Company Overview - Kennametal Inc. is an industrial technology leader with over 85 years of experience, focusing on materials science, tooling, and wear-resistant solutions [1] - The company serves customers in various sectors including aerospace and defense, earthworks, energy, general engineering, and transportation [1] - Kennametal employs approximately 8,100 individuals and operates in nearly 100 countries [1] Financial Performance - In fiscal 2025, Kennametal generated nearly $2 billion in revenues [1] Upcoming Events - Kennametal will attend the Morgan Stanley 13th Annual Laguna Conference on September 10, 2025 [1] - Key attendees from Kennametal include Sanjay Chowbey (President and CEO), Patrick Watson (CFO), and Michael Pici (VP, Investor Relations) [1]

Group 1 - The company Kennametal (NYSE: KMT) showed strong revenue performance in July 2023, indicating positive growth in the industrial sector [1] - Despite good revenue figures, the company faced challenges with profits and cash flows, suggesting potential areas for improvement [1] Group 2 - The focus of Crude Value Insights is on cash flow and identifying companies in the oil and natural gas sector that demonstrate value and growth prospects [2] - Subscribers to Crude Value Insights benefit from a comprehensive stock model account and in-depth cash flow analyses of exploration and production firms [2]

PART I [Business Overview](index=4&type=section&id=Item%201%20Business) Kennametal is a global industrial technology leader in materials science, operating Metal Cutting and Infrastructure segments - Kennametal Inc. is a global industrial technology leader founded in 1938, specializing in tungsten carbide technology for metal cutting and extreme wear applications[11](index=11&type=chunk)[99](index=99&type=chunk) - The company operates in two segments: **Metal Cutting** and **Infrastructure**, offering standard and custom products like tooling, wear components, and metallurgical powders[15](index=15&type=chunk)[100](index=100&type=chunk) - International operations generated **60% of consolidated sales** in 2025, with key markets in Western Europe, China, and India, highlighting global diversification but also exposure to international risks[17](index=17&type=chunk)[49](index=49&type=chunk) - R&D efforts focus on new product and process technology development, utilizing a disciplined 'stage-gate' framework to accelerate commercial success and enhance operational excellence[21](index=21&type=chunk) - The company maintains a competitive position in major markets, differentiating through customer support, innovation, product performance, quality, and brand recognition, rather than solely on price[24](index=24&type=chunk)[25](index=25&type=chunk) - As of June 30, 2025, Kennametal employed **8,124 people globally**, with approximately 1,900 represented by labor unions[33](index=33&type=chunk)[34](index=34&type=chunk)[37](index=37&type=chunk)[40](index=40&type=chunk) Human Capital Metrics (FY2025 vs. FY2024) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Recordable Incident Rate (TRIR) | 0.42 | 0.35 | | Voluntary Turnover Rate | 7.7% | 7.9% | [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from global operations, business strategy, cybersecurity, raw materials, and debt covenants - Geopolitical conflicts (Middle East, Russia-Ukraine) pose significant global operational risks, potentially leading to supply chain disruptions, increased cybersecurity threats, unfavorable exchange rates, and reduced customer demand[46](index=46&type=chunk) - International operations, which account for **60% of sales**, are exposed to risks like currency exchange rate fluctuations, trade barriers, regional economic uncertainty, and political instability[49](index=49&type=chunk) - Business strategy risks include the possibility that restructuring efforts may not achieve intended benefits, challenges in successfully integrating acquisitions, and the potential for future goodwill impairment charges (**goodwill totaled $282.7 million** at June 30, 2025)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - Cybersecurity threats to information technology systems could lead to operational disruptions, data misuse, litigation, and reputational damage, despite current security measures[65](index=65&type=chunk) - Fluctuations in raw material prices (e.g., tungsten, cobalt, steel) and supply availability, largely from international sources, can significantly impact operating results and profitability[67](index=67&type=chunk) - Debt agreements contain restrictive covenants, including a **maximum leverage ratio**, which could limit the company's ability to incur additional debt, make acquisitions, pay dividends, or fund capital expenditures[68](index=68&type=chunk) [Unresolved Staff Comments](index=13&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[69](index=69&type=chunk) [Cybersecurity](index=13&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity risk is managed through