ( | ||||||||||||||||||||||
Forfeited | ( | ( | |||||||||||||||||||||
Unvested, September 30, 2020 | $ | $ |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Amortization of transition obligation | |||||||||||
Amortization of prior service cost | |||||||||||
Recognition of actuarial losses | |||||||||||
Settlement gain | ( | ||||||||||
Net periodic pension income | $ | ( | $ | ( |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Interest cost | $ | $ | |||||||||
Amortization of prior service credit | ( | ( | |||||||||
Recognition of actuarial loss | |||||||||||
Net periodic other postretirement benefit cost | $ | $ |
(in thousands) | September 30, 2020 | June 30, 2020 | |||||||||
Finished goods | $ | $ | |||||||||
Work in process and powder blends | |||||||||||
Raw materials | |||||||||||
Inventories at current cost | |||||||||||
Less: LIFO valuation | ( | ( | |||||||||
Total inventories | $ | $ |
(in thousands) | Three Months Ended September 30, 2019 | |||||||
Weighted-average shares outstanding during period | ||||||||
Add: Unexercised stock options and unvested restricted stock units | ||||||||
Number of shares on which diluted earnings per share is calculated | ||||||||
Unexercised stock options with an exercise price greater than the average market price and restricted stock units not included in the computation because they were anti-dilutive |
Kennametal Shareholders’ Equity | |||||||||||||||||||||||||||||||||||
(in thousands, except per share amounts) | Capital stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Non-controlling interests | Total equity | |||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net (loss) income | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | ||||||||||||||||||||||||||||||||
Dividend reinvestment | — | — | — | ||||||||||||||||||||||||||||||||
Capital stock issued under employee benefit and stock plans(2) | — | — | — | ||||||||||||||||||||||||||||||||
Purchase of capital stock | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | ( | |||||||||||||||||||||||||||||||
Total equity, September 30, 2020 | $ | $ | $ | $ | ( | $ | $ |
Kennametal Shareholders’ Equity | |||||||||||||||||||||||||||||||||||
(in thousands, except per share amounts) | Capital stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Non-controlling interests | Total equity | |||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||
Dividend reinvestment | — | — | — | ||||||||||||||||||||||||||||||||
Capital stock issued under employee benefit and stock plans(2) | — | — | — | ||||||||||||||||||||||||||||||||
Purchase of capital stock | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||
Cash dividends ($ | — | — | ( | — | ( | ||||||||||||||||||||||||||||||
Total equity, September 30, 2019 | $ | $ | $ | $ | ( | $ | $ |
(in thousands) | Pension and other postretirement benefits | Currency translation adjustment | Derivatives | Total | ||||||||||
Attributable to Kennametal: | ||||||||||||||
Balance, June 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Other comprehensive (loss) income before reclassifications | ( | |||||||||||||
Amounts reclassified from AOCL | ||||||||||||||
Net current period other comprehensive (loss) income | ( | |||||||||||||
AOCL, September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Attributable to noncontrolling interests: | ||||||||||||||
Balance, June 30, 2020 | $ | — | $ | ( | $ | — | $ | ( | ||||||
Other comprehensive income before reclassifications | — | — | ||||||||||||
Net current period other comprehensive income | — | — | ||||||||||||
AOCL, September 30, 2020 | $ | — | $ | ( | $ | — | $ | ( |
(in thousands) | Pension and other postretirement benefits | Currency translation adjustment | Derivatives | Total | ||||||||||
Attributable to Kennametal: | ||||||||||||||
Balance, June 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ||||||||||||
Amounts reclassified from AOCL | ||||||||||||||
Net current period other comprehensive income (loss) | ( | ( | ||||||||||||
AOCL, September 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Attributable to noncontrolling interests: | ||||||||||||||
Balance, June 30, 2019 | $ | — | $ | ( | $ | — | $ | ( | ||||||
Other comprehensive loss before reclassifications | — | ( | — | ( | ||||||||||
Net current period other comprehensive loss | — | ( | — | ( | ||||||||||
AOCL, September 30, 2019 | $ | — | $ | ( | $ | — | $ | ( |
Three Months Ended September 30, | |||||||||||||||||
(in thousands) | 2020 | 2019 | Affected line item in the Income Statement | ||||||||||||||
Gains and losses on cash flow hedges: | |||||||||||||||||
Forward starting interest rate swaps | $ | $ | Interest expense | ||||||||||||||
Currency exchange contracts | ( | ( | Cost of goods sold and other income, net | ||||||||||||||
Total before tax | |||||||||||||||||
Tax impact | ( | ( | (Benefit) provision for income taxes | ||||||||||||||
Net of tax | $ | $ | |||||||||||||||
Pension and other postretirement benefits: | |||||||||||||||||
Amortization of transition obligations | $ | $ | Other income, net | ||||||||||||||
Amortization of prior service credit | ( | ( | Other income, net | ||||||||||||||
Recognition of actuarial losses | Other income, net | ||||||||||||||||
Total before tax | |||||||||||||||||
Tax impact | ( | ( | (Benefit) provision for income taxes | ||||||||||||||
Net of tax | $ | $ | |||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||
(in thousands) | Pre-tax | Tax impact | Net of tax | Pre-tax | Tax impact | Net of tax | ||||||||||||||||||||
Unrealized gain on derivatives designated and qualified as cash flow hedges | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||
Reclassification of unrealized loss on derivatives designated and qualified as cash flow hedges | ( | ( | ||||||||||||||||||||||||
Unrecognized net pension and other postretirement benefit (loss) gain | ( | ( | ( | |||||||||||||||||||||||
Reclassification of net pension and other postretirement benefit loss | ( | ( | ||||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | |||||||||||||||||||||||
