Exhibition Overview - Metalloobrabotka is the largest global machine tool and advanced metal processing technology trade fair in Eastern Europe and the CIS, established in 1984, and now ranks among the top ten machine tool trade fairs globally [2] - The exhibition attracts professional visitors from various sectors including mechanical manufacturing, defense, aerospace, heavy machinery, locomotive manufacturing, oil and gas engineering, shipbuilding, metallurgy, power plant engineering, industrial robotics, and automation [2] Event Details - The event will take place from May 12 to May 15, 2026, at the Crocus International Exhibition Center in Moscow, organized by the Moscow International Exhibition Company, and is held annually [3] Exhibits Range - The exhibition will feature a wide range of products including: - Metal forming machinery such as mechanical and hydraulic presses, CNC machine tools, and laser equipment [5] - Metal cutting machines including smart machine units, heavy-duty machine tools, and non-traditional machine tools [5] - Casting, welding, heat treatment, and coating equipment, as well as various metal cutting tools [5] - Accessories, equipment, components, molds, hardware, and software including CNC programming systems and automation tools [6] Machine Tools and Accessories - The exhibition will showcase various machine tools including turning, milling, boring, drilling, grinding, and electric discharge machines, as well as CNC bending and shearing machines [7] - It will also feature a range of cutting tools, measuring instruments, and manual, pneumatic, and electric tools [8] - Additionally, machine tool accessories such as functional components, electrical devices, and logistics equipment will be presented [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]