the NIST framework, with oversight from the Board of Directors and Audit Committee - Kennametal assesses, identifies, and manages cybersecurity risks through a structured process guided by the NIST Cybersecurity Framework[70](index=70&type=chunk) - The company monitors third-party service providers for security adherence and deploys state-of-the-art technologies, a **24/7 Security Operations Center**, and regular testing to identify and respond to security incidents[71](index=71&type=chunk)[72](index=72&type=chunk) - Cybersecurity risk oversight is maintained by the Board of Directors, with the Audit Committee specifically tasked with monitoring these risks and evaluating the company's approach[73](index=73&type=chunk) - Management, led by the Chief Information Security Officer (CISO) with over 20 years of experience, oversees risk assessment and mitigation, providing regular reports to the Board[74](index=74&type=chunk) [Properties](index=13&type=section&id=Item%202.%20Properties) The company operates numerous manufacturing, distribution, and R&D facilities globally, all deemed adequate for current needs - Principal executive offices are in Pittsburgh, PA, with corporate offices in Neuhausen (Switzerland), Bangalore (India), and Singapore[75](index=75&type=chunk) - The company operates numerous manufacturing facilities across the United States and internationally (e.g., Bolivia, Brazil, Canada, China, Germany, India, Israel, Poland, South Africa, Spain, UK, Vietnam)[76](index=76&type=chunk) - Facilities produce a diverse range of products for both **Metal Cutting** (e.g., carbide round tools, metal cutting inserts, toolholders) and **Infrastructure** (e.g., metallurgical powders, wear parts, mining and construction tools) segments[76](index=76&type=chunk) - Research and development efforts are primarily conducted at the technology center in Latrobe, PA, and facilities in Rogers, AR, Fürth, Germany, and Bangalore, India[77](index=77&type=chunk) - Production capacity is adequate for present needs, and properties are generally in good condition and suitable for business operations[78](index=78&type=chunk) [Legal Proceedings](index=15&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings and intends to vigorously defend a recent breach of contract lawsuit - The company is a party to legal claims and proceedings in the ordinary course of business, which may relate to operations or assets[79](index=79&type=chunk) - In February 2025, MachiningCloud, Inc. filed a lawsuit against Kennametal, alleging breach of contract and seeking over **$330 million in damages**; the company intends to vigorously defend the action[336](index=336&type=chunk) - Management believes that the ultimate liability from these actions will not materially affect the company's financial position, results of operations, or liquidity, though the outcome of litigation is uncertain[79](index=79&type=chunk) [Mine Safety Disclosures](index=15&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[80](index=80&type=chunk) PART II [Market for Common Equity, Stockholder Matters, and Issuer Purchases](index=15&type=section&id=Item%205.%20Market%20for%20the%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on the NYSE, and it executed share repurchases under an authorized program in fiscal 2025 - Kennametal's capital stock is traded on the New York Stock Exchange under the symbol **'KMT'**[3](index=3&type=chunk) - As of July 31, 2025, there were **1,197 shareholders of record**[81](index=81&type=chunk) - In fiscal 2025, a New Peer Group was established for executive compensation evaluation, comprising 20 companies including Alamo Group, Inc. and Barnes Group Inc[85](index=85&type=chunk)[86](index=86&type=chunk) - During 2025, the company repurchased **2.5 million shares** of common stock for **$60 million** under a $200 million, three-year share repurchase program authorized in February 2024[105](index=105&type=chunk)[148](index=148&type=chunk) Issuer Purchases of Equity Securities (Q4 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | :--- | :--- | :--- | :--- | :--- | | April 1 through April 30, 2025 | 183 | $21.89 | — | $145,000,000 | | May 1 through May 31, 2025 | 121,891 | $21.42 | 120,000 | $142,300,000 | | June 1 through June 30, 2025 | 115,578 | $21.68 | 112,000 | $140,000,000 | | Total | 237,652 | $21.55 | 232,000 | | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 sales and operating income declined due to lower volumes and unfavorable currency, despite restructuring benefits - Sales decreased **4% in 2025**, primarily due to a 4% organic sales decline and a 1% unfavorable currency exchange effect, partially offset by a 1% favorable business days effect[102](index=102&type=chunk)[111](index=111&type=chunk) - Operating income decreased due to lower sales and production volumes, higher wages, general inflation, unfavorable foreign currency exchange ($6 million), and increased tariffs ($4 million), partially offset by restructuring