Kennametal (NYSE: KMT) surges in FY 2026 profit as cash flow tightens
Rhea-AI Filing Summary
Kennametal Inc. reported very strong results for the fourth quarter and fiscal year ended June 30, 2026. Q4 sales were $737 million, up 43% year over year with 42% organic growth. Diluted EPS was $2.91 and record adjusted EPS was $2.96. Q4 operating income reached $303 million, a 41.1% margin, compared with $31 million and a 6.1% margin a year earlier.
For fiscal 2026, sales were $2,357 million, up 20% with 19% organic growth. Operating income rose to $473 million, a 20.1% margin, from $143 million and a 7.3% margin, and diluted EPS was $4.42 with record adjusted EPS of $4.57.
Despite higher earnings, net cash flow from operating activities was negative $4 million and free operating cash flow was negative $79 million, mainly from inventory growth and supplier prepayments tied to higher tungsten prices. The company guided Q1 fiscal 2027 sales to $745–$775 million and adjusted EPS to $2.50–$2.80, and full‑year sales to $3.33–$3.45 billion with adjusted EPS of $4.15–$5.15. A quarterly dividend of $0.20 per share was declared.
Positive
- Q4 sales of $737 million increased 43% year over year with 42% organic growth, and Q4 operating margin expanded to 41.1% from 6.1%.
- Fiscal 2026 sales reached $2,357 million, up 20%, with operating income rising to $473 million and margin to 20.1% from 7.3%; diluted EPS was $4.42 and record adjusted EPS $4.57.
- Infrastructure segment Q4 sales grew to $339 million from $196 million, with operating margin jumping to 58.3% from 5.5%, reflecting very strong profitability in that business.
Negative
- Net cash flow from operating activities was ($4 million) in fiscal 2026 versus $208 million a year earlier, and free operating cash flow fell to ($79 million) from $121 million, driven by heavy working capital needs.
- Inventories increased to $1,108,450 thousand from $538,237 thousand, and debt rose, with revolving and other lines of credit and notes payable at $32,170 thousand and long‑term debt at $685,280 thousand, compared with $977 thousand and $596,788 thousand a year earlier.
Filing Explained
The August 5 release is furnished, not filed; June 30 balances show cash of $95,791 thousand against long-term debt of $685,280 thousand.
As a Form 8-K, this report covers a specified material event: Kennametal’s fiscal 2026 results. The earnings announcement is furnished as Exhibit 99.1, not filed, and is not subject to Section 18 liability unless the company incorporates it into another filing.
At
For fiscal 2027, the company states that forward-looking free operating cash flow, adjusted operating income, adjusted net income, and adjusted EPS cannot be reconciled to GAAP without unreasonable effort; subsequent fiscal 2027 results will determine how those outlook measures compare with reported results.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q4 2026 Sales: $736,614 thousand
Q4 2026 Diluted EPS: $2.91
FY 2026 Sales: $2,356,698 thousand
+5 more
8 metrics
Q4 2026 Sales
$736,614 thousand
Three months ended June 30, 2026 sales
Q4 2026 Diluted EPS
$2.91
Three months ended June 30, 2026 diluted earnings per share
FY 2026 Sales
$2,356,698 thousand
Twelve months ended June 30, 2026 sales
FY 2026 Operating Income
$472,532 thousand
Twelve months ended June 30, 2026 operating income
FY 2026 Net Cash from Operating Activities
$(4,008) thousand
Net cash flow (used for) provided by operating activities in fiscal 2026
FY 2026 Free Operating Cash Flow
$(79,138) thousand
Free operating cash flow for twelve months ended June 30, 2026
Inventories at June 30, 2026
$1,108,450 thousand
Balance sheet inventories at June 30, 2026
Long-Term Debt at June 30, 2026
$685,280 thousand
Balance sheet long-term debt at June 30, 2026
Key Terms
free operating cash flow, organic sales growth, loss on early extinguishment of debt, non-GAAP financial measures, +1 more
5 terms
free operating cash flow financial
"Free operating cash flow (FOCF) is a non-GAAP financial measure"
Free operating cash flow is the cash a business generates from its normal operations after paying for the upkeep and replacement of the equipment, buildings, or other assets needed to run the business. Think of it like the money left in your household after paying for groceries and necessary home repairs — cash available for growth, debt repayment, dividends, or savings. Investors watch it because it shows how much real, spendable cash the company produces beyond day‑to‑day running costs.
