Kennametal Inc. is a global industrial technology leader with more than 85 years of materials expertise, helping customers across the General Engineering, Transportation, Earthworks, Energy and Aerospace & Defense end markets build their products with precision and efficiency. The Company was founded based on a tungsten carbide technology breakthrough in 1938 and was incorporated in Pennsylvania in 1943 as a manufacturer of tungsten carbide metal cutting tooling. The Company's core expertise includes the development and application of tungsten carbides, ceramics, super-hard materials and solutions used in metal cutting and extreme wear applications. The industry is highly competitive, with several large global competitors and many smaller niche businesses, and remains largely fragmented, containing several hundred fabricators, toolmakers and niche specialty coating businesses. The principal competitive differentiators include customer focused support and application expertise, custom and standard product innovation, product performance and quality, and brand recognition. Kennametal derives competitive advantage from its premium brand positions, global presence, application expertise and ability to address unique customer needs with new and improved tools, innovative surface and wear-resistant solutions, highly engineered components, consistent quality, traditional and digital customer service and technical assistance capabilities, state-of-the-art manufacturing and multiple sales channels.

Kennametal actively competes in the sale of all its products with several large global competitors and with many smaller niche businesses. The principal competitive differentiators in the businesses include customer focused support and application expertise, custom and standard product innovation, product performance and quality, and brand recognition. The Company derives competitive advantage from its premium brand positions, global presence, application expertise and ability to address unique customer needs with new and improved tools, innovative surface and wear-resistant solutions, highly engineered components, consistent quality, traditional and digital customer service and technical assistance capabilities, state-of-the-art manufacturing and multiple sales channels. With these strengths, the Company is able to sell products based on the value-added productivity delivered to customers, rather than competing solely on price.

Kennametal generates revenue through the manufacture and sale of high performance tooling and metal cutting products and services, as well as engineered tungsten carbide and ceramic components, earth cutting tools, and advanced metallurgical powders. The Company's standard and custom product offering spans metal cutting and wear applications including turning, milling, hole making, tooling systems and services, as well as specialized wear components and metallurgical powders. End users of the Company's metal cutting products include manufacturers engaged in a diverse array of industries including: transportation vehicles and components, machine tools and light and heavy machinery; airframe and aerospace components; and energy-related components for the oil and gas industry, as well as power generation. The Company's wear and metallurgical powders are used by producers and suppliers in equipment-intensive operations such as road construction, mining, quarrying, oil and gas exploration, refining, production and supply, and for aerospace and defense. The Company markets its products through a direct sales force, a network of independent and national distributors, integrated supplier channels and digitally.

The Metal Cutting segment develops and manufactures high performance tooling and metal cutting products and services and offers an assortment of standard and custom metal cutting solutions to diverse end markets, including General Engineering, Transportation, Aerospace & Defense and Energy. The products include milling, hole making, turning, threading and toolmaking systems used in the manufacture of airframes, aero engines, trucks and automobiles, ships and various types of industrial equipment. Metal Cutting markets its products under the Kennametal, WIDIA, WIDIA Hanita and WIDIA GTD brands. In fiscal 2026, Metal Cutting sales were $1,397.4 million ¹ and operating income was $195.6 million ² with an operating margin of 14.0 percent ³. The Infrastructure segment produces engineered tungsten carbide and ceramic components, earth cutting tools, and advanced metallurgical powders, primarily for the Earthworks, General Engineering, Energy and Aerospace & Defense end markets. These wear-resistant products include compacts, nozzles, frac seats and custom components used in oil and gas and petrochemical industries; rod blanks and abrasive water jet nozzles for general industries; earth cutting tools and systems used in underground mining, trenching and foundation drilling and road milling; tungsten carbide powders for the oil and gas, aerospace and process industries; high temperature critical wear components, tungsten penetrators and armor solutions for aerospace and defense; and ceramics used by the packaging industry for metallization of films and papers. Infrastructure markets its products primarily under the Kennametal brand. In fiscal 2026, Infrastructure sales were $959.3 million ⁴ and operating income was $279.9 million ⁵ with an operating margin of 29.2 percent ⁶.

The Metal Cutting segment develops and manufactures high performance tooling and metal cutting products and services and offers an assortment of standard and custom metal cutting solutions to diverse end markets, including General Engineering, Transportation, Aerospace & Defense and Energy. The products include milling, hole making, turning, threading and toolmaking systems used in the manufacture of airframes, aero engines, trucks and automobiles, ships and various types of industrial equipment. Metal Cutting markets its products under the Kennametal, WIDIA, WIDIA Hanita and WIDIA GTD brands through its direct sales force, a network of independent and national distributors, integrated supplier channels and digitally. In fiscal 2026, Metal Cutting sales were $1,397.4 million ⁷ and operating income was $195.6 million ⁸ with an operating margin of 14.0 percent ⁹. The Infrastructure segment produces engineered tungsten carbide and ceramic components, earth cutting tools, and advanced metallurgical powders, primarily for the Earthworks, General Engineering, Energy and Aerospace & Defense end markets. These wear-resistant products include compacts, nozzles, frac seats and custom components used in oil and gas and petrochemical industries; rod blanks and abrasive water jet nozzles for general industries; earth cutting tools and systems used in underground mining, trenching and foundation drilling and road milling; tungsten carbide powders for the oil and gas, aerospace and process industries; high temperature critical wear components, tungsten penetrators and armor solutions for aerospace and defense; and ceramics used by the packaging industry for metallization of films and papers. Infrastructure markets its products primarily under the Kennametal brand and sells through a direct sales force as well as through distributors. In fiscal 2026, Infrastructure sales were $959.3 million ¹⁰ and operating income was $279.9 million ¹¹ with an operating margin of 29.2 percent ¹².

