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FOR IMMEDIATE RELEASE:
DATE: February 4, 2026
Investor RelationsMedia Relations
CONTACT: Michael PiciCONTACT: Lori Lecker
PHONE: 412-790-0792PHONE: 412-248-8224
michael.pici@kennametal.comlori.lecker@kennametal.com
Kennametal Announces Fiscal 2026 Second Quarter Results
•Sales of $530 million increased 10 percent on both a reported and organic basis
•Operating income of $53 million and adjusted operating income of $56 million, up 66 percent and 68 percent, respectively
•Earnings per diluted share (EPS) of $0.44 and adjusted EPS of $0.47, up 92 percent and 89 percent, respectively
•Company raises sales and adjusted EPS annual Outlook

PITTSBURGH, (February 4, 2026) – Kennametal Inc. (NYSE: KMT) (the "Company") today reported results for its fiscal 2026 second quarter ended December 31, 2025.
“We are pleased with our second quarter results, which exceeded the high end of our sales and adjusted EPS Outlook, driven by volume in the quarter, largely from buy-ahead in response to the tungsten pricing environment and modest improvement in certain end markets,” said Sanjay Chowbey, President and CEO.
Chowbey added: “Looking ahead, we remain focused on driving above market growth, improving our cost structure and shaping a smarter portfolio to deliver long-term value for shareholders.”

Fiscal 2026 Second Quarter Financial Highlights
Sales of $530 million increased 10 percent from $482 million in the prior year quarter, reflecting organic sales growth of 10 percent and a favorable currency exchange effect of 1 percent, partially offset by a divestiture effect of 1 percent.
Operating income was $53 million, or 9.9 percent margin, compared to $32 million, or 6.6 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $17 million within the Infrastructure segment, pricing and tariff surcharges within the Metal Cutting segment, higher sales and production volumes in the Metal Cutting segment and incremental year-over-year restructuring savings of approximately $8 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, a prior year benefit from insurance proceeds of approximately $3 million that did not repeat in the current year and an increase in incremental restructuring and related charges of approximately $2 million. Adjusted operating income was $56 million, or 10.5 percent margin, in the current quarter, compared to $33 million, or 6.9 percent margin, in the prior year quarter.
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Year-to-date net cash flow from operating activities was $73 million compared to $101 million in the prior year period. The change in net cash flow from operating activities was driven primarily by working capital changes including an increase in inventory, partially offset by higher net income in the current year period. Year-to-date free operating cash flow (FOCF) was $38 million compared to $57 million in the prior year period. The decrease in FOCF was driven primarily by working capital changes including an increase in inventory, partially offset by higher net income and lower net capital expenditures in the current year period.

Outlook
The Company’s expectations for the third quarter of fiscal 2026 and the full year are as follows:
Quarterly Outlook:
•Sales expected to be $545 - $565 million
•Adjusted EPS is expected to be $0.50 - $0.60
Annual Outlook:
•Sales expected to be $2.190 - $2.250 billion
•Adjusted EPS is expected to be $2.05 - $2.45
•Free operating cash flow of approximately 60 percent of adjusted net income
•Capital spending expected to be approximately $90 million

The Company will provide more details regarding its Outlook during its quarterly earnings conference call.

Segment Results
Metal Cutting sales of $331 million increased 11 percent from $298 million in the prior year quarter, reflecting organic sales growth of 9 percent and a favorable currency exchange effect of 2 percent. Operating income was $30 million, or 9.0 percent margin, compared to $17 million, or 5.6 percent margin, in the prior year quarter. The increase in operating income was driven by pricing and tariff surcharges, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $6 million. These factors were partially offset by higher compensation costs and tariffs and general inflation. Adjusted operating income was $32 million, or 9.6 percent margin, in the current quarter, compared to $18 million, or 6.0 percent margin, in the prior year quarter.
Infrastructure sales of $198 million increased 8 percent from $184 million in the prior year quarter, reflecting organic sales growth of 11 percent and a favorable currency exchange effect of 1 percent, partially offset by a divestiture effect of 4 percent. Operating income was $23 million, or 11.8 percent margin, compared to $16 million, or 8.5 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $17 million, and incremental year-over-year restructuring savings of approximately $2 million. These factors were partially offset by higher compensation costs, a prior year benefit from insurance proceeds of approximately $3 million that did not repeat in the current year, and general inflation. Adjusted operating income was $24 million, or 12.3 percent margin, in the current quarter, compared to $16 million, or 8.6 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 February 24, 2026 to shareholders of record as of the close of business on February 10, 2026.