organic sales growth financial
"Organic sales growth is a non-GAAP financial measure of sales growth"
Organic sales growth measures how much a company’s revenue rises from its regular business activity — like selling more products, charging higher prices, or selling to more customers — without counting money from buying other businesses or one-time currency effects. Investors watch it because it shows whether demand and the company’s core operations are genuinely getting stronger, similar to judging a garden by how much the plants you planted yourself are growing rather than by adding bought potted plants.
loss on early extinguishment of debt financial
"Adjustments for the three months ended June 30, 2026 include ... loss on early extinguishment of debt"
A loss on early extinguishment of debt is the one-time accounting charge a company records when it pays off a loan or bond before the agreed date and pays more (fees or penalties) than the remaining balance. Think of it like breaking a rental lease early and paying a penalty; it reduces reported profit and uses cash now. Investors watch it because it can lower short-term earnings, affect cash reserves, and signal refinancing or financial stress.
non-GAAP financial measures financial
"This earnings release contains non-GAAP financial measures. Reconciliations and descriptions"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
adjusted operating income financial
"including: operating income and margin; ETR; net income ... and adjusted operating income"
Adjusted operating income is a company's profit from its main activities, excluding certain one-time or unusual costs and gains. It helps investors see how well the business is performing in its normal operations, without distractions from rare events or expenses. This way, they get a clearer picture of the company’s true profitability.
Earnings Snapshot
Q4 2026 Sales: $736,614 thousand · Guidance included
Fourth quarter and fiscal year ended June 30, 2026
Q4 2026 Sales
$736,614 thousand
up from $516,448 thousand in Q4 2025
Q4 2026 Diluted EPS
$2.91
up from $0.28 in Q4 2025
FY 2026 Sales
$2,356,698 thousand
up from $1,966,845 thousand in FY 2025
FY 2026 Diluted EPS
$4.42
up from $1.20 in FY 2025
FY 2026 Operating Margin
20.1%
up from 7.3% in FY 2025
Guidance
For Q1 fiscal 2027, the company expects sales of $745–$775 million and adjusted EPS of $2.50–$2.80. For the full year, it projects sales of $3.33–$3.45 billion, adjusted EPS of $4.15–$5.15, free operating cash flow of about 20% of adjusted net income, and capital spending of about $85 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Kennametal (KMT) perform in fiscal Q4 2026?
Kennametal’s Q4 2026 sales were $737 million, up 43% year over year, with 42% organic growth. Diluted EPS was $2.91 and record adjusted EPS $2.96. Operating income reached $303 million, a 41.1% margin versus 6.1% a year earlier.
What were Kennametal’s (KMT) full-year fiscal 2026 results?
For fiscal 2026, Kennametal reported sales of $2,357 million, up 20%, and operating income of $473 million, a 20.1% margin. Diluted EPS was $4.42 and record adjusted EPS $4.57, reflecting improved pricing, volume growth and restructuring savings.
Why was Kennametal’s (KMT) fiscal 2026 operating cash flow negative?
Net cash flow from operating activities was ($4 million), primarily due to working capital requirements. Inventory values increased from unprecedented tungsten price rises and advance payments to secure raw material supply, partially offset by higher net income versus the prior year.
What outlook did Kennametal (KMT) provide for fiscal 2027?
For Q1 fiscal 2027, Kennametal expects sales of $745–$775 million and adjusted EPS of $2.50–$2.80. For the full year, sales are projected at $3.33–$3.45 billion, adjusted EPS at $4.15–$5.15, free operating cash flow around 20% of adjusted net income and capital spending near $85 million.
How did Kennametal’s Metal Cutting and Infrastructure segments perform in Q4 2026?
In Q4 2026, Metal Cutting sales were $397.8 million with operating income of $106.2 million, a 26.7% margin. Infrastructure sales were $338.8 million, and operating income was $197.4 million, a 58.3% margin, both significantly above prior-year levels.
What dividend did Kennametal (KMT) declare with these results?
Kennametal’s board declared a quarterly cash dividend of $0.20 per share. The dividend is payable on August 25, 2026 to shareholders of record at the close of business on August 11, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 5, 2026
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (412 ) 248-8000
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Item 2.02 Results of Operations and Financial Condition.
On August 5, 2026, Kennametal Inc. (Kennametal or the Company) issued an earnings announcement for its fiscal fourth quarter and fiscal year ended June 30, 2026. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 2.02.