During fiscal 2025, the Company completed the sale of a subsidiary located in Goshen, Indiana to a Chicago-based private equity firm and recognized a loss on divestiture of $1.5 million ¹³. In January 2025, the Company announced several actions to support the long-term competitiveness of the Company and to mitigate softer market conditions, with total restructuring and related charges for this program of $23.9 million ¹⁴ recorded through June 30, 2026, consisting of $19.4 million ¹⁵ in Metal Cutting and $4.5 million ¹⁶ in Infrastructure. During fiscal 2026, the Company recorded restructuring and related charges of $11.4 million ¹⁷, which consisted of $9.7 million ¹⁸ in Metal Cutting and $1.7 million ¹⁹ in Infrastructure. In May 2026, the Company issued $300.0 million ²⁰ of 5.800% Senior Unsecured Notes due 2036 and used net proceeds to fund a tender offer for the Company's outstanding 4.625 percent Senior Unsecured Notes due 2028, resulting in the repurchase of $209.4 million ²¹ out of the total $300.0 million ²² aggregate principal of the 2028 Notes. The Company also entered into a new $500.0 million ²³ delayed-draw three-year term loan and amended its Credit Agreement to increase aggregate commitments by $200.0 million ²⁴. In February 2024, the Board of Directors authorized a $200 million ²⁵, three-year share repurchase program. During fiscal 2026, the Company repurchased 475 thousand ²⁶ shares of common stock for $10 million ²⁷ and returned a total of $71 million ²⁸ to shareholders through $10 million ²⁹ in share repurchases and $61 million ³⁰ in dividends.

Sales of $2,356.7 million ³¹ in fiscal 2026 increased 20 percent ³² from $1,966.8 million ³³ in fiscal 2025, reflecting organic sales growth of 19 percent ³⁴ and a favorable foreign currency exchange effect of 2 percent ³⁵, partially offset by a divestiture effect of 1 percent ³⁶. Operating income was $472.5 million ³⁷, or 20.1 percent ³⁸ margin, in fiscal 2026 compared with $143.1 million ³⁹, or 7.3 percent ⁴⁰ margin, in the prior year. Net income attributable to Kennametal was $342.4 million ⁴¹, or $4.42 ⁴² of earnings per diluted share in fiscal 2026, compared to $93.1 million ⁴³, or $1.20 ⁴⁴ of earnings per diluted share in fiscal 2025. Gross profit increased $371.9 million ⁴⁵ to $970.0 million ⁴⁶ in fiscal 2026 from $598.1 million ⁴⁷ in fiscal 2025. The gross profit margin for fiscal 2026 was 41.2 percent ⁴⁸ compared to 30.4 percent ⁴⁹ in fiscal 2025.

The Company's strategic partnerships with Toolpath Labs, Inc. during fiscal 2025 and ModuleWorks GmbH during fiscal 2024 support the digital manufacturing and intelligent machining solutions strategy. The Company expects to continue to grow its business and further enhance its market position through investment opportunities that exist within its core businesses, including potential acquisitions in the near term. The Company's Commercial Excellence growth initiatives and Operational Excellence initiatives are referenced as key strategic programs.

The Company's restructuring actions are designed to reduce structural costs, improve operational efficiency and position the Company for long-term profitable growth. Incremental year-over-year restructuring savings of approximately $27 million ⁵⁰ were realized in fiscal 2026. The Company expects to continue to realize benefits from these actions.

The Company's internal tungsten recycling capability provides access to additional sources of tungsten and helps mitigate reliance on third parties. The Company exercises great care in selecting, purchasing and managing the availability of raw materials utilizing a mix of long-term supply agreements coupled with spot purchases. The Company's production capacity is adequate for its present needs.

Research and development expenses totaled $43.2 million ⁵¹ and $44.4 million ⁵² for fiscal 2026 and 2025, respectively. Capital expenditures were $76.9 million ⁵³ and $89.0 million ⁵⁴ during fiscal 2026 and 2025, respectively. In February 2024, the Board of Directors authorized a $200 million ⁵⁵, three-year share repurchase program. During fiscal 2026, the Company repurchased 475 thousand ⁵⁶ shares of common stock for $10 million ⁵⁷ and paid $61 million ⁵⁸ in dividends. The Company expects to reassess repurchase activity as cash flow generation improves.