benefits ($23 million), pricing, lower raw material costs, and benefits from the Inflation Reduction Act and tornado recovery ($13 million and $12 million, respectively, in Infrastructure)[103](index=103&type=chunk) - The company completed the sale of a subsidiary in Goshen, Indiana, for **$19 million**, recognizing a **$1.5 million loss** on divestiture[104](index=104&type=chunk) - Restructuring initiatives in fiscal 2024 and 2025 aimed to streamline cost structure and mitigate softer market conditions, delivering annualized run rate pre-tax savings of approximately **$35 million** and **$28 million**, respectively[113](index=113&type=chunk)[114](index=114&type=chunk) - The effective tax rate for 2025 was **25.2%**, up from 21.3% in 2024, primarily due to prior year adjustments and current year benefits from advanced manufacturing production credit and an Indian tax dispute resolution[118](index=118&type=chunk) - Cash flow from operating activities decreased to **$208.3 million** in 2025 from $277.1 million in 2024, primarily due to changes in working capital, including an increase in inventories and decreases in accrued income taxes and pension benefits[109](index=109&type=chunk)[149](index=149&type=chunk) - The company's liquidity is supported by **$140.5 million in cash** and cash equivalents and a **$700.0 million revolving credit facility** with no outstanding borrowings as of June 30, 2025[136](index=136&type=chunk)[140](index=140&type=chunk) Consolidated Financial Highlights (FY2025 vs. FY2024) | Metric | FY2025 (in millions) | FY2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Sales | $1,966.8 | $2,046.9 | (4)% | | Operating Income | $143.1 | $170.2 | (16)% | | Operating Margin | 7.3% | 8.3% | (1.0) pp | | Net Income Attributable to Kennametal | $93.1 | $109.3 | (15)% | | Diluted EPS | $1.20 | $1.37 | (12)% | | Cash Flow from Operating Activities | $208.3 | $277.1 | (25)% | | Capital Expenditures | $89.0 | $107.6 | (17)% | | Share Repurchases | $60.0 | $60.0 (approx) | 0% | | Dividends Paid | $62.0 | $63.4 | (2)% | [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company uses derivative instruments to hedge foreign exchange and interest rate risks, with immaterial hypothetical impacts - Kennametal uses derivative financial instruments (currency forward contracts, range forward contracts) to manage market risks from foreign exchange rates and interest rates, primarily to reduce cash flow volatility, not for speculation[187](index=187&type=chunk)[191](index=191&type=chunk) - A hypothetical **10% strengthening or weakening of the U.S. dollar** would result in an immaterial change of $0.3 million to accumulated other comprehensive loss and $0.4 million to pre-tax income[191](index=191&type=chunk) - Less than **1% of the company's debt** was exposed to variable interest rates as of June 30, 2025 and 2024, making a hypothetical 10% change in market interest rates immaterial[192](index=192&type=chunk) Impact of Currency Exchange Rate Fluctuations on Diluted EPS | Year | Impact on Diluted EPS | | :--- | :--- | | 2025 | -$0.02 | | 2024 | -$0.11 | [Financial Statements and Supplementary Data](index=32&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements and reports on the effectiveness of internal controls - Management concluded that the company maintained **effective internal control** over financial reporting as of June 30, 2025, based on COSO criteria[196](index=196&type=chunk) - PricewaterhouseCoopers LLP audited and confirmed the effectiveness of the company's internal control over financial reporting and presented fair consolidated financial statements for the period ended June 30, 2025[201](index=201&type=chunk) - A critical audit matter identified was the **provision for income taxes**, requiring significant auditor effort and specialized skill due to the complexity of management's estimates and judgments regarding unrecognized tax benefits and valuation allowances[208](index=208&type=chunk)[209](index=209&type=chunk) Consolidated Statements of Income (in thousands) | Year ended June 30 | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Sales | $1,966,845 | $2,046,899 | $2,078,184 | | Cost of goods sold | 1,368,775 | 1,419,806 | 1,431,745 | | Gross profit | 598,070 | 627,093 | 646,439 | | Operating expense | 430,835 | 433,161 | 437,292 | | Restructuring and other charges, net | 11,813 | 12,152 | 4,106 | | Loss on divestiture | 1,512 | — | — | | Amortization of intangibles | 10,787 | 11,557 | 12,624 | | Operating income | 143,123 | 170,223 | 192,417 | | Interest expense | 24,930 | 26,472 | 28,496 | | Other (income) expense, net | (13,811) | (699) | 4,300 | | Income before income taxes | 132,004 | 144,450 | 159,621 | | Provision for income taxes | 33,296 | 30,809 | 36,255 | | Net income | 98,708 | 113,641 | 123,366 | | Less: Net income attributable to noncontrolling interests | 5,583 | 4,318 | 4,907 | | Net income attributable to Kennametal | $93,125 | $109,323 | $118,459 | | Basic earnings