The earnings announcement issued on August 5, 2026 is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section unless the Company specifically incorporates it by reference in a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Fiscal 2026 Fourth Quarter and Full Year Earnings Announcement
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KENNAMETAL INC. | |||||||||||||||||||||||||||||
| Date: | August 5, 2026 | By: | /s/ John W. Witt | ||||||||||||||||||||||||||
| John W. Witt | |||||||||||||||||||||||||||||
| Vice President Finance and Corporate Controller | |||||||||||||||||||||||||||||
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Exhibit 99.1
FOR IMMEDIATE RELEASE:
DATE: August 5, 2026
| 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 Reports Fiscal 2026 and Fourth Quarter Results
•Q4 sales of $737 million increased 43 percent and 42 percent on a reported and organic basis, respectively
•Q4 earnings per diluted share (EPS) of $2.91 and record adjusted EPS of $2.96
•FY26 EPS of $4.42 and record adjusted EPS of $4.57
•Company provides FY27 Q1 and annual Outlook
PITTSBURGH, (August 5, 2026) – Kennametal Inc. (NYSE: KMT) (the "Company") today announced fourth quarter and fiscal 2026 results.
“Our team delivered strong fiscal 2026 results, reflecting volume from improving market conditions and our strategic growth initiatives,” said Sanjay Chowbey, President and CEO. “We achieved record adjusted EPS this quarter through decisive pricing actions in an unprecedented tungsten environment, volume growth and cost improvement efforts.”
He continued: “Looking ahead, we are encouraged by the volume trends we have seen across several end markets and expect those improving conditions, along with our strategic initiatives, to continue to drive sales growth throughout fiscal 2027. Recent wins in the Aerospace & Defense, Energy and Earthworks end markets showcase the ability of our team to take share in any market condition. I am confident that our commitment to above market growth and continuous improvement will unlock long-term value for shareholders.”
Fiscal 2026 Fourth Quarter Key Developments
Sales of $737 million increased 43 percent from $516 million in the prior year quarter, reflecting organic sales growth of 42 percent, a favorable foreign currency exchange effect of 1 percent and a favorable business days effect of 1 percent, partially offset by a divestiture effect of 1 percent.
Operating income was $303 million, or 41.1 percent margin, compared with $31 million, or 6.1 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $252 million, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $5 million. These factors were partially offset by higher compensation costs and tariffs and general inflation. Adjusted operating income was $306 million, or 41.5 percent margin, compared with $38 million, or 7.4 percent margin, in the prior year quarter.
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Fiscal 2026 Key Developments
Sales of $2,357 million increased 20 percent from $1,967 million in the prior year, reflecting organic sales growth of 19 percent and a favorable foreign currency exchange effect of 2 percent, partially offset by a divestiture effect of 1 percent.
Operating income was $473 million, or 20.1 percent margin, compared with $143 million, or 7.3 percent margin, in the prior year. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to raw material costs of approximately $316 million, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $27 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, and fewer insurance proceeds received within Infrastructure in the current year. Adjusted operating income was $484 million, or 20.5 percent margin, compared with $158 million, or 8.0 percent margin, in the prior year.
Net cash flow from operating activities in fiscal 2026 was negative $4 million compared to positive $208 million in the prior year. The decline was driven primarily by working capital requirements, including increased inventory values resulting from unprecedented tungsten price increases, as well as advance payments made to certain suppliers to secure raw material supply. These working capital requirements were partially offset by higher net income during the year. Free operating cash flow (FOCF) was negative $79 million compared to positive $121 million in the prior year. The decrease in FOCF was driven primarily by the aforementioned working capital requirements, partially offset by higher net income and lower capital expenditures compared to the prior year.
Outlook
The Company’s expectations for the first quarter of fiscal 2027 and the full year are as follows:
Quarterly Outlook:
•Sales expected to be $745 - $775 million; foreign exchange anticipated to be neutral compared to the first quarter of fiscal 2026
•Adjusted EPS is expected to be $2.50 - $2.80
Annual Outlook:
•Sales expected to be $3.33 - $3.45 billion; foreign exchange anticipated to be neutral compared to the fiscal 2026
•Adjusted EPS is expected to be $4.15 - $5.15
•Free operating cash flow of approximately 20 percent of adjusted net income
•Capital spending expected to be approximately $85 million
The Company will provide more details regarding its fiscal 2027 assumptions during its quarterly earnings conference call.
