Core Viewpoint - Kennametal Inc. will participate in the UBS Global Industrials & Transportation Conference, indicating its ongoing engagement with industry stakeholders and investors [1] Company Information - Kennametal Inc. has over 85 years of experience as an industrial technology leader, focusing on delivering productivity through materials science, tooling, and wear-resistant solutions [1] Conference Details - The UBS Global Industrials & Transportation Conference will take place on Tuesday, December 2, 2025 [1] - Key attendees from Kennametal include Patrick Watson (Vice President and CFO), David Bersaglini (Vice President and President of Metal Cutting), and Michael Pici (Vice President of Investor Relations) [1]

Core Viewpoint - Kennametal Inc. (KMT) is showing potential for a bullish breakout due to a recent "golden cross" in its moving averages, indicating a positive technical outlook [1] Technical Analysis - KMT's 50-day simple moving average has crossed above its 200-day simple moving average, forming a "golden cross," which is a significant bullish indicator [1] - A successful golden cross event consists of three stages: a price decline bottoming out, the shorter moving average crossing above the longer one, and the stock maintaining upward momentum [2] Performance Metrics - Over the past four weeks, KMT has experienced a gain of 28.4% [3] - The stock currently holds a 2 (Buy) rating on the Zacks Rank, suggesting it may be positioned for further breakout [3] Earnings Outlook - KMT has seen one upward revision in earnings estimates over the past 60 days, with no downward revisions, indicating a positive earnings outlook for the current quarter [3] - The Zacks Consensus Estimate for KMT has also increased, reinforcing the bullish sentiment [3][5]

Core Insights - Kennametal Inc. reported better-than-expected first-quarter financial results, with adjusted earnings of 34 cents per share, surpassing market estimates of 23 cents per share [1] - The company's sales reached $497.974 million, exceeding expectations of $476.934 million [1] - Following the earnings announcement, Kennametal raised its FY26 guidance above estimates [1] Financial Performance - Adjusted earnings per share (EPS) for the first quarter were 34 cents, beating the expected 23 cents [1] - Sales for the quarter were $497.974 million, compared to the anticipated $476.934 million [1] Market Reaction - Following the earnings report, Kennametal shares increased by 1.3%, trading at $26.40 [2] - Analysts adjusted their price targets for Kennametal after the earnings announcement [2] Analyst Ratings - Barclays analyst Julian Mitchell maintained an Equal-Weight rating on Kennametal and raised the price target from $22 to $25 [4] - JP Morgan analyst Tami Zakaria maintained an Underweight rating while also increasing the price target from $22 to $25 [4]

Core Viewpoint - Kennametal Inc. reported better-than-expected first-quarter financial results and raised its FY26 guidance above estimates, indicating strong performance and positive market outlook [1]. Financial Performance - Adjusted earnings for the first quarter were 34 cents per share, surpassing market estimates of 23 cents per share [1]. - Sales reached $497.974 million, exceeding expectations of $476.934 million [1]. Management Commentary - Sanjay Chowbey, President and CEO, noted that the first quarter started strong with share gains and modest improvements in end markets, leading to sales and adjusted EPS that exceeded the upper end of their outlook [2]. Stock Market Reaction - Following the earnings announcement, Kennametal shares rose by 1.3%, trading at $26.40 [2]. Analyst Ratings and Price Targets - Barclays analyst Julian Mitchell maintained an Equal-Weight rating on Kennametal and raised the price target from $22 to $25 [4]. - JP Morgan analyst Tami Zakaria maintained an Underweight rating while also increasing the price target from $22 to $25 [4].