Other comprehensive income (loss) | $ | $ | ( | $ | $ | ( | $ | ( | $ | ( |
(in thousands) | Metal Cutting | Infrastructure | Total | ||||||||||||||
Gross goodwill | $ | $ | $ | ||||||||||||||
Accumulated impairment losses | ( | ( | ( | ||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | ||||||||||||||
Activity for the three months ended September 30, 2020: | |||||||||||||||||
Change in gross goodwill due to translation | |||||||||||||||||
Gross goodwill | |||||||||||||||||
Accumulated impairment losses | ( | ( | ( | ||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ |
Estimated Useful Life (in years) | September 30, 2020 | June 30, 2020 | ||||||||||||||||||||||||||||||
(in thousands) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||||||||||
Technology-based and other | ( | ( | ||||||||||||||||||||||||||||||
Customer-related | ( | ( | ||||||||||||||||||||||||||||||
Unpatented technology | ( | ( | ||||||||||||||||||||||||||||||
Trademarks | ( | ( | ||||||||||||||||||||||||||||||
Trademarks | Indefinite | — | — | |||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Sales: | |||||||||||
Metal Cutting | $ | $ | |||||||||
Infrastructure | |||||||||||
Total sales | $ | $ | |||||||||
Operating (loss) income: | |||||||||||
Metal Cutting | $ | ( | $ | ||||||||
Infrastructure | ( | ||||||||||
Corporate | ( | ( | |||||||||
Total operating (loss) income | ( | ||||||||||
Interest expense | |||||||||||
Other income, net | ( | ( | |||||||||
(Loss) income from continuing operations before income taxes | $ | ( | $ |
Three Months Ended | |||||||||||||||||||||||||||||||||||
September 30, 2020 | September 30, 2019 | ||||||||||||||||||||||||||||||||||
(in thousands) | Metal Cutting | Infrastructure | Total Kennametal | Metal Cutting | Infrastructure | Total Kennametal | |||||||||||||||||||||||||||||
Americas | |||||||||||||||||||||||||||||||||||
EMEA | |||||||||||||||||||||||||||||||||||
Asia Pacific |
Three Months Ended September 30, 2020 | |||||||||||||||||
(in thousands) | Metal Cutting | Infrastructure | Total Kennametal | ||||||||||||||
General engineering | |||||||||||||||||
Transportation | — | ||||||||||||||||
Aerospace | — | ||||||||||||||||
Energy | |||||||||||||||||
Earthworks | — |
Three Months Ended September 30, 2019 | |||||||||||||||||
(in thousands) | Metal Cutting | Infrastructure | Total Kennametal | ||||||||||||||
General engineering | |||||||||||||||||
Transportation | — | ||||||||||||||||
Aerospace | — | ||||||||||||||||
Energy | |||||||||||||||||
Earthworks | — |
Three Months Ended September 30, 2020 | ||||||||
(in percentages) | As Reported | Constant Currency | ||||||
End market sales decline: | ||||||||
Aerospace | (45)% | (45)% | ||||||
Energy | (26) | (26) | ||||||
Transportation | (22) | (21) | ||||||
General engineering | (21) | (19) | ||||||
Earthworks | (12) | (11) | ||||||
Regional sales decline: | ||||||||
Americas | (31)% | (28)% | ||||||
Europe, the Middle East and Africa (EMEA) | (20) | (21) | ||||||
Asia Pacific | (7) | (6) |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Sales: | |||||||||||
Metal Cutting | $ | 247,876 | $ | 324,085 | |||||||
Infrastructure | 152,429 | 194,003 | |||||||||
Total sales | $ | 400,305 | $ | 518,088 | |||||||
Operating (loss) income: | |||||||||||
Metal Cutting | $ | (23,626) | $ | 19,306 | |||||||
Infrastructure | 7,268 | (2,690) | |||||||||
Corporate | (820) | (240) | |||||||||
Total operating (loss) income | (17,178) | 16,376 | |||||||||
Interest expense | 10,578 | 7,881 | |||||||||
Other income, net | (4,019) | (2,681) | |||||||||
(Loss) income from continuing operations before income taxes | $ | (23,737) | $ | 11,176 |
Three Months Ended September 30, | |||||||||||
(in thousands, except operating margin) | 2020 | 2019 | |||||||||
Sales | $ | 247,876 | $ | 324,085 | |||||||
Operating (loss) income | (23,626) | 19,306 | |||||||||
Operating margin | (9.5) | % | 6.0 | % |
Three Months Ended September 30, 2020 | |||||
(in percentages) | |||||
Organic sales decline | (23)% | ||||
Foreign currency exchange impact(1) | (1) | ||||
Sales decline | (24)% |
Three Months Ended September 30, 2020 | |||||||||||
(in percentages) | As Reported | Constant Currency | |||||||||
End market sales decline: | |||||||||||
Aerospace | (45)% | (45)% | |||||||||
Transportation | (22) | (21) | |||||||||
General engineering | (20) | (20) | |||||||||
Energy | (17) | (17) | |||||||||
Regional sales decline: | |||||||||||
Americas | (30)% | (29)% | |||||||||
EMEA | (23) | (24) | |||||||||
Asia Pacific | (11) | (9) |
Three Months Ended September 30, | |||||||||||
(in thousands) | 2020 | 2019 | |||||||||
Sales | $ | 152,429 | $ | 194,003 | |||||||
Operating income (loss) | 7,268 | (2,690) | |||||||||
Operating margin | 4.8 | % | (1.4) | % |
Three Months Ended September 30, 2020 | |||||
(in percentages) | |||||
Organic sales decline | (18)% | ||||
Business days impact(2) | 1 | ||||
Divestiture impact(3) | (4) | ||||
Sales decline | (21)% |
Three Months Ended September 30, 2020 | |||||||||||
(in percentages) | As Reported | Constant Currency | |||||||||
End market sales decline: | |||||||||||
Energy | (32)% | (31)% | |||||||||
General engineering | (22) | (14) | |||||||||
Earthworks | (12) | (11) | |||||||||
Regional sales (decline) growth: | |||||||||||
Americas | (31)% | (27)% | |||||||||
EMEA | (10) | (9) | |||||||||
Asia Pacific | — | 1 |
Three Months Ended September 30, | ||||||||||||||
(in thousands) | 2020 | 2019 | ||||||||||||
Corporate expense | $ | (820) | $ | (240) |
Three Months Ended September 30, 2020 | Metal Cutting | Infrastructure | Total | ||||||||
Organic sales decline | (23)% | (18)% | (21)% | ||||||||
Foreign currency exchange effect(1) | (1) | — | (1) | ||||||||
Business days effect(2) | — | 1 | — | ||||||||
Divestiture effect(3) | — | (4) | (1) | ||||||||
Sales decline | (24)% | (21)% | (23)% |
Metal Cutting | ||||||||||||||