Fiscal 2026 Fourth Quarter Segment Results
Metal Cutting sales of $398 million increased 24 percent from $321 million in the prior year quarter, reflecting organic sales growth of 22 percent, a favorable foreign currency exchange effect of 1 percent and a favorable business days effect of 1 percent. Operating income was $106 million, or 26.7 percent margin, compared to $21 million, or 6.6 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $54 million, non-raw material-related pricing and tariff surcharges, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $4 million. These factors were partially offset by higher compensation costs and general inflation in the current quarter. Adjusted operating income was $108 million, or 27.3 percent margin, compared to $25 million, or 7.9 percent margin, in the prior year quarter.
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Infrastructure sales of $339 million increased 73 percent from $196 million in the prior year quarter, reflecting organic sales growth of 74 percent, a favorable currency exchange effect of 1 percent and a favorable business days effect of 1 percent, partially offset by a divestiture effect of 3 percent. Operating income was $197 million, or 58.3 percent margin, compared to $11 million, or 5.5 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $198 million, partially offset by lower sales and production volumes, higher compensation costs and general inflation in the current quarter. Adjusted operating income was $198 million, or 58.4 percent margin, compared to $13 million, or 6.8 percent margin, in the prior year quarter.
Dividend Declared
Kennametal also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend is payable on August 25, 2026 to shareholders of record as of the close of business on August 11, 2026.
Earnings Call and Webcast
The Company will discuss its fiscal 2026 fourth quarter and full year results in a live webcast at 9:30 a.m. Eastern Time, Wednesday, August 5, 2026. The conference call will be broadcast via real-time audio on Kennametal’s investor relations website at https://investors.kennametal.com/ - click “Event” (located in the blue Quarterly Earnings block).
This earnings release contains non-GAAP financial measures. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the tables that follow.
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, adjusted EPS, FOCF and capital expenditures for the first quarter and full year of fiscal 2027 and our expectations regarding future growth and financial performance are forward-looking statements. Any forward-looking statements are based on current knowledge, expectations and estimates that involve inherent risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, our actual results could vary materially from our current expectations. There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements. They include: uncertainties related to changes in macroeconomic and/or global conditions, including as a result of increased inflation, tariffs, and Russia's invasion of Ukraine and the resulting sanctions on Russia; the conflicts in the Middle East; other economic recession; our ability to achieve all anticipated benefits of restructuring initiatives; Commercial Excellence growth initiatives, Operational Excellence initiatives, our foreign operations and international markets, such as currency exchange rates, different regulatory environments, trade barriers, exchange controls, and social and political instability, including the conflicts in Ukraine and the Middle East; changes in the regulatory environment in which we operate, including environmental, health and safety regulations; potential for future goodwill and other intangible asset impairment charges; our ability to protect and defend our intellectual property; continuity of information technology infrastructure; competition; our ability to retain our management and employees; demands on management resources; availability and cost of the raw materials we use to manufacture our products, including tungsten; product liability claims; integrating acquisitions and achieving the expected savings and synergies; global or regional catastrophic events; demand for and market acceptance of our products; business divestitures; energy costs; commodity prices; labor relations; and implementation of environmental remediation matters. Many of these risks and other risks are more fully described in Kennametal’s latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.
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About Kennametal
With over 85 years as an industrial technology leader, Kennametal Inc. delivers productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace and defense, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 8,100 employees are helping customers in nearly 100 countries stay competitive. Kennametal generated $2.4 billion in revenues in fiscal 2026. Learn more at www.kennametal.com. Follow @Kennametal: Instagram, Facebook, LinkedIn and YouTube.