per share | $1.21 | $1.38 | $1.47 | | Diluted earnings per share | $1.20 | $1.37 | $1.46 | Consolidated Balance Sheets (in thousands) | As of June 30 | 2025 | 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $140,540 | $127,971 | | Accounts receivable, net | 295,401 | 302,810 | | Inventories | 538,237 | 514,632 | | Total current assets | 1,039,270 | 1,002,592 | | Property, plant and equipment, net | 919,914 | 938,063 | | Goodwill | 282,726 | 271,567 | | Other intangible assets, net | 67,209 | 81,421 | | Total assets | $2,545,412 | $2,503,758 | | **LIABILITIES** | | | | Total current liabilities | 422,329 | 415,961 | | Long-term debt, less current maturities | 596,788 | 595,980 | | Total liabilities | 1,220,764 | 1,215,159 | | **EQUITY** | | | | Total Kennametal Shareholders' Equity | 1,283,979 | 1,249,875 | | Total equity | 1,324,648 | 1,288,599 | | Total liabilities and equity | $2,545,412 | $2,503,758 | Consolidated Statements of Cash Flows (in thousands) | Year ended June 30 | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Net cash flow provided by operating activities | $208,324 | $277,108 | $257,945 | | Net cash flow used for investing activities | (61,825) | (109,426) | (89,230) | | Net cash flow used for financing activities | (133,919) | (141,747) | (143,108) | | Net increase in cash and cash equivalents | 12,569 | 21,950 | 20,435 | | Cash and cash equivalents, end of year | $140,540 | $127,971 | $106,021 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=68&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with its accountants - There were no changes in or disagreements with accountants on accounting and financial disclosure[349](index=349&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of June 30, 2025 - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were **effective as of June 30, 2025**, providing reasonable assurance for timely and accurate financial reporting[350](index=350&type=chunk) - The effectiveness of internal control over financial reporting was audited by PricewaterhouseCoopers LLP and affirmed by management[350](index=350&type=chunk) - No material changes in internal control over financial reporting occurred during the fourth quarter of 2025[350](index=350&type=chunk) [Other Information](index=68&type=section&id=Item%209B.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements in the quarter ended June 30, 2025[351](index=351&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=68&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable[352](index=352&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=69&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on executive officers and corporate governance, with key appointments made in 2024 and 2025 - Sanjay Chowbey serves as **President and Chief Executive Officer** since June 2024[353](index=353&type=chunk) - Dave Bersaglini was appointed **Vice President and President, Metal Cutting Business Segment** in August 2024[355](index=355&type=chunk) - Faisal Hamadi became **Vice President and President, Infrastructure Business Segment** in January 2025[356](index=356&type=chunk) - The Audit Committee, composed of Steven H. Wunning (Chair), Shelley Bausch, Douglas T. Dietrich, Sagar A. Patel, and Paul Sternlieb, oversees corporate governance[363](index=363&type=chunk) - The company has an insider trading policy designed to promote compliance with insider trading laws and NYSE listing standards[362](index=362&type=chunk) [Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the 2025 Proxy Statement - Executive compensation details, including Compensation Discussion and Analysis, Executive Compensation Tables, and information on retirement programs, are incorporated by reference from the 2025 Proxy Statement[364](index=364&type=chunk) - Information on Board of Directors compensation and benefits is also incorporated by reference[364](index=364&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=70&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Details on equity compensation plans and security ownership are incorporated by reference from the 2025 Proxy Statement - Information on equity compensation plans and security ownership of beneficial owners, management, and directors is incorporated by reference from the 2025 Proxy Statement[365](index=365&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=70&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related person transactions and director independence is incorporated by reference from the 2025 Proxy Statement - Information on related person transactions, executive compensation, and director independence is incorporated by reference from the 2025 Proxy Statement[366](index=366&type=chunk) [Principal Accounting Fees and Services](index=70&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Details on principal accountant fees and services are incorporated by reference from the 2025 Proxy Statement - Information on pre-approval policies for accounting