Three Months Ended September 30, 2020 | General engineering | Transportation | Aerospace | Energy | ||||||||||
Constant currency end market sales decline | (20)% | (21)% | (45)% | (17)% | ||||||||||
Foreign currency exchange effect(1) | — | (1) | — | — | ||||||||||
End market sales decline(4) | (20)% | (22)% | (45)% | (17)% |
Infrastructure | |||||||||||
Three Months Ended September 30, 2020 | Energy | Earthworks | General engineering | ||||||||
Constant currency end market sales decline | (31)% | (11)% | (14)% | ||||||||
Foreign currency exchange effect(1) | — | (1) | 2 | ||||||||
Divestiture effect(3) | (1) | — | (10) | ||||||||
End market sales decline(4) | (32)% | (12)% | (22)% |
Total | |||||||||||||||||
Three Months Ended September 30, 2020 | General engineering | Transportation | Aerospace | Energy | Earthworks | ||||||||||||
Constant currency end market sales decline | (19)% | (21)% | (45)% | (26)% | (11)% | ||||||||||||
Foreign currency exchange effect(1) | 1 | (1) | — | 1 | (1) | ||||||||||||
Divestiture effect(3) | (3) | — | — | (1) | — | ||||||||||||
End market sales decline(4) | (21)% | (22)% | (45)% | (26)% | (12)% |
Three Months Ended September 30, 2020 | ||||||||||||||||||||
Americas | EMEA | Asia Pacific | ||||||||||||||||||
Metal Cutting | ||||||||||||||||||||
Constant currency regional sales decline | (29)% | (24)% | (9)% | |||||||||||||||||
Foreign currency exchange effect(1) | (1) | 1 | (2) | |||||||||||||||||
Regional sales decline(5) | (30)% | (23)% | (11)% | |||||||||||||||||
Infrastructure | ||||||||||||||||||||
Constant currency regional sales (decline) growth | (27)% | (9)% | 1% | |||||||||||||||||
Foreign currency exchange effect(1) | 2 | (1) | (1) | |||||||||||||||||
Divestiture effect(3) | (6) | — | — | |||||||||||||||||
Regional sales (decline) growth(5) | (31)% | (10)% | —% | |||||||||||||||||
Total | ||||||||||||||||||||
Constant currency regional sales decline | (28)% | (21)% | (6)% | |||||||||||||||||
Foreign currency exchange effect(1) | — | 1 | (1) | |||||||||||||||||
Divestiture effect(3) | (3) | — | — | |||||||||||||||||
Regional sales decline(5) | (31)% | (20)% | (7)% |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. CONTROLS AND PROCEDURES |
ITEM 1. LEGAL PROCEEDINGS |
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) | |||||||||||||||||||
July 1 through July 31, 2020 | 73,021 | $ | 26.96 | — | 10,100,100 | ||||||||||||||||||
August 1 through August 31, 2020 | 51,821 | 30.89 | — | 10,100,100 | |||||||||||||||||||
September 1 through September 30, 2020 | 838 | 29.94 | — | 10,100,100 | |||||||||||||||||||
Total | 125,680 | $ | 28.60 | — |
ITEM 6. EXHIBITS |
KENNAMETAL INC. | ||||||||||||||
Date: | November 3, 2020 | By: | /s/ Patrick S. Watson | |||||||||||
Patrick S. Watson Vice President Finance and Corporate Controller |
Date: | November 3, 2020 | /s/ Christopher Rossi | |||||||||
Christopher Rossi President and Chief Executive Officer |
Date: | November 3, 2020 | /s/ Damon J. Audia | |||||||||
Damon J. Audia Vice President and Chief Financial Officer |
/s/ Christopher Rossi | ||
Christopher Rossi | ||
President and Chief Executive Officer | ||
November 3, 2020 |
/s/ Damon J. Audia | ||
Damon J. Audia | ||
Vice President and Chief Financial Officer | ||
November 3, 2020 |
Basis of Presentation |
3 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATIONThe condensed consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q, which include our accounts and those of our majority-owned subsidiaries, should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 (the “2020 Annual Report”). The condensed consolidated balance sheet as of June 30, 2020 was derived from the audited balance sheet included in our 2020 Annual Report. The interim statements are unaudited; however, we believe that all adjustments necessary for a fair statement of the results of the interim periods were made and all adjustments are normal recurring adjustments. The results for the three months ended September 30, 2020 and 2019 are not necessarily indicative of the results to be expected for a full fiscal year. Unless otherwise specified, any reference to a “year” is to a fiscal year ended June 30. For example, a reference to 2021 is to the fiscal year ending June 30, 2021. When used in this Quarterly Report on Form 10-Q, unless the context requires otherwise, the terms “the Company,” “we,” “our” and “us” refer to Kennametal Inc. and its subsidiaries. |
New Accounting Standards |
3 Months Ended |
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Sep. 30, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
NEW ACCOUNTING STANDARDS | NEW ACCOUNTING STANDARDSIn June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which introduced new guidance for the accounting for credit losses on certain financial instruments. We adopted this ASU on July 1, 2020. The adoption of this new credit loss guidance did not have a material impact on our condensed consolidated financial statements. |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | |
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Sep. 30, 2020 |
Sep. 30, 2019 |
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Net (loss) income | $ (20,860) | $ 7,410 |
Other comprehensive income (loss), net of tax [Abstract] | ||
Unrealized gain on derivatives designated and qualified as cash flow hedges | 1,210 | 395 |
Reclassification of unrealized loss on derivatives designated and qualified as cash flow hedges | 461 | 181 |
Unrecognized net pension and other postretirement benefit (loss) gain | (3,310) | 2,607 |
Reclassification of net pension and other postretirement benefit loss | 2,565 | 1,960 |
Foreign currency translation adjustments | 31,946 | (35,426) |
Total other comprehensive income (loss), net of tax | 32,872 | (30,283) |
Total comprehensive income (loss) | 12,012 | (22,873) |
Less: comprehensive income (loss) attributable to noncontrolling interests | 2,093 | (449) |
Comprehensive income (loss) attributable to Kennametal Shareholders | $ 9,919 | $ (22,424) |