Core Viewpoint - Kennametal (KMT) is positioned as a strong investment opportunity due to its improving earnings outlook and analysts' increasing earnings estimates [1][2] Earnings Estimates - Analysts are optimistic about Kennametal's earnings prospects, leading to higher estimates that are expected to positively influence the stock price [2] - The consensus earnings estimate for the current quarter is $0.27 per share, reflecting an 8.0% increase from the previous year, with a 40% rise in the Zacks Consensus Estimate over the last 30 days [6] - For the full year, the expected earnings are $1.13 per share, indicating a year-over-year decline of 15.7%, but the trend shows encouraging revisions with no negative adjustments [7] Zacks Rank - Kennametal currently holds a Zacks Rank 2 (Buy), indicating a favorable position based on the positive estimate revisions [8] - The Zacks Rank system has a strong track record, with Zacks 1 (Strong Buy) stocks averaging a 25% annual return since 2008, suggesting that Kennametal could outperform the S&P 500 [3][8] Stock Performance - The stock has appreciated by 22.8% over the past four weeks due to strong estimate revisions, indicating potential for further upside [9]

Core Viewpoint - ADT has shown strong year-to-date performance compared to its peers in the Industrial Products sector, returning 18.1% against the sector average of 7.1% [4]. Group 1: Company Performance - ADT is currently ranked 2 (Buy) in the Zacks Rank system, indicating a positive earnings outlook [3]. - Over the past 90 days, the Zacks Consensus Estimate for ADT's full-year earnings has increased by 1.2%, reflecting improved analyst sentiment [3]. - In comparison, Kennametal (KMT) has returned 8.5% year-to-date and also holds a Zacks Rank of 2 (Buy) [4][5]. Group 2: Industry Context - ADT belongs to the Security and Safety Services industry, which includes 17 stocks and is currently ranked 37 in the Zacks Industry Rank [5]. - The average return for stocks in the Security and Safety Services industry this year is 19.9%, indicating that ADT is slightly underperforming its industry [5]. - Kennametal is part of the Manufacturing - Tools & Related Products industry, which has a lower ranking (179) and has returned +0.7% this year [6].

Core Insights - Kennametal Inc. (KMT) reported adjusted earnings of 34 cents per share for Q1 fiscal 2026, exceeding the Zacks Consensus Estimate of 24 cents, marking an 18% increase year over year [1][9] Revenue Details - KMT's revenues reached $498 million, a 3% increase from the previous year, surpassing the Zacks Consensus Estimate of $473 million [2][9] - Organic sales also rose by 3% year over year, with foreign currency translation contributing positively by 1% and divestitures negatively impacting by 1% [2] - Revenue breakdown: - American operations: $247.6 million, up 4.2% year over year [3] - EMEA region: $153.3 million, up 5.1% year over year [3] - Asia Pacific: $97.1 million, down 1.2% year over year [3] - Segment performance: - Metal Cutting segment: $310.6 million, up 5% year over year, exceeding the consensus estimate of $293 million [3] - Infrastructure segment: $187.3 million, up 1% year over year, surpassing the consensus estimate of $180 million [4] Margin Profile - Cost of goods sold increased by 3.8% year over year to $343.4 million, while gross profit rose by 2.3% to $154.6 million, resulting in a margin decrease of 30 basis points to 31% [5] - Operating income increased by 4.3% year over year to $37.6 million, with an operating margin stable at 7.5% [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of Q1 were $103.5 million, down from $140.5 million at the end of fiscal 2025 [7] - Long-term debt slightly increased to $597 million from $596.8 million [7] - Net cash generated from operating activities was $17.5 million, down from $45.7 million in the previous year [8] - Free operating cash flow was negative $5.5 million compared to positive $21.1 million in the prior year [8] Guidance - KMT raised its fiscal 2026 sales guidance to $2.10-$2.17 billion, up from the previous estimate of $1.95-$2.05 billion, and adjusted EPS guidance to $1.35-$1.65 from 90 cents-$1.30 [12] - For Q2 fiscal 2026, sales are expected to be in the range of $500-$520 million, with adjusted EPS anticipated between 30-40 cents [13] Dividend Update - KMT's board approved a quarterly cash dividend of 20 cents per share, payable on November 24, 2025 [11]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer approach 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) Analysis - Kennametal (KMT) has shown significant recent price momentum, with a four-week price change of 17.4%, indicating growing investor interest [4] - KMT has gained 17.6% over the past 12 weeks, with a beta of 1.5, suggesting it moves 50% more than the market in either direction [5] - KMT holds a Momentum Score of A, indicating a favorable entry point for investors looking to capitalize on its momentum [6] Group 3: Earnings Estimates and Valuation - KMT has seen upward revisions in earnings estimates, earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - The stock is trading at a Price-to-Sales ratio of 0.97, suggesting it is undervalued, as investors pay only 97 cents for each dollar of sales [7] Group 4: Additional Opportunities - Besides KMT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help identify winning stock picks based on various investing styles [9]

