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 various sectors including aerospace and defense, earthworks, energy, general engineering, and transportation, helping customers manufacture with precision and efficiency [1] - Kennametal employs approximately 8,400 individuals across nearly 100 countries [1] Financial Performance - In fiscal 2024, Kennametal generated revenues of $2 billion [1] Upcoming Events - Kennametal will attend the J.P. Morgan Industrials Conference in New York City on March 12, 2025 [1] - Key attendees from Kennametal include Sanjay Chowbey (President and CEO), Patrick Watson (Vice President and CFO), and Michael Pici (Vice President, Investor Relations) [1]

Company Overview - Kennametal Inc. is an industrial technology leader with over 85 years of experience [1] - The company focuses on delivering productivity through materials science, tooling, and wear-resistant solutions [1] - Kennametal serves customers in various sectors including aerospace and defense, earthworks, energy, general engineering, and transportation [1] - Approximately 8,400 employees work in nearly 100 countries to help customers maintain competitiveness [1] Financial Performance - Kennametal generated $2 billion in revenues in fiscal 2024 [1] Upcoming Events - Kennametal will attend the Loop Capital Conference in New York City on March 11, 2025 [1] - Key attendees from the company include Patrick Watson, Vice President and Chief Financial Officer, and Michael Pici, Vice President of Investor Relations [1]

Core Viewpoint - The analyst gives a hold rating for Kennametal (NYSE: KMT) due to the lack of near-term recovery catalysts and anticipated continued weakness in its core Metal Cutting segment [1]. Industry Summary - There is ongoing weakness in industrial demand, which is impacting Kennametal's performance [1]. - Rising input costs are contributing to the challenges faced by the company [1]. - The performance in the Metal Cutting segment is weaker than expected, indicating potential difficulties ahead [1].

Financial Performance - Sales for the three months ended December 31, 2024, were $482.1 million, a decrease of 2.6% compared to $495.3 million in the same period of 2023[14]. - Gross profit for the six months ended December 31, 2024, was $296.0 million, down 2.0% from $302.5 million in the same period of 2023[14]. - Net income attributable to Kennametal for the three months ended December 31, 2024, was $17.9 million, a decrease of 22.3% from $23.1 million in the same period of 2023[14]. - Basic earnings per share for the six months ended December 31, 2024, were $0.51, down from $0.67 in the same period of 2023[14]. - The company reported a total comprehensive loss income attributable to Kennametal shareholders of $(31.6) million for the three months ended December 31, 2024[15]. - The total comprehensive loss for the three months ended December 31, 2024, was $51.3 million, compared to a comprehensive income of $30.9 million in the same period of 2023[65]. - The company reported a net income of $42,503 thousand for the six months ended December 31, 2024, compared to $54,697 thousand for the same period in 2023, a decrease of about 22.2%[61]. - Net income for the three months ended December 31, 2024, was $19,037 thousand, down from $24,328 thousand for the same period in 2023, representing a decrease of about 21.8%[60]. Assets and Liabilities - Total current assets as of December 31, 2024, were $968.8 million, a decrease from $1,002.6 million as of June 30, 2024[16]. - Total liabilities as of December 31, 2024, were $1,175.7 million, down from $1,215.2 million as of June 30, 2024[16]. - As of December 31, 2024, total assets at fair value were $1,476,000, with $1,476,000 classified under Level 2, and total liabilities at fair value were $27,000, all classified under Level 2[24]. - Total equity as of December 31, 2024, decreased to $1,260,101 thousand from $1,328,104 thousand as of December 31, 2023, reflecting a decline of approximately 5.1%[61]. - Total Kennametal shareholders' equity was $1,220.0 million at December 31, 2024, a decrease of $29.9 million from $1,249.9 million at June 30, 2024[130]. Cash Flow - Net cash flow provided by operating activities for the six months ended December 31, 2024, was $100.9 million, compared to $88.3 million in the same period of 2023[17]. - Cash flow provided by operating activities included net income and non-cash items amounting to an inflow of $118.7 million for the six months ended December 31, 2024[121]. - Cash flow used in investing activities was $36.6 million for the six months ended December 31, 2024, compared to $56.4 million for the prior year period[123]. - Cash flow used in financing activities was $68.0 million for the six months ended December 31, 2024, compared to $46.5 million in the prior year period[125]. Segment Performance - Metal Cutting segment sales decreased to $297.8 million in Q2 2024 from $311.4 million in Q2 2023, representing a decline of 4.3%[69]. - Infrastructure segment sales increased slightly to $184.3 million in Q2 2024 from $183.9 million in Q2 2023, showing a growth of 0.2%[69]. - Operating income for the Metal Cutting segment decreased to $16.6 million in Q2 2024 from $25.5 million in Q2 2023, a decline of 34.9%[69]. - Operating income for the Infrastructure segment increased to $15.6 million in Q2 2024 from $3.2 million in Q2 2023, a significant increase of 383.5%[69]. - Aerospace & Defense end market sales in the Metal Cutting segment increased by 7% for the three months ended December 31, 2024, while Transportation end market sales decreased by 9%[98]. Restructuring and Charges - Total restructuring and related charges recorded through December 31, 2024, amounted to $22.0 million, with $16.6 million in Metal Cutting and $5.5 million in Infrastructure[33]. - The company expects to incur pre-tax charges of approximately $25 million related to restructuring actions, including $10 million for cash-related facilities charges and $10 million for severance-related cash expenditures[37]. - For the three months ended December 31, 2024, the company recorded restructuring charges of $1.4 million, consisting of $1.2 million in Metal Cutting and $0.2 million in Infrastructure[38]. Shareholder Returns - Cash dividends paid were $15,566 thousand for the three months ended December 31, 2024, compared to $15,909 thousand for the same period in 2023, indicating a reduction of approximately 2.2%[60]. - Cash dividends for the six months ended December 31, 2024, were $31,148 thousand, consistent with the previous year's $31,844 thousand, showing a slight decrease of approximately 2.2%[61]. - The company repurchased $15 million of common stock during the three months ended December 31, 2024, and $30 million during the six months ended December 31, 2024, under a $200 million share repurchase program[119]. Legal and Compliance - The company is facing a lawsuit seeking more than $330 million in damages, which may impact future financial performance[67]. - The company is currently involved in legal proceedings that may arise in the ordinary course of business, but believes the ultimate liability will not materially affect its financial position[144]. - There were no changes in the company's internal control over financial reporting that materially affected its financial reporting during the most recent fiscal quarter[140]. Market Conditions - The company has not experienced any material changes to market risk exposures since June 30, 2024[138]. - The foreign currency exchange effect contributed to a 1% decline in constant currency regional sales for Asia Pacific during the three months ended December 31, 2024[137].

