Kennametal raises FY27 adjusted EPS outlook to $5–$6
Kennametal raised its FY27 adjusted EPS outlook to $5.00-$6.00 and expects FOCF of approximately 20% of adjusted net income.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Kennametal Inc. (KMT) reported fiscal 2027 first-quarter sales of $768 million, up 54% from $498 million a year earlier, and record first-quarter diluted EPS of $3.48, versus $0.30. Operating income was $379 million, or 49.4% of sales, compared with $38 million and 7.5%. It cited approximately $323 million from favorable timing of raw material-related pricing compared with costs, alongside non-raw material-related pricing and tariff income and higher Metal Cutting volumes, as drivers of the operating-income increase.
Year-to-date net cash flow from operating activities was negative $201 million and free operating cash flow (FOCF) was negative $212 million, primarily reflecting working-capital needs, including increased inventory values amid tungsten price increases and advance supplier payments. Kennametal reiterated FY27 sales outlook of $3.33-$3.45 billion and raised adjusted EPS outlook to $5.00-$6.00. It expects FOCF of approximately 20% of adjusted net income and capital spending of approximately $85 million; the board declared a $0.20-per-share quarterly dividend.
2 points · 1 major0 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major point. Forward-looking: it has not happened yet and may not happen.FY27 adjusted EPS outlook was raised to $5.00-$6.00 per share.
- Moderate pointSales rose 54% to $768 million in fiscal 2027's first quarter.
Negative
- Moderate pointYear-to-date operating cash flow shifted from positive $17 million to negative $201 million.
Filing Explained
The release reports term-debt borrowings of
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, or exhibit attachments filed with this report.
Key Figures
Sales: $768 million
Operating income: $379 million
Net income attributable to Kennametal: $271.6 million
+5 more
8 metrics
Sales
$768 million
Fiscal 2027 first quarter ended September 30, 2026; up 54% from $498 million a year earlier
Operating income
$379 million
Fiscal 2027 first quarter; compared with $38 million in the prior-year quarter
Net income attributable to Kennametal
$271.6 million
Fiscal 2027 first quarter; compared with $23.3 million in the prior-year quarter
Diluted EPS
$3.48
Fiscal 2027 first quarter; compared with $0.30 in the prior-year quarter
Net cash flow from operating activities
negative $201 million
Year to date; compared with positive $17 million in the prior-year period
Free operating cash flow
negative $212 million
Year to date; compared with negative $5 million in the prior-year period
FY27 sales outlook
$3.33-$3.45 billion
Full fiscal year 2027
FY27 adjusted EPS outlook
$5.00-$6.00 per share
Full fiscal year 2027; outlook raised
Key Terms
Free operating cash flow, organic sales growth, adjusted EBITDA margin, working capital requirements
4 terms
Free operating cash flow financial
"Free operating cash flow (FOCF) was negative $212 million"
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
"reflecting organic sales growth of 54 percent"
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.
adjusted EBITDA margin financial
"adjusted EBITDA margin of 16 to 19 percent"
Adjusted EBITDA margin shows how much profit a company makes from its core operations, expressed as a percentage of its total revenue, after removing certain one-time or unusual expenses and income. It helps investors understand the company's true earning ability from regular business activities, making it easier to compare performance over time or with other companies. Think of it as measuring the efficiency of a business in turning sales into profits, excluding irregular adjustments.
working capital requirements financial
"working capital requirements, including increased inventory values"
Earnings Snapshot
Sales: $768 million · Guidance included
Fiscal 2027 first quarter ended September 30, 2026
Sales
$768 million
Up 54% from $498 million in the prior-year quarter
Operating income
$379 million
Compared with $38 million in the prior-year quarter
Diluted EPS
$3.48
Compared with $0.30 in the prior-year quarter
Net cash flow from operating activities
Negative $201 million
Compared with positive $17 million in the prior-year period
Free operating cash flow
Negative $212 million
Compared with negative $5 million in the prior-year period
Guidance
FY27 sales expected to be $3.33-$3.45 billion; adjusted EPS expected to be $5.00-$6.00; free operating cash flow approximately 20% of adjusted net income; capital spending expected to be approximately $85 million.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What is KMT's fiscal 2027 second-quarter outlook?