fees and services, and details on principal accountant fees and services, is incorporated by reference from the 2025 Proxy Statement[367](index=367&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=73&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed as part of the Form 10-K report - The report includes a schedule of **Valuation and Qualifying Accounts** for the years ended June 30, 2025, 2024, and 2023[372](index=372&type=chunk)[400](index=400&type=chunk) - Various corporate documents, indentures, and material contracts, including stock and incentive plans, are listed, with many incorporated by reference from prior SEC filings[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk) - Certifications by the President and CEO, Sanjay Chowbey, and the Vice President Finance and CFO, Patrick S. Watson, are filed as exhibits[396](index=396&type=chunk)[397](index=397&type=chunk) - XBRL (Extensible Business Reporting Language) instance documents for financial statements are attached as Exhibit 101[398](index=398&type=chunk) [Form 10-K Summary](index=78&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not include a Form 10-K Summary in this report - No Form 10-K Summary is provided[401](index=401&type=chunk)

Core Viewpoint - Kennametal Inc. (KMT) has underperformed in operational performance, facing challenges from weak business segments and high debt levels [1] Group 1: Business Performance - The Metal Cutting segment has experienced a 4% year-over-year decline in organic revenues in Q4 of fiscal 2025, primarily due to decreased demand in the transportation end market and lower industrial production [3] - The Infrastructure segment's organic revenues fell by 5% year-over-year in Q4 of fiscal 2025, attributed to weakness in the general engineering end market and reduced mining activity in the Americas and Asia Pacific [4] Group 2: Financial Health - As of the end of Q4 fiscal 2025, Kennametal's long-term debt was $596.8 million, with cash and cash equivalents amounting to $140.5 million, resulting in a long-term debt-to-capital ratio of 31.1% [5] - The company's high debt levels may increase financial obligations and negatively impact profitability in the future [5] Group 3: Market Performance - Over the past year, Kennametal's stock has declined by 16.3%, contrasting with the industry's growth of 4.4% [7] - The earnings per share (EPS) estimate for fiscal 2026 has decreased from $1.38 to $1.22 over the past 60 days, indicating a downward trend in earnings expectations [9][11] Group 4: External Factors - Kennametal's global operations expose it to risks from geopolitical issues and adverse foreign currency movements, with a 1% negative impact on revenues due to foreign currency translation in fiscal 2025 [10]

Core Insights - Kennametal Inc. (KMT) reported adjusted earnings of 34 cents per share for Q4 fiscal 2025, missing the Zacks Consensus Estimate of 40 cents, and reflecting a 30.6% decrease from the previous year [1][9] - The company's adjusted earnings for fiscal 2025 were $1.34 per share, down 10.7% year over year [1] Revenue Details - KMT's revenues for Q4 were $516 million, a 5% decline from the same quarter last year, and below the Zacks Consensus Estimate of $527 million [2][9] - For fiscal 2025, net revenues totaled $1.97 billion, down 4% year over year [2] Geographical Performance - Revenues from American operations decreased 5% year over year to $254.3 million [3] - Sales from Europe, the Middle East, and Africa were $158.4 million, also down 5% from the previous year [3] - Asia Pacific sales decreased 2% to $103.8 million [3] Segment Performance - The Metal Cutting segment reported revenues of $321 million, a 4% decline year over year, missing the consensus estimate of $323 million [3] - The Infrastructure segment's revenues totaled $196 million, down 6% year over year, with organic revenues decreasing 5% [4] Margin Profile - KMT's cost of goods sold decreased 0.3% year over year to $370.8 million, while gross profit declined 15% to $145.7 million, leading to a gross margin decrease of 300 basis points to 28.2% [5][9] - Operating income fell 48.9% year over year to $31.4 million, with an operating margin decline of 520 basis points to 6.1% [6] Balance Sheet and Cash Flow - As of the end of Q4, cash and cash equivalents were $140.5 million, up from $128 million in the previous year [7] - Long-term debt increased slightly to $596.8 million from $596 million year over year [7] - KMT generated net cash of $208.3 million from operating activities, down from $277.1 million in the previous fiscal year [8] Dividend and Guidance - The board approved a quarterly cash dividend of 20 cents per share, payable on August 26, 2025 [11] - For fiscal 2026, KMT anticipates sales between $1.95 billion and $2.05 billion, with adjusted earnings per share expected to range from 90 cents to $1.30 [12]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks. Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks ...