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FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| Three Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Sales | $ | 736,614 | $ | 516,448 | $ | 2,356,698 | $ | 1,966,845 | |||||||||||||||
| Cost of goods sold | 303,055 | 370,783 | 1,386,742 | 1,368,775 | |||||||||||||||||||
| Gross profit | 433,559 | 145,665 | 969,956 | 598,070 | |||||||||||||||||||
| Operating expense | 125,616 | 105,860 | 478,993 | 430,835 | |||||||||||||||||||
| Restructuring and other charges, net | 2,677 | 4,278 | 8,909 | 11,813 | |||||||||||||||||||
| Loss on divestiture | — | 1,512 | — | 1,512 | |||||||||||||||||||
| Amortization of intangibles | 2,384 | 2,646 | 9,522 | 10,787 | |||||||||||||||||||
| Operating income | 302,882 | 31,369 | 472,532 | 143,123 | |||||||||||||||||||
| Interest expense | 10,023 | 6,225 | 28,561 | 24,930 | |||||||||||||||||||
| Other income, net | (6,393) | (5,223) | (17,358) | (13,811) | |||||||||||||||||||
| Income before income taxes | 299,252 | 30,367 | 461,329 | 132,004 | |||||||||||||||||||
| Provision for income taxes | 69,790 | 7,244 | 110,915 | 33,296 | |||||||||||||||||||
| Net income | 229,462 | 23,123 | 350,414 | 98,708 | |||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | 2,485 | 1,531 | 8,025 | 5,583 | |||||||||||||||||||
| Net income attributable to Kennametal | $ | 226,977 | $ | 21,592 | $ | 342,389 | $ | 93,125 | |||||||||||||||
| PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS | |||||||||||||||||||||||
| Basic earnings per share | $ | 2.98 | $ | 0.28 | $ | 4.49 | $ | 1.21 | |||||||||||||||
| Diluted earnings per share | $ | 2.91 | $ | 0.28 | $ | 4.42 | $ | 1.20 | |||||||||||||||
| Dividends per share | $ | 0.20 | $ | 0.20 | $ | 0.80 | $ | 0.80 | |||||||||||||||
| Basic weighted average shares outstanding | 76,274 | 76,209 | 76,215 | 77,264 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 77,929 | 76,934 | 77,424 | 77,894 | |||||||||||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (in thousands) | June 30, 2026 | June 30, 2025 | |||||||||
ASSETS | |||||||||||
| Cash and cash equivalents | $ | 95,791 | $ | 140,540 | |||||||
| Accounts receivable, net | 408,438 | 295,401 | |||||||||
| Inventories | 1,108,450 | 538,237 | |||||||||
| Other current assets | 159,092 | 65,092 | |||||||||
| Total current assets | 1,771,771 | 1,039,270 | |||||||||
| Property, plant and equipment, net | 843,584 | 919,914 | |||||||||
| Goodwill and other intangible assets, net | 335,099 | 349,935 | |||||||||
| Other assets | 219,151 | 236,293 | |||||||||
| Total assets | $ | 3,169,605 | $ | 2,545,412 | |||||||
LIABILITIES | |||||||||||
| Revolving and other lines of credit and notes payable | $ | 32,170 | $ | 977 | |||||||
| Accounts payable | 369,841 | 195,929 | |||||||||
| Other current liabilities | 274,697 | 225,423 | |||||||||
| Total current liabilities | 676,708 | 422,329 | |||||||||
| Long-term debt | 685,280 | 596,788 | |||||||||
| Other liabilities | 194,180 | 201,647 | |||||||||
| Total liabilities | 1,556,168 | 1,220,764 | |||||||||
| KENNAMETAL SHAREHOLDERS’ EQUITY | 1,569,844 | 1,283,979 | |||||||||
| NONCONTROLLING INTERESTS | 43,593 | 40,669 | |||||||||
| Total liabilities and equity | $ | 3,169,605 | $ | 2,545,412 | |||||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
| Year ended June 30 (in thousands) | 2026 | 2025 | |||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 350,414 | $ | 98,708 | |||||||
| Adjustments to reconcile to cash from operations: | |||||||||||
| Depreciation | 133,633 | 125,709 | |||||||||
| Amortization | 9,522 | 10,787 | |||||||||
| Stock-based compensation expense | 34,851 | 22,115 | |||||||||
| Restructuring and other charges, net | 8,909 | 11,813 | |||||||||
| Deferred income taxes | 44,686 | (13,084) | |||||||||
| Gain on insurance recoveries | (3,400) | (12,100) | |||||||||
| Loss on divestiture | — | 1,512 | |||||||||
| Debt refinancing charge | 1,261 | — | |||||||||
| Other | 10,648 | 2,048 | |||||||||
| Changes in certain assets and liabilities: | |||||||||||
| Accounts receivable | (116,866) | 9,068 | |||||||||
| Inventories | (593,396) | (17,396) | |||||||||
| Other current assets | (102,093) | 2,002 | |||||||||
| Accounts payable and accrued liabilities | 226,097 | (6,157) | |||||||||
| Accrued income taxes | 11,006 | (12,267) | |||||||||
| Accrued pension and postretirement benefits | (7,051) | (7,393) | |||||||||
| Other | (12,229) | (7,041) | |||||||||