Kennametal expects second-quarter fiscal 2027 sales of $785 million to $815 million and adjusted EPS of $1.20 to $1.50. Foreign exchange is anticipated to be neutral compared with the second quarter of fiscal 2026.
When will KMT pay its quarterly dividend?
The board declared a quarterly cash dividend of $0.20 per share, payable November 23, 2026, to shareholders of record as of the close of business November 9, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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): November 4, 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 November 4, 2026, Kennametal Inc. (Kennametal or the Company) issued an earnings announcement for its fiscal 2027 first quarter ended September 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 November 4, 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 2027 First Quarter 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: | November 4, 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: November 4, 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 Announces Fiscal 2027 First Quarter Results
•Sales of $768 million increased 54 percent on both a reported and organic basis
•Operating income of $379 million and record first quarter earnings per diluted share (EPS) of $3.48
•Reiterates FY27 full year sales Outlook and raises FY27 full year adjusted EPS
•Confirms commitment of 16 to 19 percent adjusted EBITDA margin profile beyond FY27, assumes tungsten stays at current levels
PITTSBURGH, (November 4, 2026) – Kennametal Inc. (NYSE: KMT) (the "Company") today reported results for its fiscal 2027 first quarter ended September 30, 2026.
“We delivered excellent first quarter results, with sales up 54 percent and record first quarter diluted EPS of $3.48, driven primarily by the favorable timing of raw material-related pricing compared to costs and stronger Metal Cutting volumes,” said Sanjay Chowbey, President and Chief Executive Officer.
“This performance reinforces our confidence in the fiscal 2027 sales Outlook and higher full year EPS expectations. Looking beyond fiscal 2027, improving markets and execution on our strategic growth initiatives position us well for continued growth. In a steady-state tungsten environment, we expect to deliver a 16 to 19 percent adjusted EBITDA margin profile while generating strong free operating cash flow and attractive returns on invested capital.”
Fiscal 2027 First Quarter Financial Highlights
Sales of $768 million increased 54 percent from $498 million in the prior year quarter, reflecting organic sales growth of 54 percent.
Operating income was $379 million, or 49.4 percent margin, compared to $38 million, or 7.5 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 $323 million, non-raw material-related pricing and tariff income, higher sales and production volumes in Metal Cutting, an incremental benefit of approximately $4 million from an advanced manufacturing production credit under the Inflation Reduction Act within the Infrastructure segment, and incremental year-over-year restructuring savings of approximately $3 million. These factors were partially offset by tariffs and general inflation, higher compensation costs, an impairment of an equity investment of approximately $5 million and a charge of approximately $5 million related to the write-off of certain fixed assets in the current quarter. Operating income was not adjusted in the current quarter, whereas adjusted operating income was $41 million, or 8.2 percent margin, in the prior year quarter.
1
Year-to-date net cash flow from operating activities was negative $201 million compared to positive $17 million in the prior year period. 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. Year-to-date free operating cash flow (FOCF) was negative $212 million compared to negative $5 million in the prior year period. 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 period.
FY27 Outlook
The Company’s expectations for the second quarter of fiscal 2027 and the full year are as follows:
Quarterly Outlook:
•Sales expected to be $785 - $815 million; foreign exchange anticipated to be neutral compared to the second quarter of fiscal 2026
•Adjusted EPS is expected to be $1.20 - $1.50
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 $5.00 - $6.00
•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 FY27 Outlook during its quarterly earnings conference call.
Steady-State Tungsten Environment
The Company is providing an updated view of its longer-term financial profile in a steady-state tungsten price environment, using the financial targets presented at its September 2023 Investor Day as a baseline.
Over the past four years, the Company has demonstrated an ability to target growth opportunities in Aerospace & Defense, Hybrid / EV powertrains and power generation to sustainably capture market share. While we continue to gain traction on growth initiatives, overall market conditions have been improving over the past year and the Company’s underlying market and strategic growth assumptions remain largely unchanged from Investor Day.