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Sep. 30, 2020 |
Jun. 30, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 9,372 | $ 9,430 |
Accumulated amortization on other intangible assets | $ 142,568 | $ 137,386 |
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Capital stock, par value | $ 1.25 | $ 1.25 |
Capital stock, shares authorized | 120,000 | 120,000 |
Capital stock, shares issued | 83,251 | 82,923 |
Preferred Stock, Shares Issued | 0 | 0 |
Supplemental Cash Flow Disclosures |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES
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Supplemental Cash Flow (Tables) |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Disclosures |
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Supplemental Cash Flow (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Sep. 30, 2020 |
Sep. 30, 2019 |
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Supplemental Cash Flow Elements [Abstract] | ||
Interest | $ 11,509 | $ 6,337 |
Income taxes | 9,635 | 9,631 |
Change in accounts payable related to property, plant, and equipment | (15,100) | $ 200 |
Changes in notes payable related to purchases of property, plant and equipment | $ 6,309 |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy consists of three levels to prioritize the inputs used in valuations, as defined below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Inputs that are unobservable. As of September 30, 2020, the fair values of our financial assets and financial liabilities are categorized as follows:
As of June 30, 2020, the fair values of our financial assets and financial liabilities are categorized as follows:
(1) Currency and interest rate derivatives are valued based on observable market spot and forward rates and are classified within Level 2 of the fair value hierarchy. There have been no changes in classification and transfers between levels in the fair value hierarchy in the current period.
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Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES As part of our financial risk management program, we use certain derivative financial instruments. We do not enter into derivative transactions for speculative purposes and, therefore, we do not hold any derivative instruments for trading purposes. We account for derivative instruments as a hedge of the related asset, liability, firm commitment or anticipated transaction, when the derivative is specifically designated and qualifies as a hedge of such items. Our objective in managing foreign exchange exposures with derivative instruments is to reduce volatility in cash flow. We measure hedge effectiveness by assessing the changes in the fair value or expected future cash flows of the hedged item. The fair value of derivatives designated and not designated as hedging instruments in the condensed consolidated balance sheet are as follows:
Certain currency forward contracts that hedge significant cross-border intercompany loans are considered as other derivatives and therefore do not qualify for hedge accounting. These contracts are recorded at fair value in the condensed consolidated balance sheet, with the offset to other income, net. Losses related to derivatives not designated as hedging instruments have been recognized as follows:
CASH FLOW HEDGES Currency forward contracts and range forward contracts (a transaction where both a put option is purchased and a call option is sold) are designated as cash flow hedges and hedge anticipated cash flows from cross-border intercompany sales of products and services. Gains and losses realized on these contracts are recorded in accumulated other comprehensive loss and are recognized as a component of cost of goods sold and other income, net when the underlying sale of products or services is recognized into earnings. All contracts expired as of September 30, 2020, and the notional amount of the contracts translated into U.S. dollars at June 30, 2020 was $2.2 million. The time value component of the fair value of range forward contracts is excluded from the assessment of hedge effectiveness. During fiscal 2020, we entered into forward starting interest rate swap contracts to hedge a portion of the interest rate risk related to our anticipated refinancing of our Senior Unsecured Notes due in fiscal 2022. We recorded the fair value of these contracts as an asset or a liability, as applicable, in the balance sheet, with the offset to accumulated other comprehensive income, net of tax. The notional amount of the contracts at September 30, 2020 and June 30, 2020 was $200.0 million. As of September 30, 2020 and June 30, 2020, we recorded assets of $0.4 million and an immaterial amount, respectively, and liabilities of $0.9 million and $2.1 million, respectively, on these contracts, the net effect of which was recorded as a decrease to other comprehensive income, net of tax. The following represents gains and losses related to cash flow hedges:
No portion of the gains or losses recognized in earnings was due to ineffectiveness and no amounts were excluded from our effectiveness testing for the three months ended September 30, 2020 and 2019. NET INVESTMENT HEDGES As of September 30, 2020 and June 30, 2020, we had certain foreign currency-denominated intercompany loans payable with total aggregate principal amounts of €15.9 million designated as net investment hedges to hedge the foreign exchange exposure of our net investment in our Euro-based subsidiaries. The notional value of the contract, which has a maturity date of June 26, 2022 and includes principal and accrued interest, was €16.0 million, or $18.8 million, as of September 30, 2020. A loss of $0.6 million and gain of $1.1 million were recorded as a component of foreign currency translation adjustments in other comprehensive income (loss) for the three months ended September 30, 2020 and 2019, respectively.