Financial Performance - Sales for the three months ended September 30, 2025, were $497.974 million, an increase of 3.1% compared to $481.948 million in the same period of 2024[14]. - Gross profit for the same period was $154.550 million, up from $151.009 million, reflecting a gross margin of approximately 31.0%[14]. - Net income attributable to Kennametal for the three months ended September 30, 2025, was $23.298 million, representing a 5.3% increase from $22.123 million in 2024[14]. - Basic earnings per share increased to $0.31 for the three months ended September 30, 2025, compared to $0.28 in the prior year[14]. - The company reported a total comprehensive income of $24.202 million for the three months ended September 30, 2025, compared to $57.807 million in 2024[15]. - Operating income for the total segments was $38.203 million, an increase from $36.556 million in the previous year, with Metal Cutting contributing $21.564 million and Infrastructure $16.639 million[63]. - The company reported a net income before income taxes of $33.695 million for the three months ended September 30, 2025, compared to $31.372 million in the same period of 2024, reflecting a growth of 7.4%[63]. - The company recorded a net income of $24.6 million for the three months ended September 30, 2025[56]. - Basic earnings per share for the three months ended September 30, 2025, was calculated using a weighted average of 76,128 thousand shares outstanding[55]. Assets and Liabilities - Total assets as of September 30, 2025, were $2.519 billion, a decrease from $2.545 billion as of June 30, 2025[16]. - The company had $1.284 billion in total equity attributable to Kennametal shareholders as of September 30, 2025, slightly up from $1.284 billion at the end of the previous quarter[16]. - Total equity as of September 30, 2025, was $1,325.6 million, a slight decrease from $1,324.6 million as of June 30, 2025[56]. - As of September 30, 2025, total debt was $598.4 million, with no borrowings outstanding under the $700.0 million revolving credit facility[100]. - The company’s obligations under the supplier finance program increased to $25.0 million as of September 30, 2025, from $17.3 million as of June 30, 2025[21]. - Environmental liabilities accrued as of September 30, 2025, totaled $11.0 million, with $1.4 million classified as current[49]. Cash Flow and Investments - Cash and cash equivalents decreased to $103.497 million from $140.540 million at the end of the previous quarter[17]. - Net cash flow provided by operating activities was $17.487 million, down from $45.746 million in the same period of 2024[17]. - Cash flow used in investing activities was $22.7 million for the three months ended September 30, 2025, compared to $20.0 million in the prior year period, primarily due to capital expenditures of $23.0 million[106]. - Cash flow used in financing activities was $31.1 million for the three months ended September 30, 2025, which included $15.1 million in dividends paid and $10.0 million in common shares repurchased[108]. - The company returned $25.1 million to shareholders through share repurchases and dividends during the three months ended September 30, 2025[75]. Segment Performance - The Metal Cutting segment generated sales of $310.625 million, up from $296.900 million in the prior year, while the Infrastructure segment saw sales increase to $187.349 million from $185.048 million[62]. - Metal Cutting segment sales were $310.6 million, a 5% increase from the prior year, while Infrastructure segment sales were $187.3 million, a 1% increase[86]. - Operating margin for the Metal Cutting segment was 6.9%, down from 8.0% in the prior year, while the Infrastructure segment's operating margin improved to 8.9% from 6.9%[87][91]. - The General Engineering end market represented 44% of total sales, followed by Transportation at 16%, Aerospace & Defense at 13%, and Energy at 13%[64]. Market and Regional Performance - The Americas accounted for 50% of total sales, while Europe, the Middle East, and Africa (EMEA) contributed 31%, and Asia Pacific made up 19%[63]. - Constant currency end market sales growth for the Aerospace & Defense sector was 16% for the three months ended September 30, 2025[120]. - Americas region reported a constant currency sales growth of 6% for the three months ended September 30, 2025[121]. - EMEA region experienced a constant currency sales growth of 1%, while Asia Pacific saw a decline of 1%[121]. - Total regional sales growth was reported at 4%, with a decline of 6% in the Americas and a growth of 5% in EMEA[121]. - Infrastructure segment showed a constant currency sales growth of 7%, with a decline of 3% in EMEA[121]. Legal and Compliance - The company is currently involved in litigation with MachiningCloud, Inc., which is seeking over $330 million in damages, although the outcome remains uncertain[60]. - The company is involved in ongoing legal proceedings, but believes the ultimate liability will not materially affect its financial position[127]. - The company's disclosure controls and procedures were evaluated as effective as of September 30, 2025[123]. - No changes in internal control over financial reporting occurred during the most recent fiscal quarter[124]. - The company expects no material impact from the One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements for the current fiscal year[53]. Other Financial Metrics - The effective income tax rate for the three months ended September 30, 2025, was 26.9%, compared to 25.2% for the same period in 2024[52]. - The company recorded total restructuring and related charges of $15.6 million through September 30, 2025, compared to a target of approximately $25 million[33]. - For the three months ended September 30, 2025, the net periodic pension expense was $1.75 million, an increase from $1.01 million in the same period of 2024[40]. - The fair value of derivatives designated as hedging instruments was $11,000 as of September 30, 2025, compared to a liability of $(9,000) as of June 30, 2025[27]. - The company recorded a net loss of $3,000 related to currency forward contracts for the three months ended September 30, 2025, compared to a gain of $14,000 in the same period of 2024[28].