At the current elevated tungsten prices levels, which have increased eightfold since the 2023 Investor Day, the Company expects to be able to achieve adjusted EBITDA margin of 16 to 19 percent in a steady-state tungsten environment.
Return on Invested Capital (ROIC) and Free Operating Cash Flow (FOCF) performance are expected to be consistent with those previously communicated targets.
Segment Results
Metal Cutting sales of $398 million increased 28 percent from $311 million in the prior year quarter, reflecting organic sales growth of 29 percent, partially offset by an unfavorable business days effect of 1 percent. Operating income was $118 million, or 29.7 percent margin, compared to $22 million, or 6.9 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 $65 million, non-raw material-related pricing and tariff income, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $2 million. These factors were partially offset by an impairment of an equity investment of approximately $5 million, higher compensation costs, and tariffs and general inflation in the current quarter. Operating income was not adjusted in the current quarter, whereas adjusted operating income was $25 million, or 8.0 percent margin, in the prior year quarter.
2
Infrastructure sales of $370 million increased 98 percent from $187 million in the prior year quarter, reflecting organic sales growth of 97 percent and a favorable currency exchange effect of 1 percent. Operating income was $262 million, or 70.7 percent margin, compared to $17 million, or 8.9 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 $258 million, non-raw material-related pricing, and an incremental benefit of approximately $4 million from an advanced manufacturing production credit under the Inflation Reduction Act. These factors were partially offset by lower sales and production volumes, tariffs and general inflation, higher compensation costs, and a charge of approximately $3 million related to the write-off of certain fixed assets in the current quarter. Operating income was not adjusted in the current quarter, whereas adjusted operating income was $17 million, or 8.8 percent margin, in the prior year quarter.
Dividend Declared
Kennametal announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend is payable on November 23, 2026 to shareholders of record as of the close of business on November 9, 2026.
Conference Call and Webcast
The Company will host a conference call to discuss its first quarter fiscal 2027 results on Wednesday, November 4, 2026 at 9:30 a.m. Eastern Time. 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 EPS, adjusted net income and FOCF for the second quarter and full year of fiscal 2027, our expectations regarding performance in a steady-state tungsten environment and longer-term financial targets, 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.
3
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 September 30, | |||||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | |||||||||
| Sales | $ | 768,193 | $ | 497,974 | |||||||
| Cost of goods sold | 254,622 | 343,424 | |||||||||
Gross profit | 513,571 | 154,550 | |||||||||
| Operating expense | 126,814 | 113,028 | |||||||||
| Restructuring and other charges, net | 5,356 | 1,589 | |||||||||
| Amortization of intangibles | 2,150 | 2,374 | |||||||||
Operating income | 379,251 | 37,559 | |||||||||
| Interest expense | 11,472 | 6,186 | |||||||||
| Other expense (income), net | 11,063 | (2,322) | |||||||||
| Income before income taxes | 356,716 | 33,695 | |||||||||
| Provision for income taxes | 82,258 | 9,064 | |||||||||
| Net income | 274,458 | 24,631 | |||||||||
| Less: Net income attributable to noncontrolling interests | 2,873 | 1,333 | |||||||||
| Net income attributable to Kennametal | $ | 271,585 | $ | 23,298 | |||||||
| PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS | |||||||||||
| Basic earnings per share | $ | 3.55 | $ | 0.31 | |||||||
| Diluted earnings per share | $ | 3.48 | $ | 0.30 | |||||||
| Basic weighted average shares outstanding | 76,590 | 76,128 | |||||||||
| Diluted weighted average shares outstanding | 78,120 | 76,829 | |||||||||
5
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (in thousands) | September 30, 2026 | June 30, 2026 | |||||||||
ASSETS | |||||||||||
| Cash and cash equivalents | $ | 272,758 | $ | 95,791 | |||||||
| Accounts receivable, net | 429,863 | 408,438 | |||||||||