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock Options Changes in our stock options for the three months ended September 30, 2020 were as follows:
As of September 30, 2020 and June 30, 2020, there was no unrecognized compensation cost related to options outstanding, and all options were fully vested as of September 30, 2020 and 2019. There was no cash received from the exercise of options during the three months ended September 30, 2020, and the amount of cash received from the exercise of options during September 30, 2019 was $0.1 million. The total intrinsic value of options exercised was immaterial during the three months ended September 30, 2020 and was $0.2 million during the three months ended September 30, 2019. Restricted Stock Units – Performance Vesting and Time Vesting Changes in our performance vesting and time vesting restricted stock units for the three months ended September 30, 2020 were as follows:
During the three months ended September 30, 2020 and 2019, compensation expense related to time vesting and performance vesting restricted stock units was $6.7 million and $7.8 million, respectively. Certain performance metrics related to fiscal 2020 were not met, resulting in an adjustment of 100,000 performance vesting stock units during the three months ended September 30, 2020. As of September 30, 2020, the total unrecognized compensation cost related to unvested time vesting and performance vesting restricted stock units was $34.2 million and is expected to be recognized over a weighted average period of 2.4 years.
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Pension and Other Postretirement Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PENSION AND OTHER POSTRETIREMENT BENEFITS | The table below summarizes the components of net periodic pension income:
The table below summarizes the components of net periodic other postretirement benefit cost:
The service cost component of net periodic pension income is reported as a component of cost of goods sold and operating expense. All other components of net periodic pension income and net periodic other postretirement benefit cost are reported as a component of other income, net.
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Inventories |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES We used the last-in, first-out (LIFO) method of valuing inventories for 41 percent and 43 percent of total inventories at September 30, 2020 and June 30, 2020, respectively. Inventory valuations under the LIFO method are based on an annual determination of quantities and costs as of June 30 of each year; therefore, the interim LIFO valuations are based on our projections of expected year-end inventory levels and costs and are subject to any final year-end LIFO inventory adjustments. Inventories consisted of the following:
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Long-Term Debt |
3 Months Ended |
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Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT AND REVOLVING AND OTHER LINES OF CREDIT During the three months ended September 30, 2020, we entered into the First Amendment (the Amendment) to the Fifth Amended and Restated Credit Agreement dated as of June 21, 2018, (as amended by the Amendment, the Credit Agreement). The Credit Agreement is a five-year, multi-currency, revolving credit facility and we use it 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) LIBOR 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 2023. The Credit Agreement requires us to comply with various restrictive and affirmative covenants, including two financial covenants: (1) a maximum leverage ratio where debt, net of domestic cash in excess of $25 million and, as added by the Amendment, sixty percent of the unrestricted cash held outside of the United States, must be less than or equal to 3.5 times trailing twelve months EBITDA (temporarily increased by the Amendment to 4.25 times trailing twelve months EBITDA during the period from September 30, 2020 through and including December 31, 2021), adjusted for certain non-cash expenses and which may be further adjusted, at our discretion, to include up to $120 million (increased from $80 million pursuant to the Amendment) of cash restructuring charges through December 31, 2021; and (2) a minimum consolidated interest coverage ratio of EBITDA to interest of 3.5 times (as the aforementioned terms are defined in the Credit Agreement). Borrowings under the Credit Agreement are guaranteed by our significant domestic subsidiaries. As of September 30, 2020, we were in compliance with all covenants of the Credit Agreement and we had $38.5 million of borrowings outstanding and $661.5 million of additional availability. There were $500.0 million of borrowings outstanding as of June 30, 2020. The Company continues to assess the expected conditions in its primary end markets, including the effects of COVID-19 on the Company’s business, financial condition, operating results and cash flows. Because the extent and duration of the COVID-19 pandemic are uncertain, the effects of the pandemic could materially affect our availability to borrow under the Credit Agreement and our compliance with the maximum leverage ratio covenant of the Credit Agreement. To offset some of the uncertainty related to COVID-19, we obtained an Amendment to the Credit Agreement during the first quarter of fiscal 2021, as described above. Additionally, we continue to evaluate when and to what extent we may access the capital markets, including our plan to refinance the $300 million 3.875 percent Senior Unsecured Notes due February 2022 during the current fiscal year. In the event that a refinancing does not occur before the February 2022 maturity date, management believes that the Company will have the ability to repay the February 2022 Notes with projected cash on hand and availability under the Credit Agreement. However, the Company can provide no assurance of this due in part, but not limited to, the uncertainty surrounding the COVID-19 pandemic. If over the course of the next year, market conditions do not improve or further deteriorate, the Company may need to take one or a combination of the following additional actions to ensure the Company has adequate access to liquidity and remains in compliance with the maximum leverage ratio covenant of the Credit Agreement, both of which are within the Company’s control: implement additional short-term cost-control actions and undertake new restructuring programs. We have concluded that we will remain in compliance with the covenants of the Credit Agreement and, as a result, will have adequate access to liquidity to satisfy our obligations within one year after the date the financial statements are issued. Fixed rate debt had a fair market value of $643.4 million and $630.2 million at September 30, 2020 and June 30, 2020, respectively. The Level 2 fair value is determined based on the quoted market prices for similar debt instruments as of September 30, 2020 and June 30, 2020, respectively.
