
PART I Business Overview 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 applications1199 - The company operates in two segments: Metal Cutting and Infrastructure, offering standard and custom products like tooling, wear components, and metallurgical powders15100 - 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 risks1749 - R&D efforts focus on new product and process technology development, utilizing a disciplined 'stage-gate' framework to accelerate commercial success and enhance operational excellence21 - The company maintains a competitive position in major markets, differentiating through customer support, innovation, product performance, quality, and brand recognition, rather than solely on price2425 - As of June 30, 2025, Kennametal employed 8,124 people globally, with approximately 1,900 represented by labor unions33343740 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 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 demand46 - International operations, which account for 60% of sales, are exposed to risks like currency exchange rate fluctuations, trade barriers, regional economic uncertainty, and political instability49 - 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)585960 - Cybersecurity threats to information technology systems could lead to operational disruptions, data misuse, litigation, and reputational damage, despite current security measures65 - Fluctuations in raw material prices (e.g., tungsten, cobalt, steel) and supply availability, largely from international sources, can significantly impact operating results and profitability67 - 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 expenditures68 Unresolved Staff Comments The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments69 Cybersecurity 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 Framework70 - 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 incidents7172 - 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 approach73 - 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 Board74 Properties 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 Singapore75 - 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 - 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) segments76 - Research and development efforts are primarily conducted at the technology center in Latrobe, PA, and facilities in Rogers, AR, Fürth, Germany, and Bangalore, India77 - Production capacity is adequate for present needs, and properties are generally in good condition and suitable for business operations78 Legal Proceedings 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 assets79 - 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 action336 - 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 uncertain79 Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant80 PART II Market for Common Equity, Stockholder Matters, and Issuer Purchases 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 - As of July 31, 2025, there were 1,197 shareholders of record81 - In fiscal 2025, a New Peer Group was established for executive compensation evaluation, comprising 20 companies including Alamo Group, Inc. and Barnes Group Inc8586 - 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 2024105148 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 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 effect102111 - 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 - The company completed the sale of a subsidiary in Goshen, Indiana, for $19 million, recognizing a $1.5 million loss on divestiture104 - 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, respectively113114 - 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 resolution118 - 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 benefits109149 - 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, 2025136140 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 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 speculation187191 - 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 income191 - 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 immaterial192 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 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 criteria196 - 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, 2025201 - 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 allowances208209 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 The company reported no changes in or disagreements with its accountants - There were no changes in or disagreements with accountants on accounting and financial disclosure349 Controls and Procedures 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 reporting350 - The effectiveness of internal control over financial reporting was audited by PricewaterhouseCoopers LLP and affirmed by management350 - No material changes in internal control over financial reporting occurred during the fourth quarter of 2025350 Other Information 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, 2025351 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Disclosure regarding foreign jurisdictions that prevent inspections is not applicable352 PART III Directors, Executive Officers and Corporate Governance 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 2024353 - Dave Bersaglini was appointed Vice President and President, Metal Cutting Business Segment in August 2024355 - Faisal Hamadi became Vice President and President, Infrastructure Business Segment in January 2025356 - The Audit Committee, composed of Steven H. Wunning (Chair), Shelley Bausch, Douglas T. Dietrich, Sagar A. Patel, and Paul Sternlieb, oversees corporate governance363 - The company has an insider trading policy designed to promote compliance with insider trading laws and NYSE listing standards362 Executive Compensation 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 Statement364 - Information on Board of Directors compensation and benefits is also incorporated by reference364 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 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 Statement365 Certain Relationships and Related Transactions, and Director Independence 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 Statement366 Principal Accounting Fees and Services 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 Statement367 PART IV Exhibits, Financial Statement Schedules 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 2023372400 - Various corporate documents, indentures, and material contracts, including stock and incentive plans, are listed, with many incorporated by reference from prior SEC filings373374375376377378379380381382383384385386387388389390391392393394395396 - Certifications by the President and CEO, Sanjay Chowbey, and the Vice President Finance and CFO, Patrick S. Watson, are filed as exhibits396397 - XBRL (Extensible Business Reporting Language) instance documents for financial statements are attached as Exhibit 101398 Form 10-K Summary The company did not include a Form 10-K Summary in this report - No Form 10-K Summary is provided401