The Company faces headwinds from foreign currency exchange, inflationary headwinds and rising tungsten prices driven by tightening global supply, geopolitical factors and evolving trade policies. These pressures have increased raw material costs and caused other business disruptions. The Company cannot predict the ultimate effect of these issues on its business, operating results, cash flows or financial condition. Continued volatility in commodity pricing, foreign exchange rates and supply availability could adversely affect margins, operations and liquidity and may increase the risk of future impairment charges, including goodwill and other intangible assets. Significant declines in raw material costs could reduce the net realizable value of inventory, potentially requiring write-downs.

The Company's international operations are subject to risks including currency exchange rate fluctuations, differing protections of intellectual property, trade barriers, exchange controls, regional economic uncertainty, overlap of different tax regimens, differing labor regulations, labor unrest, risk of governmental expropriation, domestic and foreign customs and tariffs, current and changing regulatory environments, difficulty in obtaining distribution support, difficulty in staffing and managing widespread operations, differences in the availability and terms of financing, social and political instability and unrest and risks of increased taxes and/or adverse tax consequences. During fiscal 2026, 57 percent ⁵⁹ of consolidated sales were derived from non-U.S. markets.

Management's message emphasizes the Company's position as a global industrial technology leader with more than 85 years of materials expertise. The strategic priorities emphasized include the Commercial Excellence growth initiatives and Operational Excellence initiatives, as well as restructuring actions to support long-term competitiveness and mitigate softer market conditions. Management highlights the favorable timing of raw material-related pricing compared to costs of approximately $316 million ⁶⁴ as a key driver of operating income improvement in fiscal 2026. The Company reported earnings per diluted share of $4.42 ⁶⁵ for fiscal 2026 compared to $1.20 ⁶⁶ in the prior year. Management notes that the Company expects to reassess share repurchase activity as cash flow generation improves.

Total sales were $2,356.7 million ⁶⁷ in fiscal 2026 compared to $1,966.8 million ⁶⁸ in fiscal 2025. Net income attributable to Kennametal was $342.4 million ⁶⁹ in fiscal 2026 compared to $93.1 million ⁷⁰ in fiscal 2025. Diluted earnings per share were $4.42 ⁷¹ in fiscal 2026 compared to $1.20 ⁷² in fiscal 2025. Operating income was $472.5 million ⁷³ in fiscal 2026 compared to $143.1 million ⁷⁴ in fiscal 2025, representing an operating margin of 20.1 percent ⁷⁵ versus 7.3 percent ⁷⁶. Gross profit was $970.0 million ⁷⁷ in fiscal 2026 compared to $598.1 million ⁷⁸ in fiscal 2025, with gross profit margin of 41.2 percent ⁷⁹ versus 30.4 percent ⁸⁰. The effective tax rate was 24.0 percent ⁸¹ for fiscal 2026 compared to 25.2 percent ⁸² for fiscal 2025. Net cash flow used for operating activities was $4.0 million ⁸³ in fiscal 2026 compared to net cash flow provided by operating activities of $208.3 million ⁸⁴ in fiscal 2025. Capital expenditures were $76.9 million ⁸⁵ in fiscal 2026 and $89.0 million ⁸⁶ in fiscal 2025. Cash and cash equivalents were $95.8 million ⁸⁷ as of June 30, 2026. Total debt was $717.5 million ⁸⁸ as of June 30, 2026. Total Kennametal Shareholders' equity was $1,569.8 million ⁸⁹ as of June 30, 2026. The Metal Cutting segment reported sales of $1,397.4 million ⁹⁰ and operating income of $195.6 million ⁹¹ with a 14.0 percent ⁹² operating margin. The Infrastructure segment reported sales of $959.3 million ⁹³ and operating income of $279.9 million ⁹⁴ with a 29.2 percent ⁹⁵ operating margin. Restructuring and related charges of $11.4 million ⁹⁶ were recorded in fiscal 2026, including $2.4 million ⁹⁷ in cost of goods sold and $0.1 million ⁹⁸ in operating expense. Interest expense was $28.6 million ⁹⁹ in fiscal 2026, including a loss of $2.2 million ¹⁰⁰ from the early extinguishment of the 2028 Notes.

The Company's international operations pose risks, with 57 percent ⁶⁰ of consolidated sales derived from non-U.S. markets, exposing the Company to currency exchange rate fluctuations, trade barriers, tariffs, and social and political instability. The global tungsten market remains susceptible to supply constraints and price volatility due to the concentration of mining and processing capacity in China, and recent export controls have increased uncertainty regarding the availability and cost of tungsten products. At June 30, 2026, goodwill totaled $279.2 million ⁶¹, or 9 percent ⁶² of total assets, and if future operating performance at the Metal Cutting reporting unit were to fall significantly below current levels, a non-cash impairment charge could be recorded. The Company's restructuring efforts may not have the intended effects, and there is no assurance that these actions will be sufficient to counter future economic or industry disruptions. The Company is subject to environmental cleanup and remediation activities, with accruals of $12.3 million ⁶³ as of June 30, 2026 for estimated environmental liabilities.