Group 1 - Kennametal (KMT) has experienced a significant decline of 15.3% over the past four weeks, but it is now in oversold territory, indicating a potential for a trend reversal [1] - The Relative Strength Index (RSI) for KMT is currently at 28.83, suggesting that the heavy selling pressure may be exhausting, which could lead to a price rebound [5] - There is a strong consensus among Wall Street analysts that KMT will report better earnings than previously predicted, with a 1.8% increase in the consensus EPS estimate over the last 30 days [7] Group 2 - KMT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8]

Financial Data and Key Metrics Changes - Sales for the fourth quarter decreased 5% year over year, with Metal Cutting declining 4% and Infrastructure declining 5% [16][21] - Adjusted EPS declined to $0.34 compared to $0.49 in the prior year quarter [20] - Adjusted EBITDA margin was 14.8%, down from 17.7% in the prior year quarter [18] - Cash flow from operating activities for the year was $208 million, with a full year free operating cash flow of $121 million compared to $175 million in the prior year [12][25] Business Line Data and Key Metrics Changes - Metal Cutting reported an organic sales decline of 4% year over year, with adjusted operating margin decreasing to 7.9% [21][23] - Infrastructure organic sales decreased by 5% year over year, with adjusted operating margin declining to 6.8% [23][25] - Aerospace and Defense grew 1% year over year, while Transportation declined 4% and General Engineering declined 5% [22][24] Market Data and Key Metrics Changes - Most end markets experienced mid single-digit declines on a constant currency basis, with Energy declining 6% due to lower activity [11][22] - Aerospace and Defense is expected to see low double-digit growth, while Transportation is projected to decline mid-single digits [13][14] Company Strategy and Development Direction - The company is focusing on rightsizing capacity and optimizing its cost structure to address structural cost issues [34][36] - Plans include consolidating operations and maximizing efficiency across all locations, with a target of $125 million in cost savings by 2027 [36][38] - The company aims to maintain flexibility for future recovery while addressing current low volumes [37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged continued market softness and uncertainty around tariffs impacting global production [10][11] - The outlook for fiscal 2026 includes expected sales between $1.95 billion and $2.05 billion, with volume ranging from negative 5% to flat [27] - Management expressed confidence in the long-term prospects of end markets despite near-term challenges [82] Other Important Information - The company returned $122 million to shareholders through share repurchases and dividends [12] - The company has a healthy balance sheet with $840 million of cash and revolver availability at quarter end [26] Q&A Session Summary Question: Can you provide more color on the fiscal year 2026 outlook? - Management indicated a balanced view on the outlook, projecting single-digit declines in certain segments while expecting growth in Aerospace and Defense [40][41] Question: How much of the strategy shift is due to Kennametal's positioning versus macro factors? - Management noted that both structural challenges and market conditions are influencing the strategy, with a focus on sustainable changes [42][44] Question: What is the expected seasonality of earnings for fiscal 2026? - Management expects a normal seasonal pattern with about 40% of EPS in the first half and 60% in the second half [48][51] Question: Are margins expected to improve in fiscal 2026? - Management projected operating margin improvements, although some headwinds from tariffs may compress margins [53][59] Question: How does the company plan to address competitive pressures? - Management emphasized ongoing portfolio optimization and actions to improve performance in low-performing areas [68][70] Question: What is the outlook for the energy end market? - Management expects a flat outlook for energy, with rig counts projected to decline [72] Question: What is the expectation for Aerospace and Defense growth? - Management anticipates stable low double-digit growth in Aerospace and Defense throughout the fiscal year [75]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Kennametal (KMT) Stock Analysis - Kennametal (KMT) has shown a price increase of 5.3% over the past four weeks, indicating growing investor interest [4] - KMT has gained 13.4% over the past 12 weeks, with a beta of 1.44, suggesting it moves 44% more than the market [5] - KMT holds a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - KMT has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [7] - The stock is currently trading at a Price-to-Sales ratio of 0.96, indicating it is reasonably valued at 96 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides KMT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help identify potential winning stocks based on various investing styles [9]

FY25 Fourth Quarter Earnings Call Presentation August 6, 2025 Q4 FY25 EARNINGS Safe Harbor Statement Certain statements in this release may be forward-looking in nature, or "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. For example, statements about Kennametal's outlook for sales, adjusted operating income, ...