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Environmental Matters |
3 Months Ended |
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Sep. 30, 2020 | |
Environmental Remediation Obligations [Abstract] | |
ENVIRONMENTAL MATTERS | ENVIRONMENTAL MATTERS The operation of our business has exposed us to certain liabilities and compliance costs related to environmental matters. We are involved in various environmental cleanup and remediation activities at certain of our locations. We establish and maintain reserves for certain potential environmental liabilities. At September 30, 2020, the balance of these reserves was $15.7 million, of which $6.1 million was current. At June 30, 2020, the balance of these reserves was $15.6 million, of which $6.1 million was current. The balances as of September 30, and June 30, 2020 include the Company’s resolution of an environmental indemnity claim against the seller of a prior acquisition for which receivables are also recorded in other current and long-term assets. These reserves represent anticipated costs associated with potential remedial requirements and are generally not discounted. The reserves we have established for potential environmental liabilities represent our best current estimate of the costs of addressing all identified environmental situations, based on our review of currently available evidence, and taking into consideration our prior experience in remediation and that of other companies, as well as public information released by the United States Environmental Protection Agency (USEPA), other governmental agencies and by the Potentially Responsible Party (PRP) groups in which we are participating. Although our reserves currently appear to be sufficient to cover these potential environmental liabilities, there are uncertainties associated with environmental liabilities, and we can give no assurance that our estimate of any environmental liability will not increase or decrease in the future. The reserved and unreserved liabilities for all environmental concerns could change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, technological changes, discovery of new information, the financial strength of other PRPs, the identification of new PRPs and the involvement of and direction taken by the government on these matters. Superfund Sites Among other environmental laws, we are subject to the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA), under which we have been designated by the USEPA as a PRP with respect to environmental remedial costs at certain Superfund sites. We have evaluated our claims and liabilities associated with these Superfund sites based upon best currently available information. We believe our environmental accruals are adequate to cover our portion of the environmental remedial costs at the Superfund sites where we have been designated a PRP, to the extent these expenses are probable and reasonably estimable.
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Income Taxes |
3 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe effective income tax rates for the three months ended September 30, 2020 and 2019 were 12.1 (benefit on a loss) and 33.7 (provision on income), respectively. The year-over-year change is primarily due to the effects of relatively lower pre-tax income in the current quarter. |
Earnings Per Share |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed using the weighted average number of shares outstanding during the period, while diluted earnings per share is calculated to reflect the potential dilution that would occur related to the issuance of capital stock under stock option grants, performance awards and restricted stock units. The difference between basic and diluted earnings per share relates solely to the effect of capital stock options, performance awards and restricted stock units. During the three months ended September 30, 2020, the effect of unexercised capital stock options, unvested performance awards and unvested restricted stock units was anti-dilutive as a result of a net loss in the period and therefore has been excluded from diluted shares outstanding as well as from the diluted earnings per share calculation. The following table provides the computation of diluted shares outstanding for the three months ended September 30, 2019:
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY A summary of the changes in the carrying amounts of total equity, Kennametal Shareholders’ equity and equity attributable to noncontrolling interests for the three months ending September 30, 2020 and 2019 is as follows:
(2) Net of restricted stock units delivered upon vesting to satisfy tax withholding requirements. The amounts of comprehensive income attributable to Kennametal Shareholders and noncontrolling interests are disclosed in the condensed consolidated statements of comprehensive income.
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Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS The components of, and changes in, accumulated other comprehensive loss (AOCL) were as follows, net of tax, for the three months ended September 30, 2020:
The components of, and changes in, AOCL were as follows, net of tax, for the three months ended September 30, 2019:
Reclassifications out of AOCL for the three months ended September 30, 2020 and 2019 consisted of the following:
The amount of income tax allocated to each component of other comprehensive income (loss) for the three months ended September 30, 2020 and 2019 were as follows:
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Goodwill and Other Intangible Assets |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS A summary of the carrying amount of goodwill attributable to each segment, as well as the changes in such carrying amounts, is as follows:
The components of our other intangible assets were as follows:
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Segment Data |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT DATA | SEGMENT DATA Our reportable operating segments have been determined in accordance with the our internal management structure, which is organized based on operating activities, the manner in which we organize segments for allocating resources, making operating decisions and assessing performance and the availability of separate financial results. We do not allocate certain corporate expenses related to executive retirement plans, our Board of Directors, strategic initiatives, and certain other costs and report them in Corporate. Our former segments, Industrial and Widia, were combined into one Metal Cutting segment as of July 1, 2020, while Infrastructure remains unchanged. Segment results have been retrospectively restated to reflect the change in reportable segments. Our reportable operating segments do not represent the aggregation of two or more operating segments. METAL CUTTING The Metal Cutting segment develops and manufactures high performance tooling and metal cutting products and services and offers an assortment of standard and custom metal cutting solutions to diverse end markets, including aerospace, general engineering, energy and transportation. The products include milling, hole making, turning, threading and toolmaking systems used in the manufacture of airframes, aero engines, trucks and automobiles, ships and various types of industrial equipment. We leverage advanced manufacturing capabilities in combination with varying levels of customization to solve our customers’ toughest challenges and deliver improved productivity for a wide range of applications. Metal Cutting markets its products under the Kennametal®, WIDIA®, WIDIA Hanita® and WIDIA GTD® brands through its direct sales force, a network of independent and national distributors, integrated supplier channels and via the Internet. Application engineers and technicians are critical to the sales process and directly assist our customers with specified product design, selection, application and support. INFRASTRUCTURE Our Infrastructure segment produces engineered tungsten carbide and ceramic components, earth-cutting tools, and advanced metallurgical powders, primarily for the energy, earthworks and general engineering end markets. These wear-resistant products include compacts, nozzles, frac seats and custom components used in oil and gas and petrochemical industries; rod blanks and abrasive water jet nozzles for general industries; earth cutting tools and systems used in underground mining, trenching and foundation drilling and road milling; tungsten carbide powders for the oil and gas, aerospace and process industries; and ceramics used by the packaging industry for metallization of films and papers. We combine deep metallurgical and engineering expertise with advanced manufacturing capabilities to deliver solutions that drive improved productivity for our customers. Infrastructure markets its products primarily under the Kennametal® brand and sells through a direct sales force as well as through distributors. Our sales and operating (loss) income by segment are as follows:
The following table presents Kennametal's revenue disaggregated by geography:
The following tables presents Kennametal's revenue disaggregated by end market:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments at fair value on recurring basis | As of September 30, 2020, the fair values of our financial assets and financial liabilities are categorized as follows:
As of June 30, 2020, the fair values of our financial assets and financial liabilities are categorized as follows:
(1) Currency and interest rate derivatives are valued based on observable market spot and forward rates and are classified within Level 2 of the fair value hierarchy.