| Net cash flow (used for) provided by operating activities | (4,008) | 208,324 | |||||||||
| INVESTING ACTIVITIES | |||||||||||
| Purchases of property, plant and equipment | (76,905) | (88,971) | |||||||||
| Disposals of property, plant and equipment | 1,775 | 1,841 | |||||||||
| Proceeds from divestiture | — | 18,689 | |||||||||
| Proceeds from insurance recoveries | 3,400 | 11,793 | |||||||||
| Other | 435 | (5,177) | |||||||||
| Net cash flow used for investing activities | (71,295) | (61,825) | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Net increase (decrease) in notes payable | 11,293 | (459) | |||||||||
| Net increase in revolving and other lines of credit | 20,000 | — | |||||||||
| Term debt borrowings | 296,994 | — | |||||||||
| Term debt repayments | (209,387) | — | |||||||||
| Purchase of capital stock | (10,106) | (60,120) | |||||||||
| The effect of employee benefit and stock plans and dividend reinvestment | (8,086) | (7,059) | |||||||||
| Cash dividends paid to Shareholders | (60,847) | (61,852) | |||||||||
| Other | (8,227) | (4,429) | |||||||||
| Net cash flow provided by (used for) financing activities | 31,634 | (133,919) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (1,080) | (11) | |||||||||
| CASH AND CASH EQUIVALENTS | |||||||||||
| Net (decrease) increase in cash and cash equivalents | (44,749) | 12,569 | |||||||||
| Cash and cash equivalents, beginning of year | 140,540 | 127,971 | |||||||||
| Cash and cash equivalents, end of year | $ | 95,791 | $ | 140,540 | |||||||
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| SEGMENT DATA (UNAUDITED) | Three Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Outside Sales: | ||||||||||||||||||||
| Metal Cutting | $ | 397,827 | $ | 320,652 | $ | 1,397,418 | $ | 1,219,686 | ||||||||||||
| Infrastructure | 338,787 | 195,796 | 959,280 | 747,159 | ||||||||||||||||
| Total sales | $ | 736,614 | $ | 516,448 | $ | 2,356,698 | $ | 1,966,845 | ||||||||||||
| Sales By Geographic Region: | ||||||||||||||||||||
| Americas | $ | 400,814 | $ | 254,263 | $ | 1,211,850 | $ | 967,608 | ||||||||||||
| EMEA | 203,580 | 158,402 | 687,131 | 601,087 | ||||||||||||||||
| Asia Pacific | 132,220 | 103,783 | 457,717 | 398,150 | ||||||||||||||||
| Total sales | $ | 736,614 | $ | 516,448 | $ | 2,356,698 | $ | 1,966,845 | ||||||||||||
| Operating Income: | ||||||||||||||||||||
| Metal Cutting | $ | 106,159 | $ | 21,067 | $ | 195,605 | $ | 86,375 | ||||||||||||
| Infrastructure | 197,381 | 10,696 | 279,893 | 58,465 | ||||||||||||||||
Corporate (1) | (658) | (394) | (2,966) | (1,717) | ||||||||||||||||
| Total operating income | $ | 302,882 | $ | 31,369 | $ | 472,532 | $ | 143,123 | ||||||||||||
(1) Represents unallocated corporate expenses.
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NON-GAAP RECONCILIATIONS (UNAUDITED)
In addition to reported results under generally accepted accounting principles in the United States of America (GAAP), the following financial highlight tables include, where appropriate, a reconciliation of adjusted results including: operating income and margin; ETR; net income attributable to Kennametal; diluted EPS; Metal Cutting operating income and margin; Infrastructure operating income and margin; FOCF; and consolidated and segment organic sales growth (all of which are non-GAAP financial measures), to the most directly comparable GAAP financial measures. Adjustments for the three months ended June 30, 2026 include restructuring and related charges, loss on early extinguishment of debt and differences in projected annual tax rates. Adjustments for the three months ended June 30, 2025 include restructuring and related charges, loss on divestiture and differences in projected annual tax rates. Adjustments for the twelve months ended June 30, 2026 include restructuring and related charges and loss on early extinguishment of debt. Adjustments for the twelve months ended June 30, 2025 include restructuring and related charges and loss on divestiture. For those adjustments that are presented ‘net of tax’, the tax effect of the adjustment can be derived by calculating the difference between the pre-tax and the post-tax adjustments presented. The tax effect on adjustments is calculated by preparing an overall tax calculation including the adjustments and then a tax calculation excluding the adjustments. The difference between these calculations results in the tax impact of the adjustments.
