Segment Data

12 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SEGMENT DATA

SEGMENT DATA

The Company manages and reports its business in the following two segments: Metal Cutting and Infrastructure. The Company's reportable operating segments have been determined in accordance with the Company's internal management structure, which is organized based on operating activities, the manner in which we organize segments for 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, the Company’s Board of Directors and strategic initiatives, as well as certain other costs and report them in Corporate. Our reportable operating segments do not represent the aggregation of two or more operating segments.

Sales to a single customer did not aggregate to five percent or more of total sales in 2023, 2022 and 2021.

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 and defense, 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 aerospace and defense, 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; high temperature critical wear components, tungsten penetrators and armor solutions for aerospace and defense; and ceramics used by the packaging industry for metallization of films and papers. We combine deep metallurgical and engineering expertise with advanced manufacturing capabilities, such as 3D printing, 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.

Segment data is summarized as follows: 

(in thousands)	2023		2022		2021
Sales:
Metal Cutting	$	1,269,765	$	1,227,273	$	1,150,746
Infrastructure	808,419		785,183		690,695
Total sales	$	2,078,184	$	2,012,456	$	1,841,441
Operating income:
Metal Cutting	$	135,763	$	121,386	$	45,855
Infrastructure	59,757		98,871		59,461
Corporate	(3,103)		(2,117)		(3,148)
Total operating income	$	192,417	$	218,140	$	102,168
Interest expense	$	28,496	$	25,914	$	46,375
Other expense (income), net	4,300		(14,507)		(8,867)
Income before income taxes	$	159,621	$	206,733	$	64,660
Depreciation and amortization:
Metal Cutting	$	90,880	$	87,986	$	81,796
Infrastructure	43,144		43,691		44,661
Corporate	1		1		31
Total depreciation and amortization	$	134,025	$	131,678	$	126,488
Segment assets(4):
Metal Cutting	$	1,460,757	$	1,469,835	$	1,532,177
Infrastructure	734,944		768,226		698,766
Corporate	351,533		335,463		434,818
Total assets	$	2,547,234	$	2,573,524	$	2,665,761
Capital expenditures:
Metal Cutting	$	58,384	$	64,055	$	103,812
Infrastructure	36,001		32,869		23,490
Total capital expenditures	$	94,385	$	96,924	$	127,302

(4) Metal Cutting and Infrastructure segment assets are principally accounts receivable, less allowance for doubtful accounts; inventories; property, plant and equipment, net; goodwill; other intangible assets, net of accumulated amortization; and operating lease ROU assets. Corporate assets are principally cash and cash equivalents, other current assets, long-term prepaid pension benefit, deferred income taxes and other assets.

Geographic information for sales, based on country where the sale originated, and long-lived assets is as follows:

(in thousands)	2023		2022		2021
Sales:
United States	$	848,713	$	797,768	$	692,106
Germany	270,936		262,764		260,792
China	220,193		234,997		242,815
India	112,819		108,695		94,966
Canada	103,323		94,956		79,891
Italy	68,249		67,930		59,955
France	51,178		47,218		45,356
South Africa	42,775		42,402		36,079
Mexico	42,367		35,099		29,629
Brazil	32,946		26,147		21,292
Spain	31,064		29,756		30,577
United Kingdom	29,943		30,686		28,464
Other(5)	223,678		234,038		219,519
Total sales	$	2,078,184	$	2,012,456	$	1,841,441
Total long-lived assets:
United States	$	552,770	$	585,003	$	611,724
Germany	204,551		195,325		218,250
China	81,731		92,315		97,404
India	44,748		45,146		19,144
Israel	24,662		26,864		44,504
Canada	18,934		18,478		21,790
Other (5)	41,672		38,910		42,319
Total long-lived assets(6)	$	969,068	$	1,002,041	$	1,055,135

(5) Other does not contain any country that individually exceeds 2 percent of total sales or total long-lived assets, respectively.

(6) Total long-lived assets as of June 30, 2023, 2022 and 2021 include property, plant, and equipment, net.

The following table presents Kennametal's revenue disaggregated by segment by geography:

	Metal Cutting						Infrastructure						Total Kennametal
	2023		2022		2021		2023		2022		2021		2023		2022		2021
Americas	44	%	41	%	38	%	60	%	59	%	57	%	50	%	48	%	45	%
EMEA	36		37		39		18		18		19		29		30		31
Asia Pacific	20		22		23		22		23		24		21		22		24

To better align with the Company's strategic goals and initiatives, certain of the end markets that are reported externally and used to analyze sales performance have been redefined. The changes include 1.) defense sales were moved from general engineering and are now combined with aerospace sales for a new "aerospace and defense" end market, 2.) certain Metal Cutting sales have been reclassified from general engineering to the aerospace and defense end market, and 3.) Infrastructure's ceramics sales have been reclassified from energy to the general engineering end market. All periods presented have been retrospectively restated to align with the new end markets.

The following table presents Kennametal's revenue disaggregated by segment by end market:

	Metal Cutting						Infrastructure						Total Kennametal
	2023		2022		2021		2023		2022		2021		2023		2022		2021
General Engineering	55	%	55	%	53	%	34	%	34	%	34	%	47	%	47	%	46	%
Transportation	27		27		30		—		—		—		16		17		19
Aerospace & Defense	11		10		9		6		7		9		9		9		9
Energy	7		8		8		24		22		18		14		13		12
Earthworks	—		—		—		36		37		39		14		14		14