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Sep 30, 2021
Kennametal Q1 2022 Earnings Report
Reported strong first quarter, driven by execution of commercial and operational excellence initiatives and improved market conditions.
Key Takeaways
Kennametal's first quarter fiscal 2022 results showed significant improvement, with sales increasing by 21% year-over-year to $484 million. EPS reached $0.43, and adjusted EPS was $0.44, a substantial increase from the prior year. Strong cash flow from operations and significant operating leverage contributed to the positive results.
Sales increased 21 percent year-over-year, driven by growth across all regions and end markets.
Earnings per diluted share (EPS) was $0.43, and adjusted EPS was $0.44.
Cash flow from operations showed strong performance at $16 million, up approximately 60 percent year-over-year.
Operating margin improved significantly, with more than 1,500 basis points improvement.
Revenue by Geographic Location
Forward Guidance
The Company expects sales to be up 9 - 14 percent compared to the prior year quarter. Strong operating leverage for the full year.
Positive Outlook
- Sales expected to be up 9 - 14 percent compared to the prior year quarter
- Strong operating leverage for the full year
- Free operating cash flow at approximately 100 percent of adjusted net income
- Capital spending expected to be $110 - $130 million
- Primary working capital trending toward 30 percent of sales by year-end
Challenges Ahead
- Cost headwinds of approximately $10 million from prior year temporary cost controls
- Costs increasing approximately $10 million from the first quarter due to price/raw materials, merit increases and higher depreciation expense
- First half headwinds from prior year temporary cost controls of approximately $25 million
- Adjusted ETR expected to be 25 - 28 percent
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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