Management believes that presentation of these non-GAAP financial measures provides useful information about the results of operations of the Company for the current and past periods. Management believes that investors should have available the same information that management uses to assess operating performance, determine compensation and assess the capital structure of the Company. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. Investors are cautioned that non-GAAP financial measures used by management may not be comparable to non-GAAP financial measures used by other companies. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the disclosures below.
Reconciliations to the most directly comparable GAAP financial measures for the following forward-looking non-GAAP financial measures for the first quarter and full fiscal year of 2027 have not been provided, including but not limited to: FOCF, adjusted operating income, adjusted net income, and adjusted EPS. The most comparable GAAP financial measures are net cash flow from operating activities, operating income, and net income attributable to Kennametal, respectively. Because the non-GAAP financial measures on a forward-looking basis are subject to uncertainty and variability as they are dependent on many factors - including, but not limited to, the effect of foreign currency exchange fluctuations, impacts from potential acquisitions or divestitures, gains or losses on the potential sale of businesses or other assets, restructuring costs, asset impairment charges, gains or losses from early extinguishment of debt, the tax impact of the items above and the impact of tax law changes or other tax matters - reconciliations to the most directly comparable forward-looking GAAP financial measures are not available without unreasonable effort.
| THREE MONTHS ENDED JUNE 30, 2026 (UNAUDITED) | |||||||||||||||||
| (in thousands, except percents) | Sales | Operating income | ETR | Net income(2) | Diluted EPS | ||||||||||||
| Reported results | $ | 736,614 | $ | 302,882 | 23.3 | % | $ | 226,977 | $ | 2.91 | |||||||
| Reported margins | 41.1 | % | |||||||||||||||
| Restructuring and related charges | — | 2,778 | 17.2 | 2,301 | 0.03 | ||||||||||||
| Loss on early extinguishment of debt | — | — | 24.5 | 1,672 | 0.02 | ||||||||||||
| Differences in projected annual tax rates | — | — | (41.6) | (235) | — | ||||||||||||
| Adjusted results | $ | 736,614 | $ | 305,660 | 23.4 | % | $ | 230,715 | $ | 2.96 | |||||||
| Adjusted margins | 41.5 | % | |||||||||||||||
(2) Attributable to Kennametal.
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| THREE MONTHS ENDED JUNE 30, 2026 (UNAUDITED) | ||||||||||||||
| Metal Cutting | Infrastructure | |||||||||||||
| (in thousands, except percents) | Sales | Operating income | Sales | Operating income | ||||||||||
| Reported results | $ | 397,827 | $ | 106,159 | $ | 338,787 | $ | 197,381 | ||||||
| Reported operating margin | 26.7 | % | 58.3 | % | ||||||||||
| Restructuring and related charges | — | 2,290 | — | 488 | ||||||||||
| Adjusted results | $ | 397,827 | $ | 108,449 | $ | 338,787 | $ | 197,869 | ||||||
| Adjusted operating margin | 27.3 | % | 58.4 | % | ||||||||||
| THREE MONTHS ENDED JUNE 30, 2025 (UNAUDITED) | |||||||||||||||||
| (in thousands, except percents) | Sales | Operating income | ETR | Net income(2) | Diluted EPS | ||||||||||||
| Reported results | $ | 516,448 | $ | 31,369 | 23.9 | % | $ | 21,592 | $ | 0.28 | |||||||
| Reported margins | 6.1 | % | |||||||||||||||
| Restructuring and related charges | — | 5,366 | 23.6 | 4,100 | 0.05 | ||||||||||||
| Loss on divestiture | — | 1,512 | 24.5 | 1,142 | 0.01 | ||||||||||||
| Differences in projected annual tax rates | — | — | (46.3) | (691) | — | ||||||||||||
| Adjusted results | $ | 516,448 | $ | 38,247 | 25.7 | % | $ | 26,143 | $ | 0.34 | |||||||
| Adjusted margins | 7.4 | % | |||||||||||||||
(2) Attributable to Kennametal.