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Derivative Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of derivatives | The fair value of derivatives designated and not designated as hedging instruments in the condensed consolidated balance sheet are as follows:
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(Gains) losses related to derivatives not designated as hedging instruments | Losses related to derivatives not designated as hedging instruments have been recognized as follows:
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Gains and losses related to cash flow hedges | The following represents gains and losses related to cash flow hedges:
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in stock options | Changes in our stock options for the three months ended September 30, 2020 were as follows:
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Changes in time vesting and performance vesting restricted stock units | Changes in our performance vesting and time vesting restricted stock units for the three months ended September 30, 2020 were as follows:
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Pension and Other Postretirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net periodic pension (income) | The table below summarizes the components of net periodic pension income:
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Other Postretirement Benefits Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net periodic pension (income) | The table below summarizes the components of net periodic other postretirement benefit cost:
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Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories consisted of the following:
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Earnings Per Share (Tables) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following table provides the computation of diluted shares outstanding for the three months ended September 30, 2019:
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Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the changes in the carrying amounts of total equity, Kennametal shareholders' equity and equity attributable to noncontrolling interests | A summary of the changes in the carrying amounts of total equity, Kennametal Shareholders’ equity and equity attributable to noncontrolling interests for the three months ending September 30, 2020 and 2019 is as follows:
(2) Net of restricted stock units delivered upon vesting to satisfy tax withholding requirements.
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Accumulated Other Comprehensive Loss (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of, and changes in accumulated other comprehensive loss | The components of, and changes in, accumulated other comprehensive loss (AOCL) were as follows, net of tax, for the three months ended September 30, 2020:
The components of, and changes in, AOCL were as follows, net of tax, for the three months ended September 30, 2019:
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Reclassification out of Accumulated Other Comprehensive Loss | Reclassifications out of AOCL for the three months ended September 30, 2020 and 2019 consisted of the following:
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Income Tax Allocated to Each Component of Other Comprehensive Income [Table Text Block] | The amount of income tax allocated to each component of other comprehensive income (loss) for the three months ended September 30, 2020 and 2019 were as follows:
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Goodwill and Other Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The carrying amount of goodwill | A summary of the carrying amount of goodwill attributable to each segment, as well as the changes in such carrying amounts, is as follows:
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The components of intangible assets | The components of our other intangible assets were as follows:
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Segment Data (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | The following table presents Kennametal's revenue disaggregated by geography:
The following tables presents Kennametal's revenue disaggregated by end market:
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Sales and operating income (loss) by segment and segment assets | Our sales and operating (loss) income by segment are as follows:
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Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jun. 30, 2020 |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives Assets | $ 432 | $ 36 |
Total assets at fair value | 432 | 36 |
Derivatives Liabilities | 1,659 | 2,139 |
Total liabilities at fair value | 1,659 | 2,139 |
Fair Value, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives Assets | 432 | 36 |
Total assets at fair value | 432 | 36 |
Derivatives Liabilities | 1,659 | 2,139 |
Total liabilities at fair value | $ 1,659 | $ 2,139 |
Restructuring and Related Charges - Restructuring Accrual (Details) - USD ($) $ in Thousands |
3 Months Ended | |
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Sep. 30, 2020 |
Sep. 30, 2019 |
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Restructuring Reserve [Abstract] | ||
Beginning Balance | $ 47,366 | |
Restructuring Charges | 25,577 | $ 4,700 |
Asset Write-Down | (1,184) | |
Translation | 1,593 | |
Cash Expenditures | (14,993) | |
Ending Balance | 58,359 | |
Severance [Member] | ||
Restructuring Reserve [Abstract] | ||
Beginning Balance | 47,303 | |
Restructuring Charges | 24,393 | |
Asset Write-Down | 0 | |
Translation | 1,591 | |
Cash Expenditures | (14,928) | |
Ending Balance | 58,359 | |
Facilities [Member] | ||
Restructuring Reserve [Abstract] | ||
Beginning Balance | 0 | |