Core Viewpoint - Kennametal Inc. reported a decline in earnings and revenues for the second quarter of fiscal 2025, with adjusted earnings per share matching estimates but showing a significant year-over-year decrease Revenue Details - Revenues for Kennametal were $482.1 million, a decrease of 2.7% from the previous year, and missed the Zacks Consensus Estimate of $484 million [2] - Organic sales declined by 6% year over year, although business days positively impacted revenues by 3% [2] - American operations saw a revenue decrease of 1.5% to $235.3 million, while Europe, the Middle East, and Africa revenues fell by 4.9% to $145.5 million; Asia Pacific revenues decreased by 2.1% to $101.3 million [3] - The Metal Cutting segment reported revenues of $298 million, down 4% year over year, with organic revenues declining by 7% [3] - The Infrastructure segment's revenues were flat at $184 million, with organic revenues decreasing by 4% [4] Margin Profile - Cost of goods sold decreased by 5.3% year over year to $337 million, while gross profit increased by 3.9% to $145 million, resulting in a gross margin increase of 190 basis points to 30.1% [5] - Operating income rose by 11.2% year over year to $31.7 million, with an operating margin increase of 90 basis points to 6.6% [5] - Interest expenses were reported at $6.2 million, down 9.7% from the previous year [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the fiscal second quarter were $121.2 million, down from $128 million in the previous quarter [7] - Long-term debt was reported at $596.4 million, slightly up from $596 million year over year [7] - Net cash generated from operating activities in the first six months of fiscal 2025 was $101 million, compared to $88 million in the same period last year [8] - Free operating cash flow increased to $57.3 million from $36 million in the previous fiscal year [8] Dividend Update - The board of directors approved a quarterly cash dividend of 20 cents per share, payable on February 25, 2025, to shareholders of record as of February 11, 2025 [11] Guidance - Kennametal updated its fiscal 2025 outlook, now expecting sales between $1.95 billion and $2.0 billion, down from the previous estimate of $2.0 billion to $2.1 billion [12] - Adjusted earnings per share are anticipated to be in the range of $1.05 to $1.30, revised from $1.30 to $1.70 [12] - Free operating cash flow is expected to exceed 125% of net income (adjusted), with capital spending projected at approximately $100 million [12]

FY25 Second Quarter Earnings Call Presentation February 5, 2025 Q2 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 incom ...