| Inventories | 1,615,986 | 1,108,450 | |||||||||
| Other current assets | 200,768 | 159,092 | |||||||||
| Total current assets | 2,519,375 | 1,771,771 | |||||||||
| Property, plant and equipment, net | 820,070 | 843,584 | |||||||||
| Goodwill and other intangible assets, net | 331,265 | 335,099 | |||||||||
| Other assets | 209,528 | 216,298 | |||||||||
| Total assets | $ | 3,880,238 | $ | 3,166,752 | |||||||
LIABILITIES | |||||||||||
| Revolving and other lines of credit and notes payable | $ | 39,951 | $ | 32,170 | |||||||
| Accounts payable | 387,122 | 369,841 | |||||||||
| Other current liabilities | 303,767 | 274,697 | |||||||||
| Total current liabilities | 730,840 | 676,708 | |||||||||
| Long-term debt | 1,094,084 | 685,280 | |||||||||
| Other liabilities | 187,324 | 191,327 | |||||||||
| Total liabilities | 2,012,248 | 1,553,315 | |||||||||
| KENNAMETAL SHAREHOLDERS’ EQUITY | 1,823,135 | 1,569,844 | |||||||||
| NONCONTROLLING INTERESTS | 44,855 | 43,593 | |||||||||
| Total liabilities and equity | $ | 3,880,238 | $ | 3,166,752 | |||||||
6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
| Three Months Ended September 30, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 274,458 | $ | 24,631 | |||||||
| Adjustments to reconcile to cash from operations: | |||||||||||
| Depreciation | 31,656 | 32,671 | |||||||||
| Amortization of intangible assets | 2,150 | 2,374 | |||||||||
| Stock-based compensation expense | 10,876 | 8,239 | |||||||||
| Amortization of capitalized information technology costs | 8,371 | 5,904 | |||||||||
| Restructuring and other charges, net | 5,356 | 1,589 | |||||||||
| Deferred income taxes | 184 | 7 | |||||||||
| Other | 6,273 | 817 | |||||||||
| Changes in certain assets and liabilities: | |||||||||||
| Accounts receivable | (22,106) | 7,026 | |||||||||
| Inventories | (515,964) | (28,027) | |||||||||
| Other current assets | (51,186) | (16,707) | |||||||||
| Accounts payable and accrued liabilities | (13,060) | (13,547) | |||||||||
| Accrued income taxes | 57,913 | (2,937) | |||||||||
| Accrued pension and postretirement benefits | 487 | (281) | |||||||||
| Other | 3,333 | (4,272) | |||||||||
| Net cash flow (used in) provided by operating activities | (201,259) | 17,487 | |||||||||
| INVESTING ACTIVITIES | |||||||||||
| Purchases of property, plant and equipment | (10,804) | (22,982) | |||||||||
| Disposals of property, plant and equipment | 409 | 14 | |||||||||
| Other | (2,893) | 262 | |||||||||
| Net cash flow used in investing activities | (13,288) | (22,706) | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Net increase in notes payable | 28,133 | 421 | |||||||||
| Net decrease in revolving and other lines of credit | (20,000) | — | |||||||||
| Term debt borrowings | 500,000 | — | |||||||||
| Term debt repayments | (90,616) | — | |||||||||
| Purchase of capital stock | (38) | (10,030) | |||||||||
| The effect of employee benefit and stock plans and dividend reinvestment | (11,051) | (6,327) | |||||||||
| Cash dividends paid to Shareholders | (15,242) | (15,136) | |||||||||
| Other | (76) | (3) | |||||||||
| Net cash flow provided by (used in) financing activities | 391,110 | (31,075) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 404 | (749) | |||||||||
| CASH AND CASH EQUIVALENTS | |||||||||||
| Net increase (decrease) in cash and cash equivalents | 176,967 | (37,043) | |||||||||
| Cash and cash equivalents, beginning of period | 95,791 | 140,540 | |||||||||
| Cash and cash equivalents, end of period | $ | 272,758 | $ | 103,497 | |||||||
7
| SEGMENT DATA (UNAUDITED) | Three Months Ended September 30, | ||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| Sales: | |||||||||||
| Metal Cutting | $ | 398,155 | $ | 310,625 | |||||||
| Infrastructure | 370,038 | 187,349 | |||||||||
| Total sales | $ | 768,193 | $ | 497,974 | |||||||
| Sales By Geographic Region: | |||||||||||
| Americas | $ | 436,539 | $ | 247,597 | |||||||
| EMEA | 204,512 | 153,284 | |||||||||
| Asia Pacific | 127,142 | 97,093 | |||||||||
| Total sales | $ | 768,193 | $ | 497,974 | |||||||
| Operating income: | |||||||||||
| Metal Cutting | $ | 118,337 | $ | 21,564 | |||||||
| Infrastructure | 261,723 | 16,639 | |||||||||
Corporate (1) | (809) | (644) | |||||||||
| Total operating income | $ | 379,251 | $ | 37,559 | |||||||
(1) Represents unallocated corporate expenses.