| THREE MONTHS ENDED JUNE 30, 2025 (UNAUDITED) | ||||||||||||||
| Metal Cutting | Infrastructure | |||||||||||||
| (in thousands, except percents) | Sales | Operating income | Sales | Operating income | ||||||||||
| Reported results | $ | 320,652 | $ | 21,067 | $ | 195,796 | $ | 10,696 | ||||||
| Reported operating margin | 6.6 | % | 5.5 | % | ||||||||||
| Restructuring and related charges | — | 4,266 | — | 1,101 | ||||||||||
| Loss on divestiture | — | — | — | 1,512 | ||||||||||
| Adjusted results | $ | 320,652 | $ | 25,333 | $ | 195,796 | $ | 13,309 | ||||||
| Adjusted operating margin | 7.9 | % | 6.8 | % | ||||||||||
| TWELVE MONTHS ENDED JUNE 30, 2026 (UNAUDITED) | ||||||||||||||
| (in thousands, except percents) | Sales | Operating income | Net income(2) | Diluted EPS | ||||||||||
| Reported results | $ | 2,356,698 | $ | 472,532 | $ | 342,389 | $ | 4.42 | ||||||
| Reported operating margin | 20.1 | % | ||||||||||||
| Restructuring and related charges | — | 11,413 | 9,400 | 0.13 | ||||||||||
| Loss on early extinguishment of debt | — | — | 1,671 | 0.02 | ||||||||||
| Adjusted results | $ | 2,356,698 | $ | 483,945 | $ | 353,460 | $ | 4.57 | ||||||
| Adjusted operating margin | 20.5 | % | ||||||||||||
(2) Attributable to Kennametal.
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| TWELVE MONTHS ENDED JUNE 30, 2025 (UNAUDITED) | ||||||||||||||
| (in thousands, except percents) | Sales | Operating income | Net income(2) | Diluted EPS | ||||||||||
| Reported results | $ | 1,966,845 | $ | 143,123 | $ | 93,125 | $ | 1.20 | ||||||
| Reported operating margin | 7.3 | % | ||||||||||||
| Restructuring and related charges | — | 13,252 | 10,475 | 0.13 | ||||||||||
| Loss on divestiture | — | 1,512 | 1,142 | 0.01 | ||||||||||
| Adjusted results | $ | 1,966,845 | $ | 157,887 | $ | 104,742 | $ | 1.34 | ||||||
| Adjusted operating margin | 8.0 | % | ||||||||||||
(2) Attributable to Kennametal.
Free Operating Cash Flow (FOCF)
FOCF is a non-GAAP financial measure and is defined by the Company as cash provided by operations (which is the most directly comparable GAAP financial measure) less capital expenditures plus proceeds from disposals of fixed assets. Management considers FOCF to be an important indicator of the Company's cash generating capability because it better represents cash generated from operations that can be used for dividends, debt repayment, strategic initiatives (such as acquisitions) and other investing and financing activities.
| FREE OPERATING CASH FLOW (UNAUDITED) | Twelve Months Ended | ||||||||||
| June 30, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Net cash flow from operating activities | $ | (4,008) | $ | 208,324 | |||||||
| Purchases of property, plant and equipment | (76,905) | (88,971) | |||||||||
| Proceeds from disposals of property, plant and equipment | 1,775 | 1,841 | |||||||||
| Free operating cash flow | $ | (79,138) | $ | 121,194 | |||||||
Organic Sales Growth
Organic sales growth is a non-GAAP financial measure of sales growth (which is the most directly comparable GAAP measure) excluding the impacts of acquisitions, divestitures, business days and foreign currency exchange from year-over-year comparisons. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. Management reports organic sales growth at the consolidated and segment levels.
| ORGANIC SALES GROWTH (UNAUDITED) | ||||||||||||||||||||
| THREE MONTHS ENDED JUNE 30, 2026 | Metal Cutting | Infrastructure | Total | |||||||||||||||||
| Organic sales growth | 22% | 74% | 42% | |||||||||||||||||
Foreign currency exchange effect(3) | 1 | 1 | 1 | |||||||||||||||||
Business days effect(4) | 1 | 1 | 1 | |||||||||||||||||
Divestiture effect(5) | — | (3) | (1) | |||||||||||||||||
| Sales growth | 24% | 73% | 43% | |||||||||||||||||
| TWELVE MONTHS ENDED JUNE 30, 2026 | Total | |||||||
| Organic sales growth | 19% | |||||||
Foreign currency exchange effect(3) | 2 | |||||||
Business days effect(4) | — | |||||||
Divestiture effect(5) | (1) | |||||||
| Sales growth | 20% | |||||||
(3) Foreign currency exchange effect is calculated by dividing the difference between current period sales and current period sales at prior period foreign exchange rates by prior period sales.
(4) Business days effect is calculated by dividing the year-over-year change in weighted average working days (based on mix of sales by country) by prior period weighted average working days.
(5) Divestiture effect is calculated by dividing prior period sales attributable to divested businesses by prior period sales.
11