Financial Data and Key Metrics Changes - Sales decreased by 3% year over year, with an organic decline of 6% partially offset by favorable workdays of 3% [34] - Adjusted EBITDA margin improved to 13.9% from 12.4% in the prior year [22] - Adjusted EPS decreased to $0.25 from $0.30 in the prior year [37] - Cash from operating activities year to date was $101 million compared to $88 million in the prior year [22] - Free operating cash flow year to date increased to $57 million from $36 million in the prior year [48] Business Line Data and Key Metrics Changes - Infrastructure sales decreased 4% organically while metal cutting was down 7% [18] - Aerospace and defense grew 14%, while energy grew 1% [20] - General engineering declined 4%, earthworks declined 7%, and transportation declined 9% [20] - Metal cutting adjusted operating margin decreased to 6% from 8.4% year over year [43] - Infrastructure adjusted operating margin increased by 670 basis points due to various factors [47] Market Data and Key Metrics Changes - Americas sales were flat at 0%, Asia Pacific sales decreased 3%, and EMEA declined 7% organically [18] - EMEA faced lower production volumes and realignment of investments among customers [21] - Mining capital investment in Asia decreased, impacting earthworks market [20] Company Strategy and Development Direction - Company announced actions to reduce structural costs and footprint, including plant closures and workforce reductions [8][10] - A commitment to achieve $100 million in cost savings by fiscal 2027 was reiterated [11][66] - Continuous improvement initiatives are a key focus area for enhancing profitability [65] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with recent results but remains committed to above-market growth and margin improvement [63] - The outlook for the full year reflects weakened market conditions and a strengthening U.S. Dollar [26][57] - Management noted that while external factors are challenging, they are focusing on controllable aspects [17] Other Important Information - The company continued its share repurchase program, buying back $15 million worth of shares during the quarter [50] - The effective tax rate increased year over year to 26.9% due to various factors [37] - The company expects Q3 sales to be between $480 million and $500 million, with a negative volume impact [53] Q&A Session Summary Question: Current demand environment in general engineering - Management noted some improvement in order incoming rates and billing rates, particularly in the second half of January [71][73] Question: Thoughts on cost structure and operating margins - Management confirmed ongoing restructuring actions and non-headcount related measures to improve margins [78] Question: Improvement in orders in January - Orders improved across various industries, including general engineering, with notable improvements in EMEA [83] Question: Plans for segment heads and broader changes - New segment heads are expected to focus on growth, margin improvement, and portfolio optimization [92] Question: Competitive dynamics in Earthworks - Management acknowledged pressures from reduced capital investment in China and production slowdowns in the U.S. [116] Question: Inventory management and customer inventories - Company plans to reduce inventory levels and noted that customer inventories are well controlled despite changing market conditions [110][113]

Core Viewpoint - Kennametal reported a revenue of $482.05 million for the quarter ended December 2024, reflecting a year-over-year decline of 2.7% and falling short of the Zacks Consensus Estimate of $483.66 million by 0.33% [1] Financial Performance - Earnings per share (EPS) for the quarter was $0.25, down from $0.30 in the same quarter last year, with no surprise compared to the consensus EPS estimate of $0.25 [1] - Total Sales in the Infrastructure segment reached $184.27 million, slightly above the average estimate of $182.92 million, marking a year-over-year increase of 0.2% [4] - Total Sales in the Metal Cutting segment amounted to $297.79 million, below the estimated $301.07 million, representing a decline of 4.4% compared to the previous year [4] Operating Income - The Corporate segment reported an operating loss of $0.53 million, better than the average estimate of a loss of $0.84 million [4] - Proforma Operating Income for the Infrastructure segment was $15.83 million, exceeding the average estimate of $10.52 million [4] - Proforma Operating Income for the Metal Cutting segment was $17.79 million, falling short of the average estimate of $25.45 million [4] Stock Performance - Over the past month, Kennametal's shares have returned -2%, contrasting with the Zacks S&P 500 composite's increase of 1.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Earnings Performance - Kennametal reported quarterly earnings of $0.25 per share, matching the Zacks Consensus Estimate, but down from $0.30 per share a year ago [1] - The company had previously expected earnings of $0.25 per share, but actually reported $0.29, resulting in a surprise of 16% [1] - Over the last four quarters, Kennametal has surpassed consensus EPS estimates two times [1] Revenue Performance - The company posted revenues of $482.05 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.33% [2] - This revenue figure is a decline from $495.32 million in the same quarter last year [2] - Kennametal has topped consensus revenue estimates two times over the last four quarters [2] Stock Performance and Outlook - Kennametal shares have decreased by approximately 2.3% since the beginning of the year, while the S&P 500 has gained 2.7% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call [3] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $511 million, and for the current fiscal year, it is $1.43 on revenues of $2.01 billion [7] Industry Context - The Manufacturing - Tools & Related Products industry, to which Kennametal belongs, is currently ranked in the top 35% of over 250 Zacks industries [8] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Exhibit 99.1 FOR IMMEDIATE RELEASE: DATE: February 5, 2025 Investor Relations Media Relations CONTACT: Michael Pici CONTACT: Lori Lecker PHONE: 412-790-0792 PHONE: 412-248-8224 michael.pici@kennametal.com lori.lecker@kennametal.com Kennametal Announces Fiscal 2025 Second Quarter Results PITTSBURGH, (February 5, 2025) – Kennametal Inc. (NYSE: KMT) (the "Company") today reported results for its fiscal 2025 second quarter ended December 31, 2024, with sales of $482 million compared to $495 million in the prior ...