8
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; 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. There were no adjustments for the three months ended September 30, 2026. Adjustments for the three months ended September 30, 2025 include restructuring and related charges and differences in projected annual tax rates. 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 second quarter and full fiscal year of 2027 and the Company's longer-term financial targets have not been provided, including but not limited to, FOCF, adjusted net income, adjusted EBITDA margin and adjusted EPS. The most comparable GAAP financial measures are net cash flow from operating activities, net income attributable to Kennametal and EPS, 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 SEPTEMBER 30, 2025 (UNAUDITED) | ||||||||||||||
| (in thousands, except percents and per share data) | Sales | Operating income | Net income(2) | Diluted EPS | ||||||||||
| Reported results | $ | 497,974 | $ | 37,559 | $ | 23,298 | $ | 0.30 | ||||||
| Reported operating margin | 7.5 | % | ||||||||||||
| Restructuring and related charges | — | 3,188 | 2,590 | 0.04 | ||||||||||
| Differences in projected annual tax rates | — | — | 367 | — | ||||||||||
| Adjusted results | $ | 497,974 | $ | 40,747 | $ | 26,255 | $ | 0.34 | ||||||
| Adjusted operating margin | 8.2 | % | ||||||||||||
(2) Attributable to Kennametal.
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| THREE MONTHS ENDED SEPTEMBER 30, 2025 (UNAUDITED) | ||||||||||||||
| Metal Cutting | Infrastructure | |||||||||||||
| (in thousands, except percents) | Sales | Operating income | Sales | Operating income | ||||||||||
| Reported results | $ | 310,625 | $ | 21,564 | $ | 187,349 | $ | 16,639 | ||||||
| Reported operating margin | 6.9 | % | 8.9 | % | ||||||||||
| Restructuring and related charges | — | 3,312 | — | (126) | ||||||||||
| Adjusted results | $ | 310,625 | $ | 24,876 | $ | 187,349 | $ | 16,513 | ||||||
| Adjusted operating margin | 8.0 | % | 8.8 | % | ||||||||||
Free Operating Cash Flow (FOCF)
FOCF is a non-GAAP financial measure and is defined by the Company as net cash flow provided by operating activities (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) | Three Months Ended September 30, | |||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Net cash flow (used in) provided by operating activities | $ | (201,259) | $ | 17,487 | ||||||||||
| Purchases of property, plant and equipment | (10,804) | (22,982) | ||||||||||||
| Disposals of property, plant and equipment | 409 | 14 | ||||||||||||
| Free operating cash flow | $ | (211,654) | $ | (5,481) | ||||||||||
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 effects 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 September 30, 2026 | Metal Cutting | Infrastructure | Total | |||||||||||||||||
| Organic sales growth | 29% | 97% | 54% | |||||||||||||||||
Foreign currency exchange effect (3) | — | 1 | — | |||||||||||||||||
Business days effect (4) | (1) | — | — | |||||||||||||||||
| Sales growth | 28% | 98% | 54% | |||||||||||||||||
(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.
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