Restructuring Charges | 1,184 | |
Asset Write-Down | (1,184) | |
Translation | 0 | |
Cash Expenditures | 0 | |
Ending Balance | 0 | |
Other Restructuring [Member] | ||
Restructuring Reserve [Abstract] | ||
Beginning Balance | 63 | |
Restructuring Charges | 0 | |
Asset Write-Down | 0 | |
Translation | 2 | |
Cash Expenditures | (65) | |
Ending Balance | $ 0 |
Stock-Based Compensation (Details Textual) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
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Stock-Based Compensation (Textual) [Abstract] | ||
Cash received from the exercise of capital stock option | $ 0.0 | $ 0.1 |
Stock Option [Member] | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Unrecognized compensation cost | 0.0 | |
Total Intrinsic value of options exercised | 0.2 | |
Restricted Stock Units (RSUs) [Member] | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Compensation expense related to time vesting and performance vesting restricted stock units | 6.7 | $ 7.8 |
Unrecognized compensation cost | $ 34.2 | |
Unrecognized compensation costs, weighted average period | 2 years 4 months 24 days |
Pension and Other Postretirement Benefits - Components of Net Periodic Pension Income (Details) - Pension plans contribution [Member] - USD ($) $ in Thousands |
3 Months Ended | |
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Sep. 30, 2020 |
Sep. 30, 2019 |
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Net periodic pension income | ||
Service cost | $ 416 | $ 450 |
Interest cost | 5,775 | 6,824 |
Expected return on plan assets | (13,346) | (13,456) |
Amortization of transition obligation | 23 | 22 |
Amortization of prior service cost (credit) | 8 | 12 |
Recognition of actuarial losses | 3,372 | 2,595 |
Settlement gain | 0 | (122) |
Net periodic pension income | $ (3,752) | $ (3,675) |
Pension and Other Postretirement Benefits - Components of Net Periodic Other Postretirement Benefit Cost (Details) - Other postretirement benefit plans [Member] - USD ($) $ in Thousands |
3 Months Ended | |
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Sep. 30, 2020 |
Sep. 30, 2019 |
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Net periodic other postretirement benefit costs | ||
Interest cost | $ 76 | $ 101 |
Amortization of prior service credit | (69) | (69) |
Recognition of actuarial loss | 77 | 64 |
Net periodic other postretirement benefit cost | $ 84 | $ 96 |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jun. 30, 2020 |
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Inventories | ||
Finished goods | $ 313,266 | $ 318,071 |
Work in process and powder blends | 183,303 | 190,041 |
Raw materials | 74,314 | 75,589 |
Inventories at current cost | 570,883 | 583,701 |
Less: LIFO valuation | (62,144) | (61,254) |
Total inventories | $ 508,739 | $ 522,447 |
Inventories (Textual) [Abstract] | ||
Percentage of inventories valued by using LIFO method | 41.00% | 43.00% |
Environmental Matters (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Jun. 30, 2020 |
---|---|---|
Environmental Remediation Obligations [Abstract] | ||
Reserves for Environmental Costs | $ 15.7 | $ 15.6 |
Accrued Environmental Loss Contingencies, Current | $ 6.1 | $ 6.1 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
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Income Tax (Textual) [Abstract] | ||
Effective tax rate | 12.10% | 33.70% |
Earnings Per Shares (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted Average Number of Shares Outstanding, Basic | 83,318 | 82,881 |
Earnings Per Share (Textual) [Abstract] | ||
Increase in weighted average shares due to dilutive effect of unexercised capital stock options and unvested restricted stock units | 606 | |
Weighted Average Number of Shares Outstanding, Diluted | 83,318 | 83,487 |
Unexercised capital stock options and restricted stock units excluded from computation of diluted EPS | 649 |
Goodwill and Other Intangible Assets - Carrying Amount of Goodwill Attributable to Each Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
|
Goodwill [Roll Forward] | ||
Gross goodwill | $ 1,086,278 | $ 1,081,452 |
Accumulated impairment losses | (810,872) | (810,872) |
Goodwill, Beginning Balance | 270,580 | |
Change in gross goodwill due to translation | 4,826 | |
Goodwill, Ending Balance | 275,406 | |
Infrastructure [Member] | ||
Goodwill [Roll Forward] | ||
Gross goodwill | 633,211 | 633,211 |
Accumulated impairment losses | (633,211) | (633,211) |
Goodwill, Beginning Balance | 0 | |
Change in gross goodwill due to translation | 0 | |
Goodwill, Ending Balance | 0 | |
Metal Cutting | ||
Goodwill [Roll Forward] | ||
Gross goodwill | 453,067 | 448,241 |
Accumulated impairment losses | (177,661) | $ (177,661) |
Goodwill, Beginning Balance | 270,580 | |
Change in gross goodwill due to translation | 4,826 | |
Goodwill, Ending Balance | $ 275,406 |
Segment Data - Sales and Operating (Loss) Income by Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Jun. 30, 2020 |
|
Segment Reporting Information [Line Items] | |||
Assets | $ 2,558,996 | $ 3,037,591 | |
External sales: | |||
Sales | 400,305 | $ 518,088 | |
Operating (loss) income: | |||
Total operating (loss) income | (17,178) | 16,376 | |
Interest expense | 10,578 | 7,881 | |
Other income, net | (4,019) | (2,681) | |
(Loss) income from continuing operations before income taxes | (23,737) | 11,176 | |
Infrastructure [Member] | |||
External sales: | |||
Sales | 152,429 | 194,003 | |
Operating (loss) income: | |||
Total operating (loss) income | (7,268) | 2,690 | |
Corporate [Member] | |||
Operating (loss) income: | |||
Total operating (loss) income | 820 | 240 | |
Metal Cutting | |||
External sales: | |||
Sales | 247,876 | 324,085 | |
Operating (loss) income: | |||
Total operating (loss) income | $ 23,626 | $ (19,306) |
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