Financial Data and Key Metrics Changes - Sales increased by 3% organically year over year, marking the first quarter of organic growth in two years [6][11] - Adjusted EPS rose to $0.34 compared to $0.29 in the prior year quarter [6][12] - Adjusted EBITDA margin improved to 15.3% from 14.3% in the prior year quarter [7][12] - Cash from operating activities was $17 million compared to $46 million in the prior year period, while free operating cash flow was negative $5 million compared to positive $21 million [7][17] Business Line Data and Key Metrics Changes - Metal cutting sales were up 5% year over year, with 3% organic growth [14] - Infrastructure sales increased 3% organically, with reported sales growth of 1% [15] - Aerospace and defense grew 20%, earthworks grew 5%, energy increased 1%, general engineering was flat, and transportation declined 1% [11][15] Market Data and Key Metrics Changes - Sales in the Americas increased 7%, EMEA was flat, and sales decreased 1% in Asia-Pacific [11] - Transportation market outlook improved slightly, while aerospace and defense expectations are strengthening due to recovery from supply chain challenges [8][11] Company Strategy and Development Direction - The company is focusing on strategic growth initiatives, particularly in power generation and infrastructure [4][9] - There is a commitment to offsetting tariff impacts through product moves, supply chain optimization, and pricing actions [5][6] - The company is exploring ways to strengthen its portfolio while monitoring external drivers such as trade and monetary policies [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term value creation despite potential external challenges [22] - The outlook for FY26 sales is projected to be between $2.1 billion and $2.17 billion, with adjusted EPS expected in the range of $1.35-$1.65 [19][21] - The company anticipates a modest improvement in market conditions and pricing actions to address rising costs [19][21] Other Important Information - The company returned $25 million to shareholders through share repurchases and dividends [18] - The adjusted tax rate for the year is now projected at 27% [19] Q&A Session Summary Question: Can you clarify the end market outlook and what is driving the material uplift? - Management noted that project wins, share gains, and APT-related price increases are driving the uplift across end markets [26][30] Question: What is the market share dynamic and how are you addressing tungsten price increases? - The share gain is driven by innovative solutions, commercial excellence, and operational performance, with confidence that customers will continue to prefer their products despite higher tungsten prices [31][36] Question: How much of the $250 million TAM from engines is volume versus pricing? - The $250 million includes both volume and pricing dynamics, with a projected growth rate of 10% for the next few years [41][42] Question: What is driving the improved outlook for the energy end market? - The energy outlook improved due to APT-related price increases and stable oil and gas market conditions [43][44] Question: Can you discuss the dynamics of price cost impact in your guidance? - The guidance reflects positive price raw dynamics, with expectations for neutrality in Q4 unless tungsten prices change [70][71]