Conference Call and Webcast
The Company will host a conference call to discuss its second quarter fiscal 2026 results on Wednesday, February 4, 2026 at 9:00 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.
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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, FOCF, and capital expenditures for the third quarter and full year of fiscal 2026 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 conflict 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; 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.

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 billion in revenues in fiscal 2025. 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 December 31,Six Months Ended December 31,
(in thousands, except per share amounts)2025202420252024
Sales$529,525 $482,051 $1,027,499 $963,999 
Cost of goods sold355,656 337,021 699,080 667,960 
     Gross profit
173,869 145,030 328,419 296,039 
Operating expense116,302 109,308 229,330 220,962 
Restructuring and other charges, net2,528 1,335 4,117 1,946 
Amortization of intangibles2,378 2,720 4,751 5,438 
     Operating income
52,661 31,667 90,221 67,693 
Interest expense6,089 6,180 12,275 12,493 
Other income, net(2,097)(1,477)(4,418)(3,136)
Income before income taxes48,669 26,964 82,364 58,336 
Provision for income taxes13,472 7,927 22,535 15,833 
Net income35,197 19,037 59,829 42,503 
Less: Net income attributable to noncontrolling interests1,312 1,109 2,646 2,452 
Net income attributable to Kennametal$33,885 $17,928 $57,183 $40,051 
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS
Basic earnings per share$0.44 $0.23 $0.75 $0.51 
Diluted earnings per share$0.44 $0.23 $0.74 $0.51 
Basic weighted average shares outstanding76,194 77,724 76,161 77,896 
Diluted weighted average shares outstanding77,083 78,379 76,919 78,495 

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)December 31, 2025
June 30, 2025
 
 ASSETS
Cash and cash equivalents$129,318 $140,540 
Accounts receivable, net288,205 295,401 
Inventories621,920 538,237 
Other current assets81,835 65,092 
Total current assets1,121,278 1,039,270 
Property, plant and equipment, net881,308 919,914 
Goodwill and other intangible assets, net345,518 349,935 
Other assets247,452 236,293 
Total assets$2,595,556 $2,545,412 
 
 LIABILITIES
Revolving and other lines of credit and notes payable$1,430 $977 
Accounts payable220,410 195,929 
Other current liabilities217,510 225,423 
Total current liabilities439,350 422,329 
Long-term debt597,192 596,788 
Other liabilities201,357 201,647 
Total liabilities1,237,899 1,220,764 
KENNAMETAL SHAREHOLDERS’ EQUITY1,315,037 1,283,979 
NONCONTROLLING INTERESTS42,620 40,669 
Total liabilities and equity$2,595,556 $2,545,412 

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
Six Months Ended December 31,
(in thousands)20252024
OPERATING ACTIVITIES
Net income$59,829 $42,503 
Adjustments to reconcile to cash from operations:
Depreciation64,662 62,130 
Amortization4,751 5,438 
Stock-based compensation expense16,952 13,375 
Restructuring and other charges, net4,117 1,946 
Deferred income taxes (1,768)(1,903)
Gain on insurance recoveries— (7,500)
Other1,305 2,666 
Changes in certain assets and liabilities:
Accounts receivable7,839 43,167 
Inventories(84,080)(30,695)
Accounts payable and accrued liabilities14,665 (27,214)
Accrued income taxes2,225 606 
Accrued pension and postretirement benefits(374)(2,445)
Other(17,517)(1,174)
Net cash flow provided by operating activities72,606 100,900 
INVESTING ACTIVITIES
Purchases of property, plant and equipment(35,692)(43,967)
Disposals of property, plant and equipment1,569 405 
Proceeds from insurance recoveries— 7,193 
Other336 (222)
Net cash flow used in investing activities(33,787)(36,591)
FINANCING ACTIVITIES
Net increase in notes payable421 — 
Purchase of capital stock(10,068)(30,062)
The effect of employee benefit and stock plans and dividend reinvestment(7,724)(6,240)
Cash dividends paid to Shareholders(30,364)(31,148)
Other(1,853)(599)
Net cash flow used in financing activities(49,588)(68,049)
Effect of exchange rate changes on cash and cash equivalents(453)(3,080)
CASH AND CASH EQUIVALENTS
Net decrease in cash and cash equivalents(11,222)(6,820)
Cash and cash equivalents, beginning of period140,540 127,971 
Cash and cash equivalents, end of period$129,318 $121,151 


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SEGMENT DATA (UNAUDITED)Three Months Ended December 31,Six Months Ended December 31,
(in thousands)2025202420252024
Sales:
Metal Cutting$331,059 $297,785 $641,684 $594,686 
Infrastructure198,466 184,266 385,815 369,313 
Total sales$529,525 $482,051 $1,027,499 $963,999 
Sales By Geographic Region:
Americas$265,168 $235,252 $512,763 $472,978 
EMEA156,276 145,494 309,561 291,428 
Asia Pacific108,081 101,305 205,175 199,593 
Total sales$529,525 $482,051 $1,027,499 $963,999 
Operating income:
Metal Cutting$29,758 $16,586 $51,322 $40,408 
Infrastructure23,402 15,612 40,042 28,347 
Corporate (1)
(499)(531)(1,143)(1,062)
Total operating income$52,661 $31,667 $90,221 $67,693 
(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; 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 December 31, 2025 include restructuring and related charges and differences in projected annual tax rates. Adjustments for the three months ended December 31, 2024 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 third quarter and full fiscal year of 2026 have not been provided, including but not limited to: FOCF, adjusted net income 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 DECEMBER 31, 2025 (UNAUDITED)
(in thousands, except percents and per share data)SalesOperating income
Net income(2)
Diluted EPS
Reported results$529,525 $52,661 $33,885 $0.44 
Reported operating margin9.9 %
Restructuring and related charges— 3,057 2,533 0.03 
Differences in projected annual tax rates— — (163)— 
Adjusted results$529,525 $55,718 $36,255 $0.47 
Adjusted operating margin10.5 %
(2) Attributable to Kennametal.
THREE MONTHS ENDED DECEMBER 31, 2025 (UNAUDITED)
Metal CuttingInfrastructure
(in thousands, except percents)SalesOperating incomeSalesOperating income
Reported results$331,059 $29,758 $198,466 $23,402 
Reported operating margin9.0 %11.8 %
Restructuring and related charges— 2,122 — 934 
Adjusted results$331,059 $31,880 $198,466 $24,336 
Adjusted operating margin9.6 %12.3 %
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THREE MONTHS ENDED DECEMBER 31, 2024 (UNAUDITED)
(in thousands, except percents and per share data)SalesOperating income
Net income(2)
Diluted EPS
Reported results$482,051 $31,667 $17,928 $0.23 
Reported operating margin6.6 %
Restructuring and related charges— 1,419 1,181 0.01 
Differences in projected annual tax rates— — 530 0.01 
Adjusted results$482,051 $33,086 $19,639 $0.25 
Adjusted operating margin6.9 %
(2) Attributable to Kennametal.

THREE MONTHS ENDED DECEMBER 31, 2024 (UNAUDITED)
Metal CuttingInfrastructure
(in thousands, except percents)SalesOperating incomeSalesOperating income
Reported results$297,785 $16,586 $184,266 $15,612 
Reported operating margin5.6 %8.5 %
Restructuring and related charges— 1,202 — 217 
Adjusted results$297,785 $17,788 $184,266 $15,829 
Adjusted operating margin6.0 %8.6 %

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)Six Months Ended December 31,
(in thousands)20252024
Net cash flow provided by operating activities$72,606 $100,900 
Purchases of property, plant and equipment(35,692)(43,967)
Disposals of property, plant and equipment1,569 405 
Free operating cash flow$38,483 $57,338 

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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 December 31, 2025Metal CuttingInfrastructureTotal
Organic sales growth9%11%10%
Foreign currency exchange effect (3)
211
Business days effect (4)
———
Divestiture effect (5)
—(4)(1)
Sales growth11%8%10%
(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.


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